SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 23, 1997
CONTINENTAL AIRLINES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-09781 74-2099724
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2929 Allen Parkway, Suite 2010, Houston, Texas 77019
(Address of principal executive offices) (Zip Code)
(713) 834-2950
(Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The documents listed below are filed as Exhibits with
reference to the Registration Statement on Form S-3 (Registration No. 333-34545)
of Continental Airlines, Inc. The Registration Statement and the Prospectus
Supplement, dated October 16, 1997, to the Prospectus, dated September 4, 1997,
relate to the offering of Continental Airlines, Inc.'s Pass Through
Certificates, Series 1997-4.
4.1 Revolving Credit Agreement (1997-4A), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and ABN AMRO Bank N.V., Chicago Branch, as Liquidity
Provider
4.2 Revolving Credit Agreement (1997-4A), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and Westdeutsche Landesbank Girozentrale, New York
Branch, as Liquidity Provider
4.3 Revolving Credit Agreement (1997-4B), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and ABN AMRO Bank N.V., Chicago Branch, as Liquidity
Provider
4.4 Revolving Credit Agreement (1997-4B), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and Westdeutsche Landesbank Girozentrale, New York
Branch, as Liquidity Provider
4.5 Revolving Credit Agreement (1997-4C), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and ABN AMRO Bank N.V., Chicago Branch, as Liquidity
Provider
4.6 Revolving Credit Agreement (1997-4C), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and Westdeutsche Landesbank Girozentrale, New York
Branch, as Liquidity Provider
4.7 Trust Supplement No. 1997-4A-O, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.8 Trust Supplement No. 1997-4A-S, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.9 Trust Supplement No. 1997-4B-O, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.10 Trust Supplement No. 1997-4B-S, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.11 Trust Supplement No. 1997-4C-O, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.12 Trust Supplement No. 1997-4C-S, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.13 Intercreditor Agreement, dated October 23, 1997, among Wilmington
Trust Company, as Trustee, ABN AMRO Bank N.V., Chicago Branch,
and Westdeutsche Landesbank Girozentrale, New York Branch, as
Liquidity Providers, and Wilmington Trust Company, as
Subordination Agent and Trustee
4.14 Deposit Agreement (Class A), dated October 23, 1997, between
First Security Bank, National Association, as Escrow Agent, and
Credit Suisse First Boston, New York Branch, as Depositary
4.15 Deposit Agreement (Class B), dated October 23, 1997, between
First Security Bank, National Association, as Escrow Agent, and
Credit Suisse First Boston, New York Branch, as Depositary
4.16 Deposit Agreement (Class C), dated October 23, 1997, between
First Security Bank, National Association, as Escrow Agent, and
Credit Suisse First Boston, New York Branch, as Depositary
4.17 Escrow and Paying Agent Agreement (Class A), dated October 23,
1997, among First Security Bank, National Association, as Escrow
Agent, Morgan Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Chase Securities Inc. and Salomon Brothers
Inc, as Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent
4.18 Escrow and Paying Agent Agreement (Class B), dated October 23,
1997, among First Security Bank, National Association, as Escrow
Agent, Morgan Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Chase Securities Inc. and Salomon Brothers
Inc, as Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent
4.19 Escrow and Paying Agent Agreement (Class C), dated October 23,
1997, among First Security Bank, National Association, as Escrow
Agent, Morgan Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Chase Securities Inc. and Salomon Brothers
Inc, as Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent
4.20 Note Purchase Agreement, dated October 23, 1997, among
Continental Airlines, Inc., Wilmington Trust Company, as Trustee,
Wilmington Trust Company, as Subordination Agent, First Security
Bank, National Association, as Escrow Agent, and Wilmington Trust
Company, as Paying Agent
4.21 Form of Leased Aircraft Participation Agreement (Participation
Agreement among Continental Airlines, Inc., Lessee,
[______________], Owner Participant, First Security Bank,
National Association, Owner Trustee, Wilmington Trust Company,
Mortgagee and Loan Participant) (Exhibit A-1 to Note Purchase
Agreement)
4.22 Form of Lease (Lease Agreement between First Security Bank,
National Association, Lessor, and Continental Airlines, Inc.,
Lessee) (Exhibit A-2 to Note Purchase Agreement)
4.23 Form of Leased Aircraft Indenture (Trust Indenture and Mortgage
between First Security Bank, National Association, Owner Trustee,
and Wilmington Trust Company, Mortgagee) (Exhibit A-3 to Note
Purchase Agreement)
4.24 Form of Leased Aircraft Trust Agreement (Trust Agreement between
[________] and First Security Bank, National Association)
(Exhibit A-5 to Note Purchase Agreement)
4.25 Form of Special Indenture (Trust Indenture and Mortgage between
First Security Bank, National Association, Owner Trustee and
Wilmington Trust Company, Mortgagee) (Exhibit A-6 to Note
Purchase Agreement)
4.26 Form of Owned Aircraft Participation Agreement (Participation
Agreement among Continental Airlines, Inc., Owner, and Wilmington
Trust Company, as Mortgagee, Subordination Agent and Trustee)
(Exhibit C-1 to Note Purchase Agreement)
4.27 Form of Owned Aircraft Indenture (Trust Indenture and Mortgage
between Continental Airlines, Inc., Owner, and Wilmington Trust
Company, Mortgagee) (Exhibit C-2 to Note Purchase Agreement)
4.28 6.90% Continental Airlines Pass Through Certificate 1997-4A-O,
Certificate No. 1
4.29 6.90% Continental Airlines Pass Through Certificate 1997-4A-O,
Certificate No. 2
4.30 6.90% Continental Airlines Pass Through Certificate 1997-4A-O,
Certificate No. 3
4.31 6.90% Continental Airlines Pass Through Certificate 1997-4B-O,
Certificate No. 1
4.32 6.80% Continental Airlines Pass Through Certificate 1997-4C-O,
Certificate No. 1
23.1 Consent of Aircraft Information Services, Inc.
23.2 Consent of BK Associates, Inc.
23.3 Consent of Morten Beyer and Agnew, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Continental
Airlines, Inc. has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONTINENTAL AIRLINES, INC.
By /s/ JEFFERY A. SMISEK
---------------------------
Jeffery A. Smisek
Executive Vice President
and General Counsel
November 6, 1997
EXHIBIT INDEX
4.1 Revolving Credit Agreement (1997-4A), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and ABN AMRO Bank N.V., Chicago Branch, as Liquidity
Provider
4.2 Revolving Credit Agreement (1997-4A), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and Westdeutsche Landesbank Girozentrale, New York
Branch, as Liquidity Provider
4.3 Revolving Credit Agreement (1997-4B), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and ABN AMRO Bank N.V., Chicago Branch, as Liquidity
Provider
4.4 Revolving Credit Agreement (1997-4B), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and Westdeutsche Landesbank Girozentrale, New York
Branch, as Liquidity Provider
4.5 Revolving Credit Agreement (1997-4C), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and ABN AMRO Bank N.V., Chicago Branch, as Liquidity
Provider
4.6 Revolving Credit Agreement (1997-4C), dated October 23, 1997,
between Wilmington Trust Company, as Subordination Agent, as
Borrower, and Westdeutsche Landesbank Girozentrale, New York
Branch, as Liquidity Provider
4.7 Trust Supplement No. 1997-4A-O, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.8 Trust Supplement No. 1997-4A-S, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.9 Trust Supplement No. 1997-4B-O, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.10 Trust Supplement No. 1997-4B-S, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.11 Trust Supplement No. 1997-4C-O, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.12 Trust Supplement No. 1997-4C-S, dated October 23, 1997, between
Wilmington Trust Company, as Trustee, and Continental Airlines,
Inc. to Pass Through Agreement, dated September 25, 1997
4.13 Intercreditor Agreement, dated October 23, 1997, among Wilmington
Trust Company, as Trustee, ABN AMRO Bank N.V., Chicago Branch,
and Westdeutsche Landesbank Girozentrale, New York Branch, as
Liquidity Providers, and Wilmington Trust Company, as
Subordination Agent and Trustee
4.14 Deposit Agreement (Class A), dated October 23, 1997, between
First Security Bank, National Association, as Escrow Agent, and
Credit Suisse First Boston, New York Branch, as Depositary
4.15 Deposit Agreement (Class B), dated October 23, 1997, between
First Security Bank, National Association, as Escrow Agent, and
Credit Suisse First Boston, New York Branch, as Depositary
4.16 Deposit Agreement (Class C), dated October 23, 1997, between
First Security Bank, National Association, as Escrow Agent, and
Credit Suisse First Boston, New York Branch, as Depositary
4.17 Escrow and Paying Agent Agreement (Class A), dated October 23,
1997, among First Security Bank, National Association, as Escrow
Agent, Morgan Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Chase Securities Inc. and Salomon Brothers
Inc, as Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent
4.18 Escrow and Paying Agent Agreement (Class B), dated October 23,
1997, among First Security Bank, National Association, as Escrow
Agent, Morgan Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Chase Securities Inc. and Salomon Brothers
Inc, as Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent
4.19 Escrow and Paying Agent Agreement (Class C), dated October 23,
1997, among First Security Bank, National Association, as Escrow
Agent, Morgan Stanley & Co. Incorporated, Credit Suisse First
Boston Corporation, Chase Securities Inc. and Salomon Brothers
Inc, as Underwriters, Wilmington Trust Company, as Trustee, and
Wilmington Trust Company, as Paying Agent
4.20 Note Purchase Agreement, dated October 23, 1997, among
Continental Airlines, Inc., Wilmington Trust Company, as Trustee,
Wilmington Trust Company, as Subordination Agent, First Security
Bank, National Association, as Escrow Agent, and Wilmington Trust
Company, as Paying Agent
4.21 Form of Leased Aircraft Participation Agreement (Participation
Agreement among Continental Airlines, Inc., Lessee,
[______________], Owner Participant, First Security Bank,
National Association, Owner Trustee, Wilmington Trust Company,
Mortgagee and Loan Participant) (Exhibit A-1 to Note Purchase
Agreement)
4.22 Form of Lease (Lease Agreement between First Security Bank,
National Association, Lessor, and Continental Airlines, Inc.,
Lessee) (Exhibit A-2 to Note Purchase Agreement)
4.23 Form of Leased Aircraft Indenture (Trust Indenture and Mortgage
between First Security Bank, National Association, Owner Trustee,
and Wilmington Trust Company, Mortgagee) (Exhibit A-3 to Note
Purchase Agreement)
4.24 Form of Leased Aircraft Trust Agreement (Trust Agreement between
[________] and First Security Bank, National Association)
(Exhibit A-5 to Note Purchase Agreement)
4.25 Form of Special Indenture (Trust Indenture and Mortgage between
First Security Bank, National Association, Owner Trustee and
Wilmington Trust Company, Mortgagee) (Exhibit A-6 to Note
Purchase Agreement)
4.26 Form of Owned Aircraft Participation Agreement (Participation
Agreement among Continental Airlines, Inc., Owner, and Wilmington
Trust Company, as Mortgagee, Subordination Agent and Trustee)
(Exhibit C-1 to Note Purchase Agreement)
4.27 Form of Owned Aircraft Indenture (Trust Indenture and Mortgage
between Continental Airlines, Inc., Owner, and Wilmington Trust
Company, Mortgagee) (Exhibit C-2 to Note Purchase Agreement)
4.28 6.90% Continental Airlines Pass Through Certificate 1997-4A-O,
Certificate No. 1
4.29 6.90% Continental Airlines Pass Through Certificate 1997-4A-O,
Certificate No. 2
4.30 6.90% Continental Airlines Pass Through Certificate 1997-4A-O,
Certificate No. 3
4.31 6.90% Continental Airlines Pass Through Certificate 1997-4B-O,
Certificate No. 1
4.32 6.80% Continental Airlines Pass Through Certificate 1997-4C-O,
Certificate No. 1
23.1 Consent of Aircraft Information Services, Inc.
23.2 Consent of BK Associates, Inc.
23.3 Consent of Morten Beyer and Agnew, Inc.
EXECUTION COPY
________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1997-4A)
Dated as of October 23, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-4A
as Borrower
and
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1997-4A
6.90% Continental Airlines Pass Through Certificates,
Series 1997-4A
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms ....................................... 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances ................................................ 8
Section 2.02. Making the Advances ......................................... 8
Section 2.03. Fees ........................................................ 10
Section 2.04. Reduction or Termination of the Maximum Commitment .......... 10
Section 2.05. Repayments of Interest Advances or the Final Advance ........ 10
Section 2.06. Repayments of Provider Advances ............................. 11
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement ..................................... 12
Section 2.08. Book Entries ................................................ 12
Section 2.09. Payments from Available Funds Only .......................... 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance ......... 13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs ............................................. 13
Section 3.02. Capital Adequacy ............................................ 14
Section 3.03. Payments Free of Deductions ................................. 15
Section 3.04. Payments .................................................... 16
Section 3.05. Computations ................................................ 16
Section 3.06. Payment on Non-Business Days ................................ 16
Section 3.07. Interest .................................................... 16
Section 3.08. Replacement of Borrower ..................................... 18
Section 3.09. Funding Loss Indemnification ................................ 18
Section 3.10. Illegality .................................................. 18
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 ....... 19
Section 4.02. Conditions Precedent to Borrowing ........................... 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower ....................... 21
Section 5.02. Negative Covenants of the Borrower .......................... 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default ................................. 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. ............................................ 22
Section 7.02. Notices, Etc. ............................................... 22
Section 7.03. No Waiver; Remedies ......................................... 23
Section 7.04. Further Assurances .......................................... 23
Section 7.05. Indemnification; Survival of Certain Provisions ............. 23
Section 7.06. Liability of the Liquidity Provider ......................... 24
Section 7.07. Costs, Expenses and Taxes ................................... 24
Section 7.08. Binding Effect; Participations .............................. 25
Section 7.09. Severability ................................................ 27
Section 7.10. GOVERNING LAW ............................................... 27
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity .......................................... 27
Section 7.12. Execution in Counterparts ................................... 28
Section 7.13. Entirety .................................................... 28
Section 7.14. Headings .................................................... 28
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 7.15. Transfer .................................................... 28
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES ............ 28
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of October 23, 1997, between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class A Trust (as defined below)
(the "BORROWER"), and ABN AMRO BANK N.V., a bank organized under the laws of The
Netherlands, acting through its Chicago branch (the "LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class A Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class A Trust is issuing the Class A
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (x) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75%, or (y) with respect to any Unapplied
Provider Advance that is a LIBOR Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1997-4A-O, dated as of the date hereof, relating to the
Class A Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"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 Houston,
Texas, New York, New York, Amsterdam, The Netherlands, or, so long as any
Class A Certificate is outstanding, the city and state in which the Class A
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"CERTIFICATES OF DEPOSIT" has the meaning assigned to such term in the
Deposit Agreement.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated October 23, 1997
between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York branch, as Depositary, pertaining to
the Class A Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law (excluding
from change in applicable law for this purpose a change in an applicable
treaty or other change in law affecting the applicability of a treaty)
after the date hereof, or in the case of a successor Liquidity Provider
(including a transferee of an Advance) or Lending Office, after the date on
which such successor Liquidity Provider obtains its interest or on which
the Lending Office is changed, and (ii) any withholding Taxes imposed by
the United States which are imposed or increased as a result of the
Liquidity Provider failing to deliver to the Borrower any certificate or
document (which certificate or document in the good faith judgment of the
Liquidity Provider it is legally entitled to provide) which is reasonably
requested by the Borrower to establish that payments under this Agreement
are exempt from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means October 21, 1998, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following either
(x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance (or, in the case of an Unapplied Downgrade
Advance, the period beginning on the Expiry Date) or (y) the
withdrawal of funds from the Class A Cash Collateral Account for
the purpose of paying interest on the Class A Certificates as
contemplated by Section 2.06(a) hereof and, in either case,
ending on the next Regular Distribution Date (or ending, in the
case of an Interest Period applicable to any Unapplied Provider
Advance, on the numerically corresponding day in the first or
sixth calendar month after the first day of the applicable
Interest Period and/or on the next Regular Distribution Date, as
Continental may select by providing notice thereof to the
Borrower and the Liquidity Provider no later than three Business
Days prior to the commencement of such Interest Period, PROVIDED
that if Continental shall not provide such a notice at least
three Business Days prior to the commencement of such Interest
Period, then Continental shall be deemed to have selected an
Interest Period ending on the next Regular Distribution Date);
and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date (or ending, in the case of an Interest
Period applicable to any Unapplied Provider Advance, on the
numerically corresponding day in the first or sixth calendar
month after the first day of the applicable Interest Period
and/or on the next Regular Distribution Date, as Continental may
select by providing notice thereof to the Borrower and the
Liquidity Provider no later than three Business Days prior to the
commencement of such Interest Period, PROVIDED that if
Continental shall not provide such a notice at least three
Business Days prior to the commencement of such Interest Period,
then Continental shall be deemed to have selected an Interest
Period ending on the next Regular Distribution Date);
PROVIDED, HOWEVER, that (I) if an Unapplied Provider Advance which is a
LIBOR Advance becomes an Applied Provider Advance, the Interest Period then
applicable to such Unapplied Provider Advance shall be applicable to such
Applied Provider Advance and (II) if (x) the Final Advance shall have been
made, or (y) other outstanding Advances shall have been converted into the
Final Advance, then the Interest Periods shall be successive periods of one
month beginning on the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Final Advance (in
the case of clause (x) above) or the Regular Distribution Date following
such conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; PROVIDED that the 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 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (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)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x)
$26,182,964.50, and (y) the Stated Portion of the Required Amount on such
day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"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.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated October
16, 1997 relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, 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 Class A Certificates, that would be payable on the Class A
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class A Certificates on such day and without regard to
expected future payments of principal on the Class A Certificates.
"STATED PORTION" means 50%.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1997-4A-S.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Continental pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class A Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"ABN AMRO FEE LETTER", "ABN AMRO SUB-ACCOUNT", "CERTIFICATES", "CLASS A
CASH COLLATERAL ACCOUNT", "CLASS A CERTIFICATES", "CLASS A
CERTIFICATEHOLDERS", "CLASS A TRUST", "CLASS A TRUST AGREEMENT", "CLASS A
TRUSTEE", "CLASS B CERTIFICATES", "CLASS C CERTIFICATES", "CLOSING DATE",
"CONTINENTAL", "CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING PARTY",
"CORPORATE TRUST OFFICE", "DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION
DATE", "DOWNGRADED FACILITY", "EQUIPMENT NOTES", "FINAL MATURITY DATE",
"FINANCING AGREEMENT", "INDENTURE", "INTEREST PAYMENT Date", "INVESTMENT
EARNINGS", "LIQUIDITY FACILITY", "LIQUIDITY OBLIGATIONS", "LOAN TRUSTEE",
"MOODY'S", "NON-EXTENDED FACILITY", "NOTE PURCHASE AGREEMENT", "OPERATIVE
AGREEMENTS", "PERFORMING EQUIPMENT NOTE", "PERSON", "POOL BALANCE", "RATING
AGENCY", "RATINGS CONFIRMATION", "REGULAR DISTRIBUTION DATE", "REPLACEMENT
LIQUIDITY FACILITY", "RESPONSIBLE OFFICER", "SCHEDULED PAYMENT", "SPECIAL
PAYMENT", "STANDARD & POOR'S", "STATED INTEREST RATE", "SUBORDINATION
AGENT", "TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST AGREEMENTS",
"TRUSTEE", "UNDERWRITERS", "UNDERWRITING AGREEMENT" and "WRITTEN NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of the Stated Portion of interest on the Class A
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of such
Interest Advance (subject to reinstatement as provided in the next sentence).
Upon repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if
this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement shall have been delivered to the Borrower as contemplated by said
Section 3.6(d) within the time period specified in such Section) by delivery to
the Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex II attached hereto, signed by a Responsible
Officer of the Borrower, in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the ABN AMRO Sub-Account of the Class A
Cash Collateral Account in accordance with said Section 3.6(d) and Section
3.6(f) of the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating issued
by either Rating Agency below the applicable Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the ABN AMRO Sub-Account of the Class A Cash
Collateral Account in accordance with said Section 3.6(c) and Section 3.6(f) of
the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the ABN AMRO Sub-Account of the Class A Cash Collateral Account (in
accordance with Section 3.6(i) of the Intercreditor Agreement) and Section
3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE OF
BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the ABN AMRO
Sub-Account of the Class A Cash Collateral Account, the Liquidity Provider shall
have no interest in or rights to the Class A Cash Collateral Account, any
Sub-Account thereof, such Advance or any other amounts from time to time on
deposit in the Class A Cash Collateral Account or any Sub-Account thereof;
PROVIDED that the foregoing shall not affect or impair the obligations of the
Subordination Agent to make the distributions contemplated by Section 3.6(e) or
(f) of the Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions of this
Agreement, the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. FEES. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the ABN AMRO Fee Letter.
Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT. (a)
AUTOMATIC REDUCTION. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class A
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to the Stated Portion of such reduced Required Amount (as
calculated by the Borrower). The Borrower shall give notice of any such
automatic reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any such
notice shall not affect such automatic reduction of the Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID ADVANCE"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the ABN AMRO
Sub-Account of the Class A Cash Collateral Account, invested and withdrawn from
the ABN AMRO Sub-Account of the Class A Cash Collateral Account as set forth in
Sections 3.6(c), (d) and (f) of the Intercreditor Agreement. The Borrower agrees
to pay to the Liquidity Provider, on each Regular Distribution Date, commencing
on the first Regular Distribution Date after the making of a Provider Advance,
interest on the principal amount of any such Provider Advance as provided in
Section 3.07; PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the ABN AMRO Sub-Account of the Class A Cash Collateral Account
for the purpose of paying interest on the Class A Certificates in accordance
with Section 3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the ABN AMRO Sub-Account of
the Class A Cash Collateral Account on account of a reduction in the Required
Amount, the Borrower shall repay to the Liquidity Provider a portion of the
Provider Advances in a principal amount equal to the Stated Portion of such
reduction, plus interest on the principal amount prepaid as provided in Section
3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the ABN AMRO Sub-Account of the
Class A Cash Collateral Account of any amount pursuant to clause "THIRD" of
Section 2.4(b) of the Intercreditor Agreement, clause "THIRD" of Section 3.2 of
the Intercreditor Agreement or clause "FOURTH" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "REPLENISHMENT AMOUNT") for the
purpose of replenishing or increasing the balance thereof up to the Stated
Portion of the Required Amount at such time, (i) the aggregate outstanding
principal amount of all Applied Provider Advances (and of Provider Advances
treated as an Interest Advance for purposes of determining the Applicable
Liquidity Rate for interest payable thereon) shall be automatically reduced by
the amount of such Replenishment Amount and (ii) the aggregate outstanding
principal amount of all Unapplied Provider Advances shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the ABN AMRO
Sub-Account of the Class A Cash Collateral Account after giving effect to any
Applied Provider Advance on the date of such replacement shall be reimbursed to
the Liquidity Provider, but only to the extent such amounts are necessary to
repay in full to the Liquidity Provider all amounts owing to it hereunder.
Section 2.07. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the Stated
Portion of amounts that constitute Scheduled Payments, Special Payments or
payments under Section 8.1 or 9.1, as the case may be, of the Participation
Agreements and Section 6 of the Note Purchase Agreement and only to the extent
that the Borrower shall have sufficient income or proceeds therefrom to enable
the Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable or
liability under this Agreement except as expressly provided in this Agreement,
the Intercreditor Agreement or any Participation Agreement. Amounts on deposit
in the ABN AMRO Sub-Account of the Class A Cash Collateral Account shall be
available to the Borrower to make payments under this Agreement only to the
extent and for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement. Amounts on deposit in the other Sub-Account in respect
of the Class A Certificates shall not be available to make payments under this
Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class A Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall be prima facie
evidence of the amounts owed under this Section.
Section 3.03. PAYMENTS FREE OF DEDUCTIONS. (a) All payments made by
the Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "NON-EXCLUDED TAX"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
payment required under clause (ii) hereof) and make such reports or returns in
connection therewith at the time or times and in the manner prescribed by
applicable law, and (ii) pay to the Borrower an additional amount which (after
deduction of all such Taxes) will be sufficient to yield to the Borrower the
full amount which would have been received by it had no such withholding or
deduction been made. Within 30 days after the date of each payment hereunder,
the Liquidity Provider shall furnish to the Borrower the original or a certified
copy of (or other documentary evidence of) the payment of the Taxes applicable
to such payment.
Section 3.04. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to ABN AMRO Bank, New York, N.Y.,
ABA # 026009580, Account Name: ABN AMRO Bank, Chicago CPU, Account No.
650-001-1789-41, Account Name: Continental Airlines, Inc.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of such
Advance (or, in the case of an Applied Provider Advance, from and including the
date on which the amount thereof was withdrawn from the ABN AMRO Sub-Account of
the Class A Cash Collateral Account to pay interest on the Class A Certificates)
to but excluding the date such principal amount shall be paid in full (or, in
the case of an Applied Provider Advance, the date on which the Class A Cash
Collateral Account is fully replenished in respect of such Advance) and (ii) any
other amount due hereunder (whether fees, commissions, expenses or other amounts
or, to the extent permitted by law, installments of interest on Advances or any
such other amount) which is not paid when due (whether at stated maturity, by
acceleration or otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such case, at a
fluctuating interest rate per annum for each day equal to the Applicable
Liquidity Rate (as defined below) for such Advance or such other amount as in
effect for such day, but in no event at a rate per annum greater than the
maximum rate permitted by applicable law; PROVIDED, HOWEVER, that, if at any
time the otherwise applicable interest rate as set forth in this Section 3.07
shall exceed the maximum rate permitted by applicable law, then any subsequent
reduction in such interest rate will not reduce the rate of interest payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest accrued equals the amount of interest that
would have accrued if such otherwise applicable interest rate as set forth in
this Section 3.07 had at all times been in effect.
(b) Except as provided in clause (e) below, each Advance will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each Unapplied Downgrade Advance (i) during the period from and
including the date of the making of such Unapplied Downgrade Advance through but
excluding the Expiry Date (or, if earlier, the date of repayment thereof or of
conversion thereof into a Final Advance), shall bear interest in an amount equal
to the Investment Earnings on amounts on deposit in the ABN AMRO Sub-Account of
the Class A Cash Collateral Account for such period plus .325% per annum
(through and including the first anniversary of the date of this Agreement) or
.35% (after the first anniversary of the date of this Agreement) on the amount
of such Unapplied Downgrade Advance from time to time during such period,
payable in arrears on each Regular Distribution Date and (ii) thereafter, shall
be a LIBOR Advance and shall bear interest in accordance with clause (c) above.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law, installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document
delivered pursuant to paragraphs (i), (ii) and (iii), each in form and
substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class A Certificates;
(v) An executed copy of each document, instrument, certificate and
opinion delivered on or before the Closing Date pursuant to the Class
A Trust Agreement, the Intercreditor Agreement and the other Operative
Agreements (in the case of each such opinion, other than the opinion
of counsel for the Underwriters, either addressed to the Liquidity
Provider or accompanied by a letter from the counsel rendering such
opinion to the effect that the Liquidity Provider is entitled to rely
on such opinion as of its date as if it were addressed to the
Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in full
force and effect, all filings, recordings and/or registrations, and
there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider, and
such other information as the Liquidity Provider shall reasonably
request with respect to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section 8.2.1 of the
Leases (related to Leased Aircraft) or the corresponding section of
the Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of Continental;
and
(viii)Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other
Operative Agreements as the Liquidity Provider shall have reasonably
requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of
the Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent shall have
been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after
the date hereof as from time to time may be reasonably requested by the
Liquidity Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.07 and 2.09 hereof,
all Advances (including, without limitation, any Provider Advance and Applied
Provider Advance), any accrued interest thereon and any other amounts
outstanding hereunder to become immediately due and payable to the Liquidity
Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #760
Chicago, IL 60674-9135
Attention: Claudia Heldring
Telephone: (312) 904-2900
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
Attention: Loan Operations
Telephone: (312) 904-2836
Telecopy: (312) 606-8428
West LB
Asset Based Finance
1211 Avenue of the Americas
New York, NY 10036
Attention: Loan Administration
Telephone: (212) 852-6152
Telecopy: (212) 302-7946
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
ABN AMRO Fee Letter (regardless of whether indemnified against pursuant to said
Sections or in such ABN AMRO Fee Letter)), that may be imposed, incurred by or
asserted against any Liquidity Indemnitee, in any way relating to, resulting
from, or arising out of or in connection with any action, suit or proceeding by
any third party against such Liquidity Indemnitee and relating to this
Agreement, the ABN AMRO Fee Letter, the Intercreditor Agreement or any Financing
Agreement; PROVIDED, HOWEVER, that the Borrower shall not be required to
indemnify, protect, defend and hold harmless any Liquidity Indemnitee in respect
of any Expense of such Liquidity Indemnitee to the extent such Expense is (i)
attributable to the gross negligence or willful misconduct of such Liquidity
Indemnitee or any other Liquidity Indemnitee, (ii) ordinary and usual operating
overhead expense, or (iii) attributable to the failure by such Liquidity
Indemnitee or any other Liquidity Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in this
Agreement, the Intercreditor Agreement, the ABN AMRO Fee Letter, the Tax Letter
or any other Operative Agreement to which it is a party. The indemnities
contained in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements, and the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07
hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; PROVIDED, HOWEVER, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
director or affiliates shall be liable or responsible in any respect for (i) any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with this Agreement or
any Notice of Borrowing delivered hereunder, or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class A Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03(a) and the like as they pertain to the Liquidity Provider shall be deemed
also to include those of each of its participants (subject, in each case, to the
maximum amount that would have been incurred by or attributable to the Liquidity
Provider directly if the Liquidity Provider, rather than the participant, had
held the interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. 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 7.02 hereof, or at such
other address of which the Liquidity Provider 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 sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR 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. The Borrower and
the Liquidity Provider each warrant and represent 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 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 or of any State and waives
any immunity any of its properties located in the United States 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.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class A
Trust, as Borrower
By:______________________________________
Name:
Title:
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
By:______________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4A) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the Stated Portion of the interest
on the Class A Certificates which was payable on ____________, ____ (the
"DISTRIBUTION DATE") in accordance with the terms and provisions of the
Class A Trust Agreement and the Class A Certificates, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the Stated
Portion of the interest which was due and payable on the Class A
Certificates on the Distribution Date, (ii) does not include any amount
with respect to the payment of principal of, or premium on, the Class A
Certificates, the Class B Certificates or the Class C Certificates, or
interest on the Class B Certificates or the Class C Certificates, (iii) was
computed in accordance with the provisions of the Class A Certificates, the
Class A Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the
Maximum Available Commitment on the date hereof, (v) does not include any
amount of interest which was due and payable on the Class A Certificates on
such Distribution Date but which remains unpaid due to the failure of the
Depositary to pay any amount of accrued interest on the Certificates of
Deposit on such Distribution Date and (vi) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:______________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4A) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the ABN AMRO Sub-Account of the Class A Cash Collateral Account
in accordance with Section 3.6(d) of the Intercreditor Agreement, which
Advance is requested to be made on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the ABN AMRO
Sub-Account of the Class A Cash Collateral Account in accordance with
Section 3.6(d) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class A Certificates, or principal of, or interest or premium on, the Class
B Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class A Certificates, the Class A
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class A Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(d) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:______________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice of
Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4A) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the
funding of the ABN AMRO Sub-Account of the Class A Cash Collateral Account
in accordance with Section 3.6(c) of the Intercreditor Agreement by reason
of the downgrading of the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating, which
Advance is requested to be made on __________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the ABN AMRO
Sub-Account of the Class A Cash Collateral Account in accordance with
Section 3.6(c) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class A Certificates, or principal of, or interest or premium on, the Class
B Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class A Certificates, the Class A
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class A Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(c) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:______________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of
Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4A) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding
of the ABN AMRO Sub-Account of the Class A Cash Collateral Account in
accordance with Section 3.6(i) of the Intercreditor Agreement by reason of
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider with respect to the Liquidity Agreement, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class A Certificates, or
principal of, or interest or premium on, the Class B Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class A Certificates, the Class A Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class A Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(i) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:______________________________________
Name:
Title:
_________________
Bracketed language may be included at Borrower's option.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4A-[O/S], as Borrower, and
ABN AMRO BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
By:______________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class A Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4A-[O/S], as Borrower, and
ABN AMRO BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
______________________________
[Name of Transferee]
______________________________
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:______________________________________
Name:
Title:
EXECUTION COPY
________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1997-4A)
Dated as of October 23, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-4A
as Borrower
and
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
New York branch
as Liquidity Provider
________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1997-4A
6.90% Continental Airlines Pass Through Certificates,
Series 1997-4A
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms ........................................ 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances ................................................. 8
Section 2.02. Making the Advances .......................................... 8
Section 2.03. Fees ......................................................... 10
Section 2.04. Reduction or Termination of the Maximum Commitment ........... 10
Section 2.05. Repayments of Interest Advances or the Final Advance ......... 10
Section 2.06. Repayments of Provider Advances .............................. 11
Section 2.07. Payments to the Liquidity Provider Under the Intercreditor
Agreement .................................................... 12
Section 2.08. Book Entries ................................................. 12
Section 2.09. Payments from Available Funds Only ........................... 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance .......... 13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs .............................................. 13
Section 3.02. Capital Adequacy ............................................. 14
Section 3.03. Payments Free of Deductions .................................. 15
Section 3.04. Payments ..................................................... 16
Section 3.05. Computations ................................................. 16
Section 3.06. Payment on Non-Business Days ................................. 16
Section 3.07. Interest ..................................................... 16
Section 3.08. Replacement of Borrower ...................................... 18
Section 3.09. Funding Loss Indemnification ................................. 18
Section 3.10. Illegality ................................................... 18
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 ........ 19
Section 4.02. Conditions Precedent to Borrowing ............................ 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower ........................ 21
Section 5.02. Negative Covenants of the Borrower ........................... 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default .................................. 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. ............................................. 22
Section 7.02. Notices, Etc. ................................................ 22
Section 7.03. No Waiver; Remedies .......................................... 23
Section 7.04. Further Assurances ........................................... 23
Section 7.05. Indemnification; Survival of Certain Provisions .............. 23
Section 7.06. Liability of the Liquidity Provider .......................... 24
Section 7.07. Costs, Expenses and Taxes .................................... 24
Section 7.08. Binding Effect; Participations ............................... 25
Section 7.09. Severability ................................................. 27
Section 7.10. GOVERNING LAW ................................................ 27
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity ........................................... 27
Section 7.12. Execution in Counterparts .................................... 28
Section 7.13. Entirety ..................................................... 28
Section 7.14. Headings ..................................................... 28
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 7.15. Transfer ..................................................... 28
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES ............. 28
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of October 23, 1997, between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class A Trust (as defined below)
(the "BORROWER"), and WESTDEUTSCHE LANDESBANK GIROZENTRALE, a bank organized
under the laws of the State of North Rhine-Westphalia, Germany, acting through
its New York branch ("WEST LB") (the "LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class A Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class A Trust is issuing the Class A
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (x) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75% or (y) with respect to any Unapplied
Provider Advance that is a LIBOR Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1997-4A-O, dated as of the date hereof, relating to the
Class A Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"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 Houston,
Texas, New York, New York, Amsterdam, The Netherlands, or, so long as any
Class A Certificate is outstanding, the city and state in which the Class A
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"CERTIFICATES OF DEPOSIT" has the meaning assigned to such term in the
Deposit Agreement.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated October 23, 1997
between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York branch, as Depositary, pertaining to
the Class A Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law (excluding
from change in applicable law for this purpose a change in an applicable
treaty or other change in law affecting the applicability of a treaty)
after the date hereof, or in the case of a successor Liquidity Provider
(including a transferee of an Advance) or Lending Office, after the date on
which such successor Liquidity Provider obtains its interest or on which
the Lending Office is changed, and (ii) any withholding Taxes imposed by
the United States which are imposed or increased as a result of the
Liquidity Provider failing to deliver to the Borrower any certificate or
document (which certificate or document in the good faith judgment of the
Liquidity Provider it is legally entitled to provide) which is reasonably
requested by the Borrower to establish that payments under this Agreement
are exempt from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means October 21, 1998, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following either
(x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance (or, in the case of an Unapplied Downgrade
Advance, the period beginning on the Expiry Date) or (y) the
withdrawal of funds from the Class A Cash Collateral Account for
the purpose of paying interest on the Class A Certificates as
contemplated by Section 2.06(a) hereof and, in either case,
ending on the next Regular Distribution Date (or ending, in the
case of an Interest Period applicable to any Unapplied Provider
Advance, on the numerically corresponding day in the first or
sixth calendar month after the first day of the applicable
Interest Period and/or on the next Regular Distribution Date, as
Continental may select by providing notice thereof to the
Borrower and the Liquidity Provider no later than three Business
Days prior to the commencement of such Interest Period, PROVIDED
that if Continental shall not provide such a notice at least
three Business Days prior to the commencement of such Interest
Period, then Continental shall be deemed to have selected an
Interest Period ending on the next Regular Distribution Date);
and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date (or ending, in the case of an Interest
Period applicable to any Unapplied Provider Advance, on the
numerically corresponding day in the first or sixth calendar
month after the first day of the applicable Interest Period
and/or on the next Regular Distribution Date, as Continental may
select by providing notice thereof to the Borrower and the
Liquidity Provider no later than three Business Days prior to the
commencement of such Interest Period, PROVIDED that if
Continental shall not provide such a notice at least three
Business Days prior to the commencement of such Interest Period,
then Continental shall be deemed to have selected an Interest
Period ending on the next Regular Distribution Date);
PROVIDED, HOWEVER, that (I) if an Unapplied Provider Advance which is a
LIBOR Advance becomes an Applied Provider Advance, the Interest Period then
applicable to such Unapplied Provider Advance shall be applicable to such
Applied Provider Advance and (II) if (x) the Final Advance shall have been
made, or (y) other outstanding Advances shall have been converted into the
Final Advance, then the Interest Periods shall be successive periods of one
month beginning on the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Final Advance (in
the case of clause (x) above) or the Regular Distribution Date following
such conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at New York, New York, or such other lending office as
the Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; PROVIDED that the 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 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (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)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x)
$26,182,964.50, and (y) the Stated Portion of the Required Amount on such
day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"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.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated October
16, 1997 relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, 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 Class A Certificates, that would be payable on the Class A
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class A Certificates on such day and without regard to
expected future payments of principal on the Class A Certificates.
"STATED PORTION" means 50%.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1997-4A-S.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Continental pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class A Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"CERTIFICATES", "CLASS A CASH COLLATERAL ACCOUNT", "CLASS A CERTIFICATES",
"CLASS A CERTIFICATEHOLDERS", "CLASS A TRUST", "CLASS A TRUST AGREEMENT",
"CLASS A TRUSTEE", "CLASS B CERTIFICATES", "CLASS C CERTIFICATES", "CLOSING
DATE", "CONTINENTAL", "CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING PARTY",
"CORPORATE TRUST OFFICE", "DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION
DATE", "DOWNGRADED FACILITY", "EQUIPMENT NOTES", "FINAL MATURITY Date",
"FINANCING AGREEMENT", "INDENTURE",
"INTEREST PAYMENT DATE", "INVESTMENT EARNINGS", "LIQUIDITY FACILITY",
"LIQUIDITY OBLIGATIONS", "LOAN TRUSTEE", "MOODY'S", "NON-EXTENDED
FACILITY", "NOTE PURCHASE AGREEMENT", "OPERATIVE AGREEMENTS", "PERFORMING
EQUIPMENT NOTE", "PERSON", "POOL BALANCE", "RATING AGENCY", "RATINGS
CONFIRMATION", "REGULAR DISTRIBUTION Date", "REPLACEMENT LIQUIDITY
FACILITY", "RESPONSIBLE OFFICER", "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
"STANDARD & POOR'S", "STATED INTEREST RATE", "SUBORDINATION AGENT",
"Taxes", "THRESHOLD RATING", "TRANSFER", "TRUST AGREEMENTS", "TRUSTEE",
"UNDERWRITERS", "UNDERWRITING AGREEMENT", "WEST LB FEE LETTER", "WEST LB
SUB-ACCOUNT" and "WRITTEN NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of the Stated Portion of interest on the Class A
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of such
Interest Advance (subject to reinstatement as provided in the next sentence).
Upon repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if
this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement shall have been delivered to the Borrower as contemplated by said
Section 3.6(d) within the time period specified in such Section) by delivery to
the Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex II attached hereto, signed by a Responsible
Officer of the Borrower, in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the West LB Sub-Account of the Class A
Cash Collateral Account in accordance with said Section 3.6(d) and Section
3.6(f) of the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating issued
by either Rating Agency below the applicable Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the West LB Sub-Account of the Class A Cash Collateral
Account in accordance with said Section 3.6(c) and Section 3.6(f) of the
Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the West LB Sub-Account of the Class A Cash Collateral Account (in
accordance with Section 3.6(i) of the Intercreditor Agreement) and Section
3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE OF
BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the West LB
Sub-Account of the Class A Cash Collateral Account, the Liquidity Provider shall
have no interest in or rights to the Class A Cash Collateral Account, any
Sub-Account thereof, such Advance or any other amounts from time to time on
deposit in the Class A Cash Collateral Account or any Sub-Account thereof;
PROVIDED that the foregoing shall not affect or impair the obligations of the
Subordination Agent to make the distributions contemplated by Section 3.6(e) or
(f) of the Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions of this
Agreement, the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. FEES. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the West LB Fee Letter.
Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT. (A)
AUTOMATIC REDUCTION. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class A
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to the Stated Portion of such reduced Required Amount (as
calculated by the Borrower). The Borrower shall give notice of any such
automatic reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any such
notice shall not affect such automatic reduction of the Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID ADVANCE"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the West LB
Sub-Account of the Class A Cash Collateral Account, invested and withdrawn from
the West LB Sub-Account of the Class A Cash Collateral Account as set forth in
Sections 3.6(c), (d) and (f) of the Intercreditor Agreement. The Borrower agrees
to pay to the Liquidity Provider, on each Regular Distribution Date, commencing
on the first Regular Distribution Date after the making of a Provider Advance,
interest on the principal amount of any such Provider Advance as provided in
Section 3.07; PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the West LB Sub-Account of the Class A Cash Collateral Account
for the purpose of paying interest on the Class A Certificates in accordance
with Section 3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the West LB Sub-Account of
the Class A Cash Collateral Account on account of a reduction in the Required
Amount, the Borrower shall repay to the Liquidity Provider a portion of the
Provider Advances in a principal amount equal to the Stated Portion of such
reduction, plus interest on the principal amount prepaid as provided in Section
3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the West LB Sub-Account of the
Class A Cash Collateral Account of any amount pursuant to clause "THIRD" of
Section 2.4(b) of the Intercreditor Agreement, clause "THIRD" of Section 3.2 of
the Intercreditor Agreement or clause "FOURTH" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "REPLENISHMENT AMOUNT") for the
purpose of replenishing or increasing the balance thereof up to the Stated
Portion of the Required Amount at such time, (i) the aggregate outstanding
principal amount of all Applied Provider Advances (and of Provider Advances
treated as an Interest Advance for purposes of determining the Applicable
Liquidity Rate for interest payable thereon) shall be automatically reduced by
the amount of such Replenishment Amount and (ii) the aggregate outstanding
principal amount of all Unapplied Provider Advances shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the West LB Sub-Account
of the Class A Cash Collateral Account after giving effect to any Applied
Provider Advance on the date of such replacement shall be reimbursed to the
Liquidity Provider, but only to the extent such amounts are necessary to repay
in full to the Liquidity Provider all amounts owing to it hereunder.
Section 2.07. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the Stated
Portion of amounts that constitute Scheduled Payments, Special Payments or
payments under Section 8.1 or 9.1, as the case may be, of the Participation
Agreements and Section 6 of the Note Purchase Agreement and only to the extent
that the Borrower shall have sufficient income or proceeds therefrom to enable
the Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable or
liability under this Agreement except as expressly provided in this Agreement,
the Intercreditor Agreement or any Participation Agreement. Amounts on deposit
in the West LB Sub-Account of the Class A Cash Collateral Account shall be
available to the Borrower to make payments under this Agreement only to the
extent and for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement. Amounts on deposit in the other Sub-Account in respect
of the Class A Certificates shall not be available to make payments under this
Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class A Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall be prima facie
evidence of the amounts owed under this Section.
Section 3.03. PAYMENTS FREE OF DEDUCTIONS. (a) All payments made by
the Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "NON-EXCLUDED TAX"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
payment required under clause (ii) hereof) and make such reports or returns in
connection therewith at the time or times and in the manner prescribed by
applicable law, and (ii) pay to the Borrower an additional amount which (after
deduction of all such Taxes) will be sufficient to yield to the Borrower the
full amount which would have been received by it had no such withholding or
deduction been made. Within 30 days after the date of each payment hereunder,
the Liquidity Provider shall furnish to the Borrower the original or a certified
copy of (or other documentary evidence of) the payment of the Taxes applicable
to such payment.
Section 3.04. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to The Chase Manhattan Bank, New
York, N.Y., ABA # 021000021, Account Name: Westdeutsche Landesbank Girozentrale,
New York branch, Account No. 920-1-060663, Account Reference: Continental
Airlines Liquidity Facility A 1997-4.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of such
Advance (or, in the case of an Applied Provider Advance, from and including the
date on which the amount thereof was withdrawn from the West LB Sub-Account of
the Class A Cash Collateral Account to pay interest on the Class A Certificates)
to but excluding the date such principal amount shall be paid in full (or, in
the case of an Applied Provider Advance, the date on which the Class A Cash
Collateral Account is fully replenished in respect of such Advance) and (ii) any
other amount due hereunder (whether fees, commissions, expenses or other amounts
or, to the extent permitted by law, installments of interest on Advances or any
such other amount) which is not paid when due (whether at stated maturity, by
acceleration or otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such case, at a
fluctuating interest rate per annum for each day equal to the Applicable
Liquidity Rate (as defined below) for such Advance or such other amount as in
effect for such day, but in no event at a rate per annum greater than the
maximum rate permitted by applicable law; PROVIDED, HOWEVER, that, if at any
time the otherwise applicable interest rate as set forth in this Section 3.07
shall exceed the maximum rate permitted by applicable law, then any subsequent
reduction in such interest rate will not reduce the rate of interest payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest accrued equals the amount of interest that
would have accrued if such otherwise applicable interest rate as set forth in
this Section 3.07 had at all times been in effect.
(b) Except as provided in clause (e) below, each Advance will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each Unapplied Downgrade Advance (i) during the period from and
including the date of the making of such Unapplied Downgrade Advance through but
excluding the Expiry Date (or, if earlier, the date of repayment thereof or of
conversion thereof into a Final Advance), shall bear interest in an amount equal
to the Investment Earnings on amounts on deposit in the West LB Sub-Account of
the Class A Cash Collateral Account for such period plus .325% per annum
(through and including the first anniversary of the date of this Agreement) or
.35% (after the first anniversary of the date of this Agreement) on the amount
of such Unapplied Downgrade Advance from time to time during such period,
payable in arrears on each Regular Distribution Date and (ii) thereafter, shall
be a LIBOR Advance and shall bear interest in accordance with clause (c) above.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law, installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the
last day of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the
date for borrowing specified in the relevant notice under Section
2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document
delivered pursuant to paragraphs (i), (ii) and (iii), each in form and
substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class A Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class A Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, other than the
opinion of counsel for the Underwriters, either addressed to the
Liquidity Provider or accompanied by a letter from the counsel
rendering such opinion to the effect that the Liquidity Provider is
entitled to rely on such opinion as of its date as if it were
addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider, and
such other information as the Liquidity Provider shall reasonably
request with respect to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section 8.2.1 of the
Leases (related to Leased Aircraft) or the corresponding section of
the Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of Continental;
and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other
Operative Agreements as the Liquidity Provider shall have reasonably
requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of
the Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent shall have
been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after
the date hereof as from time to time may be reasonably requested by the
Liquidity Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.07 and 2.09 hereof,
all Advances (including, without limitation, any Provider Advance and Applied
Provider Advance), any accrued interest thereon and any other amounts
outstanding hereunder to become immediately due and payable to the Liquidity
Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: WESTDEUTSCHE LANDESBANK GIROZENTRALE
Asset Based Finance
1211 Avenue of the Americas
New York, N.Y. 10036
Attention: Brigitte Thieme
Telephone: (212) 852-6111
Telecopy: (212) 921-5947
with a copy to:
WESTDEUTSCHE LANDESBANK GIROZENTRALE
Asset Based Finance
1211 Avenue of the Americas
New York, N.Y. 10036
Attention: Loan Administration
Telephone: (212) 852-6152
Telecopy: (212) 302-7946
ABN AMRO BANK N.V.
135 South La Salle Street
Chicago, IL 60674
Attention: Loan Operations
Telephone: (312) 904-2836
Telecopy: (312) 606-8428
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
West LB Fee Letter (regardless of whether indemnified against pursuant to said
Sections or in such West LB Fee Letter)), that may be imposed, incurred by or
asserted against any Liquidity Indemnitee, in any way relating to, resulting
from, or arising out of or in connection with any action, suit or proceeding by
any third party against such Liquidity Indemnitee and relating to this
Agreement, the West LB Fee Letter, the Intercreditor Agreement or any Financing
Agreement; PROVIDED, HOWEVER, that the Borrower shall not be required to
indemnify, protect, defend and hold harmless any Liquidity Indemnitee in respect
of any Expense of such Liquidity Indemnitee to the extent such Expense is (i)
attributable to the gross negligence or willful misconduct of such Liquidity
Indemnitee or any other Liquidity Indemnitee, (ii) ordinary and usual operating
overhead expense, or (iii) attributable to the failure by such Liquidity
Indemnitee or any other Liquidity Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in this
Agreement, the Intercreditor Agreement, the West LB Fee Letter, the Tax Letter
or any other Operative Agreement to which it is a party. The indemnities
contained in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements, and the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07
hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; PROVIDED, HOWEVER, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
director or affiliates shall be liable or responsible in any respect for (i) any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with this Agreement or
any Notice of Borrowing delivered hereunder, or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class A Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03(a) and the like as they pertain to the Liquidity Provider shall be deemed
also to include those of each of its participants (subject, in each case, to the
maximum amount that would have been incurred by or attributable to the Liquidity
Provider directly if the Liquidity Provider, rather than the participant, had
held the interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. 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 7.02 hereof, or at such
other address of which the Liquidity Provider 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 sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR 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. The Borrower and
the Liquidity Provider each warrant and represent 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 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 or of any State and waives
any immunity any of its properties located in the United States 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.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class A
Trust, as Borrower
By:_____________________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By:_____________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to WESTDEUTSCHE LANDESBANK
GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-4A) dated as of October 23, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the Stated Portion of the interest
on the Class A Certificates which was payable on ____________, ____ (the
"DISTRIBUTION DATE") in accordance with the terms and provisions of the
Class A Trust Agreement and the Class A Certificates, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the Stated
Portion of the interest which was due and payable on the Class A
Certificates on the Distribution Date, (ii) does not include any amount
with respect to the payment of principal of, or premium on, the Class A
Certificates, the Class B Certificates or the Class C Certificates, or
interest on the Class B Certificates or the Class C Certificates, (iii) was
computed in accordance with the provisions of the Class A Certificates, the
Class A Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the
Maximum Available Commitment on the date hereof, (v) does not include any
amount of interest which was due and payable on the Class A Certificates on
such Distribution Date but which remains unpaid due to the failure of the
Depositary to pay any amount of accrued interest on the Certificates of
Deposit on such Distribution Date and (vi) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to WESTDEUTSCHE
LANDESBANK GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the
Revolving Credit Agreement (1997-4A) dated as of October 23, 1997, between the
Borrower and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the West LB Sub-Account of the Class A Cash Collateral Account
in accordance with Section 3.6(d) of the Intercreditor Agreement, which
Advance is requested to be made on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the West LB
Sub-Account of the Class A Cash Collateral Account in accordance with
Section 3.6(d) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class A Certificates, or principal of, or interest or premium on, the Class
B Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class A Certificates, the Class A
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class A Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(d) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice of
Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to WESTDEUTSCHE
LANDESBANK GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the
Revolving Credit Agreement (1997-4A) dated as of October __, 1997, between the
Borrower and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the
funding of the West LB Sub-Account of the Class A Cash Collateral Account
in accordance with Section 3.6(c) of the Intercreditor Agreement by reason
of the downgrading of the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating, which
Advance is requested to be made on __________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the West LB
Sub-Account of the Class A Cash Collateral Account in accordance with
Section 3.6(c) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class A Certificates, or principal of, or interest or premium on, the Class
B Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class A Certificates, the Class A
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class A Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(c) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of
Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to WESTDEUTSCHE LANDESBANK
GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-4A) dated as of October 23, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding
of the West LB Sub-Account of the Class A Cash Collateral Account in
accordance with Section 3.6(i) of the Intercreditor Agreement by reason of
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider with respect to the Liquidity Agreement, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class A Certificates, or
principal of, or interest or premium on, the Class B Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class A Certificates, the Class A Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class A Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(i) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
___________________
Bracketed language may be included at Borrower's option.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4A-[O/S], as Borrower, and
WESTDEUTSCHE LANDESBANK GIROZENTRALE (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class A Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4A-[O/S], as Borrower, and
WESTDEUTSCHE LANDESBANK GIROZENTRALE (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
EXECUTION COPY
________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1997-4B)
Dated as of October 23, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-4B
as Borrower
and
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1997-4B
6.90% Continental Airlines Pass Through Certificates,
Series 1997-4B
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms ........................................ 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances ................................................. 8
Section 2.02. Making the Advances .......................................... 8
Section 2.03. Fees ......................................................... 10
Section 2.04. Reduction or Termination of the Maximum Commitment ........... 10
Section 2.05. Repayments of Interest Advances or the Final Advance ......... 10
Section 2.06. Repayments of Provider Advances .............................. 11
Section 2.07. Payments to the Liquidity Provider Under the Intercreditor
Agreement .................................................... 12
Section 2.08. Book Entries ................................................. 12
Section 2.09. Payments from Available Funds Only ........................... 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance .......... 13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs .............................................. 13
Section 3.02. Capital Adequacy ............................................. 14
Section 3.03. Payments Free of Deductions .................................. 15
Section 3.04. Payments ..................................................... 16
Section 3.05. Computations ................................................. 16
Section 3.06. Payment on Non-Business Days ................................. 16
Section 3.07. Interest ..................................................... 16
Section 3.08. Replacement of Borrower ...................................... 18
Section 3.09. Funding Loss Indemnification ................................. 18
Section 3.10. Illegality ................................................... 18
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 ........ 19
Section 4.02. Conditions Precedent to Borrowing ............................ 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower ........................ 21
Section 5.02. Negative Covenants of the Borrower ........................... 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default .................................. 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. ............................................. 22
Section 7.02. Notices, Etc. ................................................ 22
Section 7.03. No Waiver; Remedies .......................................... 23
Section 7.04. Further Assurances ........................................... 23
Section 7.05. Indemnification; Survival of Certain Provisions .............. 23
Section 7.06. Liability of the Liquidity Provider .......................... 24
Section 7.07. Costs, Expenses and Taxes .................................... 24
Section 7.08. Binding Effect; Participations ............................... 25
Section 7.09. Severability ................................................. 27
Section 7.10. GOVERNING LAW ................................................ 27
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity ........................................... 27
Section 7.12. Execution in Counterparts .................................... 28
Section 7.13. Entirety ..................................................... 28
Section 7.14. Headings ..................................................... 28
TABLE OF CONTENTS
(CONTINUED)
PAGE
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Section 7.15. Transfer ..................................................... 28
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES ............. 28
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of October 23, 1997, between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class B Trust (as defined below)
(the "BORROWER"), and ABN AMRO BANK N.V., a bank organized under the laws of The
Netherlands, acting through its Chicago branch (the "LIQUIDITY PROVIDER").
W I T N E S S E T H:
WHEREAS, pursuant to the Class B Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class B Trust is issuing the Class B
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class B Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (x) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75%, or (y) with respect to any Unapplied
Provider Advance that is a LIBOR Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1997-4B-0, dated as of the date hereof, relating to the
Class B Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"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 Houston,
Texas, New York, New York, Amsterdam, The Netherlands, or, so long as any
Class B Certificate is outstanding, the city and state in which the Class B
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"CERTIFICATES OF DEPOSIT" has the meaning assigned to such term in the
Deposit Agreement.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated October 23, 1997
between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York branch, as Depositary, pertaining to
the Class B Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law (excluding
from change in applicable law for this purpose a change in an applicable
treaty or other change in law affecting the applicability of a treaty)
after the date hereof, or in the case of a successor Liquidity Provider
(including a transferee of an Advance) or Lending Office, after the date on
which such successor Liquidity Provider obtains its interest or on which
the Lending Office is changed, and (ii) any withholding Taxes imposed by
the United States which are imposed or increased as a result of the
Liquidity Provider failing to deliver to the Borrower any certificate or
document (which certificate or document in the good faith judgment of the
Liquidity Provider it is legally entitled to provide) which is reasonably
requested by the Borrower to establish that payments under this Agreement
are exempt from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means October 21, 1998, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following either
(x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance (or, in the case of an Unapplied Downgrade
Advance, the period beginning on the Expiry Date) or (y) the
withdrawal of funds from the Class B Cash Collateral Account for
the purpose of paying interest on the Class B Certificates as
contemplated by Section 2.06(a) hereof and, in either case,
ending on the next Regular Distribution Date (or ending, in the
case of an Interest Period applicable to any Unapplied Provider
Advance, on the numerically corresponding day in the first or
sixth calendar month after the first day of the applicable
Interest Period and/or on the next Regular Distribution Date, as
Continental may select by providing notice thereof to the
Borrower and the Liquidity Provider no later than three Business
Days prior to the commencement of such Interest Period, PROVIDED
that if Continental shall not provide such a notice at least
three Business Days prior to the commencement of such Interest
Period, then Continental shall be deemed to have selected an
Interest Period ending on the next Regular Distribution Date);
and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date (or ending, in the case of an Interest
Period applicable to any Unapplied Provider Advance, on the
numerically corresponding day in the first or sixth calendar
month after the first day of the applicable Interest Period
and/or on the next Regular Distribution Date, as Continental may
select by providing notice thereof to the Borrower and the
Liquidity Provider no later than three Business Days prior to the
commencement of such Interest Period, PROVIDED that if
Continental shall not provide such a notice at least three
Business Days prior to the commencement of such Interest Period,
then Continental shall be deemed to have selected an Interest
Period ending on the next Regular Distribution Date);
PROVIDED, HOWEVER, that (I) if an Unapplied Provider Advance which is a
LIBOR Advance becomes an Applied Provider Advance, the Interest Period then
applicable to such Unapplied Provider Advance shall be applicable to such
Applied Provider Advance and (II) if (x) the Final Advance shall have been
made, or (y) other outstanding Advances shall have been converted into the
Final Advance, then the Interest Periods shall be successive periods of one
month beginning on the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Final Advance (in
the case of clause (x) above) or the Regular Distribution Date following
such conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; PROVIDED that the 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 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (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)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x) $6,982,990,
and (y) the Stated Portion of the Required Amount on such day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"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.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated October
16, 1997 relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, 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 Class B Certificates, that would be payable on the Class B
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class B Certificates on such day and without regard to
expected future payments of principal on the Class B Certificates.
"STATED PORTION" means 50%.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1997-4B-S.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Continental pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class B Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"ABN AMRO FEE LETTER", "ABN AMRO SUB-ACCOUNT", "CERTIFICATES", "CLASS A
CERTIFICATES", "CLASS B CASH COLLATERAL ACCOUNT", "CLASS B CERTIFICATES",
"CLASS B CERTIFICATEHOLDERS", "CLASS B TRUST", "CLASS B TRUST AGREEMENT",
"CLASS B TRUSTEE", "CLASS C CERTIFICATES", "CLOSING DATE", "CONTINENTAL",
"CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING PARTY", "CORPORATE TRUST
OFFICE", "DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION DATE", "DOWNGRADED
FACILITY", "EQUIPMENT NOTES", "FINAL MATURITY DATE", "FINANCING AGREEMENT",
"INDENTURE", "INTEREST PAYMENT DATE", "INVESTMENT EARNINGS", "LIQUIDITY
FACILITY", "LIQUIDITY Obligations", "LOAN TRUSTEE", "MOODY'S",
"NON-EXTENDED FACILITY", "NOTE PURCHASE AGREEMENT", "OPERATIVE AGREEMENTS",
"PERFORMING EQUIPMENT NOTE", "PERSON", "POOL BALANCE", "RATING AGENCY",
"RATINGS CONFIRMATION", "REGULAR DISTRIBUTION DATE", "REPLACEMENT LIQUIDITY
FACILITY", "RESPONSIBLE OFFICER", "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
"STANDARD & Poor's", "STATED INTEREST RATE", "SUBORDINATION AGENT",
"TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST AGREEMENTS", "TRUSTEE",
"UNDERWRITERS", "UNDERWRITING AGREEMENT" and "WRITTEN NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of the Stated Portion of interest on the Class B
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of such
Interest Advance (subject to reinstatement as provided in the next sentence).
Upon repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if this
Agreement is not extended in accordance with Section 3.6(d) of the Intercreditor
Agreement (unless a Replacement Liquidity Facility to replace this Agreement
shall have been delivered to the Borrower as contemplated by said Section 3.6(d)
within the time period specified in such Section) by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex II attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the ABN AMRO Sub-Account of the Class B Cash
Collateral Account in accordance with said Section 3.6(d) and Section 3.6(f) of
the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating issued
by either Rating Agency below the applicable Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the ABN AMRO Sub-Account of the Class B Cash
Collateral Account in accordance with said Section 3.6(c) and Section 3.6(f) of
the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the ABN AMRO Sub-Account of the Class B Cash Collateral Account (in
accordance with Section 3.6(i) of the Intercreditor Agreement) and Section
3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE OF
BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the ABN AMRO
Sub-Account of the Class B Cash Collateral Account, the Liquidity Provider shall
have no interest in or rights to the Class B Cash Collateral Account, any
Sub-Account thereof, such Advance or any other amounts from time to time on
deposit in the Class B Cash Collateral Account or any Sub-Account thereof;
PROVIDED that the foregoing shall not affect or impair the obligations of the
Subordination Agent to make the distributions contemplated by Section 3.6(e) or
(f) of the Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions of this
Agreement, the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. FEES. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the ABN AMRO Fee Letter.
Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT. (A)
AUTOMATIC REDUCTION. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class B
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to the Stated Portion of such reduced Required Amount (as
calculated by the Borrower). The Borrower shall give notice of any such
automatic reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any such
notice shall not affect such automatic reduction of the Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID ADVANCE"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the ABN AMRO
Sub-Account of the Class B Cash Collateral Account, invested and withdrawn from
the ABN AMRO Sub-Account of the Class B Cash Collateral Account as set forth in
Sections 3.6(c), (d) and (f) of the Intercreditor Agreement. The Borrower agrees
to pay to the Liquidity Provider, on each Regular Distribution Date, commencing
on the first Regular Distribution Date after the making of a Provider Advance,
interest on the principal amount of any such Provider Advance as provided in
Section 3.07; PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the ABN AMRO Sub-Account of the Class B Cash Collateral Account
for the purpose of paying interest on the Class B Certificates in accordance
with Section 3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the ABN AMRO Sub-Account of
the Class B Cash Collateral Account on account of a reduction in the Required
Amount, the Borrower shall repay to the Liquidity Provider a portion of the
Provider Advances in a principal amount equal to the Stated Portion of such
reduction, plus interest on the principal amount prepaid as provided in Section
3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the ABN AMRO Sub-Account of the
Class B Cash Collateral Account of any amount pursuant to clause "THIRD" of
Section 2.4(b) of the Intercreditor Agreement, clause "THIRD" of Section 3.2 of
the Intercreditor Agreement or clause "FOURTH" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "REPLENISHMENT AMOUNT") for the
purpose of replenishing or increasing the balance thereof up to the Stated
Portion of the Required Amount at such time, (i) the aggregate outstanding
principal amount of all Applied Provider Advances (and of Provider Advances
treated as an Interest Advance for purposes of determining the Applicable
Liquidity Rate for interest payable thereon) shall be automatically reduced by
the amount of such Replenishment Amount and (ii) the aggregate outstanding
principal amount of all Unapplied Provider Advances shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the ABN AMRO
Sub-Account of the Class B Cash Collateral Account after giving effect to any
Applied Provider Advance on the date of such replacement shall be reimbursed to
the Liquidity Provider, but only to the extent such amounts are necessary to
repay in full to the Liquidity Provider all amounts owing to it hereunder.
Section 2.07. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the Stated
Portion of amounts that constitute Scheduled Payments, Special Payments or
payments under Section 8.1 or 9.1, as the case may be, of the Participation
Agreements and Section 6 of the Note Purchase Agreement and only to the extent
that the Borrower shall have sufficient income or proceeds therefrom to enable
the Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable or
liability under this Agreement except as expressly provided in this Agreement,
the Intercreditor Agreement or any Participation Agreement. Amounts on deposit
in the ABN AMRO Sub-Account of the Class B Cash Collateral Account shall be
available to the Borrower to make payments under this Agreement only to the
extent and for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement. Amounts on deposit in the other Sub-Account in respect
of the Class B Certificates shall not be available to make payments under this
Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class B Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall be prima facie
evidence of the amounts owed under this Section.
Section 3.03. PAYMENTS FREE OF DEDUCTIONS. (a) All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "NON-EXCLUDED TAX"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
payment required under clause (ii) hereof) and make such reports or returns in
connection therewith at the time or times and in the manner prescribed by
applicable law, and (ii) pay to the Borrower an additional amount which (after
deduction of all such Taxes) will be sufficient to yield to the Borrower the
full amount which would have been received by it had no such withholding or
deduction been made. Within 30 days after the date of each payment hereunder,
the Liquidity Provider shall furnish to the Borrower the original or a certified
copy of (or other documentary evidence of) the payment of the Taxes applicable
to such payment.
Section 3.04. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to ABN AMRO Bank, New York, N.Y.,
ABA # 026009580, Account Name: ABN AMRO Bank , Chicago CPU, Account No.
650-001-1789-41, Account Name: Continental Airlines, Inc.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower shall
pay, or shall cause to be paid, without duplication, interest on (i) the unpaid
principal amount of each Advance from and including the date of such Advance
(or, in the case of an Applied Provider Advance, from and including the date on
which the amount thereof was withdrawn from the ABN AMRO Sub-Account of the
Class B Cash Collateral Account to pay interest on the Class B Certificates) to
but excluding the date such principal amount shall be paid in full (or, in the
case of an Applied Provider Advance, the date on which the Class B Cash
Collateral Account is fully replenished in respect of such Advance) and (ii) any
other amount due hereunder (whether fees, commissions, expenses or other amounts
or, to the extent permitted by law, installments of interest on Advances or any
such other amount) which is not paid when due (whether at stated maturity, by
acceleration or otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such case, at a
fluctuating interest rate per annum for each day equal to the Applicable
Liquidity Rate (as defined below) for such Advance or such other amount as in
effect for such day, but in no event at a rate per annum greater than the
maximum rate permitted by applicable law; PROVIDED, HOWEVER, that, if at any
time the otherwise applicable interest rate as set forth in this Section 3.07
shall exceed the maximum rate permitted by applicable law, then any subsequent
reduction in such interest rate will not reduce the rate of interest payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest accrued equals the amount of interest that
would have accrued if such otherwise applicable interest rate as set forth in
this Section 3.07 had at all times been in effect.
(b) Except as provided in clause (e) below, each Advance will be either
a Base Rate Advance or a LIBOR Advance as provided in this Section. Each such
Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each Unapplied Downgrade Advance (i) during the period from and
including the date of the making of such Unapplied Downgrade Advance through but
excluding the Expiry Date (or, if earlier, the date of repayment thereof or of
conversion thereof into a Final Advance), shall bear interest in an amount equal
to the Investment Earnings on amounts on deposit in the ABN AMRO Sub-Account of
the Class B Cash Collateral Account for such period plus .325% per annum
(through and including the first anniversary of the date of this Agreement) or
.35% (after the first anniversary of the date of this Agreement) on the amount
of such Unapplied Downgrade Advance from time to time during such period,
payable in arrears on each Regular Distribution Date and (ii) thereafter, shall
be a LIBOR Advance and shall bear interest in accordance with clause (c) above.
(f) Each amount not paid when due hereunder (whether fees, commissions, expenses
or other amounts or, to the extent permitted by applicable law, installments of
interest on Advances but excluding Advances) shall bear interest at a rate per
annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject to
the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document
delivered pursuant to paragraphs (i), (ii) and (iii), each in form and
substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class B Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class B Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, other than the
opinion of counsel for the Underwriters, either addressed to the
Liquidity Provider or accompanied by a letter from the counsel
rendering such opinion to the effect that the Liquidity Provider is
entitled to rely on such opinion as of its date as if it were
addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider, and
such other information as the Liquidity Provider shall reasonably
request with respect to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section 8.2.1 of the
Leases (related to Leased Aircraft) or the corresponding section of
the Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of Continental;
and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other
Operative Agreements as the Liquidity Provider shall have reasonably
requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of
the Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent shall have
been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after
the date hereof as from time to time may be reasonably requested by the
Liquidity Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.07 and 2.09 hereof,
all Advances (including, without limitation, any Provider Advance and Applied
Provider Advance), any accrued interest thereon and any other amounts
outstanding hereunder to become immediately due and payable to the Liquidity
Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #760
Chicago, IL 60674-9135
Attention: Claudia Heldring
Telephone: (312) 904-2900
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
Attention: Loan Operations
Telephone: (312) 904-2836
Telecopy: (312) 606-8428
West LB
Asset Backed Finance
1211 Avenue of the Americas
New York, NY 10036
Attention: Loan Administration
Telephone: (212) 852-6152
Telecopy: (212) 302-7946
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
ABN AMRO Fee Letter (regardless of whether indemnified against pursuant to said
Sections or in such ABN AMRO Fee Letter)), that may be imposed, incurred by or
asserted against any Liquidity Indemnitee, in any way relating to, resulting
from, or arising out of or in connection with any action, suit or proceeding by
any third party against such Liquidity Indemnitee and relating to this
Agreement, the ABN AMRO Fee Letter, the Intercreditor Agreement or any Financing
Agreement; PROVIDED, HOWEVER, that the Borrower shall not be required to
indemnify, protect, defend and hold harmless any Liquidity Indemnitee in respect
of any Expense of such Liquidity Indemnitee to the extent such Expense is (i)
attributable to the gross negligence or willful misconduct of such Liquidity
Indemnitee or any other Liquidity Indemnitee, (ii) ordinary and usual operating
overhead expense, or (iii) attributable to the failure by such Liquidity
Indemnitee or any other Liquidity Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in this
Agreement, the Intercreditor Agreement, the ABN AMRO Fee Letter, the Tax Letter
or any other Operative Agreement to which it is a party. The indemnities
contained in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements, and the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07
hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; PROVIDED, HOWEVER, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
director or affiliates shall be liable or responsible in any respect for (i) any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with this Agreement or
any Notice of Borrowing delivered hereunder, or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay, or
cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class B Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03(a) and the like as they pertain to the Liquidity Provider shall be deemed
also to include those of each of its participants (subject, in each case, to the
maximum amount that would have been incurred by or attributable to the Liquidity
Provider directly if the Liquidity Provider, rather than the participant, had
held the interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. 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 7.02 hereof, or at such
other address of which the Liquidity Provider 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 sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR 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. The Borrower and
the Liquidity Provider each warrant and represent 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 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 or of any State and waives
any immunity any of its properties located in the United States 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.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement and
the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class B
Trust, as Borrower
By:_____________________________________
Name:
Title:
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
By:_____________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4B) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the Stated Portion of the interest
on the Class B Certificates which was payable on ____________, ____ (the
"DISTRIBUTION DATE") in accordance with the terms and provisions of the
Class B Trust Agreement and the Class B Certificates, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the Stated
Portion of the interest which was due and payable on the Class B
Certificates on the Distribution Date, (ii) does not include any amount
with respect to the payment of principal of, or premium on, the Class A
Certificates, the Class B Certificates or the Class C Certificates, or
interest on the Class A Certificates or the Class C Certificates, (iii) was
computed in accordance with the provisions of the Class B Certificates, the
Class B Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the
Maximum Available Commitment on the date hereof, (v) does not include any
amount of interest which was due and payable on the Class B Certificates on
such Distribution Date but which remains unpaid due to the failure of the
Depositary to pay any amount of accrued interest on the Certificates of
Deposit on such Distribution Date and (vi) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4B) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the ABN AMRO Sub-Account of the Class B Cash Collateral Account
in accordance with Section 3.6(d) of the Intercreditor Agreement, which
Advance is requested to be made on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the ABN AMRO
Sub-Account of the Class B Cash Collateral Account in accordance with
Section 3.6(d) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class B Certificates, or principal of, or interest or premium on, the Class
A Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class B Certificates, the Class B
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class B Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(d) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4B) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the
funding of the ABN AMRO Sub-Account of the Class B Cash Collateral Account
in accordance with Section 3.6(c) of the Intercreditor Agreement by reason
of the downgrading of the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating, which
Advance is requested to be made on __________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the ABN AMRO
Sub-Account of the Class B Cash Collateral Account in accordance with
Section 3.6(c) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class B Certificates, or principal of, or interest or premium on, the Class
A Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class B Certificates, the Class B
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class B Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(c) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4B) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding
of the ABN AMRO Sub-Account of the Class B Cash Collateral Account in
accordance with Section 3.6(i) of the Intercreditor Agreement by reason of
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider with respect to the Liquidity Agreement, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class B Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class B Certificates, the Class B Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class B Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(i) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
___________________
Bracketed language may be included at Borrower's option.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4B-[O/S], as Borrower, and
ABN AMRO BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class B Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4B-[O/S], as Borrower, and
ABN AMRO BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
EXECUTION COPY
________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1997-4B)
Dated as of October 23, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-4B
as Borrower
and
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
New York branch
as Liquidity Provider
________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1997-4B
6.90% Continental Airlines Pass Through Certificates,
Series 1997-4B
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms ........................................ 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances ................................................. 8
Section 2.02. Making the Advances .......................................... 8
Section 2.03. Fees ......................................................... 10
Section 2.04. Reduction or Termination of the Maximum Commitment ........... 10
Section 2.05. Repayments of Interest Advances or the Final Advance ......... 10
Section 2.06. Repayments of Provider Advances .............................. 11
Section 2.07. Payments to the Liquidity Provider Under the Intercreditor
Agreement .................................................... 12
Section 2.08. Book Entries ................................................. 12
Section 2.09. Payments from Available Funds Only ........................... 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance .......... 13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs .............................................. 13
Section 3.02. Capital Adequacy ............................................. 14
Section 3.03. Payments Free of Deductions .................................. 15
Section 3.04. Payments ..................................................... 16
Section 3.05. Computations ................................................. 16
Section 3.06. Payment on Non-Business Days ................................. 16
Section 3.07. Interest ..................................................... 16
Section 3.08. Replacement of Borrower ...................................... 18
Section 3.09. Funding Loss Indemnification ................................. 18
Section 3.10. Illegality ................................................... 18
TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 ........ 19
Section 4.02. Conditions Precedent to Borrowing ............................ 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower ........................ 21
Section 5.02. Negative Covenants of the Borrower ........................... 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default .................................. 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. ............................................. 22
Section 7.02. Notices, Etc. ................................................ 22
Section 7.03. No Waiver; Remedies .......................................... 23
Section 7.04. Further Assurances ........................................... 23
Section 7.05. Indemnification; Survival of Certain Provisions .............. 23
Section 7.06. Liability of the Liquidity Provider .......................... 24
Section 7.07. Costs, Expenses and Taxes .................................... 24
Section 7.08. Binding Effect; Participations ............................... 25
Section 7.09. Severability ................................................. 27
Section 7.10. GOVERNING LAW ................................................ 27
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity ........................................... 27
Section 7.12. Execution in Counterparts .................................... 28
Section 7.13. Entirety ..................................................... 28
Section 7.14. Headings ..................................................... 28
TABLE OF CONTENTS
(CONTINUED)
PAGE
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Section 7.15. Transfer ..................................................... 28
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES ............. 28
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of October 23, 1997, between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class B Trust (as defined below)
(the "BORROWER"), and WESTDEUTSCHE LANDESBANK GIROZENTRALE, a bank organized
under the laws of the State of North Rhine-Westphalia, Germany, acting through
its New York branch ("WEST LB") (the "LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class B Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class B Trust is issuing the Class B
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class B Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (x) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75% or (y) with respect to any Unapplied
Provider Advance that is a LIBOR Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1997-4B-O, dated as of the date hereof, relating to the
Class B Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"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 Houston,
Texas, New York, New York, Amsterdam, The Netherlands, or, so long as any
Class B Certificate is outstanding, the city and state in which the Class B
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"CERTIFICATES OF DEPOSIT" has the meaning assigned to such term in the
Deposit Agreement.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated October 23, 1997
between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York branch, as Depositary, pertaining to
the Class B Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law (excluding
from change in applicable law for this purpose a change in an applicable
treaty or other change in law affecting the applicability of a treaty)
after the date hereof, or in the case of a successor Liquidity Provider
(including a transferee of an Advance) or Lending Office, after the date on
which such successor Liquidity Provider obtains its interest or on which
the Lending Office is changed, and (ii) any withholding Taxes imposed by
the United States which are imposed or increased as a result of the
Liquidity Provider failing to deliver to the Borrower any certificate or
document (which certificate or document in the good faith judgment of the
Liquidity Provider it is legally entitled to provide) which is reasonably
requested by the Borrower to establish that payments under this Agreement
are exempt from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means October 21, 1998, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following either
(x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance (or, in the case of an Unapplied Downgrade
Advance, the period beginning on the Expiry Date) or (y) the
withdrawal of funds from the Class B Cash Collateral Account for
the purpose of paying interest on the Class B Certificates as
contemplated by Section 2.06(a) hereof and, in either case,
ending on the next Regular Distribution Date (or ending, in the
case of an Interest Period applicable to any Unapplied Provider
Advance, on the numerically corresponding day in the first or
sixth calendar month after the first day of the applicable
Interest Period and/or on the next Regular Distribution Date, as
Continental may select by providing notice thereof to the
Borrower and the Liquidity Provider no later than three Business
Days prior to the commencement of such Interest Period, PROVIDED
that if Continental shall not provide such a notice at least
three Business Days prior to the commencement of such Interest
Period, then Continental shall be deemed to have selected an
Interest Period ending on the next Regular Distribution Date);
and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date (or ending, in the case of an Interest
Period applicable to any Unapplied Provider Advance, on the
numerically corresponding day in the first or sixth calendar
month after the first day of the applicable Interest Period
and/or on the next Regular Distribution Date, as Continental may
select by providing notice thereof to the Borrower and the
Liquidity Provider no later than three Business Days prior to the
commencement of such Interest Period, PROVIDED that if
Continental shall not provide such a notice at least three
Business Days prior to the commencement of such Interest Period,
then Continental shall be deemed to have selected an Interest
Period ending on the next Regular Distribution Date);
PROVIDED, HOWEVER, that (I) if an Unapplied Provider Advance which is a
LIBOR Advance becomes an Applied Provider Advance, the Interest Period then
applicable to such Unapplied Provider Advance shall be applicable to such
Applied Provider Advance and (II) if (x) the Final Advance shall have been
made, or (y) other outstanding Advances shall have been converted into the
Final Advance, then the Interest Periods shall be successive periods of one
month beginning on the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Final Advance (in
the case of clause (x) above) or the Regular Distribution Date following
such conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at New York, New York, or such other lending office as
the Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; PROVIDED that the 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 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (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)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x) $6,982,990,
and (y) the Stated Portion of the Required Amount on such day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"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.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated
October 16, 1997 relating to the Certificates, as such Prospectus
Supplement may be amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, 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 Class B Certificates, that would be payable on the Class B
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class B Certificates on such day and without regard to
expected future payments of principal on the Class B Certificates.
"STATED PORTION" means 50%.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1997-4B-S.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Continental pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class B Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"CERTIFICATES", "CLASS A CERTIFICATES", "CLASS B CASH COLLATERAL ACCOUNT",
"CLASS B CERTIFICATES", "CLASS B CERTIFICATEHOLDERS", "CLASS B TRUST",
"CLASS B TRUST AGREEMENT", "CLASS B TRUSTEE", "CLASS C CERTIFICATES",
"CLOSING DATE", "CONTINENTAL", "CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING
PARTY", "CORPORATE TRUST OFFICE", "DELIVERY PERIOD EXPIRY DATE",
"DISTRIBUTION DATE", "DOWNGRADED FACILITY", "EQUIPMENT NOTES", "FINAL
MATURITY Date", "FINANCING AGREEMENT", "INDENTURE", "INTEREST PAYMENT
DATE", "INVESTMENT EARNINGS", "LIQUIDITY FACILITY", "LIQUIDITY
OBLIGATIONS", "LOAN TRUSTEE", "MOODY'S", "NON-EXTENDED FACILITY", "NOTE
PURCHASE AGREEMENT", "OPERATIVE AGREEMENTS", "PERFORMING EQUIPMENT NOTE",
"PERSON", "POOL BALANCE", "RATING AGENCY", "RATINGS CONFIRMATION", "REGULAR
DISTRIBUTION Date", "REPLACEMENT LIQUIDITY FACILITY", "RESPONSIBLE
OFFICER", "SCHEDULED PAYMENT", "SPECIAL PAYMENT", "STANDARD & POOR'S",
"STATED INTEREST RATE", "SUBORDINATION AGENT", "Taxes", "THRESHOLD RATING",
"TRANSFER", "TRUST AGREEMENTS", "TRUSTEE", "UNDERWRITERS", "UNDERWRITING
AGREEMENT", "WEST LB FEE LETTER", "WEST LB SUB-ACCOUNT" and "WRITTEN
NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of the Stated Portion of interest on the Class B
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of such
Interest Advance (subject to reinstatement as provided in the next sentence).
Upon repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if
this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement shall have been delivered to the Borrower as contemplated by said
Section 3.6(d) within the time period specified in such Section) by delivery to
the Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex II attached hereto, signed by a Responsible
Officer of the Borrower, in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the West LB Sub-Account of the Class B
Cash Collateral Account in accordance with said Section 3.6(d) and Section
3.6(f) of the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating issued
by either Rating Agency below the applicable Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the West LB Sub-Account of the Class B Cash Collateral
Account in accordance with said Section 3.6(c) and Section 3.6(f) of the
Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the West LB Sub-Account of the Class B Cash Collateral Account (in
accordance with Section 3.6(i) of the Intercreditor Agreement) and Section
3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE OF
BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the West LB
Sub-Account of the Class B Cash Collateral Account, the Liquidity Provider shall
have no interest in or rights to the Class B Cash Collateral Account, any
Sub-Account thereof, such Advance or any other amounts from time to time on
deposit in the Class B Cash Collateral Account or any Sub-Account thereof;
PROVIDED that the foregoing shall not affect or impair the obligations of the
Subordination Agent to make the distributions contemplated by Section 3.6(e) or
(f) of the Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions of this
Agreement, the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. FEES. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the West LB Fee Letter.
Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT. (a)
AUTOMATIC REDUCTION. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class B
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to the Stated Portion of such reduced Required Amount (as
calculated by the Borrower). The Borrower shall give notice of any such
automatic reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any such
notice shall not affect such automatic reduction of the Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID ADVANCE"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the West LB
Sub-Account of the Class B Cash Collateral Account, invested and withdrawn from
the West LB Sub-Account of the Class B Cash Collateral Account as set forth in
Sections 3.6(c), (d) and (f) of the Intercreditor Agreement. The Borrower agrees
to pay to the Liquidity Provider, on each Regular Distribution Date, commencing
on the first Regular Distribution Date after the making of a Provider Advance,
interest on the principal amount of any such Provider Advance as provided in
Section 3.07; PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the West LB Sub-Account of the Class B Cash Collateral Account
for the purpose of paying interest on the Class B Certificates in accordance
with Section 3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the West LB Sub-Account of
the Class B Cash Collateral Account on account of a reduction in the Required
Amount, the Borrower shall repay to the Liquidity Provider a portion of the
Provider Advances in a principal amount equal to the Stated Portion of such
reduction, plus interest on the principal amount prepaid as provided in Section
3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the West LB Sub-Account of the
Class B Cash Collateral Account of any amount pursuant to clause "THIRD" of
Section 2.4(b) of the Intercreditor Agreement, clause "THIRD" of Section 3.2 of
the Intercreditor Agreement or clause "FOURTH" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "REPLENISHMENT AMOUNT") for the
purpose of replenishing or increasing the balance thereof up to the Stated
Portion of the Required Amount at such time, (i) the aggregate outstanding
principal amount of all Applied Provider Advances (and of Provider Advances
treated as an Interest Advance for purposes of determining the Applicable
Liquidity Rate for interest payable thereon) shall be automatically reduced by
the amount of such Replenishment Amount and (ii) the aggregate outstanding
principal amount of all Unapplied Provider Advances shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the West LB Sub-Account
of the Class B Cash Collateral Account after giving effect to any Applied
Provider Advance on the date of such replacement shall be reimbursed to the
Liquidity Provider, but only to the extent such amounts are necessary to repay
in full to the Liquidity Provider all amounts owing to it hereunder.
Section 2.07. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the Stated
Portion of amounts that constitute Scheduled Payments, Special Payments or
payments under Section 8.1 or 9.1, as the case may be, of the Participation
Agreements and Section 6 of the Note Purchase Agreement and only to the extent
that the Borrower shall have sufficient income or proceeds therefrom to enable
the Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable or
liability under this Agreement except as expressly provided in this Agreement,
the Intercreditor Agreement or any Participation Agreement. Amounts on deposit
in the West LB Sub-Account of the Class B Cash Collateral Account shall be
available to the Borrower to make payments under this Agreement only to the
extent and for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement. Amounts on deposit in the other Sub-Account in respect
of the Class B Certificates shall not be available to make payments under this
Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class B Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall be prima facie
evidence of the amounts owed under this Section.
Section 3.03. PAYMENTS FREE OF DEDUCTIONS. (a) All payments made by
the Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "NON-EXCLUDED TAX"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
payment required under clause (ii) hereof) and make such reports or returns in
connection therewith at the time or times and in the manner prescribed by
applicable law, and (ii) pay to the Borrower an additional amount which (after
deduction of all such Taxes) will be sufficient to yield to the Borrower the
full amount which would have been received by it had no such withholding or
deduction been made. Within 30 days after the date of each payment hereunder,
the Liquidity Provider shall furnish to the Borrower the original or a certified
copy of (or other documentary evidence of) the payment of the Taxes applicable
to such payment.
Section 3.04. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to The Chase Manhattan Bank, New
York, N.Y., ABA # 021000021, Account Name: Westdeutsche Landesbank Girozentrale,
New York branch, Account No. 920-1-060663, Account Reference: Continental
Airlines Liquidity Facility B 1997-4.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of such
Advance (or, in the case of an Applied Provider Advance, from and including the
date on which the amount thereof was withdrawn from the West LB Sub-Account of
the Class B Cash Collateral Account to pay interest on the Class B Certificates)
to but excluding the date such principal amount shall be paid in full (or, in
the case of an Applied Provider Advance, the date on which the Class B Cash
Collateral Account is fully replenished in respect of such Advance) and (ii) any
other amount due hereunder (whether fees, commissions, expenses or other amounts
or, to the extent permitted by law, installments of interest on Advances or any
such other amount) which is not paid when due (whether at stated maturity, by
acceleration or otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such case, at a
fluctuating interest rate per annum for each day equal to the Applicable
Liquidity Rate (as defined below) for such Advance or such other amount as in
effect for such day, but in no event at a rate per annum greater than the
maximum rate permitted by applicable law; PROVIDED, HOWEVER, that, if at any
time the otherwise applicable interest rate as set forth in this Section 3.07
shall exceed the maximum rate permitted by applicable law, then any subsequent
reduction in such interest rate will not reduce the rate of interest payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest accrued equals the amount of interest that
would have accrued if such otherwise applicable interest rate as set forth in
this Section 3.07 had at all times been in effect.
(b) Except as provided in clause (e) below, each Advance will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each Unapplied Downgrade Advance (i) during the period from and
including the date of the making of such Unapplied Downgrade Advance through but
excluding the Expiry Date (or, if earlier, the date of repayment thereof or of
conversion thereof into a Final Advance), shall bear interest in an amount equal
to the Investment Earnings on amounts on deposit in the West LB Sub-Account of
the Class B Cash Collateral Account for such period plus .325% per annum
(through and including the first anniversary of the date of this Agreement) or
.35% (after the first anniversary of the date of this Agreement) on the amount
of such Unapplied Downgrade Advance from time to time during such period,
payable in arrears on each Regular Distribution Date and (ii) thereafter, shall
be a LIBOR Advance and shall bear interest in accordance with clause (c) above.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law, installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document
delivered pursuant to paragraphs (i), (ii) and (iii), each in form and
substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class B Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class B Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, other than the
opinion of counsel for the Underwriters, either addressed to the
Liquidity Provider or accompanied by a letter from the counsel
rendering such opinion to the effect that the Liquidity Provider is
entitled to rely on such opinion as of its date as if it were
addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider, and
such other information as the Liquidity Provider shall reasonably
request with respect to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section 8.2.1 of the
Leases (related to Leased Aircraft) or the corresponding section of
the Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of Continental;
and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other
Operative Agreements as the Liquidity Provider shall have reasonably
requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of
the Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent shall have
been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after
the date hereof as from time to time may be reasonably requested by the
Liquidity Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.07 and 2.09 hereof,
all Advances (including, without limitation, any Provider Advance and Applied
Provider Advance), any accrued interest thereon and any other amounts
outstanding hereunder to become immediately due and payable to the Liquidity
Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: WESTDEUTSCHE LANDESBANK GIROZENTRALE
Asset Based Finance
1211 Avenue of the Americas
New York, N.Y. 10036
Attention: Brigitte Thieme
Telephone: (212) 852-6111
Telecopy: (212) 921-5947
with a copy to:
WESTDEUTSCHE LANDESBANK GIROZENTRALE
Asset Based Finance
1211 Avenue of the Americas
New York, N.Y. 10036
Attention: Loan Administration
Telephone: (212) 852-6152
Telecopy: (212) 302-7946
ABN AMRO BANK N.V.
135 South La Salle Street
Chicago, IL 60674
Attention: Loan Operations
Telephone: (312) 904-2836
Telecopy: (312) 606-8428
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
West LB Fee Letter (regardless of whether indemnified against pursuant to said
Sections or in such West LB Fee Letter)), that may be imposed, incurred by or
asserted against any Liquidity Indemnitee, in any way relating to, resulting
from, or arising out of or in connection with any action, suit or proceeding by
any third party against such Liquidity Indemnitee and relating to this
Agreement, the West LB Fee Letter, the Intercreditor Agreement or any Financing
Agreement; PROVIDED, HOWEVER, that the Borrower shall not be required to
indemnify, protect, defend and hold harmless any Liquidity Indemnitee in respect
of any Expense of such Liquidity Indemnitee to the extent such Expense is (i)
attributable to the gross negligence or willful misconduct of such Liquidity
Indemnitee or any other Liquidity Indemnitee, (ii) ordinary and usual operating
overhead expense, or (iii) attributable to the failure by such Liquidity
Indemnitee or any other Liquidity Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in this
Agreement, the Intercreditor Agreement, the West LB Fee Letter, the Tax Letter
or any other Operative Agreement to which it is a party. The indemnities
contained in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements, and the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07
hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) ENeither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; PROVIDED, HOWEVER, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
director or affiliates shall be liable or responsible in any respect for (i) any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with this Agreement or
any Notice of Borrowing delivered hereunder, or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class B Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03(a) and the like as they pertain to the Liquidity Provider shall be deemed
also to include those of each of its participants (subject, in each case, to the
maximum amount that would have been incurred by or attributable to the Liquidity
Provider directly if the Liquidity Provider, rather than the participant, had
held the interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. 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 7.02 hereof, or at such
other address of which the Liquidity Provider 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 sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR 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. The Borrower and
the Liquidity Provider each warrant and represent 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 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 or of any State and waives
any immunity any of its properties located in the United States 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.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER's RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class B
Trust, as Borrower
By:_____________________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By:_____________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to WESTDEUTSCHE LANDESBANK
GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-4B) dated as of October 23, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the Stated Portion of the interest
on the Class B Certificates which was payable on ____________, ____ (the
"DISTRIBUTION DATE") in accordance with the terms and provisions of the
Class B Trust Agreement and the Class B Certificates, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the Stated
Portion of the interest which was due and payable on the Class B
Certificates on the Distribution Date, (ii) does not include any amount
with respect to the payment of principal of, or premium on, the Class A
Certificates, the Class B Certificates or the Class C Certificates, or
interest on the Class A Certificates or the Class C Certificates, (iii) was
computed in accordance with the provisions of the Class B Certificates, the
Class B Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the
Maximum Available Commitment on the date hereof, (v) does not include any
amount of interest which was due and payable on the Class B Certificates on
such Distribution Date but which remains unpaid due to the failure of the
Depositary to pay any amount of accrued interest on the Certificates of
Deposit on such Distribution Date and (vi) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to WESTDEUTSCHE
LANDESBANK GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the
Revolving Credit Agreement (1997-4B) dated as of October 23, 1997, between the
Borrower and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the West LB Sub-Account of the Class B Cash Collateral Account
in accordance with Section 3.6(d) of the Intercreditor Agreement, which
Advance is requested to be made on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the West LB
Sub-Account of the Class B Cash Collateral Account in accordance with
Section 3.6(d) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class B Certificates, or principal of, or interest or premium on, the Class
A Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class B Certificates, the Class B
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class B Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(d) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to WESTDEUTSCHE
LANDESBANK GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the
Revolving Credit Agreement (1997-4B) dated as of October 23, 1997, between the
Borrower and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the
funding of the West LB Sub-Account of the Class B Cash Collateral Account
in accordance with Section 3.6(c) of the Intercreditor Agreement by reason
of the downgrading of the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating, which
Advance is requested to be made on __________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the West LB
Sub-Account of the Class B Cash Collateral Account in accordance with
Section 3.6(c) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class B Certificates, or principal of, or interest or premium on, the Class
A Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class B Certificates, the Class B
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class B Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(c) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to WESTDEUTSCHE LANDESBANK
GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-4B) dated as of October 23, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding
of the West LB Sub-Account of the Class B Cash Collateral Account in
accordance with Section 3.6(i) of the Intercreditor Agreement by reason of
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider with respect to the Liquidity Agreement, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class B Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class B Certificates, the Class B Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class B Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(i) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
___________________
Bracketed language may be included at Borrower's option.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Final Advance Notice of Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of October 23, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee
for the Continental Airlines Pass Through Trust, 1997-4B-[O/S], as
Borrower, and WESTDEUTSCHE LANDESBANK GIROZENTRALE (the "Liquidity
Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class B Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of October 23, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee
for the Continental Airlines Pass Through Trust, 1997-4B-[O/S], as
Borrower, and WESTDEUTSCHE LANDESBANK GIROZENTRALE (the "Liquidity
Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
EXECUTION COPY
_________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1997-4C)
Dated as of October 23, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-4C
as Borrower
and
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
_________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1997-4C
6.80% Continental Airlines Pass Through Certificates,
Series 1997-4C
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms ....................................... 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances ................................................ 8
Section 2.02. Making the Advances ......................................... 8
Section 2.03. Fees ........................................................ 10
Section 2.04. Reduction or Termination of the Maximum Commitment .......... 10
Section 2.05. Repayments of Interest Advances or the Final Advance ........ 10
Section 2.06. Repayments of Provider Advances ............................. 11
Section 2.07. Payments to the Liquidity Provider Under the Intercreditor
Agreement ................................................... 12
Section 2.08. Book Entries ................................................ 12
Section 2.09. Payments from Available Funds Only .......................... 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance ......... 13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs ............................................. 13
Section 3.02. Capital Adequacy ............................................ 14
Section 3.03. Payments Free of Deductions ................................. 15
Section 3.04. Payments .................................................... 16
Section 3.05. Computations ................................................ 16
Section 3.06. Payment on Non-Business Days ................................ 16
Section 3.07. Interest .................................................... 16
Section 3.08. Replacement of Borrower ..................................... 18
Section 3.09. Funding Loss Indemnification ................................ 18
Section 3.10. Illegality .................................................. 18
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 ....... 19
Section 4.02. Conditions Precedent to Borrowing ........................... 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower ....................... 21
Section 5.02. Negative Covenants of the Borrower .......................... 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default ................................. 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. ............................................ 22
Section 7.02. Notices, Etc. ............................................... 22
Section 7.03. No Waiver; Remedies ......................................... 23
Section 7.04. Further Assurances .......................................... 23
Section 7.05. Indemnification; Survival of Certain Provisions ............. 23
Section 7.06. Liability of the Liquidity Provider ......................... 24
Section 7.07. Costs, Expenses and Taxes ................................... 24
Section 7.08. Binding Effect; Participations .............................. 25
Section 7.09. Severability ................................................ 27
Section 7.10. GOVERNING LAW ............................................... 27
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity ................................................. 27
Section 7.12. Execution in Counterparts ................................... 28
Section 7.13. Entirety .................................................... 28
Section 7.14. Headings .................................................... 28
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 7.15. Transfer .................................................... 28
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES ............ 28
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of October 23, 1997, between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class C Trust (as defined below)
(the "BORROWER"), and ABN AMRO BANK N.V., a bank organized under the laws of The
Netherlands, acting through its Chicago branch (the "LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class C Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class C Trust is issuing the Class C
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class C Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (x) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75%, or (y) with respect to any Unapplied
Provider Advance that is a LIBOR Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1997-4C-O, dated as of the date hereof, relating to the
Class C Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"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 Houston,
Texas, New York, New York, Amsterdam, The Netherlands, or, so long as any
Class C Certificate is outstanding, the city and state in which the Class C
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"CERTIFICATES OF DEPOSIT" has the meaning assigned to such term in the
Deposit Agreement.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated October 23, 1997
between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York branch, as Depositary, pertaining to
the Class C Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law (excluding
from change in applicable law for this purpose a change in an applicable
treaty or other change in law affecting the applicability of a treaty)
after the date hereof, or in the case of a successor Liquidity Provider
(including a transferee of an Advance) or Lending Office, after the date on
which such successor Liquidity Provider obtains its interest or on which
the Lending Office is changed, and (ii) any withholding Taxes imposed by
the United States which are imposed or increased as a result of the
Liquidity Provider failing to deliver to the Borrower any certificate or
document (which certificate or document in the good faith judgment of the
Liquidity Provider it is legally entitled to provide) which is reasonably
requested by the Borrower to establish that payments under this Agreement
are exempt from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means October 21, 1998, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following either
(x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance (or, in the case of an Unapplied Downgrade
Advance, the period beginning on the Expiry Date) or (y) the
withdrawal of funds from the Class C Cash Collateral Account for
the purpose of paying interest on the Class C Certificates as
contemplated by Section 2.06(a) hereof and, in either case,
ending on the next Regular Distribution Date (or ending, in the
case of an Interest Period applicable to any Unapplied Provider
Advance, on the numerically corresponding day in the first or
sixth calendar month after the first day of the applicable
Interest Period and/or on the next Regular Distribution Date, as
Continental may select by providing notice thereof to the
Borrower and the Liquidity Provider no later than three Business
Days prior to the commencement of such Interest Period, PROVIDED
that if Continental shall not provide such a notice at least
three Business Days prior to the commencement of such Interest
Period, then Continental shall be deemed to have selected an
Interest Period ending on the next Regular Distribution Date);
and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date (or ending, in the case of an Interest
Period applicable to any Unapplied Provider Advance, on the
numerically corresponding day in the first or sixth calendar
month after the first day of the applicable Interest Period
and/or on the next Regular Distribution Date, as Continental may
select by providing notice thereof to the Borrower and the
Liquidity Provider no later than three Business Days prior to the
commencement of such Interest Period, PROVIDED that if
Continental shall not provide such a notice at least three
Business Days prior to the commencement of such Interest Period,
then Continental shall be deemed to have selected an Interest
Period ending on the next Regular Distribution Date);
PROVIDED, HOWEVER, that (I) if an Unapplied Provider Advance which is a
LIBOR Advance becomes an Applied Provider Advance, the Interest Period then
applicable to such Unapplied Provider Advance shall be applicable to such
Applied Provider Advance and (II) if (x) the Final Advance shall have been
made, or (y) other outstanding Advances shall have been converted into the
Final Advance, then the Interest Periods shall be successive periods of one
month beginning on the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Final Advance (in
the case of clause (x) above) or the Regular Distribution Date following
such conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; PROVIDED that the 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 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (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)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x) $5,666,712,
and (y) the Stated Portion of the Required Amount on such day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"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.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated October
16, 1997 relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, 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 Class C Certificates, that would be payable on the Class C
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class C Certificates on such day and without regard to
expected future payments of principal on the Class C Certificates.
"STATED PORTION" means 50%.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1997-4C-S.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Continental pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class C Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"ABN AMRO FEE LETTER", "ABN AMRO SUB-ACCOUNT", "CERTIFICATES", "CLASS A
CERTIFICATES", "CLASS B Certificates", "CLASS A CASH COLLATERAL ACCOUNT",
"CLASS C CERTIFICATES", "CLASS C CERTIFICATEHOLDERS", "CLASS C TRUST",
"CLASS C TRUST AGREEMENT", "CLASS C TRUSTEE", "CLOSING DATE",
"CONTINENTAL", "CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING PARTY",
"CORPORATE TRUST OFFICE", "DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION
DATE", "DOWNGRADED FACILITY", "EQUIPMENT NOTES", "FINAL MATURITY DATE",
"FINANCING AGREEMENT", "INDENTURE", "INTEREST PAYMENT DATE", "INVESTMENT
EARNINGS", "LIQUIDITY FACILITY", "LIQUIDITY Obligations", "LOAN TRUSTEE",
"MOODY'S", "NON-EXTENDED FACILITY", "NOTE PURCHASE AGREEMENT", "OPERATIVE
AGREEMENTS", "PERFORMING EQUIPMENT NOTE", "PERSON", "POOL BALANCE", "RATING
AGENCY", "RATINGS Confirmation", "REGULAR DISTRIBUTION DATE", "REPLACEMENT
LIQUIDITY FACILITY", "RESPONSIBLE OFFICER", "SCHEDULED PAYMENT", "SPECIAL
PAYMENT", "STANDARD & POOR'S", "STATED INTEREST RATE", "SUBORDINATION
AGENT", "TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST AGREEMENTS",
"TRUSTEE", "UNDERWRITERS", "UNDERWRITING AGREEMENT" and "WRITTEN NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of the Stated Portion of interest on the Class C
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of such
Interest Advance (subject to reinstatement as provided in the next sentence).
Upon repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if
this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement shall have been delivered to the Borrower as contemplated by said
Section 3.6(d) within the time period specified in such Section) by delivery to
the Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex II attached hereto, signed by a Responsible
Officer of the Borrower, in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the ABN AMRO Sub-Account of the Class C
Cash Collateral Account in accordance with said Section 3.6(d) and Section
3.6(f) of the Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating issued
by either Rating Agency below the applicable Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the ABN AMRO Sub-Account of the Class C Cash
Collateral Account in accordance with said Section 3.6(c) and Section 3.6(f) of
the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the ABN AMRO Sub-Account of the Class C Cash Collateral Account (in
accordance with Section 3.6(i) of the Intercreditor Agreement) and Section
3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE OF
BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the ABN AMRO
Sub-Account of the Class C Cash Collateral Account, the Liquidity Provider shall
have no interest in or rights to the Class C Cash Collateral Account, any
Sub-Account thereof, such Advance or any other amounts from time to time on
deposit in the Class C Cash Collateral Account or any Sub-Account thereof;
PROVIDED that the foregoing shall not affect or impair the obligations of the
Subordination Agent to make the distributions contemplated by Section 3.6(e) or
(f) of the Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions of this
Agreement, the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. FEES. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the ABN AMRO Fee Letter.
Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT. (a)
AUTOMATIC REDUCTION. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class C
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to the Stated Portion of such reduced Required Amount (as
calculated by the Borrower). The Borrower shall give notice of any such
automatic reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any such
notice shall not affect such automatic reduction of the Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID Advance"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the ABN AMRO
Sub-Account of the Class C Cash Collateral Account, invested and withdrawn from
the ABN AMRO Sub-Account of the Class C Cash Collateral Account as set forth in
Sections 3.6(c), (d) and (f) of the Intercreditor Agreement. The Borrower agrees
to pay to the Liquidity Provider, on each Regular Distribution Date, commencing
on the first Regular Distribution Date after the making of a Provider Advance,
interest on the principal amount of any such Provider Advance as provided in
Section 3.07; PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the ABN AMRO Sub-Account of the Class C Cash Collateral Account
for the purpose of paying interest on the Class C Certificates in accordance
with Section 3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the ABN AMRO Sub-Account of
the Class C Cash Collateral Account on account of a reduction in the Required
Amount, the Borrower shall repay to the Liquidity Provider a portion of the
Provider Advances in a principal amount equal to the Stated Portion of such
reduction, plus interest on the principal amount prepaid as provided in Section
3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the ABN AMRO Sub-Account of the
Class C Cash Collateral Account of any amount pursuant to clause "third" of
Section 2.4(b) of the Intercreditor Agreement, clause "THIRD" of Section 3.2 of
the Intercreditor Agreement or clause "FOURTH" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "REPLENISHMENT AMOUNT") for the
purpose of replenishing or increasing the balance thereof up to the Stated
Portion of the Required Amount at such time, (i) the aggregate outstanding
principal amount of all Applied Provider Advances (and of Provider Advances
treated as an Interest Advance for purposes of determining the Applicable
Liquidity Rate for interest payable thereon) shall be automatically reduced by
the amount of such Replenishment Amount and (ii) the aggregate outstanding
principal amount of all Unapplied Provider Advances shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the ABN AMRO
Sub-Account of the Class C Cash Collateral Account after giving effect to any
Applied Provider Advance on the date of such replacement shall be reimbursed to
the Liquidity Provider, but only to the extent such amounts are necessary to
repay in full to the Liquidity Provider all amounts owing to it hereunder.
Section 2.07. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the Stated
Portion of amounts that constitute Scheduled Payments, Special Payments or
payments under Section 8.1 or 9.1, as the case may be, of the Participation
Agreements and Section 6 of the Note Purchase Agreement and only to the extent
that the Borrower shall have sufficient income or proceeds therefrom to enable
the Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable or
liability under this Agreement except as expressly provided in this Agreement,
the Intercreditor Agreement or any Participation Agreement. Amounts on deposit
in the ABN AMRO Sub-Account of the Class C Cash Collateral Account shall be
available to the Borrower to make payments under this Agreement only to the
extent and for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement. Amounts on deposit in the other Sub-Account in respect
of the Class C Certificates shall not be available to make payments under this
Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class C Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall be prima facie
evidence of the amounts owed under this Section.
Section 3.03. PAYMENTS FREE OF DEDUCTIONS. (a) All payments made by
the Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "NON-EXCLUDED TAX"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
payment required under clause (ii) hereof) and make such reports or returns in
connection therewith at the time or times and in the manner prescribed by
applicable law, and (ii) pay to the Borrower an additional amount which (after
deduction of all such Taxes) will be sufficient to yield to the Borrower the
full amount which would have been received by it had no such withholding or
deduction been made. Within 30 days after the date of each payment hereunder,
the Liquidity Provider shall furnish to the Borrower the original or a certified
copy of (or other documentary evidence of) the payment of the Taxes applicable
to such payment.
Section 3.04. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to ABN AMRO Bank N.V., New York,
N.Y., ABA # 026009580, Account Name: ABN AMRO Bank N.V.--Chicago branch, Account
No. 651-0-010111-42, Account Name: Continental Airlines, Inc.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of such
Advance (or, in the case of an Applied Provider Advance, from and including the
date on which the amount thereof was withdrawn from the ABN AMRO Sub-Account of
the Class C Cash Collateral Account to pay interest on the Class C Certificates)
to but excluding the date such principal amount shall be paid in full (or, in
the case of an Applied Provider Advance, the date on which the Class C Cash
Collateral Account is fully replenished in respect of such Advance) and (ii) any
other amount due hereunder (whether fees, commissions, expenses or other amounts
or, to the extent permitted by law, installments of interest on Advances or any
such other amount) which is not paid when due (whether at stated maturity, by
acceleration or otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such case, at a
fluctuating interest rate per annum for each day equal to the Applicable
Liquidity Rate (as defined below) for such Advance or such other amount as in
effect for such day, but in no event at a rate per annum greater than the
maximum rate permitted by applicable law; PROVIDED, HOWEVER, that, if at any
time the otherwise applicable interest rate as set forth in this Section 3.07
shall exceed the maximum rate permitted by applicable law, then any subsequent
reduction in such interest rate will not reduce the rate of interest payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest accrued equals the amount of interest that
would have accrued if such otherwise applicable interest rate as set forth in
this Section 3.07 had at all times been in effect.
(b) Except as provided in clause (e) below, each Advance will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each Unapplied Downgrade Advance (i) during the period from and
including the date of the making of such Unapplied Downgrade Advance through but
excluding the Expiry Date (or, if earlier, the date of repayment thereof or of
conversion thereof into a Final Advance), shall bear interest in an amount equal
to the Investment Earnings on amounts on deposit in the ABN AMRO Sub-Account of
the Class C Cash Collateral Account for such period plus .325% per annum
(through and including the first anniversary of the date of this Agreement) or
.35% (after the first anniversary of the date of this Agreement) on the amount
of such Unapplied Downgrade Advance from time to time during such period,
payable in arrears on each Regular Distribution Date and (ii) thereafter, shall
be a LIBOR Advance and shall bear interest in accordance with clause (c) above.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law, installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION Agent") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document
delivered pursuant to paragraphs (i), (ii) and (iii), each in form and
substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class C Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class C Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, other than the
opinion of counsel for the Underwriters, either addressed to the
Liquidity Provider or accompanied by a letter from the counsel
rendering such opinion to the effect that the Liquidity Provider is
entitled to rely on such opinion as of its date as if it were
addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider, and
such other information as the Liquidity Provider shall reasonably
request with respect to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section 8.2.1 of the
Leases (related to Leased Aircraft) or the corresponding section of
the Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of Continental;
and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other
Operative Agreements as the Liquidity Provider shall have reasonably
requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of
the Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent shall have
been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after
the date hereof as from time to time may be reasonably requested by the
Liquidity Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.07 and 2.09 hereof,
all Advances (including, without limitation, any Provider Advance and Applied
Provider Advance), any accrued interest thereon and any other amounts
outstanding hereunder to become immediately due and payable to the Liquidity
Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #760
Chicago, IL 60674-9135
Attention: Claudia Heldring
Telephone: (312) 904-2900
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
Attention: Loan Operations
Telephone: (312) 904-2836
Telecopy: (312) 606-8428
West LB
Asset Based Finance
1211 Avenue of the Americas
New York, NY 10036
Attention: Loan Administration
Telephone: (212) 852-6152
Telecopy: (212) 302-7946
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
ABN AMRO Fee Letter (regardless of whether indemnified against pursuant to said
Sections or in such ABN AMRO Fee Letter)), that may be imposed, incurred by or
asserted against any Liquidity Indemnitee, in any way relating to, resulting
from, or arising out of or in connection with any action, suit or proceeding by
any third party against such Liquidity Indemnitee and relating to this
Agreement, the ABN AMRO Fee Letter, the Intercreditor Agreement or any Financing
Agreement; PROVIDED, HOWEVER, that the Borrower shall not be required to
indemnify, protect, defend and hold harmless any Liquidity Indemnitee in respect
of any Expense of such Liquidity Indemnitee to the extent such Expense is (i)
attributable to the gross negligence or willful misconduct of such Liquidity
Indemnitee or any other Liquidity Indemnitee, (ii) ordinary and usual operating
overhead expense, or (iii) attributable to the failure by such Liquidity
Indemnitee or any other Liquidity Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in this
Agreement, the Intercreditor Agreement, the ABN AMRO Fee Letter, the Tax Letter
or any other Operative Agreement to which it is a party. The indemnities
contained in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements, and the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07
hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; PROVIDED, HOWEVER, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
director or affiliates shall be liable or responsible in any respect for (i) any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with this Agreement or
any Notice of Borrowing delivered hereunder, or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class C Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03(a) and the like as they pertain to the Liquidity Provider shall be deemed
also to include those of each of its participants (subject, in each case, to the
maximum amount that would have been incurred by or attributable to the Liquidity
Provider directly if the Liquidity Provider, rather than the participant, had
held the interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. 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 7.02 hereof, or at such
other address of which the Liquidity Provider 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 sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR 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. The Borrower and
the Liquidity Provider each warrant and represent 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 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 or of any State and waives
any immunity any of its properties located in the United States 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.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class C
Trust, as Borrower
By:_____________________________________
Name:
Title:
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
By:_____________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4C) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the Stated Portion of the interest
on the Class C Certificates which was payable on ____________, ____ (the
"DISTRIBUTION Date") in accordance with the terms and provisions of the
Class C Trust Agreement and the Class C Certificates, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the Stated
Portion of the interest which was due and payable on the Class C
Certificates on the Distribution Date, (ii) does not include any amount
with respect to the payment of principal of, or premium on, the Class A
Certificates, the Class B Certificates or the Class C Certificates, or
interest on the Class A Certificates or the Class B Certificates, (iii) was
computed in accordance with the provisions of the Class C Certificates, the
Class C Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the
Maximum Available Commitment on the date hereof, (v) does not include any
amount of interest which was due and payable on the Class C Certificates on
such Distribution Date but which remains unpaid due to the failure of the
Depositary to pay any amount of accrued interest on the Certificates of
Deposit on such Distribution Date and (vi) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4C) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the ABN AMRO Sub-Account of the Class C Cash Collateral Account
in accordance with Section 3.6(d) of the Intercreditor Agreement, which
Advance is requested to be made on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the ABN AMRO
Sub-Account of the Class C Cash Collateral Account in accordance with
Section 3.6(d) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class C Certificates, or principal of, or interest or premium on, the Class
A Certificates or the Class B Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class C
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class C Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(d) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice of
Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4C) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the
funding of the ABN AMRO Sub-Account of the Class C Cash Collateral Account
in accordance with Section 3.6(c) of the Intercreditor Agreement by reason
of the downgrading of the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating, which
Advance is requested to be made on __________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the ABN AMRO
Sub-Account of the Class C Cash Collateral Account in accordance with
Section 3.6(c) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class C Certificates, or principal of, or interest or premium on, the Class
A Certificates or the Class B Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class C
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class C Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(c) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of
Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-4C) dated as of October 23, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding
of the ABN AMRO Sub-Account of the Class C Cash Collateral Account in
accordance with Section 3.6(i) of the Intercreditor Agreement by reason of
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider with respect to the Liquidity Agreement, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class C Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class B Certificates, (iii) was computed in accordance with the provisions
of the Class C Certificates, the Class C Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the ABN AMRO
Sub-Account of the Class C Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(i) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
___________________
Bracketed language may be included at Borrower's option.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4C-[O/S], as Borrower, and
ABN AMRO BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
ABN AMRO BANK N.V.,
Chicago branch
as Liquidity Provider
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class C Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4C-[O/S], as Borrower, and
ABN AMRO BANK N.V. (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
______________________________
[Name of Transferee]
______________________________
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
EXECUTION COPY
_________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1997-4C)
Dated as of October 23, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-4C
as Borrower
and
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
New York branch
as Liquidity Provider
_________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1997-4C
6.80% Continental Airlines Pass Through Certificates,
Series 1997-4C
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms ........................................ 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances ................................................. 8
Section 2.02. Making the Advances .......................................... 8
Section 2.03. Fees ......................................................... 10
Section 2.04. Reduction or Termination of the Maximum Commitment ........... 10
Section 2.05. Repayments of Interest Advances or the Final Advance ......... 10
Section 2.06. Repayments of Provider Advances .............................. 11
Section 2.07. Payments to the Liquidity Provider Under the Intercreditor
Agreement .................................................... 12
Section 2.08. Book Entries ................................................. 12
Section 2.09. Payments from Available Funds Only ........................... 12
Section 2.10. Extension of the Expiry Date; Non-Extension Advance .......... 13
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs .............................................. 13
Section 3.02. Capital Adequacy ............................................. 14
Section 3.03. Payments Free of Deductions .................................. 15
Section 3.04. Payments ..................................................... 16
Section 3.05. Computations ................................................. 16
Section 3.06. Payment on Non-Business Days ................................. 16
Section 3.07. Interest ..................................................... 16
Section 3.08. Replacement of Borrower ...................................... 18
Section 3.09. Funding Loss Indemnification ................................. 18
Section 3.10. Illegality ................................................... 18
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01 ........ 19
Section 4.02. Conditions Precedent to Borrowing ............................ 20
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower ........................ 21
Section 5.02. Negative Covenants of the Borrower ........................... 21
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default .................................. 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. ............................................. 22
Section 7.02. Notices, Etc. ................................................ 22
Section 7.03. No Waiver; Remedies .......................................... 23
Section 7.04. Further Assurances ........................................... 23
Section 7.05. Indemnification; Survival of Certain Provisions .............. 23
Section 7.06. Liability of the Liquidity Provider .......................... 24
Section 7.07. Costs, Expenses and Taxes .................................... 24
Section 7.08. Binding Effect; Participations ............................... 25
Section 7.09. Severability ................................................. 27
Section 7.10. GOVERNING LAW ................................................ 27
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity ........................................... 27
Section 7.12. Execution in Counterparts .................................... 28
Section 7.13. Entirety ..................................................... 28
Section 7.14. Headings ..................................................... 28
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 7.15. Transfer ..................................................... 28
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES ............. 28
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of October 23, 1997, between
WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class C Trust (as defined below)
(the "BORROWER"), and WESTDEUTSCHE LANDESBANK GIROZENTRALE, a bank organized
under the laws of the State of North Rhine-Westphalia, Germany, acting through
its New York branch ("WEST LB") (the "LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class C Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class C Trust is issuing the Class C
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class C Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (x) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75% or (y) with respect to any Unapplied
Provider Advance that is a LIBOR Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1997-4C-O, dated as of the date hereof, relating to the
Class C Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"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 Houston,
Texas, New York, New York, Amsterdam, The Netherlands, or, so long as any
Class C Certificate is outstanding, the city and state in which the Class C
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"CERTIFICATES OF DEPOSIT" has the meaning assigned to such term in the
Deposit Agreement.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated October 23, 1997
between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York branch, as Depositary, pertaining to
the Class C Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law (excluding
from change in applicable law for this purpose a change in an applicable
treaty or other change in law affecting the applicability of a treaty)
after the date hereof, or in the case of a successor Liquidity Provider
(including a transferee of an Advance) or Lending Office, after the date on
which such successor Liquidity Provider obtains its interest or on which
the Lending Office is changed, and (ii) any withholding Taxes imposed by
the United States which are imposed or increased as a result of the
Liquidity Provider failing to deliver to the Borrower any certificate or
document (which certificate or document in the good faith judgment of the
Liquidity Provider it is legally entitled to provide) which is reasonably
requested by the Borrower to establish that payments under this Agreement
are exempt from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means October 21, 1998, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following either
(x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance (or, in the case of an Unapplied Downgrade
Advance, the period beginning on the Expiry Date) or (y) the
withdrawal of funds from the Class C Cash Collateral Account for
the purpose of paying interest on the Class C Certificates as
contemplated by Section 2.06(a) hereof and, in either case,
ending on the next Regular Distribution Date (or ending, in the
case of an Interest Period applicable to any Unapplied Provider
Advance, on the numerically corresponding day in the first or
sixth calendar month after the first day of the applicable
Interest Period and/or on the next Regular Distribution Date, as
Continental may select by providing notice thereof to the
Borrower and the Liquidity Provider no later than three Business
Days prior to the commencement of such Interest Period, PROVIDED
that if Continental shall not provide such a notice at least
three Business Days prior to the commencement of such Interest
Period, then Continental shall be deemed to have selected an
Interest Period ending on the next Regular Distribution Date);
and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date (or ending, in the case of an Interest
Period applicable to any Unapplied Provider Advance, on the
numerically corresponding day in the first or sixth calendar
month after the first day of the applicable Interest Period
and/or on the next Regular Distribution Date, as Continental may
select by providing notice thereof to the Borrower and the
Liquidity Provider no later than three Business Days prior to the
commencement of such Interest Period, PROVIDED that if
Continental shall not provide such a notice at least three
Business Days prior to the commencement of such Interest Period,
then Continental shall be deemed to have selected an Interest
Period ending on the next Regular Distribution Date);
PROVIDED, HOWEVER, that (I) if an Unapplied Provider Advance which is a
LIBOR Advance becomes an Applied Provider Advance, the Interest Period then
applicable to such Unapplied Provider Advance shall be applicable to such
Applied Provider Advance and (II) if (x) the Final Advance shall have been
made, or (y) other outstanding Advances shall have been converted into the
Final Advance, then the Interest Periods shall be successive periods of one
month beginning on the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Final Advance (in
the case of clause (x) above) or the Regular Distribution Date following
such conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at New York, New York, or such other lending office as
the Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; PROVIDED that the 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 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (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)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x) $5,666,712,
and (y) the Stated Portion of the Required Amount on such day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"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.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated October
16, 1997 relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, 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 Class C Certificates, that would be payable on the Class C
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class C Certificates on such day and without regard to
expected future payments of principal on the Class C Certificates.
"STATED PORTION" means 50%.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1997-4C-S.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Continental pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class C Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"CERTIFICATES", "CLASS A CERTIFICATES", "CLASS B CERTIFICATES", "CLASS C
CERTIFICATES", "CLASS C CERTIFICATEHOLDERS", "CLASS C TRUST", "CLASS C
TRUST AGREEMENT", "CLASS C Trustee", "CLOSING DATE", "CONTINENTAL",
"CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING Party", "CORPORATE TRUST
OFFICE", "DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION DATE", "DOWNGRADED
FACILITY", "EQUIPMENT NOTES", "FINAL MATURITY DATE", "FINANCING AGREEMENT",
"INDENTURE", "INTEREST PAYMENT DATE", "INVESTMENT EARNINGS", "LIQUIDITY
FACILITY", "LIQUIDITY OBLIGATIONS", "LOAN TRUSTEE", "MOODY'S",
"NON-EXTENDED FACILITY", "NOTE PURCHASE AGREEMENT", "OPERATIVE AGREEMENTS",
"PERFORMING EQUIPMENT NOTE", "PERSON", "POOL BALANCE", "RATING AGENCY",
"RATINGS CONFIRMATION", "REGULAR DISTRIBUTION DATE", "REPLACEMENT LIQUIDITY
FACILITY", "RESPONSIBLE OFFICER", "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
"STANDARD & Poor's", "STATED INTEREST RATE", "SUBORDINATION AGENT",
"TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST AGREEMENTS", "TRUSTEE",
"UNDERWRITERS", "UNDERWRITING AGREEMENT", "WEST LB FEE LETTER", "WEST LB
SUB-ACCOUNT" and "WRITTEN NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of the Stated Portion of interest on the Class C
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Maximum Available Commitment and the amount
available to be borrowed hereunder by subsequent Advances by the amount of such
Interest Advance (subject to reinstatement as provided in the next sentence).
Upon repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if this
Agreement is not extended in accordance with Section 3.6(d) of the Intercreditor
Agreement (unless a Replacement Liquidity Facility to replace this Agreement
shall have been delivered to the Borrower as contemplated by said Section 3.6(d)
within the time period specified in such Section) by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex II attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the West LB Sub-Account of the Class C Cash Collateral
Account in accordance with said Section 3.6(d) and Section 3.6(f) of the
Intercreditor Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating issued
by either Rating Agency below the applicable Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the West LB Sub-Account of the Class C Cash Collateral
Account in accordance with said Section 3.6(c) and Section 3.6(f) of the
Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the West LB Sub-Account of the Class C Cash Collateral Account (in
accordance with Section 3.6(i) of the Intercreditor Agreement) and Section
3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE OF
BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the West LB
Sub-Account of the Class C Cash Collateral Account, the Liquidity Provider shall
have no interest in or rights to the Class C Cash Collateral Account, any
Sub-Account thereof, such Advance or any other amounts from time to time on
deposit in the Class C Cash Collateral Account or any Sub-Account thereof;
PROVIDED that the foregoing shall not affect or impair the obligations of the
Subordination Agent to make the distributions contemplated by Section 3.6(e) or
(f) of the Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions of this
Agreement, the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. FEES. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the West LB Fee Letter.
Section 2.04. REDUCTION OR TERMINATION OF THE MAXIMUM COMMITMENT. (A)
AUTOMATIC REDUCTION. Promptly following each date on which the Required Amount
is reduced as a result of a reduction in the Pool Balance of the Class C
Certificates or otherwise, the Maximum Commitment shall automatically be reduced
to an amount equal to the Stated Portion of such reduced Required Amount (as
calculated by the Borrower). The Borrower shall give notice of any such
automatic reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any such
notice shall not affect such automatic reduction of the Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID ADVANCE"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the West LB
Sub-Account of the Class C Cash Collateral Account, invested and withdrawn from
the West LB Sub-Account of the Class C Cash Collateral Account as set forth in
Sections 3.6(c), (d) and (f) of the Intercreditor Agreement. The Borrower agrees
to pay to the Liquidity Provider, on each Regular Distribution Date, commencing
on the first Regular Distribution Date after the making of a Provider Advance,
interest on the principal amount of any such Provider Advance as provided in
Section 3.07; PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the West LB Sub-Account of the Class C Cash Collateral Account
for the purpose of paying interest on the Class C Certificates in accordance
with Section 3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the West LB Sub-Account of
the Class C Cash Collateral Account on account of a reduction in the Required
Amount, the Borrower shall repay to the Liquidity Provider a portion of the
Provider Advances in a principal amount equal to the Stated Portion of such
reduction, plus interest on the principal amount prepaid as provided in Section
3.07 hereof.
(b) At any time when an Applied Provider Advance (or any portion
thereof) is outstanding, upon the deposit in the West LB Sub-Account of the
Class C Cash Collateral Account of any amount pursuant to clause "THIRD" of
Section 2.4(b) of the Intercreditor Agreement, clause "THIRD" of Section 3.2 of
the Intercreditor Agreement or clause "FOURTH" of Section 3.3 of the
Intercreditor Agreement (any such amount being a "REPLENISHMENT AMOUNT") for the
purpose of replenishing or increasing the balance thereof up to the Stated
Portion of the Required Amount at such time, (i) the aggregate outstanding
principal amount of all Applied Provider Advances (and of Provider Advances
treated as an Interest Advance for purposes of determining the Applicable
Liquidity Rate for interest payable thereon) shall be automatically reduced by
the amount of such Replenishment Amount and (ii) the aggregate outstanding
principal amount of all Unapplied Provider Advances shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the West LB Sub-Account
of the Class C Cash Collateral Account after giving effect to any Applied
Provider Advance on the date of such replacement shall be reimbursed to the
Liquidity Provider, but only to the extent such amounts are necessary to repay
in full to the Liquidity Provider all amounts owing to it hereunder.
Section 2.07. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the Stated
Portion of amounts that constitute Scheduled Payments, Special Payments or
payments under Section 8.1 or 9.1, as the case may be, of the Participation
Agreements and Section 6 of the Note Purchase Agreement and only to the extent
that the Borrower shall have sufficient income or proceeds therefrom to enable
the Borrower to make payments in accordance with the terms hereof after giving
effect to the priority of payments provisions set forth in the Intercreditor
Agreement. The Liquidity Provider agrees that it will look solely to such
amounts to the extent available for distribution to it as provided in the
Intercreditor Agreement and this Agreement and that the Borrower, in its
individual capacity, is not personally liable to it for any amounts payable or
liability under this Agreement except as expressly provided in this Agreement,
the Intercreditor Agreement or any Participation Agreement. Amounts on deposit
in the West LB Sub-Account of the Class C Cash Collateral Account shall be
available to the Borrower to make payments under this Agreement only to the
extent and for the purposes expressly contemplated in Section 3.6(f) of the
Intercreditor Agreement. Amounts on deposit in the other Sub-Account in respect
of the Class C Certificates shall not be available to make payments under this
Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class C Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Lending
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall be prima facie
evidence of the amounts owed under this Section.
Section 3.03. PAYMENTS FREE OF DEDUCTIONS. (a) All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "NON-EXCLUDED TAX"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
(b) All payments (including, without limitation, Advances) made by the
Liquidity Provider under this Agreement shall be made free and clear of, and
without reduction for or on account of, any Taxes. If any Taxes are required to
be withheld or deducted from any amounts payable to the Borrower under this
Agreement, the Liquidity Provider shall (i) within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (and any additional Taxes in respect of the
payment required under clause (ii) hereof) and make such reports or returns in
connection therewith at the time or times and in the manner prescribed by
applicable law, and (ii) pay to the Borrower an additional amount which (after
deduction of all such Taxes) will be sufficient to yield to the Borrower the
full amount which would have been received by it had no such withholding or
deduction been made. Within 30 days after the date of each payment hereunder,
the Liquidity Provider shall furnish to the Borrower the original or a certified
copy of (or other documentary evidence of) the payment of the Taxes applicable
to such payment.
Section 3.04. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to The Chase Manhattan Bank, New
York, N.Y., ABA # 021000021, Account Name: Westdeutsche Landesbank Girozentrale,
New York branch, Account No. 920-1-060663, Account Reference: Continental
Airlines Liquidity Facility C 1997-4.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower shall
pay, or shall cause to be paid, without duplication, interest on (i) the unpaid
principal amount of each Advance from and including the date of such Advance
(or, in the case of an Applied Provider Advance, from and including the date on
which the amount thereof was withdrawn from the West LB Sub-Account of the Class
C Cash Collateral Account to pay interest on the Class C Certificates) to but
excluding the date such principal amount shall be paid in full (or, in the case
of an Applied Provider Advance, the date on which the Class C Cash Collateral
Account is fully replenished in respect of such Advance) and (ii) any other
amount due hereunder (whether fees, commissions, expenses or other amounts or,
to the extent permitted by law, installments of interest on Advances or any such
other amount) which is not paid when due (whether at stated maturity, by
acceleration or otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such case, at a
fluctuating interest rate per annum for each day equal to the Applicable
Liquidity Rate (as defined below) for such Advance or such other amount as in
effect for such day, but in no event at a rate per annum greater than the
maximum rate permitted by applicable law; PROVIDED, HOWEVER, that, if at any
time the otherwise applicable interest rate as set forth in this Section 3.07
shall exceed the maximum rate permitted by applicable law, then any subsequent
reduction in such interest rate will not reduce the rate of interest payable
pursuant to this Section 3.07 below the maximum rate permitted by applicable law
until the total amount of interest accrued equals the amount of interest that
would have accrued if such otherwise applicable interest rate as set forth in
this Section 3.07 had at all times been in effect.
(b) Except as provided in clause (e) below, each Advance will be either
a Base Rate Advance or a LIBOR Advance as provided in this Section. Each such
Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each Unapplied Downgrade Advance (i) during the period from and
including the date of the making of such Unapplied Downgrade Advance through but
excluding the Expiry Date (or, if earlier, the date of repayment thereof or of
conversion thereof into a Final Advance), shall bear interest in an amount equal
to the Investment Earnings on amounts on deposit in the West LB Sub-Account of
the Class C Cash Collateral Account for such period plus .325% per annum
(through and including the first anniversary of the date of this Agreement) or
.35% (after the first anniversary of the date of this Agreement) on the amount
of such Unapplied Downgrade Advance from time to time during such period,
payable in arrears on each Regular Distribution Date and (ii) thereafter, shall
be a LIBOR Advance and shall bear interest in accordance with clause (c) above.
(f) Each amount not paid when due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by applicable law,
installments of interest on Advances but excluding Advances) shall bear interest
at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject to
the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document
delivered pursuant to paragraphs (i), (ii) and (iii), each in form and
substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class C Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class C Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, other than the
opinion of counsel for the Underwriters, either addressed to the
Liquidity Provider or accompanied by a letter from the counsel
rendering such opinion to the effect that the Liquidity Provider is
entitled to rely on such opinion as of its date as if it were
addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider, and
such other information as the Liquidity Provider shall reasonably
request with respect to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section 8.2.1 of the
Leases (related to Leased Aircraft) or the corresponding section of
the Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of Continental;
and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other
Operative Agreements as the Liquidity Provider shall have reasonably
requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the
entering into of this Agreement or the making of any Advance, which
constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have
been satisfied or waived, and all conditions precedent to the purchase of
the Certificates by the Underwriters under the Underwriting Agreement shall
have been satisfied (unless any of such conditions precedent shall have
been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after
the date hereof as from time to time may be reasonably requested by the
Liquidity Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.02(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.07 and 2.09 hereof,
all Advances (including, without limitation, any Provider Advance and Applied
Provider Advance), any accrued interest thereon and any other amounts
outstanding hereunder to become immediately due and payable to the Liquidity
Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: WESTDEUTSCHE LANDESBANK GIROZENTRALE
Asset Based Finance
1211 Avenue of the Americas
New York, N.Y. 10036
Attention: Brigitte Thieme
Telephone: (212) 852-6111
Telecopy: (212) 921-5947
with a copy to:
WESTDEUTSCHE LANDESBANK GIROZENTRALE
Asset Based Finance
1211 Avenue of the Americas
New York, N.Y. 10036
Attention: Loan Administration
Telephone: (212) 852-6152
Telecopy: (212) 302-7946
ABN AMRO BANK N.V.
135 South La Salle Street
Chicago, IL 60674
Attention: Loan Operations
Telephone: (312) 904-2836
Telecopy: (312) 606-8428
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
West LB Fee Letter (regardless of whether indemnified against pursuant to said
Sections or in such West LB Fee Letter)), that may be imposed, incurred by or
asserted against any Liquidity Indemnitee, in any way relating to, resulting
from, or arising out of or in connection with any action, suit or proceeding by
any third party against such Liquidity Indemnitee and relating to this
Agreement, the West LB Fee Letter, the Intercreditor Agreement or any Financing
Agreement; PROVIDED, HOWEVER, that the Borrower shall not be required to
indemnify, protect, defend and hold harmless any Liquidity Indemnitee in respect
of any Expense of such Liquidity Indemnitee to the extent such Expense is (i)
attributable to the gross negligence or willful misconduct of such Liquidity
Indemnitee or any other Liquidity Indemnitee, (ii) ordinary and usual operating
overhead expense, or (iii) attributable to the failure by such Liquidity
Indemnitee or any other Liquidity Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in this
Agreement, the Intercreditor Agreement, the West LB Fee Letter, the Tax Letter
or any other Operative Agreement to which it is a party. The indemnities
contained in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements, and the provisions of Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07
hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; PROVIDED, HOWEVER, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
director or affiliates shall be liable or responsible in any respect for (i) any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with this Agreement or
any Notice of Borrowing delivered hereunder, or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay, or
cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class C Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03(a) and the like as they pertain to the Liquidity Provider shall be deemed
also to include those of each of its participants (subject, in each case, to the
maximum amount that would have been incurred by or attributable to the Liquidity
Provider directly if the Liquidity Provider, rather than the participant, had
held the interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. 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 7.02 hereof, or at such
other address of which the Liquidity Provider 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 sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR 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. The Borrower and
the Liquidity Provider each warrant and represent 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 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 or of any State and waives
any immunity any of its properties located in the United States 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.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement and
the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER's RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class C
Trust, as Borrower
By:_____________________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By:_____________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to WESTDEUTSCHE LANDESBANK
GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-4C) dated as of October 23, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of the Stated Portion of the interest
on the Class C Certificates which was payable on ____________, ____ (the
"DISTRIBUTION DATE") in accordance with the terms and provisions of the
Class C Trust Agreement and the Class C Certificates, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the Stated
Portion of the interest which was due and payable on the Class C
Certificates on the Distribution Date, (ii) does not include any amount
with respect to the payment of principal of, or premium on, the Class A
Certificates, the Class B Certificates or the Class C Certificates, or
interest on the Class A Certificates or the Class B Certificates, (iii) was
computed in accordance with the provisions of the Class C Certificates, the
Class C Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), (iv) does not exceed the
Maximum Available Commitment on the date hereof, (v) does not include any
amount of interest which was due and payable on the Class C Certificates on
such Distribution Date but which remains unpaid due to the failure of the
Depositary to pay any amount of accrued interest on the Certificates of
Deposit on such Distribution Date and (vi) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to WESTDEUTSCHE
LANDESBANK GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the
Revolving Credit Agreement (1997-4C) dated as of October 23, 1997, between the
Borrower and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the West LB Sub-Account of the Class C Cash Collateral Account
in accordance with Section 3.6(d) of the Intercreditor Agreement, which
Advance is requested to be made on __________, ____.
(3) The amount of the Non-Extension Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the West LB
Sub-Account of the Class C Cash Collateral Account in accordance with
Section 3.6(d) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class C Certificates, or principal of, or interest or premium on, the Class
A Certificates or the Class B Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class C
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class C Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(d) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Non-Extension Advance Notice of
Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to WESTDEUTSCHE
LANDESBANK GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the
Revolving Credit Agreement (1997-4C) dated as of October 23, 1997, between the
Borrower and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Downgrade Advance by the Liquidity Provider to be used for the
funding of the West LB Sub-Account of the Class C Cash Collateral Account
in accordance with Section 3.6(c) of the Intercreditor Agreement by reason
of the downgrading of the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating, which
Advance is requested to be made on __________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the West LB
Sub-Account of the Class C Cash Collateral Account in accordance with
Section 3.6(c) of the Intercreditor Agreement, (ii) does not include any
amount with respect to the payment of the principal of, or premium on, the
Class C Certificates, or principal of, or interest or premium on, the Class
A Certificates or the Class B Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class C
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class C Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(c) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with Downgrade Advance Notice of
Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to WESTDEUTSCHE LANDESBANK
GIROZENTRALE (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-4C) dated as of October 23, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of the Final Advance by the Liquidity Provider to be used for the funding
of the West LB Sub-Account of the Class C Cash Collateral Account in
accordance with Section 3.6(i) of the Intercreditor Agreement by reason of
the receipt by the Borrower of a Termination Notice from the Liquidity
Provider with respect to the Liquidity Agreement, which Advance is
requested to be made on ____________, ____.
(3) The amount of the Final Advance requested hereby (i) is
$_________________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class C Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class B Certificates, (iii) was computed in accordance with the provisions
of the Class C Certificates, the Class C Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the West LB
Sub-Account of the Class C Cash Collateral Account and apply the same in
accordance with the terms of Section 3.6(i) of the Intercreditor Agreement,
(b) no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
___________________
Bracketed language may be included at Borrower's option.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Final Advance Notice of
Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4C-[O/S], as Borrower, and
WESTDEUTSCHE LANDESBANK GIROZENTRALE (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
as Liquidity Provider
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class C Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of October 23, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-4C-[O/S], as Borrower, and
WESTDEUTSCHE LANDESBANK GIROZENTRALE (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
EXECUTION COPY
TRUST SUPPLEMENT No. 1997-4A-O
Dated October 23, 1997
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$505,951,000
Continental Airlines Pass Through Trust 1997-4A-O
6.90% Continental Airlines
Pass Through Certificates,
Series 1997-4A-O
This Trust Supplement No. 1997-4A-O, dated as of October 23, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"Trustee"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in the
Basic Agreement) which may be issued thereunder, has heretofore been executed
and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which case
the Company will lease such Aircraft (collectively, the "LEASED AIRCRAFT") or
(ii) through separate secured loan transactions, in which case the Company will
own such Aircraft (collectively, the "OWNED AIRCRAFT");
WHEREAS, in the case of each Leased Aircraft, each Owner Trustee,
acting on behalf of the corresponding Owner Participant, will issue pursuant to
an Indenture, on a non-recourse basis, Equipment Notes in order to finance a
portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will issue
pursuant to an Indenture, on a recourse basis, Equipment Notes to finance a
portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this Continental
Airlines Pass Through Trust 1997-4A-O (the "APPLICABLE TRUST") for the benefit
of the Applicable Certificateholders, and the initial Applicable
Certificateholders as the grantors of the Applicable Trust, by their respective
acceptances of the Applicable Certificates, join in the creation of the
Applicable Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will
evidence fractional undivided interests in the Applicable Trust and will convey
no rights, benefits or interests in respect of any property other than the Trust
Property except for those Certificates to which an Escrow Receipt has been
affixed;
WHEREAS, the Escrow Agent and the Underwriters have contemporaneously
herewith entered into an Escrow Agreement with the Escrow Paying Agent pursuant
to which the Underwriters have delivered to the Escrow Agent the proceeds from
the sale of the Applicable Certificates and have irrevocably instructed the
Escrow Agent to withdraw and pay funds from such proceeds upon request and
proper certification by the Trustee to purchase Equipment Notes as the Aircraft
are delivered by Boeing under the Aircraft Purchase Agreement from time to time
prior to the Delivery Period Termination Date;
WHEREAS, the Escrow Agent on behalf of the Applicable
Certificateholders has contemporaneously herewith entered into a Deposit
Agreement with the Depositary under which the Deposits referred to therein will
be made and from which it will withdraw funds to allow the Trustee to purchase
Equipment Notes from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "AGREEMENT") and the Note Purchase
Agreement, upon or shortly following delivery of an Aircraft, the Trustee on
behalf of the Applicable Trust, using funds withdrawn under the Escrow
Agreement, shall purchase one or more Equipment Notes having the same interest
rate as, and final maturity date not later than the final Regular Distribution
Date of, the Applicable Certificates issued hereunder and shall hold such
Equipment Notes in trust for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known as
"6.90% Continental Airlines Pass Through Certificates, Series 1997-4A-O"
(hereinafter defined as the "APPLICABLE CERTIFICATES"). Each Applicable
Certificate represents a fractional undivided interest in the Applicable Trust
created hereby. The Applicable Certificates shall be the only instruments
evidencing a fractional undivided interest in the Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates that
shall be authenticated under the Agreement (except for Applicable
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04
and 3.06 of the Basic Agreement) is $505,951,000.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means January 2 and July 2 of each year, commencing on
January 2, 1998, until payment of all of the Scheduled Payments to be made
under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the restrictions on transfer of the Escrow Receipt set forth herein
and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting an Applicable
Certificate or an interest therein will, by such acquisition or acceptance,
be deemed to represent and warrant to and for the benefit of each Owner
Participant and the Company that either (i) the assets of an employee
benefit plan subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or of a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), have not been
used to purchase Applicable Certificates or an interest therein or (ii) the
purchase and holding of Applicable Certificates is exempt from the
prohibited transaction restrictions of ERISA and the Code pursuant to one
or more prohibited transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates and
shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached hereto
as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement, and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the Liquidity
Facility.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement", for
purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft) of each Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have the
following meanings:
AGREEMENT: Has the meaning specified in the recitals hereto.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
AIRCRAFT PURCHASE AGREEMENT: Has the meaning specified in the Note
Purchase Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE DELIVERY DATE: Has the meaning specified in Section 5.01(b)
of this Trust Supplement.
APPLICABLE PARTICIPATION AGREEMENT: Has the meaning specified in
Section 5.01(b) of this Trust Supplement.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C hereto executed
and delivered in accordance with Section 7.01 of this Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CUT-OFF DATE: Means the earlier of (a) the Delivery Period Termination
Date and (b) the date on which a Triggering Event occurs.
DELIVERY DATE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Means the earlier of (a) December
31, 1998, or, if the Equipment Notes relating to all of the New Aircraft
(or Substitute Aircraft in lieu thereof) have not been purchased by the
Applicable Trust and the Other Trusts on or prior to such date due to any
reason beyond the control of the Company and not occasioned by the
Company's fault or negligence, May 31, 1999 (PROVIDED that, if a labor
strike occurs at Boeing on or prior to either or both of such dates
referred to in this clause (a), such date or dates on or following the
commencement of such strike shall be extended by adding thereto the number
of days that such strike continued in effect) and (b) the date on which
Equipment Notes issued with respect to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Applicable
Trust and the Other Trusts in accordance with the Note Purchase Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of October 23,
1997 relating to the Applicable Certificates between the Depositary and the
Escrow Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
of October 23, 1997 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Trustee and Underwriters, as the
same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under the
Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
FINAL MATURITY DATE: Means July 2, 2019.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
FINAL WITHDRAWAL NOTICE: Has the meaning specified in Section 5.02 of
this Trust Supplement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
October 23, 1997 among the Trustee, the Other Trustees, the Liquidity
Providers, the liquidity providers relating to the Certificates issued
under (and as defined in) each of the Other Agreements, and Wilmington
Trust Company, as Subordination Agent and as trustee thereunder, as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred
to in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LIQUIDITY FACILITIES: Means, initially, each of the Revolving Credit
Agreements dated as of October 23, 1997 relating to the Applicable
Certificates, between a Liquidity Provider and Wilmington Trust Company as
Subordination Agent, as agent and trustee for the Applicable Trust, and,
from and after the replacement of such agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDERS: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago branch, and Westdeutsche Landesbank Girozentrale,
acting through its New York branch, and any replacements or successors
therefor appointed in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: With respect to any Equipment Note, means (i) the
Indenture and the Participation Agreement relating to such Equipment Note,
and (ii) in the case of any Equipment Note related to a Leased Aircraft,
the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as of
October 23, 1997 among the Trustee, the Other Trustees, the Company, the
Escrow Agent, the Escrow Paying Agent and the Subordination Agent,
providing for, among other things, the purchase of Equipment Notes by the
Trustee on behalf of the Trust, as the same may be amended, supplemented or
otherwise modified from time to time, in accordance with its terms.
NOTICE OF PURCHASE WITHDRAWAL: Has the meaning specified in the
Deposit Agreement.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1997-4B-O dated the date hereof relating to
Continental Airlines Pass Through Trust 1997-4B-O and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1997-4C-O dated the date
hereof relating to Continental Airlines Pass Through Trust 1997-4C-O.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1997-4B-O and the Continental Airlines Pass Through Trust 1997-4C-O, each
created on the date hereof.
OWNED AIRCRAFT: Has the meaning specified in the third recital to this
Trust Supplement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and OWNER PARTICIPANTS at
any time of determination means all of the Owner Participants thus referred
to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its individual
capacity but solely as trustee; and OWNER TRUSTEES means all of the Owner
Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with
its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the Applicable Certificates less (ii) the aggregate amount of all
payments made in respect of such Applicable Certificates or in respect of
Deposits other than payments made in respect of interest or premium thereon
or reimbursement of any costs or expenses incurred in connection therewith.
The Pool Balance as of any Distribution Date shall be computed after giving
effect to any special distribution with respect to unused Deposits, payment
of principal of the Equipment Notes or payment with respect to other Trust
Property and the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the Applicable Certificates. The
Pool Factor as of any Distribution Date shall be computed after giving
effect to any special distribution with respect to unused Deposits, payment
of principal of the Equipment Notes or other Trust Property and the
distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
16, 1997 relating to the offering of the Certificates.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1997-4A-S dated the date hereof
relating to the Continental Airlines Pass Through Trust 1997-4A-S and
entered into by the Company and the Trustee, which agreement becomes
effective upon the execution and delivery of the Assignment and Assumption
Agreement pursuant to Section 7.01 of this Trust Supplement.
RELATED TRUST: Means the Continental Pass Through Trust 1997-4A-S, to
be formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase 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) or Special Redemption Premium.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Has the meaning specified in Section 7.01 of this Trust
Supplement.
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the
Special Payments Account and, subject to the Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI of the Basic
Agreement of any Equipment Note and (iii) all rights of the Applicable
Trust and the Trustee, on behalf of the Applicable Trust, under the
Intercreditor Agreement, the Escrow Agreement, the Note Purchase Agreement
and the Liquidity Facilities, including, without limitation, all rights to
receive certain payments thereunder, and all monies paid to the Trustee on
behalf of the Applicable Trust pursuant to the Intercreditor Agreement or
the Liquidity Facilities, PROVIDED that rights with respect to the Deposits
or under the Escrow Agreement, except for the right to direct withdrawals
for the purchase of Equipment Notes to be held herein, will not constitute
Trust Property.
UNDERWRITERS: Means, collectively, Morgan Stanley & Co. Incorporated,
Credit Suisse First Boston Corporation, Chase Securities Inc. and Salomon
Brothers Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated October
16, 1997 among the Underwriters, the Company and the Depositary, as the
same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. ADDITIONS TO ARTICLE IV OF THE BASIC AGREEMENT. In
addition to the provisions of Article IV of the Basic Agreement, the following
provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the Trustee
under the Note Purchase Agreement, the Trustee, upon receipt thereof, shall
immediately deposit the aggregate amount of such Special Redemption Premium
in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium as
provided for in Section 4.02(b) of the Basic Agreement shall be on the
Special Distribution Date with respect to such Special Payment or as soon
thereafter as the Trustee has confirmed receipt of the related Special
Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium by the
Company to the Trustee under the Note Purchase Agreement, the notice
provided for in Section 4.02(c) of the Basic Agreement shall be mailed,
together with the notice by the Escrow Paying Agent under Section 2.06 of
the Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date shall be
the Final Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c) of the
Basic Agreement shall apply equally if the amount of Special Redemption
Premium, if any, has not ben calculated at the time the Trustee mails
notice of a Special Payment.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable to
principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable to
interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of
a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Delivery Period Termination Date, if
there has been any change in the information set forth in clauses (x), (y) and
(z) below from that set forth in page S-51 of the Prospectus Supplement, and
(ii) any early redemption or purchase of, or any default in the payment of
principal or interest in respect of, any of the Equipment Notes held in the
Applicable Trust, or any Final Withdrawal, the Trustee shall furnish to
Applicable Certificateholders of record on such date a statement setting forth
(x) the expected Pool Balances for each subsequent Regular Distribution Date
following the Delivery Period Termination Date, (y) the related Pool Factors for
such Regular Distribution Dates and (z) the expected principal distribution
schedule of the Equipment Notes, in the aggregate, held as Trust Property at the
date of such notice. With respect to the Applicable Certificates registered in
the name of a Clearing Agency, on the Delivery Period Termination Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such date. The Trustee will mail to each such Clearing Agency Participant the
statement described above and will make available additional copies as requested
by such Clearing Agency Participant for forwarding to holders of interests in
the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) By acceptance
of its Applicable Certificate, each Applicable Certificateholder agrees that at
any time after the occurrence and during the continuation of a Triggering Event,
(i) each Class B Certificateholder shall have the right to purchase
all, but not less than all, of the Applicable Certificates upon ten days'
written notice to the Trustee and each other Class B Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class B Certificateholder notifies such purchasing Class B
Certificateholder that such other Class B Certificateholder wants to
participate in such purchase, then such other Class B Certificateholder may
join with the purchasing Class B Certificateholder to purchase all, but not
less than all, of the Applicable Certificates pro rata based on the
Fractional Undivided Interest in the Class B Trust held by each such Class
B Certificateholder and (B) if prior to the end of such ten-day period any
other Class B Certificateholder fails to notify the purchasing Class B
Certificateholder of such other Class B Certificateholder's desire to
participate in such a purchase, then such other Class B Certificateholder
shall lose its right to purchase the Applicable Certificates pursuant to
this Section 4.01(a); and
(ii) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Applicable Certificates pursuant to
clause (i) above) to purchase all, but not less than all, of the Applicable
Certificates and the Class B Certificates upon ten days' written notice to
the Trustee, the Class B Trustee and each other Class C Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may
join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Certificates and the Class B Certificates pro rata
based on the Fractional Undivided Interest in the Class C Trust held by
each such Class C Certificateholder and (B) if prior to the end of such
ten-day period any other Class C Certificateholder fails to notify the
purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(a).
(iii) each Class D Certificateholder shall have the right (which shall
not expire upon any purchase of the Applicable Certificates pursuant to
clause (i) or (ii) above) to purchase all, but not less than all, of the
Applicable Certificates, the Class B Certificates and the Class C
Certificates upon ten days' written notice to the Trustee, the Class B
Trustee, the Class C Trustee and each other Class D Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class D Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder wants to
participate in such purchase, then such other Class D Certificateholder may
join with the purchasing Class D Certificateholder to purchase all, but not
less than all, of the Applicable Certificates, the Class B Certificates and
the Class C Certificates pro rata based on the Fractional Undivided
Interest in the Class D Trust held by each such Class D Certificateholder
and (B) if prior to the end of such ten-day period any other Class D
Certificateholder fails to notify the purchasing Class D Certificateholder
of such other Class D Certificateholder's desire to participate in such a
purchase, then such other Class D Certificateholder shall lose its right to
purchase the Applicable Certificates pursuant to this Section 4.01(a).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed hereunder on the related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date); PROVIDED FURTHER that no such
purchase of Applicable Certificates shall be effective unless the purchaser(s)
shall certify to the Trustee that contemporaneously with such purchase, such
purchaser(s) is purchasing, pursuant to the terms of this Agreement and the
Other Agreements, the Applicable Certificates, the Class B Certificates and the
Class C Certificates which are senior to the securities held by such
purchaser(s). Each payment of the purchase price of the Applicable Certificates
referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such purchase shall be subject to the terms
of this Section 4.01(a). Each Applicable Certificateholder agrees by its
acceptance of its Applicable Certificate that it will, subject to Section 3.04
of the Basic Agreement, upon payment from such Class B Certificateholder(s),
Class C Certificateholder(s), or Class D Certificateholder(s), as the case may
be, of the purchase price set forth in the first sentence of this paragraph,
forthwith sell, assign, transfer and convey to the purchaser(s) thereof (without
recourse, representation or warranty of any kind except for its own acts), all
of the right, title, interest and obligation of such Applicable
Certificateholder in this Agreement, the Escrow Agreement, the Deposit
Agreement, the Intercreditor Agreement, the Liquidity Facilities, the Note
Documents and all Applicable Certificates and Escrow Receipts held by such
Applicable Certificateholder (excluding all right, title and interest under any
of the foregoing to the extent such right, title or interest is with respect to
an obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the purchaser shall assume
all of such Applicable Certificateholder's obligations under this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facilities, the Note Documents and all such Applicable Certificates
and Escrow Receipts. The Applicable Certificates will be deemed to be purchased
on the date payment of the purchase price is made notwithstanding the failure of
the Applicable Certificateholders to deliver any Applicable Certificates and,
upon such a purchase, (i) the only rights of the Applicable Certificateholders
will be to deliver the Applicable Certificates to the purchaser(s) and receive
the purchase price for such Applicable Certificates and (ii) if the purchaser(s)
shall so request, such Applicable Certificateholder will comply with all the
provisions of Section 3.04 of the Basic Agreement to enable new Applicable
Certificates to be issued to the purchaser in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Applicable Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01(a), the terms "Class B
Certificateholder", "Class B Trust", "Class B Certificate", "Class B Trustee",
"Class C Certificateholder", "Class C Trust", "Class C Certificate""Class C
Trustee", "Class D Certificateholder" and "Class D Trust", shall have the
respective meanings assigned to such terms in the Intercreditor Agreement.
(b) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. DELIVERY OF DOCUMENTS; DELIVERY DATES. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor Agreement, the
Escrow Agreement and the Note Purchase Agreement on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii) subject
to the respective terms thereof, to perform its obligations thereunder. Upon
request of the Company and the satisfaction or waiver of the closing conditions
specified in the Underwriting Agreement, the Trustee shall execute, deliver,
authenticate, issue and sell Applicable Certificates in authorized denominations
equalling in the aggregate the amount set forth, with respect to the Applicable
Trust, in Schedule II to the Underwriting Agreement evidencing the entire
ownership interest in the Applicable Trust, which amount equals the maximum
aggregate principal amount of Equipment Notes which may be purchased by the
Trustee pursuant to the Note Purchase Agreement. Except as provided in Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement, the Trustee shall not execute,
authenticate or deliver Applicable Certificates in excess of the aggregate
amount specified in this paragraph.
(b) On or after the Issuance Date, the Company may deliver from time
to time to the Trustee a Delivery Notice relating to one or more Equipment
Notes. After receipt of a Delivery Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery Notice relates
(the "APPLICABLE DELIVERY DATE"), the Trustee shall (as and when specified in
the Delivery Notice) instruct the Escrow Agent to provide a Notice of Purchase
Withdrawal to the Depositary requesting (A) the withdrawal of one or more
Deposits on the Applicable Delivery Date in accordance with and to the extent
permitted by the terms of the Escrow Agreement and the Deposit Agreement and (B)
the payment of all, or a portion, of such Deposit or Deposits in an amount equal
in the aggregate to the purchase price of such Equipment Notes to or on behalf
of the Owner Trustee or the Company, as the case may be, issuing such Equipment
Notes, all as shall be described in the Delivery Notice. The Trustee shall (as
and when specified in such Delivery Notice), subject to the conditions set forth
in Section 2 of the Note Purchase Agreement, enter into and perform its
obligations under the Participation Agreement specified in such Delivery Notice
(the "APPLICABLE PARTICIPATION Agreement") and cause such certificates,
documents and legal opinions relating to the Trustee to be duly delivered as
required by the Applicable Participation Agreement. If at any time prior to the
Applicable Delivery Date, the Trustee receives a notice of postponement pursuant
to Section 1(e) or 1(f) of the Note Purchase Agreement, then the Trustee shall
give the Depositary (with a copy to the Escrow Agent) a notice of cancellation
of such Notice of Purchase Withdrawal relating to such Deposit or Deposits on
such Applicable Delivery Date. Upon satisfaction of the conditions specified in
the Note Purchase Agreement and the Applicable Participation Agreement, the
Trustee shall purchase the applicable Equipment Notes with the proceeds of the
withdrawals of one or more Deposits made on the Applicable Delivery Date in
accordance with the terms of the Deposit Agreement and the Escrow Agreement. The
purchase price of such Equipment Notes shall equal the principal amount of such
Equipment Notes. Amounts withdrawn from such Deposit or Deposits in excess of
the purchase price of the Equipment Notes or to the extent not applied on the
Applicable Delivery Date to the purchase price of the Equipment Notes, shall be
re-deposited by the Trustee with the Depositary on the Applicable Delivery Date
in accordance with the terms of the Deposit Agreement. The provisions of this
Section 5.01(b) supersede and replace the provisions of Section 2.02 of the
Basic Agreement (which are inapplicable to the Trust), and all provisions of the
Basic Agreement relating to Postponed Notes and Section 2.02 of the Basic
Agreement shall not apply to the Applicable Trust.
Section 5.02. WITHDRAWAL OF DEPOSITS. If any Deposits remain
outstanding on the Business Day next succeeding the Cut-off Date, (i) (A) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated and
instruct the Escrow Agent to provide a notice of Final Withdrawal to the
Depositary substantially in the form of Exhibit B to the Deposit Agreement (the
"FINAL WITHDRAWAL NOTICE") and (B) the Trustee will make a demand upon the
Company under the Note Purchase Agreement for an amount equal to the Special
Redemption Premium, such payment to be made on the Final Withdrawal Date.
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the recitals
and statements contained herein or therein, all of which recitals and statements
are made solely by the Company.
(b) Except as herein otherwise provided, no duties, responsibilities
or liabilities are assumed, or shall be construed to be assumed by the Trustee
by reason of this Trust Supplement other than as set forth in the Basic
Agreement, and this Trust Supplement is executed and accepted on behalf of the
Trustee, subject to all the terms and conditions set forth in the Basic
Agreement, upon the effectiveness thereof, as fully to all intents as if the
same were herein set forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to execute,
deliver and perform this Trust Supplement, the Escrow Agreement and the
Note Documents to which it is a party and has taken all necessary action to
authorize the execution, delivery and performance by it of this Trust
Supplement, the Escrow Agreement and the Note Documents to which it is a
party;
(b) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party (i) will not violate any provision of any United States federal
law or the law of the state of the United States where it is located
governing the banking and trust powers of the Trustee or any order, writ,
judgment, or decree of any court, arbitrator or governmental authority
applicable to the Trustee or any of its assets, (ii) will not violate any
provision of the articles of association or by-laws of the Trustee, and
(iii) will not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust Property
pursuant to the provisions of any mortgage, indenture, contract, agreement
or other undertaking to which it is a party, which violation, default or
lien could reasonably be expected to have an adverse effect on the
Trustee's performance or ability to perform its duties hereunder or
thereunder or on the transactions contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party will not require the authorization, consent, or approval of, the
giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency of the
United States or the state of the United States where it is located
regulating the banking and corporate trust activities of the Trustee; and
(d) this Trust Supplement, the Escrow Agreement and the Note Documents
to which it is a party have been, or will be, as applicable, duly executed
and delivered by the Trustee and constitute, or will constitute, as
applicable, the legal, valid and binding agreements of the Trustee,
enforceable against it in accordance with their respective terms; PROVIDED,
HOWEVER, that enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and (ii) general principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Under the terms of, and subject to the limitations contained
in, Section 9.01 of the Basic Agreement, the Company may (but will not be
required to), and the Trustee (subject to Section 9.03 of the Basic Agreement)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental to the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement, for any of the purposes set forth in clauses
(1) through (9) of such Section 9.01, except that (a) clause (2) and (3) of such
Section 9.01 shall be deemed to include the Company's obligations under (in the
case of clause (2)), and the Company's rights and powers conferred by (in the
case of clause (3)), the Note Purchase Agreement and (b) clause (4) of such
Section 9.01 shall be deemed to include corrections or supplements to provisions
of the Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement
which may be defective or inconsistent with any other provision of this
Agreement or contained in any agreement referred to in such clause (4) and the
curing of any ambiguity or the modification of any other provision with respect
to matters or questions arising under the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement.
Section 6.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. The provisions of Section 9.02 of the Basic Agreement shall
apply to agreements or amendments for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Escrow
Agreement, the Deposit Agreement or the Note Purchase Agreement to the extent
applicable to the Applicable Certificateholders approving such agreement or
amendment or modifying in any manner the rights and obligations of such
Applicable Certificateholders under the Escrow Agreement, the Deposit Agreement
or the Note Purchase Agreement; provided that the provisions of Section 9.02(1)
of the Basic Agreement shall be deemed to include reductions in any manner of,
or delay in the timing of, any receipt by the Applicable Certificateholders of
payments upon the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE TRUST. The respective obligations and
responsibilities of the Company and the Trustee with respect to the Applicable
Trust shall terminate upon the earlier of (A) the completion of the assignment,
transfer and discharge described in the first sentence of the immediately
following paragraph and (B) distribution to all Applicable Certificateholders
and the Trustee of all amounts required to be distributed to them pursuant to
this Agreement and the disposition of all property held as part of the Trust
Property; PROVIDED, HOWEVER, that in no event shall the Applicable Trust
continue beyond one hundred ten (110) years following the date of the execution
of this Trust Supplement.
Upon the earlier of (i) the first Business Day following December 31,
1998, or, if later, the fifth Business Day following the Delivery Period
Termination Date and (ii) the fifth Business Day following the date on which a
Triggering Event occurs (such date, the "Transfer Date"), or, if later, the date
on which all of the conditions set forth in the immediately following sentence
have been satisfied, the Trustee is hereby directed (subject only to the
immediately following sentence) to, and the Company shall direct the institution
that will serve as the Related Trustee under the Related Pass Through Trust
Agreement to, execute and deliver the Assignment and Assumption Agreement,
pursuant to which the Trustee shall assign, transfer and deliver all of the
Trustee's right, title and interest to the Trust Property to the Related Trustee
under the Related Pass Through Trust Agreement. The Trustee and the Related
Trustee shall execute and deliver the Assignment and Assumption Agreement upon
the satisfaction of the following conditions:
(i) The Trustee, the Related Trustee and each of the Rating Agencies
then rating the Applicable Certificates shall have received an Officer's
Certificate and an Opinion of Counsel dated the date of the Assignment and
Assumption Agreement and each satisfying the requirements of Section 1.02
of the Basic Agreement, which Opinion of Counsel shall be substantially to
the effect set forth below and may be relied upon by the Beneficiaries (as
defined in the Assignment and Assumption Agreement):
(a) upon the execution and delivery thereof by the parties
thereto in accordance with the terms of this Agreement and the Related
Pass Through Trust Agreement, the Assignment and Assumption Agreement
will constitute the valid and binding obligation of each of the
parties thereto enforceable against each such party in accordance with
its terms;
(b) upon the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, each of the Applicable
Certificates then Outstanding will be entitled to the benefits of the
Related Pass Through Trust Agreement;
(c) the Related Trust is not required to be registered as an
investment company under the Investment Company Act of 1940, as
amended;
(d) the Related Pass Through Trust Agreement constitutes the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms; and
(e) neither the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, nor the consummation by
the parties thereto of the transactions contemplated to be consummated
thereunder on the date thereof, will violate any law or governmental
rule or regulation of the State of New York or the United States of
America known to such counsel to be applicable to the transactions
contemplated by the Assignment and Assumption Agreement.
(ii) The Trustee and the Company shall have received (x) a copy of the
articles of incorporation and bylaws of the Related Trustee certified as of
the Transfer Date by the Secretary or Assistant Secretary of such
institution and (y) a copy of the filing (including all attachments
thereto) made by the institution serving as the Related Trustee with the
Office of the Superintendent, State of New York Banking Department for the
qualification of the Related Trustee under Section 131(3) of the New York
Banking Law.
Upon the execution of the Assignment and Assumption Agreement by the parties
thereto, the Applicable Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Related Trust in
exchange for their interests in the Applicable Trust equal to their respective
beneficial interests in the Applicable Trust, and the Outstanding Applicable
Certificates representing Fractional Undivided Interests in the Applicable Trust
shall be deemed for all purposes of this Agreement and the Related Pass Through
Trust Agreement, without further signature or action of any party or Applicable
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related Trust and its trust property. By acceptance of its
Applicable Certificate, each Applicable Certificateholder consents to such
assignment, transfer and delivery of the Trust Property to the trustee of the
Related Trust upon the execution and delivery of the Assignment and Assumption
Agreement.
In connection with the occurrence of the event set forth in clause (B)
above, notice of such termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates to
the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Applicable Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding such final
Distribution Date specifying (A) the Distribution Date upon which the proposed
final payment of the Applicable Certificates will be made upon presentation and
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (c)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time such
notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 8.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. Each Applicable Certificateholder and Investor, by its
acceptance of its Applicable Certificate or a beneficial interest therein,
agrees to treat the Applicable Trust as a grantor trust for all U.S. federal,
state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:_____________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT A
---------
FORM OF CERTIFICATE
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]
CONTINENTAL AIRLINES PASS THROUGH TRUST 1997-4A-O
6.90% Continental Airlines Pass Through Certificate, Series 1997-4A-O
Issuance Date: October 23, 1997
Final Expected Distribution Date: January 2, 2018
Evidencing A Fractional Undivided Interest In The
Continental Airlines Pass Through Trust 1997-4A-O, The
Property Of Which Includes Certain Equipment Notes Each
Secured By An Aircraft Leased To Or Owned By Continental
Airlines, Inc.
Certificate
No. _______ $______________ Fractional Undivided Interest
representing 0.____% of the Trust per $1,000
face amount
THIS CERTIFIES THAT ____________________________, for value received,
is the registered owner of a $_____________ ( dollars) Fractional Undivided
Interest in the Continental Airlines Pass Through Trust 1997-4A-O (the "TRUST")
created by Wilmington Trust Company, as trustee (the "TRUSTEE"), pursuant to a
___________________
This legend to appear on Book-Entry Certificates to be deposited with the
Depository Trust Company.
Pass Through Trust Agreement, dated as of September 25, 1997 (the "BASIC
AGREEMENT"), between the Trustee and Continental Airlines, Inc., a Delaware
corporation (the "Company"), as supplemented by Trust Supplement No. 1997-4A-O
thereto, dated as of October 23, 1997 (the "Trust Supplement" and, together with
the Basic Agreement, the "AGREEMENT"), between the Trustee and the Company, a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement. This Certificate is one of the
duly authorized Certificates designated as "6.90% Continental Airlines Pass
Through Certificates, Series 1997-4A-O" (herein called the "CERTIFICATES"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the
Certificateholder of this Certificate assents to and agrees to be bound by the
provisions of the Agreement and the Intercreditor Agreement. The property of the
Trust includes certain Equipment Notes and all rights of the Trust to receive
payments under the Intercreditor Agreement and any Liquidity Facilities (the
"TRUST PROPERTY"). Each issue of the Equipment Notes is secured by, among other
things, a security interest in an Aircraft leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January 2 and July 2 (a "Regular Distribution Date")
commencing January 2, 1998, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS THROUGH TRUST
1997-4A-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT B
---------
[DTC Letter of Representations]
EXHIBIT C
---------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Continental Airlines Pass Through Trust 1997-4A
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ____________, 199_ (the
"ASSIGNMENT AGREEMENT"), between Wilmington Trust Company, a Delaware banking
corporation ("WTC"), not in its individual capacity except as expressly provided
herein, but solely as trustee under the Pass Through Trust Agreement dated as of
September 25, 1997 (as amended or modified from time to time, the "BASIC
AGREEMENT"), as supplemented by the Trust Supplement No. 1997-4A-O, dated
October 23 , 1997 (the "TRUST SUPPLEMENT" and together with the Basic Agreement,
the "AGREEMENT") in respect of the Continental Airlines Pass Through Trust
1997-4A-O (the "ASSIGNOR"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity except as expressly provided herein,
but solely as trustee under the Basic Agreement as supplemented by the Trust
Supplement No. 1997-4A-S dated October 23, 1997 (the "NEW SUPPLEMENT", and,
together with the Basic Agreement, the "NEW AGREEMENT") in respect of the
Continental Airlines Pass Through Trust 1997-4A-S (the "ASSIGNEE").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to effect on the date hereof (the
"TRANSFER DATE") (a) the transfer by the Assignor to the Assignee of all of the
right, title and interest of the Assignor in, under and with respect to, among
other things, the Trust Property and each of the documents listed in Schedule I
hereto (the "SCHEDULED DOCUMENTS") and (b) the assumption by the Assignee of the
obligations of the Assignor (i) under the Scheduled Documents and (ii) in
respect of the Applicable Certificates issued under the Agreement; and
WHEREAS, the Scheduled Documents permit such transfer upon
satisfaction of certain conditions heretofore or concurrently herewith being
complied with;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows (capitalized terms used herein without definition having the meaning
ascribed thereto in the Agreement):
1. ASSIGNMENT. The Assignor does hereby sell, assign, convey, transfer
and set over unto the Assignee as of the Transfer Date all of its present and
future right, title and interest in, under and with respect to the Trust
Property and the Scheduled Documents and each other contract, agreement,
document or instrument relating to the Trust Property or the Scheduled Documents
(such other contracts, agreements, documents or instruments, together with the
Scheduled Documents, to be referred to as the "ASSIGNED DOCUMENTS"), and any
proceeds therefrom, together with all documents and instruments evidencing any
of such right, title and interest.
2. ASSUMPTION. The Assignee hereby assumes for the benefit of the
Assignor and each of the parties listed in Schedule II hereto (collectively, the
"BENEFICIARIES") all of the duties and obligations of the Assignor, whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the Assigned Documents to which the Assignor is a
party and shall be bound by all the terms thereof (including the agreements and
obligations of the Assignor set forth therein) as if therein named as the
Assignor. Further, the Assignee hereby assumes for the benefit of the Assignor
and the Beneficiaries all of the duties and obligations of the Assignor under
the Outstanding Applicable Certificates and hereby confirms that the Applicable
Certificates representing Fractional Undivided Interests under the Agreement
shall be deemed for all purposes of the Agreement and the New Agreement to be
certificates representing the same fractional undivided interests under the New
Agreement equal to their respective beneficial interests in the trust created
under the Agreement.
3. EFFECTIVENESS. This Assignment Agreement shall be effective upon
the execution and delivery hereof by the parties hereto, and each Applicable
Certificateholder, by its acceptance of its Applicable Certificate or a
beneficial interest therein, agrees to be bound by the terms of this Assignment
Agreement.
4. PAYMENTS. The Assignor hereby covenants and agrees to pay over to
the Assignee, if and when received following the Transfer Date, any amounts
(including any sums payable as interest in respect thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.
5. FURTHER ASSURANCES. The Assignor shall, at any time and from time
to time, upon the request of the Assignee, promptly and duly execute and deliver
any and all such further instruments and documents and take such further action
as the Assignee may reasonably request to obtain the full benefits of this
Assignment Agreement and of the right and powers herein granted. The Assignor
agrees to deliver any Applicable Certificates, and all Trust Property, if any,
then in the physical possession of the Assignor, to the Assignee.
6. REPRESENTATIONS AND WARRANTIES. (a) The Assignee represents and
warrants to the Assignor and each of the Beneficiaries that:
(i) it has all requisite power and authority and legal right to enter
into and carry out the transactions contemplated hereby and to carry out
and perform the obligations of the "Pass Through Trustee" under the
Assigned Documents;
(ii) on and as of the date hereof, the representations and warranties
of the Assignee set forth in Section 7.15 of the Basic Agreement and
Section 5.04 of the New Supplement are true and correct.
(b) The Assignor represents and warrants to the Assignee that:
(i) it is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the full trust power,
authority and legal right under the laws of the State of Delaware and the
United States pertaining to its trust and fiduciary powers to execute and
deliver this Assignment Agreement;
(ii) the execution and delivery by it of this Assignment Agreement and
the performance by it of its obligations hereunder have been duly
authorized by it and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
(iii) this Assignment Agreement constitutes the legal, valid and
binding obligations of it enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
7. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
8. COUNTERPARTS. This Assignment Agreement may be executed in any
number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by both
parties so long as each party shall sign at least one counterpart.
9. THIRD PARTY BENEFICIARIES. The Assignee hereby agrees, for the
benefit of the Beneficiaries, that its representations, warranties and covenants
contained herein are also intended to be for the benefit of each Beneficiary,
and each Beneficiary shall be deemed to be an express third party beneficiary
with respect thereto, entitled to enforce directly and in its own name any
rights or claims it may have against such party as such beneficiary.
IN WITNESS WHEREOF, the parties hereto, through their respective
officers thereunto duly authorized, have duly executed this Assignment Agreement
as of the day and year first above written.
ASSIGNOR:
WILMINGTON TRUST COMPANY, not in its
individual capacity except as
expressly provided herein, but solely
as trustee under the Pass Through
Trust Agreement and Trust Supplement
in respect of the Continental Airlines
Pass Through Trust 1997-4A-O
By:____________________________________
Title:
ASSIGNEE:
WILMINGTON TRUST COMPANY, not in its
individual capacity except as
expressly provided herein, but solely
as trustee under the Pass Through
Trust Agreement and Trust Supplement
in respect of the Continental Airlines
Pass Through Trust 1997-4A-S
By:____________________________________
Title:
Schedule I
Schedule of Assigned Documents
(1) Intercreditor Agreement dated as of October 23, 1997 among the
Trustee, the Other Trustees, the Liquidity Providers, the liquidity provider, if
any, relating to the Certificates issued under (and as defined in) each of the
Other Agreements and the Subordination Agent.
(2) Escrow and Paying Agent Agreement (Class A) dated as of October
23, 1997 among the Escrow Agent, the Underwriters, the Trustee and the Paying
Agent.
(3) Note Purchase Agreement dated as of October 23, 1997 among the
Company, the Trustee, the Other Trustees, the Depositary, the Escrow Agent, the
Paying Agent and the Subordination Agent.
(4) Deposit Agreement (Class A) dated as of October 23, 1997 between
the Escrow Agent and the Depositary.
(5) Each of the Operative Agreements (as defined in the Participation
Agreement for each Aircraft) in effect as of the Transfer Date.
Schedule II
Schedule of Beneficiaries
Wilmington Trust Company, not in its individual capacity but solely as
Subordination Agent
Wilmington Trust Company, not in its individual capacity but solely as Paying
Agent
ABN AMRO Bank N.V., acting through its Chicago branch, and Westdeutsche
Landesbank Girozentrale, acting through its New York branch, as Liquidity
Providers
Continental Airlines, Inc.
Morgan Stanley & Co. Incorporated, as Underwriter
Credit Suisse First Boston Corporation, as Underwriter
Chase Securities Inc., as Underwriter
Salomon Brothers Inc, as Underwriter
First Security Bank, National Association, as Escrow Agent
Each of the other parties to the Assigned Documents
EXECUTION COPY
TRUST SUPPLEMENT No. 1997-4A-S
Dated October 23, 1997
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$505,951,000
Continental Airlines Pass Through Trust 1997-4A-S
6.90% Continental Airlines
Pass Through Certificates,
Series 1997-4A-S
This Trust Supplement No. 1997-4A-S, dated as of October 23, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"Trustee"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in the
Basic Agreement) which may be issued thereunder, has heretofore been executed
and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, as of the Transfer Date (as defined below), the Company will
have financed the acquisition of all or a portion of such Aircraft either (i)
through separate leveraged lease transactions, in which case the Company leases
such Aircraft (collectively, the "LEASED AIRCRAFT") or (ii) through separate
secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "OWNED AIRCRAFT");
WHEREAS, as of the Transfer Date in the case of each Leased Aircraft,
each Owner Trustee, acting on behalf of the corresponding Owner Participant,
will have issued pursuant to an Indenture, on a non-recourse basis, Equipment
Notes in order to finance a portion of its purchase price of such Leased
Aircraft;
WHEREAS, as of the Transfer Date, in the case of each Owned Aircraft,
the Company will have issued pursuant to an Indenture, on a recourse basis,
Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;
WHEREAS, as of the Transfer Date, the Related Trustee will assign,
transfer and deliver all of such trustee's right, title and interest to the
trust property held by the Related Trustee to the Trustee pursuant to the
Assignment and Assumption Agreement (as defined below);
WHEREAS, the Trustee, effective only, but automatically, upon
execution and delivery of the Assignment and Assumption Agreement, will be
deemed to have declared the creation of the Continental Airlines Pass Through
Trust 1997-4A-S (the "APPLICABLE TRUST") for the benefit of the Applicable
Certificateholders, and each Holder of Applicable Certificates outstanding as of
the Transfer Date, as the grantors of the Applicable Trust, by their respective
acceptances of such Applicable Certificates, will join in the creation of this
Applicable Trust with the Trustee;
WHEREAS, all Applicable Certificates deemed issued by the Applicable
Trust will evidence fractional undivided interests in the Applicable Trust and
will convey no rights, benefits or interests in respect of any property other
than the Trust Property except for those Applicable Certificates to which an
Escrow Receipt (as defined below) has been affixed;
WHEREAS, upon the execution and delivery of the Assignment and
Assumption Agreement, all of the conditions and requirements necessary to make
this Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. The Applicable Certificates shall be
known as "6.90% Continental Airlines Pass Through Certificates, Series
1997-4A-S". Each Applicable Certificate represents a fractional undivided
interest in the Applicable Trust created hereby. The Applicable Certificates
shall be the only instruments evidencing a fractional undivided interest in the
Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates that
shall be initially deemed issued under the Agreement shall be equal to the
aggregate principal amount of "Outstanding" pass through certificates
representing fractional undivided interests in the Related Trust on the
Transfer Date.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means January 2 and July 2 of each year, commencing on
January 2, 1998, until payment of all of the Scheduled Payments to be made
under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the restrictions on transfer of the Escrow Receipt set forth herein
and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached as
Exhibit A to the Related Pass Through Trust Agreement,with such appropriate
insertions, omissions, substitutions and other variations as are required
or permitted by the Related Pass Through Trust Agreement or this Agreement,
as the case may be, or as the Trustee may deem appropriate, to reflect the
fact that the Applicable Certificates are being issued hereunder as opposed
to under the Related Pass Through Trust Agreement. Any Person acquiring or
accepting an Applicable Certificate, by its acceptance of such Applicable
Certificate or an interest therein will, by such acquisition or acceptance,
be deemed to represent and warrant to and for the benefit of each Owner
Participant and the Company that either (i) the assets of an employee
benefit plan subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or of a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), have not been
used to purchase Applicable Certificates or an interest therein or (ii) the
purchase and holding of Applicable Certificates is exempt from the
prohibited transaction restrictions of ERISA and the Code pursuant to one
or more prohibited transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry
Certificates.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement.
(g) The Applicable Certificates are entitled to the benefits of the
Liquidity Facilities.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement," for
purposes of clause (3) of Section 7.07 of the Basic Agreement are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft).
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have the
following meanings:
AGREEMENT: Means the Basic Agreement, as supplemented by this Trust
Supplement.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
APPLICABLE CERTIFICATE: means any of the Applicable Certificates
issued by the Related Trust and that are "Outstanding" (as defined in the
Related Pass Through Trust Agreement) as of the Transfer Date (the
"Transfer Date Certificates") and any Applicable Certificates issued in
exchange therefor or replacement thereof pursuant to this Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C to the Related
Trust Supplement executed and delivered in accordance with Section 7.01 of
the Related Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Has the meaning specified in the
Related Pass Through Trust Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of October 23,
1997 relating to the Applicable Certificates between the Depositary and the
Escrow Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
of October 23, 1997 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Related Trustee (and after the
Transfer Date, the Trustee) and the Underwriters, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under the
Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
FINAL MATURITY DATE: Means July 2, 2019.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
October 23, 1997 among the Related Trustee (and after the Transfer Date,
the Trustee), the Related Other Trustees (and after the Transfer Date, the
Other Trustees), the Liquidity Providers, the liquidity providers relating
to the Certificates issued under (and as defined in) each of the Related
Other Agreements, and Wilmington Trust Company, as Subordination Agent and
as trustee thereunder, as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred
to in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LIQUIDITY FACILITIES: Means, initially, each of the Revolving Credit
Agreements dated as of October 23, 1997 relating to the Applicable
Certificates, between a Liquidity Provider and Wilmington Trust Company, as
the Subordination Agent, as agent and trustee for the Applicable Trust,
and, from and after the replacement of such Agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDERS: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago branch, and Westdeutsche Landesbank Girozentrale,
acting through its New York branch, and any replacements or successors
therefor appointed in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: With respect to any Equipment Note, means (i) the
Indenture and the Participation Agreement relating to such Equipment Note,
and (ii) in the case of any Equipment Note related to a Leased Aircraft,
the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as of
October 23, 1997 among the Related Trustee (and after the Transfer Date,
the Trustee), the Related Other Trustees (and after the Transfer Date, the
Other Trustees), the Company, the Escrow Agent, the Escrow Paying Agent and
the Subordination Agent, as the same may be amended, supplemented or
otherwise modified from time to time, in accordance with its terms.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1997-4B-S dated the date hereof relating to
Continental Airlines Pass Through Trust 1997-4B-S and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1997-4C-S dated the date
hereof relating to Continental Airlines Pass Through Trust 1997-4C-S.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1997-4B-S and Continental Airlines Pass Through Trust 1997-4C-S, created by
the Other Pass Through Trust Agreements.
OUTSTANDING: when used with respect to Applicable Certificates, means,
as of the date of determination, all Transfer Date Certificates, and all
other Applicable Certificates theretofore authenticated and delivered under
this Agreement, in each case except:
(i) Applicable Certificates theretofore canceled by the Registrar or
delivered to the Trustee or the Registrar for cancellation;
(ii) Applicable Certificates for which money in the full amount
required to make the final distribution with respect to such Applicable
Certificates pursuant to Section 11.01 of the Basic Agreement has been
theretofore deposited with the Trustee in trust for the Applicable
Certificateholders as provided in Section 4.01 of the Basic Agreement
pending distribution of such money to such Applicable Certificateholders
pursuant to payment of such final distribution; and
(iii) Applicable Certificates in exchange for or in lieu of which
other Applicable Certificates have been authenticated and delivered
pursuant to this Agreement.
OWNED AIRCRAFT: Has the meaning specified in the third recital to this
Trust Supplement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and OWNER PARTICIPANTS at
any time of determination means all of the Owner Participants thus referred
to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its individual
capacity but solely as trustee; and OWNER TRUSTEES means all of the Owner
Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with
its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the "Applicable Certificates" as defined in the Related Pass
Through Trust Agreement, less (ii) the aggregate amount of all payments
made in respect of such Certificates or in respect of Deposits other than
payments made in respect of interest or premium thereon or reimbursement of
any costs or expenses incurred in connection therewith. The Pool Balance as
of any Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, payment of principal
on the Equipment Notes or payments with respect to other Trust Property and
the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the "Applicable Certificates" as
defined in the Related Pass Through Trust Agreement. The Pool Factor as of
any Distribution Date shall be computed after giving effect to any special
distribution with respect unused Deposits, payment of principal on the
Equipment Notes or payments with respect to other Trust Property and the
distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
16, 1997 relating to the offering of the Certificates.
RELATED OTHER PASS THROUGH TRUST AGREEMENTS: Means the "Other
Agreements" as defined in the Related Pass Through Trust Agreement.
RELATED OTHER TRUSTEES: Means the "Other Trustees" as defined in the
Related Pass Through Trust Agreement.
RELATED OTHER TRUSTS: Means the "Other Trusts" as defined in the
Related Pass Through Trust Agreement.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1997-4A-O dated the date hereof
(the "RELATED PASS THROUGH TRUST SUPPLEMENT"), relating to the Continental
Airlines Pass Through Trust 1997-4A-O and entered into by the Company and
the Trustee, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
RELATED TRUST: Means the Continental Pass Through Trust 1997-4A-O,
formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase 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) or Special Redemption Premium.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Means the moment of execution and delivery of the
Assignment and Assumption Agreement by each of the parties thereto.
TRANSFER DATE CERTIFICATE: Has the meaning specified in the definition
of "Applicable Certificates".
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the
Special Payments Account and, subject to the Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI of the Basic
Agreement of any Equipment Note and (iii) all rights of the Trust and the
Trustee, on behalf of the Applicable Trust, under the Intercreditor
Agreement, the Escrow Agreement, the Note Purchase Agreement and the
Liquidity Facilities, including, without limitation, all rights to receive
certain payments thereunder, and all monies paid to the Trustee on behalf
of the Applicable Trust pursuant to the Intercreditor Agreement or the
Liquidity Facilities, PROVIDED that rights with respect to the Deposits or
under the Escrow Agreement, will not constitute Trust Property.
UNDERWRITERS: Means, collectively, Morgan Stanley & Co. Incorporated,
Credit Suisse First Boston Corporation, Chase Securities Inc. and Salomon
Brothers Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated October
16, 1997 among the Underwriters, the Company and the Depositary, as the
same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. ADDITIONS TO ARTICLE IV OF THE BASIC AGREEMENT. In
addition to the provisions of Article IV of the Basic Agreement, the following
provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the Trustee
under the Note Purchase Agreement, the Trustee, upon receipt thereof, shall
immediately deposit the aggregate amount of such Special Redemption Premium
in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium as
provided for in Section 4.02(b) of the Basic Agreement shall be on the
Special Distribution Date with respect to such Special Payment or as soon
thereafter as the Trustee has confirmed receipt of the related Special
Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium by the
Company to the Trustee under the Note Purchase Agreement, the notice
provided for in Section 4.02(c) of the Basic Agreement shall be mailed,
together with the notice by the Escrow Paying Agent under Section 2.06 of
the Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date shall be
the Final Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c) of the
Basic Agreement shall apply equally if the amount of Special Redemption
Premium, if any, has not ben calculated at the time the Trustee mails
notice of a Special Payment.
Section 3.02. STATEMENTS TO CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable to
principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable to
interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of
a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Transfer Date, if there has been any
change in the information set forth in clauses (x), (y) and (z) below from that
set forth in page S-51 of the Prospectus Supplement, and (ii) any early
redemption or purchase of, or any default in the payment of principal or
interest in respect of, any of the Equipment Notes held in the Applicable Trust,
or any Final Withdrawal, the Trustee shall furnish to Certificateholders of
record on such date a statement setting forth (x) the expected Pool Balances for
each subsequent Regular Distribution Date following the Delivery Period
Termination Date, (y) the related Pool Factors for such Regular Distribution
Dates and (z) the expected principal distribution schedule of the Equipment
Notes, in the aggregate, held as Trust Property at the date of such notice. With
respect to the Applicable Certificates registered in the name of a Clearing
Agency, on the Transfer Date, the Trustee will request from such Clearing Agency
a securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests in
the "Applicable Certificates" (as defined in the Related Pass Through Trust
Agreement) on such date. The Trustee will mail to each such Clearing Agency
Participant the statement described above and will make available additional
copies as requested by such Clearing Agency Participant for forwarding to
holders of interests in the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) By acceptance
of its Applicable Certificate, each Applicable Certificateholder agrees that at
any time after the occurrence and during the continuation of a Triggering Event,
(i) each Class B Certificateholder shall have the right to purchase
all, but not less than all, of the Applicable Certificates upon ten days'
written notice to the Trustee and each other Class B Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class B Certificateholder notifies such purchasing Class B
Certificateholder that such other Class B Certificateholder wants to
participate in such purchase, then such other Class B Certificateholder may
join with the purchasing Class B Certificateholder to purchase all, but not
less than all, of the Applicable Certificates pro rata based on the
Fractional Undivided Interest in the Class B Trust held by each such Class
B Certificateholder and (B) if prior to the end of such ten-day period any
other Class B Certificateholder fails to notify the purchasing Class B
Certificateholder of such other Class B Certificateholder's desire to
participate in such a purchase, then such other Class B Certificateholder
shall lose its right to purchase the Applicable Certificates pursuant to
this Section 4.01(a);
(ii) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Applicable Certificates pursuant to
clause (i) above) to purchase all, but not less than all, of the Applicable
Certificates and the Class B Certificates upon ten days' written notice to
the Trustee, the Class B Trustee and each other Class C Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may
join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Applicable Certificates and the Class B Certificates
pro rata based on the Fractional Undivided Interest in the Class C Trust
held by each such Class C Certificateholder and (B) if prior to the end of
such ten-day period any other Class C Certificateholder fails to notify the
purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(a)
(iii) each Class D Certificateholder shall have the right (which shall
not expire upon any purchase of the Applicable Certificates pursuant to
clause (i) or (ii) above) to purchase all, but not less than all, of the
Applicable Certificates, the Class B Certificates and the Class C
Certificates upon ten days' written notice to the Trustee, the Class B
Trustee, the Class C Trustee and each other Class D Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class D Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder wants to
participate in such purchase, then such other Class D Certificateholder may
join with the purchasing Class D Certificateholder to purchase all, but not
less than all, of the Applicable Certificates, the Class B Certificates and
the Class C Certificates pro rata based on the Fractional Undivided
Interest in the Class D Trust held by each such Class D Certificateholder
and (B) if prior to the end of such ten-day period any other Class D
Certificateholder fails to notify the purchasing Class D Certificateholder
of such other Class D Certificateholder's desire to participate in such a
purchase, then such other Class D Certificateholder shall lose its right to
purchase the Applicable Certificates pursuant to this Section 4.01(a).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed hereunder on the related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date); PROVIDED FURTHER that no such
purchase of Applicable Certificates shall be effective unless the purchaser(s)
shall certify to the Trustee that contemporaneously with such purchase, such
purchaser(s) is purchasing, pursuant to the terms of this Agreement and the
Other Agreements, the Applicable Certificates, the Class B Certificates and the
Class C Certificates which are senior to the securities held by such
purchaser(s). Each payment of the purchase price of the Applicable Certificates
referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such purchase shall be subject to the terms
of this Section 4.01(a). Each Applicable Certificateholder agrees by its
acceptance of its Applicable Certificate that it will, subject to Section 3.04
of the Basic Agreement, upon payment from such Class B Certificateholder(s),
Class C Certificateholder(s) or Class D Certificateholder(s), as the case may
be, of the purchase price set forth in the first sentence of this paragraph,
forthwith sell, assign, transfer and convey to the purchaser(s) thereof (without
recourse, representation or warranty of any kind except for its own acts), all
of the right, title, interest and obligation of such Applicable
Certificateholder in this Agreement, the Escrow Agreement, the Deposit
Agreement, the Intercreditor Agreement, the Liquidity Facilities, the Note
Documents and all Applicable Certificates and Escrow Receipts held by such
Applicable Certificateholder (excluding all right, title and interest under any
of the foregoing to the extent such right, title or interest is with respect to
an obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the purchaser shall assume
all of such Applicable Certificateholder's obligations under this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facilities, the Note Documents and all such Applicable Certificates
and Escrow Receipts. The Applicable Certificates will be deemed to be purchased
on the date payment of the purchase price is made notwithstanding the failure of
the Applicable Certificateholders to deliver any Applicable Certificates and,
upon such a purchase, (i) the only rights of the Applicable Certificateholders
will be to deliver the Applicable Certificates to the purchaser(s) and receive
the purchase price for such Applicable Certificates and (ii) if the purchaser(s)
shall so request, such Applicable Certificateholder will comply with all the
provisions of Section 3.04 of the Basic Agreement to enable new Applicable
Certificates to be issued to the purchaser in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01, the terms "Class B Certificateholder",
"Class B Trust", "Class B Certificate", "Class B Trustee", "Class C
Certificate", "Class C Certificateholder", "Class C Trust", "Class C Trustee",
"Class D Certificateholder" and "Class D Trust", shall have the respective
meanings assigned to such terms in the Intercreditor Agreement.
(b) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. ACQUISITION OF TRUST PROPERTY. (a) The Trustee is hereby
irrevocably authorized and directed to execute and deliver the Assignment and
Assumption Agreement on the date specified in Section 7.01 of the Related Trust
Supplement, subject only to the satisfaction of the conditions set forth in said
Section 7.01. This Agreement (except only for the immediately preceding sentence
hereof, which is effective upon execution and delivery hereof) shall become
effective upon the execution and delivery of the Assignment and Assumption
Agreement by the Trustee and the Related Trustee, automatically and without any
further signature or action on the part of the Company and the Trustee, and
shall thereupon constitute the legal, valid and binding obligation of the
parties hereto enforceable against each of the parties hereto in accordance with
its terms. Upon such execution and delivery of the Assignment and Assumption
Agreement, the Related Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Applicable Trust in
exchange for their interests in the Related Trust equal to their respective
beneficial interests in the Related Trust and the "Outstanding" (as defined in
the Related Pass Through Trust Agreement) pass through certificates representing
fractional undivided interests in the Related Trust shall be deemed for all
purposes of this Agreement, without further signature or action of any party or
Certificateholder, to be Certificates representing the same Fractional Undivided
Interests in the Trust and Trust Property. By acceptance of its Applicable
Certificate, each Applicable Certificateholder consents to and ratifies such
assignment, transfer and delivery of the trust property of the Related Trust to
the Trustee upon the execution and delivery of the Assignment and Assumption
Agreement. The provisions of this Section 5.01(a) supersede and replace the
provisions of Section 2.02 of the Basic Agreement (which are inapplicable to the
Trust), and all provisions of the Basic Agreement relating to Postponed Notes or
Section 2.02 of the Basic Agreement shall not apply to the Applicable Trust.
(b) The Trustee, upon the execution and delivery of the Assignment and
Assumption Agreement, acknowledges its acceptance of all right, title and
interest in and to the Trust Property and declares that the Trustee holds and
will hold such right, title and interest for the benefit of all then present and
future Applicable Certificateholders, upon the trusts herein and in the Basic
Agreement set forth. By the acceptance of each Applicable Certificate issued to
it under the Related Pass Through Trust Agreement and deemed issued under this
Agreement, each Holder of any such Applicable Certificate as grantor of the
Applicable Trust thereby joins in the creation and declaration of the Applicable
Trust. The provisions of this Section 5.01(b) supersede and replace the
provisions of Section 2.03 of the Basic Agreement (which are inapplicable to the
Trust).
Section 5.02. [Intentionally Omitted]
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the recitals
and statements contained herein or therein, all of which recitals and statements
are made solely by the Company.
(b) Except as herein otherwise provided, no duties, responsibilities
or liabilities are assumed, or shall be construed to be assumed by the Trustee
by reason of this Trust Supplement other than as set forth in the Basic
Agreement, and this Trust Supplement is executed and accepted on behalf of the
Trustee, subject to all the terms and conditions set forth in the Basic
Agreement, upon the effectiveness thereof, as fully to all intents as if the
same were herein set forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants, on the Transfer Date, that:
(a) the Trustee has full power, authority and legal right to receive
the Trust Property assigned by the Related Trustee, assume the obligations
under, and perform, the Assignment and Assumption Agreement, this Trust
Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
Documents and has taken all necessary action to authorize such receipt,
assumption and performance by it of this Trust Supplement, the
Intercreditor Agreement, the Escrow Agreement and the Note Documents to
which it is a party;
(b) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents (i) will not violate
any provision of any United States federal law or the law of the state of
the United States where it is located governing the banking and trust
powers of the Trustee or any order, writ, judgment, or decree of any court,
arbitrator or governmental authority applicable to the Trustee or any of
its assets, (ii) will not violate any provision of the articles of
association or by-laws of the Trustee, and (iii) will not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to which it
is a party, which violation, default or lien could reasonably be expected
to have an adverse effect on the Trustee's performance or ability to
perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(c) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents will not require the
authorization, consent, or approval of, the giving of notice to, the filing
or registration with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the state of the
United States where it is located regulating the banking and corporate
trust activities of the Trustee; and
(d) The Assignment and Assumption Agreement has been duly executed and
delivered by the Trustee and this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents have been, or will
be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and binding
agreements of the Trustee, enforceable against it in accordance with their
respective terms; PROVIDED, however, that enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and (ii) general
principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
CERTIFICATEHOLDERS. Under the terms of, and subject to the limitations contained
in, Section 9.01 of the Basic Agreement, the Company may (but will not be
required to), and the Trustee (subject to Section 9.03 of the Basic Agreement)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental to the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement, for any of the purposes set forth in clauses
(1) through (9) of such Section 9.01, except that (a) clause (2) and (3) of such
Section 9.01 shall be deemed to include the Company's obligations under (in the
case of clause (2)), and the Company's rights and powers conferred by (in the
case of clause (3)), the Note Purchase Agreement and (b) clause (4) of such
Section 9.01 shall be deemed to include corrections or supplements to provisions
of the Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement
which may be defective or inconsistent with any other provision of this
Agreement or contained in any agreement referred to in such clause (4) and the
curing of any ambiguity or the modification of any other provision with respect
to matters or questions arising under the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement.
Section 6.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
CERTIFICATEHOLDERS. The provisions of Section 9.02 of the Basic Agreement shall
apply to agreements or amendments for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Escrow
Agreement, the Deposit Agreement or the Note Purchase Agreement to the extent
applicable to the Applicable Certificateholders approving such agreement or
amendment or modifying in any manner the rights and obligations of such
Applicable Certificateholders under the Escrow Agreement, the Deposit Agreement
or the Note Purchase Agreement; provided that the provisions of Section 9.02(1)
of the Basic Agreement shall be deemed to include reductions in any manner of,
or delay in the timing of, any receipt by the Applicable Certificateholders of
payments upon the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
earliest execution of this Trust Supplement.
Notice of any termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates to
the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Applicable Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding such final
Distribution Date specifying (A) the Distribution Date upon which the proposed
final payment of the Applicable Certificates will be made upon presentation and
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (c)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time such
notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 8.02. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. Each Applicable Certificateholder and Investor, by its
acceptance of its Applicable Certificate or a beneficial interest therein,
agrees to treat the Applicable Trust as a grantor trust for all U.S. federal,
state and local income tax purposes. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to further
such intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:____________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:____________________________________
Name:
Title:
EXECUTION COPY
TRUST SUPPLEMENT No. 1997-4B-O
Dated October 23, 1997
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$134,937,000
Continental Airlines Pass Through Trust 1997-4B-O
6.90% Continental Airlines
Pass Through Certificates,
Series 1997-4B-O
This Trust Supplement No. 1997-4B-O, dated as of October 23, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"Trustee"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
WHEREAS, the Basic Agreement, unlimited as to the aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified in
the Basic Agreement) which may be issued thereunder, has heretofore been
executed and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which case
the Company will lease such Aircraft (collectively, the "LEASED AIRCRAFT") or
(ii) through separate secured loan transactions, in which case the Company will
own such Aircraft (collectively, the "OWNED AIRCRAFT");
WHEREAS, in the case of each Leased Aircraft, each Owner Trustee,
acting on behalf of the corresponding Owner Participant, will issue pursuant to
an Indenture, on a non-recourse basis, Equipment Notes in order to finance a
portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will issue
pursuant to an Indenture, on a recourse basis, Equipment Notes to finance a
portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this
Continental Airlines Pass Through Trust 1997-4B-O (the "APPLICABLE TRUST") for
the benefit of the Applicable Certificateholders, and the initial Applicable
Certificateholders as the grantors of the Applicable Trust, by their respective
acceptances of the Applicable Certificates, join in the creation of the
Applicable Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will
evidence fractional undivided interests in the Applicable Trust and will convey
no rights, benefits or interests in respect of any property other than the Trust
Property except for those Certificates to which an Escrow Receipt has been
affixed;
WHEREAS, the Escrow Agent and the Underwriters have
contemporaneously herewith entered into an Escrow Agreement with the Escrow
Paying Agent pursuant to which the Underwriters have delivered to the Escrow
Agent the proceeds from the sale of the Applicable Certificates and have
irrevocably instructed the Escrow Agent to withdraw and pay funds from such
proceeds upon request and proper certification by the Trustee to purchase
Equipment Notes as the Aircraft are delivered by Boeing under the Aircraft
Purchase Agreement from time to time prior to the Delivery Period Termination
Date;
WHEREAS, the Escrow Agent on behalf of the Applicable
Certificateholders has contemporaneously herewith entered into a Deposit
Agreement with the Depositary under which the Deposits referred to therein will
be made and from which it will withdraw funds to allow the Trustee to purchase
Equipment Notes from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "AGREEMENT") and the Note Purchase
Agreement, upon or shortly following delivery of an Aircraft, the Trustee on
behalf of the Applicable Trust, using funds withdrawn under the Escrow
Agreement, shall purchase one or more Equipment Notes having the same interest
rate as, and final maturity date not later than the final Regular Distribution
Date of, the Applicable Certificates issued hereunder and shall hold such
Equipment Notes in trust for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make
this Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known as
"6.90% Continental Airlines Pass Through Certificates, Series 1997-4B-O"
(hereinafter defined as the "APPLICABLE CERTIFICATES"). Each Applicable
Certificate represents a fractional undivided interest in the Applicable Trust
created hereby. The Applicable Certificates shall be the only instruments
evidencing a fractional undivided interest in the Applicable Trust.
The terms and conditions applicable to the Applicable Certificates
are as follows:
(a) The aggregate principal amount of the Applicable Certificates
that shall be authenticated under the Agreement (except for Applicable
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04
and 3.06 of the Basic Agreement) is $134,937,000.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means January 2 and July 2 of each year, commencing on
January 2, 1998, until payment of all of the Scheduled Payments to be made
under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of
any Applicable Certificate shall be permitted unless the corresponding
Escrow Receipt is attached thereto and also is so transferred or
exchanged. By acceptance of any Applicable Certificate to which an Escrow
Receipt is attached, each Holder of such an Applicable Certificate
acknowledges and accepts the restrictions on transfer of the Escrow
Receipt set forth herein and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting an Applicable
Certificate or an interest therein will, by such acquisition or
acceptance, be deemed to represent and warrant to and for the benefit of
each Owner Participant and the Company that either (i) the assets of an
employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or of a plan subject to
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), have not been used to purchase Applicable Certificates or an
interest therein or (ii) the purchase and holding of Applicable
Certificates is exempt from the prohibited transaction restrictions of
ERISA and the Code pursuant to one or more prohibited transaction
statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates
and shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached
hereto as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement, and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the
Liquidity Facility.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement", for
purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft) of each Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic
Agreement as supplemented by this Trust Supplement, the following capitalized
terms have the following meanings:
AGREEMENT: Has the meaning specified in the recitals hereto.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
AIRCRAFT PURCHASE AGREEMENT: Has the meaning specified in the Note
Purchase Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE DELIVERY DATE: Has the meaning specified in Section
5.01(b) of this Trust Supplement.
APPLICABLE PARTICIPATION AGREEMENT: Has the meaning specified in
Section 5.01(b) of this Trust Supplement.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C hereto
executed and delivered in accordance with Section 7.01 of this Trust
Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CUT-OFF DATE: Means the earlier of (a) the Delivery Period
Termination Date and (b) the date on which a Triggering Event occurs.
DELIVERY DATE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Means the earlier of (a) December
31, 1998, or, if the Equipment Notes relating to all of the New Aircraft
(or Substitute Aircraft in lieu thereof) have not been purchased by the
Applicable Trust and the Other Trusts on or prior to such date due to any
reason beyond the control of the Company and not occasioned by the
Company's fault or negligence, May 31, 1999 (PROVIDED that, if a labor
strike occurs at Boeing on or prior to either or both of such dates
referred to in this clause (a), such date or dates on or following the
commencement of such strike shall be extended by adding thereto the number
of days that such strike continued in effect) and (b) the date on which
Equipment Notes issued with respect to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Applicable
Trust and the Other Trusts in accordance with the Note Purchase Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of October
23, 1997 relating to the Applicable Certificates between the Depositary
and the Escrow Agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated
as of October 23, 1997 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Trustee and Underwriters, as
the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under
the Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed
to the Escrow Agreement representing a fractional undivided interest in
the funds held in escrow thereunder.
FINAL MATURITY DATE: Means July 2, 2018.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
FINAL WITHDRAWAL NOTICE: Has the meaning specified in Section 5.02
of this Trust Supplement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as
of October 23, 1997 among the Trustee, the Other Trustees, the Liquidity
Providers, the liquidity providers relating to the Certificates issued
under (and as defined in) each of the Other Agreements, and Wilmington
Trust Company, as Subordination Agent and as trustee thereunder, as
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease
between an Owner Trustee, as the lessor, and the Company, as the lessee,
referred to in the related Indenture, as such lease may be amended,
supplemented or otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LIQUIDITY FACILITIES: Means, initially, each of the Revolving Credit
Agreements dated as of October 23, 1997 relating to the Applicable
Certificates, between a Liquidity Provider and Wilmington Trust Company as
Subordination Agent, as agent and trustee for the Applicable Trust, and,
from and after the replacement of such agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDERS: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago branch, and Westdeutsche Landesbank Girozentrale,
acting through its New York branch, and any replacements or successors
therefor appointed in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: With respect to any Equipment Note, means (i) the
Indenture and the Participation Agreement relating to such Equipment Note,
and (ii) in the case of any Equipment Note related to a Leased Aircraft,
the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as
of October 23, 1997 among the Trustee, the Other Trustees, the Company,
the Escrow Agent, the Escrow Paying Agent and the Subordination Agent,
providing for, among other things, the purchase of Equipment Notes by the
Trustee on behalf of the Trust, as the same may be amended, supplemented
or otherwise modified from time to time, in accordance with its terms.
NOTICE OF PURCHASE WITHDRAWAL: Has the meaning specified in the
Deposit Agreement.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1997-4A-O dated the date hereof relating to
Continental Airlines Pass Through Trust 1997-4A-O and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1997-4C-O dated the date
hereof relating to Continental Airlines Pass Through Trust 1997-4C-O.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and
any successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1997-4A-O and the Continental Airlines Pass Through Trust 1997-4C-O, each
created on the date hereof.
OWNED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any
permitted successor or assign of such Owner Participant; and OWNER
PARTICIPANTS at any time of determination means all of the Owner
Participants thus referred to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Trustee", as referred to in the
Indenture pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and OWNER TRUSTEES means all of
the Owner Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as
the same may be amended, supplemented or otherwise modified in accordance
with its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the Applicable Certificates less (ii) the aggregate amount of
all payments made in respect of such Applicable Certificates or in respect
of Deposits other than payments made in respect of interest or premium
thereon or reimbursement of any costs or expenses incurred in connection
therewith. The Pool Balance as of any Distribution Date shall be computed
after giving effect to any special distribution with respect to unused
Deposits, payment of principal of the Equipment Notes or payment with
respect to other Trust Property and the distribution thereof to be made on
that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient
(rounded to the seventh decimal place) computed by dividing (i) the Pool
Balance by (ii) the original aggregate face amount of the Applicable
Certificates. The Pool Factor as of any Distribution Date shall be
computed after giving effect to any special distribution with respect to
unused Deposits, payment of principal of the Equipment Notes or other
Trust Property and the distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
16, 1997 relating to the offering of the Certificates.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1997-4B-S dated the date hereof
relating to the Continental Airlines Pass Through Trust 1997-4B-S and
entered into by the Company and the Trustee, which agreement becomes
effective upon the execution and delivery of the Assignment and Assumption
Agreement pursuant to Section 7.01 of this Trust Supplement.
RELATED TRUST: Means the Continental Pass Through Trust 1997-4B-S,
to be formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase
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) or Special Redemption Premium.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Has the meaning specified in Section 7.01 of this
Trust Supplement.
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement,
the Equipment Notes held as the property of the Applicable Trust, all
monies at any time paid thereon and all monies due and to become due
thereunder, (ii) funds from time to time deposited in the Certificate
Account and the Special Payments Account and, subject to the Intercreditor
Agreement, any proceeds from the sale by the Trustee pursuant to Article
VI of the Basic Agreement of any Equipment Note and (iii) all rights of
the Applicable Trust and the Trustee, on behalf of the Applicable Trust,
under the Intercreditor Agreement, the Escrow Agreement, the Note Purchase
Agreement and the Liquidity Facilities, including, without limitation, all
rights to receive certain payments thereunder, and all monies paid to the
Trustee on behalf of the Applicable Trust pursuant to the Intercreditor
Agreement or the Liquidity Facilities, PROVIDED that rights with respect
to the Deposits or under the Escrow Agreement, except for the right to
direct withdrawals for the purchase of Equipment Notes to be held herein,
will not constitute Trust Property.
UNDERWRITERS: Means, collectively, Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, Chase Securities
Inc. and Salomon Brothers Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
October 16, 1997 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. ADDITIONS TO ARTICLE IV OF THE BASIC Agreement. In
addition to the provisions of Article IV of the Basic Agreement, the following
provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the Trustee
under the Note Purchase Agreement, the Trustee, upon receipt thereof,
shall immediately deposit the aggregate amount of such Special Redemption
Premium in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium as
provided for in Section 4.02(b) of the Basic Agreement shall be on the
Special Distribution Date with respect to such Special Payment or as soon
thereafter as the Trustee has confirmed receipt of the related Special
Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium by
the Company to the Trustee under the Note Purchase Agreement, the notice
provided for in Section 4.02(c) of the Basic Agreement shall be mailed,
together with the notice by the Escrow Paying Agent under Section 2.06 of
the Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date shall
be the Final Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c) of
the Basic Agreement shall apply equally if the amount of Special
Redemption Premium, if any, has not ben calculated at the time the Trustee
mails notice of a Special Payment.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On
each Distribution Date, the Trustee will include with each distribution to
Applicable Certificateholders of a Scheduled Payment or Special Payment, as the
case may be, a statement setting forth the information provided below (in the
case of a Special Payment, including any Special Redemption Premium, reflecting
in part the information provided by the Escrow Paying Agent under the Escrow
Agreement). Such statement shall set forth (per $1,000 face amount Applicable
Certificate as to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable
to principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable
to interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name
of a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Trustee
shall furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Delivery Period Termination Date, if
there has been any change in the information set forth in clauses (x), (y) and
(z) below from that set forth in page S-51 of the Prospectus Supplement, and
(ii) any early redemption or purchase of, or any default in the payment of
principal or interest in respect of, any of the Equipment Notes held in the
Applicable Trust, or any Final Withdrawal, the Trustee shall furnish to
Applicable Certificateholders of record on such date a statement setting forth
(x) the expected Pool Balances for each subsequent Regular Distribution Date
following the Delivery Period Termination Date, (y) the related Pool Factors for
such Regular Distribution Dates and (z) the expected principal distribution
schedule of the Equipment Notes, in the aggregate, held as Trust Property at the
date of such notice. With respect to the Applicable Certificates registered in
the name of a Clearing Agency, on the Delivery Period Termination Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such date. The Trustee will mail to each such Clearing Agency Participant the
statement described above and will make available additional copies as requested
by such Clearing Agency Participant for forwarding to holders of interests in
the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the continuance of a Triggering Event, each
Applicable Certificateholder shall have the right to purchase, for the purchase
price set forth in Section 6.01(b) of the Basic Agreement, all, but not less
than all, of the Class A Certificates upon ten days' written notice to the Class
A Trustee and each other Applicable Certificateholder, provided that (i) if
prior to the end of such ten day period any other Applicable Certificateholder
notifies such purchasing Applicable Certificateholder that such other Applicable
Certificateholder wants to participate in such purchase, then such other
Applicable Certificateholder may join with the purchasing Applicable
Certificateholder to purchase all, but not less than all, of the Class A
Certificates pro rata based on the Fractional Undivided Interest in the
Applicable Trust held by each such Applicable Certificateholder and (ii) if
prior to the end of such ten-day period any other Applicable Certificateholder
fails to notify the purchasing Applicable Certificateholder of such other
Applicable Certificateholder's desire to participate in such a purchase, then
such other Applicable Certificateholder shall lose its right to purchase the
Class A Certificates pursuant to this Section 4.01(a); and
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event,
(i) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A Certificates pursuant to
clause (a) above) to purchase all, but not less than all, of the
Applicable Certificates and the Class A Certificates upon ten days'
written notice to the Trustee, the Class A Trustee and each other Class C
Certificateholder, PROVIDED that (A) if prior to the end of such ten-day
period any other Class C Certificateholder notifies such purchasing Class
C Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder
may join with the purchasing Class C Certificateholder to purchase all,
but not less than all, of the Applicable Certificates and the Class A
Certificates pro rata based on the Fractional Undivided Interest in the
Class C Trust held by each such Class C Certificateholder and (B) if prior
to the end of such ten-day period any other Class C Certificateholder
fails to notify the purchasing Class C Certificateholder of such other
Class C Certificateholder's desire to participate in such a purchase, then
such other Class C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(b).
(ii) each Class D Certificateholder shall have the right (which
shall not expire upon any purchase of the Applicable Certificates pursuant
to clause (a) above or clause (i) above) to purchase all, but not less
than all, of the Applicable Certificates, the Class A Certificates and the
Class C Certificates upon ten days' written notice to the Trustee, the
Class A Trustee, the Class C Trustee and each other Class D
Certificateholder, PROVIDED that (A) if prior to the end of such ten-day
period any other Class D Certificateholder notifies such purchasing Class
D Certificateholder that such other Class D Certificateholder wants to
participate in such purchase, then such other Class D Certificateholder
may join with the purchasing Class D Certificateholder to purchase all,
but not less than all, of the Applicable Certificates, the Class A
Certificates and the Class C Certificates pro rata based on the Fractional
Undivided Interest in the Class D Trust held by each such Class D
Certificateholder and (B) if prior to the end of such ten-day period any
other Class D Certificateholder fails to notify the purchasing Class D
Certificateholder of such other Class D Certificateholder's desire to
participate in such a purchase, then such other Class D Certificateholder
shall lose its right to purchase the Applicable Certificates pursuant to
this Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed hereunder on the related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date); PROVIDED FURTHER that no such
purchase of Applicable Certificates shall be effective unless the purchaser(s)
shall certify to the Trustee that contemporaneously with such purchase, such
purchaser(s) is purchasing, pursuant to the terms of this Agreement and the
Other Agreements, the Applicable Certificates, the Class A Certificates and the
Class C Certificates which are senior to the securities held by such
purchaser(s). Each payment of the purchase price of the Applicable Certificates
referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such purchase shall be subject to the terms
of this Section 4.01(b). Each Applicable Certificateholder agrees by its
acceptance of its Applicable Certificate that it will, subject to Section 3.04
of the Basic Agreement, upon payment from such Class C Certificateholder(s) or
Class D Certificateholder(s), as the case may be, of the purchase price set
forth in the first sentence of this paragraph, forthwith sell, assign, transfer
and convey to the purchaser(s) thereof (without recourse, representation or
warranty of any kind except for its own acts), all of the right, title, interest
and obligation of such Applicable Certificateholder in this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facilities, the Note Documents and all Applicable Certificates and
Escrow Receipts held by such Applicable Certificateholder (excluding all right,
title and interest under any of the foregoing to the extent such right, title or
interest is with respect to an obligation not then due and payable as respects
any action or inaction or state of affairs occurring prior to such sale) and the
purchaser shall assume all of such Applicable Certificateholder's obligations
under this Agreement, the Escrow Agreement, the Deposit Agreement, the
Intercreditor Agreement, the Liquidity Facilities, the Note Documents and all
such Applicable Certificates and Escrow Receipts. The Applicable Certificates
will be deemed to be purchased on the date payment of the purchase price is made
notwithstanding the failure of the Applicable Certificateholders to deliver any
Applicable Certificates and, upon such a purchase, (i) the only rights of the
Applicable Certificateholders will be to deliver the Applicable Certificates to
the purchaser(s) and receive the purchase price for such Applicable Certificates
and (ii) if the purchaser(s) shall so request, such Applicable Certificateholder
will comply with all the provisions of Section 3.04 of the Basic Agreement to
enable new Applicable Certificates to be issued to the purchaser in such
denominations as it shall request. All charges and expenses in connection with
the issuance of any such new Applicable Certificates shall be borne by the
purchaser thereof.
As used in this Section 4.01, the terms, "Class A Certificate",
"Class A Trustee", "Class C Certificateholder", "Class C Trust", "Class C
Certificate""Class C Trustee", "Class D Certificateholder" and "Class D Trust",
shall have the respective meanings assigned to such terms in the Intercreditor
Agreement.
(c) Except as expressly set forth above, this Section 4.01
supersedes and replaces Section 6.01(b) of the Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. DELIVERY OF DOCUMENTS; DELIVERY DATES. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor Agreement, the
Escrow Agreement and the Note Purchase Agreement on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii) subject
to the respective terms thereof, to perform its obligations thereunder. Upon
request of the Company and the satisfaction or waiver of the closing conditions
specified in the Underwriting Agreement, the Trustee shall execute, deliver,
authenticate, issue and sell Applicable Certificates in authorized denominations
equalling in the aggregate the amount set forth, with respect to the Applicable
Trust, in Schedule II to the Underwriting Agreement evidencing the entire
ownership interest in the Applicable Trust, which amount equals the maximum
aggregate principal amount of Equipment Notes which may be purchased by the
Trustee pursuant to the Note Purchase Agreement. Except as provided in Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement, the Trustee shall not execute,
authenticate or deliver Applicable Certificates in excess of the aggregate
amount specified in this paragraph.
(b) On or after the Issuance Date, the Company may deliver from time
to time to the Trustee a Delivery Notice relating to one or more Equipment
Notes. After receipt of a Delivery Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery Notice relates
(the "APPLICABLE DELIVERY DATE"), the Trustee shall (as and when specified in
the Delivery Notice) instruct the Escrow Agent to provide a Notice of Purchase
Withdrawal to the Depositary requesting (A) the withdrawal of one or more
Deposits on the Applicable Delivery Date in accordance with and to the extent
permitted by the terms of the Escrow Agreement and the Deposit Agreement and (B)
the payment of all, or a portion, of such Deposit or Deposits in an amount equal
in the aggregate to the purchase price of such Equipment Notes to or on behalf
of the Owner Trustee or the Company, as the case may be, issuing such Equipment
Notes, all as shall be described in the Delivery Notice. The Trustee shall (as
and when specified in such Delivery Notice), subject to the conditions set forth
in Section 2 of the Note Purchase Agreement, enter into and perform its
obligations under the Participation Agreement specified in such Delivery Notice
(the "APPLICABLE PARTICIPATION AGREEMENT") and cause such certificates,
documents and legal opinions relating to the Trustee to be duly delivered as
required by the Applicable Participation Agreement. If at any time prior to the
Applicable Delivery Date, the Trustee receives a notice of postponement pursuant
to Section 1(e) or 1(f) of the Note Purchase Agreement, then the Trustee shall
give the Depositary (with a copy to the Escrow Agent) a notice of cancellation
of such Notice of Purchase Withdrawal relating to such Deposit or Deposits on
such Applicable Delivery Date. Upon satisfaction of the conditions specified in
the Note Purchase Agreement and the Applicable Participation Agreement, the
Trustee shall purchase the applicable Equipment Notes with the proceeds of the
withdrawals of one or more Deposits made on the Applicable Delivery Date in
accordance with the terms of the Deposit Agreement and the Escrow Agreement. The
purchase price of such Equipment Notes shall equal the principal amount of such
Equipment Notes. Amounts withdrawn from such Deposit or Deposits in excess of
the purchase price of the Equipment Notes or to the extent not applied on the
Applicable Delivery Date to the purchase price of the Equipment Notes, shall be
re-deposited by the Trustee with the Depositary on the Applicable Delivery Date
in accordance with the terms of the Deposit Agreement. The provisions of this
Section 5.01(b) supersede and replace the provisions of Section 2.02 of the
Basic Agreement (which are inapplicable to the Trust), and all provisions of the
Basic Agreement relating to Postponed Notes and Section 2.02 of the Basic
Agreement shall not apply to the Applicable Trust.
Section 5.02. WITHDRAWAL OF DEPOSITS. If any Deposits remain
outstanding on the Business Day next succeeding the Cut-off Date, (i) (A) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated and
instruct the Escrow Agent to provide a notice of Final Withdrawal to the
Depositary substantially in the form of Exhibit B to the Deposit Agreement (the
"FINAL WITHDRAWAL NOTICE") and (B) the Trustee will make a demand upon the
Company under the Note Purchase Agreement for an amount equal to the Special
Redemption Premium, such payment to be made on the Final Withdrawal Date.
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the recitals
and statements contained herein or therein, all of which recitals and statements
are made solely by the Company.
(b) Except as herein otherwise provided, no duties, responsibilities
or liabilities are assumed, or shall be construed to be assumed by the Trustee
by reason of this Trust Supplement other than as set forth in the Basic
Agreement, and this Trust Supplement is executed and accepted on behalf of the
Trustee, subject to all the terms and conditions set forth in the Basic
Agreement, upon the effectiveness thereof, as fully to all intents as if the
same were herein set forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to
execute, deliver and perform this Trust Supplement, the Escrow Agreement
and the Note Documents to which it is a party and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party;
(b) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party (i) will not violate any provision of any United States federal
law or the law of the state of the United States where it is located
governing the banking and trust powers of the Trustee or any order, writ,
judgment, or decree of any court, arbitrator or governmental authority
applicable to the Trustee or any of its assets, (ii) will not violate any
provision of the articles of association or by-laws of the Trustee, and
(iii) will not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust Property
pursuant to the provisions of any mortgage, indenture, contract, agreement
or other undertaking to which it is a party, which violation, default or
lien could reasonably be expected to have an adverse effect on the
Trustee's performance or ability to perform its duties hereunder or
thereunder or on the transactions contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party will not require the authorization, consent, or approval of,
the giving of notice to, the filing or registration with, or the taking of
any other action in respect of, any governmental authority or agency of
the United States or the state of the United States where it is located
regulating the banking and corporate trust activities of the Trustee; and
(d) this Trust Supplement, the Escrow Agreement and the Note
Documents to which it is a party have been, or will be, as applicable,
duly executed and delivered by the Trustee and constitute, or will
constitute, as applicable, the legal, valid and binding agreements of the
Trustee, enforceable against it in accordance with their respective terms;
PROVIDED, HOWEVER, that enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and (ii) general principles of
equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Under the terms of, and subject to the limitations contained
in, Section 9.01 of the Basic Agreement, the Company may (but will not be
required to), and the Trustee (subject to Section 9.03 of the Basic Agreement)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental to the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement, for any of the purposes set forth in clauses
(1) through (9) of such Section 9.01, except that (a) clause (2) and (3) of such
Section 9.01 shall be deemed to include the Company's obligations under (in the
case of clause (2)), and the Company's rights and powers conferred by (in the
case of clause (3)), the Note Purchase Agreement and (b) clause (4) of such
Section 9.01 shall be deemed to include corrections or supplements to provisions
of the Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement
which may be defective or inconsistent with any other provision of this
Agreement or contained in any agreement referred to in such clause (4) and the
curing of any ambiguity or the modification of any other provision with respect
to matters or questions arising under the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement.
Section 6.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. The provisions of Section 9.02 of the Basic Agreement shall
apply to agreements or amendments for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Escrow
Agreement, the Deposit Agreement or the Note Purchase Agreement to the extent
applicable to the Applicable Certificateholders approving such agreement or
amendment or modifying in any manner the rights and obligations of such
Applicable Certificateholders under the Escrow Agreement, the Deposit Agreement
or the Note Purchase Agreement; provided that the provisions of Section 9.02(1)
of the Basic Agreement shall be deemed to include reductions in any manner of,
or delay in the timing of, any receipt by the Applicable Certificateholders of
payments upon the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE TRUST. The respective obligations
and responsibilities of the Company and the Trustee with respect to the
Applicable Trust shall terminate upon the earlier of (A) the completion of the
assignment, transfer and discharge described in the first sentence of the
immediately following paragraph and (B) distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
execution of this Trust Supplement.
Upon the earlier of (i) the first Business Day following December
31, 1998, or, if later, the fifth Business Day following the Delivery Period
Termination Date and (ii) the fifth Business Day following the date on which a
Triggering Event occurs (such date, the "Transfer Date"), or, if later, the date
on which all of the conditions set forth in the immediately following sentence
have been satisfied, the Trustee is hereby directed (subject only to the
immediately following sentence) to, and the Company shall direct the institution
that will serve as the Related Trustee under the Related Pass Through Trust
Agreement to, execute and deliver the Assignment and Assumption Agreement,
pursuant to which the Trustee shall assign, transfer and deliver all of the
Trustee's right, title and interest to the Trust Property to the Related Trustee
under the Related Pass Through Trust Agreement. The Trustee and the Related
Trustee shall execute and deliver the Assignment and Assumption Agreement upon
the satisfaction of the following conditions:
(i) The Trustee, the Related Trustee and each of the Rating Agencies
then rating the Applicable Certificates shall have received an Officer's
Certificate and an Opinion of Counsel dated the date of the Assignment and
Assumption Agreement and each satisfying the requirements of Section 1.02
of the Basic Agreement, which Opinion of Counsel shall be substantially to
the effect set forth below and may be relied upon by the Beneficiaries (as
defined in the Assignment and Assumption Agreement):
(a) upon the execution and delivery thereof by the
parties thereto in accordance with the terms of this Agreement and
the Related Pass Through Trust Agreement, the Assignment and
Assumption Agreement will constitute the valid and binding
obligation of each of the parties thereto enforceable against each
such party in accordance with its terms;
(b) upon the execution and delivery of the Assignment
and Assumption Agreement in accordance with the terms of this
Agreement and the Related Pass Through Trust Agreement, each of the
Applicable Certificates then Outstanding will be entitled to the
benefits of the Related Pass Through Trust Agreement;
(c) the Related Trust is not required to be registered
as an investment company under the Investment Company Act of 1940,
as amended;
(d) the Related Pass Through Trust Agreement constitutes
the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms; and
(e) neither the execution and delivery of the Assignment
and Assumption Agreement in accordance with the terms of this
Agreement and the Related Pass Through Trust Agreement, nor the
consummation by the parties thereto of the transactions contemplated
to be consummated thereunder on the date thereof, will violate any
law or governmental rule or regulation of the State of New York or
the United States of America known to such counsel to be applicable
to the transactions contemplated by the Assignment and Assumption
Agreement.
(ii) The Trustee and the Company shall have received (x) a copy of
the articles of incorporation and bylaws of the Related Trustee certified
as of the Transfer Date by the Secretary or Assistant Secretary of such
institution and (y) a copy of the filing (including all attachments
thereto) made by the institution serving as the Related Trustee with the
Office of the Superintendent, State of New York Banking Department for the
qualification of the Related Trustee under Section 131(3) of the New York
Banking Law.
Upon the execution of the Assignment and Assumption Agreement by the parties
thereto, the Applicable Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Related Trust in
exchange for their interests in the Applicable Trust equal to their respective
beneficial interests in the Applicable Trust, and the Outstanding Applicable
Certificates representing Fractional Undivided Interests in the Applicable Trust
shall be deemed for all purposes of this Agreement and the Related Pass Through
Trust Agreement, without further signature or action of any party or Applicable
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related Trust and its trust property. By acceptance of its
Applicable Certificate, each Applicable Certificateholder consents to such
assignment, transfer and delivery of the Trust Property to the trustee of the
Related Trust upon the execution and delivery of the Assignment and Assumption
Agreement.
In connection with the occurrence of the event set forth in clause
(B) above, notice of such termination, specifying the Distribution Date upon
which the Applicable Certificateholders may surrender their Applicable
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Applicable
Certificateholders not earlier than the 60th day and not later than the 15th day
next preceding such final Distribution Date specifying (A) the Distribution Date
upon which the proposed final payment of the Applicable Certificates will be
made upon presentation and surrender of Applicable Certificates at the office or
agency of the Trustee therein specified, (B) the amount of any such proposed
final payment, and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Applicable Certificates at the office or agency of the
Trustee therein specified. The Trustee shall give such notice to the Registrar
at the time such notice is given to Applicable Certificateholders. Upon
presentation and surrender of the Applicable Certificates in accordance with
such notice, the Trustee shall cause to be distributed to Applicable
Certificateholders such final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 8.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that
the Applicable Trust be classified for U.S. federal income tax purposes as a
grantor trust under Subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Applicable Certificateholder and Investor,
by its acceptance of its Applicable Certificate or a beneficial interest
therein, agrees to treat the Applicable Trust as a grantor trust for all U.S.
federal, state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Trust Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:_____________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT A
FORM OF CERTIFICATE
[Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to Issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]
CONTINENTAL AIRLINES PASS THROUGH TRUST 1997-4B-O
6.90% Continental Airlines Pass Through Certificate, Series 1997-4B-O
Issuance Date: October 23, 1997
Final Expected Distribution Date: January 2, 2017
Evidencing A Fractional Undivided Interest In The
Continental Airlines Pass Through Trust 1997-4B-O,
The Property Of Which Includes Certain Equipment
Notes Each Secured By An Aircraft Leased To Or
Owned By Continental Airlines, Inc.
Certificate
No. _________ $______________ Fractional Undivided Interest representing
0.____% of the Trust per $1,000 face amount
THIS CERTIFIES THAT ___________________________, for value received,
is the registered owner of a $________________ (_______________ dollars)
Fractional Undivided Interest in the Continental Airlines Pass Through Trust
1997-4B-O (the "TRUST") created by Wilmington Trust Company, as trustee (the
________________
This legend to appear on Book-Entry Certificates to be deposited with the
Depository Trust Company.
"Trustee"), pursuant to a Pass Through Trust Agreement, dated as of September
25, 1997 (the "BASIC AGREEMENT"), between the Trustee and Continental Airlines,
Inc., a Delaware corporation (the "Company"), as supplemented by Trust
Supplement No. 1997-4B-O thereto, dated as of October 23, 1997 (the "Trust
Supplement" and, together with the Basic Agreement, the "AGREEMENT"), between
the Trustee and the Company, a summary of certain of the pertinent provisions of
which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is one of the duly authorized Certificates
designated as "6.90% Continental Airlines Pass Through Certificates, Series
1997-4B-O" (herein called the "CERTIFICATES"). This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement. By
virtue of its acceptance hereof, the Certificateholder of this Certificate
assents to and agrees to be bound by the provisions of the Agreement and the
Intercreditor Agreement. The property of the Trust includes certain Equipment
Notes and all rights of the Trust to receive payments under the Intercreditor
Agreement and any Liquidity Facilities (the "TRUST PROPERTY"). Each issue of the
Equipment Notes is secured by, among other things, a security interest in an
Aircraft leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the
Trust and the Trust Property and have no rights, benefits or interest in respect
of any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January 2 and July 2 (a "Regular Distribution Date")
commencing January 2, 1998, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by
check mailed to the Person entitled thereto, without presentation or surrender
of this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of a Clearing
Agency (or its nominee), such distribution shall be made by wire transfer.
Except as otherwise provided in the Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after notice mailed by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Trustee specified
in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $1,000 Fractional Undivided Interest
and integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
CONTINENTAL AIRLINES PASS THROUGH
TRUST 1997-4B-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:_______________________________
Name:
Title:
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT B
[DTC Letter of Representations]
EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Continental Airlines Pass Through Trust 1997-4B
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated _____________, 199__ (the
"ASSIGNMENT AGREEMENT"), between Wilmington Trust Company, a Delaware banking
corporation ("WTC"), not in its individual capacity except as expressly provided
herein, but solely as trustee under the Pass Through Trust Agreement dated as of
September 25, 1997 (as amended or modified from time to time, the "BASIC
AGREEMENT"), as supplemented by the Trust Supplement No. 1997-4B-O, dated
October 23 , 1997 (the "TRUST SUPPLEMENT" and together with the Basic Agreement,
the "AGREEMENT") in respect of the Continental Airlines Pass Through Trust
1997-4B-O (the "ASSIGNOR"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity except as expressly provided herein,
but solely as trustee under the Basic Agreement as supplemented by the Trust
Supplement No. 1997-4B-S dated October 23, 1997 (the "NEW SUPPLEMENT", and,
together with the Basic Agreement, the "NEW AGREEMENT") in respect of the
Continental Airlines Pass Through Trust 1997-4B-S (the "ASSIGNEE").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to effect on the date hereof (the
"TRANSFER DATE") (a) the transfer by the Assignor to the Assignee of all of the
right, title and interest of the Assignor in, under and with respect to, among
other things, the Trust Property and each of the documents listed in Schedule I
hereto (the "SCHEDULED DOCUMENTS") and (b) the assumption by the Assignee of the
obligations of the Assignor (i) under the Scheduled Documents and (ii) in
respect of the Applicable Certificates issued under the Agreement; and
WHEREAS, the Scheduled Documents permit such transfer upon
satisfaction of certain conditions heretofore or concurrently herewith being
complied with;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows (capitalized terms used herein without definition having the meaning
ascribed thereto in the Agreement):
1. ASSIGNMENT. The Assignor does hereby sell, assign, convey,
transfer and set over unto the Assignee as of the Transfer Date all of its
present and future right, title and interest in, under and with respect to the
Trust Property and the Scheduled Documents and each other contract, agreement,
document or instrument relating to the Trust Property or the Scheduled Documents
(such other contracts, agreements, documents or instruments, together with the
Scheduled Documents, to be referred to as the "ASSIGNED DOCUMENTS"), and any
proceeds therefrom, together with all documents and instruments evidencing any
of such right, title and interest.
2. ASSUMPTION. The Assignee hereby assumes for the benefit of the
Assignor and each of the parties listed in Schedule II hereto (collectively, the
"BENEFICIARIES") all of the duties and obligations of the Assignor, whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the Assigned Documents to which the Assignor is a
party and shall be bound by all the terms thereof (including the agreements and
obligations of the Assignor set forth therein) as if therein named as the
Assignor. Further, the Assignee hereby assumes for the benefit of the Assignor
and the Beneficiaries all of the duties and obligations of the Assignor under
the Outstanding Applicable Certificates and hereby confirms that the Applicable
Certificates representing Fractional Undivided Interests under the Agreement
shall be deemed for all purposes of the Agreement and the New Agreement to be
certificates representing the same fractional undivided interests under the New
Agreement equal to their respective beneficial interests in the trust created
under the Agreement.
3. EFFECTIVENESS. This Assignment Agreement shall be effective upon
the execution and delivery hereof by the parties hereto, and each Applicable
Certificateholder, by its acceptance of its Applicable Certificate or a
beneficial interest therein, agrees to be bound by the terms of this Assignment
Agreement.
4. PAYMENTS. The Assignor hereby covenants and agrees to pay over to
the Assignee, if and when received following the Transfer Date, any amounts
(including any sums payable as interest in respect thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.
5. FURTHER ASSURANCES. The Assignor shall, at any time and from time
to time, upon the request of the Assignee, promptly and duly execute and deliver
any and all such further instruments and documents and take such further action
as the Assignee may reasonably request to obtain the full benefits of this
Assignment Agreement and of the right and powers herein granted. The Assignor
agrees to deliver any Applicable Certificates, and all Trust Property, if any,
then in the physical possession of the Assignor, to the Assignee.
6. REPRESENTATIONS AND WARRANTIES. (a) The Assignee represents and
warrants to the Assignor and each of the Beneficiaries that:
(i) it has all requisite power and authority and legal right to
enter into and carry out the transactions contemplated hereby and to carry
out and perform the obligations of the "Pass Through Trustee" under the
Assigned Documents;
(ii) on and as of the date hereof, the representations and
warranties of the Assignee set forth in Section 7.15 of the Basic
Agreement and Section 5.04 of the New Supplement are true and correct.
(b) The Assignor represents and warrants to the Assignee that:
(i) it is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the full trust power,
authority and legal right under the laws of the State of Delaware and the
United States pertaining to its trust and fiduciary powers to execute and
deliver this Assignment Agreement;
(ii) the execution and delivery by it of this Assignment Agreement
and the performance by it of its obligations hereunder have been duly
authorized by it and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
(iii) this Assignment Agreement constitutes the legal, valid and
binding obligations of it enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
7. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
8. COUNTERPARTS. This Assignment Agreement may be executed in any
number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by both
parties so long as each party shall sign at least one counterpart.
9. THIRD PARTY BENEFICIARIES. The Assignee hereby agrees, for the
benefit of the Beneficiaries, that its representations, warranties and covenants
contained herein are also intended to be for the benefit of each Beneficiary,
and each Beneficiary shall be deemed to be an express third party beneficiary
with respect thereto, entitled to enforce directly and in its own name any
rights or claims it may have against such party as such beneficiary.
IN WITNESS WHEREOF, the parties hereto, through their respective
officers thereunto duly authorized, have duly executed this Assignment Agreement
as of the day and year first above written.
ASSIGNOR:
WILMINGTON TRUST COMPANY, not in its
individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1997-4B-O
By:_____________________________________
Title:
ASSIGNEE:
WILMINGTON TRUST COMPANY, not in its
individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1997-4B-S
By:_____________________________________
Title:
Schedule I
Schedule of Assigned Documents
(1) Intercreditor Agreement dated as of October 23, 1997 among the
Trustee, the Other Trustees, the Liquidity Providers, the liquidity provider, if
any, relating to the Certificates issued under (and as defined in) each of the
Other Agreements and the Subordination Agent.
(2) Escrow and Paying Agent Agreement (Class B) dated as of October
23, 1997 among the Escrow Agent, the Underwriters, the Trustee and the Paying
Agent.
(3) Note Purchase Agreement dated as of October 23, 1997 among the
Company, the Trustee, the Other Trustees, the Depositary, the Escrow Agent, the
Paying Agent and the Subordination Agent.
(4) Deposit Agreement (Class B) dated as of October 23, 1997 between
the Escrow Agent and the Depositary.
(5) Each of the Operative Agreements (as defined in the
Participation Agreement for each Aircraft) in effect as of the Transfer Date.
Schedule II
Schedule of Beneficiaries
Wilmington Trust Company, not in its individual capacity but solely as
Subordination Agent
Wilmington Trust Company, not in its individual capacity but solely as Paying
Agent
ABN AMRO Bank N.V., acting through its Chicago branch, and Westdeutsche
Landesbank Girozentrale, acting through its New York branch, as Liquidity
Providers
Continental Airlines, Inc.
Morgan Stanley & Co. Incorporated, as Underwriter
Credit Suisse First Boston Corporation, as Underwriter
Chase Securities Inc., as Underwriter
Salomon Brothers Inc, as Underwriter
First Security Bank, National Association, as Escrow Agent
Each of the other parties to the Assigned Documents
EXECUTION COPY
TRUST SUPPLEMENT No. 1997-4B-S
Dated October 23, 1997
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$134,937,000
Continental Airlines Pass Through Trust 1997-4B-S
6.90% Continental Airlines
Pass Through Certificates,
Series 1997-4B-S
This Trust Supplement No. 1997-4B-S, dated as of October 23, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"Trustee"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
WHEREAS, the Basic Agreement, unlimited as to the aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified in
the Basic Agreement) which may be issued thereunder, has heretofore been
executed and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, as of the Transfer Date (as defined below), the Company
will have financed the acquisition of all or a portion of such Aircraft either
(i) through separate leveraged lease transactions, in which case the Company
leases such Aircraft (collectively, the "LEASED AIRCRAFT") or (ii) through
separate secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "OWNED AIRCRAFT");
WHEREAS, as of the Transfer Date in the case of each Leased
Aircraft, each Owner Trustee, acting on behalf of the corresponding Owner
Participant, will have issued pursuant to an Indenture, on a non-recourse basis,
Equipment Notes in order to finance a portion of its purchase price of such
Leased Aircraft;
WHEREAS, as of the Transfer Date, in the case of each Owned
Aircraft, the Company will have issued pursuant to an Indenture, on a recourse
basis, Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;
WHEREAS, as of the Transfer Date, the Related Trustee will assign,
transfer and deliver all of such trustee's right, title and interest to the
trust property held by the Related Trustee to the Trustee pursuant to the
Assignment and Assumption Agreement (as defined below);
WHEREAS, the Trustee, effective only, but automatically, upon
execution and delivery of the Assignment and Assumption Agreement, will be
deemed to have declared the creation of the Continental Airlines Pass Through
Trust 1997-4B-S (the "APPLICABLE TRUST") for the benefit of the Applicable
Certificateholders, and each Holder of Applicable Certificates outstanding as of
the Transfer Date, as the grantors of the Applicable Trust, by their respective
acceptances of such Applicable Certificates, will join in the creation of this
Applicable Trust with the Trustee;
WHEREAS, all Applicable Certificates deemed issued by the Applicable
Trust will evidence fractional undivided interests in the Applicable Trust and
will convey no rights, benefits or interests in respect of any property other
than the Trust Property except for those Applicable Certificates to which an
Escrow Receipt (as defined below) has been affixed;
WHEREAS, upon the execution and delivery of the Assignment and
Assumption Agreement, all of the conditions and requirements necessary to make
this Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. The Applicable Certificates shall be
known as "6.90% Continental Airlines Pass Through Certificates, Series
1997-4B-S". Each Applicable Certificate represents a fractional undivided
interest in the Applicable Trust created hereby. The Applicable Certificates
shall be the only instruments evidencing a fractional undivided interest in the
Applicable Trust.
The terms and conditions applicable to the Applicable Certificates
are as follows:
(a) The aggregate principal amount of the Applicable Certificates
that shall be initially deemed issued under the Agreement shall be equal
to the aggregate principal amount of "Outstanding" pass through
certificates representing fractional undivided interests in the Related
Trust on the Transfer Date.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means January 2 and July 2 of each year, commencing on
January 2, 1998, until payment of all of the Scheduled Payments to be made
under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of
any Applicable Certificate shall be permitted unless the corresponding
Escrow Receipt is attached thereto and also is so transferred or
exchanged. By acceptance of any Applicable Certificate to which an Escrow
Receipt is attached, each Holder of such an Applicable Certificate
acknowledges and accepts the restrictions on transfer of the Escrow
Receipt set forth herein and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached as
Exhibit A to the Related Pass Through Trust Agreement,with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Related Pass Through Trust Agreement or
this Agreement, as the case may be, or as the Trustee may deem
appropriate, to reflect the fact that the Applicable Certificates are
being issued hereunder as opposed to under the Related Pass Through Trust
Agreement. Any Person acquiring or accepting an Applicable Certificate, by
its acceptance of such Applicable Certificate or an interest therein will,
by such acquisition or acceptance, be deemed to represent and warrant to
and for the benefit of each Owner Participant and the Company that either
(i) the assets of an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
of a plan subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), have not been used to purchase Applicable
Certificates or an interest therein or (ii) the purchase and holding of
Applicable Certificates is exempt from the prohibited transaction
restrictions of ERISA and the Code pursuant to one or more prohibited
transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry
Certificates.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement.
(g) The Applicable Certificates are entitled to the benefits of the
Liquidity Facilities.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement," for
purposes of clause (3) of Section 7.07 of the Basic Agreement are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft).
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement
as supplemented by this Trust Supplement, the following capitalized terms have
the following meanings:
AGREEMENT: Means the Basic Agreement, as supplemented by this Trust
Supplement.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
APPLICABLE CERTIFICATE: means any of the Applicable Certificates
issued by the Related Trust and that are "Outstanding" (as defined in the
Related Pass Through Trust Agreement) as of the Transfer Date (the
"Transfer Date Certificates") and any Applicable Certificates issued in
exchange therefor or replacement thereof pursuant to this Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C to the Related
Trust Supplement executed and delivered in accordance with Section 7.01 of
the Related Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Has the meaning specified in the
Related Pass Through Trust Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of October
23, 1997 relating to the Applicable Certificates between the Depositary
and the Escrow Agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated
as of October 23, 1997 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Related Trustee (and after the
Transfer Date, the Trustee) and the Underwriters, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under
the Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed
to the Escrow Agreement representing a fractional undivided interest in
the funds held in escrow thereunder.
FINAL MATURITY DATE: Means July 2, 2018.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as
of October 23, 1997 among the Related Trustee (and after the Transfer
Date, the Trustee), the Related Other Trustees (and after the Transfer
Date, the Other Trustees), the Liquidity Providers, the liquidity
providers relating to the Certificates issued under (and as defined in)
each of the Related Other Agreements, and Wilmington Trust Company, as
Subordination Agent and as trustee thereunder, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease
between an Owner Trustee, as the lessor, and the Company, as the lessee,
referred to in the related Indenture, as such lease may be amended,
supplemented or otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LIQUIDITY FACILITIES: Means, initially, each of the Revolving Credit
Agreements dated as of October 23, 1997 relating to the Applicable
Certificates, between a Liquidity Provider and Wilmington Trust Company,
as the Subordination Agent, as agent and trustee for the Applicable Trust,
and, from and after the replacement of such Agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDERS: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago branch, and Westdeutsche Landesbank Girozentrale,
acting through its New York branch, and any replacements or successors
therefor appointed in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: With respect to any Equipment Note, means (i) the
Indenture and the Participation Agreement relating to such Equipment Note,
and (ii) in the case of any Equipment Note related to a Leased Aircraft,
the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as
of October 23, 1997 among the Related Trustee (and after the Transfer
Date, the Trustee), the Related Other Trustees (and after the Transfer
Date, the Other Trustees), the Company, the Escrow Agent, the Escrow
Paying Agent and the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time, in accordance with
its terms.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1997-4A-S dated the date hereof relating to
Continental Airlines Pass Through Trust 1997-4A-S and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1997-4C-S dated the date
hereof relating to Continental Airlines Pass Through Trust 1997-4C-S.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and
any successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1997-4A-S and Continental Airlines Pass Through Trust 1997-4C-S, created
by the Other Pass Through Trust Agreements.
OUTSTANDING: when used with respect to Applicable Certificates,
means, as of the date of determination, all Transfer Date Certificates,
and all other Applicable Certificates theretofore authenticated and
delivered under this Agreement, in each case except:
(i) Applicable Certificates theretofore canceled by the Registrar
or delivered to the Trustee or the Registrar for cancellation;
(ii) Applicable Certificates for which money in the full amount
required to make the final distribution with respect to such Applicable
Certificates pursuant to Section 11.01 of the Basic Agreement has been
theretofore deposited with the Trustee in trust for the Applicable
Certificateholders as provided in Section 4.01 of the Basic Agreement
pending distribution of such money to such Applicable Certificateholders
pursuant to payment of such final distribution; and
(iii) Applicable Certificates in exchange for or in lieu of which
other Applicable Certificates have been authenticated and delivered
pursuant to this Agreement.
OWNED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any
permitted successor or assign of such Owner Participant; and OWNER
PARTICIPANTS at any time of determination means all of the Owner
Participants thus referred to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Trustee", as referred to in the
Indenture pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and OWNER TRUSTEES means all of
the Owner Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as
the same may be amended, supplemented or otherwise modified in accordance
with its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the "Applicable Certificates" as defined in the Related Pass
Through Trust Agreement, less (ii) the aggregate amount of all payments
made in respect of such Certificates or in respect of Deposits other than
payments made in respect of interest or premium thereon or reimbursement
of any costs or expenses incurred in connection therewith. The Pool
Balance as of any Distribution Date shall be computed after giving effect
to any special distribution with respect to unused Deposits, payment of
principal on the Equipment Notes or payments with respect to other Trust
Property and the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient
(rounded to the seventh decimal place) computed by dividing (i) the Pool
Balance by (ii) the original aggregate face amount of the "Applicable
Certificates" as defined in the Related Pass Through Trust Agreement. The
Pool Factor as of any Distribution Date shall be computed after giving
effect to any special distribution with respect unused Deposits, payment
of principal on the Equipment Notes or payments with respect to other
Trust Property and the distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
16, 1997 relating to the offering of the Certificates.
RELATED OTHER PASS THROUGH TRUST AGREEMENTS: Means the "Other
Agreements" as defined in the Related Pass Through Trust Agreement.
RELATED OTHER TRUSTEES: Means the "Other Trustees" as defined in the
Related Pass Through Trust Agreement.
RELATED OTHER TRUSTS: Means the "Other Trusts" as defined in the
Related Pass Through Trust Agreement.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1997-4B-O dated the date hereof
(the "RELATED PASS THROUGH TRUST SUPPLEMENT"), relating to the Continental
Airlines Pass Through Trust 1997-4B-O and entered into by the Company and
the Trustee, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
RELATED TRUST: Means the Continental Pass Through Trust 1997-4B-O,
formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase
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) or Special Redemption Premium.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Means the moment of execution and delivery of the
Assignment and Assumption Agreement by each of the parties thereto.
TRANSFER DATE CERTIFICATE: Has the meaning specified in the
definition of "Applicable Certificates".
TRIGGERING EVENT: Has the meaning specified in the Intercreditor
Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement,
the Equipment Notes held as the property of the Applicable Trust, all
monies at any time paid thereon and all monies due and to become due
thereunder, (ii) funds from time to time deposited in the Certificate
Account and the Special Payments Account and, subject to the Intercreditor
Agreement, any proceeds from the sale by the Trustee pursuant to Article
VI of the Basic Agreement of any Equipment Note and (iii) all rights of
the Trust and the Trustee, on behalf of the Applicable Trust, under the
Intercreditor Agreement, the Escrow Agreement, the Note Purchase Agreement
and the Liquidity Facilities, including, without limitation, all rights to
receive certain payments thereunder, and all monies paid to the Trustee on
behalf of the Applicable Trust pursuant to the Intercreditor Agreement or
the Liquidity Facilities, PROVIDED that rights with respect to the
Deposits or under the Escrow Agreement, will not constitute Trust
Property.
UNDERWRITERS: Means, collectively, Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, Chase Securities
Inc. and Salomon Brothers Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
October 16, 1997 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. ADDITIONS TO ARTICLE IV OF THE BASIC Agreement. In
addition to the provisions of Article IV of the Basic Agreement, the following
provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the Trustee
under the Note Purchase Agreement, the Trustee, upon receipt thereof,
shall immediately deposit the aggregate amount of such Special Redemption
Premium in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium as
provided for in Section 4.02(b) of the Basic Agreement shall be on the
Special Distribution Date with respect to such Special Payment or as soon
thereafter as the Trustee has confirmed receipt of the related Special
Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium by
the Company to the Trustee under the Note Purchase Agreement, the notice
provided for in Section 4.02(c) of the Basic Agreement shall be mailed,
together with the notice by the Escrow Paying Agent under Section 2.06 of
the Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date shall
be the Final Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c) of
the Basic Agreement shall apply equally if the amount of Special
Redemption Premium, if any, has not ben calculated at the time the Trustee
mails notice of a Special Payment.
Section 3.02. STATEMENTS TO CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable
to principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable
to interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name
of a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Trustee
shall furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Transfer Date, if there has been any
change in the information set forth in clauses (x), (y) and (z) below from that
set forth in page S-51 of the Prospectus Supplement, and (ii) any early
redemption or purchase of, or any default in the payment of principal or
interest in respect of, any of the Equipment Notes held in the Applicable Trust,
or any Final Withdrawal, the Trustee shall furnish to Certificateholders of
record on such date a statement setting forth (x) the expected Pool Balances for
each subsequent Regular Distribution Date following the Delivery Period
Termination Date, (y) the related Pool Factors for such Regular Distribution
Dates and (z) the expected principal distribution schedule of the Equipment
Notes, in the aggregate, held as Trust Property at the date of such notice. With
respect to the Applicable Certificates registered in the name of a Clearing
Agency, on the Transfer Date, the Trustee will request from such Clearing Agency
a securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests in
the "Applicable Certificates" (as defined in the Related Pass Through Trust
Agreement) on such date. The Trustee will mail to each such Clearing Agency
Participant the statement described above and will make available additional
copies as requested by such Clearing Agency Participant for forwarding to
holders of interests in the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the continuance of a Triggering Event, each
Applicable Certificateholder shall have the right to purchase, for the purchase
price set forth in Section 6.01(b) of the Basic Agreement, all, but not less
than all, of the Class A Certificates upon ten days' written notice to the Class
A Trustee and each other Applicable Certificateholder, provided that (i) if
prior to the end of such ten day period any other Applicable Certificateholder
notifies such purchasing Applicable Certificateholder that such other Applicable
Certificateholder wants to participate in such purchase, then such other
Applicable Certificateholder may join with the purchasing Applicable
Certificateholder to purchase all, but not less than all, of the Class A
Certificates pro rata based on the Fractional Undivided Interest in the
Applicable Trust held by each such Applicable Certificateholder and (ii) if
prior to the end of such ten-day period any other Applicable Certificateholder
fails to notify the purchasing Applicable Certificateholder of such other
Applicable Certificateholder's desire to participate in such a purchase, then
such other Applicable Certificateholder shall lose its right to purchase the
Class A Certificates pursuant to this Section 4.01(a); and
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event,
(i) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A Certificates pursuant to
clause (a) above) to purchase all, but not less than all, of the
Applicable Certificates and the Class A Certificates upon ten days'
written notice to the Trustee, the Class A Trustee and each other Class C
Certificateholder, PROVIDED that (A) if prior to the end of such ten-day
period any other Class C Certificateholder notifies such purchasing Class
C Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder
may join with the purchasing Class C Certificateholder to purchase all,
but not less than all, of the Applicable Certificates and the Class A
Certificates pro rata based on the Fractional Undivided Interest in the
Class C Trust held by each such Class C Certificateholder and (B) if prior
to the end of such ten-day period any other Class C Certificateholder
fails to notify the purchasing Class C Certificateholder of such other
Class C Certificateholder's desire to participate in such a purchase, then
such other Class C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(b).
(ii) each Class D Certificateholder shall have the right (which
shall not expire upon any purchase of the Applicable Certificates pursuant
to clause (a) above or clause (i) above) to purchase all, but not less
than all, of the Applicable Certificates, the Class A Certificates and the
Class C Certificates upon ten days' written notice to the Trustee, the
Class A Trustee, the Class C Trustee and each other Class D
Certificateholder, PROVIDED that (A) if prior to the end of such ten-day
period any other Class D Certificateholder notifies such purchasing Class
D Certificateholder that such other Class D Certificateholder wants to
participate in such purchase, then such other Class D Certificateholder
may join with the purchasing Class D Certificateholder to purchase all,
but not less than all, of the Applicable Certificates, the Class A
Certificates and the Class C Certificates pro rata based on the Fractional
Undivided Interest in the Class D Trust held by each such Class D
Certificateholder and (B) if prior to the end of such ten-day period any
other Class D Certificateholder fails to notify the purchasing Class D
Certificateholder of such other Class D Certificateholder's desire to
participate in such a purchase, then such other Class D Certificateholder
shall lose its right to purchase the Applicable Certificates pursuant to
this Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed hereunder on the related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date); PROVIDED FURTHER that no such
purchase of Applicable Certificates shall be effective unless the purchaser(s)
shall certify to the Trustee that contemporaneously with such purchase, such
purchaser(s) is purchasing, pursuant to the terms of this Agreement and the
Other Agreements, the Applicable Certificates, the Class A Certificates and the
Class C Certificates which are senior to the securities held by such
purchaser(s). Each payment of the purchase price of the Applicable Certificates
referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such purchase shall be subject to the terms
of this Section 4.01(b). Each Applicable Certificateholder agrees by its
acceptance of its Applicable Certificate that it will, subject to Section 3.04
of the Basic Agreement, upon payment from such Class C Certificateholder(s) or
Class D Certificateholder(s), as the case may be, of the purchase price set
forth in the first sentence of this paragraph, forthwith sell, assign, transfer
and convey to the purchaser(s) thereof (without recourse, representation or
warranty of any kind except for its own acts), all of the right, title, interest
and obligation of such Applicable Certificateholder in this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facilities, the Note Documents and all Applicable Certificates and
Escrow Receipts held by such Applicable Certificateholder (excluding all right,
title and interest under any of the foregoing to the extent such right, title or
interest is with respect to an obligation not then due and payable as respects
any action or inaction or state of affairs occurring prior to such sale) and the
purchaser shall assume all of such Applicable Certificateholder's obligations
under this Agreement, the Escrow Agreement, the Deposit Agreement, the
Intercreditor Agreement, the Liquidity Facilities, the Note Documents and all
such Applicable Certificates and Escrow Receipts. The Applicable Certificates
will be deemed to be purchased on the date payment of the purchase price is made
notwithstanding the failure of the Applicable Certificateholders to deliver any
Applicable Certificates and, upon such a purchase, (i) the only rights of the
Applicable Certificateholders will be to deliver the Applicable Certificates to
the purchaser(s) and receive the purchase price for such Applicable Certificates
and (ii) if the purchaser(s) shall so request, such Applicable Certificateholder
will comply with all the provisions of Section 3.04 of the Basic Agreement to
enable new Applicable Certificates to be issued to the purchaser in such
denominations as it shall request. All charges and expenses in connection with
the issuance of any such new Applicable Certificates shall be borne by the
purchaser thereof.
As used in this Section 4.01, the terms "Class A Certificate",
"Class A Trustee", "Class C Certificateholder", Class C Trust", Class C
Certificate" "Class C Trustee", "Class D Certificateholder" and "Class D Trust",
shall have the respective meanings assigned to such terms in the Intercreditor
Agreement.
(c) Except as expressly set forth above, this Section 4.01
supersedes and replaces Section 6.01(b) of the Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. ACQUISITION OF TRUST PROPERTY. (a) The Trustee is
hereby irrevocably authorized and directed to execute and deliver the Assignment
and Assumption Agreement on the date specified in Section 7.01 of the Related
Trust Supplement, subject only to the satisfaction of the conditions set forth
in said Section 7.01. This Agreement (except only for the immediately preceding
sentence hereof, which is effective upon execution and delivery hereof) shall
become effective upon the execution and delivery of the Assignment and
Assumption Agreement by the Trustee and the Related Trustee, automatically and
without any further signature or action on the part of the Company and the
Trustee, and shall thereupon constitute the legal, valid and binding obligation
of the parties hereto enforceable against each of the parties hereto in
accordance with its terms. Upon such execution and delivery of the Assignment
and Assumption Agreement, the Related Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Applicable Trust in
exchange for their interests in the Related Trust equal to their respective
beneficial interests in the Related Trust and the "Outstanding" (as defined in
the Related Pass Through Trust Agreement) pass through certificates representing
fractional undivided interests in the Related Trust shall be deemed for all
purposes of this Agreement, without further signature or action of any party or
Certificateholder, to be Certificates representing the same Fractional Undivided
Interests in the Trust and Trust Property. By acceptance of its Applicable
Certificate, each Applicable Certificateholder consents to and ratifies such
assignment, transfer and delivery of the trust property of the Related Trust to
the Trustee upon the execution and delivery of the Assignment and Assumption
Agreement. The provisions of this Section 5.01(a) supersede and replace the
provisions of Section 2.02 of the Basic Agreement (which are inapplicable to the
Trust), and all provisions of the Basic Agreement relating to Postponed Notes or
Section 2.02 of the Basic Agreement shall not apply to the Applicable Trust.
(b) The Trustee, upon the execution and delivery of the Assignment
and Assumption Agreement, acknowledges its acceptance of all right, title and
interest in and to the Trust Property and declares that the Trustee holds and
will hold such right, title and interest for the benefit of all then present and
future Applicable Certificateholders, upon the trusts herein and in the Basic
Agreement set forth. By the acceptance of each Applicable Certificate issued to
it under the Related Pass Through Trust Agreement and deemed issued under this
Agreement, each Holder of any such Applicable Certificate as grantor of the
Applicable Trust thereby joins in the creation and declaration of the Applicable
Trust. The provisions of this Section 5.01(b) supersede and replace the
provisions of Section 2.03 of the Basic Agreement (which are inapplicable to the
Trust).
Section 5.02. [Intentionally Omitted]
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the recitals
and statements contained herein or therein, all of which recitals and statements
are made solely by the Company.
(b) Except as herein otherwise provided, no duties, responsibilities
or liabilities are assumed, or shall be construed to be assumed by the Trustee
by reason of this Trust Supplement other than as set forth in the Basic
Agreement, and this Trust Supplement is executed and accepted on behalf of the
Trustee, subject to all the terms and conditions set forth in the Basic
Agreement, upon the effectiveness thereof, as fully to all intents as if the
same were herein set forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants, on the Transfer Date, that:
(a) the Trustee has full power, authority and legal right to receive
the Trust Property assigned by the Related Trustee, assume the obligations
under, and perform, the Assignment and Assumption Agreement, this Trust
Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
Documents and has taken all necessary action to authorize such receipt,
assumption and performance by it of this Trust Supplement, the
Intercreditor Agreement, the Escrow Agreement and the Note Documents to
which it is a party;
(b) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents (i) will not
violate any provision of any United States federal law or the law of the
state of the United States where it is located governing the banking and
trust powers of the Trustee or any order, writ, judgment, or decree of any
court, arbitrator or governmental authority applicable to the Trustee or
any of its assets, (ii) will not violate any provision of the articles of
association or by-laws of the Trustee, and (iii) will not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions of
any mortgage, indenture, contract, agreement or other undertaking to which
it is a party, which violation, default or lien could reasonably be
expected to have an adverse effect on the Trustee's performance or ability
to perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(c) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents will not require
the authorization, consent, or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in respect
of, any governmental authority or agency of the United States or the state
of the United States where it is located regulating the banking and
corporate trust activities of the Trustee; and
(d) The Assignment and Assumption Agreement has been duly executed
and delivered by the Trustee and this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents have been, or will
be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and
binding agreements of the Trustee, enforceable against it in accordance
with their respective terms; PROVIDED, HOWEVER, that enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
(ii) general principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
CERTIFICATEHOLDERS. Under the terms of, and subject to the limitations contained
in, Section 9.01 of the Basic Agreement, the Company may (but will not be
required to), and the Trustee (subject to Section 9.03 of the Basic Agreement)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental to the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement, for any of the purposes set forth in clauses
(1) through (9) of such Section 9.01, except that (a) clause (2) and (3) of such
Section 9.01 shall be deemed to include the Company's obligations under (in the
case of clause (2)), and the Company's rights and powers conferred by (in the
case of clause (3)), the Note Purchase Agreement and (b) clause (4) of such
Section 9.01 shall be deemed to include corrections or supplements to provisions
of the Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement
which may be defective or inconsistent with any other provision of this
Agreement or contained in any agreement referred to in such clause (4) and the
curing of any ambiguity or the modification of any other provision with respect
to matters or questions arising under the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement.
Section 6.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
CERTIFICATEHOLDERS. The provisions of Section 9.02 of the Basic Agreement shall
apply to agreements or amendments for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Escrow
Agreement, the Deposit Agreement or the Note Purchase Agreement to the extent
applicable to the Applicable Certificateholders approving such agreement or
amendment or modifying in any manner the rights and obligations of such
Applicable Certificateholders under the Escrow Agreement, the Deposit Agreement
or the Note Purchase Agreement; provided that the provisions of Section 9.02(1)
of the Basic Agreement shall be deemed to include reductions in any manner of,
or delay in the timing of, any receipt by the Applicable Certificateholders of
payments upon the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
earliest execution of this Trust Supplement.
Notice of any termination, specifying the Distribution Date upon
which the Applicable Certificateholders may surrender their Applicable
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Applicable
Certificateholders not earlier than the 60th day and not later than the 15th day
next preceding such final Distribution Date specifying (A) the Distribution Date
upon which the proposed final payment of the Applicable Certificates will be
made upon presentation and surrender of Applicable Certificates at the office or
agency of the Trustee therein specified, (B) the amount of any such proposed
final payment, and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Applicable Certificates at the office or agency of the
Trustee therein specified. The Trustee shall give such notice to the Registrar
at the time such notice is given to Applicable Certificateholders. Upon
presentation and surrender of the Applicable Certificates in accordance with
such notice, the Trustee shall cause to be distributed to Applicable
Certificateholders such final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 8.02. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE
APPLICABLE CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that
the Applicable Trust be classified for U.S. federal income tax purposes as a
grantor trust under Subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Applicable Certificateholder and Investor,
by its acceptance of its Applicable Certificate or a beneficial interest
therein, agrees to treat the Applicable Trust as a grantor trust for all U.S.
federal, state and local income tax purposes. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to further
such intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Trust Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:_____________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
EXECUTION COPY
TRUST SUPPLEMENT No. 1997-4C-O
Dated October 23, 1997
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$111,112,000
Continental Airlines Pass Through Trust 1997-4C-O
6.80% Continental Airlines
Pass Through Certificates,
Series 1997-4C-O
This Trust Supplement No. 1997-4C-O, dated as of October 23, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"Trustee"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
WHEREAS, the Basic Agreement, unlimited as to the aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified in
the Basic Agreement) which may be issued thereunder, has heretofore been
executed and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which case
the Company will lease such Aircraft (collectively, the "LEASED AIRCRAFT") or
(ii) through separate secured loan transactions, in which case the Company will
own such Aircraft (collectively, the "OWNED AIRCRAFT");
WHEREAS, in the case of each Leased Aircraft, each Owner Trustee,
acting on behalf of the corresponding Owner Participant, will issue pursuant to
an Indenture, on a non-recourse basis, Equipment Notes in order to finance a
portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will issue
pursuant to an Indenture, on a recourse basis, Equipment Notes to finance a
portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this
Continental Airlines Pass Through Trust 1997-4C-O (the "APPLICABLE TRUST") for
the benefit of the Applicable Certificateholders, and the initial Applicable
Certificateholders as the grantors of the Applicable Trust, by their respective
acceptances of the Applicable Certificates, join in the creation of the
Applicable Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will
evidence fractional undivided interests in the Applicable Trust and will convey
no rights, benefits or interests in respect of any property other than the Trust
Property except for those Certificates to which an Escrow Receipt has been
affixed;
WHEREAS, the Escrow Agent and the Underwriters have
contemporaneously herewith entered into an Escrow Agreement with the Escrow
Paying Agent pursuant to which the Underwriters have delivered to the Escrow
Agent the proceeds from the sale of the Applicable Certificates and have
irrevocably instructed the Escrow Agent to withdraw and pay funds from such
proceeds upon request and proper certification by the Trustee to purchase
Equipment Notes as the Aircraft are delivered by Boeing under the Aircraft
Purchase Agreement from time to time prior to the Delivery Period Termination
Date;
WHEREAS, the Escrow Agent on behalf of the Applicable
Certificateholders has contemporaneously herewith entered into a Deposit
Agreement with the Depositary under which the Deposits referred to therein will
be made and from which it will withdraw funds to allow the Trustee to purchase
Equipment Notes from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "AGREEMENT") and the Note Purchase
Agreement, upon or shortly following delivery of an Aircraft, the Trustee on
behalf of the Applicable Trust, using funds withdrawn under the Escrow
Agreement, shall purchase one or more Equipment Notes having the same interest
rate as, and final maturity date not later than the final Regular Distribution
Date of, the Applicable Certificates issued hereunder and shall hold such
Equipment Notes in trust for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make
this Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known as
"6.80% Continental Airlines Pass Through Certificates, Series 1997-4C-O"
(hereinafter defined as the "APPLICABLE CERTIFICATES"). Each Applicable
Certificate represents a fractional undivided interest in the Applicable Trust
created hereby. The Applicable Certificates shall be the only instruments
evidencing a fractional undivided interest in the Applicable Trust.
The terms and conditions applicable to the Applicable Certificates
are as follows:
(a) The aggregate principal amount of the Applicable Certificates
that shall be authenticated under the Agreement (except for Applicable
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04
and 3.06 of the Basic Agreement) is $111,112,000.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means January 2 and July 2 of each year, commencing on
January 2, 1998, until payment of all of the Scheduled Payments to be made
under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of
any Applicable Certificate shall be permitted unless the corresponding
Escrow Receipt is attached thereto and also is so transferred or
exchanged. By acceptance of any Applicable Certificate to which an Escrow
Receipt is attached, each Holder of such an Applicable Certificate
acknowledges and accepts the restrictions on transfer of the Escrow
Receipt set forth herein and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting an Applicable
Certificate or an interest therein will, by such acquisition or
acceptance, be deemed to represent and warrant to and for the benefit of
each Owner Participant and the Company that either (i) the assets of an
employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or of a plan subject to
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), have not been used to purchase Applicable Certificates or an
interest therein or (ii) the purchase and holding of Applicable
Certificates is exempt from the prohibited transaction restrictions of
ERISA and the Code pursuant to one or more prohibited transaction
statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates
and shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached
hereto as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement, and the Escrow
Agreement.
(g) The Applicable Certificates will have the benefit of the
Liquidity Facility.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement", for
purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft) of each Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement
as supplemented by this Trust Supplement, the following capitalized terms have
the following meanings:
AGREEMENT: Has the meaning specified in the recitals hereto.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
AIRCRAFT PURCHASE AGREEMENT: Has the meaning specified in the Note
Purchase Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE DELIVERY DATE: Has the meaning specified in Section
5.01(b) of this Trust Supplement.
APPLICABLE PARTICIPATION AGREEMENT: Has the meaning specified in
Section 5.01(b) of this Trust Supplement.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C hereto
executed and delivered in accordance with Section 7.01 of this Trust
Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CUT-OFF DATE: Means the earlier of (a) the Delivery Period
Termination Date and (b) the date on which a Triggering Event occurs.
DELIVERY DATE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Means the earlier of (a) December
31, 1998, or, if the Equipment Notes relating to all of the New Aircraft
(or Substitute Aircraft in lieu thereof) have not been purchased by the
Applicable Trust and the Other Trusts on or prior to such date due to any
reason beyond the control of the Company and not occasioned by the
Company's fault or negligence, May 31, 1999 (PROVIDED that, if a labor
strike occurs at Boeing on or prior to either or both of such dates
referred to in this clause (a), such date or dates on or following the
commencement of such strike shall be extended by adding thereto the number
of days that such strike continued in effect) and (b) the date on which
Equipment Notes issued with respect to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Applicable
Trust and the Other Trusts in accordance with the Note Purchase Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of October
23, 1997 relating to the Applicable Certificates between the Depositary
and the Escrow Agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated
as of October 23, 1997 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Trustee and Underwriters, as
the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under
the Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed
to the Escrow Agreement representing a fractional undivided interest in
the funds held in escrow thereunder.
FINAL MATURITY DATE: Means January 2, 2009.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
FINAL WITHDRAWAL NOTICE: Has the meaning specified in Section 5.02
of this Trust Supplement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as
of October 23, 1997 among the Trustee, the Other Trustees, the Liquidity
Providers, the liquidity providers relating to the Certificates issued
under (and as defined in) each of the Other Agreements, and Wilmington
Trust Company, as Subordination Agent and as trustee thereunder, as
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease
between an Owner Trustee, as the lessor, and the Company, as the lessee,
referred to in the related Indenture, as such lease may be amended,
supplemented or otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LIQUIDITY FACILITIES: Means, initially, each of the Revolving Credit
Agreements dated as of October 23, 1997 relating to the Applicable
Certificates, between a Liquidity Provider and Wilmington Trust Company as
Subordination Agent, as agent and trustee for the Applicable Trust, and,
from and after the replacement of such agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDERS: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago branch, and Westdeutsche Landesbank Girozentrale,
acting through its New York branch, and any replacements or successors
therefor appointed in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: With respect to any Equipment Note, means (i) the
Indenture and the Participation Agreement relating to such Equipment Note,
and (ii) in the case of any Equipment Note related to a Leased Aircraft,
the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as
of October 23, 1997 among the Trustee, the Other Trustees, the Company,
the Escrow Agent, the Escrow Paying Agent and the Subordination Agent,
providing for, among other things, the purchase of Equipment Notes by the
Trustee on behalf of the Trust, as the same may be amended, supplemented
or otherwise modified from time to time, in accordance with its terms.
NOTICE OF PURCHASE WITHDRAWAL: Has the meaning specified in the
Deposit Agreement.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1997-4A-O dated the date hereof relating to
Continental Airlines Pass Through Trust 1997-4A-O and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1997-4B-O dated the date
hereof relating to Continental Airlines Pass Through Trust 1997-4B-O.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and
any successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1997-4A-O and the Continental Airlines Pass Through Trust 1997-4B-O, each
created on the date hereof.
OWNED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any
permitted successor or assign of such Owner Participant; and OWNER
PARTICIPANTS at any time of determination means all of the Owner
Participants thus referred to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Trustee", as referred to in the
Indenture pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and OWNER TRUSTEES means all of
the Owner Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as
the same may be amended, supplemented or otherwise modified in accordance
with its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the Applicable Certificates less (ii) the aggregate amount of
all payments made in respect of such Applicable Certificates or in respect
of Deposits other than payments made in respect of interest or premium
thereon or reimbursement of any costs or expenses incurred in connection
therewith. The Pool Balance as of any Distribution Date shall be computed
after giving effect to any special distribution with respect to unused
Deposits, payment of principal of the Equipment Notes or payment with
respect to other Trust Property and the distribution thereof to be made on
that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient
(rounded to the seventh decimal place) computed by dividing (i) the Pool
Balance by (ii) the original aggregate face amount of the Applicable
Certificates. The Pool Factor as of any Distribution Date shall be
computed after giving effect to any special distribution with respect to
unused Deposits, payment of principal of the Equipment Notes or other
Trust Property and the distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
16, 1997 relating to the offering of the Certificates.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1997-4C-S dated the date hereof
relating to the Continental Airlines Pass Through Trust 1997-4C-S and
entered into by the Company and the Trustee, which agreement becomes
effective upon the execution and delivery of the Assignment and Assumption
Agreement pursuant to Section 7.01 of this Trust Supplement.
RELATED TRUST: Means the Continental Pass Through Trust 1997-4C-S,
to be formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase
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) or Special Redemption Premium.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Has the meaning specified in Section 7.01 of this
Trust Supplement.
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement,
the Equipment Notes held as the property of the Applicable Trust, all
monies at any time paid thereon and all monies due and to become due
thereunder, (ii) funds from time to time deposited in the Certificate
Account and the Special Payments Account and, subject to the Intercreditor
Agreement, any proceeds from the sale by the Trustee pursuant to Article
VI of the Basic Agreement of any Equipment Note and (iii) all rights of
the Applicable Trust and the Trustee, on behalf of the Applicable Trust,
under the Intercreditor Agreement, the Escrow Agreement, the Note Purchase
Agreement and the Liquidity Facilities, including, without limitation, all
rights to receive certain payments thereunder, and all monies paid to the
Trustee on behalf of the Applicable Trust pursuant to the Intercreditor
Agreement or the Liquidity Facilities, PROVIDED that rights with respect
to the Deposits or under the Escrow Agreement, except for the right to
direct withdrawals for the purchase of Equipment Notes to be held herein,
will not constitute Trust Property.
UNDERWRITERS: Means, collectively, Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, Chase Securities
Inc. and Salomon Brothers Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
October 16, 1997 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. ADDITIONS TO ARTICLE IV OF THE BASIC Agreement. In
addition to the provisions of Article IV of the Basic Agreement, the following
provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the Trustee
under the Note Purchase Agreement, the Trustee, upon receipt thereof,
shall immediately deposit the aggregate amount of such Special Redemption
Premium in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium as
provided for in Section 4.02(b) of the Basic Agreement shall be on the
Special Distribution Date with respect to such Special Payment or as soon
thereafter as the Trustee has confirmed receipt of the related Special
Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium by
the Company to the Trustee under the Note Purchase Agreement, the notice
provided for in Section 4.02(c) of the Basic Agreement shall be mailed,
together with the notice by the Escrow Paying Agent under Section 2.06 of
the Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date shall
be the Final Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c) of
the Basic Agreement shall apply equally if the amount of Special
Redemption Premium, if any, has not ben calculated at the time the Trustee
mails notice of a Special Payment.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On
each Distribution Date, the Trustee will include with each distribution to
Applicable Certificateholders of a Scheduled Payment or Special Payment, as the
case may be, a statement setting forth the information provided below (in the
case of a Special Payment, including any Special Redemption Premium, reflecting
in part the information provided by the Escrow Paying Agent under the Escrow
Agreement). Such statement shall set forth (per $1,000 face amount Applicable
Certificate as to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable
to principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable
to interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name
of a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Trustee
shall furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Delivery Period Termination Date, if
there has been any change in the information set forth in clauses (x), (y) and
(z) below from that set forth in page S-51 of the Prospectus Supplement, and
(ii) any early redemption or purchase of, or any default in the payment of
principal or interest in respect of, any of the Equipment Notes held in the
Applicable Trust, or any Final Withdrawal, the Trustee shall furnish to
Applicable Certificateholders of record on such date a statement setting forth
(x) the expected Pool Balances for each subsequent Regular Distribution Date
following the Delivery Period Termination Date, (y) the related Pool Factors for
such Regular Distribution Dates and (z) the expected principal distribution
schedule of the Equipment Notes, in the aggregate, held as Trust Property at the
date of such notice. With respect to the Applicable Certificates registered in
the name of a Clearing Agency, on the Delivery Period Termination Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such date. The Trustee will mail to each such Clearing Agency Participant the
statement described above and will make available additional copies as requested
by such Clearing Agency Participant for forwarding to holders of interests in
the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the continuance of a Triggering Event, each
Applicable Certificateholder shall have the right (which shall not expire upon
any purchase of the Class A Certificates pursuant to the agreements governing
the Class B Trust) to purchase, for the purchase price set forth in Section
6.01(b) of the Basic Agreement, all, but not less than all, of the Class A
Certificates and the Class B Certificates upon ten days' written notice to the
Class A Trustee, the Class B Trustee and each other Applicable
Certificateholder, provided that (i) if prior to the end of such ten day period
any other Applicable Certificateholder notifies such purchasing Applicable
Certificateholder that such other Applicable Certificateholder wants to
participate in such purchase, then such other Applicable Certificateholder may
join with the purchasing Applicable Certificateholder to purchase all, but not
less than all, of the Class A Certificates and the Class B Certificates pro rata
based on the Fractional Undivided Interest in the Applicable Trust held by each
such Applicable Certificateholder and (ii) if prior to the end of such ten-day
period any other Applicable Certificateholder fails to notify the purchasing
Applicable Certificateholder of such other Applicable Certificateholder's desire
to participate in such a purchase, then such other Applicable Certificateholder
shall lose its right to purchase the Class A Certificates and the Class B
Certificates pursuant to this Section 4.01(a); and
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event, each Class D Certificateholder shall have
the right (which shall not expire upon any purchase of the Class A Certificates
pursuant to the agreements governing the Class B Trust or the Applicable Trust
or any purchase of Class B Certificates pursuant to clause (a) above) to
purchase all, but not less than all, of the Applicable Certificates, the Class A
Certificates and the Class B Certificates upon ten days' written notice to the
Trustee, the Class A Trustee, the Class B Trustee and each other Class D
Certificateholder, PROVIDED that (A) if prior to the end of such ten-day period
any other Class D Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder wants to participate
in such purchase, then such other Class D Certificateholder may join with the
purchasing Class D Certificateholder to purchase all, but not less than all, of
the Applicable Certificates, the Class A Certificates and the Class B
Certificates pro rata based on the Fractional Undivided Interest in the Class D
Trust held by each such Class D Certificateholder and (B) if prior to the end of
such ten-day period any other Class D Certificateholder fails to notify the
purchasing Class D Certificateholder of such other Class D Certificateholder's
desire to participate in such a purchase, then such other Class D
Certificateholder shall lose its right to purchase the Applicable Certificates
pursuant to this Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed hereunder on the related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date); PROVIDED FURTHER that no such
purchase of Applicable Certificates shall be effective unless the purchaser(s)
shall certify to the Trustee that contemporaneously with such purchase, such
purchaser(s) is purchasing, pursuant to the terms of this Agreement and the
Other Agreements, the Applicable Certificates, the Class A Certificates and the
Class B Certificates which are senior to the securities held by such
purchaser(s). Each payment of the purchase price of the Applicable Certificates
referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such purchase shall be subject to the terms
of this Section 4.01(a). Each Applicable Certificateholder agrees by its
acceptance of its Applicable Certificate that it will, subject to Section 3.04
of the Basic Agreement, upon payment from such Class D Certificateholder(s) of
the purchase price set forth in the first sentence of this paragraph, forthwith
sell, assign, transfer and convey to the purchaser(s) thereof (without recourse,
representation or warranty of any kind except for its own acts), all of the
right, title, interest and obligation of such Applicable Certificateholder in
this Agreement, the Escrow Agreement, the Deposit Agreement, the Intercreditor
Agreement, the Liquidity Facilities, the Note Documents and all Applicable
Certificates and Escrow Receipts held by such Applicable Certificateholder
(excluding all right, title and interest under any of the foregoing to the
extent such right, title or interest is with respect to an obligation not then
due and payable as respects any action or inaction or state of affairs occurring
prior to such sale) and the purchaser shall assume all of such Applicable
Certificateholder's obligations under this Agreement, the Escrow Agreement, the
Deposit Agreement, the Intercreditor Agreement, the Liquidity Facilities, the
Note Documents and all such Applicable Certificates and Escrow Receipts. The
Applicable Certificates will be deemed to be purchased on the date payment of
the purchase price is made notwithstanding the failure of the Applicable
Certificateholders to deliver any Applicable Certificates and, upon such a
purchase, (i) the only rights of the Applicable Certificateholders will be to
deliver the Applicable Certificates to the purchaser(s) and receive the purchase
price for such Applicable Certificates and (ii) if the purchaser(s) shall so
request, such Applicable Certificateholder will comply with all the provisions
of Section 3.04 of the Basic Agreement to enable new Applicable Certificates to
be issued to the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new Applicable
Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01, the terms "Class A Certificate",
"Class A Trustee", "Class B Trust", "Class B Certificate""Class B Trustee",
"Class D Certificateholder" and "Class D Trust", shall have the respective
meanings assigned to such terms in the Intercreditor Agreement.
(c) Except as expressly set forth above, this Section 4.01
supersedes and replaces Section 6.01(b) of the Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. DELIVERY OF DOCUMENTS; DELIVERY DATES. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor Agreement, the
Escrow Agreement and the Note Purchase Agreement on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii) subject
to the respective terms thereof, to perform its obligations thereunder. Upon
request of the Company and the satisfaction or waiver of the closing conditions
specified in the Underwriting Agreement, the Trustee shall execute, deliver,
authenticate, issue and sell Applicable Certificates in authorized denominations
equalling in the aggregate the amount set forth, with respect to the Applicable
Trust, in Schedule II to the Underwriting Agreement evidencing the entire
ownership interest in the Applicable Trust, which amount equals the maximum
aggregate principal amount of Equipment Notes which may be purchased by the
Trustee pursuant to the Note Purchase Agreement. Except as provided in Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement, the Trustee shall not execute,
authenticate or deliver Applicable Certificates in excess of the aggregate
amount specified in this paragraph.
(b) On or after the Issuance Date, the Company may deliver from time
to time to the Trustee a Delivery Notice relating to one or more Equipment
Notes. After receipt of a Delivery Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery Notice relates
(the "APPLICABLE DELIVERY DATE"), the Trustee shall (as and when specified in
the Delivery Notice) instruct the Escrow Agent to provide a Notice of Purchase
Withdrawal to the Depositary requesting (A) the withdrawal of one or more
Deposits on the Applicable Delivery Date in accordance with and to the extent
permitted by the terms of the Escrow Agreement and the Deposit Agreement and (B)
the payment of all, or a portion, of such Deposit or Deposits in an amount equal
in the aggregate to the purchase price of such Equipment Notes to or on behalf
of the Owner Trustee or the Company, as the case may be, issuing such Equipment
Notes, all as shall be described in the Delivery Notice. The Trustee shall (as
and when specified in such Delivery Notice), subject to the conditions set forth
in Section 2 of the Note Purchase Agreement, enter into and perform its
obligations under the Participation Agreement specified in such Delivery Notice
(the "APPLICABLE PARTICIPATION AGREEMENT") and cause such certificates,
documents and legal opinions relating to the Trustee to be duly delivered as
required by the Applicable Participation Agreement. If at any time prior to the
Applicable Delivery Date, the Trustee receives a notice of postponement pursuant
to Section 1(e) or 1(f) of the Note Purchase Agreement, then the Trustee shall
give the Depositary (with a copy to the Escrow Agent) a notice of cancellation
of such Notice of Purchase Withdrawal relating to such Deposit or Deposits on
such Applicable Delivery Date. Upon satisfaction of the conditions specified in
the Note Purchase Agreement and the Applicable Participation Agreement, the
Trustee shall purchase the applicable Equipment Notes with the proceeds of the
withdrawals of one or more Deposits made on the Applicable Delivery Date in
accordance with the terms of the Deposit Agreement and the Escrow Agreement. The
purchase price of such Equipment Notes shall equal the principal amount of such
Equipment Notes. Amounts withdrawn from such Deposit or Deposits in excess of
the purchase price of the Equipment Notes or to the extent not applied on the
Applicable Delivery Date to the purchase price of the Equipment Notes, shall be
re-deposited by the Trustee with the Depositary on the Applicable Delivery Date
in accordance with the terms of the Deposit Agreement. The provisions of this
Section 5.01(b) supersede and replace the provisions of Section 2.02 of the
Basic Agreement (which are inapplicable to the Trust), and all provisions of the
Basic Agreement relating to Postponed Notes and Section 2.02 of the Basic
Agreement shall not apply to the Applicable Trust.
Section 5.02. WITHDRAWAL OF DEPOSITS. If any Deposits remain
outstanding on the Business Day next succeeding the Cut-off Date, (i) (A) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated and
instruct the Escrow Agent to provide a notice of Final Withdrawal to the
Depositary substantially in the form of Exhibit B to the Deposit Agreement (the
"FINAL WITHDRAWAL NOTICE") and (B) the Trustee will make a demand upon the
Company under the Note Purchase Agreement for an amount equal to the Special
Redemption Premium, such payment to be made on the Final Withdrawal Date.
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the recitals
and statements contained herein or therein, all of which recitals and statements
are made solely by the Company.
(b) Except as herein otherwise provided, no duties, responsibilities
or liabilities are assumed, or shall be construed to be assumed by the Trustee
by reason of this Trust Supplement other than as set forth in the Basic
Agreement, and this Trust Supplement is executed and accepted on behalf of the
Trustee, subject to all the terms and conditions set forth in the Basic
Agreement, upon the effectiveness thereof, as fully to all intents as if the
same were herein set forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to
execute, deliver and perform this Trust Supplement, the Escrow Agreement
and the Note Documents to which it is a party and has taken all necessary
action to authorize the execution, delivery and performance by it of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party;
(b) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party (i) will not violate any provision of any United States federal
law or the law of the state of the United States where it is located
governing the banking and trust powers of the Trustee or any order, writ,
judgment, or decree of any court, arbitrator or governmental authority
applicable to the Trustee or any of its assets, (ii) will not violate any
provision of the articles of association or by-laws of the Trustee, and
(iii) will not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust Property
pursuant to the provisions of any mortgage, indenture, contract, agreement
or other undertaking to which it is a party, which violation, default or
lien could reasonably be expected to have an adverse effect on the
Trustee's performance or ability to perform its duties hereunder or
thereunder or on the transactions contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party will not require the authorization, consent, or approval of,
the giving of notice to, the filing or registration with, or the taking of
any other action in respect of, any governmental authority or agency of
the United States or the state of the United States where it is located
regulating the banking and corporate trust activities of the Trustee; and
(d) this Trust Supplement, the Escrow Agreement and the Note
Documents to which it is a party have been, or will be, as applicable,
duly executed and delivered by the Trustee and constitute, or will
constitute, as applicable, the legal, valid and binding agreements of the
Trustee, enforceable against it in accordance with their respective terms;
PROVIDED, HOWEVER, that enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and (ii) general principles of
equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Under the terms of, and subject to the limitations contained
in, Section 9.01 of the Basic Agreement, the Company may (but will not be
required to), and the Trustee (subject to Section 9.03 of the Basic Agreement)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental to the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement, for any of the purposes set forth in clauses
(1) through (9) of such Section 9.01, except that (a) clause (2) and (3) of such
Section 9.01 shall be deemed to include the Company's obligations under (in the
case of clause (2)), and the Company's rights and powers conferred by (in the
case of clause (3)), the Note Purchase Agreement and (b) clause (4) of such
Section 9.01 shall be deemed to include corrections or supplements to provisions
of the Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement
which may be defective or inconsistent with any other provision of this
Agreement or contained in any agreement referred to in such clause (4) and the
curing of any ambiguity or the modification of any other provision with respect
to matters or questions arising under the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement.
Section 6.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. The provisions of Section 9.02 of the Basic Agreement shall
apply to agreements or amendments for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Escrow
Agreement, the Deposit Agreement or the Note Purchase Agreement to the extent
applicable to the Applicable Certificateholders approving such agreement or
amendment or modifying in any manner the rights and obligations of such
Applicable Certificateholders under the Escrow Agreement, the Deposit Agreement
or the Note Purchase Agreement; provided that the provisions of Section 9.02(1)
of the Basic Agreement shall be deemed to include reductions in any manner of,
or delay in the timing of, any receipt by the Applicable Certificateholders of
payments upon the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE TRUST. The respective obligations
and responsibilities of the Company and the Trustee with respect to the
Applicable Trust shall terminate upon the earlier of (A) the completion of the
assignment, transfer and discharge described in the first sentence of the
immediately following paragraph and (B) distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
execution of this Trust Supplement.
Upon the earlier of (i) the first Business Day following December
31, 1998, or, if later, the fifth Business Day following the Delivery Period
Termination Date and (ii) the fifth Business Day following the date on which a
Triggering Event occurs (such date, the "Transfer Date"), or, if later, the date
on which all of the conditions set forth in the immediately following sentence
have been satisfied, the Trustee is hereby directed (subject only to the
immediately following sentence) to, and the Company shall direct the institution
that will serve as the Related Trustee under the Related Pass Through Trust
Agreement to, execute and deliver the Assignment and Assumption Agreement,
pursuant to which the Trustee shall assign, transfer and deliver all of the
Trustee's right, title and interest to the Trust Property to the Related Trustee
under the Related Pass Through Trust Agreement. The Trustee and the Related
Trustee shall execute and deliver the Assignment and Assumption Agreement upon
the satisfaction of the following conditions:
(i) The Trustee, the Related Trustee and each of the Rating Agencies
then rating the Applicable Certificates shall have received an Officer's
Certificate and an Opinion of Counsel dated the date of the Assignment and
Assumption Agreement and each satisfying the requirements of Section 1.02
of the Basic Agreement, which Opinion of Counsel shall be substantially to
the effect set forth below and may be relied upon by the Beneficiaries (as
defined in the Assignment and Assumption Agreement):
(a) upon the execution and delivery thereof by the parties
thereto in accordance with the terms of this Agreement and the
Related Pass Through Trust Agreement, the Assignment and Assumption
Agreement will constitute the valid and binding obligation of each
of the parties thereto enforceable against each such party in
accordance with its terms;
(b) upon the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, each of the Applicable
Certificates then Outstanding will be entitled to the benefits of
the Related Pass Through Trust Agreement;
(c) the Related Trust is not required to be registered as an
investment company under the Investment Company Act of 1940, as
amended;
(d) the Related Pass Through Trust Agreement constitutes the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms; and
(e) neither the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, nor the consummation
by the parties thereto of the transactions contemplated to be
consummated thereunder on the date thereof, will violate any law or
governmental rule or regulation of the State of New York or the
United States of America known to such counsel to be applicable to
the transactions contemplated by the Assignment and Assumption
Agreement.
(ii) The Trustee and the Company shall have received (x) a copy of
the articles of incorporation and bylaws of the Related Trustee certified
as of the Transfer Date by the Secretary or Assistant Secretary of such
institution and (y) a copy of the filing (including all attachments
thereto) made by the institution serving as the Related Trustee with the
Office of the Superintendent, State of New York Banking Department for the
qualification of the Related Trustee under Section 131(3) of the New York
Banking Law.
Upon the execution of the Assignment and Assumption Agreement by the parties
thereto, the Applicable Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Related Trust in
exchange for their interests in the Applicable Trust equal to their respective
beneficial interests in the Applicable Trust, and the Outstanding Applicable
Certificates representing Fractional Undivided Interests in the Applicable Trust
shall be deemed for all purposes of this Agreement and the Related Pass Through
Trust Agreement, without further signature or action of any party or Applicable
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related Trust and its trust property. By acceptance of its
Applicable Certificate, each Applicable Certificateholder consents to such
assignment, transfer and delivery of the Trust Property to the trustee of the
Related Trust upon the execution and delivery of the Assignment and Assumption
Agreement.
In connection with the occurrence of the event set forth in clause
(B) above, notice of such termination, specifying the Distribution Date upon
which the Applicable Certificateholders may surrender their Applicable
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Applicable
Certificateholders not earlier than the 60th day and not later than the 15th day
next preceding such final Distribution Date specifying (A) the Distribution Date
upon which the proposed final payment of the Applicable Certificates will be
made upon presentation and surrender of Applicable Certificates at the office or
agency of the Trustee therein specified, (B) the amount of any such proposed
final payment, and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Applicable Certificates at the office or agency of the
Trustee therein specified. The Trustee shall give such notice to the Registrar
at the time such notice is given to Applicable Certificateholders. Upon
presentation and surrender of the Applicable Certificates in accordance with
such notice, the Trustee shall cause to be distributed to Applicable
Certificateholders such final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 8.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that
the Applicable Trust be classified for U.S. federal income tax purposes as a
grantor trust under Subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Applicable Certificateholder and Investor,
by its acceptance of its Applicable Certificate or a beneficial interest
therein, agrees to treat the Applicable Trust as a grantor trust for all U.S.
federal, state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Trust Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:_____________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT A
FORM OF CERTIFICATE
[Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to Issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]
CONTINENTAL AIRLINES PASS THROUGH TRUST 1997-4C-O
6.80% Continental Airlines Pass Through Certificate, Series 1997-4C-O
Issuance Date: October 23, 1997
Final Expected Distribution Date: July 2, 2007
Evidencing A Fractional Undivided Interest In The
Continental Airlines Pass Through Trust 1997-4C-O,
The Property Of Which Includes Certain Equipment
Notes Each Secured By An Aircraft Leased To Or
Owned By Continental Airlines, Inc.
Certificate
No. __________ $______________ Fractional Undivided Interest representing
0._____% of the Trust per $1,000 face amount
THIS CERTIFIES THAT _______________________, for value received, is
the registered owner of a $_____________ (__________ dollars) Fractional
Undivided Interest in the Continental Airlines Pass Through Trust 1997-4C-O (the
"TRUST") created by Wilmington Trust Company, as trustee (the "Trustee"),
____________
This legend to appear on Book-Entry Certificates to be deposited with the
Depository Trust Company
pursuant to a Pass Through Trust Agreement, dated as of September 25, 1997 (the
"BASIC AGREEMENT"), between the Trustee and Continental Airlines, Inc., a
Delaware corporation (the "Company"), as supplemented by Trust Supplement No.
1997-4C-O thereto, dated as of October 23, 1997 (the "Trust Supplement" and,
together with the Basic Agreement, the "AGREEMENT"), between the Trustee and the
Company, a summary of certain of the pertinent provisions of which is set forth
below. To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Agreement. This Certificate is
one of the duly authorized Certificates designated as "6.80% Continental
Airlines Pass Through Certificates, Series 1997-4C-O" (herein called the
"CERTIFICATES"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement. By virtue of its acceptance hereof,
the Certificateholder of this Certificate assents to and agrees to be bound by
the provisions of the Agreement and the Intercreditor Agreement. The property of
the Trust includes certain Equipment Notes and all rights of the Trust to
receive payments under the Intercreditor Agreement and any Liquidity Facilities
(the "TRUST PROPERTY"). Each issue of the Equipment Notes is secured by, among
other things, a security interest in an Aircraft leased to or owned by the
Company.
The Certificates represent Fractional Undivided Interests in the
Trust and the Trust Property and have no rights, benefits or interest in respect
of any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January 2 and July 2 (a "Regular Distribution Date")
commencing January 2, 1998, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by
check mailed to the Person entitled thereto, without presentation or surrender
of this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of a Clearing
Agency (or its nominee), such distribution shall be made by wire transfer.
Except as otherwise provided in the Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after notice mailed by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Trustee specified
in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $1,000 Fractional Undivided Interest
and integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
CONTINENTAL AIRLINES PASS THROUGH TRUST
1997-4C-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:_______________________________
Name:
Title:
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT B
[DTC Letter of Representations]
EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Continental Airlines Pass Through Trust 1997-4C
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ______________, 199__
(the "ASSIGNMENT AGREEMENT"), between Wilmington Trust Company, a Delaware
banking corporation ("WTC"), not in its individual capacity except as expressly
provided herein, but solely as trustee under the Pass Through Trust Agreement
dated as of September 25, 1997 (as amended or modified from time to time, the
"BASIC AGREEMENT"), as supplemented by the Trust Supplement No. 1997-4C-O, dated
October 23 , 1997 (the "TRUST SUPPLEMENT" and together with the Basic Agreement,
the "AGREEMENT") in respect of the Continental Airlines Pass Through Trust
1997-4C-O (the "ASSIGNOR"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity except as expressly provided herein,
but solely as trustee under the Basic Agreement as supplemented by the Trust
Supplement No. 1997-4C-S dated October 23, 1997 (the "NEW SUPPLEMENT", and,
together with the Basic Agreement, the "NEW AGREEMENT") in respect of the
Continental Airlines Pass Through Trust 1997-4C-S (the "ASSIGNEE").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to effect on the date hereof (the
"TRANSFER DATE") (a) the transfer by the Assignor to the Assignee of all of the
right, title and interest of the Assignor in, under and with respect to, among
other things, the Trust Property and each of the documents listed in Schedule I
hereto (the "SCHEDULED DOCUMENTS") and (b) the assumption by the Assignee of the
obligations of the Assignor (i) under the Scheduled Documents and (ii) in
respect of the Applicable Certificates issued under the Agreement; and
WHEREAS, the Scheduled Documents permit such transfer upon
satisfaction of certain conditions heretofore or concurrently herewith being
complied with;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows (capitalized terms used herein without definition having the meaning
ascribed thereto in the Agreement):
1. ASSIGNMENT. The Assignor does hereby sell, assign, convey,
transfer and set over unto the Assignee as of the Transfer Date all of its
present and future right, title and interest in, under and with respect to the
Trust Property and the Scheduled Documents and each other contract, agreement,
document or instrument relating to the Trust Property or the Scheduled Documents
(such other contracts, agreements, documents or instruments, together with the
Scheduled Documents, to be referred to as the "ASSIGNED DOCUMENTS"), and any
proceeds therefrom, together with all documents and instruments evidencing any
of such right, title and interest.
2. ASSUMPTION. The Assignee hereby assumes for the benefit of the
Assignor and each of the parties listed in Schedule II hereto (collectively, the
"BENEFICIARIES") all of the duties and obligations of the Assignor, whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the Assigned Documents to which the Assignor is a
party and shall be bound by all the terms thereof (including the agreements and
obligations of the Assignor set forth therein) as if therein named as the
Assignor. Further, the Assignee hereby assumes for the benefit of the Assignor
and the Beneficiaries all of the duties and obligations of the Assignor under
the Outstanding Applicable Certificates and hereby confirms that the Applicable
Certificates representing Fractional Undivided Interests under the Agreement
shall be deemed for all purposes of the Agreement and the New Agreement to be
certificates representing the same fractional undivided interests under the New
Agreement equal to their respective beneficial interests in the trust created
under the Agreement.
3. EFFECTIVENESS. This Assignment Agreement shall be effective upon
the execution and delivery hereof by the parties hereto, and each Applicable
Certificateholder, by its acceptance of its Applicable Certificate or a
beneficial interest therein, agrees to be bound by the terms of this Assignment
Agreement.
4. PAYMENTS. The Assignor hereby covenants and agrees to pay over to
the Assignee, if and when received following the Transfer Date, any amounts
(including any sums payable as interest in respect thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.
5. FURTHER ASSURANCES. The Assignor shall, at any time and from time
to time, upon the request of the Assignee, promptly and duly execute and deliver
any and all such further instruments and documents and take such further action
as the Assignee may reasonably request to obtain the full benefits of this
Assignment Agreement and of the right and powers herein granted. The Assignor
agrees to deliver any Applicable Certificates, and all Trust Property, if any,
then in the physical possession of the Assignor, to the Assignee.
6. REPRESENTATIONS AND WARRANTIES. (a) The Assignee represents and
warrants to the Assignor and each of the Beneficiaries that:
(i) it has all requisite power and authority and legal right to
enter into and carry out the transactions contemplated hereby and to carry
out and perform the obligations of the "Pass Through Trustee" under the
Assigned Documents;
(ii) on and as of the date hereof, the representations and
warranties of the Assignee set forth in Section 7.15 of the Basic
Agreement and Section 5.04 of the New Supplement are true and correct.
(b) The Assignor represents and warrants to the Assignee that:
(i) it is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the full trust power,
authority and legal right under the laws of the State of Delaware and the
United States pertaining to its trust and fiduciary powers to execute and
deliver this Assignment Agreement;
(ii) the execution and delivery by it of this Assignment Agreement
and the performance by it of its obligations hereunder have been duly
authorized by it and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
(iii) this Assignment Agreement constitutes the legal, valid and
binding obligations of it enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
7. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
8. COUNTERPARTS. This Assignment Agreement may be executed in any
number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by both
parties so long as each party shall sign at least one counterpart.
9. THIRD PARTY BENEFICIARIES. The Assignee hereby agrees, for the
benefit of the Beneficiaries, that its representations, warranties and covenants
contained herein are also intended to be for the benefit of each Beneficiary,
and each Beneficiary shall be deemed to be an express third party beneficiary
with respect thereto, entitled to enforce directly and in its own name any
rights or claims it may have against such party as such beneficiary.
IN WITNESS WHEREOF, the parties hereto, through their respective
officers thereunto duly authorized, have duly executed this Assignment Agreement
as of the day and year first above written.
ASSIGNOR:
WILMINGTON TRUST COMPANY, not in its
individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1997-4C-O
By:________________________________
Title:
ASSIGNEE:
WILMINGTON TRUST COMPANY, not in its
individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1997-4C-S
By:________________________________
Title:
Schedule I
Schedule of Assigned Documents
(1) Intercreditor Agreement dated as of October 23, 1997 among the
Trustee, the Other Trustees, the Liquidity Providers, the liquidity provider, if
any, relating to the Certificates issued under (and as defined in) each of the
Other Agreements and the Subordination Agent.
(2) Escrow and Paying Agent Agreement (Class C) dated as of October
23, 1997 among the Escrow Agent, the Underwriters, the Trustee and the Paying
Agent.
(3) Note Purchase Agreement dated as of October 23, 1997 among the
Company, the Trustee, the Other Trustees, the Depositary, the Escrow Agent, the
Paying Agent and the Subordination Agent.
(4) Deposit Agreement (Class C) dated as of October 23, 1997 between
the Escrow Agent and the Depositary.
(5) Each of the Operative Agreements (as defined in the
Participation Agreement for each Aircraft) in effect as of the Transfer Date.
Schedule II
Schedule of Beneficiaries
Wilmington Trust Company, not in its individual capacity but solely as
Subordination Agent
Wilmington Trust Company, not in its individual capacity but solely as Paying
Agent
ABN AMRO Bank N.V., acting through its Chicago branch, and Westdeutsche
Landesbank Girozentrale, acting through its New York branch, as Liquidity
Providers
Continental Airlines, Inc.
Morgan Stanley & Co. Incorporated, as Underwriter
Credit Suisse First Boston Corporation, as Underwriter
Chase Securities Inc., as Underwriter
Salomon Brothers Inc, as Underwriter
First Security Bank, National Association, as Escrow Agent
Each of the other parties to the Assigned Documents
EXECUTION COPY
TRUST SUPPLEMENT No. 1997-4C-S
Dated October 23, 1997
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$111,112,000
Continental Airlines Pass Through Trust 1997-4C-S
6.80% Continental Airlines
Pass Through Certificates,
Series 1997-4C-S
This Trust Supplement No. 1997-4C-S, dated as of October 23, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"Trustee"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
WHEREAS, the Basic Agreement, unlimited as to the aggregate
principal amount of Certificates (unless otherwise specified herein, capitalized
terms used herein without definition having the respective meanings specified in
the Basic Agreement) which may be issued thereunder, has heretofore been
executed and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, as of the Transfer Date (as defined below), the Company
will have financed the acquisition of all or a portion of such Aircraft either
(i) through separate leveraged lease transactions, in which case the Company
leases such Aircraft (collectively, the "LEASED AIRCRAFT") or (ii) through
separate secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "OWNED AIRCRAFT");
WHEREAS, as of the Transfer Date in the case of each Leased
Aircraft, each Owner Trustee, acting on behalf of the corresponding Owner
Participant, will have issued pursuant to an Indenture, on a non-recourse basis,
Equipment Notes in order to finance a portion of its purchase price of such
Leased Aircraft;
WHEREAS, as of the Transfer Date, in the case of each Owned
Aircraft, the Company will have issued pursuant to an Indenture, on a recourse
basis, Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;
WHEREAS, as of the Transfer Date, the Related Trustee will assign,
transfer and deliver all of such trustee's right, title and interest to the
trust property held by the Related Trustee to the Trustee pursuant to the
Assignment and Assumption Agreement (as defined below);
WHEREAS, the Trustee, effective only, but automatically, upon
execution and delivery of the Assignment and Assumption Agreement, will be
deemed to have declared the creation of the Continental Airlines Pass Through
Trust 1997-4C-S (the "APPLICABLE TRUST") for the benefit of the Applicable
Certificateholders, and each Holder of Applicable Certificates outstanding as of
the Transfer Date, as the grantors of the Applicable Trust, by their respective
acceptances of such Applicable Certificates, will join in the creation of this
Applicable Trust with the Trustee;
WHEREAS, all Applicable Certificates deemed issued by the Applicable
Trust will evidence fractional undivided interests in the Applicable Trust and
will convey no rights, benefits or interests in respect of any property other
than the Trust Property except for those Applicable Certificates to which an
Escrow Receipt (as defined below) has been affixed;
WHEREAS, upon the execution and delivery of the Assignment and
Assumption Agreement, all of the conditions and requirements necessary to make
this Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. The Applicable Certificates shall be
known as "6.80% Continental Airlines Pass Through Certificates, Series
1997-4C-S". Each Class C Certificate represents a fractional undivided interest
in the Applicable Trust created hereby. The Applicable Certificates shall be the
only instruments evidencing a fractional undivided interest in the Applicable
Trust.
The terms and conditions applicable to the Applicable Certificates
are as follows:
(a) The aggregate principal amount of the Applicable Certificates
that shall be initially deemed issued under the Agreement shall be equal
to the aggregate principal amount of "Outstanding" pass through
certificates representing fractional undivided interests in the Related
Trust on the Transfer Date.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means January 2 and July 2 of each year, commencing on
January 2, 1998, until payment of all of the Scheduled Payments to be made
under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of
any Applicable Certificate shall be permitted unless the corresponding
Escrow Receipt is attached thereto and also is so transferred or
exchanged. By acceptance of any Applicable Certificate to which an Escrow
Receipt is attached, each Holder of such an Applicable Certificate
acknowledges and accepts the restrictions on transfer of the Escrow
Receipt set forth herein and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached as
Exhibit A to the Related Pass Through Trust Agreement,with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Related Pass Through Trust Agreement or
this Agreement, as the case may be, or as the Trustee may deem
appropriate, to reflect the fact that the Applicable Certificates are
being issued hereunder as opposed to under the Related Pass Through Trust
Agreement. Any Person acquiring or accepting an Applicable Certificate, by
its acceptance of such Applicable Certificate or an interest therein will,
by such acquisition or acceptance, be deemed to represent and warrant to
and for the benefit of each Owner Participant and the Company that either
(i) the assets of an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
of a plan subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), have not been used to purchase Applicable
Certificates or an interest therein or (ii) the purchase and holding of
Applicable Certificates is exempt from the prohibited transaction
restrictions of ERISA and the Code pursuant to one or more prohibited
transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry
Certificates.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement.
(g) The Applicable Certificates are entitled to the benefits of the
Liquidity Facilities.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement,"
for purposes of clause (3) of Section 7.07 of the Basic Agreement are
Section 8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect
to Leased Aircraft).
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement
as supplemented by this Trust Supplement, the following capitalized terms have
the following meanings:
AGREEMENT: Means the Basic Agreement, as supplemented by this Trust
Supplement.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
APPLICABLE CERTIFICATE: means any of the Applicable Certificates
issued by the Related Trust and that are "Outstanding" (as defined in the
Related Pass Through Trust Agreement) as of the Transfer Date (the
"Transfer Date Certificates") and any Applicable Certificates issued in
exchange therefor or replacement thereof pursuant to this Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C to the Related
Trust Supplement executed and delivered in accordance with Section 7.01 of
the Related Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Has the meaning specified in the
Related Pass Through Trust Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of October
23, 1997 relating to the Applicable Certificates between the Depositary
and the Escrow Agent, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated
as of October 23, 1997 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Related Trustee (and after the
Transfer Date, the Trustee) and the Underwriters, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under
the Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed
to the Escrow Agreement representing a fractional undivided interest in
the funds held in escrow thereunder.
FINAL MATURITY DATE: Means January 2, 2009.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as
of October 23, 1997 among the Related Trustee (and after the Transfer
Date, the Trustee), the Related Other Trustees (and after the Transfer
Date, the Other Trustees), the Liquidity Providers, the liquidity
providers relating to the Certificates issued under (and as defined in)
each of the Related Other Agreements, and Wilmington Trust Company, as
Subordination Agent and as trustee thereunder, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease
between an Owner Trustee, as the lessor, and the Company, as the lessee,
referred to in the related Indenture, as such lease may be amended,
supplemented or otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LIQUIDITY FACILITIES: Means, initially, each of the Revolving Credit
Agreements dated as of October 23, 1997 relating to the Applicable
Certificates, between a Liquidity Provider and Wilmington Trust Company,
as the Subordination Agent, as agent and trustee for the Applicable Trust,
and, from and after the replacement of such Agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDERS: Means, initially, ABN AMRO Bank N.V., acting
through its Chicago branch, and Westdeutsche Landesbank Girozentrale,
acting through its New York branch, and any replacements or successors
therefor appointed in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: With respect to any Equipment Note, means (i) the
Indenture and the Participation Agreement relating to such Equipment Note,
and (ii) in the case of any Equipment Note related to a Leased Aircraft,
the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as
of October 23, 1997 among the Related Trustee (and after the Transfer
Date, the Trustee), the Related Other Trustees (and after the Transfer
Date, the Other Trustees), the Company, the Escrow Agent, the Escrow
Paying Agent and the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time, in accordance with
its terms.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1997-4A-S dated the date hereof relating to
Continental Airlines Pass Through Trust 1997-4A-S and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1997-4B-S dated the date
hereof relating to Continental Airlines Pass Through Trust 1997-4B-S.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and
any successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1997-4A-S and Continental Airlines Pass Through Trust 1997-4B-S, created
by the Other Pass Through Trust Agreements.
OUTSTANDING: when used with respect to Applicable Certificates,
means, as of the date of determination, all Transfer Date Certificates,
and all other Applicable Certificates theretofore authenticated and
delivered under this Agreement, in each case except:
(i) Applicable Certificates theretofore canceled by the Registrar
or delivered to the Trustee or the Registrar for cancellation;
(ii) Applicable Certificates for which money in the full amount
required to make the final distribution with respect to such Applicable
Certificates pursuant to Section 11.01 of the Basic Agreement has been
theretofore deposited with the Trustee in trust for the Applicable
Certificateholders as provided in Section 4.01 of the Basic Agreement
pending distribution of such money to such Applicable Certificateholders
pursuant to payment of such final distribution; and
(iii) Applicable Certificates in exchange for or in lieu of which
other Applicable Certificates have been authenticated and delivered
pursuant to this Agreement.
OWNED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any
permitted successor or assign of such Owner Participant; and OWNER
PARTICIPANTS at any time of determination means all of the Owner
Participants thus referred to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Trustee", as referred to in the
Indenture pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and OWNER TRUSTEES means all of
the Owner Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as
the same may be amended, supplemented or otherwise modified in accordance
with its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the "Applicable Certificates" as defined in the Related Pass
Through Trust Agreement, less (ii) the aggregate amount of all payments
made in respect of such Certificates or in respect of Deposits other than
payments made in respect of interest or premium thereon or reimbursement
of any costs or expenses incurred in connection therewith. The Pool
Balance as of any Distribution Date shall be computed after giving effect
to any special distribution with respect to unused Deposits, payment of
principal on the Equipment Notes or payments with respect to other Trust
Property and the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient
(rounded to the seventh decimal place) computed by dividing (i) the Pool
Balance by (ii) the original aggregate face amount of the "Applicable
Certificates" as defined in the Related Pass Through Trust Agreement. The
Pool Factor as of any Distribution Date shall be computed after giving
effect to any special distribution with respect unused Deposits, payment
of principal on the Equipment Notes or payments with respect to other
Trust Property and the distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated October
16, 1997 relating to the offering of the Certificates.
RELATED OTHER PASS THROUGH TRUST AGREEMENTS: Means the "Other
Agreements" as defined in the Related Pass Through Trust Agreement.
RELATED OTHER TRUSTEES: Means the "Other Trustees" as defined in the
Related Pass Through Trust Agreement.
RELATED OTHER TRUSTS: Means the "Other Trusts" as defined in the
Related Pass Through Trust Agreement.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1997-4C-O dated the date hereof
(the "RELATED PASS THROUGH TRUST SUPPLEMENT"), relating to the Continental
Airlines Pass Through Trust 1997-4C-O and entered into by the Company and
the Trustee, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
RELATED TRUST: Means the Continental Pass Through Trust 1997-4C-O,
formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase
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) or Special Redemption Premium.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Means the moment of execution and delivery of the
Assignment and Assumption Agreement by each of the parties thereto.
TRANSFER DATE CERTIFICATE: Has the meaning specified in the
definition of "Applicable Certificates".
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement,
the Equipment Notes held as the property of the Applicable Trust, all
monies at any time paid thereon and all monies due and to become due
thereunder, (ii) funds from time to time deposited in the Certificate
Account and the Special Payments Account and, subject to the Intercreditor
Agreement, any proceeds from the sale by the Trustee pursuant to Article
VI of the Basic Agreement of any Equipment Note and (iii) all rights of
the Trust and the Trustee, on behalf of the Applicable Trust, under the
Intercreditor Agreement, the Escrow Agreement, the Note Purchase Agreement
and the Liquidity Facilities, including, without limitation, all rights to
receive certain payments thereunder, and all monies paid to the Trustee on
behalf of the Applicable Trust pursuant to the Intercreditor Agreement or
the Liquidity Facilities, PROVIDED that rights with respect to the
Deposits or under the Escrow Agreement, will not constitute Trust
Property.
UNDERWRITERS: Means, collectively, Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, Chase Securities
Inc. and Salomon Brothers Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
October 16, 1997 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. ADDITIONS TO ARTICLE IV OF THE BASIC Agreement. In
addition to the provisions of Article IV of the Basic Agreement, the following
provisions shall apply to the Applicable Trust:
(a) Upon the payment of Special Redemption Premium to the Trustee
under the Note Purchase Agreement, the Trustee, upon receipt thereof,
shall immediately deposit the aggregate amount of such Special Redemption
Premium in the Special Payments Account;
(b) The distribution of amounts of Special Redemption Premium as
provided for in Section 4.02(b) of the Basic Agreement shall be on the
Special Distribution Date with respect to such Special Payment or as soon
thereafter as the Trustee has confirmed receipt of the related Special
Redemption Premium;
(c) In the event of the payment of a Special Redemption Premium by
the Company to the Trustee under the Note Purchase Agreement, the notice
provided for in Section 4.02(c) of the Basic Agreement shall be mailed,
together with the notice by the Escrow Paying Agent under Section 2.06 of
the Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date shall
be the Final Withdrawal Date; and
(d) The last sentence of the first paragraph of Section 4.02(c) of
the Basic Agreement shall apply equally if the amount of Special
Redemption Premium, if any, has not ben calculated at the time the Trustee
mails notice of a Special Payment.
Section 3.02. STATEMENTS TO CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable
to principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable
to interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to Deposits; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name
of a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Trustee
shall furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Transfer Date, if there has been any
change in the information set forth in clauses (x), (y) and (z) below from that
set forth in page S-51 of the Prospectus Supplement, and (ii) any early
redemption or purchase of, or any default in the payment of principal or
interest in respect of, any of the Equipment Notes held in the Applicable Trust,
or any Final Withdrawal, the Trustee shall furnish to Certificateholders of
record on such date a statement setting forth (x) the expected Pool Balances for
each subsequent Regular Distribution Date following the Delivery Period
Termination Date, (y) the related Pool Factors for such Regular Distribution
Dates and (z) the expected principal distribution schedule of the Equipment
Notes, in the aggregate, held as Trust Property at the date of such notice. With
respect to the Applicable Certificates registered in the name of a Clearing
Agency, on the Transfer Date, the Trustee will request from such Clearing Agency
a securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests in
the "Applicable Certificates" (as defined in the Related Pass Through Trust
Agreement) on such date. The Trustee will mail to each such Clearing Agency
Participant the statement described above and will make available additional
copies as requested by such Clearing Agency Participant for forwarding to
holders of interests in the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the continuance of a Triggering Event, each
Applicable Certificateholder shall have the right (which shall not expire upon
any purchase of the Class A Certificates pursuant to the agreements governing
the Class B Trust) to purchase, for the purchase price set forth in Section
6.01(b) of the Basic Agreement, all, but not less than all, of the Class A
Certificates and the Class B Certificates upon ten days' written notice to the
Class A Trustee, the Class B Trustee and each other Applicable
Certificateholder, provided that (i) if prior to the end of such ten day period
any other Applicable Certificateholder notifies such purchasing Applicable
Certificateholder that such other Applicable Certificateholder wants to
participate in such purchase, then such other Applicable Certificateholder may
join with the purchasing Applicable Certificateholder to purchase all, but not
less than all, of the Class A Certificates and the Class B Certificates pro rata
based on the Fractional Undivided Interest in the Applicable Trust held by each
such Applicable Certificateholder and (ii) if prior to the end of such ten-day
period any other Applicable Certificateholder fails to notify the purchasing
Applicable Certificateholder of such other Applicable Certificateholder's desire
to participate in such a purchase, then such other Applicable Certificateholder
shall lose its right to purchase the Class A Certificates and the Class B
Certificates pursuant to this Section 4.01(a); and
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event, each Class D Certificateholder shall have
the right (which shall not expire upon any purchase of the Class A Certificates
pursuant to the agreements governing the Class B Trust or the Applicable Trust
or any purchase of Class B Certificates pursuant to clause (a) above) to
purchase all, but not less than all, of the Applicable Certificates, the Class A
Certificates and the Class B Certificates upon ten days' written notice to the
Trustee, the Class A Trustee, the Class B Trustee and each other Class D
Certificateholder, PROVIDED that (A) if prior to the end of such ten-day period
any other Class D Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder wants to participate
in such purchase, then such other Class D Certificateholder may join with the
purchasing Class D Certificateholder to purchase all, but not less than all, of
the Applicable Certificates, the Class A Certificates and the Class B
Certificates pro rata based on the Fractional Undivided Interest in the Class D
Trust held by each such Class D Certificateholder and (B) if prior to the end of
such ten-day period any other Class D Certificateholder fails to notify the
purchasing Class D Certificateholder of such other Class D Certificateholder's
desire to participate in such a purchase, then such other Class D
Certificateholder shall lose its right to purchase the Applicable Certificates
pursuant to this Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed hereunder on the related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such Record Date); PROVIDED FURTHER that no such
purchase of Applicable Certificates shall be effective unless the purchaser(s)
shall certify to the Trustee that contemporaneously with such purchase, such
purchaser(s) is purchasing, pursuant to the terms of this Agreement and the
Other Agreements, the Applicable Certificates, the Class A Certificates and the
Class B Certificates which are senior to the securities held by such
purchaser(s). Each payment of the purchase price of the Applicable Certificates
referred to in the first sentence hereof shall be made to an account or accounts
designated by the Trustee and each such purchase shall be subject to the terms
of this Section 4.01(a). Each Applicable Certificateholder agrees by its
acceptance of its Applicable Certificate that it will, subject to Section 3.04
of the Basic Agreement, upon payment from such Class D Certificateholder(s) of
the purchase price set forth in the first sentence of this paragraph, forthwith
sell, assign, transfer and convey to the purchaser(s) thereof (without recourse,
representation or warranty of any kind except for its own acts), all of the
right, title, interest and obligation of such Applicable Certificateholder in
this Agreement, the Escrow Agreement, the Deposit Agreement, the Intercreditor
Agreement, the Liquidity Facilities, the Note Documents and all Applicable
Certificates and Escrow Receipts held by such Applicable Certificateholder
(excluding all right, title and interest under any of the foregoing to the
extent such right, title or interest is with respect to an obligation not then
due and payable as respects any action or inaction or state of affairs occurring
prior to such sale) and the purchaser shall assume all of such Applicable
Certificateholder's obligations under this Agreement, the Escrow Agreement, the
Deposit Agreement, the Intercreditor Agreement, the Liquidity Facilities, the
Note Documents and all such Applicable Certificates and Escrow Receipts. The
Applicable Certificates will be deemed to be purchased on the date payment of
the purchase price is made notwithstanding the failure of the Applicable
Certificateholders to deliver any Applicable Certificates and, upon such a
purchase, (i) the only rights of the Applicable Certificateholders will be to
deliver the Applicable Certificates to the purchaser(s) and receive the purchase
price for such Applicable Certificates and (ii) if the purchaser(s) shall so
request, such Applicable Certificateholder will comply with all the provisions
of Section 3.04 of the Basic Agreement to enable new Applicable Certificates to
be issued to the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new Applicable
Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01, the terms "Class A Certificate",
"Class A Trustee", "Class B Trust", "Class B Certificate""Class B Trustee",
"Class D Certificateholder" and "Class D Trust", shall have the respective
meanings assigned to such terms in the Intercreditor Agreement.
(c) Except as expressly set forth above, this Section 4.01
supersedes and replaces Section 6.01(b) of the Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. ACQUISITION OF TRUST PROPERTY. (a) The Trustee is
hereby irrevocably authorized and directed to execute and deliver the Assignment
and Assumption Agreement on the date specified in Section 7.01 of the Related
Trust Supplement, subject only to the satisfaction of the conditions set forth
in said Section 7.01. This Agreement (except only for the immediately preceding
sentence hereof, which is effective upon execution and delivery hereof) shall
become effective upon the execution and delivery of the Assignment and
Assumption Agreement by the Trustee and the Related Trustee, automatically and
without any further signature or action on the part of the Company and the
Trustee, and shall thereupon constitute the legal, valid and binding obligation
of the parties hereto enforceable against each of the parties hereto in
accordance with its terms. Upon such execution and delivery of the Assignment
and Assumption Agreement, the Related Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Applicable Trust in
exchange for their interests in the Related Trust equal to their respective
beneficial interests in the Related Trust and the "Outstanding" (as defined in
the Related Pass Through Trust Agreement) pass through certificates representing
fractional undivided interests in the Related Trust shall be deemed for all
purposes of this Agreement, without further signature or action of any party or
Certificateholder, to be Certificates representing the same Fractional Undivided
Interests in the Trust and Trust Property. By acceptance of its Applicable
Certificate, each Applicable Certificateholder consents to and ratifies such
assignment, transfer and delivery of the trust property of the Related Trust to
the Trustee upon the execution and delivery of the Assignment and Assumption
Agreement. The provisions of this Section 5.01(a) supersede and replace the
provisions of Section 2.02 of the Basic Agreement (which are inapplicable to the
Trust), and all provisions of the Basic Agreement relating to Postponed Notes or
Section 2.02 of the Basic Agreement shall not apply to the Applicable Trust.
(b) The Trustee, upon the execution and delivery of the Assignment
and Assumption Agreement, acknowledges its acceptance of all right, title and
interest in and to the Trust Property and declares that the Trustee holds and
will hold such right, title and interest for the benefit of all then present and
future Applicable Certificateholders, upon the trusts herein and in the Basic
Agreement set forth. By the acceptance of each Applicable Certificate issued to
it under the Related Pass Through Trust Agreement and deemed issued under this
Agreement, each Holder of any such Applicable Certificate as grantor of the
Applicable Trust thereby joins in the creation and declaration of the Applicable
Trust. The provisions of this Section 5.01(b) supersede and replace the
provisions of Section 2.03 of the Basic Agreement (which are inapplicable to the
Trust).
Section 5.02. [Intentionally Omitted]
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement or the Escrow
Agreement or the due execution hereof or thereof by the Company or the other
parties thereto (other than the Trustee), or for or in respect of the recitals
and statements contained herein or therein, all of which recitals and statements
are made solely by the Company.
(b) Except as herein otherwise provided, no duties, responsibilities
or liabilities are assumed, or shall be construed to be assumed by the Trustee
by reason of this Trust Supplement other than as set forth in the Basic
Agreement, and this Trust Supplement is executed and accepted on behalf of the
Trustee, subject to all the terms and conditions set forth in the Basic
Agreement, upon the effectiveness thereof, as fully to all intents as if the
same were herein set forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants, on the Transfer Date, that:
(a) the Trustee has full power, authority and legal right to receive
the Trust Property assigned by the Related Trustee, assume the obligations
under, and perform, the Assignment and Assumption Agreement, this Trust
Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
Documents and has taken all necessary action to authorize such receipt,
assumption and performance by it of this Trust Supplement, the
Intercreditor Agreement, the Escrow Agreement and the Note Documents to
which it is a party;
(b) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents (i) will not
violate any provision of any United States federal law or the law of the
state of the United States where it is located governing the banking and
trust powers of the Trustee or any order, writ, judgment, or decree of any
court, arbitrator or governmental authority applicable to the Trustee or
any of its assets, (ii) will not violate any provision of the articles of
association or by-laws of the Trustee, and (iii) will not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions of
any mortgage, indenture, contract, agreement or other undertaking to which
it is a party, which violation, default or lien could reasonably be
expected to have an adverse effect on the Trustee's performance or ability
to perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(c) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents will not require
the authorization, consent, or approval of, the giving of notice to, the
filing or registration with, or the taking of any other action in respect
of, any governmental authority or agency of the United States or the state
of the United States where it is located regulating the banking and
corporate trust activities of the Trustee; and
(d) The Assignment and Assumption Agreement has been duly executed
and delivered by the Trustee and this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents have been, or will
be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and
binding agreements of the Trustee, enforceable against it in accordance
with their respective terms; PROVIDED, HOWEVER, that enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
(ii) general principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
SUPPLEMENTAL AGREEMENTS
Section 6.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
CERTIFICATEHOLDERS. Under the terms of, and subject to the limitations contained
in, Section 9.01 of the Basic Agreement, the Company may (but will not be
required to), and the Trustee (subject to Section 9.03 of the Basic Agreement)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental to the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement, for any of the purposes set forth in clauses
(1) through (9) of such Section 9.01, except that (a) clause (2) and (3) of such
Section 9.01 shall be deemed to include the Company's obligations under (in the
case of clause (2)), and the Company's rights and powers conferred by (in the
case of clause (3)), the Note Purchase Agreement and (b) clause (4) of such
Section 9.01 shall be deemed to include corrections or supplements to provisions
of the Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement
which may be defective or inconsistent with any other provision of this
Agreement or contained in any agreement referred to in such clause (4) and the
curing of any ambiguity or the modification of any other provision with respect
to matters or questions arising under the Escrow Agreement, the Note Purchase
Agreement or the Deposit Agreement.
Section 6.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
CERTIFICATEHOLDERS. The provisions of Section 9.02 of the Basic Agreement shall
apply to agreements or amendments for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Escrow
Agreement, the Deposit Agreement or the Note Purchase Agreement to the extent
applicable to the Applicable Certificateholders approving such agreement or
amendment or modifying in any manner the rights and obligations of such
Applicable Certificateholders under the Escrow Agreement, the Deposit Agreement
or the Note Purchase Agreement; provided that the provisions of Section 9.02(1)
of the Basic Agreement shall be deemed to include reductions in any manner of,
or delay in the timing of, any receipt by the Applicable Certificateholders of
payments upon the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
earliest execution of this Trust Supplement.
Notice of any termination, specifying the Distribution Date upon
which the Applicable Certificateholders may surrender their Applicable
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Applicable
Certificateholders not earlier than the 60th day and not later than the 15th day
next preceding such final Distribution Date specifying (A) the Distribution Date
upon which the proposed final payment of the Applicable Certificates will be
made upon presentation and surrender of Applicable Certificates at the office or
agency of the Trustee therein specified, (B) the amount of any such proposed
final payment, and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Applicable Certificates at the office or agency of the
Trustee therein specified. The Trustee shall give such notice to the Registrar
at the time such notice is given to Applicable Certificateholders. Upon
presentation and surrender of the Applicable Certificates in accordance with
such notice, the Trustee shall cause to be distributed to Applicable
Certificateholders such final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 8.02. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE
APPLICABLE CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that
the Applicable Trust be classified for U.S. federal income tax purposes as a
grantor trust under Subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. Each Applicable Certificateholder and Investor,
by its acceptance of its Applicable Certificate or a beneficial interest
therein, agrees to treat the Applicable Trust as a grantor trust for all U.S.
federal, state and local income tax purposes. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to further
such intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
Trust Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:_____________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Name:
Title:
EXECUTION COPY
- --------------------------------------------------------------------------------
INTERCREDITOR AGREEMENT
Dated as of
October 23, 1997
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Continental Airlines Pass Through Trust 1997-4A,
Continental Airlines Pass Through Trust 1997-4B
and
Continental Airlines Pass Through Trust 1997-4C
ABN AMRO BANK N.V.,
Chicago branch
and
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
New York branch
as Class A Liquidity Providers,
as Class B Liquidity Providers
and
as Class C Liquidity Providers,
AND
WILMINGTON TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
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 ...................................... 24
SECTION 2.2. Trust Accounts ............................................ 24
SECTION 2.3. Deposits to the Collection Account and Special
Payments Account .......................................... 26
SECTION 2.4. Distributions of Special Payments ......................... 26
SECTION 2.5. Designated Representatives ................................ 29
SECTION 2.6. Controlling Party ......................................... 30
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution ............................ 31
SECTION 3.2. Distribution of Amounts on Deposit in the
Collection Account ........................................ 34
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event .......................................... 35
SECTION 3.4. Other Payments ............................................ 37
SECTION 3.5. Payments to the Trustees and the Liquidity Providers ...... 38
SECTION 3.6. Liquidity Facilities ...................................... 38
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party ..................... 45
SECTION 4.2. Remedies Cumulative ....................................... 46
SECTION 4.3. Discontinuance of Proceedings ............................. 47
SECTION 4.4. Right of Certificateholders to Receive Payments
Not to Be Impaired ........................................ 47
SECTION 4.5. Undertaking for Costs ..................................... 47
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering Event ........... 47
SECTION 5.2. Indemnification ........................................... 48
SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement ................................................. 48
SECTION 5.4. Notice from the Liquidity Providers and Trustees .......... 48
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties ............ 49
SECTION 6.2. Absence of Duties ......................................... 49
SECTION 6.3. No Representations or Warranties as to Documents .......... 49
SECTION 6.4. No Segregation of Monies; No Interest ..................... 49
SECTION 6.5. Reliance; Agents; Advice of Counsel ....................... 50
SECTION 6.6. Capacity in Which Acting .................................. 50
SECTION 6.7. Compensation .............................................. 50
SECTION 6.8. May Become Certificateholder .............................. 51
SECTION 6.9. Subordination Agent Required; Eligibility ................. 51
SECTION 6.10. Money to Be Held in Trust ................................. 51
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification .................................. 51
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment
of Successor .............................................. 52
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. ................................. 53
SECTION 9.2. Subordination Agent Protected ............................. 54
SECTION 9.3. Effect of Supplemental Agreements ......................... 55
SECTION 9.4. Notice to Rating Agencies ................................. 55
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement .................... 55
SECTION 10.2. Intercreditor Agreement for Benefit of
Trustees, Liquidity Providers and
Subordination Agent ....................................... 55
SECTION 10.3. Notices ................................................... 56
SECTION 10.4. Severability .............................................. 57
SECTION 10.5. No Oral Modifications or Continuing Waivers ............... 57
SECTION 10.6. Successors and Assigns .................................... 58
SECTION 10.7. Headings .................................................. 58
SECTION 10.8. Counterpart Form .......................................... 58
SECTION 10.9. Subordination ............................................. 58
SECTION 10.10. Governing Law ............................................. 59
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity ................................. 60
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of October 23, 1997, among
WILMINGTON TRUST COMPANY, a Delaware corporation ("WTC"), 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 a Class A Liquidity Provider, as a Class B
Liquidity Provider and as a Class C Liquidity Provider; and Westdeutsche
Landesbank Girozentrale ("WEST LB"), a bank organized under the laws of the
State of North Rhine-Westphalia, Germany, acting through its New York branch, as
a Class A Liquidity Provider, as a Class B Liquidity Provider and as a Class C
Liquidity Provider; and WILMINGTON 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 Continental at the time such Indenture is entered into (the
"OWNED AIRCRAFT"), Continental 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 Continental 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 each 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, each Liquidity Provider proposes to enter into three
separate revolving credit agreements (each, a "LIQUIDITY FACILITY") with the
Subordination Agent, as agent for the Trustee of each 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 Providers, 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 recital of
the parties to this Agreement.
"ABN AMRO FEE LETTER" means the Fee Letter dated October 23, 1997
between ABN AMRO and the Subordination Agent with respect to the Liquidity
Facilities.
"ABN AMRO SUB-ACCOUNT" means, with respect to any Cash Collateral
Account, a sub-ledger account to such Cash Collateral Account designated the
"ABN AMRO Sub-Account".
"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.
"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.
"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.
"AIRCRAFT" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"APPRAISAL" means a 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 Aircraft Information Services, Inc., BK
Associates, Inc. and Morten Beyer and Associates, Inc.
"ASSIGNMENT AND ASSUMPTION AGREEMENTS" means each of the Assignment
and Assumption Agreements to be executed among a Trustee and trustee of the
relevant Successor Trust in accordance with the relevant Trust Agreement, as the
same may be amended, modified or supplemented from time to time.
"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 Houston,
Texas, 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 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 FACILITIES" means, initially, (i) the Revolving
Credit Agreement dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class A Trustee, and ABN AMRO and (ii) the
Revolving Credit Agreement dated as of the date hereof, between the
Subordination Agent, as agent and trustee for the Class A Trustee, and West LB,
and, from and after the replacement of either 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 PROVIDERS" means each of ABN AMRO and West LB,
together with any Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace any Class A Liquidity Facility pursuant to Section
3.6(e).
"CLASS A TRUST" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 1997-4A-O created and administered pursuant to the
Class A Trust Agreement and (ii) after the Transfer, the Continental Airlines
Pass Through Trust 1997-4A-S created and administered pursuant to the Class A
Trust Agreement.
"CLASS A TRUST AGREEMENT" means (i) prior to the Transfer, the Pass
Through Trust Agreement dated as of September 25, 1997, between Continental and
the Class A Trustee (the "Basic Agreement"), as supplemented by the Supplement
No. 1997-4A-O thereto dated as of the date hereof, governing the creation and
administration of the Continental Airlines Pass Through Trust 1997-4A-O 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, and (ii)
after the Transfer, the Basic Agreement, as supplemented by the Supplement No.
1997-4A-S thereto, governing the creation and administration of the Continental
Airlines Pass Through Trust 1997-4A-S 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 WTC, 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 FACILITIES" means, initially, (i) 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 (ii) the
Revolving Credit Agreement dated as of the date hereof, between the
Subordination Agent, as agent and trustee for the Class B Trustee, and West LB,
and, from and after the replacement of either 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 PROVIDERS" means each of ABN AMRO and West LB,
together with any Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace any Class B Liquidity Facility pursuant to Section
3.6(e).
"CLASS B TRUST" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 1997-4B-O created and administered pursuant to the
Class B Trust Agreement and (ii) after the Transfer, the Continental Airlines
Pass Through Trust 1997-4B-S created and administered pursuant to the Class B
Trust Agreement.
"CLASS B TRUST AGREEMENT" means (i) prior to the Transfer, the Basic
Agreement, as supplemented by the Supplement No. 1997-4B-O thereto dated as of
the date hereof, governing the creation and administration of the Continental
Airlines Pass Through Trust 1997-4B-O 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, and (ii) after the Transfer, the
Basic Agreement, as supplemented by the Supplement No. 1997-4B-S thereto,
governing the creation and administration of the Continental Airlines Pass
Through Trust 1997-4B-S 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.
"CLASS B TRUSTEE" means WTC, 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 and 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 FACILITIES" means, initially, (i) 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 (ii) the
Revolving Credit Agreement dated as of the date hereof, between the
Subordination Agent, as agent and trustee for the Class C Trustee, and West LB,
and, from and after the replacement of either 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 PROVIDERS" means each of ABN AMRO and West LB,
together with any Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace any Class C Liquidity Facility pursuant to Section
3.6(e).
"CLASS C TRUST" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 1997-4C-O created and administered pursuant to the
Class C Trust Agreement and (ii) after the Transfer, the Continental Airlines
Pass Through Trust 1997-4C-S created and administered pursuant to the Class C
Trust Agreement.
"CLASS C TRUST AGREEMENT" means (i) prior to the Transfer, the Basic
Agreement, as supplemented by the Supplement No. 1997-4C-O thereto dated as of
the date hereof, governing the creation and administration of the Continental
Airlines Pass Through Trust 1997-4C-O 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, and (ii) after the Transfer, the
Basic Agreement, as supplemented by the Supplement No. 1997-4C-S thereto,
governing the creation and administration of the Continental Airlines Pass
Through Trust 1997-4C-S 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.
"CLASS C TRUSTEE" means WTC, 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.
"CLASS D CERTIFICATES" means any pass through certificates issued by
the Class D Trust representing fractional undivided interests in the Class D
Trust.
"CLASS D TRUST" means the Continental Airlines Pass Through Trust
1997-4D, if and when established.
"CLOSING DATE" means October 23, 1997.
"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.
"CONTINENTAL" means Continental Airlines, Inc., a Delaware
corporation, and its successors and assigns.
"CONTINENTAL BANKRUPTCY EVENT" means the occurrence and continuation
of any of the following:
(a) Continental 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 Continental 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 Continental 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 Continental
in any such case, or Continental 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 Continental shall seek an agreement,
composition, extension or adjustment with its creditors under such laws,
or Continental'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 Continental, a
receiver, trustee or liquidator of Continental or of any substantial part
of its property, or any substantial part of the property of Continental
shall be sequestered, or granting any other relief in respect of
Continental 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 Continental 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 Continental, any court of competent
jurisdiction assumes jurisdiction, custody or control of Continental 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.
"CONTINENTAL PROVISIONS" has the meaning specified in Section
9.1(a).
"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) December 31,
1998, or, if the Equipment Notes relating to all the New Aircraft (or Substitute
Aircraft in lieu thereof) have not been purchased by the Trusts on or prior to
such date due to any reason beyond the control of Continental and not occasioned
by Continental's fault or negligence, May 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 Credit Suisse First Boston, New York branch,
as depositary under each Deposit Agreement.
"DEPOSITS" with respect to any Class, shall have the meaning set
forth in the Deposit Agreement pertaining to such Class.
"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; and PROVIDED FURTHER that no Cash Collateral Account may be
maintained with a Liquidity Provider at any time Continental holds any
participation in the related Liquidity Facility unless written confirmation
shall have been received from each Rating Agency prior to such time to the
effect that such maintenance of the Cash Collateral Account with the Liquidity
Provider will not result in a withdrawal or downgrading of the ratings of the
Certificates.
"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; PROVIDED that a Liquidity Provider
shall not qualify as an Eligible Institution at any time Continental holds any
participation in the related Liquidity Facility unless written confirmation
shall have been received from each Rating Agency to the effect that such
Liquidity Provider's status as an Eligible Institution will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"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 Moody's 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 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. Notwithstanding the foregoing, no investment of the types described
in clause (b) or (c) above which is issued or guaranteed by a Liquidity Provider
or Continental or any of their respective Affiliates, and no investment in the
obligations of any one bank in excess of $10,000,000, shall be an Eligible
Investment at any time Continental holds any participation in the related
Liquidity Facility unless written confirmation shall have been received from
each Rating Agency that the making of such investment will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"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, 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). 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, collectively, the ABN AMRO Fee Letter and the
West LB Fee Letter 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 2, 2019, (ii) with respect to the Class B Certificates,
July 2, 2018 and (iii) with respect to the Class C Certificates, January 2,
2009.
"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 Continental, 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.
"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 such Liquidity Provider thereunder, presently located at
Chicago, Illinois, and New York, New York, for ABN AMRO and West LB,
respectively, 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 FACILITIES" means, at any time, the Class A Liquidity
Facilities, the Class B Liquidity Facilities or the Class C Liquidity
Facilities.
"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, any Class A Liquidity
Provider, any Class B Liquidity Provider or any Class C Liquidity Provider, as
applicable.
"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 44.0%, for the Class
B Certificates 56.0%, and for the Class C Certificates, 68.0%.
"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 Moody's 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).
"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 Continental, 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 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.
"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 Continental 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 right so to act with
respect to such Certificates and that the pledgee is not Continental 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 Wilmington 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 Continental 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 Continental 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.
"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 2 and July 2,
commencing on January 2, 1998; 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
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 Stated Portion of 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.
"REPLACEMENT LIQUIDITY PROVIDER SUB-ACCOUNT" means, with respect to
any Cash Collateral Account, a sub-ledger account to such Cash Collateral
Account having a designation indicating that it is a Sub-Account with respect to
such Replacement Liquidity Provider.
"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. The Required Amount for any Sub Account
of any Cash Collateral Account of any Class shall be equal to the Stated Portion
(under the related Liquidity Facility) of the Required Amount for such Class.
"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.
"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 6.90% Series A Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
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 6.90% Series B Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
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 6.80% Series C Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
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 McGraw-Hill Companies, Inc.
"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).
"STATED INTEREST RATE" means (i) with respect to the Class A
Certificates, 6.90% per annum, (ii) with respect to the Class B Certificates,
6.90% per annum, and (iii) with respect to the Class C Certificates, 6.80% per
annum.
"STATED PORTION" with respect to any Liquidity Facility, means the
Stated Portion (as defined in such Liquidity Facility).
"SUB-ACCOUNT" means, collectively, the ABN AMRO Sub-Account, the
West LB Sub-Account and any Replacement Liquidity Provider Sub-Account.
"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.
"SUCCESSOR TRUSTS" means, collectively, Continental Airlines Pass
Through Trust 1997-4A-S, Continental Airlines Pass Through Trust 1997-4B-S and
Continental Airlines Pass Through Trust 1997-4C-S.
"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, collectively, each of the three Tax Letters,
dated as of October 23, 1997, between Continental and ABN AMRO with respect to
the Liquidity Facilities to which ABN AMRO is a party, each of the three Tax
Letters, dated as of October 23, 1997, between Continental and West LB with
respect to the Liquidity Facilities to which West LB is a party and all tax
letters entered into between Continental 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.
"TRANSFER" means the transfers contemplated by the Assignment and
Assumption Agreements.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed 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, the aggregate principal balance
of in excess of $300,000,000) or (z) the occurrence of a Continental 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 Morgan Stanley & Co. Incorporated, Credit
Suisse First Boston Corporation, Chase Securities and Salomon Brothers Inc.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated
October 16, 1997 among the Underwriters and Continental, relating to the
purchase of the Certificates by the Underwriters, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"WEST LB" has the meaning assigned to such term in the recital of
the parties to this Agreement.
"WEST LB FEE LETTER" means the Fee Letter dated October 23, 1997,
between West LB and the Subordination Agent with respect to the Liquidity
Facilities.
"WEST LB SUB-ACCOUNT" means, with respect to any Cash Collateral
Account, a sub-ledger account to such Cash Collateral Account designated the
"West LB Sub-Account".
"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.
"WTC" has the meaning assigned to such term in the recital of
parties to this Agreement.
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 9.1 of the
Participation Agreements or payments under Sections 6 and 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 (and the ABN AMRO
Sub-Accounts, the West LB Sub-Accounts and any Replacement Liquidity Provider
Sub-Accounts related thereto) 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.
(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 Continental (or, if and to the extent
so specified to the Subordination Agent by Continental with respect to any
Liquidity Facility, the Liquidity Provider with respect to such Liquidity
Facility); PROVIDED FURTHER, HOWEVER, that following the making of a Downgrade
Drawing or Non-Extension Drawing under any initial Liquidity Facility, (i) the
Subordination Agent shall invest and reinvest the amounts in the Cash Collateral
Account with respect to such Liquidity Facility in Eligible Investments pursuant
to the written instructions of the Liquidity Provider funding such Drawing,which
instructions shall be reasonably acceptable to Continental, and (ii) if the
Subordination Agent shall be investing such amounts in the Cash Collateral
Account in Eligible Investments in accordance with the instructions of such
Liquidity Provider pursuant to clause (i) above, such Liquidity Provider shall
use reasonable efforts to cause the amounts in the Cash Collateral Account with
respect to such Liquidity Facility to be invested in Eligible Investments which
yield at least an amount equal to the interest (excluding the Applicable Margin
(as defined in the relevant Liquidity Facility)) that is payable to such
Liquidity Provider in respect of such Downgrade Drawing or Non-Extension Drawing
pursuant to Section 3.07 of such Liquidity Facility (it being understood that it
may not be feasible to obtain such a yield); 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 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 WTC 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 (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 Sub-Account of any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Sub-Account up to its Required Amount shall be
deposited in such Sub-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
Sub-Account of the related Cash Collateral Account an amount equal to such
Sub-Account's Required Amount shall be deposited in such Sub-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 Stated Portion of 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;
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 Continental 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 Continental under any Operative Agreement in respect of any Payee, directly
to the Payee entitled thereto.
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 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 earlier 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, and (ii)
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 of in excess of
$300,000,000), the Liquidity Providers with at least two-thirds 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.
(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.
(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 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 Sub-Account of
any Cash Collateral Account had been previously funded as provided in
Section 3.6(f), to fund such Sub-Account up to its Required Amount shall
be deposited in such Sub-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
Sub-Account of the related Cash Collateral Account an amount equal to such
Sub-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 Stated Portion of 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 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
Sub-Account of 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
Sub-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 Sub-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 (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 deposit into the related
Sub-Account of the related Cash Collateral Account an amount equal to such
Sub-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 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 Stated Portion of 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 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 12:00 noon
(New York City time) on the Business Day following such Distribution Date, the
Subordination Agent shall request a drawing (each such drawing, an "INTEREST
DRAWING") under each Liquidity Facility with respect to such Class of
Certificates in an amount equal to the lesser of (i) the Stated Portion (with
respect to such Liquidity Facility) of an amount sufficient to pay 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.
(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 Facilities 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 Facilities 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 Facilities 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 Continental 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 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,
Continental 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 neither ABN AMRO nor West
LB shall be replaced by Continental 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 Continental 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 Continental to
the initial Liquidity Provider setting forth the basis for such determination
and accompanied by an opinion of outside counsel selected by Continental 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 Sub-Account of 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.
(iii) No Replacement Liquidity Facility arranged by Continental 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
Continental.
(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 (vii) 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 Continental 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
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 Continental 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
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) on 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 of 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 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), (ii) or (iii) 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.
(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
Stated Portion of 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.
(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 Continental 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 Continental 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 Continental 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 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.
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 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. WTC 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 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.
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.
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
9.1 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 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(c)
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(c), the "CONTINENTAL
PROVISIONS") or (y) otherwise adversely affect the interests of a potential
Replacement Liquidity Provider or of Continental 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 Continental.
Notwithstanding the foregoing, without the consent 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 Continental under any Lease or reduce the
amount of principal or interest payable by Continental under any Equipment Note
issued under any Indenture in respect of an Owned Aircraft.
(c) If with respect to any Owned Aircraft Continental issues Class D
Certificates, this Agreement shall be amended by written agreement of
Continental and the Subordination Agent to provide for the subordination of such
Class D Certificates to the Class A Certificates, the Class B Certificates and
the Class C Certificates substantially in the same manner as the Class C
Certificates are subordinated hereunder to the Class B and Class A Certificates.
No such amendment shall materially adversely affect any Trustee. The amendment
to this Agreement to give effect to the issuance of any Class D Certificates
shall include, without limitation:
(i) the trustee of the Class D Trust shall be added as a party to
this Agreement;
(ii) the definitions of "Cash Collateral Account," "Certificate,"
"Class," "Equipment Notes," "Final Legal Distribution Date," "Liquidity
Facilities," "Liquidity Provider." "LTV Ratio," "Stated Interest Rate,"
"Trust," "Trust Agreement," "Controlling Party" shall be revised, as
appropriate, to reflect the issuance of the Class D Certificates (and the
subordination thereof); and
(iii) provisions of this Agreement governing payments with respect
to Certificates and related notices, including, without limitation,
Sections 2.4, 3.1, 3.2, 3.3 and 3.6(e), shall be revised to provide for
distributions on the Class D Certificates after payment of all relevant
distributions on Class C Certificates.
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 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
(i) if to the Subordination Agent, addressed to at its office at:
WILMINGTON TRUST COMPANY
One Rodney Square
1100 N. Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Telecopy: (302) 651-8882
(ii) if to any Trustee, addressed to it at its office at:
WILMINGTON TRUST COMPANY
One Rodney Square
1100 N. Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Telecopy: (302) 651-8882
(iii) if to ABN AMRO as Liquidity Provider, addressed to it at its office
at:
ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #820
Chicago, IL 60674-9135
Attention: Claudia Heldring, V.P.
Telephone: (312) 904-5031
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
Attention: Loan Operations
Telephone: (312) 904-2961
Telecopy: (312) 606-6893
(iv) if to West LB as Liquidity Provider, addressed to it at its office
at:
Westdeutsche Landesbank Girozentrale
Asset Based Finance
1211 Avenue of the Americas
New York, NY 10036
Attention: Brigitte Thieme
Telephone: (212) 852-6111
Telecopy: (212) 921-5947
with a copy to:
Westdeutsche Landesbank Girozentrale
Asset Based Finance
1211 Avenue of the Americas
New York, NY 10036
Attention: Loan Administration
Telephone: (212) 852-6152
Telecopy: (212) 302-7946
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 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 Continental Provisions shall inure to the benefit of
Continental and its successors and assigns, and (without limitation of the
foregoing) Continental is hereby constituted, and agreed to be, an express third
party beneficiary of the Continental Provisions. Upon the occurrence of the
Transfers contemplated by the Assignment and Assumption Agreements, the Trustee
of each Class shall (without any further act) be deemed to have transferred all
of its rights, title and interest in and to this Agreement to the trustee of the
Successor Trust of the same Class and, thereafter, the trustee of each Successor
Trust shall be deemed to be the "Trustee" of such Successor Trust with the
rights and obligations of a "Trustee" hereunder and under the other Operative
Agreements and each reference to a Trust of any Class herein shall be deemed a
reference to the Successor Trust of such Class.
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 Section 510 of
the United States 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 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;
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 sue 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 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.
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, and acknowledge that this Agreement has
been made and delivered in the City of New York, and this Agreement has become
effective only upon such execution and delivery.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Trustee for each of the
Trusts
By______________________________________
Name: Bruce Bisson
Title: Vice President
ABNAMRO BANK N.V., Chicago branch, as
a Class A Liquidity Provider, a
Class B Liquidity Provider and a
Class C Liquidity Provider
By______________________________________
Name:
Title:
By______________________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
New York Branch as a Class A
Liquidity Provider, a Class B
Liquidity Provider and a Class C
Liquidity Provider
By______________________________________
Name:
Title:
By______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity except as
expressly set forth herein but
solely as Subordination Agent and
trustee
By______________________________________
Name: James Lawler
Title: Vice President
EXECUTION COPY
- --------------------------------------------------------------------------------
DEPOSIT AGREEMENT
(Class A)
Dated as of October 23, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
and
CREDIT SUISSE FIRST BOSTON
New York branch
as Depositary
- --------------------------------------------------------------------------------
DEPOSIT AGREEMENT (Class A) dated as of October 23, 1997 (as
amended, modified or supplemented from time to time, this "AGREEMENT") between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, as
Escrow Agent under the Escrow and Paying Agent Agreement referred to below (in
such capacity, together with its successors in such capacity, the "ESCROW
AGENT"), and CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, a banking institution
organized under the laws of Switzerland acting through its New York branch, as
depositary bank (the "DEPOSITARY").
W I T N E S S E T H
WHEREAS, Continental Airlines, Inc. ("CONTINENTAL") and Wilmington
Trust Company, not in its individual capacity except as otherwise expressly
provided therein, but solely as trustee (in such capacity, together with its
successors in such capacity, the "PASS THROUGH TRUSTEE") have entered into a
Trust Supplement, dated October 23, 1997, to the Pass Through Trust Agreement
dated as of September 25, 1997 (together, as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "PASS THROUGH TRUST
AGREEMENT") relating to Continental Airlines Pass Through Trust 1997-4A-O
pursuant to which the Continental Airlines Pass Through Trust, Series 1997-4A-O
Certificates referred to therein (the "CERTIFICATES") are being issued;
WHEREAS, Continental and Morgan Stanley & Co. Incorporated, Credit
Suisse First Boston Corporation, Chase Securities Inc. and Salomon Brothers Inc
(collectively, the "UNDERWRITERS" and, together with their respective
transferees and assigns as registered owners of the Certificates, the
"INVESTORS") have entered into an Underwriting Agreement dated as of October 16,
1997 pursuant to which the Pass Through Trustee will issue and sell the
Certificates to the Underwriters;
WHEREAS, Continental, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "NOTE
PURCHASE AGREEMENT"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) equipment notes (the "EQUIPMENT
NOTES") issued to finance the acquisition of aircraft by Continental, as lessee
or as owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "NET PROCEEDS");
WHEREAS, the Escrow Agent, the Underwriters, the Pass Through
Trustee and Wilmington Trust Company, as paying agent for the Escrow Agent (in
such capacity, together with its successors in such capacity, the "PAYING
AGENT") concurrently herewith are entering into an Escrow and Paying Agent
Agreement, dated as of the date hereof (as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "ESCROW AND PAYING
AGENT AGREEMENT"); and
WHEREAS, the Underwriters and the Pass Through Trustee intend that
the Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors pursuant to the Escrow and Paying Agent Agreement, subject to
withdrawal upon request of and proper certification by the Pass Through Trustee
for the purpose of purchasing Equipment Notes, and that pending such withdrawal
the Net Proceeds be deposited by the Escrow Agent with the Depositary pursuant
to this Agreement, which provides for the Depositary to pay interest for
distribution to the Investors and to establish accounts from which the Escrow
Agent shall make withdrawals upon request of and proper certification by the
Pass Through Trustee.
NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1.1 ACCEPTANCE OF DEPOSITARY. The Depositary hereby agrees
to act as depositary bank as provided herein and in connection therewith to
accept all amounts to be delivered to or held by the Depositary pursuant to the
terms of this Agreement. The Depositary further agrees to hold, maintain and
safeguard the Deposits and the Accounts (as defined below) during the term of
this Agreement in accordance with the provisions of this Agreement. The Escrow
Agent shall not have any right to withdraw, assign or otherwise transfer moneys
held in the Accounts except as permitted by this Agreement.
SECTION 1.2 ESTABLISHMENT OF ACCOUNTS. The Escrow Agent hereby
instructs the Depositary, and the Depositary agrees, to establish the separate
deposit accounts listed on Schedule I hereto and to establish such additional
separate deposit accounts as may be required in connection with the deposits
contemplated by Section 2.4 hereof (each, an "ACCOUNT" and collectively, the
"ACCOUNTS"), each in the name of the Escrow Agent and all on the terms and
conditions set forth in this Agreement.
SECTION 2.1 DEPOSITS. The Escrow Agent shall direct the Underwriters
to deposit with the Depositary on the date of this Agreement (the "DEPOSIT
DATE") in Federal (same day) funds by official check or checks or wire or other
transfer to: Credit Suisse First Boston, New York branch, Reference: Continental
1997-4, and the Depositary shall accept from the Underwriters, on behalf of the
Escrow Agent, the sum of US$505,951,000. Upon acceptance of such sum, the
Depositary shall (i) establish each of the deposits specified in Schedule I
hereto maturing on the respective dates set forth therein (including any deposit
made pursuant to Section 2.4 hereof, individually, a "DEPOSIT" and,
collectively, the "DEPOSITS") and (ii) credit each Deposit to the related
Account as set forth therein. No amount shall be deposited in any Account other
than the related Deposit.
SECTION 2.2 INTEREST. Each Deposit shall bear interest from and
including the date of deposit to but excluding the date of withdrawal at the
rate of 6.90% per annum (computed on the basis of a year of twelve 30-day
months) payable to the Paying Agent on behalf of the Escrow Agent semi-annually
in arrears on each January 2 and July 2, and on the date of the Final Withdrawal
(as defined below), commencing on January 2, 1998 (each, an "INTEREST PAYMENT
DATE"), all in accordance with the terms of this Agreement (whether or not any
such Deposit is withdrawn on an Interest Payment Date). Interest accrued on any
Deposit that is withdrawn pursuant to a Notice of Purchase Withdrawal (as
defined below) shall be paid on the next Interest Payment Date, notwithstanding
any intervening Final Withdrawal (as defined below).
SECTION 2.3 WITHDRAWALS. (a) On and after the date seven days after
the establishment of any Deposit, the Escrow Agent may, by providing at least
one Business Day's prior notice of withdrawal to the Depositary in the form of
Exhibit A hereto (a "NOTICE OF PURCHASE WITHDRAWAL"), withdraw not less than the
entire balance of such Deposit, except that at any time prior to the actual
withdrawal of such Deposit, the Escrow Agent or the Pass Through Trustee may, by
notice to the Depositary, cancel such withdrawal (including on the scheduled
date therefor), and thereafter such Deposit shall continue to be maintained by
the Depositary in accordance with the original terms thereof. Following such
withdrawal the balance in the related Account shall be zero and the Depositary
shall close such Account. As used herein, "BUSINESS DAY" means any day, other
than a Saturday, Sunday or other day on which commercial banks are authorized or
required by law to close in New York, New York, Houston, Texas, Wilmington,
Delaware or Salt Lake City, Utah.
(b) The Escrow Agent may, by providing at least 15 days' prior
notice of withdrawal to the Depositary in the form of Exhibit B hereto (a
"NOTICE OF FINAL WITHDRAWAL"), withdraw the entire amount of all of the
remaining Deposits together with the payment by the Depositary of all accrued
and unpaid interest on such Deposits to but excluding the specified date of
withdrawal (a "FINAL WITHDRAWAL"), on such date as shall be specified in such
Notice of Final Withdrawal. If a Notice of Final Withdrawal has not been given
to the Depositary on or before June 7, 1999 (provided that, if a labor strike
occurs at The Boeing Company prior to June 1, 1999 (a "LABOR STRIKE"), such date
shall be extended by adding thereto the number of days that such strike
continued in effect (the "ADDITIONAL DAYS") and there are unwithdrawn Deposits
on such date, the Depositary shall pay the amount of the Final Withdrawal to the
Paying Agent on June 30, 1999 (provided that if a Labor Strike occurs, such date
shall be extended by the Additional Days).
(c) If the Depositary receives a duly completed Notice of Purchase
Withdrawal or Notice of Final Withdrawal complying with the provisions of this
Agreement, it shall make the payments specified therein in accordance with the
provisions of this Agreement.
SECTION 2.4 OTHER ACCOUNTS. On the date of withdrawal of any
Deposit, the Escrow Agent, or the Pass Through Trustee on behalf of the Escrow
Agent, shall be entitled to re-deposit with the Depositary any portion thereof
and the Depositary shall accept the same for deposit hereunder. Any sums so
received for deposit shall be established as a new Deposit and credited to a new
Account, all as more fully provided in Section 2.1 hereof, and thereafter the
provisions of this Agreement shall apply thereto as fully and with the same
force and effect as if such Deposit had been established on the Deposit Date
except that (i) such Deposit may not be withdrawn prior to the date seven days
after the establishment thereof and (ii) such Deposit shall mature on June 30,
1999 (provided that if a Labor Strike occurs, such date shall be extended by the
Additional Days) and bear interest as provided in Section 2.2. The Depositary
shall promptly give notice to the Escrow Agent of receipt of each such
re-deposit and the account number assigned thereto.
SECTION 3. TERMINATION. This Agreement shall terminate on the fifth
Business Day after the later of the date on which (i) all of the Deposits shall
have been withdrawn and paid as provided herein without any re-deposit and (ii)
all accrued and unpaid interest on the Deposits shall have been paid as provided
herein, but in no event prior to the date on which the Depositary shall have
performed in full its obligations hereunder.
SECTION 4. PAYMENTS. All payments (including, without limitation,
those payments made in respect of Taxes (as defined and provided for below))
made by the Depositary hereunder shall be paid in United States Dollars and
immediately available funds by wire transfer (i) in the case of accrued interest
on the Deposits payable under Section 2.2 hereof or any Final Withdrawal,
directly to the Paying Agent at Wilmington Trust Company, Wilmington, DE, ABA#
031-100-092, Account No. _________, Attention: _____________, Reference:
Continental 1997-4A, or to such other account as the Paying Agent may direct
from time to time in writing to the Depositary and the Escrow Agent and (ii) in
the case of any withdrawal of one or more Deposits pursuant to a Notice of
Purchase Withdrawal, directly to or as directed by the Pass Through Trustee as
specified and in the manner provided in such Notice of Purchase Withdrawal. The
Depositary hereby waives any and all rights of set-off, combination of accounts,
right of retention or similar right (whether arising under applicable law,
contract or otherwise) it may have against the Deposits howsoever arising. All
payments on or in respect of each Deposit shall be made free and clear of and
without reduction for or on account of any and all taxes, levies or other
impositions or charges (collectively, "TAXES"). However, if the Depositary or
the Paying Agent (pursuant to Section 2.04 of the Escrow and Paying Agent
Agreement) shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable hereunder, the Depositary shall (i) make such
deductions or withholding, (ii) pay the full amount deducted or withheld
(including in respect of such additional amounts) to the competent taxation
authority and (iii) if the Taxes required to be deducted or withheld are imposed
by Switzerland or any political subdivision thereof, pay such additional amounts
as may be necessary in order that the actual amount received by the designated
recipient of such sum under this Agreement or the Escrow and Paying Agency
Agreement after such deduction or withholding equals the sum it would have
received had no such deduction or withholding been required. If the date on
which any payment due on any Deposit would otherwise fall on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day,
and no additional interest shall accrue in respect of such extension.
SECTION 5. REPRESENTATION AND WARRANTIES. The Depositary hereby
represents and warrants to Continental, the Escrow Agent, the Pass Through
Trustee and the Paying Agent that:
(a) it is a bank duly organized and validly existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified to conduct banking business in the State of New York through its
New York Branch;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of it
and do not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof;
(d) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation
of any of the terms, conditions or provisions of, or will require any
consent or approval under, any law, governmental rule or regulation or the
charter documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of
its properties is bound, or constitutes or will constitute a default
thereunder or results or will result in the imposition of any lien upon
any of its properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (i) would
adversely affect the ability of it to perform its obligations under this
Agreement or (ii) would call into question or challenge the validity of
this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Depositary in default with respect to any order of any
court, governmental authority, arbitration board or administrative agency
so as to adversely affect its ability to perform its obligations under
this Agreement.
SECTION 6. TRANSFER. Neither party hereto shall be entitled to
assign or otherwise transfer this Agreement (or any interest herein) other than
(in the case of the Escrow Agent) to a successor escrow agent under the Escrow
and Paying Agent Agreement, and any purported assignment in violation thereof
shall be void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent) permitted assigns.
Upon the occurrence of the Transfer (as defined below) contemplated by the
Assignment and Assumption Agreement (as defined below), the Pass Through Trustee
shall (without further act) be deemed to have transferred all of its right,
title and interest in and to this Agreement to the trustee of the Successor
Trust (as defined below) and, thereafter, the trustee of the Successor Trust
shall be deemed to be the "Pass Through Trustee" hereunder with the rights of
the "Pass Through Trustee" hereunder, and each reference herein to "Continental
Airlines Pass Through Trust 1997-4A-O" shall be deemed to be a reference to
"Continental Airlines Pass Through Trust 1997-4A-S". The Escrow Agent and the
Depositary hereby acknowledge and consent to the Transfer contemplated by the
Assignment and Assumption Agreement. For the purposes of this Section 6,
"TRANSFER" means the transfer contemplated by the Assignment and Assumption
Agreement; "ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption Agreement to be entered into between the Pass Through Trustee and the
trustee of the Successor Trust, substantially in the form of Exhibit D to the
Pass Through Trust Agreement; and "SUCCESSOR TRUST" means the Continental
Airlines Pass Through Trust 1997-4A-S.
SECTION 7. AMENDMENT, ETC. This Agreement may not be amended, waived
or otherwise modified except by an instrument in writing signed by the party
against whom the amendment, waiver or other modification is sought to be
enforced and by the Pass Through Trustee.
SECTION 8. NOTICES. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (x) in the case of the Depositary,
Credit Suisse First Boston, 11 Madison Avenue, New York, New York 10010,
Attention: Robert Finney and Kevin Kappell (Telecopier: (212) 325-8319) or (y)
in the case of the Escrow Agent, First Security Bank, National Association, 79
South Main Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), in each case, with a copy to the Pass Through
Trustee, Wilmington Trust Company, 1100 North Market Street, Wilmington, DE
19890, Attention: Corporate Trust Administration (Telecopier: (302) 651-8882)
and to Continental, Continental Airlines, Inc., 2929 Allen Parkway, Suite 2010,
Houston, TX 77019, Attention: Executive Vice President and Chief Financial
Officer (Telecopier: (713) 520-6329) (or at such other address as any such party
may specify from time to time in a written notice to the parties hereto). On or
prior to the execution of this Agreement, the Escrow Agent has delivered to the
Depositary a certificate containing specimen signatures of the representatives
of the Escrow Agent who are authorized to give notices and instructions with
respect to this Agreement. The Depositary may conclusively rely on such
certificate until the Depositary receives written notice from the Escrow Agent
to the contrary.
SECTION 9. OBLIGATIONS UNCONDITIONAL. The Depositary hereby
acknowledges and agrees that its obligation to repay each Deposit together with
interest thereon as provided herein is absolute, irrevocable and unconditional
and constitutes a full recourse obligation of the Depositary enforceable against
it to the full extent of all of its assets and properties.
SECTION 10. ENTIRE AGREEMENT. This Agreement (including all
attachments hereto) sets forth all of the promises, covenants, agreements,
conditions and understandings between the Depositary and the Escrow Agent with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 11. GOVERNING LAW. This Agreement, and the rights and
obligations of the Depositary and the Escrow Agent with respect to the Deposits,
shall be governed by, and construed in accordance with, the laws of the State of
New York and subject to the provisions of Regulation D of the Board of Governors
of the Federal Reserve System (or any successor), as the same may be modified
and supplemented and in effect from time to time.
SECTION 12. WAIVER OF JURY TRIAL RIGHT. EACH OF THE DEPOSITARY AND
THE ESCROW AGENT ACKNOWLEDGES AND ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS
RIGHT TO A TRIAL BY JURY.
SECTION 13. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which taken together shall constitute one
instrument.
SECTION 14. HEAD OFFICE OBLIGATION. Credit Suisse First Boston
hereby agrees that the obligations of the Depositary hereunder are also the
obligations of Credit Suisse First Boston's Head Office in Zurich, Switzerland.
Accordingly, any beneficiary of this Agreement will be able to proceed directly
against Credit Suisse First Boston's Head Office in Zurich, Switzerland if
Credit Suisse First Boston's New York branch defaults in its obligation to such
beneficiary under this Agreement.
IN WITNESS WHEREOF, the Escrow Agent and the Depositary have caused
this Deposit Agreement to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By:_____________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
New York branch,
as Depositary
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
Schedule I
SCHEDULE OF DEPOSITS
(Class A)
DATE DEPOSIT AMOUNT ACCOUNT NO. MATURITY DATE
---- -------------- ----------- -------------
EXHIBIT A
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$_________, Account No. ________________.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [_____________, Account No. ___________, Reference:
________________] on _____________ ______, 199__, upon the telephonic request of
a representative of the Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By:___________________________________
Name:
Title:
Dated: ______________ ___, 199__
EXHIBIT B
NOTICE OF FINAL WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(b) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of all Deposits.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposits and accrued interest thereon to the Paying Agent at Wilmington
Trust Company, ABA# 031-100-092, Account No. _______________, Reference:
Continental 1997-4.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By:___________________________________
Name:
Title:
Dated: _____________ ___, 199__
EXECUTION COPY
- --------------------------------------------------------------------------------
DEPOSIT AGREEMENT
(Class B)
Dated as of October 23, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
and
CREDIT SUISSE FIRST BOSTON
New York branch
as Depositary
- --------------------------------------------------------------------------------
DEPOSIT AGREEMENT (Class B) dated as of October 23, 1997 (as
amended, modified or supplemented from time to time, this "AGREEMENT") between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, as
Escrow Agent under the Escrow and Paying Agent Agreement referred to below (in
such capacity, together with its successors in such capacity, the "ESCROW
AGENT"), and CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, a banking institution
organized under the laws of Switzerland acting through its New York branch, as
depositary bank (the "DEPOSITARY").
W I T N E S S E T H
WHEREAS, Continental Airlines, Inc. ("CONTINENTAL") and Wilmington
Trust Company, not in its individual capacity except as otherwise expressly
provided therein, but solely as trustee (in such capacity, together with its
successors in such capacity, the "PASS THROUGH TRUSTEE") have entered into a
Trust Supplement, dated October 23, 1997, to the Pass Through Trust Agreement
dated as of September 25, 1997 (together, as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "PASS THROUGH TRUST
AGREEMENT") relating to Continental Airlines Pass Through Trust 1997-4B-O
pursuant to which the Continental Airlines Pass Through Trust, Series 1997-4B-O
Certificates referred to therein (the "CERTIFICATES") are being issued;
WHEREAS, Continental and Morgan Stanley & Co. Incorporated, Credit
Suisse First Boston Corporation, Chase Securities Inc. and Salomon Brothers Inc
(collectively, the "UNDERWRITERS" and, together with their respective
transferees and assigns as registered owners of the Certificates, the
"INVESTORS") have entered into an Underwriting Agreement dated as of October 16,
1997 pursuant to which the Pass Through Trustee will issue and sell the
Certificates to the Underwriters;
WHEREAS, Continental, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "NOTE
PURCHASE AGREEMENT"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) equipment notes (the "EQUIPMENT
NOTES") issued to finance the acquisition of aircraft by Continental, as lessee
or as owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "NET PROCEEDS");
WHEREAS, the Escrow Agent, the Underwriters, the Pass Through
Trustee and Wilmington Trust Company, as paying agent for the Escrow Agent (in
such capacity, together with its successors in such capacity, the "PAYING
AGENT") concurrently herewith are entering into an Escrow and Paying Agent
Agreement, dated as of the date hereof (as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "ESCROW AND PAYING
AGENT AGREEMENT"); and
WHEREAS, the Underwriters and the Pass Through Trustee intend that
the Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors pursuant to the Escrow and Paying Agent Agreement, subject to
withdrawal upon request of and proper certification by the Pass Through Trustee
for the purpose of purchasing Equipment Notes, and that pending such withdrawal
the Net Proceeds be deposited by the Escrow Agent with the Depositary pursuant
to this Agreement, which provides for the Depositary to pay interest for
distribution to the Investors and to establish accounts from which the Escrow
Agent shall make withdrawals upon request of and proper certification by the
Pass Through Trustee.
NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1.1 ACCEPTANCE OF DEPOSITARY. The Depositary hereby agrees
to act as depositary bank as provided herein and in connection therewith to
accept all amounts to be delivered to or held by the Depositary pursuant to the
terms of this Agreement. The Depositary further agrees to hold, maintain and
safeguard the Deposits and the Accounts (as defined below) during the term of
this Agreement in accordance with the provisions of this Agreement. The Escrow
Agent shall not have any right to withdraw, assign or otherwise transfer moneys
held in the Accounts except as permitted by this Agreement.
SECTION 1.2 ESTABLISHMENT OF ACCOUNTS. The Escrow Agent hereby
instructs the Depositary, and the Depositary agrees, to establish the separate
deposit accounts listed on Schedule I hereto and to establish such additional
separate deposit accounts as may be required in connection with the deposits
contemplated by Section 2.4 hereof (each, an "ACCOUNT" and collectively, the
"ACCOUNTS"), each in the name of the Escrow Agent and all on the terms and
conditions set forth in this Agreement.
SECTION 2.1 DEPOSITS. The Escrow Agent shall direct the Underwriters
to deposit with the Depositary on the date of this Agreement (the "DEPOSIT
DATE") in Federal (same day) funds by official check or checks or wire or other
transfer to: Credit Suisse First Boston, New York branch, Reference: Continental
1997-4, and the Depositary shall accept from the Underwriters, on behalf of the
Escrow Agent, the sum of US$134,937,000. Upon acceptance of such sum, the
Depositary shall (i) establish each of the deposits specified in Schedule I
hereto maturing on the respective dates set forth therein (including any deposit
made pursuant to Section 2.4 hereof, individually, a "DEPOSIT" and,
collectively, the "DEPOSITS") and (ii) credit each Deposit to the related
Account as set forth therein. No amount shall be deposited in any Account other
than the related Deposit.
SECTION 2.2 INTEREST. Each Deposit shall bear interest from and
including the date of deposit to but excluding the date of withdrawal at the
rate of 6.90% per annum (computed on the basis of a year of twelve 30-day
months) payable to the Paying Agent on behalf of the Escrow Agent semi-annually
in arrears on each January 2 and July 2, and on the date of the Final Withdrawal
(as defined below), commencing on January 2, 1998 (each, an "INTEREST PAYMENT
DATE"), all in accordance with the terms of this Agreement (whether or not any
such Deposit is withdrawn on an Interest Payment Date). Interest accrued on any
Deposit that is withdrawn pursuant to a Notice of Purchase Withdrawal (as
defined below) shall be paid on the next Interest Payment Date, notwithstanding
any intervening Final Withdrawal (as defined below).
SECTION 2.3 WITHDRAWALS. (a) On and after the date seven days after
the establishment of any Deposit, the Escrow Agent may, by providing at least
one Business Day's prior notice of withdrawal to the Depositary in the form of
Exhibit A hereto (a "NOTICE OF PURCHASE WITHDRAWAL"), withdraw not less than the
entire balance of such Deposit, except that at any time prior to the actual
withdrawal of such Deposit, the Escrow Agent or the Pass Through Trustee may, by
notice to the Depositary, cancel such withdrawal (including on the scheduled
date therefor), and thereafter such Deposit shall continue to be maintained by
the Depositary in accordance with the original terms thereof. Following such
withdrawal the balance in the related Account shall be zero and the Depositary
shall close such Account. As used herein, "BUSINESS DAY" means any day, other
than a Saturday, Sunday or other day on which commercial banks are authorized or
required by law to close in New York, New York, Houston, Texas, Wilmington,
Delaware or Salt Lake City, Utah.
(b) The Escrow Agent may, by providing at least 15 days' prior
notice of withdrawal to the Depositary in the form of Exhibit B hereto (a
"NOTICE OF FINAL WITHDRAWAL"), withdraw the entire amount of all of the
remaining Deposits together with the payment by the Depositary of all accrued
and unpaid interest on such Deposits to but excluding the specified date of
withdrawal (a "FINAL WITHDRAWAL"), on such date as shall be specified in such
Notice of Final Withdrawal. If a Notice of Final Withdrawal has not been given
to the Depositary on or before June 7, 1999 (provided that, if a labor strike
occurs at The Boeing Company prior to June 1, 1999 (a "LABOR STRIKE"), such date
shall be extended by adding thereto the number of days that such strike
continued in effect (the "ADDITIONAL DAYS") and there are unwithdrawn Deposits
on such date, the Depositary shall pay the amount of the Final Withdrawal to the
Paying Agent on June 30, 1999 (provided that if a Labor Strike occurs, such date
shall be extended by the Additional Days).
(c) If the Depositary receives a duly completed Notice of Purchase
Withdrawal or Notice of Final Withdrawal complying with the provisions of this
Agreement, it shall make the payments specified therein in accordance with the
provisions of this Agreement.
SECTION 2.4 OTHER ACCOUNTS. On the date of withdrawal of any
Deposit, the Escrow Agent, or the Pass Through Trustee on behalf of the Escrow
Agent, shall be entitled to re-deposit with the Depositary any portion thereof
and the Depositary shall accept the same for deposit hereunder. Any sums so
received for deposit shall be established as a new Deposit and credited to a new
Account, all as more fully provided in Section 2.1 hereof, and thereafter the
provisions of this Agreement shall apply thereto as fully and with the same
force and effect as if such Deposit had been established on the Deposit Date
except that (i) such Deposit may not be withdrawn prior to the date seven days
after the establishment thereof and (ii) such Deposit shall mature on June 30,
1999 (provided that if a Labor Strike occurs, such date shall be extended by the
Additional Days) and bear interest as provided in Section 2.2. The Depositary
shall promptly give notice to the Escrow Agent of receipt of each such
re-deposit and the account number assigned thereto.
SECTION 3. TERMINATION. This Agreement shall terminate on the fifth
Business Day after the later of the date on which (i) all of the Deposits shall
have been withdrawn and paid as provided herein without any re-deposit and (ii)
all accrued and unpaid interest on the Deposits shall have been paid as provided
herein, but in no event prior to the date on which the Depositary shall have
performed in full its obligations hereunder.
SECTION 4. PAYMENTS. All payments (including, without limitation,
those payments made in respect of Taxes (as defined and provided for below))
made by the Depositary hereunder shall be paid in United States Dollars and
immediately available funds by wire transfer (i) in the case of accrued interest
on the Deposits payable under Section 2.2 hereof or any Final Withdrawal,
directly to the Paying Agent at Wilmington Trust Company, Wilmington, DE, ABA#
031-100-092, Account No. _______, Attention: ____________, Reference:
Continental 1997-4A, or to such other account as the Paying Agent may direct
from time to time in writing to the Depositary and the Escrow Agent and (ii) in
the case of any withdrawal of one or more Deposits pursuant to a Notice of
Purchase Withdrawal, directly to or as directed by the Pass Through Trustee as
specified and in the manner provided in such Notice of Purchase Withdrawal. The
Depositary hereby waives any and all rights of set-off, combination of accounts,
right of retention or similar right (whether arising under applicable law,
contract or otherwise) it may have against the Deposits howsoever arising. All
payments on or in respect of each Deposit shall be made free and clear of and
without reduction for or on account of any and all taxes, levies or other
impositions or charges (collectively, "TAXES"). However, if the Depositary or
the Paying Agent (pursuant to Section 2.04 of the Escrow and Paying Agent
Agreement) shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable hereunder, the Depositary shall (i) make such
deductions or withholding, (ii) pay the full amount deducted or withheld
(including in respect of such additional amounts) to the competent taxation
authority and (iii) if the Taxes required to be deducted or withheld are imposed
by Switzerland or any political subdivision thereof, pay such additional amounts
as may be necessary in order that the actual amount received by the designated
recipient of such sum under this Agreement or the Escrow and Paying Agency
Agreement after such deduction or withholding equals the sum it would have
received had no such deduction or withholding been required. If the date on
which any payment due on any Deposit would otherwise fall on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day,
and no additional interest shall accrue in respect of such extension.
SECTION 5. REPRESENTATION AND WARRANTIES. The Depositary hereby
represents and warrants to Continental, the Escrow Agent, the Pass Through
Trustee and the Paying Agent that:
(a) it is a bank duly organized and validly existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified to conduct banking business in the State of New York through its
New York Branch;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of it
and do not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof;
(d) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation
of any of the terms, conditions or provisions of, or will require any
consent or approval under, any law, governmental rule or regulation or the
charter documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of
its properties is bound, or constitutes or will constitute a default
thereunder or results or will result in the imposition of any lien upon
any of its properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (i) would
adversely affect the ability of it to perform its obligations under this
Agreement or (ii) would call into question or challenge the validity of
this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Depositary in default with respect to any order of any
court, governmental authority, arbitration board or administrative agency
so as to adversely affect its ability to perform its obligations under
this Agreement.
SECTION 6. TRANSFER. Neither party hereto shall be entitled to
assign or otherwise transfer this Agreement (or any interest herein) other than
(in the case of the Escrow Agent) to a successor escrow agent under the Escrow
and Paying Agent Agreement, and any purported assignment in violation thereof
shall be void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent) permitted assigns.
Upon the occurrence of the Transfer (as defined below) contemplated by the
Assignment and Assumption Agreement (as defined below), the Pass Through Trustee
shall (without further act) be deemed to have transferred all of its right,
title and interest in and to this Agreement to the trustee of the Successor
Trust (as defined below) and, thereafter, the trustee of the Successor Trust
shall be deemed to be the "Pass Through Trustee" hereunder with the rights of
the "Pass Through Trustee" hereunder, and each reference herein to "Continental
Airlines Pass Through Trust 1997-4B-O" shall be deemed to be a reference to
"Continental Airlines Pass Through Trust 1997-4B-S". The Escrow Agent and the
Depositary hereby acknowledge and consent to the Transfer contemplated by the
Assignment and Assumption Agreement. For the purposes of this Section 6,
"TRANSFER" means the transfer contemplated by the Assignment and Assumption
Agreement; "ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption Agreement to be entered into between the Pass Through Trustee and the
trustee of the Successor Trust, substantially in the form of Exhibit D to the
Pass Through Trust Agreement; and "SUCCESSOR TRUST" means the Continental
Airlines Pass Through Trust 1997-4B-S.
SECTION 7. AMENDMENT, ETC. This Agreement may not be amended, waived
or otherwise modified except by an instrument in writing signed by the party
against whom the amendment, waiver or other modification is sought to be
enforced and by the Pass Through Trustee.
SECTION 8. NOTICES. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (x) in the case of the Depositary,
Credit Suisse First Boston, 11 Madison Avenue, New York, New York 10010,
Attention: Robert Finney and Kevin Kappell (Telecopier: (212) 325-8319) or (y)
in the case of the Escrow Agent, First Security Bank, National Association, 79
South Main Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), in each case, with a copy to the Pass Through
Trustee, Wilmington Trust Company, 1100 North Market Street, Wilmington, DE
19890, Attention: Corporate Trust Administration (Telecopier: (302) 651-8882)
and to Continental, Continental Airlines, Inc., 2929 Allen Parkway, Suite 2010,
Houston, TX 77019, Attention: Executive Vice President and Chief Financial
Officer (Telecopier: (713) 520-6329) (or at such other address as any such party
may specify from time to time in a written notice to the parties hereto). On or
prior to the execution of this Agreement, the Escrow Agent has delivered to the
Depositary a certificate containing specimen signatures of the representatives
of the Escrow Agent who are authorized to give notices and instructions with
respect to this Agreement. The Depositary may conclusively rely on such
certificate until the Depositary receives written notice from the Escrow Agent
to the contrary.
SECTION 9. OBLIGATIONS UNCONDITIONAL. The Depositary hereby
acknowledges and agrees that its obligation to repay each Deposit together with
interest thereon as provided herein is absolute, irrevocable and unconditional
and constitutes a full recourse obligation of the Depositary enforceable against
it to the full extent of all of its assets and properties.
SECTION 10. ENTIRE AGREEMENT. This Agreement (including all
attachments hereto) sets forth all of the promises, covenants, agreements,
conditions and understandings between the Depositary and the Escrow Agent with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 11. GOVERNING LAW. This Agreement, and the rights and
obligations of the Depositary and the Escrow Agent with respect to the Deposits,
shall be governed by, and construed in accordance with, the laws of the State of
New York and subject to the provisions of Regulation D of the Board of Governors
of the Federal Reserve System (or any successor), as the same may be modified
and supplemented and in effect from time to time.
SECTION 12. WAIVER OF JURY TRIAL RIGHT. EACH OF THE DEPOSITARY AND
THE ESCROW AGENT ACKNOWLEDGES AND ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS
RIGHT TO A TRIAL BY JURY.
SECTION 13. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which taken together shall constitute one
instrument.
SECTION 14. HEAD OFFICE OBLIGATION. Credit Suisse First Boston
hereby agrees that the obligations of the Depositary hereunder are also the
obligations of Credit Suisse First Boston's Head Office in Zurich, Switzerland.
Accordingly, any beneficiary of this Agreement will be able to proceed directly
against Credit Suisse First Boston's Head Office in Zurich, Switzerland if
Credit Suisse First Boston's New York branch defaults in its obligation to such
beneficiary under this Agreement.
IN WITNESS WHEREOF, the Escrow Agent and the Depositary have caused
this Deposit Agreement to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
New York branch,
as Depositary
By _____________________________________
Name:
Title:
By _____________________________________
Name:
Title:
Schedule I
SCHEDULE OF DEPOSITS
(Class B)
DATE DEPOSIT AMOUNT ACCOUNT NO. MATURITY DATE
---- -------------- ----------- -------------
EXHIBIT A
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to the Deposit Agreement (Class B) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$_____________, Account No. _________________.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [_______________, Account No. _____, Reference: __________] on
_____________ ___, 199__, upon the telephonic request of a representative of the
Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
Dated: _____________ ____, 199__
EXHIBIT B
NOTICE OF FINAL WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to the Deposit Agreement (Class B) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(b) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of all Deposits.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposits and accrued interest thereon to the Paying Agent at Wilmington
Trust Company, ABA# 031-100-092, Account No. ______________, Reference:
Continental 1997-4.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By ___________________________________
Name:
Title:
Dated: _____________ ____, 199__
EXECUTION COPY
- --------------------------------------------------------------------------------
DEPOSIT AGREEMENT
(Class C)
Dated as of October 23, 1997
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
and
CREDIT SUISSE FIRST BOSTON
New York branch
as Depositary
- --------------------------------------------------------------------------------
DEPOSIT AGREEMENT (Class C) dated as of October 23, 1997 (as
amended, modified or supplemented from time to time, this "AGREEMENT") between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, as
Escrow Agent under the Escrow and Paying Agent Agreement referred to below (in
such capacity, together with its successors in such capacity, the "ESCROW
AGENT"), and CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, a banking institution
organized under the laws of Switzerland acting through its New York branch, as
depositary bank (the "DEPOSITARY").
W I T N E S S E T H
WHEREAS, Continental Airlines, Inc. ("CONTINENTAL") and Wilmington
Trust Company, not in its individual capacity except as otherwise expressly
provided therein, but solely as trustee (in such capacity, together with its
successors in such capacity, the "PASS THROUGH TRUSTEE") have entered into a
Trust Supplement, dated October 23, 1997, to the Pass Through Trust Agreement
dated as of September 25, 1997 (together, as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "PASS THROUGH TRUST
AGREEMENT") relating to Continental Airlines Pass Through Trust 1997-4C-O
pursuant to which the Continental Airlines Pass Through Trust, Series 1997-4C-O
Certificates referred to therein (the "CERTIFICATES") are being issued;
WHEREAS, Continental and Morgan Stanley & Co. Incorporated, Credit
Suisse First Boston Corporation, Chase Securities Inc. and Salomon Brothers Inc
(collectively, the "UNDERWRITERS" and, together with their respective
transferees and assigns as registered owners of the Certificates, the
"INVESTORS") have entered into an Underwriting Agreement dated as of October 16,
1997 pursuant to which the Pass Through Trustee will issue and sell the
Certificates to the Underwriters;
WHEREAS, Continental, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "NOTE
PURCHASE AGREEMENT"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) equipment notes (the "EQUIPMENT
NOTES") issued to finance the acquisition of aircraft by Continental, as lessee
or as owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "NET PROCEEDS");
WHEREAS, the Escrow Agent, the Underwriters, the Pass Through
Trustee and Wilmington Trust Company, as paying agent for the Escrow Agent (in
such capacity, together with its successors in such capacity, the "PAYING
AGENT") concurrently herewith are entering into an Escrow and Paying Agent
Agreement, dated as of the date hereof (as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "ESCROW AND PAYING
AGENT AGREEMENT"); and
WHEREAS, the Underwriters and the Pass Through Trustee intend that
the Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors pursuant to the Escrow and Paying Agent Agreement, subject to
withdrawal upon request of and proper certification by the Pass Through Trustee
for the purpose of purchasing Equipment Notes, and that pending such withdrawal
the Net Proceeds be deposited by the Escrow Agent with the Depositary pursuant
to this Agreement, which provides for the Depositary to pay interest for
distribution to the Investors and to establish accounts from which the Escrow
Agent shall make withdrawals upon request of and proper certification by the
Pass Through Trustee.
NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1.1 ACCEPTANCE OF DEPOSITARY. The Depositary hereby agrees
to act as depositary bank as provided herein and in connection therewith to
accept all amounts to be delivered to or held by the Depositary pursuant to the
terms of this Agreement. The Depositary further agrees to hold, maintain and
safeguard the Deposits and the Accounts (as defined below) during the term of
this Agreement in accordance with the provisions of this Agreement. The Escrow
Agent shall not have any right to withdraw, assign or otherwise transfer moneys
held in the Accounts except as permitted by this Agreement.
SECTION 1.2 ESTABLISHMENT OF ACCOUNTS. The Escrow Agent hereby
instructs the Depositary, and the Depositary agrees, to establish the separate
deposit accounts listed on Schedule I hereto and to establish such additional
separate deposit accounts as may be required in connection with the deposits
contemplated by Section 2.4 hereof (each, an "ACCOUNT" and collectively, the
"ACCOUNTS"), each in the name of the Escrow Agent and all on the terms and
conditions set forth in this Agreement.
SECTION 2.1 DEPOSITS. The Escrow Agent shall direct the Underwriters
to deposit with the Depositary on the date of this Agreement (the "DEPOSIT
DATE") in Federal (same day) funds by official check or checks or wire or other
transfer to: Credit Suisse First Boston, New York branch, Reference: Continental
1997-4, and the Depositary shall accept from the Underwriters, on behalf of the
Escrow Agent, the sum of US$111,112,000. Upon acceptance of such sum, the
Depositary shall (i) establish each of the deposits specified in Schedule I
hereto maturing on the respective dates set forth therein (including any deposit
made pursuant to Section 2.4 hereof, individually, a "DEPOSIT" and,
collectively, the "DEPOSITS") and (ii) credit each Deposit to the related
Account as set forth therein. No amount shall be deposited in any Account other
than the related Deposit.
SECTION 2.2 INTEREST. Each Deposit shall bear interest from and
including the date of deposit to but excluding the date of withdrawal at the
rate of 6.80% per annum (computed on the basis of a year of twelve 30-day
months) payable to the Paying Agent on behalf of the Escrow Agent semi-annually
in arrears on each January 2 and July 2, and on the date of the Final Withdrawal
(as defined below), commencing on January 2, 1998 (each, an "INTEREST PAYMENT
DATE"), all in accordance with the terms of this Agreement (whether or not any
such Deposit is withdrawn on an Interest Payment Date). Interest accrued on any
Deposit that is withdrawn pursuant to a Notice of Purchase Withdrawal (as
defined below) shall be paid on the next Interest Payment Date, notwithstanding
any intervening Final Withdrawal (as defined below).
SECTION 2.3 WITHDRAWALS. (a) On and after the date seven days after
the establishment of any Deposit, the Escrow Agent may, by providing at least
one Business Day's prior notice of withdrawal to the Depositary in the form of
Exhibit A hereto (a "NOTICE OF PURCHASE WITHDRAWAL"), withdraw not less than the
entire balance of such Deposit, except that at any time prior to the actual
withdrawal of such Deposit, the Escrow Agent or the Pass Through Trustee may, by
notice to the Depositary, cancel such withdrawal (including on the scheduled
date therefor), and thereafter such Deposit shall continue to be maintained by
the Depositary in accordance with the original terms thereof. Following such
withdrawal the balance in the related Account shall be zero and the Depositary
shall close such Account. As used herein, "BUSINESS DAY" means any day, other
than a Saturday, Sunday or other day on which commercial banks are authorized or
required by law to close in New York, New York, Houston, Texas, Wilmington,
Delaware or Salt Lake City, Utah.
(b) The Escrow Agent may, by providing at least 15 days' prior
notice of withdrawal to the Depositary in the form of Exhibit B hereto (a
"NOTICE OF FINAL WITHDRAWAL"), withdraw the entire amount of all of the
remaining Deposits together with the payment by the Depositary of all accrued
and unpaid interest on such Deposits to but excluding the specified date of
withdrawal (a "FINAL WITHDRAWAL"), on such date as shall be specified in such
Notice of Final Withdrawal. If a Notice of Final Withdrawal has not been given
to the Depositary on or before June 7, 1999 (provided that, if a labor strike
occurs at The Boeing Company prior to June 1, 1999 (a "LABOR STRIKE"), such date
shall be extended by adding thereto the number of days that such strike
continued in effect (the "ADDITIONAL DAYS") and there are unwithdrawn Deposits
on such date, the Depositary shall pay the amount of the Final Withdrawal to the
Paying Agent on June 30, 1999 (provided that if a Labor Strike occurs, such date
shall be extended by the Additional Days).
(c) If the Depositary receives a duly completed Notice of Purchase
Withdrawal or Notice of Final Withdrawal complying with the provisions of this
Agreement, it shall make the payments specified therein in accordance with the
provisions of this Agreement.
SECTION 2.4 OTHER ACCOUNTS. On the date of withdrawal of any
Deposit, the Escrow Agent, or the Pass Through Trustee on behalf of the Escrow
Agent, shall be entitled to re-deposit with the Depositary any portion thereof
and the Depositary shall accept the same for deposit hereunder. Any sums so
received for deposit shall be established as a new Deposit and credited to a new
Account, all as more fully provided in Section 2.1 hereof, and thereafter the
provisions of this Agreement shall apply thereto as fully and with the same
force and effect as if such Deposit had been established on the Deposit Date
except that (i) such Deposit may not be withdrawn prior to the date seven days
after the establishment thereof and (ii) such Deposit shall mature on June 30,
1999 (provided that if a Labor Strike occurs, such date shall be extended by the
Additional Days) and bear interest as provided in Section 2.2. The Depositary
shall promptly give notice to the Escrow Agent of receipt of each such
re-deposit and the account number assigned thereto.
SECTION 3. TERMINATION. This Agreement shall terminate on the fifth
Business Day after the later of the date on which (i) all of the Deposits shall
have been withdrawn and paid as provided herein without any re-deposit and (ii)
all accrued and unpaid interest on the Deposits shall have been paid as provided
herein, but in no event prior to the date on which the Depositary shall have
performed in full its obligations hereunder.
SECTION 4. PAYMENTS. All payments (including, without limitation,
those payments made in respect of Taxes (as defined and provided for below))
made by the Depositary hereunder shall be paid in United States Dollars and
immediately available funds by wire transfer (i) in the case of accrued interest
on the Deposits payable under Section 2.2 hereof or any Final Withdrawal,
directly to the Paying Agent at Wilmington Trust Company, Wilmington, DE, ABA#
031-100-092, Account No. ________, Attention: ______________, Reference:
Continental 1997-4A, or to such other account as the Paying Agent may direct
from time to time in writing to the Depositary and the Escrow Agent and (ii) in
the case of any withdrawal of one or more Deposits pursuant to a Notice of
Purchase Withdrawal, directly to or as directed by the Pass Through Trustee as
specified and in the manner provided in such Notice of Purchase Withdrawal. The
Depositary hereby waives any and all rights of set-off, combination of accounts,
right of retention or similar right (whether arising under applicable law,
contract or otherwise) it may have against the Deposits howsoever arising. All
payments on or in respect of each Deposit shall be made free and clear of and
without reduction for or on account of any and all taxes, levies or other
impositions or charges (collectively, "TAXES"). However, if the Depositary or
the Paying Agent (pursuant to Section 2.04 of the Escrow and Paying Agent
Agreement) shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable hereunder, the Depositary shall (i) make such
deductions or withholding, (ii) pay the full amount deducted or withheld
(including in respect of such additional amounts) to the competent taxation
authority and (iii) if the Taxes required to be deducted or withheld are imposed
by Switzerland or any political subdivision thereof, pay such additional amounts
as may be necessary in order that the actual amount received by the designated
recipient of such sum under this Agreement or the Escrow and Paying Agency
Agreement after such deduction or withholding equals the sum it would have
received had no such deduction or withholding been required. If the date on
which any payment due on any Deposit would otherwise fall on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day,
and no additional interest shall accrue in respect of such extension.
SECTION 5. REPRESENTATION AND WARRANTIES. The Depositary hereby
represents and warrants to Continental, the Escrow Agent, the Pass Through
Trustee and the Paying Agent that:
(a) it is a bank duly organized and validly existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified to conduct banking business in the State of New York through its
New York Branch;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of it
and do not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof;
(d) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation
of any of the terms, conditions or provisions of, or will require any
consent or approval under, any law, governmental rule or regulation or the
charter documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of
its properties is bound, or constitutes or will constitute a default
thereunder or results or will result in the imposition of any lien upon
any of its properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (i) would
adversely affect the ability of it to perform its obligations under this
Agreement or (ii) would call into question or challenge the validity of
this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Depositary in default with respect to any order of any
court, governmental authority, arbitration board or administrative agency
so as to adversely affect its ability to perform its obligations under
this Agreement.
SECTION 6. TRANSFER. Neither party hereto shall be entitled to
assign or otherwise transfer this Agreement (or any interest herein) other than
(in the case of the Escrow Agent) to a successor escrow agent under the Escrow
and Paying Agent Agreement, and any purported assignment in violation thereof
shall be void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent) permitted assigns.
Upon the occurrence of the Transfer (as defined below) contemplated by the
Assignment and Assumption Agreement (as defined below), the Pass Through Trustee
shall (without further act) be deemed to have transferred all of its right,
title and interest in and to this Agreement to the trustee of the Successor
Trust (as defined below) and, thereafter, the trustee of the Successor Trust
shall be deemed to be the "Pass Through Trustee" hereunder with the rights of
the "Pass Through Trustee" hereunder, and each reference herein to "Continental
Airlines Pass Through Trust 1997-4C-O" shall be deemed to be a reference to
"Continental Airlines Pass Through Trust 1997-4C-S". The Escrow Agent and the
Depositary hereby acknowledge and consent to the Transfer contemplated by the
Assignment and Assumption Agreement. For the purposes of this Section 6,
"TRANSFER" means the transfer contemplated by the Assignment and Assumption
Agreement; "ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption Agreement to be entered into between the Pass Through Trustee and the
trustee of the Successor Trust, substantially in the form of Exhibit D to the
Pass Through Trust Agreement; and "SUCCESSOR TRUST" means the Continental
Airlines Pass Through Trust 1997-4C-S.
SECTION 7. AMENDMENT, ETC. This Agreement may not be amended, waived
or otherwise modified except by an instrument in writing signed by the party
against whom the amendment, waiver or other modification is sought to be
enforced and by the Pass Through Trustee.
SECTION 8. NOTICES. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (x) in the case of the Depositary,
Credit Suisse First Boston, 11 Madison Avenue, New York, New York 10010,
Attention: Robert Finney and Kevin Kappell (Telecopier: (212) 325-8319) or (y)
in the case of the Escrow Agent, First Security Bank, National Association, 79
South Main Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), in each case, with a copy to the Pass Through
Trustee, Wilmington Trust Company, 1100 North Market Street, Wilmington, DE
19890, Attention: Corporate Trust Administration (Telecopier: (302) 651-8882)
and to Continental, Continental Airlines, Inc., 2929 Allen Parkway, Suite 2010,
Houston, TX 77019, Attention: Executive Vice President and Chief Financial
Officer (Telecopier: (713) 520-6329) (or at such other address as any such party
may specify from time to time in a written notice to the parties hereto). On or
prior to the execution of this Agreement, the Escrow Agent has delivered to the
Depositary a certificate containing specimen signatures of the representatives
of the Escrow Agent who are authorized to give notices and instructions with
respect to this Agreement. The Depositary may conclusively rely on such
certificate until the Depositary receives written notice from the Escrow Agent
to the contrary.
SECTION 9. OBLIGATIONS UNCONDITIONAL. The Depositary hereby
acknowledges and agrees that its obligation to repay each Deposit together with
interest thereon as provided herein is absolute, irrevocable and unconditional
and constitutes a full recourse obligation of the Depositary enforceable against
it to the full extent of all of its assets and properties.
SECTION 10. ENTIRE AGREEMENT. This Agreement (including all
attachments hereto) sets forth all of the promises, covenants, agreements,
conditions and understandings between the Depositary and the Escrow Agent with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 11. GOVERNING LAW. This Agreement, and the rights and
obligations of the Depositary and the Escrow Agent with respect to the Deposits,
shall be governed by, and construed in accordance with, the laws of the State of
New York and subject to the provisions of Regulation D of the Board of Governors
of the Federal Reserve System (or any successor), as the same may be modified
and supplemented and in effect from time to time.
SECTION 12. WAIVER OF JURY TRIAL RIGHT. EACH OF THE DEPOSITARY AND
THE ESCROW AGENT ACKNOWLEDGES AND ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS
RIGHT TO A TRIAL BY JURY.
SECTION 13. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which taken together shall constitute one
instrument.
SECTION 14. HEAD OFFICE OBLIGATION. Credit Suisse First Boston
hereby agrees that the obligations of the Depositary hereunder are also the
obligations of Credit Suisse First Boston's Head Office in Zurich, Switzerland.
Accordingly, any beneficiary of this Agreement will be able to proceed directly
against Credit Suisse First Boston's Head Office in Zurich, Switzerland if
Credit Suisse First Boston's New York branch defaults in its obligation to such
beneficiary under this Agreement.
IN WITNESS WHEREOF, the Escrow Agent and the Depositary have caused
this Deposit Agreement to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
New York branch,
as Depositary
By _____________________________________
Name:
Title:
By _____________________________________
Name:
Title:
Schedule I
SCHEDULE OF DEPOSITS
(Class C)
DATE DEPOSIT AMOUNT ACCOUNT NO. MATURITY DATE
---- -------------- ----------- -------------
EXHIBIT A
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York branch
11 Madison Avenue
New York, NY 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to the Deposit Agreement (Class C) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$_________, Account No. __________________.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [_________________, Account No. ______________, Reference:
________________] on _____________ ____, 199__, upon the telephonic request of a
representative of the Pass Through Trustee.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
Dated: ___________ ___, 199__
EXHIBIT B
NOTICE OF FINAL WITHDRAWAL
CREDIT SUISSE FIRST BOSTON New York Branch 11 Madison Avenue New York, NY 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to the Deposit Agreement (Class C) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(b) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of all Deposits.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposits and accrued interest thereon to the Paying Agent at Wilmington
Trust Company, ABA# 031-100-092, Account No. ______________, Reference:
Continental 1997-4.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
Dated: _____________ ___, 199__
EXECUTION COPY
================================================================================
ESCROW AND PAYING AGENT AGREEMENT
(Class A)
Dated as of October 23, 1997
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
CHASE SECURITIES INC.
and
SALOMON BROTHERS INC
as Underwriters
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Pass Through Trustee
for and on behalf of
Continental Airlines Pass Through Trust 1997-4A-O
as Pass Through Trustee
and
WILMINGTON TRUST COMPANY
as Paying Agent
================================================================================
TABLE OF CONTENTS
PAGE
SECTION 1. Escrow Agent ............................................ 2
Section 1.01. Appointment of Escrow Agent ............................. 2
Section 1.02. Instruction; Etc. ....................................... 3
Section 1.03. Initial Escrow Amount; Issuance of
Escrow Receipts ......................................... 3
Section 1.04. Payments to Receiptholders .............................. 4
Section 1.05. Mutilated, Destroyed, Lost or
Stolen Escrow Receipt ................................... 4
Section 1.06. Additional Escrow Amounts ............................... 5
Section 1.07. Resignation or Removal of Escrow
Agent ................................................... 5
Section 1.08. Persons Deemed Owners ................................... 5
Section 1.09. Further Assurances ...................................... 6
SECTION 2. Paying Agent ............................................ 6
Section 2.01. Appointment of Paying Agent ............................. 6
Section 2.02. Establishment of Paying Agent
Account ................................................. 6
Section 2.03. Payments from Paying Agent Account ...................... 6
Section 2.04. Withholding Taxes ....................................... 7
Section 2.05. Resignation or Removal of Paying
Agent ................................................... 8
Section 2.06. Notice of Final Withdrawal .............................. 8
SECTION 3. Payments ................................................ 9
SECTION 4. Other Actions ........................................... 9
SECTION 5. Representations and Warranties of
the Escrow Agent ........................................ 9
PAGE
SECTION 6. Representations and Warranties of
the Paying Agent ........................................ 11
SECTION 7. Indemnification ......................................... 12
SECTION 8. Amendment, Etc. ......................................... 12
SECTION 9. Notices ................................................. 13
SECTION 10. Transfer ................................................ 13
SECTION 11. Entire Agreement ........................................ 14
SECTION 12. Governing Law ........................................... 14
SECTION 13. Waiver of Jury Trial Right .............................. 14
SECTION 14. Counterparts ............................................ 14
Exhibit A Escrow Receipt
Exhibit B Withdrawal Certificate
ESCROW AND PAYING AGENT AGREEMENT (Class A) dated as of October 23,
1997 (as amended, modified or supplemented from time to time, this "AGREEMENT")
among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association,
as Escrow Agent (in such capacity, together with its successors in such
capacity, the "ESCROW AGENT"); MORGAN STANLEY & CO. INCORPORATED, CREDIT SUISSE
FIRST BOSTON CORPORATION, CHASE SECURITIES INC. and SALOMON BROTHERS INC, as
Underwriters of the Certificates referred to below (the "UNDERWRITERS" and
together with their respective transferees and assigns as registered owners of
the Certificates, the "INVESTORS") under the Underwriting Agreement referred to
below; WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity except as otherwise expressly provided herein, but solely as
trustee (in such capacity, together with its successors in such capacity, the
"PASS THROUGH TRUSTEE") under the Pass Through Trust Agreement referred to
below; and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as paying
agent hereunder (in such capacity, together with its successors in such
capacity, the "PAYING AGENT").
W I T N E S S E T H
WHEREAS, Continental Airlines, Inc. ("CONTINENTAL") and the Pass
Through Trustee have entered into a Trust Supplement, dated as of October 23,
1997 (the "TRUST SUPPLEMENT"), to the Pass Through Trust Agreement, dated as of
September 25, 1997 (together, as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "PASS THROUGH TRUST AGREEMENT")
relating to Continental Airlines Pass Through Trust 1997-4A-O (the "PASS THROUGH
TRUST") pursuant to which the Continental Airlines Pass Through Trust, Series
1997-4A-O Certificates referred to therein (the "CERTIFICATES") are being
issued;
WHEREAS, Continental and the Underwriters have entered into an
Underwriting Agreement dated as of October 16, 1997 (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"UNDERWRITING AGREEMENT") pursuant to which the Pass Through Trustee will issue
and sell the Certificates to the Underwriters;
WHEREAS, Continental, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "NOTE
PURCHASE AGREEMENT"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) equipment notes (the "EQUIPMENT
NOTES") issued to finance the acquisition of aircraft by Continental, as lessee
or as owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "NET PROCEEDS");
WHEREAS, the Underwriters and the Pass Through Trustee intend that
the Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors, subject to withdrawal upon request by the Pass Through Trustee and
satisfaction of the conditions set forth in the Note Purchase Agreement for the
purpose of purchasing Equipment Notes, and that pending such withdrawal the Net
Proceeds be deposited on behalf of the Escrow Agent with Credit Suisse First
Boston, a Swiss Bank acting through its New York branch, as Depositary (the
"DEPOSITARY") under the Deposit Agreement, dated as of the date hereof between
the Depositary and the Escrow Agent relating to the Pass Through Trust (as
amended, modified or supplemented from time to time in accordance with the terms
thereof, the "DEPOSIT AGREEMENT") pursuant to which, among other things, the
Depositary will pay interest for distribution to the Investors and establish
accounts from which the Escrow Agent shall make withdrawals upon request of and
proper certification by the Pass Through Trustee;
WHEREAS, the Escrow Agent wishes to appoint the Paying Agent to pay
amounts required to be distributed to the Investors in accordance with this
Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Pass Through Trust Agreement.
NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. ESCROW AGENT.
Section 1.01. APPOINTMENT OF ESCROW AGENT. Each of the Underwriters,
for and on behalf of each of the Investors, hereby irrevocably appoints,
authorizes and directs the Escrow Agent to act as escrow agent and fiduciary
hereunder and under the Deposit Agreement for such specific purposes and with
such powers as are specifically delegated to the Escrow Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Escrow Agent under this
Agreement or the Deposit Agreement shall be held in escrow by the Escrow Agent
in accordance with the terms of this Agreement. This Agreement is irrevocable
and the Investors' rights with respect to any monies received and held in escrow
by the Escrow Agent under this Agreement or the Deposit Agreement shall only be
as provided under the terms and conditions of this Agreement and the Deposit
Agreement. The Escrow Agent (which term as used in this sentence shall include
reference to its affiliates and its own and its affiliates' officers, directors,
employees and agents): (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement; (b) shall not be responsible to the Pass
Through Trustee or the Investors for any recitals, statements, representations
or warranties of any person other then itself contained in this Agreement or the
Deposit Agreement or for the failure by the Pass Through Trustee, the Investors
or any other person or entity (other than the Escrow Agent) to perform any of
its obligations hereunder (whether or not the Escrow Agent shall have any
knowledge thereof); and (c) shall not be responsible for any action taken or
omitted to be taken by it hereunder or provided for herein or in connection
herewith, except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
Section 1.02. INSTRUCTION; ETC. The Underwriters, for and on behalf
of each of the Investors, hereby irrevocably instruct the Escrow Agent, and the
Escrow Agent agrees, (a) to enter into the Deposit Agreement, (b) to appoint the
Paying Agent as provided in this Agreement, (c) upon receipt at any time and
from time to time prior to the Termination Date (as defined below) of a
certificate substantially in the form of Exhibit B hereto (a "WITHDRAWAL
CERTIFICATE") executed by the Pass Through Trustee, together with an attached
Notice of Purchase Withdrawal in substantially the form of Exhibit A to the
Deposit Agreement duly completed by the Pass Through Trustee (the "APPLICABLE
NOTICE OF PURCHASE WITHDRAWAL" and the withdrawal to which it relates, a
"PURCHASE WITHDRAWAL"), immediately to execute the Applicable Notice of Purchase
Withdrawal as Escrow Agent and transmit it to the Depositary by facsimile
transmission in accordance with the Deposit Agreement; PROVIDED that, upon the
request of the Pass Through Trustee after such transmission, the Escrow Agent
shall cancel such Applicable Notice of Purchase Withdrawal, and (d) if there are
any undrawn Deposits (as defined in the Deposit Agreement) on the "TERMINATION
DATE", which shall mean the earlier of (i) June 1, 1999 (provided that, if a
labor strike occurs at The Boeing Company prior to such date (a "LABOR STRIKE"),
such date shall be extended by adding thereto the number of days that such
strike continued in effect (the "ADDITIONAL DAYS") and (ii) the day on which the
Escrow Agent receives notice from the Pass Through Trustee that the Pass Through
Trustee's obligation to purchase Equipment Notes under the Note Purchase
Agreement has terminated, to give notice to the Depositary (with a copy to the
Paying Agent) substantially in the form of Exhibit B to the Deposit Agreement
requesting a withdrawal of all of the remaining Deposits, together with accrued
and unpaid interest on such Deposits to the date of withdrawal, on the 35th day
after the date that such notice of withdrawal is given to the Depositary (or, if
not a Business Day, on the next succeeding Business Day) (a "FINAL WITHDRAWAL"),
PROVIDED that if the day scheduled for the Final Withdrawal in accordance with
the foregoing is within 10 days before or after a Regular Distribution Date,
then the Escrow Agent shall request that such requested Final Withdrawal be made
on such Regular Distribution Date (the date of such requested withdrawal, the
"FINAL WITHDRAWAL DATE"). If for any reason the Escrow Agent shall have failed
to give the Final Withdrawal Notice to the Depositary on or before June 7, 1999
(PROVIDED that if a Labor Strike occurs, such date shall be extended by the
Additional Days), and there are unwithdrawn Deposits on such date, the Final
Withdrawal Date shall be deemed to be June 30, 1999 (PROVIDED that if a Labor
Strike occurs, such date shall be extended by the Additional Days).
Section 1.03. INITIAL ESCROW AMOUNT; ISSUANCE OF ESCROW RECEIPTS.
The Escrow Agent hereby directs the Underwriters to, and the Underwriters hereby
acknowledge that on the date hereof they shall, irrevocably deliver to the
Depositary on behalf of the Escrow Agent, an amount in U.S. dollars ("DOLLARS")
and immediately available funds equal to $505,951,000 for deposit on behalf of
the Escrow Agent with the Depositary in accordance with Section 2.1 of the
Deposit Agreement. The Underwriters hereby instruct the Escrow Agent, upon
receipt of such sum from the Underwriters, to confirm such receipt by executing
and delivering to the Pass Through Trustee an Escrow Receipt in the form of
Exhibit A hereto (an "ESCROW RECEIPT"), (a) to be affixed by the Pass Through
Trustee to each Certificate and (b) to evidence the same percentage interest
(the "ESCROW INTEREST") in the Account Amounts (as defined below) as the
Fractional Undivided Interest in the Pass Through Trust evidenced by the
Certificate to which it is to be affixed. The Escrow Agent shall provide to the
Pass Through Trustee for attachment to each Certificate newly issued under and
in accordance with the Pass Through Trust Agreement an executed Escrow Receipt
as the Pass Through Trustee may from time to time request of the Escrow Agent.
Each Escrow Receipt shall be registered by the Escrow Agent in a register (the
"Register") maintained by the Escrow Agent in the same name and same manner as
the Certificate to which it is attached and may not thereafter be detached from
such Certificate to which it is to be affixed prior to the distribution of the
Final Withdrawal (the "FINAL DISTRIBUTION"). After the Final Distribution, no
additional Escrow Receipts shall be issued and the Pass Through Trustee shall
request the return to the Escrow Agent for cancellation of all outstanding
Escrow Receipts.
Section 1.04. PAYMENTS TO RECEIPTHOLDERS. All payments and
distributions made to holders of an Escrow Receipt (collectively
"RECEIPTHOLDERS") in respect of the Escrow Receipt shall be made only from
amounts deposited in the Paying Agent Account (as defined below) ("ACCOUNT
AMOUNTS"). Each Receiptholder, by its acceptance of an Escrow Receipt, agrees
that (a) it will look solely to the Account Amounts for any payment or
distribution due to such Receiptholder pursuant to the terms of the Escrow
Receipt and this Agreement and (b) it will have no recourse to Continental, the
Pass Through Trustee, the Paying Agent or the Escrow Agent, except as expressly
provided herein or in the Pass Through Trust Agreement. No Receiptholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account or the obligations of the parties hereto,
nor shall anything set forth herein, or contained in the terms of the Escrow
Receipt, be construed so as to constitute the Receiptholders from time to time
as partners or members of an association.
Section 1.05. MUTILATED, DESTROYED, LOST OR STOLEN ESCROW RECEIPT.
If (a) any mutilated Escrow Receipt is surrendered to the Escrow Agent or the
Escrow Agent receives evidence to its satisfaction of the destruction, loss or
theft of any Escrow Receipt and (b) there is delivered to the Escrow Agent and
the Pass Through Trustee such security, indemnity or bond, as may be required by
them to hold each of them harmless, then, absent notice to the Escrow Agent or
the Pass Through Trustee that such destroyed, lost or stolen Escrow Receipt has
been acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the Uniform Commercial Code in effect in any applicable
jurisdiction are met, the Escrow Agent shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Escrow Receipt, a new Escrow Receipt or Escrow Receipts and of like Escrow
Interest in the Account Amounts and bearing a number not contemporaneously
outstanding.
In connection with the issuance of any new Escrow Receipt under this
Section 1.05, the Escrow Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Pass
Through Trustee and the Escrow Agent) connected therewith.
Any duplicate Escrow Receipt issued pursuant to this Section 1.05
shall constitute conclusive evidence of the appropriate Escrow Interest in the
Account Amounts, as if originally issued, whether or not the lost, stolen or
destroyed Escrow Receipt shall be found at any time.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Escrow Receipts.
Section 1.06. ADDITIONAL ESCROW AMOUNTS. On the date of any Purchase
Withdrawal, the Pass Through Trustee may re-deposit with the Depositary some or
all of the amounts so withdrawn in accordance with Section 2.4 of the Deposit
Agreement.
Section 1.07. RESIGNATION OR REMOVAL OF ESCROW AGENT. Subject to the
appointment and acceptance of a successor Escrow Agent as provided below, the
Escrow Agent may resign at any time by giving 30 days' prior written notice
thereof to the Investors, but may not otherwise be removed except for cause by
the written consent of the Investors with respect to Investors representing
Escrow Interests aggregating not less than a majority in interest in the Account
Amounts (an "ACTION OF INVESTORS"). Upon any such resignation or removal, the
Investors, by an Action of Investors, shall have the right to appoint a
successor Escrow Agent. If no successor Escrow Agent shall have been so
appointed and shall have accepted such appointment within 30 days after the
retiring Escrow Agent's giving of notice of resignation or the removal of the
retiring Escrow Agent, then the retiring Escrow Agent may appoint a successor
Escrow Agent. Any successor Escrow Agent shall be a bank which has an office in
the United States with a combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Escrow Agent hereunder by a successor
Escrow Agent, such successor Escrow Agent shall enter into such documents as the
Pass Through Trustee shall require and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Escrow
Agent, and the retiring Escrow Agent shall be discharged from its duties and
obligations hereunder. No resignation or removal of the Escrow Agent shall be
effective unless a written confirmation shall have been obtained from each of
Moody's Investors Service, Inc. and Standard & Poor's Rating Group, a division
of McGraw-Hill Inc., that the replacement of the Escrow Agent with the successor
Escrow Agent will not result in (a) a reduction of the rating for the
Certificates below the then current rating for the Certificates or (b) a
withdrawal or suspension of the rating of the Certificates.
Section 1.08. PERSONS DEEMED OWNERS. Prior to due presentment of a
Certificate for registration of transfer, the Escrow Agent and the Paying Agent
may treat the Person in whose name any Escrow Receipt is registered (as of the
day of determination) as the owner of such Escrow Receipt for the purpose of
receiving distributions pursuant to this Agreement and for all other purposes
whatsoever, and neither the Escrow Agent nor the Paying Agent shall be affected
by any notice to the contrary.
Section 1.09. FURTHER ASSURANCES. The Escrow Agent agrees to take
such actions, and execute such other documents, as may be reasonably requested
by the Pass Through Trustee in order to effectuate the purposes of this
Agreement and the performance by the Escrow Agent of its obligations hereunder.
SECTION 2. PAYING AGENT.
Section 2.01. APPOINTMENT OF PAYING AGENT. The Escrow Agent hereby
irrevocably appoints and authorizes the Paying Agent to act as its paying agent
hereunder, for the benefit of the Investors, for such specific purposes and with
such powers as are specifically delegated to the Paying Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Paying Agent under this
Agreement or the Deposit Agreement shall be held in the Paying Agent Account for
the benefit of the Investors. The Paying Agent (which term as used in this
sentence shall include reference to its affiliates and its own and its
affiliates' officers, directors, employees and agents): (a) shall have no duties
or responsibilities except those expressly set forth in this Agreement, and
shall not by reason of this Agreement be a trustee for the Escrow Agent; (b)
shall not be responsible to the Escrow Agent for any recitals, statements,
representations or warranties of any person other then itself contained in this
Agreement or for the failure by the Escrow Agent or any other person or entity
(other than the Paying Agent) to perform any of its obligations hereunder
(whether or not the Paying Agent shall have any knowledge thereof); and (c)
shall not be responsible for any action taken or omitted to be taken by it
hereunder or provided for herein or in connection herewith, except for its own
willful misconduct or gross negligence (or simple negligence in connection with
the handling of funds).
Section 2.02. ESTABLISHMENT OF PAYING AGENT ACCOUNT. The Paying
Agent shall establish a deposit account (the "PAYING AGENT ACCOUNT") at
Wilmington Trust Company in the name of the Escrow Agent. It is expressly
understood by the parties hereto that the Paying Agent is acting as the paying
agent of the Escrow Agent hereunder and that no amounts on deposit in the Paying
Agent Account constitute part of the Trust Property.
Section 2.03. PAYMENTS FROM PAYING AGENT ACCOUNT. The Escrow Agent
hereby irrevocably instructs the Paying Agent, and the Paying Agent agrees to
act, as follows:
(a) On each Interest Payment Date (as defined in the Deposit
Agreement) or as soon thereafter as the Paying Agent has confirmed receipt
in the Paying Agent Account from the Depositary of any amount in respect
of accrued interest on the Deposits, the Paying Agent shall distribute out
of the Paying Agent Account the entire amount deposited therein by the
Depositary. There shall be so distributed to each Receiptholder of record
on the 15th day (whether or not a Business Day) preceding such Interest
Payment Date by check mailed to such Receiptholder, at the address
appearing in the Register, such Receiptholder's pro rata share (based on
the Escrow Interest in the Account Amounts held by such Receiptholder) of
the total amount of interest deposited by the Depositary in the Paying
Agent Account on such date, except that, with respect to Escrow Receipts
registered on the Record Date in the name of DTC, such distribution shall
be made by wire transfer in immediately available funds to the account
designated by DTC.
(b) Upon the confirmation by the Paying Agent of receipt in the
Paying Agent Account from the Depositary of any amount in respect of the
Final Withdrawal, the Paying Agent shall forthwith distribute the entire
amount of the Final Withdrawal deposited therein by the Depositary. There
shall be so distributed to each Receiptholder of record on the 15th day
(whether or not a Business Day) preceding the Final Withdrawal Date by
check mailed to such Receiptholder, at the address appearing in the
Register, such Receiptholder's pro rata share (based on the Escrow
Interest in the Account Amounts held by such Receiptholder) of the total
amount in the Paying Agent Account on account of such Final Withdrawal,
except that, with respect to Escrow Receipts registered on the Record Date
in the name of DTC, such distribution shall be made by wire transfer in
immediately available funds to the account designated by DTC.
(c) If any payment of interest or principal in respect of the Final
Withdrawal is not received by the Paying Agent within five days of the
applicable date when due, then it shall be distributed to Receiptholders
after actual receipt by the Paying Agent on the same basis as a Special
Payment is distributed under the Pass Through Trust Agreement.
(d) The Paying Agent shall include with any check mailed pursuant to
this Section any notice required to be distributed under the Pass Through
Trust Agreement that is furnished to the Paying Agent by the Pass Through
Trustee.
Section 2.04. WITHHOLDING TAXES. The Paying Agent shall exclude and
withhold from each distribution of accrued interest on the Deposits (as defined
in the Deposit Agreement) and any amount in respect of the Final Withdrawal any
and all withholding taxes applicable thereto as required by law. The Paying
Agent agrees to act as such withholding agent and, in connection therewith,
whenever any present or future taxes or similar charges are required to be
withheld with respect to any amounts payable in respect of the Deposits (as
defined in the Deposit Agreement) or the escrow amounts, to withhold such
amounts and timely pay the same to the appropriate authority in the name of and
on behalf of the Receiptholders, that it will file any necessary withholding tax
returns or statements when due, and that, as promptly as possible after the
payment thereof, it will deliver to each such Receiptholder appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such Receiptholder may reasonably request from time to
time. The Paying Agent agrees to file any other information reports as it may be
required to file under United States law.
Section 2.05. RESIGNATION OR REMOVAL OF PAYING AGENT. Subject to the
appointment and acceptance of a successor Paying Agent as provided below, the
Paying Agent may resign at any time by giving 30 days' prior written notice
thereof to the Escrow Agent, but may not otherwise be removed except for cause
by the Escrow Agent. Upon any such resignation or removal, the Escrow Agent
shall have the right to appoint a successor Paying Agent. If no successor Paying
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Paying Agent's giving of notice of resignation
or the removal of the retiring Paying Agent, then the retiring Paying Agent may
appoint a successor Paying Agent. Any Successor Paying Agent shall be a bank
which has an office in the United States with a combined capital and surplus of
at least $100,000,000. Upon the acceptance of any appointment as Paying Agent
hereunder by a successor Paying Agent, such successor Paying Agent shall enter
into such documents as the Escrow Agent shall require and shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Paying Agent, and the retiring Paying Agent shall be discharged
from its duties and obligations hereunder.
Section 2.06. NOTICE OF FINAL WITHDRAWAL. Promptly after receipt by
the Paying Agent of notice that the Escrow Agent has requested a Final
Withdrawal or that a Final Withdrawal will be made, the Paying Agent shall cause
notice of the distribution of the Final Withdrawal to be mailed to each of the
Receiptholders at its address as it appears in the Register. Such notice shall
be mailed not less than 15 days prior to the Final Withdrawal Date. Such notice
shall set forth:
(i) the Final Withdrawal Date and the date for determining
Receiptholders of record who shall be entitled to receive distributions in
respect of the Final Withdrawal,
(ii) the amount of the payment in respect of the Final Withdrawal
for each $1,000 face amount Certificate (based on information provided by
the Pass Through Trustee) and the amount thereof constituting unused
Deposits (as defined in the Deposit Agreement) and interest thereon, and
(iii) if the Final Withdrawal Date is the same date as a Regular
Distribution Date, the total amount to be received on such date for each
$1,000 face amount Certificate (based on information provided by the Pass
Through Trustee).
Such mailing may include any notice required to be given to
Certificateholders in connection with such distribution pursuant to the Pass
Through Trust Agreement.
SECTION 3. PAYMENTS. If, notwithstanding the instructions in Section
4 of the Deposit Agreement that all amounts payable to the Escrow Agent under
the Deposit Agreement be paid by the Depositary directly to the Paying Agent or
the Pass Through Trustee (depending on the circumstances), the Escrow Agent
receives any payment thereunder, then the Escrow Agent shall forthwith pay such
amount in Dollars and in immediately available funds by wire transfer to (a) in
the case of a payment of accrued interest on the Deposits (as defined in the
Deposit Agreement) or any Final Withdrawal, directly to the Paying Agent Account
and (b) in the case of any Purchase Withdrawal, directly to the Pass Through
Trustee or its designee as specified and in the manner provided in the
Applicable Notice of Purchase Withdrawal. The Escrow Agent hereby waives any and
all rights of set-off, combination of accounts, right of retention or similar
right (whether arising under applicable law, contract or otherwise) it may have
against amounts payable to the Paying Agent howsoever arising.
SECTION 4. OTHER ACTIONS. The Escrow Agent shall take such other
actions under or in respect of the Deposit Agreement (including, without
limitation, the enforcement of the obligations of the Depositary thereunder) as
the Investors, by an Action of Investors, may from time to time request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE ESCROW AGENT. The
Escrow Agent represents and warrants to Continental, the Investors, the Paying
Agent and the Pass Through Trustee as follows:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America;
(ii) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement and the Deposit Agreement;
(iii) the execution, delivery and performance of each of this
Agreement and the Deposit Agreement have been duly authorized by all
necessary corporate action on the part of it and do not require any
stockholder approval, or approval or consent of any trustee or holder of
any indebtedness or obligations of it, and each such document has been
duly executed and delivered by it and constitutes its legal, valid and
binding obligations enforceable against it in accordance with the terms
hereof or thereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
or equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iv) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement or the Deposit Agreement;
(v) neither the execution, delivery or performance by it of this
Agreement or the Deposit Agreement, nor compliance with the terms and
provisions hereof or thereof, conflicts or will conflict with or results
or will result in a breach or violation of any of the terms, conditions or
provisions of, or will require any consent or approval under, any law,
governmental rule or regulation or the charter documents, as amended, or
bylaws, as amended, of it or any similar instrument binding on it or any
order, writ, injunction or decree of any court or governmental authority
against it or by which it or any of its properties is bound or any
indenture, mortgage or contract or other agreement or instrument to which
it is a party or by which it or any of its properties is bound, or
constitutes or will constitute a default thereunder or results or will
result in the imposition of any lien upon any of its properties; and
(vi) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (A) would
adversely affect the ability of it to perform its obligations under this
Agreement or the Deposit Agreement or (B) would call into question or
challenge the validity of this Agreement or the Deposit Agreement or the
enforceability hereof or thereof in accordance with the terms hereof or
thereof, nor is the Escrow Agent in default with respect to any order of
any court, governmental authority, arbitration board or administrative
agency so as to adversely affect its ability to perform its obligations
under this Agreement or the Deposit Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PAYING AGENT. The
Paying Agent represents and warrants to Continental, the Investors, the Escrow
Agent and the Pass Through Trustee as follows:
(i) it is a Delaware banking company duly organized and validly
existing in good standing under the laws of its jurisdiction of
incorporation;
(ii) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
(iii) the execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action on the part of it
and does not require any stockholder approval, or approval or consent of
any trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
or equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iv) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(v) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation
of any of the terms, conditions or provisions of, or will require any
consent or approval under, any law, governmental rule or regulation or the
charter documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of
its properties is bound, or constitutes or will constitute a default
thereunder or results or will result in the imposition of any lien upon
any of its properties; and
(vi) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (A) would
adversely affect the ability of it to perform its obligations under this
Agreement or (B) would call into question or challenge the validity of
this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Paying Agent in default with respect to any order of
any court, governmental authority, arbitration board or administrative
agency so as to adversely affect its ability to perform its obligations
under this Agreement.
SECTION 7. INDEMNIFICATION. Except for actions expressly required of
the Escrow Agent or the Paying Agent hereunder, each of the Escrow Agent and the
Paying Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have been indemnified by the party requesting such
action in a manner reasonably satisfactory to it against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. In the event Continental requests any amendment to any
Operative Agreement (as defined in the Note Purchase Agreement), the Pass
Through Trustee agrees to pay all reasonable fees and expenses (including,
without limitation, fees and disbursements of counsel) of the Escrow Agent and
the Paying Agent in connection therewith.
SECTION 8. AMENDMENT, ETC. Upon request of the Pass Through Trustee
and approval by an Action of Investors, the Escrow Agent shall enter into an
amendment to this Agreement, so long as such amendment does not adversely affect
the rights or obligations of the Escrow Agent or the Paying Agent, PROVIDED that
upon request of the Pass Through Trustee and without any consent of the
Investors, the Escrow Agent shall enter into an amendment to this Agreement for
any of the following purposes:
(1) to correct or supplement any provision in this Agreement which
may be defective or inconsistent with any other provision herein or to
cure any ambiguity or correct any mistake or to modify any other provision
with respect to matters or questions arising under this Agreement,
PROVIDED that any such action shall not materially adversely affect the
interests of the Investors; or
(2) to comply with any requirement of the SEC, applicable law, rules
or regulations of any exchange or quotation system on which the
Certificates are listed or any regulatory body; or
(3) to evidence and provide for the acceptance of appointment under
this Agreement of a successor Escrow Agent, successor Paying Agent or
successor Pass Through Trustee.
SECTION 9. NOTICES. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (a) in the case of the Investors,
as their respective addresses shall appear in the Register, (b) in the case of
the Escrow Agent, First Security Bank, National Association, 79 South Main
Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), (c) in the case of the Pass Through Trustee,
Wilmington Trust Company, 1100 North Market Street, Wilmington, DE 19890,
Attention: Corporate Trust Administration (Telecopier: (302) 651-8882) or (d) in
the case of the Paying Agent, Wilmington Trust Company, 1100 North Market
Street, Wilmington, DE 19890, Attention: Corporate Trust Administration
(Telecopier: (302) 651-8882), in each case with a copy to Continental,
Continental Airlines, Inc., 2929 Allen Parkway, Suite 2010, Houston, TX 77019,
Attention: Executive Vice President and Chief Financial Officer (Telecopier:
(713) 520-6329) (or at such other address as any such party may specify from
time to time in a written notice to the other parties). On or prior to the
execution of this Agreement, the Pass Through Trustee has delivered to the
Escrow Agent a certificate containing specimen signatures of the representatives
of the Pass Through Trustee who are authorized to give notices and instructions
with respect to this Agreement. The Escrow Agent may conclusively rely on such
certificate until the Escrow Agent receives written notice from the Pass Through
Trustee to the contrary.
SECTION 10. TRANSFER. No party hereto shall be entitled to assign or
otherwise transfer this Agreement (or any interest herein) other than (in the
case of the Escrow Agent) to a successor escrow agent under Section 1.06 hereof
or (in the case of the Paying Agent) to a successor paying agent under Section
2.04 hereof, and any purported assignment in violation thereof shall be void.
This Agreement shall be binding upon the parties hereto and their respective
successors and (in the case of the Escrow Agent and the Paying Agent) their
respective permitted assigns. Upon the occurrence of the Transfer (as defined
below) contemplated by the Assignment and Assumption Agreement (as defined
below), the Pass Through Trustee shall (without further act) be deemed to have
transferred all of its right, title and interest in and to this Agreement to the
trustee of the Successor Trust (as defined below) and, thereafter, the trustee
of the Successor Trust shall be deemed to be the "Pass Through Trustee"
hereunder with the rights and obligations of the "Pass Through Trustee"
hereunder and each reference herein to "Continental Airlines Pass Through Trust
"1997-4A-O" shall be deemed to be a reference to "Continental Airlines Pass
Through Trust 1997-4A-S". The parties hereto hereby acknowledge and consent to
the Transfer contemplated by the Assignment and Assumption Agreement. As used
herein, "TRANSFER" means the transfers of the assets to the Successor Trust
contemplated by the Assignment and Assumption Agreement; "ASSIGNMENT AND
ASSUMPTION AGREEMENT" means the Assignment and Assumption Agreement to be
entered into between the Pass Through Trustee and the trustee of the Successor
Trust, substantially in the form of Exhibit C to the Trust Supplement;
"SUCCESSOR TRUST" means the Continental Airlines Pass Through Trust 1997-4A-S.
SECTION 11. ENTIRE AGREEMENT. This Agreement sets forth all of the
promises, covenants, agreements, conditions and understandings among the Escrow
Agent, the Paying Agent, the Underwriters and the Pass Through Trustee with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 13. WAIVER OF JURY TRIAL RIGHT. EACH OF THE ESCROW AGENT,
THE PAYING AGENT, THE INVESTORS AND THE PASS THROUGH TRUSTEE ACKNOWLEDGES AND
ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
SECTION 14. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one instrument.
IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the
Underwriters and the Pass Through Trustee have caused this Escrow and Paying
Agent Agreement (Class A) to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By______________________________________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED;
CREDIT SUISSE FIRST BOSTON CORPORATION;
CHASE SECURITIES INC.; and
SALOMON BROTHERS INC,
as Underwriters
By: MORGAN STANLEY & CO.
INCORPORATED
By______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as
Pass Through Trustee for and on behalf
of Continental Airlines Pass Through
Trust 1997-4A-O
By______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Paying Agent
By______________________________________
Name:
Title:
EXHIBIT A
CONTINENTAL AIRLINES 1997-4A ESCROW RECEIPT
No. ___
This Escrow Receipt evidences a fractional undivided interest in
amounts ("ACCOUNT AMOUNTS") from time to time deposited into a certain paying
agent account (the "PAYING AGENT ACCOUNT") described in the Escrow and Paying
Agent Agreement (Class A) dated as of October 23, 1997 (as amended, modified or
supplemented from time to time, the "ESCROW AND PAYING AGENT AGREEMENT") among
First Security Bank, National Association, as Escrow Agent (in such capacity,
together with its successors in such capacity, the "ESCROW AGENT"), Morgan
Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Chase
Securities Inc. and Salomon Brothers Inc, as Underwriters, Wilmington Trust
Company, as Pass Through Trustee (in such capacity, together with its successors
in such capacity, the "PASS THROUGH TRUSTEE") and Wilmington Trust Company, as
paying agent (in such capacity, together with its successors in such capacity,
the "PAYING AGENT"). Capitalized terms not defined herein shall have the
meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the Fractional Undivided Interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Continental, the Pass Through Trustee, the
Paying Agent or the Escrow Agent, except as expressly provided herein or in the
Pass Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to constitute
the Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate
to which this Escrow Receipt is attached as the owner hereof for all purposes,
and the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt
to be duly executed.
Dated: ___________________, 199__
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By______________________________________
Name:
Title:
EXHIBIT B
WITHDRAWAL CERTIFICATE
(Class A)
First Security Bank, National Association,
as Escrow Agent
Dear Sirs:
Reference is made to the Escrow and Paying Agent Agreement, dated as
of October 23, 1997 (the "Agreement"). We hereby certify to you that the
conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied. Pursuant
to Section 1.02(c) of the Agreement, please execute the attached Notice of
Withdrawal and immediately transmit by facsimile to the Depositary, at (212)
325-8319, Attention: Robert Finney and Kevin Kappell.
Very truly yours,
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Pass Through Trustee
By______________________________________
Name
Dated: _______________, 199__
EXECUTION COPY
================================================================================
ESCROW AND PAYING AGENT AGREEMENT
(Class B)
Dated as of October 23, 1997
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
CHASE SECURITIES INC.
and
SALOMON BROTHERS INC
as Underwriters
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Pass Through Trustee
for and on behalf of
Continental Airlines Pass Through Trust 1997-4B-O
as Pass Through Trustee
and
WILMINGTON TRUST COMPANY
as Paying Agent
================================================================================
TABLE OF CONTENTS
PAGE
SECTION 1. Escrow Agent ........................................... 2
Section 1.01. Appointment of Escrow Agent ............................ 2
Section 1.02. Instruction; Etc. ...................................... 3
Section 1.03. Initial Escrow Amount; Issuance of Escrow
Receipts ............................................... 3
Section 1.04. Payments to Receiptholders ............................. 4
Section 1.05. Mutilated, Destroyed, Lost or Stolen
Escrow Receipt ......................................... 4
Section 1.06. Additional Escrow Amounts .............................. 5
Section 1.07. Resignation or Removal of Escrow Agent ................. 5
Section 1.08. Persons Deemed Owners .................................. 5
Section 1.09. Further Assurances ..................................... 6
SECTION 2. Paying Agent ........................................... 6
Section 2.01. Appointment of Paying Agent ............................ 6
Section 2.02. Establishment of Paying Agent Account .................. 6
Section 2.03. Payments from Paying Agent Account ..................... 6
Section 2.04. Withholding Taxes ...................................... 7
Section 2.05. Resignation or Removal of Paying Agent ................. 8
Section 2.06. Notice of Final Withdrawal ............................. 8
SECTION 3. Payments ............................................... 9
SECTION 4. Other Actions .......................................... 9
SECTION 5. Representations and Warranties of the
Escrow Agent ........................................... 9
PAGE
SECTION 6. Representations and Warranties of the
Paying Agent ........................................... 11
SECTION 7. Indemnification ........................................ 12
SECTION 8. Amendment, Etc. ........................................ 12
SECTION 9. Notices ................................................ 13
SECTION 10. Transfer ............................................... 13
SECTION 11. Entire Agreement ....................................... 14
SECTION 12. Governing Law .......................................... 14
SECTION 13. Waiver of Jury Trial Right ............................. 14
SECTION 14. Counterparts ........................................... 14
Exhibit A Escrow Receipt
Exhibit B Withdrawal Certificate
ESCROW AND PAYING AGENT AGREEMENT (Class B) dated as of October 23,
1997 (as amended, modified or supplemented from time to time, this "AGREEMENT")
among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association,
as Escrow Agent (in such capacity, together with its successors in such
capacity, the "ESCROW AGENT"); MORGAN STANLEY & CO. INCORPORATED, CREDIT SUISSE
FIRST BOSTON CORPORATION, CHASE SECURITIES INC. and SALOMON BROTHERS INC, as
Underwriters of the Certificates referred to below (the "UNDERWRITERS" and
together with their respective transferees and assigns as registered owners of
the Certificates, the "INVESTORS") under the Underwriting Agreement referred to
below; WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity except as otherwise expressly provided herein, but solely as
trustee (in such capacity, together with its successors in such capacity, the
"PASS THROUGH TRUSTEE") under the Pass Through Trust Agreement referred to
below; and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as paying
agent hereunder (in such capacity, together with its successors in such
capacity, the "PAYING AGENT").
W I T N E S S E T H
WHEREAS, Continental Airlines, Inc. ("CONTINENTAL") and the Pass
Through Trustee have entered into a Trust Supplement, dated as of October 23,
1997 (the "TRUST SUPPLEMENT"), to the Pass Through Trust Agreement, dated as of
September 25, 1997 (together, as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "PASS THROUGH TRUST AGREEMENT")
relating to Continental Airlines Pass Through Trust 1997-4B-O (the "PASS THROUGH
TRUST") pursuant to which the Continental Airlines Pass Through Trust, Series
1997-4B-O Certificates referred to therein (the "CERTIFICATES") are being
issued;
WHEREAS, Continental and the Underwriters have entered into an
Underwriting Agreement dated as of October 16, 1997 (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"UNDERWRITING AGREEMENT") pursuant to which the Pass Through Trustee will issue
and sell the Certificates to the Underwriters;
WHEREAS, Continental, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "NOTE
PURCHASE AGREEMENT"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) equipment notes (the "EQUIPMENT
NOTES") issued to finance the acquisition of aircraft by Continental, as lessee
or as owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "NET PROCEEDS");
WHEREAS, the Underwriters and the Pass Through Trustee intend that
the Net Proceeds be held in escrow by the Escrow Agent on behalf of the
Investors, subject to withdrawal upon request by the Pass Through Trustee and
satisfaction of the conditions set forth in the Note Purchase Agreement for the
purpose of purchasing Equipment Notes, and that pending such withdrawal the Net
Proceeds be deposited on behalf of the Escrow Agent with Credit Suisse First
Boston, a Swiss Bank acting through its New York branch, as Depositary (the
"DEPOSITARY") under the Deposit Agreement, dated as of the date hereof between
the Depositary and the Escrow Agent relating to the Pass Through Trust (as
amended, modified or supplemented from time to time in accordance with the terms
thereof, the "DEPOSIT AGREEMENT") pursuant to which, among other things, the
Depositary will pay interest for distribution to the Investors and establish
accounts from which the Escrow Agent shall make withdrawals upon request of and
proper certification by the Pass Through Trustee;
WHEREAS, the Escrow Agent wishes to appoint the Paying Agent to pay
amounts required to be distributed to the Investors in accordance with this
Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Pass Through Trust Agreement.
NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. ESCROW AGENT.
Section 1.01. APPOINTMENT OF ESCROW AGENT. Each of the Underwriters,
for and on behalf of each of the Investors, hereby irrevocably appoints,
authorizes and directs the Escrow Agent to act as escrow agent and fiduciary
hereunder and under the Deposit Agreement for such specific purposes and with
such powers as are specifically delegated to the Escrow Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Escrow Agent under this
Agreement or the Deposit Agreement shall be held in escrow by the Escrow Agent
in accordance with the terms of this Agreement. This Agreement is irrevocable
and the Investors' rights with respect to any monies received and held in escrow
by the Escrow Agent under this Agreement or the Deposit Agreement shall only be
as provided under the terms and conditions of this Agreement and the Deposit
Agreement. The Escrow Agent (which term as used in this sentence shall include
reference to its affiliates and its own and its affiliates' officers, directors,
employees and agents): (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement; (b) shall not be responsible to the Pass
Through Trustee or the Investors for any recitals, statements, representations
or warranties of any person other then itself contained in this Agreement or the
Deposit Agreement or for the failure by the Pass Through Trustee, the Investors
or any other person or entity (other than the Escrow Agent) to perform any of
its obligations hereunder (whether or not the Escrow Agent shall have any
knowledge thereof); and (c) shall not be responsible for any action taken or
omitted to be taken by it hereunder or provided for herein or in connection
herewith, except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
Section 1.02. INSTRUCTION; ETC. The Underwriters, for and on behalf
of each of the Investors, hereby irrevocably instruct the Escrow Agent, and the
Escrow Agent agrees, (a) to enter into the Deposit Agreement, (b) to appoint the
Paying Agent as provided in this Agreement, (c) upon receipt at any time and
from time to time prior to the Termination Date (as defined below) of a
certificate substantially in the form of Exhibit B hereto (a "WITHDRAWAL
CERTIFICATE") executed by the Pass Through Trustee, together with an attached
Notice of Purchase Withdrawal in substantially the form of Exhibit A to the
Deposit Agreement duly completed by the Pass Through Trustee (the "APPLICABLE
NOTICE OF PURCHASE WITHDRAWAL" and the withdrawal to which it relates, a
"PURCHASE WITHDRAWAL"), immediately to execute the Applicable Notice of Purchase
Withdrawal as Escrow Agent and transmit it to the Depositary by facsimile
transmission in accordance with the Deposit Agreement; PROVIDED that, upon the
request of the Pass Through Trustee after such transmission, the Escrow Agent
shall cancel such Applicable Notice of Purchase Withdrawal, and (d) if there are
any undrawn Deposits (as defined in the Deposit Agreement) on the "TERMINATION
DATE", which shall mean the earlier of (i) June 1, 1999 (provided that, if a
labor strike occurs at The Boeing Company prior to such date (a "LABOR STRIKE"),
such date shall be extended by adding thereto the number of days that such
strike continued in effect (the "ADDITIONAL DAYS") and (ii) the day on which the
Escrow Agent receives notice from the Pass Through Trustee that the Pass Through
Trustee's obligation to purchase Equipment Notes under the Note Purchase
Agreement has terminated, to give notice to the Depositary (with a copy to the
Paying Agent) substantially in the form of Exhibit B to the Deposit Agreement
requesting a withdrawal of all of the remaining Deposits, together with accrued
and unpaid interest on such Deposits to the date of withdrawal, on the 35th day
after the date that such notice of withdrawal is given to the Depositary (or, if
not a Business Day, on the next succeeding Business Day) (a "FINAL WITHDRAWAL"),
PROVIDED that if the day scheduled for the Final Withdrawal in accordance with
the foregoing is within 10 days before or after a Regular Distribution Date,
then the Escrow Agent shall request that such requested Final Withdrawal be made
on such Regular Distribution Date (the date of such requested withdrawal, the
"FINAL WITHDRAWAL DATE"). If for any reason the Escrow Agent shall have failed
to give the Final Withdrawal Notice to the Depositary on or before June 7, 1999
(PROVIDED that if a Labor Strike occurs, such date shall be extended by the
Additional Days), and there are unwithdrawn Deposits on such date, the Final
Withdrawal Date shall be deemed to be June 30, 1999 (PROVIDED that if a Labor
Strike occurs, such date shall be extended by the Additional Days).
Section 1.03. INITIAL ESCROW AMOUNT; ISSUANCE OF ESCROW RECEIPTS.
The Escrow Agent hereby directs the Underwriters to, and the Underwriters hereby
acknowledge that on the date hereof they shall, irrevocably deliver to the
Depositary on behalf of the Escrow Agent, an amount in U.S. dollars ("DOLLARS")
and immediately available funds equal to $134,937,000 for deposit on behalf of
the Escrow Agent with the Depositary in accordance with Section 2.1 of the
Deposit Agreement. The Underwriters hereby instruct the Escrow Agent, upon
receipt of such sum from the Underwriters, to confirm such receipt by executing
and delivering to the Pass Through Trustee an Escrow Receipt in the form of
Exhibit A hereto (an "ESCROW RECEIPT"), (a) to be affixed by the Pass Through
Trustee to each Certificate and (b) to evidence the same percentage interest
(the "ESCROW INTEREST") in the Account Amounts (as defined below) as the
Fractional Undivided Interest in the Pass Through Trust evidenced by the
Certificate to which it is to be affixed. The Escrow Agent shall provide to the
Pass Through Trustee for attachment to each Certificate newly issued under and
in accordance with the Pass Through Trust Agreement an executed Escrow Receipt
as the Pass Through Trustee may from time to time request of the Escrow Agent.
Each Escrow Receipt shall be registered by the Escrow Agent in a register (the
"Register") maintained by the Escrow Agent in the same name and same manner as
the Certificate to which it is attached and may not thereafter be detached from
such Certificate to which it is to be affixed prior to the distribution of the
Final Withdrawal (the "FINAL DISTRIBUTION"). After the Final Distribution, no
additional Escrow Receipts shall be issued and the Pass Through Trustee shall
request the return to the Escrow Agent for cancellation of all outstanding
Escrow Receipts.
Section 1.04. PAYMENTS TO RECEIPTHOLDERS. All payments and
distributions made to holders of an Escrow Receipt (collectively
"RECEIPTHOLDERS") in respect of the Escrow Receipt shall be made only from
amounts deposited in the Paying Agent Account (as defined below) ("ACCOUNT
AMOUNTS"). Each Receiptholder, by its acceptance of an Escrow Receipt, agrees
that (a) it will look solely to the Account Amounts for any payment or
distribution due to such Receiptholder pursuant to the terms of the Escrow
Receipt and this Agreement and (b) it will have no recourse to Continental, the
Pass Through Trustee, the Paying Agent or the Escrow Agent, except as expressly
provided herein or in the Pass Through Trust Agreement. No Receiptholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account or the obligations of the parties hereto,
nor shall anything set forth herein, or contained in the terms of the Escrow
Receipt, be construed so as to constitute the Receiptholders from time to time
as partners or members of an association.
Section 1.05. MUTILATED, DESTROYED, LOST OR STOLEN ESCROW RECEIPT.
If (a) any mutilated Escrow Receipt is surrendered to the Escrow Agent or the
Escrow Agent receives evidence to its satisfaction of the destruction, loss or
theft of any Escrow Receipt and (b) there is delivered to the Escrow Agent and
the Pass Through Trustee such security, indemnity or bond, as may be required by
them to hold each of them harmless, then, absent notice to the Escrow Agent or
the Pass Through Trustee that such destroyed, lost or stolen Escrow Receipt has
been acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the Uniform Commercial Code in effect in any applicable
jurisdiction are met, the Escrow Agent shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Escrow Receipt, a new Escrow Receipt or Escrow Receipts and of like Escrow
Interest in the Account Amounts and bearing a number not contemporaneously
outstanding.
In connection with the issuance of any new Escrow Receipt under this
Section 1.05, the Escrow Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Pass
Through Trustee and the Escrow Agent) connected therewith.
Any duplicate Escrow Receipt issued pursuant to this Section 1.05
shall constitute conclusive evidence of the appropriate Escrow Interest in the
Account Amounts, as if originally issued, whether or not the lost, stolen or
destroyed Escrow Receipt shall be found at any time.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Escrow Receipts.
Section 1.06. ADDITIONAL ESCROW AMOUNTS. On the date of any
Purchase Withdrawal, the Pass Through Trustee may re-deposit with the
Depositary some or all of the amounts so withdrawn in accordance with Section
2.4 of the Deposit Agreement.
Section 1.07. RESIGNATION OR REMOVAL OF ESCROW AGENT. Subject to the
appointment and acceptance of a successor Escrow Agent as provided below, the
Escrow Agent may resign at any time by giving 30 days' prior written notice
thereof to the Investors, but may not otherwise be removed except for cause by
the written consent of the Investors with respect to Investors representing
Escrow Interests aggregating not less than a majority in interest in the Account
Amounts (an "ACTION OF INVESTORS"). Upon any such resignation or removal, the
Investors, by an Action of Investors, shall have the right to appoint a
successor Escrow Agent. If no successor Escrow Agent shall have been so
appointed and shall have accepted such appointment within 30 days after the
retiring Escrow Agent's giving of notice of resignation or the removal of the
retiring Escrow Agent, then the retiring Escrow Agent may appoint a successor
Escrow Agent. Any successor Escrow Agent shall be a bank which has an office in
the United States with a combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Escrow Agent hereunder by a successor
Escrow Agent, such successor Escrow Agent shall enter into such documents as the
Pass Through Trustee shall require and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Escrow
Agent, and the retiring Escrow Agent shall be discharged from its duties and
obligations hereunder. No resignation or removal of the Escrow Agent shall be
effective unless a written confirmation shall have been obtained from each of
Moody's Investors Service, Inc. and Standard & Poor's Rating Group, a division
of McGraw-Hill Inc., that the replacement of the Escrow Agent with the successor
Escrow Agent will not result in (a) a reduction of the rating for the
Certificates below the then current rating for the Certificates or (b) a
withdrawal or suspension of the rating of the Certificates.
Section 1.08. PERSONS DEEMED OWNERS. Prior to due presentment of a
Certificate for registration of transfer, the Escrow Agent and the Paying Agent
may treat the Person in whose name any Escrow Receipt is registered (as of the
day of determination) as the owner of such Escrow Receipt for the purpose of
receiving distributions pursuant to this Agreement and for all other purposes
whatsoever, and neither the Escrow Agent nor the Paying Agent shall be affected
by any notice to the contrary.
Section 1.09. FURTHER ASSURANCES. The Escrow Agent agrees to take
such actions, and execute such other documents, as may be reasonably requested
by the Pass Through Trustee in order to effectuate the purposes of this
Agreement and the performance by the Escrow Agent of its obligations hereunder.
SECTION 2. PAYING AGENT.
Section 2.01. APPOINTMENT OF PAYING AGENT. The Escrow Agent hereby
irrevocably appoints and authorizes the Paying Agent to act as its paying agent
hereunder, for the benefit of the Investors, for such specific purposes and with
such powers as are specifically delegated to the Paying Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Paying Agent under this
Agreement or the Deposit Agreement shall be held in the Paying Agent Account for
the benefit of the Investors. The Paying Agent (which term as used in this
sentence shall include reference to its affiliates and its own and its
affiliates' officers, directors, employees and agents): (a) shall have no duties
or responsibilities except those expressly set forth in this Agreement, and
shall not by reason of this Agreement be a trustee for the Escrow Agent; (b)
shall not be responsible to the Escrow Agent for any recitals, statements,
representations or warranties of any person other then itself contained in this
Agreement or for the failure by the Escrow Agent or any other person or entity
(other than the Paying Agent) to perform any of its obligations hereunder
(whether or not the Paying Agent shall have any knowledge thereof); and (c)
shall not be responsible for any action taken or omitted to be taken by it
hereunder or provided for herein or in connection herewith, except for its own
willful misconduct or gross negligence (or simple negligence in connection with
the handling of funds).
Section 2.02. ESTABLISHMENT OF PAYING AGENT ACCOUNT. The Paying
Agent shall establish a deposit account (the "PAYING AGENT ACCOUNT") at
Wilmington Trust Company in the name of the Escrow Agent. It is expressly
understood by the parties hereto that the Paying Agent is acting as the paying
agent of the Escrow Agent hereunder and that no amounts on deposit in the Paying
Agent Account constitute part of the Trust Property.
Section 2.03. PAYMENTS FROM PAYING AGENT ACCOUNT. The Escrow Agent
hereby irrevocably instructs the Paying Agent, and the Paying Agent agrees to
act, as follows:
(a) On each Interest Payment Date (as defined in the Deposit
Agreement) or as soon thereafter as the Paying Agent has confirmed receipt
in the Paying Agent Account from the Depositary of any amount in respect
of accrued interest on the Deposits, the Paying Agent shall distribute out
of the Paying Agent Account the entire amount deposited therein by the
Depositary. There shall be so distributed to each Receiptholder of record
on the 15th day (whether or not a Business Day) preceding such Interest
Payment Date by check mailed to such Receiptholder, at the address
appearing in the Register, such Receiptholder's pro rata share (based on
the Escrow Interest in the Account Amounts held by such Receiptholder) of
the total amount of interest deposited by the Depositary in the Paying
Agent Account on such date, except that, with respect to Escrow Receipts
registered on the Record Date in the name of DTC, such distribution shall
be made by wire transfer in immediately available funds to the account
designated by DTC.
(b) Upon the confirmation by the Paying Agent of receipt in the
Paying Agent Account from the Depositary of any amount in respect of the
Final Withdrawal, the Paying Agent shall forthwith distribute the entire
amount of the Final Withdrawal deposited therein by the Depositary. There
shall be so distributed to each Receiptholder of record on the 15th day
(whether or not a Business Day) preceding the Final Withdrawal Date by
check mailed to such Receiptholder, at the address appearing in the
Register, such Receiptholder's pro rata share (based on the Escrow
Interest in the Account Amounts held by such Receiptholder) of the total
amount in the Paying Agent Account on account of such Final Withdrawal,
except that, with respect to Escrow Receipts registered on the Record Date
in the name of DTC, such distribution shall be made by wire transfer in
immediately available funds to the account designated by DTC.
(c) If any payment of interest or principal in respect of the Final
Withdrawal is not received by the Paying Agent within five days of the
applicable date when due, then it shall be distributed to Receiptholders
after actual receipt by the Paying Agent on the same basis as a Special
Payment is distributed under the Pass Through Trust Agreement.
(d) The Paying Agent shall include with any check mailed pursuant to
this Section any notice required to be distributed under the Pass Through
Trust Agreement that is furnished to the Paying Agent by the Pass Through
Trustee.
Section 2.04. WITHHOLDING TAXES. The Paying Agent shall exclude and
withhold from each distribution of accrued interest on the Deposits (as defined
in the Deposit Agreement) and any amount in respect of the Final Withdrawal any
and all withholding taxes applicable thereto as required by law. [In addition,
the Paying Agent shall remit or cause to be remitted such amounts as would be
required by Section 1446 of the Internal Revenue Code of 1986, as amended, as if
the agreements of the Underwriters set forth in this Agreement were
characterized as a partnership engaged in a U.S. trade or business for U.S.
federal income tax purposes and shall withhold or cause to be withheld such
amounts from amounts distributable to or for the benefit of Receiptholders or
beneficial owners of interests in Escrow Receipts that are not United States
persons within the meaning of section 7701(a)(30) of the Internal Revenue Code
of 1986, as amended ("NON-U.S. PERSONS"). In this regard, the Paying Agent shall
cause the appropriate withholding agent to withhold with respect to such
distributions in the manner contemplated by Section 10.04 of Revenue Procedure
89-31 and Treasury Regulation 1.1445-8(b)(3)) by filing a notice with the
National Association of Securities Dealers, Inc. substantially in the form of
Exhibits C and D on or before the date 10 days prior to the Record Date. The
Paying Agent shall mail such notice to the National Association of Securities
Dealers no later than the date 15 days prior to the Record Date. Investors that
are not United States Persons agree to furnish a taxpayer identification number
("TIN") to the Paying Agent and the Paying Agent shall provide such TINs to the
appropriate U.S. withholding agent.] The Paying Agent agrees to act as such
withholding agent [(except to the extent contemplated above with respect to
withholding amounts as if the agreements of the Underwriters as set forth in
this Agreement were characterized as a business engaged in a U.S. trade or
business for U.S. federal income tax purposes)] and, in connection therewith,
whenever any present or future taxes or similar charges are required to be
withheld with respect to any amounts payable in respect of the Deposits (as
defined in the Deposit Agreement) or the escrow amounts, to withhold such
amounts and timely pay the same to the appropriate authority in the name of and
on behalf of the Receiptholders, that it will file any necessary withholding tax
returns or statements when due, and that, as promptly as possible after the
payment thereof, it will deliver to each such Receiptholder appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such Receiptholder may reasonably request from time to
time. The Paying Agent agrees to file any other information reports as it may be
required to file under United States law. [Each Receiptholder or beneficial
owner of an interest in an Escrow Receipt that is a Non-U.S. Person, by its
acceptance of an Escrow Receipt or a beneficial interest therein, agrees to
indemnify and hold harmless the Escrow Agent and the Paying Agent from and
against any improper failure to withhold Taxes from amounts payable to it or for
its benefit other than an improper failure attributable to the gross negligence
or willful misconduct of the Escrow Agent or the Paying Agent, as the case may
be.]
Section 2.05. RESIGNATION OR REMOVAL OF PAYING AGENT. Subject to the
appointment and acceptance of a successor Paying Agent as provided below, the
Paying Agent may resign at any time by giving 30 days' prior written notice
thereof to the Escrow Agent, but may not otherwise be removed except for cause
by the Escrow Agent. Upon any such resignation or removal, the Escrow Agent
shall have the right to appoint a successor Paying Agent. If no successor Paying
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Paying Agent's giving of notice of resignation
or the removal of the retiring Paying Agent, then the retiring Paying Agent may
appoint a successor Paying Agent. Any Successor Paying Agent shall be a bank
which has an office in the United States with a combined capital and surplus of
at least $100,000,000. Upon the acceptance of any appointment as Paying Agent
hereunder by a successor Paying Agent, such successor Paying Agent shall enter
into such documents as the Escrow Agent shall require and shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Paying Agent, and the retiring Paying Agent shall be discharged
from its duties and obligations hereunder.
Section 2.06. NOTICE OF FINAL WITHDRAWAL. Promptly after receipt by
the Paying Agent of notice that the Escrow Agent has requested a Final
Withdrawal or that a Final Withdrawal will be made, the Paying Agent shall cause
notice of the distribution of the Final Withdrawal to be mailed to each of the
Receiptholders at its address as it appears in the Register. Such notice shall
be mailed not less than 15 days prior to the Final Withdrawal Date. Such notice
shall set forth:
(i) the Final Withdrawal Date and the date for determining
Receiptholders of record who shall be entitled to receive distributions in
respect of the Final Withdrawal,
(ii) the amount of the payment in respect of the Final Withdrawal
for each $1,000 face amount Certificate (based on information provided by
the Pass Through Trustee) and the amount thereof constituting unused
Deposits (as defined in the Deposit Agreement) and interest thereon, and
(iii) if the Final Withdrawal Date is the same date as a Regular
Distribution Date, the total amount to be received on such date for each
$1,000 face amount Certificate (based on information provided by the Pass
Through Trustee).
Such mailing may include any notice required to be given to
Certificateholders in connection with such distribution pursuant to the Pass
Through Trust Agreement.
SECTION 3. PAYMENTS. If, notwithstanding the instructions in Section
4 of the Deposit Agreement that all amounts payable to the Escrow Agent under
the Deposit Agreement be paid by the Depositary directly to the Paying Agent or
the Pass Through Trustee (depending on the circumstances), the Escrow Agent
receives any payment thereunder, then the Escrow Agent shall forthwith pay such
amount in Dollars and in immediately available funds by wire transfer to (a) in
the case of a payment of accrued interest on the Deposits (as defined in the
Deposit Agreement) or any Final Withdrawal, directly to the Paying Agent Account
and (b) in the case of any Purchase Withdrawal, directly to the Pass Through
Trustee or its designee as specified and in the manner provided in the
Applicable Notice of Purchase Withdrawal. The Escrow Agent hereby waives any and
all rights of set-off, combination of accounts, right of retention or similar
right (whether arising under applicable law, contract or otherwise) it may have
against amounts payable to the Paying Agent howsoever arising.
SECTION 4. OTHER ACTIONS. The Escrow Agent shall take such other
actions under or in respect of the Deposit Agreement (including, without
limitation, the enforcement of the obligations of the Depositary thereunder) as
the Investors, by an Action of Investors, may from time to time request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE ESCROW AGENT. The
Escrow Agent represents and warrants to Continental, the Investors, the Paying
Agent and the Pass Through Trustee as follows:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America;
(ii) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement and the Deposit Agreement;
(iii) the execution, delivery and performance of each of this
Agreement and the Deposit Agreement have been duly authorized by all
necessary corporate action on the part of it and do not require any
stockholder approval, or approval or consent of any trustee or holder of
any indebtedness or obligations of it, and each such document has been
duly executed and delivered by it and constitutes its legal, valid and
binding obligations enforceable against it in accordance with the terms
hereof or thereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
or equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iv) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement or the Deposit Agreement;
(v) neither the execution, delivery or performance by it of this
Agreement or the Deposit Agreement, nor compliance with the terms and
provisions hereof or thereof, conflicts or will conflict with or results
or will result in a breach or violation of any of the terms, conditions or
provisions of, or will require any consent or approval under, any law,
governmental rule or regulation or the charter documents, as amended, or
bylaws, as amended, of it or any similar instrument binding on it or any
order, writ, injunction or decree of any court or governmental authority
against it or by which it or any of its properties is bound or any
indenture, mortgage or contract or other agreement or instrument to which
it is a party or by which it or any of its properties is bound, or
constitutes or will constitute a default thereunder or results or will
result in the imposition of any lien upon any of its properties; and
(vi) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (A) would
adversely affect the ability of it to perform its obligations under this
Agreement or the Deposit Agreement or (B) would call into question or
challenge the validity of this Agreement or the Deposit Agreement or the
enforceability hereof or thereof in accordance with the terms hereof or
thereof, nor is the Escrow Agent in default with respect to any order of
any court, governmental authority, arbitration board or administrative
agency so as to adversely affect its ability to perform its obligations
under this Agreement or the Deposit Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PAYING AGENT. The
Paying Agent represents and warrants to Continental, the Investors, the Escrow
Agent and the Pass Through Trustee as follows:
(i) it is a Delaware banking company duly organized and validly
existing in good standing under the laws of its jurisdiction of
incorporation;
(ii) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
(iii) the execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action on the part of it
and does not require any stockholder approval, or approval or consent of
any trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
or equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iv) no authorization, consent or approval of or other action by,
and no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(v) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation
of any of the terms, conditions or provisions of, or will require any
consent or approval under, any law, governmental rule or regulation or the
charter documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of
its properties is bound, or constitutes or will constitute a default
thereunder or results or will result in the imposition of any lien upon
any of its properties; and
(vi) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (A) would
adversely affect the ability of it to perform its obligations under this
Agreement or (B) would call into question or challenge the validity of
this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Paying Agent in default with respect to any order of
any court, governmental authority, arbitration board or administrative
agency so as to adversely affect its ability to perform its obligations
under this Agreement.
SECTION 7. INDEMNIFICATION. Except for actions expressly required of
the Escrow Agent or the Paying Agent hereunder, each of the Escrow Agent and the
Paying Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have been indemnified by the party requesting such
action in a manner reasonably satisfactory to it against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. In the event Continental requests any amendment to any
Operative Agreement (as defined in the Note Purchase Agreement), the Pass
Through Trustee agrees to pay all reasonable fees and expenses (including,
without limitation, fees and disbursements of counsel) of the Escrow Agent and
the Paying Agent in connection therewith.
SECTION 8. AMENDMENT, ETC. Upon request of the Pass Through Trustee
and approval by an Action of Investors, the Escrow Agent shall enter into an
amendment to this Agreement, so long as such amendment does not adversely affect
the rights or obligations of the Escrow Agent or the Paying Agent, PROVIDED that
upon request of the Pass Through Trustee and without any consent of the
Investors, the Escrow Agent shall enter into an amendment to this Agreement for
any of the following purposes:
(1) to correct or supplement any provision in this Agreement which
may be defective or inconsistent with any other provision herein or to
cure any ambiguity or correct any mistake or to modify any other provision
with respect to matters or questions arising under this Agreement,
PROVIDED that any such action shall not materially adversely affect the
interests of the Investors; or
(2) to comply with any requirement of the SEC, applicable law, rules
or regulations of any exchange or quotation system on which the
Certificates are listed or any regulatory body; or
(3) to evidence and provide for the acceptance of appointment under
this Agreement of a successor Escrow Agent, successor Paying Agent or
successor Pass Through Trustee.
SECTION 9. NOTICES. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (a) in the case of the Investors,
as their respective addresses shall appear in the Register, (b) in the case of
the Escrow Agent, First Security Bank, National Association, 79 South Main
Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), (c) in the case of the Pass Through Trustee,
Wilmington Trust Company, 1100 North Market Street, Wilmington, DE 19890,
Attention: Corporate Trust Administration (Telecopier: (302) 651-8882) or (d) in
the case of the Paying Agent, Wilmington Trust Company, 1100 North Market
Street, Wilmington, DE 19890, Attention: Corporate Trust Administration
(Telecopier: (302) 651-8882), in each case with a copy to Continental,
Continental Airlines, Inc., 2929 Allen Parkway, Suite 2010, Houston, TX 77019,
Attention: Executive Vice President and Chief Financial Officer (Telecopier:
(713) 520-6329) (or at such other address as any such party may specify from
time to time in a written notice to the other parties). On or prior to the
execution of this Agreement, the Pass Through Trustee has delivered to the
Escrow Agent a certificate containing specimen signatures of the representatives
of the Pass Through Trustee who are authorized to give notices and instructions
with respect to this Agreement. The Escrow Agent may conclusively rely on such
certificate until the Escrow Agent receives written notice from the Pass Through
Trustee to the contrary.
SECTION 10. TRANSFER. No party hereto shall be entitled to assign or
otherwise transfer this Agreement (or any interest herein) other than (in the
case of the Escrow Agent) to a successor escrow agent under Section 1.06 hereof
or (in the case of the Paying Agent) to a successor paying agent under Section
2.04 hereof, and any purported assignment in violation thereof shall be void.
This Agreement shall be binding upon the parties hereto and their respective
successors and (in the case of the Escrow Agent and the Paying Agent) their
respective permitted assigns. Upon the occurrence of the Transfer (as defined
below) contemplated by the Assignment and Assumption Agreement (as defined
below), the Pass Through Trustee shall (without further act) be deemed to have
transferred all of its right, title and interest in and to this Agreement to the
trustee of the Successor Trust (as defined below) and, thereafter, the trustee
of the Successor Trust shall be deemed to be the "Pass Through Trustee"
hereunder with the rights and obligations of the "Pass Through Trustee"
hereunder and each reference herein to "Continental Airlines Pass Through Trust
"1997-4B-O" shall be deemed to be a reference to "Continental Airlines Pass
Through Trust 1997-4B-S". The parties hereto hereby acknowledge and consent to
the Transfer contemplated by the Assignment and Assumption Agreement. As used
herein, "TRANSFER" means the transfers of the assets to the Successor Trust
contemplated by the Assignment and Assumption Agreement; "ASSIGNMENT AND
ASSUMPTION AGREEMENT" means the Assignment and Assumption Agreement to be
entered into between the Pass Through Trustee and the trustee of the Successor
Trust, substantially in the form of Exhibit D to the Trust Supplement;
"SUCCESSOR TRUST" means the Continental Airlines Pass Through Trust 1997-4B-S.
SECTION 11. ENTIRE AGREEMENT. This Agreement sets forth all of the
promises, covenants, agreements, conditions and understandings among the Escrow
Agent, the Paying Agent, the Underwriters and the Pass Through Trustee with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 13. WAIVER OF JURY TRIAL RIGHT. EACH OF THE ESCROW AGENT,
THE PAYING AGENT, THE INVESTORS AND THE PASS THROUGH TRUSTEE ACKNOWLEDGES AND
ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
SECTION 14. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one instrument.
IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the
Underwriters and the Pass Through Trustee have caused this Escrow and Paying
Agent Agreement (Class B) to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By______________________________________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED;
CREDIT SUISSE FIRST BOSTON CORPORATION;
CHASE SECURITIES INC.; and
SALOMON BROTHERS INC,
as Underwriters
By: MORGAN STANLEY & CO.
INCORPORATED
By_________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as
Pass Through Trustee for and on behalf
of Continental Airlines Pass Through
Trust 1997-4B-O
By______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Paying Agent
By______________________________________
Name:
Title:
EXHIBIT A
CONTINENTAL AIRLINES 1997-4B ESCROW RECEIPT
No. __
This Escrow Receipt evidences a fractional undivided interest in
amounts ("ACCOUNT AMOUNTS") from time to time deposited into a certain paying
agent account (the "PAYING AGENT ACCOUNT") described in the Escrow and Paying
Agent Agreement (Class B) dated as of October 23, 1997 (as amended, modified or
supplemented from time to time, the "ESCROW AND PAYING AGENT AGREEMENT") among
First Security Bank, National Association, as Escrow Agent (in such capacity,
together with its successors in such capacity, the "ESCROW AGENT"), Morgan
Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Chase
Securities Inc. and Salomon Brothers Inc, as Underwriters, Wilmington Trust
Company, as Pass Through Trustee (in such capacity, together with its successors
in such capacity, the "PASS THROUGH TRUSTEE") and Wilmington Trust Company, as
paying agent (in such capacity, together with its successors in such capacity,
the "PAYING AGENT"). Capitalized terms not defined herein shall have the
meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the Fractional Undivided Interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Continental, the Pass Through Trustee, the
Paying Agent or the Escrow Agent, except as expressly provided herein or in the
Pass Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to constitute
the Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate
to which this Escrow Receipt is attached as the owner hereof for all purposes,
and the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt
to be duly executed.
Dated: _____________, 199__
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By______________________________________
Name:
Title:
EXHIBIT B
WITHDRAWAL CERTIFICATE
(Class B)
First Security Bank, National Association,
as Escrow Agent
Dear Sirs:
Reference is made to the Escrow and Paying Agent Agreement, dated as
of October 23, 1997 (the "Agreement"). We hereby certify to you that the
conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied. Pursuant
to Section 1.02(c) of the Agreement, please execute the attached Notice of
Withdrawal and immediately transmit by facsimile to the Depositary, at (212)
325-8319, Attention: Robert Finney and Kevin Kappell.
Very truly yours,
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Pass Through Trustee
By___________________________________________
Name
Dated: _____________, 199__
EXECUTION COPY
================================================================================
ESCROW AND PAYING AGENT AGREEMENT
(Class C)
Dated as of October 23, 1997
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
MORGAN STANLEY & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
CHASE SECURITIES INC.
and
SALOMON BROTHERS INC
as Underwriters
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Pass Through Trustee
for and on behalf of
Continental Airlines Pass Through Trust 1997-4C-O
as Pass Through Trustee
and
WILMINGTON TRUST COMPANY
as Paying Agent
================================================================================
TABLE OF CONTENTS
PAGE
----
SECTION 1. Escrow Agent.......................................... 2
Section 1.01. Appointment of Escrow Agent........................... 2
Section 1.02. Instruction; Etc...................................... 3
Section 1.03. Initial Escrow Amount; Issuance of Escrow Receipts.... 3
Section 1.04. Payments to Receiptholders............................ 4
Section 1.05. Mutilated, Destroyed, Lost or Stolen Escrow Receipt... 4
Section 1.06. Additional Escrow Amounts............................. 5
Section 1.07. Resignation or Removal of Escrow Agent................ 5
Section 1.08. Persons Deemed Owners................................. 5
Section 1.09. Further Assurances.................................... 6
SECTION 2. Paying Agent.......................................... 6
Section 2.01. Appointment of Paying Agent........................... 6
Section 2.02. Establishment of Paying Agent Account................. 6
Section 2.03. Payments from Paying Agent Account.................... 6
Section 2.04. Withholding Taxes..................................... 7
Section 2.05. Resignation or Removal of Paying Agent................ 8
Section 2.06. Notice of Final Withdrawal............................ 8
SECTION 3. Payments.............................................. 9
SECTION 4. Other Actions......................................... 9
SECTION 5. Representations and Warranties of the Escrow Agent.... 9
PAGE
----
SECTION 6. Representations and Warranties of the Paying Agent.... 11
SECTION 7. Indemnification....................................... 12
SECTION 8. Amendment, Etc........................................ 12
SECTION 9. Notices............................................... 13
SECTION 10. Transfer.............................................. 13
SECTION 11. Entire Agreement...................................... 14
SECTION 12. Governing Law......................................... 14
SECTION 13. Waiver of Jury Trial Right............................ 14
SECTION 14. Counterparts.......................................... 14
Exhibit A Escrow Receipt
Exhibit B Withdrawal Certificate
ESCROW AND PAYING AGENT AGREEMENT (Class C) dated as of October 23,
1997 (as amended, modified or supplemented from time to time, this "AGREEMENT")
among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association,
as Escrow Agent (in such capacity, together with its successors in such
capacity, the "ESCROW AGENT"); MORGAN STANLEY & CO. INCORPORATED, CREDIT SUISSE
FIRST BOSTON CORPORATION, CHASE SECURITIES INC. and SALOMON BROTHERS INC, as
Underwriters of the Certificates referred to below (the "UNDERWRITERS" and
together with their respective transferees and assigns as registered owners of
the Certificates, the "INVESTORS") under the Underwriting Agreement referred to
below; WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity except as otherwise expressly provided herein, but solely as
trustee (in such capacity, together with its successors in such capacity, the
"PASS THROUGH TRUSTEE") under the Pass Through Trust Agreement referred to
below; and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as paying
agent hereunder (in such capacity, together with its successors in such
capacity, the "PAYING AGENT").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Continental Airlines, Inc. ("CONTINENTAL") and the Pass
Through Trustee have entered into a Trust Supplement, dated as of October 23,
1997 (the "TRUST SUPPLEMENT"), to the Pass Through Trust Agreement, dated as of
September 25, 1997 (together, as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "PASS THROUGH TRUST AGREEMENT")
relating to Continental Airlines Pass Through Trust 1997-4C-O (the "PASS THROUGH
TRUST") pursuant to which the Continental Airlines Pass Through Trust, Series
1997-4C-O Certificates referred to therein (the "CERTIFICATES") are being
issued;
WHEREAS, Continental and the Underwriters have entered into an
Underwriting Agreement dated as of October 16, 1997 (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"UNDERWRITING AGREEMENT") pursuant to which the Pass Through Trustee will issue
and sell the Certificates to the Underwriters;
WHEREAS, Continental, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "NOTE
PURCHASE AGREEMENT"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) equipment notes (the "EQUIPMENT
NOTES") issued to finance the acquisition of aircraft by Continental, as lessee
or as owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "NET PROCEEDS");
WHEREAS, the Underwriters and the Pass Through Trustee intend that the
Net Proceeds be held in escrow by the Escrow Agent on behalf of the Investors,
subject to withdrawal upon request by the Pass Through Trustee and satisfaction
of the conditions set forth in the Note Purchase Agreement for the purpose of
purchasing Equipment Notes, and that pending such withdrawal the Net Proceeds be
deposited on behalf of the Escrow Agent with Credit Suisse First Boston, a Swiss
Bank acting through its New York branch, as Depositary (the "DEPOSITARY") under
the Deposit Agreement, dated as of the date hereof between the Depositary and
the Escrow Agent relating to the Pass Through Trust (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"DEPOSIT AGREEMENT") pursuant to which, among other things, the Depositary will
pay interest for distribution to the Investors and establish accounts from which
the Escrow Agent shall make withdrawals upon request of and proper certification
by the Pass Through Trustee;
WHEREAS, the Escrow Agent wishes to appoint the Paying Agent to pay
amounts required to be distributed to the Investors in accordance with this
Agreement; and
WHEREAS, capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Pass Through Trust Agreement.
NOW, THEREFORE, in consideration of the obligations contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. ESCROW AGENT.
Section 1.01. APPOINTMENT OF ESCROW AGENT. Each of the Underwriters,
for and on behalf of each of the Investors, hereby irrevocably appoints,
authorizes and directs the Escrow Agent to act as escrow agent and fiduciary
hereunder and under the Deposit Agreement for such specific purposes and with
such powers as are specifically delegated to the Escrow Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Escrow Agent under this
Agreement or the Deposit Agreement shall be held in escrow by the Escrow Agent
in accordance with the terms of this Agreement. This Agreement is irrevocable
and the Investors' rights with respect to any monies received and held in escrow
by the Escrow Agent under this Agreement or the Deposit Agreement shall only be
as provided under the terms and conditions of this Agreement and the Deposit
Agreement. The Escrow Agent (which term as used in this sentence shall include
reference to its affiliates and its own and its affiliates' officers, directors,
employees and agents): (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement; (b) shall not be responsible to the Pass
Through Trustee or the Investors for any recitals, statements, representations
or warranties of any person other then itself contained in this Agreement or the
Deposit Agreement or for the failure by the Pass Through Trustee, the Investors
or any other person or entity (other than the Escrow Agent) to perform any of
its obligations hereunder (whether or not the Escrow Agent shall have any
knowledge thereof); and (c) shall not be responsible for any action taken or
omitted to be taken by it hereunder or provided for herein or in connection
herewith, except for its own willful misconduct or gross negligence (or simple
negligence in connection with the handling of funds).
Section 1.02. INSTRUCTION; ETC. The Underwriters, for and on behalf of
each of the Investors, hereby irrevocably instruct the Escrow Agent, and the
Escrow Agent agrees, (a) to enter into the Deposit Agreement, (b) to appoint the
Paying Agent as provided in this Agreement, (c) upon receipt at any time and
from time to time prior to the Termination Date (as defined below) of a
certificate substantially in the form of Exhibit B hereto (a "WITHDRAWAL
CERTIFICATE") executed by the Pass Through Trustee, together with an attached
Notice of Purchase Withdrawal in substantially the form of Exhibit A to the
Deposit Agreement duly completed by the Pass Through Trustee (the "APPLICABLE
NOTICE OF PURCHASE WITHDRAWAL" and the withdrawal to which it relates, a
"PURCHASE WITHDRAWAL"), immediately to execute the Applicable Notice of Purchase
Withdrawal as Escrow Agent and transmit it to the Depositary by facsimile
transmission in accordance with the Deposit Agreement; PROVIDED that, upon the
request of the Pass Through Trustee after such transmission, the Escrow Agent
shall cancel such Applicable Notice of Purchase Withdrawal, and (d) if there are
any undrawn Deposits (as defined in the Deposit Agreement) on the "TERMINATION
DATE", which shall mean the earlier of (i) June 1, 1999 (provided that, if a
labor strike occurs at The Boeing Company prior to such date (a "LABOR STRIKE"),
such date shall be extended by adding thereto the number of days that such
strike continued in effect (the "ADDITIONAL DAYS") and (ii) the day on which the
Escrow Agent receives notice from the Pass Through Trustee that the Pass Through
Trustee's obligation to purchase Equipment Notes under the Note Purchase
Agreement has terminated, to give notice to the Depositary (with a copy to the
Paying Agent) substantially in the form of Exhibit B to the Deposit Agreement
requesting a withdrawal of all of the remaining Deposits, together with accrued
and unpaid interest on such Deposits to the date of withdrawal, on the 35th day
after the date that such notice of withdrawal is given to the Depositary (or, if
not a Business Day, on the next succeeding Business Day) (a "FINAL WITHDRAWAL"),
PROVIDED that if the day scheduled for the Final Withdrawal in accordance with
the foregoing is within 10 days before or after a Regular Distribution Date,
then the Escrow Agent shall request that such requested Final Withdrawal be made
on such Regular Distribution Date (the date of such requested withdrawal, the
"FINAL WITHDRAWAL DATE"). If for any reason the Escrow Agent shall have failed
to give the Final Withdrawal Notice to the Depositary on or before June 7, 1999
(PROVIDED that if a Labor Strike occurs, such date shall be extended by the
Additional Days), and there are unwithdrawn Deposits on such date, the Final
Withdrawal Date shall be deemed to be June 30, 1999 (PROVIDED that if a Labor
Strike occurs, such date shall be extended by the Additional Days).
Section 1.03. INITIAL ESCROW AMOUNT; ISSUANCE OF ESCROW RECEIPTS. The
Escrow Agent hereby directs the Underwriters to, and the Underwriters hereby
acknowledge that on the date hereof they shall, irrevocably deliver to the
Depositary on behalf of the Escrow Agent, an amount in U.S. dollars ("DOLLARS")
and immediately available funds equal to $111,112,000 for deposit on behalf of
the Escrow Agent with the Depositary in accordance with Section 2.1 of the
Deposit Agreement. The Underwriters hereby instruct the Escrow Agent, upon
receipt of such sum from the Underwriters, to confirm such receipt by executing
and delivering to the Pass Through Trustee an Escrow Receipt in the form of
Exhibit A hereto (an "ESCROW RECEIPT"), (a) to be affixed by the Pass Through
Trustee to each Certificate and (b) to evidence the same percentage interest
(the "ESCROW INTEREST") in the Account Amounts (as defined below) as the
Fractional Undivided Interest in the Pass Through Trust evidenced by the
Certificate to which it is to be affixed. The Escrow Agent shall provide to the
Pass Through Trustee for attachment to each Certificate newly issued under and
in accordance with the Pass Through Trust Agreement an executed Escrow Receipt
as the Pass Through Trustee may from time to time request of the Escrow Agent.
Each Escrow Receipt shall be registered by the Escrow Agent in a register (the
"REGISTER") maintained by the Escrow Agent in the same name and same manner as
the Certificate to which it is attached and may not thereafter be detached from
such Certificate to which it is to be affixed prior to the distribution of the
Final Withdrawal (the "FINAL DISTRIBUTION"). After the Final Distribution, no
additional Escrow Receipts shall be issued and the Pass Through Trustee shall
request the return to the Escrow Agent for cancellation of all outstanding
Escrow Receipts.
Section 1.04. PAYMENTS TO RECEIPTHOLDERS. All payments and
distributions made to holders of an Escrow Receipt (collectively
"RECEIPTHOLDERS") in respect of the Escrow Receipt shall be made only from
amounts deposited in the Paying Agent Account (as defined below) ("ACCOUNT
AMOUNTS"). Each Receiptholder, by its acceptance of an Escrow Receipt, agrees
that (a) it will look solely to the Account Amounts for any payment or
distribution due to such Receiptholder pursuant to the terms of the Escrow
Receipt and this Agreement and (b) it will have no recourse to Continental, the
Pass Through Trustee, the Paying Agent or the Escrow Agent, except as expressly
provided herein or in the Pass Through Trust Agreement. No Receiptholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account or the obligations of the parties hereto,
nor shall anything set forth herein, or contained in the terms of the Escrow
Receipt, be construed so as to constitute the Receiptholders from time to time
as partners or members of an association.
Section 1.05. MUTILATED, DESTROYED, LOST OR STOLEN ESCROW RECEIPT. If
(a) any mutilated Escrow Receipt is surrendered to the Escrow Agent or the
Escrow Agent receives evidence to its satisfaction of the destruction, loss or
theft of any Escrow Receipt and (b) there is delivered to the Escrow Agent and
the Pass Through Trustee such security, indemnity or bond, as may be required by
them to hold each of them harmless, then, absent notice to the Escrow Agent or
the Pass Through Trustee that such destroyed, lost or stolen Escrow Receipt has
been acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the Uniform Commercial Code in effect in any applicable
jurisdiction are met, the Escrow Agent shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Escrow Receipt, a new Escrow Receipt or Escrow Receipts and of like Escrow
Interest in the Account Amounts and bearing a number not contemporaneously
outstanding.
In connection with the issuance of any new Escrow Receipt under this
Section 1.05, the Escrow Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Pass
Through Trustee and the Escrow Agent) connected therewith.
Any duplicate Escrow Receipt issued pursuant to this Section 1.05
shall constitute conclusive evidence of the appropriate Escrow Interest in the
Account Amounts, as if originally issued, whether or not the lost, stolen or
destroyed Escrow Receipt shall be found at any time.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Escrow Receipts.
Section 1.06. ADDITIONAL ESCROW AMOUNTS. On the date of any Purchase
Withdrawal, the Pass Through Trustee may re-deposit with the Depositary some or
all of the amounts so withdrawn in accordance with Section 2.4 of the Deposit
Agreement.
Section 1.07. RESIGNATION OR REMOVAL OF ESCROW AGENT. Subject to the
appointment and acceptance of a successor Escrow Agent as provided below, the
Escrow Agent may resign at any time by giving 30 days' prior written notice
thereof to the Investors, but may not otherwise be removed except for cause by
the written consent of the Investors with respect to Investors representing
Escrow Interests aggregating not less than a majority in interest in the Account
Amounts (an "ACTION OF INVESTORS"). Upon any such resignation or removal, the
Investors, by an Action of Investors, shall have the right to appoint a
successor Escrow Agent. If no successor Escrow Agent shall have been so
appointed and shall have accepted such appointment within 30 days after the
retiring Escrow Agent's giving of notice of resignation or the removal of the
retiring Escrow Agent, then the retiring Escrow Agent may appoint a successor
Escrow Agent. Any successor Escrow Agent shall be a bank which has an office in
the United States with a combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Escrow Agent hereunder by a successor
Escrow Agent, such successor Escrow Agent shall enter into such documents as the
Pass Through Trustee shall require and shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Escrow
Agent, and the retiring Escrow Agent shall be discharged from its duties and
obligations hereunder. No resignation or removal of the Escrow Agent shall be
effective unless a written confirmation shall have been obtained from each of
Moody's Investors Service, Inc. and Standard & Poor's Rating Group, a division
of McGraw-Hill Inc., that the replacement of the Escrow Agent with the successor
Escrow Agent will not result in (a) a reduction of the rating for the
Certificates below the then current rating for the Certificates or (b) a
withdrawal or suspension of the rating of the Certificates.
Section 1.08. PERSONS DEEMED OWNERS. Prior to due presentment of a
Certificate for registration of transfer, the Escrow Agent and the Paying Agent
may treat the Person in whose name any Escrow Receipt is registered (as of the
day of determination) as the owner of such Escrow Receipt for the purpose of
receiving distributions pursuant to this Agreement and for all other purposes
whatsoever, and neither the Escrow Agent nor the Paying Agent shall be affected
by any notice to the contrary.
Section 1.09. FURTHER ASSURANCES. The Escrow Agent agrees to take such
actions, and execute such other documents, as may be reasonably requested by the
Pass Through Trustee in order to effectuate the purposes of this Agreement and
the performance by the Escrow Agent of its obligations hereunder.
SECTION 2. PAYING AGENT.
Section 2.01. APPOINTMENT OF PAYING AGENT. The Escrow Agent hereby
irrevocably appoints and authorizes the Paying Agent to act as its paying agent
hereunder, for the benefit of the Investors, for such specific purposes and with
such powers as are specifically delegated to the Paying Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Any and all money received and held by the Paying Agent under this
Agreement or the Deposit Agreement shall be held in the Paying Agent Account for
the benefit of the Investors. The Paying Agent (which term as used in this
sentence shall include reference to its affiliates and its own and its
affiliates' officers, directors, employees and agents): (a) shall have no duties
or responsibilities except those expressly set forth in this Agreement, and
shall not by reason of this Agreement be a trustee for the Escrow Agent; (b)
shall not be responsible to the Escrow Agent for any recitals, statements,
representations or warranties of any person other then itself contained in this
Agreement or for the failure by the Escrow Agent or any other person or entity
(other than the Paying Agent) to perform any of its obligations hereunder
(whether or not the Paying Agent shall have any knowledge thereof); and (c)
shall not be responsible for any action taken or omitted to be taken by it
hereunder or provided for herein or in connection herewith, except for its own
willful misconduct or gross negligence (or simple negligence in connection with
the handling of funds).
Section 2.02. ESTABLISHMENT OF PAYING AGENT ACCOUNT. The Paying Agent
shall establish a deposit account (the "PAYING AGENT ACCOUNT") at Wilmington
Trust Company in the name of the Escrow Agent. It is expressly understood by the
parties hereto that the Paying Agent is acting as the paying agent of the Escrow
Agent hereunder and that no amounts on deposit in the Paying Agent Account
constitute part of the Trust Property.
Section 2.03. PAYMENTS FROM PAYING AGENT ACCOUNT. The Escrow Agent
hereby irrevocably instructs the Paying Agent, and the Paying Agent agrees to
act, as follows:
(a) On each Interest Payment Date (as defined in the Deposit
Agreement) or as soon thereafter as the Paying Agent has confirmed receipt
in the Paying Agent Account from the Depositary of any amount in respect of
accrued interest on the Deposits, the Paying Agent shall distribute out of
the Paying Agent Account the entire amount deposited therein by the
Depositary. There shall be so distributed to each Receiptholder of record
on the 15th day (whether or not a Business Day) preceding such Interest
Payment Date by check mailed to such Receiptholder, at the address
appearing in the Register, such Receiptholder's pro rata share (based on
the Escrow Interest in the Account Amounts held by such Receiptholder) of
the total amount of interest deposited by the Depositary in the Paying
Agent Account on such date, except that, with respect to Escrow Receipts
registered on the Record Date in the name of DTC, such distribution shall
be made by wire transfer in immediately available funds to the account
designated by DTC.
(b) Upon the confirmation by the Paying Agent of receipt in the Paying
Agent Account from the Depositary of any amount in respect of the Final
Withdrawal, the Paying Agent shall forthwith distribute the entire amount
of the Final Withdrawal deposited therein by the Depositary. There shall be
so distributed to each Receiptholder of record on the 15th day (whether or
not a Business Day) preceding the Final Withdrawal Date by check mailed to
such Receiptholder, at the address appearing in the Register, such
Receiptholder's pro rata share (based on the Escrow Interest in the Account
Amounts held by such Receiptholder) of the total amount in the Paying Agent
Account on account of such Final Withdrawal, except that, with respect to
Escrow Receipts registered on the Record Date in the name of DTC, such
distribution shall be made by wire transfer in immediately available funds
to the account designated by DTC.
(c) If any payment of interest or principal in respect of the Final
Withdrawal is not received by the Paying Agent within five days of the
applicable date when due, then it shall be distributed to Receiptholders
after actual receipt by the Paying Agent on the same basis as a Special
Payment is distributed under the Pass Through Trust Agreement.
(d) The Paying Agent shall include with any check mailed pursuant to
this Section any notice required to be distributed under the Pass Through
Trust Agreement that is furnished to the Paying Agent by the Pass Through
Trustee.
Section 2.04. WITHHOLDING TAXES. The Paying Agent shall exclude and
withhold from each distribution of accrued interest on the Deposits (as defined
in the Deposit Agreement) and any amount in respect of the Final Withdrawal any
and all withholding taxes applicable thereto as required by law. The Paying
Agent agrees to act as such withholding agent and, in connection therewith,
whenever any present or future taxes or similar charges are required to be
withheld with respect to any amounts payable in respect of the Deposits (as
defined in the Deposit Agreement) or the escrow amounts, to withhold such
amounts and timely pay the same to the appropriate authority in the name of and
on behalf of the Receiptholders, that it will file any necessary withholding tax
returns or statements when due, and that, as promptly as possible after the
payment thereof, it will deliver to each such Receiptholder appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such Receiptholder may reasonably request from time to
time. The Paying Agent agrees to file any other information reports as it may be
required to file under United States law.
Section 2.05. RESIGNATION OR REMOVAL OF PAYING AGENT. Subject to the
appointment and acceptance of a successor Paying Agent as provided below, the
Paying Agent may resign at any time by giving 30 days' prior written notice
thereof to the Escrow Agent, but may not otherwise be removed except for cause
by the Escrow Agent. Upon any such resignation or removal, the Escrow Agent
shall have the right to appoint a successor Paying Agent. If no successor Paying
Agent shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Paying Agent's giving of notice of resignation
or the removal of the retiring Paying Agent, then the retiring Paying Agent may
appoint a successor Paying Agent. Any Successor Paying Agent shall be a bank
which has an office in the United States with a combined capital and surplus of
at least $100,000,000. Upon the acceptance of any appointment as Paying Agent
hereunder by a successor Paying Agent, such successor Paying Agent shall enter
into such documents as the Escrow Agent shall require and shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Paying Agent, and the retiring Paying Agent shall be discharged
from its duties and obligations hereunder.
Section 2.06. NOTICE OF FINAL WITHDRAWAL. Promptly after receipt by
the Paying Agent of notice that the Escrow Agent has requested a Final
Withdrawal or that a Final Withdrawal will be made, the Paying Agent shall cause
notice of the distribution of the Final Withdrawal to be mailed to each of the
Receiptholders at its address as it appears in the Register. Such notice shall
be mailed not less than 15 days prior to the Final Withdrawal Date. Such notice
shall set forth:
(i) the Final Withdrawal Date and the date for determining
Receiptholders of record who shall be entitled to receive
distributions in respect of the Final Withdrawal,
(ii) the amount of the payment in respect of the Final
Withdrawal for each $1,000 face amount Certificate (based on
information provided by the Pass Through Trustee) and the amount
thereof constituting unused Deposits (as defined in the Deposit
Agreement) and interest thereon, and
(iii) if the Final Withdrawal Date is the same date as a
Regular Distribution Date, the total amount to be received on
such date for each $1,000 face amount Certificate (based on
information provided by the Pass Through Trustee).
Such mailing may include any notice required to be given to
Certificateholders in connection with such distribution pursuant to the Pass
Through Trust Agreement.
SECTION 3. PAYMENTS. If, notwithstanding the instructions in Section 4
of the Deposit Agreement that all amounts payable to the Escrow Agent under the
Deposit Agreement be paid by the Depositary directly to the Paying Agent or the
Pass Through Trustee (depending on the circumstances), the Escrow Agent receives
any payment thereunder, then the Escrow Agent shall forthwith pay such amount in
Dollars and in immediately available funds by wire transfer to (a) in the case
of a payment of accrued interest on the Deposits (as defined in the Deposit
Agreement) or any Final Withdrawal, directly to the Paying Agent Account and (b)
in the case of any Purchase Withdrawal, directly to the Pass Through Trustee or
its designee as specified and in the manner provided in the Applicable Notice of
Purchase Withdrawal. The Escrow Agent hereby waives any and all rights of
set-off, combination of accounts, right of retention or similar right (whether
arising under applicable law, contract or otherwise) it may have against amounts
payable to the Paying Agent howsoever arising.
SECTION 4. OTHER ACTIONS. The Escrow Agent shall take such other
actions under or in respect of the Deposit Agreement (including, without
limitation, the enforcement of the obligations of the Depositary thereunder) as
the Investors, by an Action of Investors, may from time to time request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE ESCROW AGENT. The
Escrow Agent represents and warrants to Continental, the Investors, the Paying
Agent and the Pass Through Trustee as follows:
(i) it is a national banking association duly organized and
validly existing in good standing under the laws of the United
States of America;
(ii) it has full power, authority and legal right to conduct
its business and operations as currently conducted and to enter
into and perform its obligations under this Agreement and the
Deposit Agreement;
(iii) the execution, delivery and performance of each of
this Agreement and the Deposit Agreement have been duly
authorized by all necessary corporate action on the part of it
and do not require any stockholder approval, or approval or
consent of any trustee or holder of any indebtedness or
obligations of it, and each such document has been duly executed
and delivered by it and constitutes its legal, valid and binding
obligations enforceable against it in accordance with the terms
hereof or thereof except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other
similar laws or equitable principles of general application to or
affecting the enforcement of creditors' rights generally
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iv) no authorization, consent or approval of or other
action by, and no notice to or filing with, any United States
federal or state governmental authority or regulatory body is
required for the execution, delivery or performance by it of this
Agreement or the Deposit Agreement;
(v) neither the execution, delivery or performance by it of
this Agreement or the Deposit Agreement, nor compliance with the
terms and provisions hereof or thereof, conflicts or will
conflict with or results or will result in a breach or violation
of any of the terms, conditions or provisions of, or will require
any consent or approval under, any law, governmental rule or
regulation or the charter documents, as amended, or bylaws, as
amended, of it or any similar instrument binding on it or any
order, writ, injunction or decree of any court or governmental
authority against it or by which it or any of its properties is
bound or any indenture, mortgage or contract or other agreement
or instrument to which it is a party or by which it or any of its
properties is bound, or constitutes or will constitute a default
thereunder or results or will result in the imposition of any
lien upon any of its properties; and
(vi) there are no pending or, to its knowledge, threatened
actions, suits, investigations or proceedings (whether or not
purportedly on behalf of it) against or affecting it or any of
its property before or by any court or administrative agency
which, if adversely determined, (A) would adversely affect the
ability of it to perform its obligations under this Agreement or
the Deposit Agreement or (B) would call into question or
challenge the validity of this Agreement or the Deposit Agreement
or the enforceability hereof or thereof in accordance with the
terms hereof or thereof, nor is the Escrow Agent in default with
respect to any order of any court, governmental authority,
arbitration board or administrative agency so as to adversely
affect its ability to perform its obligations under this
Agreement or the Deposit Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PAYING AGENT. The
Paying Agent represents and warrants to Continental, the Investors, the Escrow
Agent and the Pass Through Trustee as follows:
(i) it is a Delaware banking company duly organized and
validly existing in good standing under the laws of its
jurisdiction of incorporation;
(ii) it has full power, authority and legal right to conduct
its business and operations as currently conducted and to enter
into and perform its obligations under this Agreement;
(iii) the execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate
action on the part of it and does not require any stockholder
approval, or approval or consent of any trustee or holder of any
indebtedness or obligations of it, and such document has been
duly executed and delivered by it and constitutes its legal,
valid and binding obligations enforceable against it in
accordance with the terms hereof except as such enforceability
may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors'
rights generally (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) no authorization, consent or approval of or other
action by, and no notice to or filing with, any United States
federal or state governmental authority or regulatory body is
required for the execution, delivery or performance by it of this
Agreement;
(v) neither the execution, delivery or performance by it of
this Agreement, nor compliance with the terms and provisions
hereof, conflicts or will conflict with or results or will result
in a breach or violation of any of the terms, conditions or
provisions of, or will require any consent or approval under, any
law, governmental rule or regulation or the charter documents, as
amended, or bylaws, as amended, of it or any similar instrument
binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any
of its properties is bound or any indenture, mortgage or contract
or other agreement or instrument to which it is a party or by
which it or any of its properties is bound, or constitutes or
will constitute a default thereunder or results or will result in
the imposition of any lien upon any of its properties; and
(vi) there are no pending or, to its knowledge, threatened
actions, suits, investigations or proceedings (whether or not
purportedly on behalf of it) against or affecting it or any of
its property before or by any court or administrative agency
which, if adversely determined, (A) would adversely affect the
ability of it to perform its obligations under this Agreement or
(B) would call into question or challenge the validity of this
Agreement or the enforceability hereof in accordance with the
terms hereof, nor is the Paying Agent in default with respect to
any order of any court, governmental authority, arbitration board
or administrative agency so as to adversely affect its ability to
perform its obligations under this Agreement.
SECTION 7. INDEMNIFICATION. Except for actions expressly required of
the Escrow Agent or the Paying Agent hereunder, each of the Escrow Agent and the
Paying Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have been indemnified by the party requesting such
action in a manner reasonably satisfactory to it against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. In the event Continental requests any amendment to any
Operative Agreement (as defined in the Note Purchase Agreement), the Pass
Through Trustee agrees to pay all reasonable fees and expenses (including,
without limitation, fees and disbursements of counsel) of the Escrow Agent and
the Paying Agent in connection therewith.
SECTION 8. AMENDMENT, ETC. Upon request of the Pass Through Trustee
and approval by an Action of Investors, the Escrow Agent shall enter into an
amendment to this Agreement, so long as such amendment does not adversely affect
the rights or obligations of the Escrow Agent or the Paying Agent, PROVIDED that
upon request of the Pass Through Trustee and without any consent of the
Investors, the Escrow Agent shall enter into an amendment to this Agreement for
any of the following purposes:
(1) to correct or supplement any provision in this Agreement which may
be defective or inconsistent with any other provision herein or to cure any
ambiguity or correct any mistake or to modify any other provision with
respect to matters or questions arising under this Agreement, PROVIDED that
any such action shall not materially adversely affect the interests of the
Investors; or
(2) to comply with any requirement of the SEC, applicable law, rules
or regulations of any exchange or quotation system on which the
Certificates are listed or any regulatory body; or
(3) to evidence and provide for the acceptance of appointment under
this Agreement of a successor Escrow Agent, successor Paying Agent or
successor Pass Through Trustee.
SECTION 9. NOTICES. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (a) in the case of the Investors,
as their respective addresses shall appear in the Register, (b) in the case of
the Escrow Agent, First Security Bank, National Association, 79 South Main
Street, Salt Lake City, UT 84111, Attention: Corporate Trust Services
(Telecopier: (801) 246-5053), (c) in the case of the Pass Through Trustee,
Wilmington Trust Company, 1100 North Market Street, Wilmington, DE 19890,
Attention: Corporate Trust Administration (Telecopier: (302) 651-8882) or (d) in
the case of the Paying Agent, Wilmington Trust Company, 1100 North Market
Street, Wilmington, DE 19890, Attention: Corporate Trust Administration
(Telecopier: (302) 651-8882), in each case with a copy to Continental,
Continental Airlines, Inc., 2929 Allen Parkway, Suite 2010, Houston, TX 77019,
Attention: Executive Vice President and Chief Financial Officer (Telecopier:
(713) 520-6329) (or at such other address as any such party may specify from
time to time in a written notice to the other parties). On or prior to the
execution of this Agreement, the Pass Through Trustee has delivered to the
Escrow Agent a certificate containing specimen signatures of the representatives
of the Pass Through Trustee who are authorized to give notices and instructions
with respect to this Agreement. The Escrow Agent may conclusively rely on such
certificate until the Escrow Agent receives written notice from the Pass Through
Trustee to the contrary.
SECTION 10. TRANSFER. No party hereto shall be entitled to assign or
otherwise transfer this Agreement (or any interest herein) other than (in the
case of the Escrow Agent) to a successor escrow agent under Section 1.06 hereof
or (in the case of the Paying Agent) to a successor paying agent under Section
2.04 hereof, and any purported assignment in violation thereof shall be void.
This Agreement shall be binding upon the parties hereto and their respective
successors and (in the case of the Escrow Agent and the Paying Agent) their
respective permitted assigns. Upon the occurrence of the Transfer (as defined
below) contemplated by the Assignment and Assumption Agreement (as defined
below), the Pass Through Trustee shall (without further act) be deemed to have
transferred all of its right, title and interest in and to this Agreement to the
trustee of the Successor Trust (as defined below) and, thereafter, the trustee
of the Successor Trust shall be deemed to be the "Pass Through Trustee"
hereunder with the rights and obligations of the "Pass Through Trustee"
hereunder and each reference herein to "Continental Airlines Pass Through Trust
"1997-4C-O" shall be deemed to be a reference to "Continental Airlines Pass
Through Trust 1997-4C-S". The parties hereto hereby acknowledge and consent to
the Transfer contemplated by the Assignment and Assumption Agreement. As used
herein, "TRANSFER" means the transfers of the assets to the Successor Trust
contemplated by the Assignment and Assumption Agreement; "ASSIGNMENT AND
ASSUMPTION AGREEMENT" means the Assignment and Assumption Agreement to be
entered into between the Pass Through Trustee and the trustee of the Successor
Trust, substantially in the form of Exhibit C to the Trust Supplement;
"SUCCESSOR TRUST" means the Continental Airlines Pass Through Trust 1997-4C-S.
SECTION 11. ENTIRE AGREEMENT. This Agreement sets forth all of the
promises, covenants, agreements, conditions and understandings among the Escrow
Agent, the Paying Agent, the Underwriters and the Pass Through Trustee with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 13. WAIVER OF JURY TRIAL RIGHT. EACH OF THE ESCROW AGENT, THE
PAYING AGENT, THE INVESTORS AND THE PASS THROUGH TRUSTEE ACKNOWLEDGES AND
ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A TRIAL BY JURY.
SECTION 14. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one instrument.
IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the
Underwriters and the Pass Through Trustee have caused this Escrow and Paying
Agent Agreement (Class C) to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By:____________________________________
Name:
Title:
MORGAN STANLEY & CO.
INCORPORATED;
CREDIT SUISSE FIRST BOSTON
CORPORATION;
CHASE SECURITIES INC.; and
SALOMON BROTHERS INC,
as Underwriters
By:____________________________________
Name:
Title:
By: MORGAN STANLEY & CO.
INCORPORATED
By:____________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as Pass
Through Trustee for and on behalf of
Continental Airlines Pass Through Trust
1997-4C-O
By:____________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Paying Agent
By:____________________________________
Name:
Title:
EXHIBIT A
CONTINENTAL AIRLINES 1997-4C ESCROW RECEIPT
No. __
This Escrow Receipt evidences a fractional undivided interest in
amounts ("ACCOUNT AMOUNTS") from time to time deposited into a certain paying
agent account (the "PAYING AGENT ACCOUNT") described in the Escrow and Paying
Agent Agreement (Class C) dated as of October 23, 1997 (as amended, modified or
supplemented from time to time, the "ESCROW AND PAYING AGENT AGREEMENT") among
First Security Bank, National Association, as Escrow Agent (in such capacity,
together with its successors in such capacity, the "ESCROW AGENT"), Morgan
Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Chase
Securities Inc. and Salomon Brothers Inc, as Underwriters, Wilmington Trust
Company, as Pass Through Trustee (in such capacity, together with its successors
in such capacity, the "PASS THROUGH TRUSTEE") and Wilmington Trust Company, as
paying agent (in such capacity, together with its successors in such capacity,
the "PAYING AGENT"). Capitalized terms not defined herein shall have the
meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the Fractional Undivided Interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Continental, the Pass Through Trustee, the
Paying Agent or the Escrow Agent, except as expressly provided herein or in the
Pass Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to constitute
the Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate to
which this Escrow Receipt is attached as the owner hereof for all purposes, and
the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt to
be duly executed.
Dated: ______________, 199_
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By:____________________________________
Name:
Title:
EXHIBIT B
WITHDRAWAL CERTIFICATE
(Class C)
First Security Bank, National Association,
as Escrow Agent
Dear Sirs:
Reference is made to the Escrow and Paying Agent Agreement, dated as
of October 23, 1997 (the "Agreement"). We hereby certify to you that the
conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied. Pursuant
to Section 1.02(c) of the Agreement, please execute the attached Notice of
Withdrawal and immediately transmit by facsimile to the Depositary, at (212)
325-8319, Attention: Robert Finney and Kevin Kappell.
Very truly yours,
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Pass Through Trustee
By:____________________________________
Name:
Dated: ____________, 199_
- --------------------------------------------------------------------------------
NOTE PURCHASE AGREEMENT
Dated as of October 23, 1997
Among
CONTINENTAL AIRLINES, INC.,
WILMINGTON TRUST COMPANY,
as Pass Through Trustee under each of the
Pass Through Trust Agreements
WILMINGTON TRUST COMPANY,
as Subordination Agent
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Escrow Agent
and
WILMINGTON TRUST COMPANY,
as Paying Agent
- --------------------------------------------------------------------------------
INDEX TO NOTE PURCHASE AGREEMENT
Page
SECTION 1. Financing of New Aircraft.............................. 3
SECTION 2. Conditions Precedent................................... 7
SECTION 3. Representations and Warranties......................... 8
SECTION 4. Covenants.............................................. 12
SECTION 5. Notices................................................ 14
SECTION 6. Expenses............................................... 14
SECTION 7. Further Assurances..................................... 15
SECTION 8. Miscellaneous.......................................... 15
SECTION 9. Governing Law.......................................... 16
SCHEDULES
Schedule I New Aircraft and Scheduled Delivery Months
Schedule II Trust Supplements
Schedule III Deposit Agreements
Schedule IV Escrow and Paying Agent Agreements
Schedule V Mandatory Document Terms
Schedule VI Mandatory Economic Terms
Schedule VII Aggregate Amortization Schedule
ANNEX
Annex A Definitions
EXHIBITS
Exhibit A-1 Form of Leased Aircraft Participation Agreement
Exhibit A-2 Form of Lease
Exhibit A-3 Form of Leased Aircraft Indenture
Exhibit A-4 Form of Aircraft Purchase Agreement Assignment
Exhibit A-5 Form of Leased Aircraft Trust Agreement
Exhibit A-6 Form of Special Indenture
Exhibit B Form of Delivery Notice
Exhibit C-1 Form of Owned Aircraft Participation Agreement
Exhibit C-2 Form of Owned Aircraft Indenture
Exhibit D Form of Special Addition to Participation Agreement
Exhibit E Special Revisions to Section 6.2 of the Participation
Agreement
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT, dated as of October 23, 1997, among
(i)CONTINENTAL AIRLINES, INC., a Delaware corporation (the "COMPANY"),
(ii)WILMINGTON TRUST COMPANY ("WTC"), a Delaware banking corporation, not in its
individual capacity except as otherwise expressly provided herein, but solely as
trustee (in such capacity together with its successors in such capacity, the
"PASS THROUGH TRUSTEE") under each of the three separate Pass Through Trust
Agreements (as defined below), (iii) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as subordination agent and trustee (in such capacity
together with its successors in such capacity, the "SUBORDINATION AGENT") under
the Intercreditor Agreement (as defined below), (iv)FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, as Escrow Agent (in such
capacity together with its successors in such capacity, the "ESCROW AGENT"),
under each of the Escrow and Paying Agent Agreements (as defined below) and (v)
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Paying Agent (in
such capacity together with its successors in such capacity, the "PAYING AGENT")
under each of the Escrow and Paying Agent Agreements.
W I T N E S S E T H:
WHEREAS, capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in Annex A hereto;
WHEREAS, the Company has obtained commitments from the Manufacturer
pursuant to the Aircraft Purchase Agreements for the delivery of the 24 aircraft
listed in Schedule I hereto (together with any aircraft substituted therefor in
accordance with an Aircraft Purchase Agreement prior to the delivery thereof,
the "NEW AIRCRAFT");
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each
of the Trust Supplements set forth in Schedule II hereto, and concurrently with
the execution and delivery of this Agreement, separate grantor trusts
(collectively, the "PASS THROUGH TRUSTS" and, individually, a "PASS THROUGH
TRUST") have been created to facilitate certain of the transactions contemplated
hereby, including, without limitation, the issuance and sale of pass through
certificates pursuant thereto (collectively, the "CERTIFICATES") to provide for
a portion of the financing of the New Aircraft;
WHEREAS, the Company has entered into the Underwriting Agreement
dated as of October 16, 1997 (the "UNDERWRITING AGREEMENT") with the several
underwriters (the "UNDERWRITERS") named therein, which provides that the Company
will cause each Pass Through Trustee to issue and sell the Certificates to the
Underwriters;
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) the Escrow Agents and the Depositary entered into the Deposit
Agreements set forth in Schedule III hereto (the "DEPOSIT AGREEMENTS") whereby
the applicable Escrow Agent agreed to direct the Underwriters to make certain
deposits referred to therein on the Issuance Date (the "INITIAL DEPOSITS") and
to permit the applicable Pass Through Trustee to make additional deposits from
time to time thereafter (the Initial Deposits together with such additional
deposits are collectively referred to as the "DEPOSITS") and (ii) the Pass
Through Trustees, the Underwriters, the Paying Agents and the Escrow Agents
entered into the Escrow and Paying Agent Agreements set forth in Schedule IV
hereto (the "ESCROW AND PAYING AGENT AGREEMENTS") whereby, among other things,
(a) the Underwriters agreed to deliver an amount equal to the amount of the
Initial Deposits to the Depositary on behalf of the applicable Escrow Agent and
(b) the applicable Escrow Agent, upon the Depositary receiving such amount, has
agreed to deliver escrow receipts to be affixed to each Certificate;
WHEREAS, prior to the delivery of each New Aircraft, the Company
will determine whether to enter into a leveraged lease transaction as lessee
with respect to such New Aircraft (a "LEASED AIRCRAFT") or to purchase as owner
such New Aircraft (an "OWNED AIRCRAFT") and will give to the Pass Through
Trustee a Delivery Notice (as defined below) specifying its election;
WHEREAS, upon receipt of a Delivery Notice with respect to a New
Aircraft, subject to the terms and conditions of this Agreement, the applicable
Pass Through Trustees will enter into the applicable Financing Agreements
relating to such New Aircraft;
WHEREAS, upon the delivery of each New Aircraft, each Pass Through
Trustee will fund its purchase of Equipment Notes with the proceeds of one or
more Deposits withdrawn by the applicable Escrow Agent under the related Deposit
Agreement bearing the same interest rate as the Certificates issued by such Pass
Through Trust; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) ABN AMRO Bank N.V., acting through its Chicago branch, a bank
organized under the laws of the Netherlands, and Westdeutsche Landesbank
Girozentrale, acting through its New York branch, a bank organized under the
laws of Germany (collectively, the "LIQUIDITY PROVIDERS"), each has entered into
three revolving credit agreements (each, a "LIQUIDITY FACILITY"), one each for
the benefit of the Certificateholders of each Pass Through Trust, with the
Subordination Agent, as agent for the Pass Through Trustee on behalf of each
such Pass Through Trust and (ii)the Pass Through Trustee, the Liquidity
Providers and the Subordination Agent have entered into the Intercreditor
Agreement, dated as of the date hereof (the "INTERCREDITOR AGREEMENT");
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. FINANCING OF NEW AIRCRAFT. (a) The Company confirms that
it has entered into the Aircraft Purchase Agreements with the Manufacturer
pursuant to which the Company has agreed to purchase, and the Manufacturer has
agreed to deliver, the New Aircraft in the months specified in Schedule I
hereto, all on and subject to terms and conditions specified in the applicable
Aircraft Purchase Agreement. The Company agrees to finance the New Aircraft in
the manner provided herein, all on and subject to the terms and conditions
hereof and of the relevant Financing Agreements.
(b) In furtherance of the foregoing, the Company agrees to give the
parties hereto, the Depositary and each of the Rating Agencies not less than two
Business Days' prior notice (a "DELIVERY NOTICE") of the scheduled delivery date
(the "SCHEDULED DELIVERY DATE") (or, in the case of a substitute Delivery Notice
under Section 1(e) or (f) hereof, one Business Day's prior notice) in respect of
each New Aircraft under the applicable Aircraft Purchase Agreement, which notice
shall:
(i) specify whether the Company has elected to treat such New
Aircraft as a Leased Aircraft or an Owned Aircraft;
(ii) specify the Scheduled Delivery Date of such New Aircraft (which
shall be a Business Day before the Cut-off Date and, except as provided in
Section 1(f) hereof, the date (the "FUNDING DATE") on which the financing
therefor in the manner provided herein shall be consummated);
(iii) instruct the Pass Through Trustee to instruct the relevant
Escrow Agent to provide a Notice of Purchase Withdrawal to the Depositary
with respect to the Equipment Notes to be issued in connection with the
financing of such New Aircraft;
(iv) instruct the Pass Through Trustee to enter into the
Participation Agreement included in the Financing Agreements with respect
to such Aircraft in such form and at such a time on or before the Funding
Date specified in such Delivery Notice and to perform its obligations
thereunder;
(v) specify the aggregate principal amount of each series of
Equipment Notes to be issued, and purchased by the Pass Through Trustees,
in connection with the financing of such New Aircraft scheduled to be
delivered on such Funding Date (which shall in all respects comply with
the Mandatory Economic Terms); and
(vi) if such New Aircraft is to be a Leased Aircraft, certify that
the related Owner Participant (A) is not an Affiliate of the Company and
(B) based on the representations of such Owner Participant, is either (1)
a Qualified Owner Participant or (2) any other person the obligations of
which under the Owner Participant Agreements (as defined in the applicable
Participation Agreement) are guaranteed by a Qualified Owner Participant.
Notwithstanding the foregoing, in the event the date of issuance of the
Certificates coincides with the Scheduled Delivery Date of the first Aircraft to
be financed pursuant to the terms hereof, the Delivery Notice therefor may be
delivered to the parties hereto on such Scheduled Delivery Date.
(c) Upon receipt of a Delivery Notice, the Pass Through Trustees
shall, and shall cause the Subordination Agent to, enter into and perform their
obligations under the Participation Agreement specified in such Delivery Notice,
PROVIDED that such Participation Agreement and the other Lease Financing
Agreements or Owner Financing Agreements to be entered into pursuant to such
Participation Agreement shall be in the forms thereof annexed hereto in all
material respects with such changes therein as shall have been requested by the
related Owner Participant (in the case of Lease Financing Agreements) or by the
initial purchasers of the Series D Equipment Notes or Class D Pass Through
Certificates (in the case of the Owner Financing Agreements), agreed to by the
Company and, if modified in any material respect, as to which Rating Agency
Confirmation shall have been obtained from each Rating Agency by the Company (to
be delivered by the Company to the applicable Pass Through Trustee on or before
the relevant Delivery Date, it being understood that if Rating Agency
Confirmation shall have been received with respect to any Financing Agreements
and such Financing Agreements are utilized for subsequent New Aircraft (or
Substitute Aircraft) without material modifications, no additional Rating Agency
Confirmation shall be required); PROVIDED, HOWEVER, that the relevant Financing
Agreements as executed and delivered shall not vary the Mandatory Economic Terms
and shall contain the Mandatory Document Terms. Notwithstanding the foregoing,
(i) if The Boeing Company or General Electric Company, or any of their
respective Affiliates, is the Owner Participant with respect to any Leased
Aircraft, the Leased Aircraft Participation Agreement to be entered into
pursuant to the Delivery Notice with respect to such Leased Aircraft may be
modified, if agreed to by the Company, from the form annexed hereto (x) to add a
Section 16 thereto substantially in the form of Exhibit D hereto and (y) in the
case of The Boeing Company or any of its Affiliates, Section 6.2 may be changed
as set forth in Exhibit E hereto, and such Leased Aircraft Participation
Agreement, as so modified, shall be deemed (A) to be substantially in the form
thereof annexed hereto and (B) by virtue of such modification not to be
inconsistent with the Mandatory Document Terms and (ii) if any Financing
Document annexed hereto shall not have been reviewed by either Rating Agency
prior to the Issuance Date, then, prior to the use thereof in connection with
the financing of any Aircraft hereunder, the Company shall obtain from each
Rating Agency a confirmation that the use of such Financing Documents 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. With respect to each New
Aircraft, the Company shall cause WTC (or such other person that meets the
eligibility requirements to act as loan trustee under the Leased Aircraft
Indenture, Owned Aircraft Indenture or Special Indenture) to execute as Loan
Trustee the Financing Agreements relating to such Aircraft to which such Loan
Trustee is intended to be a party, and shall concurrently therewith execute such
Financing Agreements to which the Company is intended to be a party and perform
its respective obligations thereunder. Upon the request of either Rating Agency,
the Company shall deliver or cause to be delivered to each Rating Agency a true
and complete copy of each Financing Agreement relating to the financing of each
New Aircraft together with a true and complete set of the closing documentation
(including legal opinions) delivered to the related Loan Trustee, Subordination
Agent and Pass Through Trustee under the related Participation Agreement.
(d) [Intentionally omitted.]
(e) If after giving any Delivery Notice, there shall be a delay in
the delivery of a New Aircraft, or if on the Scheduled Delivery Date of a New
Aircraft the financing thereof in the manner contemplated hereby shall not be
consummated for whatever reason, the Company shall give the parties hereto
prompt notice thereof. Concurrently with the giving of such notice of
postponement or subsequently, the Company shall give the parties hereto a
substitute Delivery Notice specifying the date to which such delivery and
related financing shall have been re-scheduled (which shall be a Business Day
before the Cut-off Date on which the Escrow Agents shall be entitled to withdraw
one or more Deposits under each of the applicable Deposit Agreements to enable
each applicable Pass Through Trustee to fund its purchase of the related
Equipment Notes). Upon receipt of any such notice of postponement, each
applicable Pass Through Trustee shall comply with its obligations under Section
5.01 of each of the Trust Supplements and thereafter the financing of the
relevant New Aircraft shall take place on the re-scheduled Delivery Date
therefor (all on and subject to the terms and conditions of the relevant
Financing Agreements) unless further postponed as provided herein.
(f) Anything in this Section 1 to the contrary notwithstanding, the
Company shall have the right at any time on or before the Scheduled Delivery
Date of any New Aircraft, and subsequent to its giving a Delivery Notice
therefor, to postpone the Scheduled Delivery Date of such New Aircraft so as to
enable the Company to change its election to treat such New Aircraft as a Leased
Aircraft or an Owned Aircraft by written notice of such postponement to the
other parties hereto. The Company shall subsequently give the parties hereto a
substitute Delivery Notice complying with the provisions of Section 1(b) hereof
and specifying the new Funding Date for such postponed New Aircraft (which shall
be a Business Day occurring before the Cut-off Date and on which the Escrow
Agents shall be entitled to withdraw Deposits under each of the applicable
Deposit Agreements sufficient to enable each applicable Pass Through Trustee to
fund its purchase of the related Equipment Notes). In addition, the Company
shall have the further right, anything in this Section 1 to the contrary
notwithstanding, to accept delivery of a New Aircraft under the applicable
Aircraft Purchase Agreement on the Delivery Date thereof by utilization of
bridge financing of such New Aircraft and promptly thereafter give the parties
hereto a Delivery Notice specifying a Funding Date not later than 30 days after
the Delivery Date of such New Aircraft and no later than the Cut-off Date and
otherwise complying with the provisions of Section 1(b) hereof. All other terms
and conditions of this Note Purchase Agreement shall apply to the financing of
any such New Aircraft on the re-scheduled Funding Date therefor except (i)the
re-scheduled Funding Date shall be deemed the Delivery Date of such New Aircraft
for all purposes of this Section 1 and (ii)the related Financing Agreements
shall be amended to reflect the original delivery of such New Aircraft to the
Company.
(g) If the Scheduled Delivery Date for any New Aircraft is delayed
(a) more than 30 days beyond the last day of the month set forth opposite such
New Aircraft under the heading "Scheduled Delivery Months" in Schedule I hereto
or (b) beyond December 31, 1998, the Company may identify for delivery a
substitute aircraft therefor meeting the following conditions (a "SUBSTITUTE
AIRCRAFT"): (i) a Substitute Aircraft must be a Boeing 777-200, 737-500, 737-700
or 737-800 aircraft manufactured after the date of this Agreement, (ii) one or
more Substitute Aircraft of the same or different types may be substituted for
one or more New Aircraft of the same or different types so long as after giving
effect thereto such substitution does not vary the Mandatory Economic Terms and
(iii) the Company shall be obligated to obtain Rating Agency Confirmation in
respect of the replacement of any New Aircraft by Substitute Aircraft. Upon the
satisfaction of the conditions set forth above with respect to a Substitute
Aircraft, the New Aircraft to be replaced shall cease to be subject to this
Agreement and all rights and obligations of the parties hereto concerning such
New Aircraft shall cease, and such Substitute Aircraft shall become and
thereafter be subject to the terms and conditions of this Agreement to the same
extent as such New Aircraft.
(h) The Company shall have no liability for the failure of the Pass
Through Trustees to purchase Equipment Notes with respect to any New Aircraft or
Substitute Aircraft, other than the Company's obligation, if any, to pay the
Deposit Make-Whole Premium pursuant to Section 4(a)(i) of this Agreement.
(i) The parties agree that if, in connection with the delivery of a
New Aircraft or Substitute Aircraft, any Owner Participant who is to be a party
to any Lease Financing Agreement or Special Financing Agreement shall not be a
"Citizen of the United States" within the meaning of Section 40102(a)(15) of the
Act, then the applicable Lease Financing Agreements shall be modified,
consistent with the Mandatory Document Terms, to require such Owner Participant
to enter into a voting trust, voting powers or similar arrangement satisfactory
to the Company that (A) enables such New Aircraft or Substitute Aircraft to be
registered in the United States and (B) complies with the FAA regulations issued
under the Act applicable thereto.
(j) Anything herein to the contrary notwithstanding, the Company
shall not have the right, and shall not be entitled, at any time to request the
issuance of Equipment Notes of any series to any Pass Through Trustee in an
aggregate principal amount in excess of the amount of the Deposits then
available for withdrawal by the Escrow Agent under and in accordance with the
provisions of the related Deposit Agreement.
SECTION 2. CONDITIONS PRECEDENT. The obligation of the Pass Through
Trustees to enter into, and to cause the Subordination Agent to enter into, any
Participation Agreement as directed pursuant to a Delivery Notice and to perform
its obligations under such Participation Agreement is subject to satisfaction of
the following conditions:
(a) no Triggering Event shall have occurred; and
(b) the Company shall have delivered a certificate to each such Pass
Through Trustee and each Liquidity Provider stating that (i) such
Participation Agreement and the other Financing Agreements to be entered
into pursuant to such Participation Agreement do not vary the Mandatory
Economic Terms and contain the Mandatory Document Terms and (ii)any
substantive modification of such Financing Agreements from the forms
thereof attached to this Agreement do not materially and adversely affect
the Certificateholders, and such certification shall be true and correct.
Anything herein to the contrary notwithstanding, the obligation of
each Pass Through Trustee to purchase Equipment Notes shall terminate on the
Cut-off Date.
SECTION 3. REPRESENTATIONS AND WARRANTIES. (a) The Company
represents and warrants that:
(i) the Company is duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and is a
"citizen of the United States" as defined in 49 U.S.C. Section
40102, and has the full corporate power, authority and legal right
under the laws of the State of Delaware to execute and deliver this
Agreement and each Financing Agreement to which it will be a party
and to carry out the obligations of the Company under this Agreement
and each Financing Agreement to which it will be a party;
(ii) the execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations
under this Agreement have been duly authorized by the Company and
will not violate its Certificate of Incorporation or by-laws or the
provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it is bound; and
(iii) this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance with
its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at law or
in equity.
(b) WTC represents and warrants that:
(i) WTC is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and is a "citizen
of the United States" as defined in 49 U.S.C. Section 40102, and has
the full corporate power, authority and legal right under the laws
of the State of Delaware and the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver this
Agreement and each Financing Agreement to which it will be a party
and to carry out the obligations of WTC, in its capacity as
Subordination Agent, Pass Through Trustee or Paying Agent, as the
case may be, under this Agreement and each Financing Agreement to
which it will be a party;
(ii) the execution and delivery by WTC, in its capacity as
Subordination Agent, Pass Through Trustee or Paying Agent, as the
case may be, of this Agreement and the performance by WTC, in its
capacity as Subordination Agent, Pass Through Trustee or Paying
Agent, as the case may be, of its obligations under this Agreement
have been duly authorized by WTC, in its capacity as Subordination
Agent, Pass Through Trustee or Paying Agent, as the case may be, and
will not violate its articles of association or by-laws or the
provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it is bound; and
(iii) this Agreement constitutes the legal, valid and binding
obligations of WTC, in its capacity as Subordination Agent, Pass
Through Trustee or Paying Agent, as the case may be, enforceable
against it in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in
a proceeding at law or in equity.
(c) The Pass Through Trustee hereby confirms to each of the other
parties hereto that its representations and warranties set forth in Section 7.15
of the Basic Pass Through Trust Agreement and Section 5.04 of each Trust
Supplement are true and correct as of the date hereof.
(d) The Subordination Agent represents and warrants that:
(i) the Subordination Agent is duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has the full corporate power, authority and legal
right under the laws of the State of Delaware and the United States
pertaining to its banking, trust and fiduciary powers to execute and
deliver this Agreement and each Financing Agreement to which it is
or will be a party and to perform its obligations under this
Agreement and each Financing Agreement to which it is or will be a
party;
(ii) this Agreement has been duly authorized, executed and
delivered by the Subordination Agent; this Agreement constitutes the
legal, valid and binding obligations of the Subordination Agent
enforceable against it in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity;
(iii) none of the execution, delivery and performance by the
Subordination Agent of this Agreement contravenes any law, rule or
regulation of the State of Delaware or any United States
governmental authority or agency regulating the Subordination
Agent's banking, trust or fiduciary powers or any judgment or order
applicable to or binding on the Subordination Agent and do not
contravene the Subordination Agent's articles of association or
by-laws or result in any breach of, or constitute a default under,
any agreement or instrument to which the Subordination Agent is a
party or by which it or any of its properties may be bound;
(iv) neither the execution and delivery by the Subordination
Agent of this Agreement nor the consummation by the Subordination
Agent of any of the transactions contemplated hereby requires the
consent or approval of, the giving of notice to, the registration
with, or the taking of any other action with respect to, any
Delaware governmental authority or agency or any federal
governmental authority or agency regulating the Subordination
Agent's banking, trust or fiduciary powers;
(v) there are no Taxes payable by the Subordination Agent
imposed by the State of Delaware or any political subdivision or
taxing authority thereof in connection with the execution, delivery
and performance by the Subordination Agent of this Agreement (other
than franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services
rendered in connection with the transactions contemplated by the
Intercreditor Agreement or any of the Liquidity Facilities), and
there are no Taxes payable by the Subordination Agent imposed by the
State of Delaware or any political subdivision thereof in connection
with the acquisition, possession or ownership by the Subordination
Agent of any of the Equipment Notes (other than franchise or other
taxes based on or measured by any fees or compensation received by
the Subordination Agent for services rendered in connection with the
transactions contemplated by the Intercreditor Agreement or any of
the Liquidity Facilities); and
(vi) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative
agency which individually or in the aggregate, if determined
adversely to it, would materially adversely affect the ability of
the Subordination Agent to perform its obligations under this
Agreement.
(e) The Escrow Agent represents and warrants that:
(i) the Escrow Agent is a national banking association duly
incorporated, validly existing and in good standing under the laws
of the United States and has the full corporate power, authority and
legal right under the laws of the United States pertaining to its
banking, trust and fiduciary powers to execute and deliver this
Agreement, each Deposit Agreement and each Escrow and Paying Agent
Agreement (collectively, the "ESCROW AGENT AGREEMENTS") and to carry
out the obligations of the Escrow Agent under each of the Escrow
Agent Agreements;
(ii) the execution and delivery by the Escrow Agent of each of
the Escrow Agent Agreements and the performance by the Escrow Agent
of its obligations hereunder and thereunder have been duly
authorized by the Escrow Agent and will not violate its articles of
association or by-laws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound; and
(iii) each of the Escrow Agent Agreements constitutes the
legal, valid and binding obligations of the Escrow Agent enforceable
against it in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in
a proceeding at law or in equity.
(f) The Paying Agent represents and warrants that:
(i) the Paying Agent is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has
the full corporate power, authority and legal right under the laws
of the United States pertaining to its banking, trust and fiduciary
powers to execute and deliver this Agreement and the Escrow and
Paying Agent Agreement (collectively, the "PAYING AGENT AGREEMENTS")
and to carry out the obligations of the Paying Agent under each of
the Paying Agent Agreements;
(ii) the execution and delivery by the Paying Agent of each of
the Paying Agent Agreements and the performance by the Paying Agent
of its obligations hereunder and thereunder have been duly
authorized by the Paying Agent and will not violate its articles of
association or by-laws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by which it is
bound; and
(iii) each of the Paying Agent Agreements constitutes the
legal, valid and binding obligations of the Paying Agent enforceable
against it in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether considered in
a proceeding at law or in equity.
SECTION 4. COVENANTS. (a) The Company covenants with each of the
other parties hereto that:
(i) on the date that the Depositary is obligated to pay the amount
of the Final Withdrawal to the Paying Agent pursuant to a Deposit
Agreement relating to any Trust, the Company shall pay to the Pass Through
Trustee of such Trust no later than 12:30 p.m. (New York time) an amount
equal to the Deposit Make-Whole Premium, if any, required to be paid in
respect of such Final Withdrawal amount;
(ii) subject to Section 4(a)(iv) of this Agreement, the Company
shall at all times maintain its corporate existence and shall not wind up,
liquidate or dissolve or take any action, or fail to take any action, that
would have the effect of any of the foregoing;
(iii) the Company shall at all times remain a U.S. Air Carrier (as
defined in the Financing Agreements) and shall at all times be otherwise
certificated and registered to the extent necessary to entitle (i) in the
case of Leased Aircraft, the Owner Trustee (and the Loan Trustee as
assignee of the Owner Trustee's rights under each Lease) to the rights
afforded to lessors of aircraft equipment under Section 1110 and (ii) in
the case of Owned Aircraft, the Loan Trustee to the rights afforded to
secured parties of aircraft equipment under Section 1110;
(iv) Section 13.2.1 of each Lease is hereby incorporated by
reference herein;
(v) the Company agrees to provide written notice to each of the
parties hereto of the occurrence of the Cut-off Date no later than one
Business Day after the date thereof; such notice to refer specifically to
the Pass Through Trustee's obligation to assign, transfer and deliver all
of its right, title and interest to the Trust Property (as defined in each
Pass Through Trust Agreement) to the trustee of the Related Trust (as
defined in each Pass Through Trust Agreement) in accordance with Section
7.01 of each of the Trust Supplements; and
(vi) the Company shall not issue Series D Equipment Notes pursuant
to any Owned Aircraft Indenture unless it shall have obtained written
confirmation from each Rating Agency that the issuance of such Series D
Equipment Notes will 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.
(b) WTC, in its individual capacity, covenants with each of the
other parties to this Agreement that it will, immediately upon obtaining
knowledge of any facts that would cast doubt upon its continuing status as a
"citizen of the United States" as defined in 49 U.S.C. Section 40102 and
promptly upon public disclosure of negotiations in respect of any transaction
which would or might adversely affect such status, notify in writing all parties
hereto of all relevant matters in connection therewith. Upon WTC giving any such
notice, WTC shall, subject to Section 8.02 of any Indenture then entered into,
resign as Loan Trustee in respect of such Indenture.
SECTION 5. NOTICES. Unless otherwise specifically provided herein,
all notices required or permitted by the terms of this Agreement shall be in
English and in writing, and any such notice shall become effective upon being
delivered personally or, if promptly confirmed by mail, when dispatched by
facsimile or other written telecommunication, addressed to such party hereto at
its address or facsimile number set forth below the signature of such party at
the foot of this Agreement.
SECTION 6. EXPENSES. (a) The Company agrees to pay to the
Subordination Agent when due an amount or amounts equal to the fees payable to
the relevant Liquidity Provider under Section 2.03 of each Liquidity Facility
and the related Fee Letter (as defined in the Intercreditor Agreement)
multiplied by a fraction the numerator of which shall be the then outstanding
aggregate amount of the Deposits under the Deposit Agreements and the
denominator of which shall be the sum of (x) the then outstanding aggregate
principal amount of the Series A Equipment Notes, Series B Equipment Notes and
Series C Equipment Notes issued under all of the Indentures and (y) the then
outstanding aggregate amount of the Deposits under the Deposit Agreements.
(b) So long as no Equipment Notes have been issued in respect of any
Aircraft, the Company agrees to pay (i) to the Subordination Agent when due (A)
the amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07(e) of each Liquidity Facility
minus Investment Earnings while such Downgrade Advance shall be outstanding, (B)
the amount equal to interest on any Non-Extension Advance (other than any
Applied Non-Extension Advance) payable under Section 3.07(a)(i) of each
Liquidity Facility minus Investment Earnings while such Non-Extension Advance
shall be outstanding and (C) any other amounts owed to the Liquidity Provider by
the Subordination Agent as borrower under each Liquidity Facility (other than
amounts due as repayment of advances thereunder or as interest on such advances,
except to the extent payable pursuant to clause (A) or (B)), (ii) all
compensation and reimbursement of expenses, disbursements and advances payable
by the Company under the Pass Through Trust Agreements, (iii) all compensation
and reimbursement of expenses and disbursements payable to the Subordination
Agent under the Intercreditor Agreement except with respect to any income or
franchise taxes incurred by the Subordination Agent in connection with the
transactions contemplated by the Intercreditor Agreement and (iv) in the event
the Company requests any amendment to any Operative Agreement, all reasonable
fees and expenses (including, without limitation, fees and disbursements of
counsel) of the Escrow Agent and/or the Paying Agent in connection therewith.
For purposes of this Section 6(b), the terms "Applied Downgrade Advance",
"Applied Non-Extension Advance", "Downgrade Advance", "Investment Earnings" and
"Non-Extension Advance" shall have the meanings specified in each Liquidity
Facility.
SECTION 7. FURTHER ASSURANCES. Each party hereto shall duly execute,
acknowledge and deliver, or shall cause to be executed, acknowledged and
delivered, all such further agreements, instruments, certificates or documents,
and shall do and cause to be done such further acts and things, in any case, as
any other party hereto shall reasonably request in connection with its
administration of, or to carry out more effectually the purposes of, or to
better assure and confirm unto it the rights and benefits to be provided under,
this Agreement.
SECTION 8. MISCELLANEOUS. (a) Provided that the transactions
contemplated hereby have been consummated, and except as otherwise provided for
herein, the representations, warranties and agreements herein of the Company,
the Subordination Agent, the Escrow Agent, the Paying Agent and the Pass Through
Trustee, and the Company's, the Subordination Agent's, the Escrow Agent's, the
Paying Agent's and the Pass Through Trustee's obligations under any and all
thereof, shall survive the expiration or other termination of this Agreement and
the other agreements referred to herein.
(b) This Agreement may be executed in any number of counterparts
(and each of the parties hereto shall not be required to execute the same
counterpart). Each counterpart of this Agreement, including a signature page
executed by each of the parties hereto, shall be an original counterpart of this
Agreement, but all of such counterparts together shall constitute one
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the party against which the enforcement of the
termination, amendment, supplement, waiver or modification is sought. The index
preceding this Agreement and the headings of the various Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof. The terms of this
Agreement shall be binding upon, and shall inure to the benefit of, the Company
and its successors and permitted assigns, the Pass Through Trustee and its
successors as Pass Through Trustee (and any additional trustee appointed) under
any of the Pass Through Trust Agreements, the Escrow Agent and its successors as
Escrow Agent under the Escrow and Paying Agent Agreements, the Paying Agent and
its successors as Paying Agent under the Escrow and Paying Agent Agreement and
the Subordination Agent and its successors as Subordination Agent under the
Intercreditor Agreement.
(c) This Agreement is not intended to, and shall not, provide any
person not a party hereto (other than the Underwriters and each of the
beneficiaries of Section 6 hereof) with any rights of any nature whatsoever
against any of the parties hereto, and no person not a party hereto (other than
the Underwriters and each of the beneficiaries of Section 6 hereof) shall have
any right, power or privilege in respect of, or have any benefit or interest
arising out of, this Agreement.
SECTION 9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THIS AGREEMENT
IS BEING DELIVERED IN THE STATE OF NEW YORK.
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.
CONTINENTAL AIRLINES, INC.
By______________________________________
Name:
Title:
Address: 2929 Allen Parkway
Suite 2010
Houston, TX 77019
Attention: Executive Vice President
and Chief Financial Officer
Facsimile: (713) 520-6329
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as otherwise
provided herein, but solely as Pass
Through Trustee
By______________________________________
Name:
Title:
Address: Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
Facsimile: (302) 651-8882
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as otherwise
provided herein, but solely as
Subordination Agent
By______________________________________
Name:
Title:
Address: Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
Facsimile: (302) 651-8882
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Escrow Agent
By______________________________________
Name:
Title:
Address: 79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
WILMINGTON TRUST COMPANY,
as Paying Agent
By______________________________________
Name:
Title:
Address: Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust
Administration
Facsimile: (302) 651-8882
SCHEDULE I to
NOTE PURCHASE AGREEMENT
NEW AIRCRAFT AND SCHEDULED DELIVERY MONTHS
New Aircraft Aircraft Tail Manufacturer's Scheduled Delivery
Type Number Serial Number Months
- ------------ ------------- -------------- ------------------
Boeing 737-524 656 28917 April 1998
Boeing 737-524 657 28918 May 1998
Boeing 737-524 658 28919 June 1998
Boeing 737-524 659 28920 July 1998
Boeing 737-524 660 28921 August 1998
Boeing 737-724 705 28766 April 1998
Boeing 737-724 706 28767 April 1998
Boeing 737-724 707 28768 April 1998
Boeing 737-724 708 28769 April 1998
Boeing 737-724 709 28779 August 1998
Boeing 737-724 710 28780 August 1998
Boeing 737-824 201 28770 May 1998
Boeing 737-824 202 28771 May 1998
Boeing 737-824 203 28772 May 1998
Boeing 737-824 204 28773 June 1998
Boeing 737-824 205 28774 June 1998
Boeing 737-824 206 28775 June 1998
Boeing 737-824 207 28776 July 1998
Boeing 737-824 208 28777 July 1998
Boeing 737-824 209 28778 July 1998
Boeing 737-824 210 28781 August 1998
Boeing 777-200 001 27577 September 1998
Boeing 777-200 002 27578 October 1998
Boeing 777-200 003 27579 November 1998
SCHEDULE II to
NOTE PURCHASE AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of Continental Airlines Pass Through Trust, Series
1997-4A-O.
Trust Supplement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of Continental Airlines Pass Through Trust, Series
1997-4B-O.
Trust Supplement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of Continental Airlines Pass Through Trust, Series
1997-4C-O.
SCHEDULE III to
NOTE PURCHASE AGREEMENT
DEPOSIT AGREEMENTS
Deposit Agreement (Class A) dated as of the Issuance Date between the Depositary
and the Escrow Agent.
Deposit Agreement (Class B) dated as of the Issuance Date between the Depositary
and the Escrow Agent.
Deposit Agreement (Class C) dated as of the Issuance Date between the Depositary
and the Escrow Agent.
SCHEDULE IV to
NOTE PURCHASE AGREEMENT
ESCROW AND PAYING AGENT AGREEMENTS
Escrow and Paying Agent Agreement (Class A) dated as of the Issuance Date among
the Escrow Agent, the Underwriters, the Pass Through Trustee and the Paying
Agent.
Escrow and Paying Agent Agreement (Class B) dated as of the Issuance Date among
the Escrow Agent, the Underwriters, the Pass Through Trustee and the Paying
Agent.
Escrow and Paying Agent Agreement (Class C) dated as of the Issuance Date
among the Escrow Agent, the Underwriters, the Pass Through Trustee and the
Paying Agent.
SCHEDULE V TO
NOTE PURCHASE AGREEMENT
MANDATORY DOCUMENT TERMS
1. May not modify in any material adverse respect the Granting
Clause of the Trust Indenture Form so as to deprive the Note Holders of a first
priority security interest in and mortgage lien on the Aircraft and the Lease or
to eliminate any of the obligations secured thereby or otherwise modify in any
material adverse respect as regards the interests of the Note Holders, the
Subordination Agent, the Liquidity Providers or the Mortgagee the provisions of
Article II or III or Section 4.02, 4.03, 4.04, 5.02, 5.06, 9.01(b), 10.04, 10.11
or 10.12 of the Trust Indenture Form.
2. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity Providers
or the Mortgagee the provisions of Section 3.2.1(e), 3.3(c), 4.7, the final
sentence of 7.1.1, 10.3.1(d)(ii), 13.3, 16, 18.3 or 18.7(a) of the Lease Form or
otherwise modify the terms of the Lease Form so as to deprive the Mortgagee of
rights expressly granted to the "Mortgagee" therein.
3. May not modify in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity Providers
or the Mortgagee the provisions of Section 5.1.9, 5.1.10, 5.1.11, 5.1.12, 7.5,
12, 15.8(a) or 15.9 of the Participation Agreement Form or of the provisions of
Section 5.1.2(xxiii) or 10.1.1(a)(iv) of the Participation Agreement Form so as
to eliminate the requirement to deliver to the Loan Participant or the
Mortgagee, as the case may be, the legal opinions to be provided to such Persons
thereunder (recognizing that the lawyers rendering such opinions may be changed)
or of the provisions of Section 7.6.11(a)(ii) of the Participation Agreement
Form as regards the rights of the Mortgagee thereunder or otherwise modify the
terms of the Participation Agreement Form to deprive the Trustees, the
Subordination Agent, the Liquidity Providers or the Mortgagee of any indemnity
or right of reimbursement in its favor for Expenses or Taxes.
4. May not modify, in any material adverse respect as regards the
interests of the Note Holders, the Subordination Agent, the Liquidity Providers
or the Mortgagee, the definition of "Make Whole Amount" in Annex A to the
Participation Agreement Form.
Notwithstanding the foregoing, any such Mandatory Document Term may
be modified to correct or supplement any such provision which may be defective
or to cure any ambiguity or correct any mistake, PROVIDED that any such action
shall not materially adversely affect the interests of the Note Holders, the
Subordination Agent, the Liquidity Providers, the Mortgagee or the
Certificateholders.
SCHEDULE VI TO
NOTE PURCHASE AGREEMENT
MANDATORY ECONOMIC TERMS
EQUIPMENT NOTES
Obligor: Continental or an Owner Trust
Maximum Principal Amount:
The maximum principal amount of all Equipment Notes issued with
respect to an Aircraft shall not exceed the maximum principal amount
of Equipment Notes indicated for such Aircraft as set forth in the
Prospectus Supplement in "Prospectus Supplement Summary - Equipment
Notes and the Aircraft" under the column "Maximum Principal Amount
of Equipment Notes".
Aggregate Maximum Principal Amount:
For all Boeing 777-200 Aircraft $247,583,000
For all Boeing 737-524 Aircraft $96,050,000
For all Boeing 737-724 Aircraft $155,464,000
For all Boeing 737-824 Aircraft $300,746,000
The aggregate original principal amount of all Equipment Notes for
all Aircraft shall not exceed the aggregate face amount of all Certificates
issued on the Issuance Date. The aggregate original principal amount of all
Equipment Notes of any series shall not exceed the aggregate face amount of all
Certificates of the related Class issued on the Issuance Date.
Initial Loan to Aircraft Value (with the value of any Aircraft equal
to the value for such Aircraft set forth in the Prospectus Supplement in
"Prospectus Supplement Summary--Equipment Notes and the Aircraft" under the
column "Appraised Value"):
Series A: not in excess of 44.0%
Series B: not in excess of 56.0%
Series C: not in excess of 68.0%
Initial Average Life (in years) from the Issuance Date
For each Boeing 777-200 Aircraft
Series A: not more than 14.4 years
Series B: not more than 13.3 years
Series C: not more than 6.7 years
For each Boeing 737-524 Aircraft
Series A: not more than 12.9 years
Series B: not more than 11.6 years
Series C: not more than 6.8 years
For each Boeing 737-724 Aircraft
Series A: not more than 12.9 years
Series B: not more than 11.5 years
Series C: not more than 6.8 years
For each Boeing 737-824 Aircraft
Series A: not more than 12.9 years
Series B: not more than 11.7 years
Series C: not more than 6.8 years
AVERAGE LIFE (IN YEARS)
As of the Delivery Period Termination Date (or if earlier, the date
of the occurrence of a Triggering Event), the average life of the
Class A Certificates, the Class B Certificates and the Class C
Certificates shall not extend beyond, respectively, 12.9 years, 11.8
years, and 6.3 years from the Issuance Date (computed without regard
to the acceleration of any Equipment Notes and after giving effect
to any special distribution on the Certificates thereafter required
in respect of unused Deposits).
FINAL MATURITY DATE
Series A: not in excess of 21.7 years from the Issuance Date
Series B: not in excess of 21.7 years from the Issuance Date
Series C: not in excess of 11.7 years from the Issuance Date
Debt Rate (computed on the basis of a 360-day year consisting of
twelve 30-day months, payable semi-annually in arrears)
Series A: 6.90%
Series B: 6.90%
Series C: 6.80%
Payment Due Rate: Debt Rate plus 2% per annum
Payment Dates: January 2 and July 2
Make-Whole Premiums: as provided in Article II of the form of Trust
Indenture marked as Exhibit A-3 or A-6 (whichever
shall be utilized for a Leased Aircraft) of the
Note Purchase Agreement (the "TRUST INDENTURE
FORM") or the Owned Aircraft Indenture marked as
Exhibit C-2 of the Note Purchase Agreement
Redemption and Purchase: as provided in Article II of the Trust Indenture
Form
LEASE
Term: The Base Lease Term shall expire by its terms
on or after final maturity date of the related
Series A Equipment Notes
Lease Payment Dates: January 2 and July 2
Minimum Rent: Basic Rent due and payable on each Payment Date
shall be at least sufficient to pay in full, as of
such Payment Date (assuming timely payment of the
related Equipment Notes prior to such Date), the
aggregate principal amount of scheduled
installments due on the related Equipment Notes
outstanding on such Payment Date, together with
accrued and unpaid interest thereon.
Supplemental Rent: Sufficient to cover the sums described in clauses
(a) through (d) of such term as defined in Annex A
to the form of Lease (the "LEASE FORM") marked as
Exhibit A-2 of the Note Purchase Agreement
Stipulated Loss Value: At all times equal to or greater than the then
outstanding principal amount of the related
Equipment Notes together with accrued interest
thereon
Termination Value: At all times equal to or greater than the then
outstanding principal amount of the related
Equipment Notes together with accrued interest
thereon
All-risk hull insurance: not less than Stipulated Loss Value, subject to
Lessee's right to self-insure on terms no more
favorable to Lessee in any material respect than
those set forth in Section G of Annex D to the
form of Lease marked as Exhibit A-2.
Minimum Liability as set forth in Schedule 1 to the form of Lease
Insurance Amount: marked as Exhibit A-2.
Payment Due Rate: as set forth in Schedule 1 to the form of Lease
marked as Exhibit A-2.
SLV Rate: as set forth in Schedule 1 to the form of Lease
marked as Exhibit A-2.
PARTICIPATION AGREEMENT
Mortgagee, Subordination Agent, Liquidity Providers, Pass Through Trustees,
Escrow Agents and Note Holders indemnified against Expenses and Taxes to the
extent set forth in Section 9 of the form of the Participation Agreement (the
"PARTICIPATION FORM") marked as Exhibit A-1 to the Note Purchase Agreement
SCHEDULE VII to
NOTE PURCHASE AGREEMENT
AGGREGATE AMORTIZATION SCHEDULE
1997-4A Trust 1997-4B Trust 1997-4C Trust
Scheduled Scheduled Scheduled
Date Principal Payment Principal Payment Principal Payment
- --------------- ----------------- ----------------- -----------------
January 2, 1998 $ 0.00 $ 0.00 $ 0.00
July 2, 1998 0.00 0.00 0.00
January 2, 1999 0.00 0.00 0.00
July 2, 1999 13,741,816.27 3,053,281.92 8,570,779.51
January 2, 2000 9,697,844.62 2,100,472.33 0.00
July 2, 2000 1,866,589.46 151,974.70 581,000.00
January 2, 2001 18,663,309.56 0.00 935,112.52
July 2, 2001 8,081,024.51 103,953.56 2,458,737.12
January 2, 2002 12,849,316.00 840,235.10 3,221,729.63
July 2, 2002 2,104,684.96 1,246,250.00 6,559,448.07
January 2, 2003 13,761,955.22 703,625.32 18,909,491.13
July 2, 2003 768,632.78 610,581.78 1,577,863.34
January 2, 2004 14,359,236.75 881,662.63 15,402,859.59
July 2, 2004 1,326,457.20 608,555.93 8,415,940.09
January 2, 2005 6,165,589.53 532,880.96 21,951,495.53
July 2, 2005 2,781,176.72 117,593.95 1,285,196.93
January 2, 2006 14,309,054.86 2,897,541.89 12,907,445.91
July 2, 2006 1,174,893.29 2,089,375.11 4,034,070.08
January 2, 2007 10,937,402.83 8,800,925.45 3,271,080.55
July 2, 2007 686,370.95 4,563,750.00 1,029,750.00
January 2, 2008 20,730,526.12 21,663,008.01 0.00
July 2, 2008 1,672,651.45 2,148,110.84 0.00
January 2, 2009 9,986,307.09 18,348,237.49 0.00
July 2, 2009 3,637,035.84 2,436,860.36 0.00
January 2, 2010 21,044,178.83 12,653,743.63 0.00
July 2, 2010 6,733,508.21 0.00 0.00
January 2, 2011 24,414,930.00 9,001,950.38 0.00
July 2, 2011 6,526,873.14 3,716,250.00 0.00
January 2, 2012 35,011,582.82 10,277,213.61 0.00
July 2, 2012 6,761,758.79 3,731,250.00 0.00
January 2, 2013 37,849,654.83 13,945,000.00 0.00
July 2, 2013 3,253,692.50 0.00 0.00
January 2, 2014 53,900,457.25 4,443,813.45 0.00
July 2, 2014 10,508,483.54 0.00 0.00
January 2, 2015 53,827,776.35 0.00 0.00
July 2, 2015 10,485,336.98 1,246,250.00 0.00
January 2, 2016 31,538,341.34 14,142.99 0.00
July 2, 2016 4,240,688.85 1,274,187.27 0.00
January 2, 2017 25,222,223.47 734,321.34 0.00
July 2, 2017 0.00 0.00 0.00
January 2, 2018 5,329,637.09 0.00 0.00
ANNEX A to
NOTE PURCHASE AGREEMENT
DEFINITIONS
"ACT" means 49 U.S.C. Section 40101-46507.
"ADJUSTED TREASURY YIELD" means the Treasury Yield plus, in the case
of a distribution to holders of Class A Certificates, 86 basis points, in the
case of a distribution to holders of Class B Certificates, 86 basis points and,
in the case of a distribution to holders of Class C Certificates, 79 basis
points.
"AFFILIATE" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person. For 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 "controlling," "controlled by" and "under common
control with" have correlative meanings.
"AIRCRAFT PURCHASE AGREEMENT" means, in the case of the Boeing
777-200 Aircraft, the Purchase Agreement No. 2061 dated October 10, 1997, or, in
the case of the Boeing 737-524 Aircraft, the Boeing 737-724 Aircraft and the
Boeing 737-824 Aircraft, the Purchase Agreement No. 1951 dated July 23, 1996, as
amended, each between the Company and the Manufacturer (including all exhibits
thereto, together with all letter agreements entered into that by their terms
constitute part of any such Purchase Agreement).
"AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT" means a Purchase Agreement
and Engine Warranties Assignment substantially in the form of Exhibit A-4 to the
Note Purchase Agreement.
"ASSUMED AMORTIZATION SCHEDULE" means Schedule VII to the Note
Purchase Agreement.
"AVERAGE LIFE DATE" means, for any Equipment Note, the date which
follows the time of determination by a period equal to the Remaining Weighted
Average Life of such Equipment Note.
"BANKRUPTCY CODE" means the United States Bankruptcy Code, 11 U.S.C.
Section 102 ET SEQ.
"BASIC PASS THROUGH TRUST AGREEMENT" means the Pass Through Trust
Agreement, dated September 25, 1997, between the Company and Pass Through
Trustee, as such agreement may be supplemented, amended or modified, but does
not include any Trust Supplement.
"BUSINESS DAY" means any day, other than a Saturday, Sunday or other
day on which commercial banks are authorized or required by law to close in New
York, New York, Houston, Texas, Wilmington, Delaware or Salt Lake City, Utah.
"CERTIFICATE" has the meaning set forth in the third recital to the
Note Purchase Agreement.
"CERTIFICATEHOLDER" means the Person in whose name a Certificate is
registered in the Register.
"CLASS" means the class of Certificates issued by each Pass Through
Trust.
"CLASS D CERTIFICATES" means pass through certificates issued by the
Continental Airlines Pass Through Trust, Series 1997-4D.
"COMPANY" means Continental Airlines, Inc., a Delaware corporation.
"CORPORATE TRUST OFFICE" with respect to any Pass Through Trustee or
any Loan Trustee, means the office of such trustee in the city at which at any
particular time its corporate trust business shall be principally administered.
"CUT-OFF DATE" means the earlier of (a) the day after the Delivery
Period Termination Date and (b) the date on which a Triggering Event occurs.
"DELIVERY PERIOD TERMINATION DATE" means the earlier of (a) December
31, 1998, or, if the Equipment Notes relating to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have not been purchased by the Pass Through
Trustees on or prior to such date due to any reason beyond the control of the
Company and not occasioned by the Company's fault or negligence, May 31, 1999
(provided that, if a labor strike occurs at the Manufacturer on or prior to
either or both of such dates referred to in this clause (a), such date or dates
on or following the commencement of such strike shall be extended by adding
thereto the number of days that such strike continued in effect) and (b) the
date on which Equipment Notes issued with respect to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Pass Through
Trustees in accordance with the Note Purchase Agreement.
"DELIVERY DATE" means the Business Day on which a New Aircraft is
delivered to and accepted by the Company.
"DEPOSIT" has the meaning set forth in the fifth recital to the Note
Purchase Agreement.
"DEPOSIT AGREEMENT" has the meaning set forth in the fifth recital
to the Note Purchase Agreement.
"DEPOSIT MAKE-WHOLE PREMIUM" means, with respect to the distribution
of unused Deposits to holders of any Class of Certificates, as of any date of
determination, an amount equal to the excess, if any, of (a) the present value
of the excess of (i) the scheduled payment of principal and interest to maturity
of the Equipment Notes, assuming the maximum principal amount thereof (the
"Maximum Amount") minus such Class of Certificates' Pro Rata Share were issued,
on each remaining Regular Distribution Date for such Class under the Assumed
Amortization Schedule (assuming for purposes of giving effect to the subtraction
above, if such Class of Certificates' Pro Rata Share is greater than zero, that
each scheduled payment of principal on such Schedule is reduced in an amount
equal to such scheduled payment multiplied by a fraction, the numerator of which
shall be the Pro Rata Share and the denominator of which shall be the Maximum
Amount) over (ii) the scheduled payment of principal and interest to maturity of
the Equipment Notes actually acquired by the Pass Through Trustee for such Class
on each such Regular Distribution Date, such present value computed by
discounting such excess on a semiannual basis on each Regular Distribution Date
(assuming a 360-day year of twelve 30-day months) using a discount rate equal to
the Adjusted Treasury Yield over (b) the amount of such unused Deposits to be
distributed to the holders of such Certificates minus such Class of
Certificates' Pro Rata Share (the remainder of such subtraction, the "Net
Deposits") plus accrued and unpaid interest on the Net Deposits to but excluding
such date of determination from and including the preceding Regular Distribution
Date (or if such date of determination precedes the first Regular Distribution
Date, the Issuance Date).
"DEPOSITARY" means Credit Suisse First Boston, New York branch, a
banking institution organized under the laws of Switzerland.
"EQUIPMENT NOTES" means and includes any equipment notes issued
under any Indenture in the form specified in Section 2.01 thereof (as such form
may be varied pursuant to the terms of such Indenture) and any Equipment Note
issued under any Indenture in exchange for or replacement of any other Equipment
Note.
"ESCROW AGENT" has the meaning set forth in the first paragraph of
the Note Purchase Agreement.
"ESCROW AND PAYING AGENT AGREEMENT" has the meaning set forth in the
fifth recital to the Note Purchase Agreement.
"FAA" means the Federal Aviation Administration of the United
States.
"FINAL WITHDRAWAL" with respect to each Escrow and Paying Agent
Agreement, has the meaning set forth in Section 1.02 thereof.
"FINANCING AGREEMENTS" means, collectively, the Lease Financing
Agreements and the Owner Financing Agreements.
"GOVERNMENT ENTITY" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"H.15(519)" means the weekly statistical release designated as such,
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"INDENTURES" means, collectively, the Leased Aircraft Indentures,
the Special Indentures and the Owned Aircraft Indentures.
"INTERCREDITOR AGREEMENT" has the meaning set forth in the ninth
recital to the Note Purchase Agreement.
"ISSUANCE DATE" means the date of the original issuance of the
Certificates.
"LAW" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.
"LEASE" means a Lease Agreement substantially in the form of Exhibit
A-2 to the Note Purchase Agreement.
"LEASE FINANCING AGREEMENTS" means, collectively, the Aircraft
Purchase Agreement Assignment, the Leased Aircraft Participation Agreement, the
Lease, the Leased Aircraft Indenture (or, in a case where The Boeing Company or
any of its Affiliates is the Owner Participant and if so specified in the
Delivery Notice, the Special Indenture), the Equipment Notes issued thereunder
and the Trust Agreement relating to the financing of a Leased Aircraft.
"LEASED AIRCRAFT" means a New Aircraft subject to a Lease.
"LEASED AIRCRAFT INDENTURE" means a Trust Indenture and Mortgage
substantially in the form of Exhibit A-3 to the Note Purchase Agreement.
"LEASED AIRCRAFT PARTICIPATION AGREEMENT" means a Participation
Agreement substantially in the form of Exhibit A-1 to the Note Purchase
Agreement.
"LIQUIDITY FACILITY" has the meaning set forth in the ninth recital
to the Note Purchase Agreement.
"LIQUIDITY PROVIDER" has the meaning set forth in the ninth recital
to the Note Purchase Agreement.
"LOAN TRUSTEE" means (i) in the case of the Lease Financing
Agreements, the "Mortgagee" as defined therein and (ii) in the case of the Owner
Financing Agreements, the "Mortgagee" as defined therein.
"MANDATORY DOCUMENT TERMS" means the terms set forth on Schedule V
to the Note Purchase Agreement.
"MANDATORY ECONOMIC TERMS" means the terms set forth on Schedule VI
to the Note Purchase Agreement.
"MANUFACTURER" means The Boeing Company, a Delaware corporation,
solely in its capacity as manufacturer or seller of New Aircraft.
"NEW AIRCRAFT" has the meaning set forth in the second recital to
the Note Purchase Agreement.
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement to which
this Annex A is attached.
"NOTICE OF PURCHASE WITHDRAWAL" with respect to each Deposit
Agreement, has the meaning set forth in Section 2.3 thereof.
"OPERATIVE AGREEMENTS" means, collectively, the Pass Through Trust
Agreements, the Escrow and Paying Agent Agreements, the Deposit Agreements, the
Liquidity Facilities, the Intercreditor Agreement, the Trust Agreements, the
Equipment Notes, the Certificates and the Financing Agreements.
"OWNED AIRCRAFT" means a New Aircraft subject to an Owned Aircraft
Indenture.
"OWNED AIRCRAFT INDENTURE" means a Trust Indenture and Mortgage
substantially in the form of Exhibit C-2 to the Note Purchase Agreement.
"OWNED AIRCRAFT PARTICIPATION AGREEMENT" means a Participation
Agreement substantially in the form of Exhibit C-1 to the Note Purchase
Agreement.
"OWNER FINANCING AGREEMENTS" means, collectively, the Owned Aircraft
Participation Agreement, the Owned Aircraft Indenture and the Equipment Notes
issued thereunder.
"OWNER PARTICIPANT" means, with respect to any Leased Aircraft, the
Person named as the Owner Participant in the Participation Agreement with
respect to such Leased Aircraft.
"OWNER TRUST" means with respect to any Leased Aircraft, the trust
created by the "Trust Agreement" referred to in the Leased Aircraft Indenture or
Special Indenture related thereto.
"OWNER TRUSTEE" means with respect to any Leased Aircraft, the
"Owner Trustee" party to the "Trust Agreement" referred to in the Leased
Aircraft Indenture or Special Indenture related thereto.
"PARTICIPATION AGREEMENTS" means, collectively, the Leased Aircraft
Participation Agreements and the Owned Aircraft Participation Agreements.
"PASS THROUGH TRUST" has the meaning set forth in the third recital
to the Note Purchase Agreement.
"PASS THROUGH TRUST AGREEMENT" means each of the three separate
Trust Supplements, together in each case with the Basic Pass Through Trust
Agreement, each dated as of the Issuance Date, by and between the Lessee and
Pass Through Trustee.
"PASS THROUGH TRUSTEE" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
"PAYING AGENT" has the meaning set forth in the first paragraph of
the Note Purchase Agreement.
"PERSON" means any individual, firm, partnership, joint venture,
trust, trustee, Government Entity, organization, association, corporation,
government agency, committee, department, authority and other body, corporate or
incorporate, whether having distinct legal status or not, or any member of any
of the same.
"PRO RATA SHARE" means, with respect to any Class of Certificates,
the sum of (i) $15,000,000 multiplied by a fraction, the numerator of which
shall be the amount of unused Deposits to be distributed to holders of such
Class of Certificates in connection with the Final Withdrawal and the
denominator of which shall be the amount of unused Deposits to be distributed to
holders of all Classes of Certificates in connection with the Final Withdrawal
plus (ii) if any Aircraft has not been delivered by the Manufacturer on or prior
to the Delivery Period Termination Date due to any reason not occasioned by the
Company's fault or negligence and no Substitute Aircraft has been provided in
lieu of such Aircraft, an amount equal to the maximum principal amount of
Equipment Notes with respect to such Aircraft that could have been issued and
acquired by the Pass Through Trust that issued such Class of Certificates in
accordance with the Mandatory Economic Terms.
"QUALIFIED OWNER PARTICIPANT" means any bank, trust company,
insurance company, financial institution or corporation (other than, without the
Company's consent, a commercial air carrier, a commercial aircraft operator, a
freight forwarder or Affiliate of any of the foregoing), in each case with a
combined capital and surplus or net worth of at least $50,000,000.
"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 Investors Service, Inc. and Standard & Poor's Ratings
Services, a division of McGraw-Hill Inc.
"RATING AGENCY CONFIRMATION" means, with respect to any Financing
Agreement that has been modified in any material respect from the forms thereof
attached to the Note Purchase Agreement or with respect to Substitute Aircraft,
a written confirmation from each of the Rating Agencies that the use of such
Financing Agreement with such modifications or the substituting of such
Substitute Aircraft for a New Aircraft, whichever of the foregoing shall in a
particular case require Rating Agency Confirmation, 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.
"REGISTER" means the register maintained pursuant to Sections 3.04
and 7.12 of the Basic Pass Through Trust Agreement with respect to each Pass
Through Trust.
"REGULAR DISTRIBUTION DATES" shall mean January 2 and July 2 of each
year, commencing January 2, 1998.
"REMAINING WEIGHTED AVERAGE LIFE" means, on a given date with
respect to any Equipment Note, the number of days equal to the quotient obtained
by dividing (a) the sum of each of the products obtained by multiplying (i) the
amount of each then remaining scheduled payment of principal of such Equipment
Note by (ii) the number of days from and including such determination date to
but excluding the date on which such payment of principal is scheduled to be
made, by (b) the then outstanding principal amount of such Equipment Note.
"SECTION 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code
or any successor or analogous Section of the federal bankruptcy Law in effect
from time to time.
"SERIES A EQUIPMENT NOTES" means Equipment Notes issued under an
Indenture and designated as "Series A" thereunder.
"SERIES B EQUIPMENT NOTES" means Equipment Notes issued under an
Indenture and designated as "Series B" thereunder.
"SERIES C EQUIPMENT NOTES" means Equipment Notes issued under an
Indenture and designated as "Series C" thereunder.
"SERIES D EQUIPMENT NOTES" means Equipment Notes issued under an
Owned Aircraft Indenture and designated as "Series D" thereunder.
"SPECIAL INDENTURE" means a Trust Indenture and Mortgage
substantially in the form of Exhibit A-6 to the Note Purchase Agreement.
"SUBORDINATION AGENT" has the meaning set forth in the first
paragraph of the Note Purchase Agreement.
"SUBSTITUTE AIRCRAFT" has the meaning set forth in Section 1(g) of
the Note Purchase Agreement.
"TAXES" means all license, recording, documentary, registration and
other similar fees and all taxes, levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever imposed by any Taxing Authority,
together with any penalties, additions to tax, fines or interest thereon or
additions thereto.
"TAXING AUTHORITY" means any federal, state or local government or
other taxing authority in the United States, any foreign government or any
political subdivision or taxing authority thereof, any international taxing
authority or any territory or possession of the United States or any taxing
authority thereof.
"TREASURY YIELD" means, as of any date of determination, with
respect to any Equipment Note (utilizing the Assumed Amortization Schedule
applicable thereto), the interest rate (expressed as a decimal and, in the case
of United States Treasury bills, converted to a bond equivalent yield)
determined to be the per annum rate equal to the semi-annual yield to maturity
for United States Treasury securities maturing on the Average Life Date (of such
Equipment Note) and trading in the public securities markets either as
determined by interpolation between the most recent weekly average yield to
maturity for two series of United States Treasury securities, trading in the
public securities markets, (A) one maturing as close as possible to, but earlier
than, the Average Life Date (of such Equipment Note) and (B) the other maturing
as close as possible to, but later than, the Average Life Date (of such
Equipment Note), in each case as published in the most recent H.15(519) or, if a
weekly average yield to maturity for United States Treasury securities maturing
on the Average Life Date (of such Equipment Note) is reported on the most recent
H.15(519), such weekly average yield to maturity as published in such H.15(519).
"TRIGGERING EVENT" has the meaning assigned to such term in the
Intercreditor Agreement.
"TRUST AGREEMENT" means a Trust Agreement substantially in the form
of Exhibit E to the Note Purchase Agreement.
"TRUST SUPPLEMENT" means an agreement supplemental to the Basic Pass
Through Trust Agreement pursuant to which (i) a separate trust is created for
the benefit of the holders of the Pass Through Certificates of a class, (ii) the
issuance of the Pass Through Certificates of such class representing fractional
undivided interests in such trust is authorized and (iii) the terms of the Pass
Through Certificates of such class are established.
"UNDERWRITERS" has the meaning set forth in the fourth recital to
the Note Purchase Agreement.
"WTC" has the meaning set forth in the first paragraph of the Note
Purchase Agreement.
EXHIBIT A-1 to
NOTE PURCHASE AGREEMENT
FORM OF LEASED AIRCRAFT PARTICIPATION AGREEMENT
[FILED SEPARATELY]
EXHIBIT A-2 to
NOTE PURCHASE AGREEMENT
FORM OF LEASE
[FILED SEPARATELY]
EXHIBIT A-3 to
NOTE PURCHASE AGREEMENT
FORM OF LEASED AIRCRAFT INDENTURE
[FILED SEPARATELY]
EXHIBIT A-4 to
NOTE PURCHASE AGREEMENT
FORM OF AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT
--------------------------------------------------------------------
| CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION |
| SET FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS |
| DEFINED HEREIN) |
--------------------------------------------------------------------
PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___*
PURCHASE AGREEMENT AND ENGINE WARRANTIES ASSIGNMENT ___, dated as of
__________, between Continental Airlines, Inc., a Delaware corporation
("Assignor"), and First Security Bank, National Association, a national banking
association, not in its individual capacity but solely as Owner Trustee
("Assignee") under Trust Agreement ___ dated as of __________ (the "Trust
Agreement"), between the Owner Participant named therein and Assignee, in its
individual capacity, and otherwise not in its individual capacity but solely as
trustee thereunder.
Assignor and Manufacturer (as such term and other capitalized terms
are hereinafter defined) are parties to the Purchase Agreement, providing, among
other things, for the manufacture and sale by Manufacturer or Manufacturer's
wholly owned subsidiary to Assignor of certain aircraft, engines and related
equipment, including the Aircraft. Assignor and Engine Manufacturer are parties
to the General Terms Agreement, containing, among other terms and conditions,
the Engine Warranties.
Assignee wishes to acquire the Aircraft and Assignor, on the terms
and conditions hereinafter set forth, is willing to assign to Assignee certain
of Assignor's rights and interests under the Purchase Agreement and the General
Terms Agreement and Assignee is willing to accept such assignment, as
hereinafter set forth.
AGREEMENTS
The parties hereto agree as follows:
Section 1. DEFINITIONS. For all purposes of this Assignment, except
as otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following meanings: ----------
- ----------
* This form is to be utilized for Boeing 737 aircraft and will be modified,
as appropriate, for Boeing 777 aircraft.
AIRCRAFT - The Boeing Model 737-___ aircraft bearing Manufacturer's
Serial No. _______ and U.S. Registration No. __________, to be financed pursuant
to the Participation Agreement, including the Engines.
ENGINES - Two CFM Model ________ series engines bearing
manufacturer's serial numbers ________ and ________, respectively, installed on
the Aircraft.
ENGINE MANUFACTURER - CFM International, Inc., a Delaware
corporation, and its successors and assigns.
ENGINE WARRANTIES - Engine Manufacturer's "New Engine Warranty,"
"New Parts Warranty," "Ultimate Life Warranty" and "Campaign Change Warranty,"
as set forth in the Engine Manufacturer's Engine Product Support Plan which
forms a part of the General Terms Agreement, and as limited by the applicable
terms of the General Terms Agreement and such Engine Product Support Plan.
GENERAL TERMS AGREEMENT - The Agreement No. 6-7075, dated as of June
10, 1985, by and between Engine Manufacturer and Assignor, including the "Engine
Product Support Plan" at Exhibit B thereto, insofar as such Engine Product
Support Plan relates to the Engine Warranties, but excluding any and all letter
agreements attached thereto (which do not detract or limit the Engine Warranties
in any material respect), to the extent that such General Terms Agreement and
such Exhibit relate to the Engines, as such General Terms Agreement may
hereafter be amended, supplemented and modified to the extent permitted by the
terms of this Assignment to the extent relating to the Engines.
LEASE - The Lease Agreement ___, dated as of __________, as at any
time amended, supplemented and modified, between Assignee, as lessor, and
Assignor, as lessee, providing for the lease of the Aircraft.
MANUFACTURER - The Boeing Company, a Delaware corporation, and its
successors and assigns.
PARTICIPATION AGREEMENT - The Participation Agreement ___, dated as
of ___________, among Assignor, the Participants, Assignee and Mortgagee, as at
any time amended, supplemented and modified.
PURCHASE AGREEMENT - Purchase Agreement No.1951, dated July 23,
1996, between Manufacturer and Assignor, providing, among other things, for the
manufacture and sale by Manufacturer to Assignor of certain Boeing Model 737
aircraft (including the Aircraft) and including as part thereof Exhibits A, B,
D, E and F thereto, but excluding all other exhibits and letter and supplemental
agreements, to the extent that such Purchase Agreement and such Exhibits relate
to the Aircraft, as such Purchase Agreement may hereafter be amended,
supplemented and modified to the extent permitted by the terms of this
Assignment.
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in the Participation
Agreement.
Section 2. ASSIGNMENT. Assignor does hereby sell, assign, transfer
and set over unto Assignee and its successors and permitted assigns all of
Assignor's rights and interests in and to the Purchase Agreement, as and only to
the extent that the same relates to the Aircraft, and in and to the General
Terms Agreement, as and only to the extent that the Engine Warranties contained
therein relate to the Engines, except to the extent reserved below, including
without limitation in such assignment (a) all claims for damages in respect of
the Aircraft and the Engines arising as a result of any default by Manufacturer
under the Purchase Agreement or Engine Manufacturer or any other vendor or
supplier of other parts or equipment installed on or in the Aircraft, including
without limitation all warranty service life policies, aircraft performance
guarantees and indemnity provisions contained in the Purchase Agreement and the
Engine Warranties, and all claims arising thereunder, in respect of the Aircraft
and the Engines, (b) any and all rights of Assignor to compel performance of the
terms of the Purchase Agreement in respect of the Aircraft and the Engine
Warranties in respect of the Engines and (c) the right to purchase and take
title to the Aircraft pursuant to the Purchase Agreement; reserving to Assignor,
however, with respect to the Aircraft and each Engine, (i) all rights to receive
any credits due to Assignor with respect to the purchase price of the Aircraft
pursuant to the Purchase Agreement and of the Engines pursuant to the General
Terms Agreement, (ii) all of Assignor's rights and interests in or arising out
of any payments or deposits made relating to the Aircraft or to be made by
Assignor on amounts credited or to be credited or paid or to be paid by the
Manufacturer to the Assignor in respect of the Aircraft and (iii) so long and
only so long as the Aircraft and each Engine shall be subject to the Lease and
no Lease Event of Default shall have occurred and be continuing thereunder, the
rights (A) to demand, accept and retain all rights in and to all property (other
than the Aircraft), data and services that Manufacturer or Engine Manufacturer
is obligated to provide or does provide pursuant to the Purchase Agreement or
the General Terms Agreement, as the case may be, and (B) to obtain services,
training, data and demonstration and test flights pursuant to the Purchase
Agreement or the General Terms Agreement, as the case may be.
Assignee hereby accepts such assignment subject to the terms hereof.
Assignor has furnished a true copy of the Purchase Agreement and a true copy of
the General Terms Agreement to Assignee and has specifically directed Assignee's
attention to Paragraph 10 of Part A, Paragraph 5 of Part C, Paragraph 3 of Part
D, Paragraph 2 of Part D-1, Paragraph 5 of Part I, and Paragraph 9 and 10 of
Part F-2 of Exhibit B to the Purchase Agreement.
Section 3. EXERCISE OF RIGHTS OF "BUYER" UNDER PURCHASE AGREEMENT
AND OF "AIRLINE" UNDER GENERAL TERMS AGREEMENT. Notwithstanding the foregoing,
if and so long as no Lease Event of Default shall have occurred and be
continuing, Assignee authorizes Assignor, to the exclusion of Assignee, during
the Term, to exercise in Assignor's name all rights and powers of the "Buyer" in
respect of the Aircraft under the Purchase Agreement and of the "Airline" in
respect of each Engine under the General Terms Agreement, and of Assignee in
respect of a default by any vendor or supplier of parts and equipment (as
specified in clause (a) of Section 2 above) and to retain any recovery or
benefit resulting from the enforcement of any warranty or indemnity under the
Purchase Agreement or the General Terms Agreement in respect of the Aircraft or
each Engine, as the case may be, except that Assignor may not enter into any
change order or other amendment, modification or supplement to the Purchase
Agreement without the written consent or countersignature of Assignee if such
change order, amendment, modification or supplement would (i) result in any
rescission, cancellation or termination of the Purchase Agreement in respect of
the Aircraft or (ii) materially diminish the rights assigned hereunder to
Assignee. Assignee agrees that, as between Assignee and Manufacturer or Engine
Manufacturer, as the case may be (and without affecting Assignor's duties or
obligations under the Participation Agreement or the Lease), neither
Manufacturer nor Engine Manufacturer, as the case may be, shall be deemed to
have knowledge of any Lease Default, Lease Event of Default, declaration of
default or the discontinuance or remedy thereof or the Aircraft or either Engine
being no longer subject to the Lease or any change in the authority of Assignor
or Assignee, as the case may be, to exercise any of the rights established
hereunder unless and until Manufacturer shall have received written notice
thereof from Assignee or Mortgagee addressed to its Vice President - Contracts
at P.O. Box 3707, Mail Stop 75-38, Seattle, Washington 98124-2207, if by mail,
or to (425) 237-1706, if by facsimile, or, in the case of Engine Manufacturer,
Engine Manufacturer shall have received written notice thereof from Assignee or
Mortgagee addressed to its Commercial Contract Director at P.O. Box 15514,
Cincinnati, Ohio 45215-6301, if by mail, or to (513) 243-1345, if by facsimile.
So long as Manufacturer and Engine Manufacturer act in good faith, Manufacturer
and Engine Manufacturer may rely conclusively on any such notice without
inquiring as to the accuracy of, or the entitlement of the party to give, such
notice.
The Engine Manufacturer shall not be deemed to have knowledge of the
replacement of an Engine with another CFM engine, until the Engine Manufacturer
has received written notice thereof. Such notice shall include the serial number
of the Engine being replaced, as well as the serial number of the replacement
Engine and shall be sent to: Lease Pool Manager, Customer Support Operation, GE
Aircraft Engines, 111 Merchant Street, Room 450, Cincinnati, Ohio 45246.
Section 4. CERTAIN AGREEMENTS. It is expressly agreed that, anything
herein contained to the contrary notwithstanding:
(a) Assignor shall at all times remain liable (i) to Manufacturer
under the Purchase Agreement to perform all the duties and obligations of
the "Buyer" thereunder and (ii) to Engine Manufacturer under the General
Terms Agreement to perform all the duties and obligations of the "Airline"
thereunder, in each case to the same extent as if this Assignment had not
been executed,
(b) the exercise by Assignee of any of the rights assigned hereunder
shall not release Assignor from any of its duties or obligations to
Manufacturer under the Purchase Agreement or to Engine Manufacturer under
the General Terms Agreement except to the extent that such exercise by
Assignee shall constitute performance of such duties and obligations, and
(c) except as provided in the next sentence, none of Assignee,
Mortgagee or any Participant shall have any obligation or liability under
the Purchase Agreement or the General Terms Agreement by reason of, or
arising out of, this Assignment or be obligated to perform any of the
obligations or duties of Assignor under the Purchase Agreement or the
General Terms Agreement or to make any payment thereunder or to make any
inquiry as to the sufficiency of any payment received by any of them or to
present or file any claim or to take any other action to collect or
enforce any claim for any payment assigned hereunder.
Anything contained in this Assignment, the Consent and Agreement or the Engine
Consent and Agreement to the contrary notwithstanding, but without in any way
releasing Assignor from any of its duties or obligations under the Purchase
Agreement, the General Terms Agreement or this Assignment, Assignee and
Mortgagee confirm for the benefit of Manufacturer and Engine Manufacturer,
respectively, that, insofar as the provisions of the Purchase Agreement or the
Engine Warranties relate to the Aircraft or the Engines, as the case may be, in
exercising any rights under the Purchase Agreement or the Engine Warranties, or
in making any claim with respect to the Aircraft or other goods and services
delivered or to be delivered pursuant to the Purchase Agreement or the Engine
Warranties, the terms and conditions of the Purchase Agreement including,
without limitation, the Disclaimer and Release and Exclusion of Liabilities
provisions of Sections 12.1 through 12.4 of Article 12 and the Engine
Warranties, including without limitation Exhibit B (the "Product Assurance
Document") shall apply to, and be binding upon, Assignee and Mortgagee to the
same extent as Assignor.
Section 5. PRESERVATION OF RIGHTS. Nothing contained in this
Assignment shall in any way diminish or limit the provisions of Assignor's
indemnity in Section 9 of the Participation Agreement with respect to any
liability of Assignee to Manufacturer in any way relating to or arising out of
the Purchase Agreement. Nothing contained in this Assignment shall subject
Manufacturer or Engine Manufacturer to any obligation or liability to which it
would not otherwise be subject under the Purchase Agreement or under the General
Terms Agreement, as the case may be, or modify in any respect the contract
rights of Manufacturer or Engine Manufacturer thereunder, except as may be
provided in the Consent and Agreement and the Engine Consent and Agreement, or
require Manufacturer to divest itself of title to or possession of the Aircraft
or other goods and services until delivery thereof and payment therefor as
provided in the Purchase Agreement or subject Manufacturer or Engine
Manufacturer to any multiple or duplicative liability or obligation under the
Purchase Agreement or the General Terms Agreement, as the case may be. No
further assignment of the Engine Warranties, including without limitation
assignments for security purposes (other than under the Trust Indenture), are
permitted without the express written consent of Engine Manufacturer.
Section 6. APPOINTMENT OF ATTORNEY. Effective at any time when a
Lease Event of Default shall have occurred and be continuing, (i) unless
Assignee and Mortgagee (so long as the Lien of the Trust Indenture has not been
discharged), in their sole discretion, shall notify Manufacturer or Engine
Manufacturer, as the case may be, to the contrary, the authorization given to
Assignor under Section 3 hereof to enforce such rights and claims shall
henceforth cease to be effective and Assignee and its successors and permitted
assigns shall, to the exclusion of Assignor, be entitled to assert and enforce
such rights and claims as substitute party plaintiff or otherwise, and Assignor
shall, at the request of Assignee or its successors or permitted assigns and at
Assignor's expense, cooperate with and take such action as is reasonably
necessary to enable Assignee and its successors and permitted assigns to enforce
such rights and claims, and (ii) Assignor does hereby constitute Assignee, its
successors and permitted assigns, Assignor's true and lawful attorney,
irrevocably, with full power (in the name of Assignor or otherwise) to ask,
require, demand, receive, compound and give acquittance for any and all monies
and claims for monies due and to become due under, or arising out of, the
Purchase Agreement in respect of the Aircraft or the Engine Warranties in
respect of the Engines, as the case may be, to the extent that the same have
been assigned by this Assignment and, for such period as Assignee may exercise
rights with respect thereto under this Assignment, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or
take any action or institute (or, if previously commenced, assume control of)
any proceeding and to obtain any recovery in connection therewith which Assignee
may deem to be necessary or advisable in the premises.
Section 7. OTHER ACTION. Assignor agrees that, at Assignor's sole
cost and expense, at any time and from time to time, upon the written request of
Assignee or, so long as the Lien of the Trust Indenture has not been discharged,
Mortgagee, Assignor will promptly and duly execute and deliver any and all such
further instruments and documents and take such further action as Assignee or,
so long as the Lien of the Trust Indenture has not been discharged, Mortgagee,
may reasonably request in order to obtain the full benefits of this Assignment
and of the rights and powers herein granted.
Section 8. ASSIGNOR'S REPRESENTATIONS AND WARRANTIES. Assignor does
hereby represent and warrant that the Purchase Agreement and the General Terms
Agreement are in full force and effect as to Assignor and are enforceable
against Assignor in accordance with their respective terms. Assignor does hereby
further represent and warrant that Assignor has, with the authorized execution
of the Consent and Agreement and the Engine Consent and Agreement, (i) received
all necessary consents to the assignment and transfer contemplated herein
(including without limitation the assignment and transfer contemplated herein of
Assignor's rights under the Purchase Agreement and the General Terms Agreement)
and (ii) assuming that the Consent and Agreement and the Engine Consent and
Agreement are in full force and effect, such consents are in full force and
effect and Assignor further represents and warrants that Assignor has not
assigned (except as assigned hereby) or pledged (except pursuant to the 737
Purchase Agreement Assignment dated as of November 27, 1996 between Lessee and
Manufacturer, the Lien of which will have been released at or prior to the
delivery of this Agreement), and hereby covenants that it will not during the
Term assign (except as assigned hereby) or pledge so long as this Assignment
shall remain in effect, the whole or any part of the rights hereby assigned or
any of its rights with respect to the Aircraft under the Purchase Agreement or
with respect to the Engines under the General Terms Agreement not assigned
hereby to anyone other than Assignee.
Section 9. PAYMENTS. Notwithstanding this Assignment and anything
herein to the contrary, all amounts that Manufacturer or Engine Manufacturer is
obligated to pay to Assignor under the Purchase Agreement with respect to the
Aircraft or under the General Terms Agreement with respect to the Engines,
including, without limitation, resulting from the enforcement of any warranty,
covenant, representation, indemnity or product support agreement thereunder or
the enforcement or exercise of any right or power thereunder or hereunder (in
the case of Manufacturer, a "Manufacturer Payment," and in the case of Engine
Manufacturer, an "Engine Manufacturer Payment") (excluding, however, from
Manufacturer Payments and Engine Manufacturer Payments any amounts Manufacturer
is obligated to pay to Assignor with respect to the rights reserved to Assignor
in Section 2 hereof), will be payable and applicable as follows: all
Manufacturer Payments and Engine Manufacturer Payments shall be paid to Assignor
unless and until Manufacturer or Engine Manufacturer, as the case may be, shall
have received written notice as set forth in Section 3 hereof from Assignee or
Mortgagee that a Lease Event of Default has occurred and is continuing,
whereupon Manufacturer or Engine Manufacturer, as the case may be, will, until
Manufacturer or Engine Manufacturer, as the case may be, shall have received
written notice from Assignee or Mortgagee that all Lease Events of Default have
been cured or waived, make any and all such payments directly to Assignee (or,
so long as the Trust Indenture has not been discharged and Manufacturer or
Engine Manufacturer, as the case may be, shall have received notice thereof, to
Mortgagee). Any amounts received by Assignee pursuant to the immediately
preceding sentence shall, to the extent not theretofore applied in satisfaction
of sums owing to Assignee in accordance with the terms of the Operative
Agreements, be held and invested as provided in Section 4.5 of the Lease.
Section 10. ASSIGNEE'S AGREEMENT. Assignee agrees that, during the
Term, except as otherwise contemplated by Section 2 hereof and unless a Lease
Event of Default shall have occurred and be continuing, it will not enter into
any agreement that would amend, modify, supplement, rescind, cancel or terminate
the Purchase Agreement or the General Terms Agreement in respect of the Aircraft
or the Engines without the prior written consent of Assignor.
Section 11. EXECUTION; COUNTERPARTS, ETC. This Assignment is
executed by Assignor and Assignee concurrently with the execution and delivery
of the Lease. This Assignment may be executed by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the same
instrument. The section headings in this Assignment are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
Section 12. CONFIDENTIAL TREATMENT. Assignee agrees that it will not
disclose to any third party the terms of the Purchase Agreement or the General
Terms Agreement except (i) as required by applicable law or governmental
regulation, (ii) in connection with the financing of the Aircraft, (iii) as
permitted under Section 8 of the Participation Agreement as if this Assignment
were specifically referred to therein, (iv) with the consent of Assignor,
Manufacturer and the Engine Manufacturer (as the case may be) or (v) in
connection with any sale or lease of the Aircraft. Assignee further agrees that
in connection with any disclosures made as contemplated by clauses (ii) (except
in connection with the financing contemplated by the Participation Agreement),
(iii) (except as to clauses (C) and (E) and (F) of Section 8 of the
Participation Agreement) or (iv) of the preceding sentence, Assignee shall
instruct the entity to which such information is disclosed to treat such
information as confidential on the terms set forth in this Section 12.
Section 13. ASSIGNMENT TO MORTGAGEE. The right, title and interest
of Assignee in and to this Assignment has been assigned to and is subject to a
security interest in favor of Wilmington Trust Company, as Mortgagee under the
Trust Indenture, for the benefit of the Noteholders and the Indenture
Indemnitees referred to in such Trust Indenture, all to the extent provided in
such Trust Indenture. Assignor hereby consents to such assignment and to the
creation of such security interest in and to this Assignment.
SECTION 14. GOVERNING LAW. THIS ASSIGNMENT SHALL IN ALL RESPECTS BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS.
[This space intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement and
Engine Warranties Assignment ___ to be duly executed as of the day and year
first above written.
CONTINENTAL AIRLINES, INC.
By______________________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
not in its individual capacity
but solely as Owner Trustee
By______________________________________
Name:
Title:
The undersigned, as Mortgagee for the benefit of the Note Holders
and Indenture Indemnitees and as assignee of, and holder of a security interest
in, the estate, right, title and interest of Assignee in and to the foregoing
Assignment pursuant to the terms of the Trust Indenture agrees to the terms of
the foregoing Assignment and agrees that its rights and remedies under the Trust
Indenture shall be subject to the terms and conditions of the foregoing
Assignment, including Sections 4 and 5 therein, and of the Purchase Agreement
and the General Terms Agreement.
WILMINGTON TRUST COMPANY,
as Mortgagee
By______________________________________
Name:
Title:
MANUFACTURER CONSENT AND AGREEMENT ___
The undersigned, THE BOEING COMPANY, a Delaware corporation, hereby acknowledges
notice of and consents to all of the terms of Purchase Agreement and Engine
Warranties Assignment ___ (herein called the "Assignment") (the defined terms
therein being hereinafter used with the same meanings unless otherwise defined
herein) between Continental Airlines, Inc., as Assignor, and First Security
Bank, National Association, as Owner Trustee, as Assignee, and hereby confirms
to Assignee that: (i) all representations, warranties, indemnities and
agreements of Manufacturer under the Purchase Agreement with respect to the
Aircraft shall inure to the benefit of Assignee to the same extent as if
originally named the "Buyer" therein, except as provided by Section 2 of the
Assignment; (ii) Assignee shall not be liable for any of the obligations or
duties of Assignor under the Purchase Agreement, nor shall the Assignment give
rise to any duties or obligations whatsoever on the part of Assignee owing to
Manufacturer, except as provided in Section 4 of the Assignment; (iii)
Manufacturer consents to the lease of the Aircraft by Assignee to Assignor under
the Lease, consents to the grant of a security interest in the Aircraft pursuant
to the Trust Indenture by Assignee and agrees that the Assignment constitutes an
agreement by Assignee as required by Article 10.2 of the Purchase Agreement; and
(iv) Manufacturer will continue to pay to Assignor or its order all payments
that Manufacturer may be required to make in respect of the Aircraft under the
Purchase Agreement unless and until Manufacturer shall have received written
notice from Assignee or Mortgagee addressed to its Vice President - Contracts at
P.O. Box 3707, Mail Stop 75-38, Seattle, Washington 98124-2207, if by mail, or
to (425) 237-1706, if by facsimile, that a Lease Event of Default has occurred
and is continuing, whereupon Manufacturer will not be required to make further
inquiry into the content of such notice and will make any and all payments that
it may be required thereafter to make in respect of the Aircraft under the
Purchase Agreement and the right to receive that has been assigned under the
Assignment, directly to Assignee at its address at 79 South Main Street, Salt
Lake City, Utah 84111, Attn: Corporate Trust Department (or, so long as the
Trust Indenture has not been discharged, directly to Mortgagee at its address at
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attn:
Corporate Trust Administration), unless and until Manufacturer shall have
received notice in writing from Assignee or Mortgagee that no Lease Event of
Default is continuing, whereupon Manufacturer shall make all payments that
Manufacturer may be required to make in respect of the Aircraft under the
Purchase Agreement to Assignor or its order, as aforesaid.
Manufacturer hereby represents and warrants that: (i) Manufacturer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware; (ii) the making and performance of the Purchase
Agreement and this Manufacturer Consent and Agreement ___ have been duly
authorized by all necessary corporate action on the part of Manufacturer, do not
require any stockholder approval and do not contravene Manufacturer's
Certificate of Incorporation or by-laws or any indenture, credit agreement or
other contractual agreement to which Manufacturer is a party or by which it is
bound and the making of the Purchase Agreement and this Manufacturer Consent and
Agreement ___, the giving of the warranty obligations thereunder, do not, as to
such making or giving, contravene any law binding on Manufacturer; and (iii) the
Purchase Agreement constituted, as of the date thereof and at all times
thereafter to and including the date of this Manufacturer Consent and Agreement
___, and this Manufacturer Consent and Agreement ___ constitutes, binding
obligations of Manufacturer enforceable against Manufacturer in accordance with
their respective terms subject to (A) the limitations of applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and (B) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law), which
principles do not make the remedies available at law or in equity with respect
to the Purchase Agreement and this Manufacturer Consent and Agreement ___
inadequate for the practical realization of the benefits intended to be provided
thereby. It is understood that the execution of this Manufacturer Consent and
Agreement ___ by Manufacturer is subject to the condition that, concurrently
with the delivery of the Aircraft to Assignee, Assignee shall lease the Aircraft
to Assignor under the Lease.
THIS MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL RESPECTS BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF WASHINGTON, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT REFERENCE TO CONFLICTS OF
LAWS PRINCIPLES.
Dated as of ____________.
THE BOEING COMPANY
By______________________________________
Name:
Title:
ENGINE MANUFACTURER CONSENT AND AGREEMENT ___
The undersigned, CFM INTERNATIONAL INC., a Delaware corporation,
hereby acknowledges notice of and consents to all of the terms of Purchase
Agreement and Engine Warranties Assignment ___ (herein called the "Assignment")
(the defined terms therein being hereinafter used with the same meanings unless
otherwise defined herein) between Continental Airlines, Inc., as Assignor, and
First Security Bank, National Association, as Owner Trustee, as Assignee. Under
the General Terms Agreement, Engine Manufacturer has agreed to support certain
CFM Model ________ engines and spare parts therefor purchased by Assignor from
Engine Manufacturer, as installed on certain Boeing Model 737 aircraft. Engine
Manufacturer hereby confirms to Assignor and Assignee that the Engine
Warranties, as and to the extent that such relate to the Engines, shall inure to
the benefit of Assignee (and, so long as the Trust Indenture has not been
discharged, Mortgagee) to the same extent as if originally named "Airline" in
the General Terms Agreement and to the benefit of Assignor (but only to the
extent provided for in the Assignment) in each case subject to the terms and
conditions of the Assignment; PROVIDED, that Engine Manufacturer shall not owe
any liability or obligation under the Engine Warranties more than once in total.
Engine Manufacturer represents and warrants that:
1. It is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware;
2. The making and performance of this Engine Manufacturer Consent
and Agreement ___ in accordance with its terms have been duly authorized by all
necessary corporate action on the part of Engine Manufacturer, do not require
any stockholder approval and do not contravene its Certificate of Incorporation
or by-laws or any debenture, credit agreement or other contractual agreement to
which Engine Manufacturer is a party or by which it is bound or any law binding
on Engine Manufacturer;
3. The making and performance of the Engine Warranties in accordance
with their terms have been duly authorized by all necessary corporate action on
the part of Engine Manufacturer, do not require any stockholder approval and do
not contravene Engine Manufacturer's Certificate of Incorporation or by-laws or
any debenture, credit agreement or other contractual agreement to which Engine
Manufacturer is a party or by which it is bound, and do not, as to the making
thereof, contravene any law binding on Engine Manufacturer, and to the best of
its knowledge, do not as to the performance thereof contravene any law binding
on Engine Manufacturer; and
4. The Engine Warranties constituted as of the date on which they
were made and at all times thereafter to and including the date of this Engine
Manufacturer Consent and Agreement ___, and this Engine Manufacturer Consent and
Agreement ___ constitute binding obligations of Engine Manufacturer enforceable
against Engine Manufacturer in accordance with their respective terms subject
to:
(a) the limitations of applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights of creditors generally; and
(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
[This space intentionally left blank.]
THIS ENGINE MANUFACTURER CONSENT AND AGREEMENT ___ SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAWS.
Dated as of _____________.
CFM INTERNATIONAL, INC.
By______________________________________
Name:
Title:
EXHIBIT A-5 to
NOTE PURCHASE AGREEMENT
FORM OF LEASED AIRCRAFT TRUST AGREEMENT
[FILED SEPARATELY]
EXHIBIT A-6 to
NOTE PURCHASE AGREEMENT
FORM OF SPECIAL INDENTURE
[FILED SEPARATELY]
EXHIBIT B to
NOTE PURCHASE AGREEMENT
FORM OF DELIVERY NOTICE
EXHIBIT B
DELIVERY NOTICE
Dated as of [__________]
To each of the addressees listed
in Schedule A hereto
RE: DELIVERY NOTICE IN ACCORDANCE WITH NOTE
PURCHASE AGREEMENT REFERRED TO BELOW
Gentlemen:
Reference is made to the Note Purchase Agreement, dated as of
October 23, 1997 among Continental Airlines, Inc. (the "COMPANY"), Wilmington
Trust Company, as Pass Through Trustee under each of the Pass Through Trust
Agreements (as defined therein) (the "PASS THROUGH Trustee"), Wilmington Trust
Company, as Subordination Agent (the "SUBORDINATION AGENT"), First Security
Bank, National Association, as Escrow Agent (the "ESCROW AGENT") and Wilmington
Trust Company, as Paying Agent (the "PAYING AGENT") (as in effect from time to
time, the "NOTE PURCHASE AGREEMENT"). Unless otherwise defined herein,
capitalized terms used herein shall have the meanings set forth in the Note
Purchase Agreement or, to the extent not defined therein, the Intercreditor
Agreement.
Pursuant to Sections 1(b) of the Note Purchase Agreement, the
undersigned hereby notifies you, in respect of the Boeing [_______] aircraft
with manufacturer's serial number [______] (the "AIRCRAFT"), of the following:
(1) The Company has elected to treat the Aircraft as [a Leased Aircraft] [an
Owned Aircraft];
(2) The Scheduled Delivery Date of the Aircraft is [_________];
(3) The Funding Date for the Aircraft shall be [__________]; and
(4) The aggregate amount of each series of Equipment Notes to be issued, and
purchased by the respective Pass Through Trustees, on the Funding Date, in
connection with the financing of such Aircraft is as follows:
(a) the Class A Trustee shall purchase Series A Equipment
Notes in the amount of $[__________];
(b) the Class B Trustee shall purchase Series B Equipment Notes in
the amount of $[__________]; and
(c) the Class C Trustee shall purchase Series C Equipment Notes in
the amount of $[__________].
The Company hereby instructs the Class A Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated as of [__________]
and attach thereto a Notice of Purchase Withdrawal dated such date completed as
set forth on Exhibit A hereto and (ii) deliver such Withdrawal Certificate and
Notice of Purchase Withdrawal to the applicable Escrow Agent.
The Company hereby instructs the Class B Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated as of [__________]
and attach thereto a Notice of Purchase Withdrawal dated such date completed as
set forth on Exhibit B hereto and (ii) deliver such Withdrawal Certificate and
Notice of Purchase Withdrawal to the applicable Escrow Agent.
The Company hereby instructs the Class C Trustee to (i) execute a
Withdrawal Certificate in the form of Annex A hereto dated as of [__________]
and attach thereto a Notice of Purchase Withdrawal dated such date completed as
set forth on Exhibit C hereto and (ii) deliver such Withdrawal Certificate and
Notice of Purchase Withdrawal to the applicable Escrow Agent.
The Company hereby instructs each Pass Through Trustee to (i)
purchase Equipment Notes of a series and in an amount set forth opposite such
Pass Through Trustee in clause (4) above with a portion of the proceeds of the
withdrawals of Deposits referred to in the applicable Notice of Purchase
Withdrawal referred to above and (ii) re-deposit with the Depositary the excess,
if any, of the amount so withdrawn OVER the purchase price of such Equipment
Notes.
The Company hereby instructs each Pass Through Trustee to (a) enter
into the Participation Agreement [____] dated as of [__________] among the
Company, as Lessee, the Subordination Agent, the Pass Through Trustee,
Wilmington Trust Company, as Mortgagee and Loan Participant, First Security
Bank, National Association, as Owner Trustee and [__________], as Owner
Participant, (b) perform its obligations thereunder and (c) deliver such
certificates, documents and legal opinions relating to such Pass Through Trustee
as required thereby. [The Company confirms that the Special Indenture shall be
utilized in lieu of the Leased Aircraft Indenture.]
The Company hereby certifies that the Owner Participant with respect
to the Aircraft (A) is not an Affiliate of the Company and (B) based on the
representations of such Owner Participant, is either a Qualified Owner
Participant or a person whose obligations under the Owner Participant Agreements
(as defined in the Participation Agreement) are guaranteed by a Qualified Owner
Participant.
Yours faithfully,
Continental Airlines, Inc.
By:________________________
Name:
Title:
SCHEDULE A
Wilmington Trust Company, as
Pass Through Trustee, Subordination
Agent and Paying Agent
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Facsimile: (302) 651-8882
First Security Bank, National Association,
as Escrow Agent
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
Standard & Poor's Ratings Service
25 Broadway, 16th Floor
New York, New York 10004
Attention: Michael K. Vernier
Facsimile: (212) 208-0300
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Monica Rodriguez
Facsimile: (212) 553-4600
Annex A
WITHDRAWAL CERTIFICATE
(Class ___)
First Security Bank, National Association,
as Escrow Agent
Ladies and Gentlemen:
Reference is made to the Escrow and Paying Agent Agreement, dated as
of October 23, 1997 (the "Agreement"). We hereby certify to you that the
conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied. Pursuant
to Section 1.02(c) of the Agreement, please execute the attached Notice of
Withdrawal and immediately transmit by facsimile to the Depositary, at (212)
325-8319.
Capitalized terms used herein but not defined herein shall have the
meanings set forth in the Agreement.
Very truly yours,
WILMINGTON TRUST COMPANY
not in its individual capacity
by solely as Pass Through Trustee
By:_____________________________________
Name:
Title:
Dated: As of [__________]
Exhibit A
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, N.Y. 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to the Deposit Agreement (Class A) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York Branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$[_______], Account No. [____].
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [___________________] on [__________], upon the telephonic
request of a representative of the Pass Through Trustee.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By______________________________________
Name:
Title:
Dated: As of [__________]
Exhibit B
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, N.Y. 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to the Deposit Agreement (Class B) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York Branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$[_______], Account No. [_____].
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [________________] on [__________], upon the telephonic request
of a representative of the Pass Through Trustee.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By______________________________________
Name:
Title:
Dated: As of [__________]
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York Branch
11 Madison Avenue
New York, N.Y. 10010
Attention: Robert Finney and
Kevin Kappell
Telecopier: (212) 325-8319
Gentlemen:
Reference is made to (i) the Deposit Agreement (Class C) dated as of
October 23, 1997 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York Branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$[________], Account No. [____].
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [______________] on [__________], upon the telephonic request of
a representative of the Pass Through Trustee.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By______________________________________
Name:
Title:
Dated: As of [__________]
EXHIBIT C-1 to
NOTE PURCHASE AGREEMENT
FORM OF OWNED AIRCRAFT PARTICIPATION AGREEMENT
[FILED SEPARATELY]
EXHIBIT C-2 to
NOTE PURCHASE AGREEMENT
FORM OF OWNED AIRCRAFT INDENTURE
[FILED SEPARATELY]
EXHIBIT D to
NOTE PURCHASE AGREEMENT
SECTION 16. OWNER PARTICIPANT'S RIGHT TO RESTRUCTURE
16.1 GENERAL RIGHT TO RESTRUCTURE
Lessee, Loan Participant and each Note Holder agree that after the
Delivery Date and subject to the limitations of Section 16.2, the original Owner
Participant (or any transferee Owner Participant that is an Affiliate of the
original Owner Participant) shall have the right to restructure the Transactions
using (a) a "cross-border lease," a tax lease or a head-lease/sublease structure
and (b) any other type of transaction, which may involve special structural
arrangements, as such Owner Participant may elect (any such structure described
above, a "Special Structure"). Any Special Structure may result in additional
persons participating in the Transactions, which persons shall agree to
provisions comparable to Sections 7.6.4(a) and 7.6.13. Subject to the provisions
of Sections 16.2 and 16.3, Lessee, Loan Participant and each Note Holder agree
to cooperate in the implementation of any such restructuring and take such
action as may reasonably be requested by the original Owner Participant to
accomplish such restructuring, including taking such actions as may be
reasonable or customary in the type of Special Structure selected. In connection
with any proposed Special Structure, Owner Participant shall provide all
information reasonably requested by Lessee, Loan Participant or any Note Holder
with respect thereto. The original Owner Participant shall be entitled to retain
all of the benefits of any such transaction.
16.2 LIMITATIONS ON RESTRUCTURING PROVISIONS; ADDITIONAL TERMS
16.2.1 LESSEE
(a) Notwithstanding Section 16.1 or 16.2.1(b), in no event shall any
such Special Structure (a) change the terms and conditions of Lessee's rights
and obligations, from those which Lessee would otherwise possess or be subject
to in the absence of any such Special Structure, in a manner which is materially
adverse to Lessee, (b) expose Lessee to any additional risks (including overall
tax risks) beyond those to which Lessee would be exposed in the absence of any
such Special Structure unless Lessee shall have been indemnified against such
additional risks by the original Owner Participant, or other participants in
such transaction (so long as such original Owner Participant or other
participants shall, as to their creditworthiness at the time any such indemnity
is given, be reasonably acceptable to Lessee) in a manner reasonably
satisfactory to Lessee. In no event shall Lessee be required to provide an
indemnity with respect to any foreign tax benefit of a Special Structure or to
indemnify against the failure of a head-lease not to constitute a true lease for
U.S. federal income tax purposes.
(b) In any Special Structure that may be entered into pursuant to
this Section 16, the Termination Values under the Lease (as the same may be
restructured) shall not be affected by the termination values under any
head-lease, except that any prepayment premiums and any funding or swap breakage
costs under such head-lease or similar arrangement will be added in calculating
the Termination Values and Stipulated Loss Values under the Lease (as the same
may be restructured). Further, upon implementation of any Special Structure, the
Stipulated Loss Values payable by Lessee under the Lease (as the same may be
restructured) shall in no event be less than the stipulated loss values payable
under the applicable head-lease or similar arrangement.
16.2.2 LOAN PARTICIPANT AND CERTIFICATE HOLDERS
Notwithstanding Section 16.1, any such Special Structure shall not,
and prior to the exercise of its rights thereunder, the Owner Participant shall
deliver an officer's certificate to the Pass Through Trustee that provides that
any such Special Structure shall not, (a) change the terms and conditions of
Loan Participant's or any Note Holder's rights and obligations under the
Operative Agreements or rights and obligations of holders of Pass Through
Certificates, from those which Loan Participant, Note Holders and such Pass
Through Certificate holders would otherwise possess or be subject to in the
absence of such Special Structure (including, without limitation, the amount and
timing of any payment of principal, interest and Make-Whole Amount under the
Equipment Notes, the relative rights of the Note Holders with respect to such
payments and such holder of Pass Through Certificates and the priority of
Mortgagee's Lien on the Trust Indenture Estate under the Trust Indenture) or (b)
expose Loan Participant, any such Note Holder or any such holder of Pass Through
Certificates to any additional risks beyond those to which Loan Participant,
such Note Holder or such holder of such Pass Through Certificates would be
exposed in the absence of such Special Structure. In addition, in no event shall
any Special Structure be permitted unless a written confirmation from the Rating
Agencies (as defined in the Note Purchase Agreement) is obtained prior to the
implementation of such Special Structure to the effect that such Special
Structure will not adversely affect the ratings of the Pass Through
Certificates.
16.3 TRANSACTION EXPENSES
Whether or not any proposed restructuring transaction under this
Section 16 is consummated, the original Owner Participant shall pay (or cause to
be paid) the reasonable costs and expenses incurred by all parties in connection
therewith; PROVIDED, that, only in connection with a consummated transaction
(unless Lessee shall have, by failing to act in good faith, caused a transaction
not to be consummated), Lessee shall pay or reimburse such original Owner
Participant for the original Owner Participant's reasonable estimate of the
costs and expenses that would have been incurred by all parties if the
Transactions had been restructured as a head-lease/sublease transaction in which
the original Owner Participant, or an Affiliate or designee thereof, were the
head-lessee/sublessor and Lessee were the sublessee.
EXHIBIT E to
NOTE PURCHASE AGREEMENT
Section 6.2 may be amended to delete Section 6.2.9 in its entirety.
-----------------------------------------------------------
| CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION |
| SET FORTH IN SECTION 8 OF THIS AGREEMENT |
-----------------------------------------------------------
================================================================================
PARTICIPATION AGREEMENT
Dated as of
Among
CONTINENTAL AIRLINES, INC.,
Lessee,
[ ],
Owner Participant,
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
Not in its individual capacity
except as expressly provided herein,
but solely as Owner Trustee,
Owner Trustee,
and
WILMINGTON TRUST COMPANY,
Not in its individual capacity
except as expressly provided herein,
but solely as Mortgagee, Subordination Agent
under the Intercreditor Agreement and Pass Through
Trustee under each of the Pass Through Trust Agreements,
Mortgagee and Loan Participant
----------------------------
One Boeing Model ______ Aircraft
Bearing Manufacturer's Serial No. ______
and U.S. Registration No. ______
================================================================================
CONTENTS
SECTION 1. DEFINITIONS AND CONSTRUCTION.................................. 2
SECTION 2. PARTICIPATION IN LESSOR'S COST; ISSUANCE OF
EQUIPMENT NOTES; TERMINATION OF OBLIGATION
TO PARTICIPATE................................................ 2
2.1 Participation in Lessor's Cost................................ 2
2.2 Nature of Obligations of Participants......................... 3
2.3 Termination of Obligation to Participate...................... 3
SECTION 3. COMMITMENT TO LEASE AIRCRAFT.................................. 3
SECTION 4. PROCEDURE FOR PARTICIPATION IN PAYMENT OF
LESSOR'S COST; POSTPONEMENT OF SCHEDULED
DELIVERY DATE................................................. 4
4.1 Notices of Scheduled Delivery Date............................ 4
4.2 Payment of Lessor's Cost...................................... 4
4.3 Postponement of Scheduled Delivery Date....................... 5
4.4 Closing....................................................... 6
SECTION 5. CONDITIONS PRECEDENT.......................................... 6
5.1 Conditions Precedent to Obligations of Participants........... 6
5.2 Conditions Precedent to Obligations of Owner Trustee.......... 13
5.3 Conditions Precedent to Obligations of Mortgagee.............. 13
5.4 Conditions Precedent to Obligations of Lessee................. 14
SECTION 6. REPRESENTATIONS AND WARRANTIES................................ 15
6.1 Lessee's Representations and Warranties....................... 15
6.2 Owner Participant's Representations and Warranties............ 19
6.3 First Security's Representations and Warranties............... 22
6.4 WTC's Representations and Warranties.......................... 25
SECTION 7. COVENANTS, UNDERTAKINGS AND AGREEMENTS........................ 29
7.1 Covenants of Lessee........................................... 29
7.2 Covenants of Owner Participant................................ 31
7.3 Covenants of First Security and Owner Trustee................. 33
7.4 Covenants of WTC.............................................. 35
7.5 Covenants of Note Holders..................................... 36
7.6 Agreements.................................................... 38
SECTION 8. CONFIDENTIALITY............................................... 45
SECTION 9. INDEMNIFICATION AND EXPENSES.................................. 46
9.1 General Indemnity............................................. 46
9.2 Expenses...................................................... 53
9.3 General Tax Indemnity......................................... 54
9.4 Payments...................................................... 65
9.5 Interest...................................................... 65
9.6 Benefit of Indemnities........................................ 66
SECTION 10. ASSIGNMENT OR TRANSFER OF INTERESTS........................... 66
10.1 Participants, Owner Trustee and Note Holders.................. 66
10.2 Effect of Transfer............................................ 68
SECTION 11. REFUNDING AND CERTAIN OTHER MATTERS........................... 69
11.1 Refunding Generally........................................... 69
11.2 Limitations on Obligation to Refund........................... 71
11.3 Execution of Certain Documents................................ 71
11.4 ERISA......................................................... 71
11.5 Consent to Optional Redemptions............................... 72
SECTION 12. SECTION 1110.................................................. 72
SECTION 13. CHANGE OF CITIZENSHIP......................................... 72
13.1 Generally..................................................... 72
13.2 Owner Participant............................................. 72
13.3 Owner Trustee................................................. 73
13.4 Mortgagee..................................................... 73
SECTION 14. CONCERNING OWNER TRUSTEE...................................... 73
SECTION 15. MISCELLANEOUS................................................. 74
15.1 Amendments.................................................... 74
15.2 Severability.................................................. 74
15.3 Survival...................................................... 75
15.4 Reproduction of Documents..................................... 75
15.5 Counterparts.................................................. 75
15.6 No Waiver..................................................... 75
15.7 Notices....................................................... 76
15.8 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE........................................................ 76
15.9 Third-Party Beneficiary....................................... 77
15.10 Entire Agreement.............................................. 77
15.11 Further Assurances............................................ 78
ANNEX, SCHEDULES AND EXHIBITS
ANNEX A - Definitions
SCHEDULE 1 - Accounts; Addresses
SCHEDULE 2 - Commitments
SCHEDULE 3 - Certain Terms
EXHIBIT A - Opinion of special counsel to Lessee
EXHIBIT B - Opinion of corporate counsel to Lessee
EXHIBIT C - Opinion of corporate counsel to Airframe Manufacturer
EXHIBIT D - Opinion of special counsel to Owner Trustee
EXHIBIT E - Opinion of special counsel to Mortgagee and the Loan Participants
EXHIBIT F - Opinion of special counsel to Owner Participant
EXHIBIT G - Opinion of special counsel in Oklahoma City, Oklahoma
PARTICIPATION AGREEMENT
PARTICIPATION AGREEMENT , dated as of (this "Agreement"), among (a)
CONTINENTAL AIRLINES, INC., a Delaware corporation ("Lessee"), (b) [ ] ("Owner
Participant"), (c) FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, except as expressly provided
herein, but solely as Owner Trustee (this and all other capitalized terms used
but not defined herein shall have the respective meanings ascribed thereto in
Section 1) (in its capacity as Owner Trustee, "Owner Trustee" or "Lessor," and
in its individual capacity, "First Security"), (d) WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not in its individual capacity, except as
expressly provided herein, but solely as Mortgagee (in its capacity as
Mortgagee, "Mortgagee" and in its individual capacity, "WTC"), (e) WILMINGTON
TRUST COMPANY, not in its individual capacity, except as expressly provided
herein, but solely as Pass Through Trustee under each of the Pass Through Trust
Agreements, (each, a "Pass Through Trustee") and (f) WILMINGTON TRUST COMPANY,
not in its individual capacity, except as expressly provided herein, but solely
as Subordination Agent under the Intercreditor Agreement ("Subordination
Agent").
RECITALS
A. Owner Participant and First Security, concurrently herewith, are
entering into the Trust Agreement, pursuant to which, among other things, Owner
Trustee agrees to hold the Trust Estate for the use and benefit of Owner
Participant upon and subject to the terms and conditions set forth therein.
B. Lessee and Airframe Manufacturer have entered into the Purchase
Agreement, pursuant to which, among other things, Airframe Manufacturer has
agreed to manufacture and sell to Lessee and Lessee has agreed to purchase from
Airframe Manufacturer, certain aircraft, including the Aircraft.
C. On the Delivery Date, Lessee and Owner Trustee will enter into the
Purchase Agreement Assignment, pursuant to which, among other things, Lessee
will assign to Owner Trustee its right to purchase the Aircraft from Airframe
Manufacturer upon and subject to the terms and conditions set forth in the
Purchase Agreement and the Purchase Agreement Assignment.
D. Pursuant to each of the Pass Through Trust Agreements, on the Issuance
Date the Pass Through Trusts were created and the Pass Through Certificates were
issued and sold.
E. Pursuant to the Note Purchase Agreement, each Pass Through Trustee has
agreed to use a portion of the proceeds from the issuance and sale of the Pass
Through Certificates issued by each Pass Through Trust to purchase from the
Owner Trustee, on behalf of the related Pass Through Trust, the Equipment Note
bearing the same interest rate as the Pass Through Certificates issued by such
Pass Through Trust.
F. Owner Trustee and Mortgagee, concurrently with the execution and
delivery hereof, have entered into the Trust Indenture for the benefit of the
Note Holders, pursuant to which, among other things, Owner Trustee agrees (1) to
issue Equipment Notes, in the amounts and otherwise as provided in the Trust
Indenture, the proceeds of which will be used to pay a portion of Lessor's Cost
and (2) to mortgage, pledge and assign to Mortgagee all of Owner Trustee's
right, title and interest in the Trust Indenture Estate to secure the Secured
Obligations, including, without limitation, Owner Trustee's obligations under
the Equipment Notes.
G. On the Delivery Date, Lessor and Lessee will enter into the Lease,
pursuant to which, among other things, Lessor shall lease the Aircraft to Lessee
and Lessee shall lease the Aircraft from Lessor upon and subject to the terms
and conditions set forth therein.
H. The parties hereto wish to set forth in this Agreement the terms and
conditions upon and subject to which the aforesaid transactions shall be
effected.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION
Capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in Annex A.
SECTION 2. PARTICIPATION IN LESSOR'S COST; ISSUANCE OF EQUIPMENT NOTES;
TERMINATION OF OBLIGATION TO PARTICIPATE
2.1 PARTICIPATION IN LESSOR'S COST
Subject to the terms and conditions of this Agreement, on the Delivery
Date, Owner Participant and each Pass Through Trustee shall participate in the
payment of Lessor's Cost as follows:
(a) Owner Participant shall participate in the payment of Lessor's Cost
for the Aircraft by making an equity investment in the beneficial
ownership of the Aircraft in the amount in Dollars equal to Owner
Participant's Percentage multiplied by Lessor's Cost; and
(b) Each Pass Through Trustee shall make a non-recourse secured loan to
Owner Trustee to finance, in part, the Owner Trustee's payment of
Lessor's Cost in the amount in Dollars equal to such Pass Through
Trustee's PTT Percentage multiplied by Lessor's Cost, such loan to be
evidenced by one or more Equipment Notes, dated the Delivery Date,
issued to the Subordination Agent as the registered holder on behalf
of each such Pass Through Trustee for the related Pass Through Trust
by Owner Trustee in accordance with this Agreement and the Trust
Indenture, in an aggregate principal amount equal to the Commitment of
each such Pass Through Trustee.
2.2 NATURE OF OBLIGATIONS OF PARTICIPANTS
The obligations hereunder of each Participant are several, and not joint,
and a Participant shall have no obligation to make available to Owner Trustee
any portion of any amount not paid hereunder by any other Participant. The
failure by either Participant to perform its obligations hereunder shall not
affect the obligations of Lessee toward the other Participant, except to the
extent provided in Section 5.4.
2.3 TERMINATION OF OBLIGATION TO PARTICIPATE
Notwithstanding any other provision of this Agreement, if the Closing does
not occur on or before the Commitment Termination Date, the Commitment of each
Participant and its obligation to participate in the payment of Lessor's Cost
shall expire and be of no further force and effect; PROVIDED, that the liability
of any Participant that has defaulted in the payment of its Commitment shall not
be released.
SECTION 3. COMMITMENT TO LEASE AIRCRAFT
Subject to the terms and conditions of this Agreement, concurrently with
the issuance of the Equipment Notes on the Delivery Date, Owner Trustee shall
purchase and accept delivery of the Aircraft under and pursuant to the Purchase
Agreement and the Purchase Agreement Assignment, and thereupon Owner Trustee
shall lease the Aircraft to Lessee, and Lessee shall lease the Aircraft from
Owner Trustee, under the Lease.
SECTION 4. PROCEDURE FOR PARTICIPATION IN PAYMENT OF LESSOR'S COST;
POSTPONEMENT OF SCHEDULED DELIVERY DATE
4.1 NOTICES OF SCHEDULED DELIVERY DATE
Without limiting its obligations to the Loan Participant under Section 1(b)
of the Note Purchase Agreement, Lessee agrees to give Participants, Owner
Trustee, and Mortgagee at least one Business Day's written notice of the
Scheduled Delivery Date, which notice shall set forth Lessor's Cost and the
amount of each Participant's Commitment. Each Participant agrees that making
available its respective Commitment shall constitute a waiver of such notice.
Owner Trustee and Mortgagee shall be deemed to have waived such notice if
Mortgagee shall have received from each Participant funds in the full amount of
its respective Commitment.
4.2 PAYMENT OF LESSOR'S COST
(a) Each Participant agrees, subject to the terms and conditions of this
Agreement, to make the Dollar amount of its respective Commitment available, by
wire transfer of immediately available funds to WTC's account no. 920-1-014363
at The Chase Manhattan Bank, New York, New York ABA# 021000021 (contact: Emma
Budget, tel. (718) 242-3795), reference Continental Lease ___, at or before
12:00 Noon, New York City time, on the Scheduled Delivery Date. All such funds
made available by each Participant to WTC shall, until payment thereof to
Airframe Manufacturer and Lessee as provided in Section 4.2(b)(ii) or return
thereof to the respective Participant as provided in Section 4.3.2, be held by
WTC in trust for the benefit of the respective Participant, as the sole and
exclusive property of the respective Participant and not as part of the Trust
Estate or the Trust Indenture Estate.
(b) Subject to the satisfaction, or waiver by the applicable party, of the
conditions precedent set forth in Section 5, and simultaneously with the receipt
by the parties hereto of all amounts to be paid to them on the Delivery Date
pursuant to this Section 4.2, Owner Trustee shall:
(i) purchase, take title to, and accept delivery of, the Aircraft;
(ii) in consideration of the transfer of title to the Aircraft to
Owner Trustee, direct WTC to pay, from the funds made available to WTC
hereunder by the Participants, all or a specified portion of its Commitment
either to (A) Airframe Manufacturer, which payments in the aggregate shall
be equal to Manufacturer's Purchase Price, by wire transfer of immediately
available funds to Airframe Manufacturer's account set forth in Schedule 1
and (B) Lessee, which payments in the aggregate shall be equal to Lessor's
Cost minus Manufacturer's Purchase Price, by wire transfer of immediately
available funds to Lessee's account set forth in Schedule 1 or as otherwise
directed by Lessee;
(iii) execute an application for registration of the Aircraft with the
FAA and Lease Supplement No. 1, in each case with respect to the Aircraft;
(iv) execute the Trust Indenture and the initial Trust Indenture
Supplement and issue the Equipment Notes to the Subordination Agent in
accordance with Section 2.1(b);
(v) lease the Aircraft to Lessee, pursuant to the Lease; and
(vi) take such other action as may be required to be taken by the
Owner Trustee on the Delivery Date by the terms of any Operative Agreement.
4.3 POSTPONEMENT OF SCHEDULED DELIVERY DATE
4.3.1 POSTPONEMENT
If for any reason whatsoever the Closing is not consummated on the
Scheduled Delivery Date, Lessee may, subject to the provisions of 1(e) of the
Note Purchase Agreement, by telephonic notice, given by 5:00 p.m., New York City
time (such telephonic notice to be promptly confirmed in writing by personal
delivery or facsimile), on the Scheduled Delivery Date to each Participant,
Owner Trustee and Mortgagee, designate a Delayed Delivery Date, in which case
the Owner Participant will keep its funds available, and the Loan Participant
shall comply with its obligations under Section 5.01 of each applicable Trust
Supplement.
4.3.2 RETURN OF FUNDS
WTC shall promptly return to each Participant that makes funds available to
it in accordance with Section 4.2(a) such funds, together with interest or
income earned thereon, if the Closing fails to occur on the Scheduled Delivery
Date, PROVIDED that any funds made available by the Loan Participant shall be
returned on such Scheduled Delivery Date.
4.4 CLOSING
The Closing shall occur at the offices of Hughes Hubbard & Reed LLP, One
Battery Park Plaza, New York, New York 10004, or such other place as the parties
shall agree.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTICIPANTS
The obligation of each Participant to make the Dollar amount of its
respective Commitment available for payment as directed by the Owner Trustee on
the Delivery Date is subject to satisfaction or waiver by each such Participant,
on or prior to the Delivery Date, of the conditions precedent set forth below in
this Section 5.1; PROVIDED, that it shall not be a condition precedent to the
obligation of any Participant that any document be produced or action taken that
is to be produced or taken by such Participant or by a Person within such
Participant's control; PROVIDED, FURTHER, that Sections 5.1.2(iii), (xv) and
(xxiii) (H) shall not be conditions precedent to the obligation of Loan
Participant and Sections 5.1.15 and 5.1.16 shall not be conditions precedent to
the obligation of Owner Participant.
5.1.1 NOTICE
Such Participant shall have received the notice described in Section 4.1
or, in the case of a Delayed Delivery Date, 4.3, when and as required thereby,
or shall have waived such notice.
5.1.2 DELIVERY OF DOCUMENTS
Such Participant shall, except as noted below, have received executed
counterparts of the following agreements, instruments, certificates or
documents, and such counterparts (a) shall have been duly authorized, executed
and delivered by the respective party or parties thereto, (b) shall be
reasonably satisfactory in form and substance to such Participant and (c) shall
be in full force and effect:
(i) the Lease; provided, that only Mortgagee shall receive the sole
executed chattel paper original thereof;
(ii) Lease Supplement No. 1; PROVIDED, that only Mortgagee shall
receive the sole executed chattel paper original thereof;
(iii) the Tax Indemnity Agreement; PROVIDED, that only Owner
Participant and Lessee shall receive copies of the Tax Indemnity Agreement;
(iv) the Trust Agreement;
(v) the Trust Indenture;
(vi) the initial Trust Indenture Supplement;
(vii) the Purchase Agreement Assignment;
(viii) the Consent and Agreement and the Engine Consent and Agreement;
(ix) the Equipment Notes dated the Delivery Date; PROVIDED, that only
the Subordination Agent shall receive the authenticated Equipment Notes;
(x) an excerpted copy of the Purchase Agreement to the extent relating
to Airframe Manufacturer's or Engine Manufacturer's respective warranties
or related obligations or any right in the Purchase Agreement assigned to
Owner Trustee pursuant to the Purchase Agreement Assignment; PROVIDED, that
only Owner Trustee and Mortgagee shall receive copies of such agreements
(copies of which may be inspected by Participants and their respective
special counsel on the Delivery Date, but after the Delivery Date such
copies shall be retained by Owner Trustee and Mortgagee and may be
inspected and reviewed by Owner Participant or Loan Participant or their
respective counsel if and only if there shall have occurred and be
continuing a Lease Default or Lease Event of Default);
(xi) the Bills of Sale;
(xii) an invoice from Airframe Manufacturer to Owner Trustee in
respect of the Aircraft (except for the BFE) specifying the amount of the
Manufacturer's Purchase Price and an invoice from Lessee specifying the
amount due to Lessee in respect of the Aircraft and the BFE, which amounts,
in the aggregate, shall equal Lessor's Cost of the Aircraft;
(xiii) an appointment of authorized representatives by Owner Trustee,
and an acceptance thereof by such representatives in each case, dated the
Delivery Date;
(xiv) the broker's report and insurance certificates required by
Section 11 of the Lease;
(xv) an appraisal or appraisals from an Appraiser, which appraisal or
appraisals shall be reasonably satisfactory in form and substance to Owner
Participant; PROVIDED, that only Owner Participant and Lessee shall receive
copies of such appraisal or appraisals;
(xvi) (A) a copy of the Certificate of Incorporation and By-Laws of
Lessee and resolutions of the board of directors of Lessee and/or the
executive committee thereof, in each case certified as of the Delivery
Date, by the Secretary or an Assistant Secretary of Lessee, duly
authorizing the execution, delivery and performance by Lessee of the Lessee
Operative Agreements required to be executed and delivered by Lessee on or
prior to the Delivery Date in accordance with the provisions hereof and
thereof; (B) an incumbency certificate of Lessee, Owner Participant, First
Security and WTC as to the person or persons authorized to execute and
deliver the relevant Operative Agreements on behalf of such party; and (C)
a copy of the Certificate of Incorporation or Articles of Incorporation and
By-Laws and general authorizing resolutions of the boards of directors (or
executive committees) or other satisfactory evidence of authorization of
Owner Participant, First Security and WTC, certified as of the Delivery
Date by the Secretary or an Assistant or Attesting Secretary of Owner
Participant, First Security and WTC, respectively, which authorize the
execution, delivery and performance by Owner Participant, First Security
and WTC, respectively, of each of the Operative Agreements to which it is a
party, together with such other documents and evidence with respect to it
as Lessee or any Participant may reasonably request in order to establish
the consummation of the transactions contemplated by this Agreement and the
taking of all corporate proceedings in connection therewith;
(xvii) an Officer's Certificate of Lessee, dated as of the Delivery
Date, stating that its representations and warranties set forth in this
Agreement are true and correct as of the Delivery Date (or, to the extent
that any such representation and warranty expressly relates to an earlier
date, true and correct as of such earlier date);
(xviii) an Officer's Certificate of First Security, dated as of the
Delivery Date, stating that its representations and warranties, in its
individual capacity and as Owner Trustee, set forth in this Agreement are
true and correct as of the Delivery Date (or, to the extent that any such
representation and warranty expressly relates to an earlier date, true and
correct as of such earlier date);
(xix) an Officer's Certificate of Owner Participant, dated as of the
Delivery Date, stating that its representations and warranties set forth in
this Agreement are true and correct as of the Delivery Date (or, to the
extent that any such representation and warranty expressly relates to an
earlier date, true and correct as of such earlier date);
(xx) an Officer's Certificate of WTC, dated as of the Delivery Date,
stating that its representations and warranties, in its individual capacity
or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case
may be, set forth in this Agreement are true and correct as of the Delivery
Date (or, to the extent that any such representation and warranty expressly
relates to an earlier date, true and correct as of such earlier date);
(xxi) an application for registration of the Aircraft with the FAA in
the name of Owner Trustee; PROVIDED, that only special counsel in Oklahoma
City, Oklahoma shall receive the sole executed copy thereof for filing with
the FAA;
(xxii) the Financing Statements;
(xxiii) the following opinions of counsel, in each case dated the
Delivery Date:
(A) an opinion of Hughes Hubbard & Reed LLP, special counsel to
Lessee, substantially in the form of Exhibit A;
(B) an opinion of Lessee's Legal Department, substantially in the
form of Exhibit B;
(C) an opinion of _________ __________, corporate counsel to
Airframe Manufacturer, substantially in the form of Exhibit C;
(D) an opinion of Ray, Quinney & Nebeker, special counsel to
Owner Trustee, substantially in the form of Exhibit D;
(E) an opinion of ___________, special counsel to Mortgagee and
the Loan Participants, substantially in the form of Exhibit E;
(F) an opinion of ___________, special counsel to Owner
Participant, substantially in the form ___________ of Exhibit F;
(G) an opinion of Lytle Soule & Curlee, special counsel in
Oklahoma City, Oklahoma, substantially in the form of Exhibit G; and
(H) an opinion of ___________, special tax counsel to Owner
Participant, with respect to certain tax consequences of the
transactions contemplated hereby; PROVIDED, that only Owner
Participant shall receive such opinion;
(xxiv) a copy of a current, valid Standard Certificate of
Airworthiness for the Aircraft duly issued by the FAA;
(xxv) the Participants and their respective counsel shall have
received copies of such documents and papers as such Participants may
reasonably request, other than (A) in the case of Loan Participant, copies
of the Purchase Agreement, provided that special counsel for Loan
Participant may inspect the Purchase Agreement in connection with the
transactions contemplated hereby or as a basis for such counsel's closing
opinion, and (B) in the case of parties other than Owner Participant and
its special counsel, the Tax Indemnity Agreement.
5.1.3 OTHER COMMITMENTS
Each other Participant shall have made available the Dollar amount of its
Commitment as directed by Owner Trustee in accordance with Section 4.
5.1.4 VIOLATION OF LAW
No change shall have occurred after the date of this Agreement in any
applicable Law that makes it a violation of Law for (a) Lessee, any Participant,
Subordination Agent, Owner Trustee or Mortgagee to execute, deliver and perform
the Operative Agreements to which any of them is a party or (b) any Participant
to make the Dollar amount of its Commitment available or, in the case of any
Loan Participant, to acquire an Equipment Note or to realize the benefits of the
security afforded by the Trust Indenture.
5.1.5 TAX LAW CHANGE
In respect of Owner Participant, no Adverse Change in Tax Law shall have
been enacted, promulgated or issued on or prior to the Delivery Date. Owner
Participant agrees to consider promptly, and to consult with Lessee concerning
any such Adverse Change in Tax Law and to advise Lessee and Loan Participant
promptly if Owner Participant determines that an Adverse Change in Tax Law which
has been enacted or promulgated or, if proposed, has a substantial likelihood of
becoming effective, would cause Owner Participant to elect not to close with
respect to the Aircraft. At any time on or before the Delivery Date, Owner
Participant may notify Lessee and Loan Participant that Owner Participant elects
not to close as a result of the enactment, promulgation or issuance of any
Adverse Change in Tax Law on or before the Delivery Date, specifying such
Adverse Change in Tax Law; and failure to give such notice on or before the
Delivery Date shall preclude Owner Participant from not closing with respect to
such Aircraft as a result of any Adverse Change in Tax Law.
5.1.6 REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations and warranties of each other party to this Agreement
made, in each case, in this Agreement and in any other Operative Agreement to
which it is a party, shall be true and accurate in all material respects as of
the Delivery Date (unless any such representation and warranty shall have been
made with reference to a specified date, in which case such representation and
warranty shall be true and accurate as of such specified date) and each other
party to this Agreement shall have performed and observed, in all material
respects, all of its covenants, obligations and agreements in this Agreement and
in any other Operative Agreement to which it is a party to be observed or
performed by it as of the Delivery Date.
5.1.7 NO EVENT OF DEFAULT
On the Delivery Date, no event shall have occurred and be continuing, or
would result from the sale, mortgage or lease of the Aircraft, which constitutes
a Lease Default or Lease Event of Default, or an Indenture Default or Indenture
Event of Default.
5.1.8 NO EVENT OF LOSS
No Event of Loss with respect to the Airframe or any Engine shall have
occurred and no circumstance, condition, act or event that, with the giving of
notice or lapse of time or both, would give rise to or constitute an Event of
Loss with respect to the Airframe or any Engine shall have occurred.
5.1.9 TITLE
Owner Trustee shall have good title (subject to filing and recordation of
the FAA Bill of Sale with the FAA) to the Aircraft, free and clear of Liens,
except (a) the rights of Lessee under the Lease and Lease Supplement No. 1, (b)
the Lien created by the Trust Indenture and the initial Trust Indenture
Supplement, (c) the beneficial interest of Owner Participant created by the
Trust Agreement, (d) Liens permitted by clause (d) (solely for taxes not yet
due) of Section 6 of the Lease and (e) Liens permitted by clause (e) of Section
6 of the Lease.
5.1.10 CERTIFICATION
The Aircraft shall have been duly certificated by the FAA as to type and
airworthiness in accordance with the terms of the Purchase Agreement.
5.1.11 SECTION 1110
Owner Trustee, as lessor under the Lease (and Mortgagee, as assignee of
Owner Trustee under the Trust Indenture), shall be entitled to the benefits of
Section 1110 (as currently in effect) with respect to the right to take
possession of the Airframe and Engines as provided in the Lease in the event of
a case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.
5.1.12 FILING
On the Delivery Date (a) the FAA Filed Documents shall have been duly filed
for recordation (or shall be in the process of being so duly filed for
recordation) with the FAA in accordance with the Act and (b) each Financing
Statement shall have been duly filed (or shall be in the process of being so
duly filed) in the appropriate jurisdiction.
5.1.13 NO PROCEEDINGS
No action or proceeding shall have been instituted, nor shall any action be
threatened in writing, before any Government Entity, nor shall any order,
judgment or decree have been issued or proposed to be issued by any Government
Entity, to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or any other Operative Agreement or the
transactions contemplated hereby or thereby.
5.1.14 GOVERNMENTAL ACTION
All appropriate action required to have been taken prior to the Delivery
Date by the FAA, or any governmental or political agency, subdivision or
instrumentality of the United States, in connection with the transactions
contemplated by this Agreement shall have been taken, and all orders, permits,
waivers, authorizations, exemptions and approvals of such entities required to
be in effect on the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been issued.
5.1.15 NOTE PURCHASE AGREEMENT
The conditions precedent to the obligations of the Loan Participants and
the other requirements relating to the Aircraft and the Equipment Notes set
forth in the Note Purchase Agreement shall have been satisfied.
5.1.16 PERFECTED SECURITY INTEREST
On the Delivery Date, after giving effect to the filing of the FAA Filed
Documents and the Financing Statements, Mortgagee shall have received a duly
perfected first priority security interest in all of Owner Trustee's right,
title and interest in the Aircraft and the Lease, subject only to Permitted
Liens.
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF OWNER TRUSTEE
The obligation of Owner Trustee to direct the Participants to apply the
Commitments to pay Lessor's Cost on the Delivery Date is subject to satisfaction
or waiver by Owner Trustee, on or prior to the Delivery Date, of the conditions
precedent set forth below in this Section 5.2.
5.2.1 NOTICE
Owner Trustee shall have received the notice described in Section 4.1 or,
in the case of a Delayed Delivery Date, 4.3, when and as required thereby, or
shall have waived such notice.
5.2.2 DOCUMENTS
Executed originals of the agreements, instruments, certificates or
documents described in Section 5.1.2 shall have been received by Owner Trustee,
except as specifically provided therein, unless the failure to receive any such
agreement, instrument, certificate or document is the result of any action or
inaction by Owner Trustee.
5.2.3 OTHER CONDITIONS PRECEDENT
Each of the conditions set forth in Sections 5.1.4, 5.1.6, 5.1.7 and 5.1.11
shall have been satisfied unless the failure of any such condition to be
satisfied is the result of any action or inaction by Owner Trustee.
5.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF MORTGAGEE
The obligation of Mortgagee to authenticate the Equipment Notes on the
Delivery Date is subject to the satisfaction or waiver by Mortgagee, on or prior
to the Delivery Date, of the conditions precedent set forth below in this
Section 5.3.
5.3.1 NOTICE
Mortgagee shall have received the notice described in Section 4.1 or, in
the case of a Delayed Delivery Date, 4.3, when and as required thereby, or shall
have waived such notice.
5.3.2 DOCUMENTS
Executed originals of the agreements, instruments, certificates or
documents described in Section 5.1.2 shall have been received by Mortgagee,
except as specifically provided therein, unless the failure to receive any such
agreement, instrument, certificate or document is the result of any action or
inaction by Mortgagee.
5.3.3 OTHER CONDITIONS PRECEDENT
Each of the conditions set forth in Sections 5.1.4, 5.1.6, 5.1.7 and 5.1.11
shall have been satisfied unless the failure of any such condition to be
satisfied is the result of any action or inaction by Mortgagee.
5.4 CONDITIONS PRECEDENT TO OBLIGATIONS OF LESSEE
The obligation of Lessee to lease the Aircraft on the Delivery Date is
subject to the satisfaction or waiver by Lessee, on or prior to the Delivery
Date, of the conditions precedent set forth below in this Section 5.4.
5.4.1 DOCUMENTS
Executed originals of the agreements, instruments, certificates or
documents described in Section 5.1.2 shall have been received by Lessee, except
as specifically provided therein, and shall be satisfactory to Lessee, unless
the failure to receive any such agreement, instrument, certificate or document
is the result of any action or inaction by Lessee.
5.4.2 SALES TAX
Lessee shall be satisfied that no sales, use, value added, goods and
services or like tax, and no stamp tax duty, is payable with respect to the
delivery of the Aircraft on the Delivery Date to the extent that Lessee has
liability therefor under Section 9.3.
5.4.3 OTHER CONDITIONS PRECEDENT
Each of the conditions set forth in Sections 5.1.3 (as to all
Participants), 5.1.4, 5.1.5, 5.1.6, 5.1.7 (as to Indenture Defaults or Indenture
Events of Default not constituting Lease Defaults or Lease Events of Default,
respectively), 5.1.8, 5.1.9, 5.1.10, 5.1.11, 5.1.12, 5.1.13 and 5.1.14 shall
have been satisfied or waived by Lessee, unless the failure of any such
condition to be satisfied is the result of any action or inaction by Lessee.
5.4.4 TAX LAW CHANGE
No Adverse Change in Tax Law shall have been enacted, promulgated or
proposed on or prior to the Delivery Date. Lessee agrees to consider promptly,
and to consult with Owner Participant concerning, any such Adverse Change in Tax
Law and to advise Owner Participant and Loan Participant promptly if Lessee
determines that an Adverse Change in Tax Law which has been enacted or
promulgated or, if proposed, has a substantial likelihood of becoming effective,
would cause Lessee to elect not to close the transactions contemplated by the
Lease and this Agreement. At any time on or before the Delivery Date, Lessee may
notify Owner Participant and Loan Participant that Lessee elects not to close
the transactions contemplated by the Lease and this Agreement as a result of the
enactment, promulgation or proposal of any Adverse Change in Tax Law on or
before the Delivery Date, specifying such Adverse Change in Tax Law.
5.5 POST-REGISTRATION OPINION
Promptly upon the registration of the Aircraft and the recordation of the
FAA Filed Documents pursuant to the Act, Lessee will cause Lytle Soule & Curlee,
special counsel in Oklahoma City, Oklahoma, to deliver to Lessee, each
Participant, Owner Trustee and Mortgagee a favorable opinion or opinions
addressed to each of them with respect to such registration and recordation.
SECTION 6. REPRESENTATIONS AND WARRANTIES
6.1 LESSEE'S REPRESENTATIONS AND WARRANTIES
Lessee represents and warrants to each Participant, Subordination Agent,
Owner Trustee and Mortgagee that:
6.1.1 ORGANIZATION; QUALIFICATION
Lessee is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware and has the corporate power and
authority to conduct the business in which it is currently engaged and to own or
hold under lease its properties and to enter into and perform its obligations
under the Lessee Operative Agreements. Lessee is duly qualified to do business
as a foreign corporation in good standing in each jurisdiction in which the
nature and extent of the business conducted by it, or the ownership of its
properties, requires such qualification, except where the failure to be so
qualified would not give rise to a Material Adverse Change to Lessee.
6.1.2 CORPORATE AUTHORIZATION
Lessee has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval of
stockholders required by its Certificate of Incorporation or By-Laws) to
authorize the execution and delivery of each of the Lessee Operative Agreements,
and the performance of its obligations thereunder.
6.1.3 NO VIOLATION
The execution and delivery by Lessee of the Lessee Operative Agreements,
the performance by Lessee of its obligations thereunder and the consummation by
Lessee on the Delivery Date of the transactions contemplated thereby, do not and
will not (a) violate any provision of the Certificate of Incorporation or
By-Laws of Lessee, (b) violate any Law applicable to or binding on Lessee or (c)
violate or constitute any default under (other than any violation or default
that would not result in a Material Adverse Change to Lessee), or result in the
creation of any Lien (other than as permitted under the Lease) upon the Aircraft
under, any indenture, mortgage, chattel mortgage, deed of trust, conditional
sales contract, lease, loan or other material agreement, instrument or document
to which Lessee is a party or by which Lessee or any of its properties is bound.
6.1.4 APPROVALS
The execution and delivery by Lessee of the Lessee Operative Agreements,
the performance by Lessee of its obligations thereunder and the consummation by
Lessee on the Delivery Date of the transactions contemplated thereby do not and
will not require the consent or approval of, or the giving of notice to, or the
registration with, or the recording or filing of any documents with, or the
taking of any other action in respect of, (a) any trustee or other holder of any
Debt of Lessee and (b) any Government Entity, other than the filing of (x) the
FAA Filed Documents and the Financing Statements (and continuation statements
periodically) and (y) filings, recordings, notices or other ministerial actions
pursuant to any routine recording, contractual or regulatory requirements
applicable to it.
6.1.5 VALID AND BINDING AGREEMENTS
The Lessee Operative Agreements have been duly authorized, executed and
delivered by Lessee and, assuming the due authorization, execution and delivery
thereof by the other party or parties thereto, constitute the legal, valid and
binding obligations of Lessee and are enforceable against Lessee in accordance
with the respective terms thereof, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar Laws affecting the rights of creditors generally and general principles
of equity, whether considered in a proceeding at law or in equity.
6.1.6 LITIGATION
Except as set forth in Lessee's most recent Annual Report on Form 10-K, as
amended, filed by Lessee with the SEC on or prior to the Delivery Date, or in
any Quarterly Report on Form 10-Q or Current Report on Form 8-K filed by Lessee
with the SEC subsequent to such Form 10-K and on or prior to the Delivery Date,
no action, claim or proceeding is now pending or, to the Actual Knowledge of
Lessee, threatened, against Lessee, before any court, governmental body,
arbitration board, tribunal or administrative agency, which is reasonably likely
to be determined adversely to Lessee and if determined adversely to Lessee would
result in a Material Adverse Change.
6.1.7 FINANCIAL CONDITION
The audited consolidated balance sheet of Lessee with respect to Lessee's
most recent fiscal year included in Lessee's most recent Annual Report on Form
10-K, as amended, filed by Lessee with the SEC, and the related consolidated
statements of operations and cash flows for the period then ended have been
prepared in accordance with GAAP and fairly present in all material respects the
financial condition of Lessee and its consolidated subsidiaries as of such date
and the results of its operations and cash flows for such period, and since the
date of such balance sheet, there has been no material adverse change in such
financial condition or operations of Lessee, except for matters disclosed in (a)
the financial statements referred to above or (b) any subsequent Quarterly
Report on Form 10-Q or Current Report on Form 8-K filed by Lessee with the SEC
on or prior to the date hereof.
6.1.8 REGISTRATION AND RECORDATION
Except for (a) the registration of the Aircraft with the FAA pursuant to
the Act in the name of Owner Trustee, (b) the filing for recordation (and
recordation) of the FAA Filed Documents, (c) the filing of the Financing
Statements (and continuation statements relating thereto at periodic intervals),
(d) the taking of possession and retention by Mortgagee of the original
counterparts of the Lease and Lease Supplement No. 1 and (e) the affixation of
the placards referred to in Section 7.1.3 of the Lease, no further action,
including any filing or recording of any document (including any financing
statement in respect thereof under Article 9 of the UCC) is necessary in order
to establish and perfect the right, title or interest of Owner Trustee, and the
Mortgagee's security interest, in the Aircraft and the Lease, as against Lessee
and any other Person, in each case, in any applicable jurisdictions in the
United States.
6.1.9 CHIEF EXECUTIVE OFFICE
The chief executive office (as such term is defined in Article 9 of the
UCC) of Lessee is located at 2929 Allen Parkway, Houston, Texas 77019.
6.1.10 NO DEFAULT
No event which, if the Aircraft were subject to the Lease, constitutes a
Lease Default or Lease Event of Default has occurred and is continuing.
6.1.11 NO EVENT OF LOSS
No Event of Loss has occurred with respect to the Airframe or any Engine,
and, to the Actual Knowledge of Lessee, no circumstance, condition, act or event
has occurred that, with the giving of notice or lapse of time or both gives rise
to or constitutes an Event of Loss with respect to the Airframe or any Engine.
6.1.12 COMPLIANCE WITH LAWS
(a) Lessee is a Citizen of the United States and a U.S. Air Carrier.
(b) Lessee holds all licenses, permits and franchises from the appropriate
Government Entities necessary to authorize Lessee to lawfully engage in air
transportation and to carry on scheduled commercial passenger service as
currently conducted, except where the failure to so hold any such license,
permit or franchise would not give rise to a Material Adverse Change to Lessee.
(c) Lessee is not an "investment company" or a company controlled by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
6.1.13 SECURITIES LAWS
Neither Lessee nor any person authorized to act on its behalf has directly
or indirectly offered any beneficial interest or Security relating to the
ownership of the Aircraft or the Lease or any interest in the Trust Estate and
Trust Agreement, or any of the Equipment Notes or any other interest in or
security under the Trust Indenture, for sale to, or solicited any offer to
acquire any such interest or security from, or has sold any such interest or
security to, any person in violation of the Securities Act.
6.1.14 BROKER'S FEES
No Person acting on behalf of Lessee is or will be entitled to any broker's
fee, commission or finder's fee in connection with the Transactions, except for
fees payable to Lessee's Advisor, if any.
6.1.15 SECTION 1110
Owner Trustee, as lessor under the Lease (and Mortgagee, as assignee under
the Trust Indenture), is entitled to the benefits of Section 1110 (as currently
in effect) with respect to the right to take possession of the Airframe and
Engines as provided in the Lease in the event of a case under Chapter 11 of the
Bankruptcy Code in which Lessee is a debtor.
6.2 OWNER PARTICIPANT'S REPRESENTATIONS AND WARRANTIES
Owner Participant represents and warrants to Lessee, Loan Participant,
Subordination Agent, Owner Trustee and Mortgagee that:
6.2.1 ORGANIZATION, ETC.
Owner Participant is a corporation duly incorporated, validly existing and
in good standing under the Laws of the OP Jurisdiction, has the corporate power
and authority to conduct the business in which it is currently engaged and to
own or hold under lease its properties and to enter into, and perform its
obligations under the Owner Participant Agreements, and has a tangible net worth
(exclusive of goodwill) greater than $75,000,000.
6.2.2 CORPORATE AUTHORIZATION
Owner Participant has taken, or caused to be taken, all necessary corporate
action (including, without limitation, the obtaining of any consent or approval
of stockholders required by its Certificate of Incorporation or By-Laws) to
authorize the execution and delivery of each of the Owner Participant
Agreements, and the performance of its obligations thereunder.
6.2.3 NO VIOLATION
The execution and delivery by Owner Participant of the Owner Participant
Agreements, the performance by Owner Participant of its obligations thereunder
and the consummation by Owner Participant on the Delivery Date of the
transactions contemplated thereby, do not and will not (a) violate any provision
of the Certificate of Incorporation or By-Laws of Owner Participant, (b) violate
any Law applicable to or binding on Owner Participant or (c) violate or
constitute any default under (other than any violation or default that would not
result in a Material Adverse Change to Owner Participant), or result in the
creation of any Lien (other than as provided for or otherwise permitted in the
Operative Agreements) upon the Trust Estate under, any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, lease, loan or
other material agreement, instrument or document to which Owner Participant is a
party or by which Owner Participant or any of its properties is bound.
6.2.4 APPROVALS
The execution and delivery by Owner Participant of the Owner Participant
Agreements, the performance by Owner Participant of its obligations thereunder
and the consummation by Owner Participant on the Delivery Date of the
transactions contemplated thereby do not and will not require the consent or
approval of, or the giving of notice to, or the registration with, or the
recording or filing of any documents with, or the taking of any other action in
respect of, (a) any trustee or other holder of any Debt of Owner Participant and
(b) any Government Entity, other than the filing of the FAA Filed Documents and
the Financing Statements.
6.2.5 VALID AND BINDING AGREEMENTS
The Owner Participant Agreements have been duly authorized, executed and
delivered by Owner Participant and, assuming the due authorization, execution
and delivery by the other party or parties thereto, constitute the legal, valid
and binding obligations of Owner Participant and are enforceable against Owner
Participant in accordance with the respective terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar Laws affecting the rights of
creditors generally and general principles of equity, whether considered in a
proceeding at law or in equity.
6.2.6 CITIZENSHIP
On the Delivery Date, Owner Participant is a Citizen of the United States.
6.2.7 NO LIENS
On the Delivery Date, there are no Lessor Liens attributable to Owner
Participant in respect of all or any part of the Trust Estate.
6.2.8 INVESTMENT BY OWNER PARTICIPANT
Owner Participant's beneficial interest in the Trust Estate is being
acquired by it for its own account, for investment and not with a view to any
resale or distribution thereof, except that, subject to the restrictions on
transfer set forth in Section 10, the disposition by Owner Participant of its
beneficial interest in the Trust Estate shall at all times be within its
control.
6.2.9 ERISA
No part of the funds to be used by Owner Participant to acquire or
hold its interests in the Trust Estate to be acquired by it under this Agreement
directly or indirectly constitutes assets of a Plan.
6.2.10 LITIGATION
There are no pending or, to the Actual Knowledge of Owner
Participant, threatened actions or proceedings against Owner Participant before
any court, governmental body, arbitration board, administrative agency or
tribunal which, if determined adversely to Owner Participant, would materially
adversely affect the ability of Owner Participant to perform its obligations
under the Owner Participant Agreements.
6.2.11 SECURITIES LAWS
Neither Owner Participant nor any person Owner Participant has authorized
to act on its behalf has directly or indirectly offered any beneficial interest
in or Security relating to the ownership of the Aircraft or any interest in the
Trust Estate, or any of the Equipment Notes or any other interest in or Security
under the Trust Indenture for sale to, or solicited any offer to acquire any of
the same from, any Person in violation of the Securities Act or applicable state
securities Laws.
6.2.12 BROKER'S FEES
No Person acting on behalf of Owner Participant is or will be entitled to
any broker's fee, commission or finder's fee in connection with the
Transactions.
6.3 FIRST SECURITY'S REPRESENTATIONS AND WARRANTIES
First Security represents and warrants to Lessee, Owner Participant, Loan
Participant, Subordination Agent and Mortgagee that:
6.3.1 ORGANIZATION, ETC.
First Security is a national banking association duly organized, validly
existing and in good standing under the Laws of the United States, holding a
valid certificate to do business as a national banking association with banking
authority to execute and deliver, and perform its obligations under, the Owner
Trustee Agreements.
6.3.2 CORPORATE AUTHORIZATION
First Security has taken, or caused to be taken, all necessary corporate
action (including, without limitation, the obtaining of any consent or approval
of stockholders required by Law or by its Articles of Association or By-Laws) to
authorize the execution and delivery by First Security, in its individual
capacity and as Owner Trustee, of each of the Owner Trustee Agreements, and the
performance of its obligations thereunder.
6.3.3 NO VIOLATION
The execution and delivery by First Security, in its individual capacity
and as Owner Trustee of the Owner Trustee Agreements, the performance by First
Security, in its individual capacity and as Owner Trustee, of its obligations
thereunder and the consummation by First Security in its individual capacity and
as Owner Trustee on the Delivery Date of the transactions contemplated thereby,
do not and will not (a) violate any provision of the Articles of Association or
By-Laws of First Security, (b) violate any Law applicable to or binding on Owner
Trustee or First Security or (c) violate or constitute any default under(other
than any violation or default that would not result in a Material Adverse Change
to First Security, in its individual capacity or as Owner Trustee), or result in
the creation of any Lien (other than the Lien of the Trust Indenture) upon any
property of First Security, in its individual capacity and as Owner Trustee, or
any of its subsidiaries under, any indenture, mortgage, chattel mortgage, deed
of trust, conditional sales contract, lease, loan or other material agreement,
instrument or document to which First Security, in its individual capacity and
as Owner Trustee, is a party or by which First Security, in its individual
capacity and as Owner Trustee, or any of its properties is or may be bound or
affected.
6.3.4 APPROVALS
The execution and delivery by First Security, in its individual capacity
and as Owner Trustee, of the Owner Trustee Agreements, the performance by First
Security, in its individual capacity and as Owner Trustee, of its obligations
thereunder and the consummation by First Security, in its individual capacity
and as Owner Trustee, on the Delivery Date of the transactions contemplated
thereby do not and will not require the consent, approval or authorization of,
or the giving of notice to, or the registration with, or the recording or filing
of any documents with, or the taking of any other action in respect of, (a) any
trustee or other holder of any Debt of First Security or (b) any Government
Entity, other than the filing of the FAA Filed Documents and the Financing
Statements.
6.3.5 VALID AND BINDING AGREEMENTS
The Owner Trustee Agreements have been duly authorized, executed and
delivered by First Security, in its individual capacity or as Owner Trustee, as
the case may be, and constitute the legal, valid and binding obligations of
First Security, in its individual capacity and as Owner Trustee, and, assuming
the due authorization, execution and delivery thereof by the other party or
parties thereto, are enforceable against First Security, in its individual
capacity and as Owner Trustee, in accordance with the respective terms thereof,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar Laws affecting the
rights of creditors generally and general principles of equity, whether
considered in a proceeding at law or in equity.
6.3.6 CITIZENSHIP
On the Delivery Date, First Security is a Citizen of the United States.
6.3.7 CHIEF EXECUTIVE OFFICE
The chief executive office (as such term is defined in Article 9 of the
UCC) of Owner Trustee is located at 79 South Main Street, Salt Lake City, Utah
84111.
6.3.8 TITLE
On the Delivery Date, Owner Trustee shall have received whatever title (a)
to the Aircraft (other than the BFE) as was conveyed to it by Airframe
Manufacturer and (b) to the BFE as was conveyed to it by Lessee.
6.3.9 NO LIENS; FINANCING STATEMENTS
On the Delivery Date, there are no Lessor Liens attributable to First
Security or Owner Trustee in respect of all or any part of the Aircraft, Trust
Estate or the Trust Indenture Estate. Except for the Financing Statements, it
has not, either in its individual capacity or as Owner Trustee, executed any UCC
financing statements relating to the Aircraft or the Lease.
6.3.10 LITIGATION
There are no pending or, to the Actual Knowledge of First Security,
threatened actions or proceedings against First Security or Owner Trustee before
any court, governmental body, arbitration board, administrative agency or
tribunal which, if determined adversely to First Security, would materially
adversely affect the ability of First Security or Owner Trustee to perform its
obligations under the Owner Trustee Agreements.
6.3.11 SECURITIES LAWS
Neither First Security, nor any person authorized to act on its behalf, has
directly or indirectly offered any beneficial interest or Security relating to
the ownership of the Aircraft or any interest in the Trust Estate or any of the
Equipment Notes or any other interest in or security under the Trust Indenture
for sale to, or solicited any offer to acquire any such interest or security
from, or has sold any such interest or security to, any person other than the
Participants, except for the offering and sale of the Pass Through Certificates.
6.3.12 EXPENSES AND TAXES
There are no Expenses or Taxes that may be imposed on or asserted against
the Trust, the Trust Estate or any part thereof or any interest therein, the
Trust Indenture Estate, Lessee, Owner Participant, any Pass Through Trustee,
Subordination Agent, Owner Trustee or Mortgagee (except as to Owner Trustee,
Taxes imposed on the fees payable to Owner Trustee) under the laws of Utah in
connection with the execution, delivery or performance of any Operative
Agreement by Owner Trustee or in connection with the issuance of the Equipment
Notes, which Expenses or Taxes would not have been imposed if Owner Trustee had
not (x) had its principal place of business in, (y) performed (in its individual
capacity or as Owner Trustee) any or all of its duties under the Operative
Agreements in or (z) engaged in any activities unrelated to the transactions
contemplated by the Operative Agreements in, the State of Utah.
6.4 WTC'S REPRESENTATIONS AND WARRANTIES
WTC represents and warrants (with respect to Section 6.4.10, solely in its
capacity as Subordination Agent) to Lessee, Owner Participant and Owner Trustee
that:
6.4.1 ORGANIZATION, ETC.
WTC is a Delaware banking corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware, holding a valid
certificate to do business as a Delaware banking corporation with banking
authority to execute and deliver, and perform its obligations under, the
Mortgagee Agreements, the Pass Through Trustee Agreements and the Subordination
Agent Agreements.
6.4.2 CORPORATE AUTHORIZATION
WTC has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval of
stockholders required by Law or by its Certificate of Incorporation or By-Laws)
to authorize the execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Mortgagee Agreements, the Pass Through Trustee Agreements and the
Subordination Agent Agreements and the performance of its obligations
thereunder.
6.4.3 NO VIOLATION
The execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Mortgagee Agreements, the Pass Through Trustee Agreements and the
Subordination Agent Agreements, the performance by WTC, in its individual
capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the
case may be, of its obligations thereunder and the consummation on the Delivery
Date of the transactions contemplated thereby, do not and will not (a) violate
any provision of the Certificate of Incorporation or By-Laws of WTC, (b) violate
any Law applicable to or binding on WTC, in its individual capacity or (except
in the case of any Law relating to any Plan) as Mortgagee, a Pass Through
Trustee or Subordination Agent, or (c) violate or constitute any default under
(other than any violation or default that would not result in a Material Adverse
Change to WTC, in its individual capacity or Mortgagee, a Pass Through Trustee
or Subordination Agent), or result in the creation of any Lien (other than the
Lien of the Trust Indenture) upon any property of WTC, in its individual
capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, or any
of WTC's subsidiaries under, any indenture, mortgage, chattel mortgage, deed of
trust, conditional sales contract, lease, loan or other agreement, instrument or
document to which WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, is a party or by which WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, or any of their respective properties is bound.
6.4.4 APPROVALS
The execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Mortgagee Agreements, the Pass Through Trustee Agreements and the
Subordination Agent Agreements, the performance by WTC, in its individual
capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the
case may be, of its obligations thereunder and the consummation on the Delivery
Date by WTC, in its individual capacity or as Mortgagee, a Pass Through Trustee
or Subordination Agent, as the case may be, of the transactions contemplated
thereby do not and will not require the consent, approval or authorization of,
or the giving of notice to, or the registration with, or the recording or filing
of any documents with, or the taking of any other action in respect of, (a) any
trustee or other holder of any Debt of WTC or (b) any Government Entity, other
than the filing of the FAA Filed Documents and the Financing Statements.
6.4.5 VALID AND BINDING AGREEMENTS
The Mortgagee Agreements, the Pass Through Trustee Agreements and the
Subordination Agent Agreements have been duly authorized, executed and delivered
by WTC and, assuming the due authorization, execution and delivery by the other
party or parties thereto, constitute the legal, valid and binding obligations of
WTC, in its individual capacity or as Mortgagee, a Pass Through Trustee or
Subordination Agent, as the case may be, and are enforceable against WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, as the case may be, in accordance with the respective terms thereof,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar Laws affecting the
rights of creditors generally and general principles of equity, whether
considered in a proceeding at law or in equity.
6.4.6 CITIZENSHIP
WTC is a Citizen of the United States.
6.4.7 NO LIENS
On the Delivery Date, there are no Lessor Liens attributable to WTC in
respect of all or any part of the Trust Estate or the Trust Indenture Estate.
6.4.8 LITIGATION
There are no pending or, to the Actual Knowledge of WTC, threatened actions
or proceedings against WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, before any court, administrative agency
or tribunal which, if determined adversely to WTC, in its individual capacity or
as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be,
would materially adversely affect the ability of WTC, in its individual capacity
or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may
be, to perform its obligations under any of the Mortgagee Agreements, the Pass
Through Trustee Agreements or the Subordination Agent Agreements.
6.4.9 SECURITIES LAWS
Neither WTC nor any person authorized to act on its behalf has directly or
indirectly offered any beneficial interest or Security relating to the ownership
of the Aircraft or any interest in the Trust Indenture Estate or any of the
Equipment Notes or any other interest in or security under the Trust Indenture
for sale to, or solicited any offer to acquire any such interest or security
from, or has sold any such interest or security to, any Person other than the
Participants, except for the offering and sale of the Pass Through Certificates.
6.4.10 INVESTMENT
The Equipment Notes to be acquired by the Subordination Agent are being
acquired by it for the account of the Pass Through Trustees, for investment and
not with a view to any resale or distribution thereof, except that, subject to
the restrictions on transfer set forth in Section 10.1.3, the disposition by it
of its Equipment Notes shall at all times be within its control.
6.4.11 TAXES
There are no Taxes payable by any Pass Through Trustee or WTC, as the case
may be, imposed by the State of Delaware or any political subdivision or taxing
authority thereof in connection with the execution, delivery and performance by
such Pass Through Trustee or WTC, as the case may be, of this Agreement or any
of the Pass Through Trustee Agreements (other than franchise or other taxes
based on or measured by any fees or compensation received by any such Pass
Through Trustee or WTC, as the case may be, for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust Agreements),
and there are no Taxes payable by any Pass Through Trustee or WTC, as the case
may be, imposed by the State of Delaware or any political subdivision thereof in
connection with the acquisition, possession or ownership by any such Pass
Through Trustee of any of the Equipment Notes (other than franchise or other
taxes based on or measured by any fees or compensation received by any such Pass
Through Trustee or WTC, as the case may be, for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust Agreements),
and, assuming that the trusts created by the Pass Through Trust Agreements will
not be taxable as corporations, but, rather, each will be characterized as a
grantor trust under subpart E, Part I of Subchapter J of the Code or as a
partnership under Subchapter K of the Code, such trusts will not be subject to
any Taxes imposed by the State of Delaware or any political subdivision thereof;
6.4.12 CONTROL
WTC is not an Affiliate of the Owner Participant or the Owner Trustee.
6.4.13 BROKER'S FEES
No Person acting on behalf of WTC, in its individual capacity or as
Mortgagee, any Pass Through Trustee or Subordination Agent, is or will be
entitled to any broker's fee, commission or finder's fee in connection with the
Transactions.
SECTION 7. COVENANTS, UNDERTAKINGS AND AGREEMENTS
7.1 COVENANTS OF LESSEE
Lessee covenants and agrees, at its own cost and expense, with Owner
Participant, Loan Participant, Owner Trustee and Mortgagee as follows:
7.1.1 CORPORATE EXISTENCE; U.S. AIR CARRIER
Lessee shall at all times maintain its corporate existence, except as
permitted by Section 13.2 of the Lease, and shall at all times remain a U.S. Air
Carrier.
7.1.2 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE
Lessee will give Owner Participant, Owner Trustee and Mortgagee timely
written notice (but in any event within 30 days prior to the expiration of the
period of time specified under applicable Law to prevent lapse of perfection) of
any relocation of its chief executive office (as such term is defined in Article
9 of the UCC) from its then present location and will promptly take any action
required by Section 7.1.3(c) as a result of such relocation.
7.1.3 CERTAIN ASSURANCES
(a) Lessee shall duly execute, acknowledge and deliver, or shall cause to
be executed, acknowledged and delivered, all such further agreements,
instruments, certificates or documents, and shall do and cause to be done such
further acts and things, in any case, as Owner Participant, Owner Trustee or
Mortgagee shall reasonably request for accomplishing the purposes of this
Agreement and the other Operative Agreements, PROVIDED THAT any instrument or
other document so executed by Lessee will not expand any obligations or limit
any rights of Lessee in respect of the transactions contemplated by any
Operative Agreement.
(b) Lessee shall promptly take such action with respect to the recording,
filing, re-recording and refiling of the Lease, the Trust Agreement and the
Trust Indenture and the respective supplements thereto, including, without
limitation, Lease Supplement No. 1 and the initial Trust Indenture Supplement,
as shall be necessary to establish, perfect and protect the interests and rights
of Owner Trustee in and to the Aircraft and under the Lease and the perfection
and priority of the Lien created by the Trust Indenture. Lessee shall furnish to
Owner Participant or Owner Trustee such information (other than with respect to
the citizenship of Owner Participant and Owner Trustee) in Lessee's possession
or otherwise reasonably available to Lessee as may be required to enable Owner
Participant or Owner Trustee to make application for registration of the
Aircraft under the Act (subject to Lessee's rights under Section 7.1.2 of the
Lease) and shall pay or cause to be paid all out-of-pocket costs and expenses
thereof (including, without limitation, reasonable attorneys' fees and
disbursements).
(c) Lessee, at its sole cost and expense, will cause the FAA Filed
Documents, the Financing Statements and all continuation statements (and any
amendments necessitated by any combination, consolidation or merger pursuant to
Section 13.2 of the Lease, or any relocation of its chief executive office) in
respect of the Financing Statements to be prepared and, subject only to the
execution and delivery thereof by Owner Trustee and Mortgagee, as applicable,
duly and timely filed and recorded, or filed for recordation, to the extent
permitted under the Act (with respect to the FAA Filed Documents) or the UCC or
similar law of any other applicable jurisdiction (with respect to such other
documents).
(d) If the Aircraft has been registered in a country other than the United
States pursuant to Section 7.1.2 of the Lease, Lessee will furnish to Owner
Trustee, Mortgagee and each Participant annually after such registration,
commencing with the calendar year after such registration is effected, an
opinion of special counsel reasonably satisfactory to Owner Trustee and
Mortgagee stating that, in the opinion of such counsel, either that (i) such
action has been taken with respect to the recording, filing, rerecording and
refiling of the Operative Agreements and any supplements and amendments thereto
as is necessary to establish, perfect and protect Owner Trustee's and
Mortgagee's respective right, title and interest in and to the Aircraft and the
Operative Agreements, reciting the details of such actions, or (ii) no such
action is necessary to maintain the perfection of such right, title and
interest.
7.1.4 SECURITIES LAWS
Neither Lessee nor any person authorized to act on its behalf will directly
or indirectly offer any beneficial interest or Security relating to the
ownership of the Aircraft or the Lease or any interest in the Trust Estate and
Trust Agreement or any of the Equipment Notes or any other interest in or
security under the Trust Indenture, for sale to, or solicit any offer to acquire
any such interest or security from, or sell any such interest or security to,
any person in violation of the Securities Act or applicable state or foreign
securities Laws.
7.2 COVENANTS OF OWNER PARTICIPANT
Owner Participant covenants and agrees with Lessee, and except with respect
to Section 7.2.4, Loan Participant, Owner Trustee and Mortgagee as follows:
7.2.1 LIENS
Owner Participant (a) will not directly or indirectly create, incur, assume
or suffer to exist any Lessor Lien attributable to it on or with respect to all
or any part of the Trust Estate, the Trust Indenture Estate or the Aircraft, (b)
will, at its own cost and expense, promptly take such action as may be necessary
to discharge any Lessor Lien attributable to Owner Participant on all or any
part of the Trust Estate, the Trust Indenture Estate or the Aircraft and (c)
will hold harmless and indemnify Lessee, Owner Trustee, each Note Holder,
Mortgagee, each of their respective Affiliates, successors and permitted
assigns, the Trust Estate and the Trust Indenture Estate from and against (i)
any and all Expenses, (ii) any reduction in the amount payable out of the Trust
Estate or the Trust Indenture Estate and (iii) any interference with the
possession, operation or other use of all or any part of the Aircraft imposed
on, incurred by or asserted against any of the foregoing as a consequence of any
such Lessor Lien.
7.2.2 REVOCATION OF TRUST AGREEMENT
(a) Owner Participant will comply with the provisions of the Trust
Agreement applicable to it, and will not terminate or revoke the Trust Agreement
or the trusts created thereunder without the prior written consent of Lessee and
Mortgagee and will not amend, modify or supplement the Trust Agreement, or waive
any of the provisions thereof, if such amendment, modification, supplement or
waiver would have a material adverse effect on Lessee, without the consent of
Lessee, or on Mortgagee or any Note Holder, without the consent of Mortgagee.
(b) Notwithstanding Section 7.2.2(a), Owner Participant may at any time
remove Owner Trustee pursuant to Section 9.1 of the Trust Agreement or terminate
the Trust Agreement pursuant to Section 11.2 of the Trust Agreement.
7.2.3 CHANGE OF SITUS OF OWNER TRUST
If, at any time, any Tax Indemnitee or the Trust Estate becomes subject to
any Taxes for which it is indemnified pursuant to Section 9.3 of this Agreement
and if, as a consequence thereof, Lessee should request that the situs of the
Trust be moved to another state in the United States from the state in which it
is then located, the situs of the Trust may be moved with the written consent of
Owner Participant (which consent shall not be unreasonably withheld) and Owner
Participant will take whatever action may be reasonably necessary to accomplish
such removal; PROVIDED, that, in any event, (a) Lessee shall provide such
additional tax indemnification as Owner Participant and the Note Holders or the
Pass Through Trustees may reasonably request to cover any additional
unindemnified Taxes or loss of Tax benefits described in the assumptions in the
Tax Indemnity Agreement resulting from such change in the situs of the Trust,
(b) the rights and obligations under the Operative Agreements of Owner
Participant, the Note Holders, Pass Through Trustees and Mortgagee shall not be
adversely affected as a result of the taking of such action, (c) the Lien of the
Trust Indenture on the Trust Indenture Estate shall not be adversely affected by
such action, and Lessee and Owner Trustee shall execute and deliver such
documents as may reasonably be requested by Mortgagee to protect and maintain
the perfection and priority of such Lien, (d) Owner Participant, Pass Through
Trustees and Mortgagee shall have received an opinion or opinions of counsel
(which counsel is reasonably satisfactory to Owner Participant, Pass Through
Trustees and Mortgagee) in scope, form and substance reasonably satisfactory to
Owner Participant, Pass Through Trustees and Mortgagee to the effect that (i)
the Trust, as thus removed, shall remain a validly established trust, (ii) any
amendments to the Trust Agreement necessitated by such removal shall have been
duly authorized, executed and delivered by the parties thereto and shall
constitute the valid and binding obligations of such parties, enforceable in
accordance with their terms, (iii) covering such other matters as Owner
Participant, Pass Through Trustees or Mortgagee may reasonably request, (e) if
such removal involves the replacement of Owner Trustee, then Owner Participant,
Pass Through Trustees and Mortgagee shall have received an opinion of counsel to
such successor Owner Trustee in form and substance reasonably satisfactory to
Owner Participant, Pass Through Trustees and Mortgagee covering the matters
described in the opinion delivered pursuant to Section 5.1.2(xxiii)(D) and (f)
Lessee shall indemnify and hold harmless Owner Participant, Note Holders, Pass
Through Trustees and First Security, in its individual capacity and as Owner
Trustee, on a net after-tax basis against any and all reasonable out-of-pocket
costs and expenses including attorneys' fees and disbursements, fees and
expenses of any new owner trustee, registration, recording or filing fees and
taxes incurred by Owner Participant, Note Holders, Pass Through Trustees or
Owner Trustee in connection with such change of situs. Owner Participant agrees
with Lessee that it will not consent to or direct a change in the situs of the
Trust Estate without the prior written consent of Lessee.
7.2.4 COMPLIANCE WITH LEASE PROVISIONS
Owner Participant will, solely for the benefit of Lessee, comply with the
express provisions applicable to it contained in the Lease.
7.2.5 SECURITIES ACT
Owner Participant will not directly or indirectly offer any beneficial
interest or security relating to the ownership of the Aircraft or any interest
in the Trust Estate or any of the Equipment Notes or any other interest in or
security under the Trust Indenture for sale to, or solicit any offer to acquire
any such interest or security from, or sell any such interest or security to,
any Person in violation of the Securities Act or applicable state or foreign
securities Laws, provided that the foregoing shall not be deemed to impose on
Owner Participant any responsibility with respect to any such offer, sale or
solicitation by any other party hereto.
7.2.6 REGARDING THE OWNER TRUSTEE
Owner Participant will cause Owner Trustee to perform its obligations under
each Owner Trustee Agreement.
7.3 COVENANTS OF FIRST SECURITY AND OWNER TRUSTEE
First Security, in its individual capacity and/or as Owner Trustee, as
provided below, covenants and agrees with Lessee, Owner Participant, each Note
Holder and Mortgagee as follows:
7.3.1 LIENS
First Security (a) will not directly or indirectly create, incur, assume or
suffer to exist any Lessor Lien attributable to it or Owner Trustee with respect
to all or any part of the Trust Estate, the Trust Indenture Estate or the
Aircraft, (b) will, at its own cost and expense, promptly take such action as
may be necessary to discharge any Lessor Lien attributable to First Security or
Owner Trustee on all or any part of the Trust Estate, the Trust Indenture Estate
or the Aircraft and (c) will personally hold harmless and indemnify Lessee,
Owner Participant, each Note Holder, Mortgagee, each of their respective
Affiliates, successors and permitted assigns, the Trust Estate and the Trust
Indenture Estate from and against (i) any and all Expenses, (ii) any reduction
in the amount payable out of the Trust Estate or the Trust Indenture Estate and
(iii) any interference with the possession, operation or other use of all or any
part of the Aircraft imposed on, incurred by or asserted against any of the
foregoing as a consequence of any such Lessor Lien.
7.3.2 OTHER BUSINESS
Owner Trustee will not enter into any business or other activity except as
contemplated by the Operative Agreements.
7.3.3 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE
First Security, in its individual capacity and as Owner Trustee, will give
Lessee, each Participant and Mortgagee 30 days' prior written notice of any
relocation of its chief executive office (as such term is defined in Article 9
of the UCC) from its then present location and will promptly take any action
required by Section 7.3.8 as a result of such relocation.
7.3.4 SECURITIES ACT
First Security, in its individual capacity and as Owner Trustee, will not
directly or indirectly offer any beneficial interest or Security relating to the
ownership of the Aircraft or any interest in the Trust Estate or any of the
Equipment Notes or any other interest in or security under the Trust Indenture
for sale to, or solicit any offer to acquire any such interest or security from,
or sell any such interest or security to, any Person in violation of the
Securities Act or applicable state or foreign securities Laws, provided that the
foregoing shall not be deemed to impose on First Security in its individual
capacity or as Owner Trustee, any responsibility with respect to any such offer,
sale or solicitation by any other party hereto.
7.3.5 PERFORMANCE OF AGREEMENTS
Owner Trustee shall perform its obligations under the Owner Trustee
Agreements in accordance with the terms thereof.
7.3.6 RELEASE OF LIEN OF TRUST INDENTURE
Owner Trustee, in each instance referred to in the Lease in which a
transfer of any property is required to be made by Owner Trustee to Lessee or
any other Person (other than Mortgagee or Owner Participant), shall, at Lessee's
request and expense, use its reasonable efforts to procure from Mortgagee the
prompt release of the Lien of the Trust Indenture with respect to such property.
7.3.7 NOTICES; DOCUMENTS
In the event any claim with respect to any liabilities is filed against the
Owner Trustee in its capacity as such and Owner Trustee shall have Actual
Knowledge thereof, the Owner Trustee shall promptly notify Lessee in writing
thereof. Owner Trustee further agrees to provide to Lessee promptly any
documents (including the certificate of aircraft registration) that it receives
from the FAA with respect to the Aircraft.
7.3.8 FILINGS
After the Delivery Date, Owner Trustee shall duly execute and deliver to
Lessee all filings and recordings (including, without limitation, all filings
and UCC financing statements under the Act and the UCC and any amendments to UCC
financing statements necessitated by any relocation of its chief executive
office), prepared and delivered to it by Lessee required to perfect Owner
Trustee's title to the Aircraft and the liens of and security interests granted
by the Trust Indenture (or to maintain such perfection) and to make such title,
liens and security interests valid and enforceable.
7.3.9 TRUST AGREEMENT
Each of First Security and Owner Trustee hereby (i) agrees with Lessee,
Loan Participant and Mortgagee not to amend, supplement, terminate or otherwise
modify any provision of the Trust Agreement in such a manner as to adversely
affect the rights of any such party without the prior written consent of such
party and (ii) agrees with Lessee, Loan Participant and Mortgagee not to revoke
the trust created by the Trust Agreement so long as the Trust Indenture remains
undischarged or if such revocation would have an adverse effect on the Lessee.
Nothing contained in this Agreement shall impair any right under the Trust
Agreement of First Security to resign as Owner Trustee in accordance with the
provisions of the Trust Agreement.
7.4 COVENANTS OF WTC
WTC in its individual capacity or as Mortgagee, each Pass Through Trustee
or Subordination Agent, as the case may be, covenants and agrees with Lessee,
Owner Participant and Owner Trustee as follows:
7.4.1 LIENS
WTC (a) will not directly or indirectly create, incur, assume or suffer to
exist any Lessor Lien attributable to it on or with respect to all or any part
of the Trust Estate, the Trust Indenture Estate or the Aircraft, (b) will, at
its own cost and expense, promptly take such action as may be necessary to
discharge any Lessor Lien attributable to WTC on all or any part of the Trust
Estate, the Trust Indenture Estate or the Aircraft and (c) will personally hold
harmless and indemnify Lessee, Owner Participant, each Note Holder, Owner
Trustee, each of their respective Affiliates, successors and permitted assigns,
the Trust Estate and the Trust Indenture Estate from and against (i) any and all
Expenses, (ii) any reduction in the amount payable out of the Trust Estate or
the Trust Indenture Estate and (iii) any interference with the possession,
operation or other use of all or any part of the Aircraft, imposed on, incurred
by or asserted against any of the foregoing as a consequence of any such Lessor
Lien.
7.4.2 SECURITIES ACT
WTC in its individual capacity or as Mortgagee, a Pass Through Trustee or
Subordination Agent, will not offer any beneficial interest or Security relating
to the ownership of the Aircraft or any interest in the Trust Indenture Estate,
or any of the Equipment Notes or any other interest in or security under the
Trust Indenture for sale to, or solicit any offer to acquire any such interest
or security from, or sell any such interest or security to, any Person in
violation of the Securities Act or applicable state or foreign securities Laws,
provided that the foregoing shall not be deemed to impose on WTC any
responsibility with respect to any such offer, sale or solicitation by any other
party hereto.
7.4.3 PERFORMANCE OF AGREEMENTS
WTC, in its individual capacity and as Mortgagee, a Pass Through Trustee or
Subordination Agent, as the case may be, shall perform its obligations under the
Indenture Agreements, the Pass Through Trustee Agreements and the Subordination
Agent Agreements in accordance with the terms thereof.
7.4.4 WITHHOLDING TAXES
WTC shall indemnify (on an after-tax basis) and hold harmless Lessee,
Lessor and Owner Participant against any United States withholding taxes (and
related interest, penalties and additions to tax) as a result of the failure by
WTC to withhold on payments to any Note Holder if such Note Holder failed to
provide to Mortgagee necessary certificates or forms to substantiate the right
to exemption from such withholding tax.
7.5 COVENANTS OF NOTE HOLDERS
Each Note Holder (including Subordination Agent) as to itself only
covenants and agrees with Lessee, Owner Participant, Owner Trustee and Mortgagee
as follows:
7.5.1 WITHHOLDING TAXES
Such Note Holder (if it is a Non-U.S. Person) agrees to indemnify (on an
after-tax basis) and hold harmless Lessee, Lessor, Owner Participant and
Mortgagee against any United States withholding taxes (and related interest,
penalties and additions to tax) as a result of the inaccuracy or invalidity of
any certificate or form provided by such Note Holder to Mortgagee in connection
with such withholding taxes. Any amount payable hereunder shall be paid within
30 days after receipt by a Note Holder of a written demand therefor.
7.5.2 TRANSFER; COMPLIANCE
(a) Such Note Holder will (i) not transfer any Equipment Note or interest
therein in violation of the Securities Act or applicable state or foreign
securities Law; PROVIDED, that the foregoing provisions of this section shall
not be deemed to impose on such Note Holder any responsibility with respect to
any such offer, sale or solicitation by any other party hereto, and (ii) perform
and comply with the obligations specified to be imposed on it (as a Note Holder)
under each of the Trust Indenture and the form of Equipment Note set forth in
the Trust Indenture.
(b) Except for the transfer of the interests of each Pass Through Trustee
in the Equipment Notes to the trustee of the Related Trust (as defined in each
Pass Through Trust Agreement) in accordance with the Pass Through Trust
Agreement and except as otherwise required by the terms of Section 2.13 of the
Trust Indenture or Section 11 hereof, each Note Holder will not sell, assign,
convey, exchange or otherwise transfer any Equipment Note or any interest in, or
represented by, any Equipment Note (it being understood that this provision is
not applicable to the Pass Through Certificates) unless the proposed transferee
thereof first provides Lessee and Owner Participant with both of the following:
(i) a written representation and covenant that either (a) no portion
of the funds it uses to purchase, acquire and hold such Equipment Note or
interest directly or indirectly constitutes, or may be deemed under the
Code or ERISA or any rulings, regulations or court decisions thereunder to
constitute, the assets of any Plan or (b) the transfer, and subsequent
holding, of such Equipment Note or interest shall not involve or give rise
to a transaction that constitutes a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code involving
Lessee, Owner Participant, a Pass Through Trustee, the Subordination Agent
or the proposed transferee (other than a transaction that is exempted from
the prohibitions of such sections by applicable provisions of ERISA or the
Code or administrative exemptions or regulations issued thereunder); and
(ii) a written covenant that it will not transfer any Equipment Note
or any interest in, or represented by, any Equipment Note unless the
subsequent transferee also makes the representation described in clause (i)
above and agrees to comply with this clause (ii).
7.6 AGREEMENTS
7.6.1 OWNER TRUSTEE IS OWNER FOR ALL PURPOSES
Lessee, the Owner Participant and Owner Trustee agree that for all
purposes, after the Closing, Owner Trustee will be the owner of the Aircraft
(except that Owner Participant will be the owner for income tax purposes) and
Lessee will be the lessee thereof. No transfer, by operation of Law or
otherwise, of the beneficial interest of Owner Participant in and to the Trust
Estate shall operate to transfer legal title to any part of the Trust Estate to
any transferee thereof.
7.6.2 COMMENCEMENT OF BANKRUPTCY PROCEEDINGS
Lessee, each Participant, each Note Holder, First Security, Owner Trustee,
WTC and Mortgagee agree for the benefit of each of the others that it will not
commence or join in any proceeding under the Bankruptcy Code to commence a case
under Section 303 of the Bankruptcy Code against the Trust Estate. Nothing
contained herein shall be deemed to preclude any Participant, any Note Holder,
First Security, Owner Trustee, WTC or Mortgagee from filing any claim against
the Trust Estate in any case commenced against the Trust Estate.
7.6.3 CERTAIN BANKRUPTCY MATTERS
If (a) all or any part of the Trust Estate becomes the property of, or
Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (b) pursuant to such
reorganization provisions, including Section 1111(b) of the Bankruptcy Code,
First Security or Owner Participant is required, by reason of First Security or
Owner Participant being held to have recourse liability to any Note Holder or
Mortgagee directly or indirectly (other than the recourse liability of First
Security or Owner Participant under this Agreement, the Trust Indenture or by
separate agreement), to make payment on account of any amount payable as
principal, Make-Whole Amount, if any, interest or other amounts on the Equipment
Notes, and (c) any Note Holder or Mortgagee actually receives any Excess Amount,
as defined below, which reflects any payment by First Security or Owner
Participant on account of (b) above, then such Note Holder or Mortgagee, as the
case may be, shall promptly refund to First Security or Owner Participant
(whichever shall have made such payment) such Excess Amount.
For purposes of this Section 7.6.3, "Excess Amount" means the amount by
which such payment exceeds the amount that would have been received by a Note
Holder or Mortgagee if First Security or Owner Participant had not become
subject to the recourse liability referred to in clause (b) above. Nothing
contained in this Section 7.6.3 shall prevent a Note Holder or Mortgagee from
enforcing any personal recourse obligation (and retaining the proceeds thereof)
of First Security or Owner Participant under this Agreement (other than as
referred to in clause (b) above) or the Trust Indenture (and any exhibits or
annexes thereto) or from retaining any amount paid by Owner Participant under
Sections 2.13 or 4.03 of the Trust Indenture.
7.6.4 QUIET ENJOYMENT; SALE BY OWNER TRUSTEE BINDING
(a) Owner Participant, each Pass Through Trustee, Subordination Agent, each
Note Holder, Owner Trustee and Mortgagee agrees as to itself with Lessee that,
so long as no Lease Event of Default shall have occurred and be continuing, such
Person shall not (and shall not permit any Affiliate or other Person claiming
by, through or under it to) interfere with Lessee's rights in accordance with
the Lease to the quiet enjoyment, possession and use of the Aircraft during the
Term.
(b) Any assignment, sale, transfer or other conveyance of the Aircraft by
Owner Trustee made pursuant to the terms of this Agreement or the Lease shall
bind Owner Participant and shall be effective to transfer or convey all right,
title and interest of Owner Trustee and Owner Participant in and to the
Aircraft. No purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance, or as to the application of any sale or other proceeds
with respect thereto by Owner Trustee, as regards Owner Participant.
7.6.5 RELEASE OF LIEN OF TRUST INDENTURE
Each of Lessee, Lessor and Mortgagee agrees that in each instance referred
to in the Lease in which a transfer of any property is required to be made by
Lessor to Lessee or any other Person (other than Mortgagee), Mortgagee shall,
upon request of Lessor and compliance with the applicable provisions of the
Lease and the Trust Indenture, including payment of all amounts then due and
payable to each Liquidity Provider as Supplemental Rent, promptly execute (at
Lessee's cost and expense) such instruments as Lessor or Lessee may reasonably
request to evidence the release of the Lien of the Trust Indenture with respect
to such property.
7.6.6 NON-RECOURSE
Loan Participant and Mortgagee agree that (a) obligations of Owner Trustee
under the Trust Indenture or any other Operative Agreement and with respect to
the Equipment Notes shall be non-recourse to Owner Participant and to First
Security and (b) they will look solely to the income and proceeds from the Trust
Estate and the Trust Indenture Estate to the extent available for distribution
to Note Holder or Mortgagee as provided in the Trust Indenture and that neither
Owner Participant nor First Security will be personally liable to Loan
Participant or Mortgagee for any amounts payable by Owner Trustee under the
Trust Indenture or any other Operative Agreement; PROVIDED, HOWEVER, that the
foregoing is not intended nor shall it be construed to limit any recourse
liability of Owner Participant or First Security to the extent that such
liability is expressly set forth in this Agreement or in any of the Operative
Agreements or arises by reason of the breach of any representation or warranty
or covenant given by such Person (in the case of First Security, in its
individual capacity).
7.6.7 OTHER DOCUMENTS; AMENDMENT
(a) Each of the Owner Participant and the Owner Trustee hereby (A) agrees
with Lessee, the Loan Participant and the Mortgagee not to amend, supplement or
otherwise modify any provision of the Trust Agreement in a manner that could
adversely affect such party without the prior written consent of such party.
Notwithstanding the foregoing, so long as the Lease has not been terminated or
expired, each Participant, the Mortgagee and the Owner Trustee hereby agree for
the benefit of Lessee that without the consent of Lessee they will not amend,
supplement or otherwise modify (i) Article III, Article IX or Section 2.05 of
the Trust Indenture, (ii) any provision of any Operative Agreement that will
affect the stated principal amount of or premium or interest on the Equipment
Notes or (iii) any other provision of the Trust Indenture or Equipment Notes in
a manner that could adversely affect Lessee. Mortgagee and Owner Trustee agree
to promptly furnish to Lessee copies of any supplement, amendment, waiver or
modification of any of the Operative Agreements to which Lessee is not a party.
Loan Participant agrees that it will not take any action in respect of the Trust
Indenture Estate except through the Mortgagee pursuant to the Trust Indenture or
as otherwise permitted by Trust Indenture.
(b) Owner Trustee agrees to join with Lessee to the extent that action on
its part is necessary or appropriate (i) to cause the following to be duly
accomplished in accordance with applicable United States federal Law by the time
the Aircraft is delivered under this Agreement and the Lease: (A) the
application for registration of the Aircraft in the name of Owner Trustee and
(B) all related action necessary in order for Lessee to have temporary or
permanent authority to operate the Aircraft as contemplated by the Lease and
(ii) forthwith upon delivery of the Aircraft under this Agreement and the Lease,
to cause all necessary documents to be duly filed for recording in accordance
with applicable United States federal Law.
7.6.8 CONSENTS
Each Participant, each Pass Through Trustee, Subordination Agent, Owner
Trustee and Mortgagee covenants and agrees, for the benefit of Lessee, that it
shall not unreasonably withhold its consent to any consent or approval requested
of it or of Owner Trustee or Mortgagee under the terms of any of the Operative
Agreements which by its terms is not to be unreasonably withheld.
7.6.9 INSURANCE
Each of Owner Participant, the Pass Through Trustees, the Subordination
Agent and the Owner Trustee agrees not to obtain or maintain insurance for its
own account as permitted by Section 11.2 of the Lease if such insurance would
limit or otherwise adversely affect the coverage of any insurance required to be
obtained or maintained by Lessee pursuant to Section 11 and Annex D of the
Lease.
7.6.10 EXTENT OF INTEREST OF NOTE HOLDERS
A Note Holder shall not, as such, have any further interest in, or other
right with respect to, the Trust Estate or the Trust Indenture Estate when and
if the principal and Make-Whole Amount, if any, of and interest on the Equipment
Note held by such Note Holder, and all other sums, then due and payable to such
Note Holder hereunder and under any other Operative Agreement, shall have been
paid in full.
7.6.11 FOREIGN REGISTRATION
Each Participant, Owner Trustee and Mortgagee hereby agree, for the benefit
of Lessee but subject to the provisions of Section 7.1.2 of the Lease:
(a) that Lessee shall be entitled to register the Aircraft or cause the
Aircraft to be registered in a country other than the United States subject to
compliance with the following:
(i) each of the following requirements is satisfied:
(A) such registration shall be made only after the Tax Attribute
Period, unless Lessee prepays on a lump sum basis any liability
due under the Tax Indemnity Agreement as a result of such
registration based upon the assumption that such registration
would continue for the remainder of the term of the Permitted
Sublease described in clause (C) below;
(B) no Lease Event of Default shall have occurred and be continuing
at the time of such registration;
(C) such proposed change of registration is made in connection with a
Permitted Sublease to a Permitted Air Carrier;
(D) such country is a country with which the United States then
maintains normal diplomatic relations or, if Taiwan, the United
States then maintains diplomatic relations at least as good as
those in effect on the Delivery Date;
(ii) the Owner Trustee and Mortgagee shall have received an opinion of
counsel (subject to customary exceptions) reasonably satisfactory to the
Owner Participant addressed to each such party as to the effect that:
(A) such country would recognize the Owner Trustee's ownership
interest in the Aircraft;
(B) the obligations of Lessee, and the rights and remedies of
Owner Trustee, under the Lease are valid, binding and enforceable
under the laws of such jurisdiction (or the laws of the jurisdiction
to which the laws of such jurisdiction would refer as the applicable
governing law);
(C) after giving effect to such change in registration, the Lien
of the Trust Indenture on the Owner Trustee's right, title and
interest in and to the Aircraft and the Lease shall continue as a
valid and duly perfected first priority security interest and all
filing, recording or other action necessary to protect the same shall
have been accomplished (or, if such opinion cannot be given at the
time of such proposed change in registration because such change in
registration is not yet effective, (1) the opinion shall detail what
filing, recording or other action is necessary and (2) the Owner
Trustee and the Mortgagee shall have received a certificate from
Lessee that all possible preparations to accomplish such filing,
recording and other action shall have been done, and such filing,
recording and other action shall be accomplished and a supplemental
opinion to that effect shall be delivered to the Owner Trustee and the
Mortgagee on or prior to the effective date of such change in
registration;
(D) it is not necessary, solely as a consequence of such change
in registration and without giving effect to any other activity of the
Owner Trustee, the Owner Participant or the Mortgagee (or any
Affiliate thereof), as the case may be, for the Owner Trustee, the
Owner Participant or the Mortgagee to qualify to do business in such
jurisdiction as a result of such reregistration in order to exercise
any rights or remedies with respect to the Aircraft pursuant to the
Lease;
(E) there is no tort liability of the owner or lessor of an
aircraft not in possession thereof under the laws of such jurisdiction
(it being agreed that, in the event such latter opinion cannot be
given in a form satisfactory to the Owner Participant, such opinion
shall be waived if insurance reasonably satisfactory to the Owner
Participant is provided to cover such risk); and
(F) unless Lessee shall have agreed to provide insurance covering
the risk of requisition of use of the Aircraft by the government of
such country (so long as the Aircraft is registered under the laws of
such country), the laws of such country require fair compensation by
the government of such country payable in currency freely convertible
into Dollars and freely removable from such country (without license
or permit, unless Lessee prior to such proposed reregistration has
obtained such license or permit) for the taking or requisition by such
government of such use;
(b) In addition, as a condition precedent to any change in registration
Lessee shall have given to Lessor and Mortgagee assurances reasonably
satisfactory to each of them:
(i) to the effect that the provisions of Section 11 of the Lease have
been complied with after giving effect to such change of
registration;
(ii) of the payment by Lessee of all reasonable out-of-pocket expenses
of Lessor, each Participant and Mortgagee in connection with such
change of registry, including, without limitation (1) the
reasonable fees and disbursements of counsel to Lessee, Lessor
and Mortgagee, (2) any filing or recording fees, Taxes or similar
payments incurred in connection with the change of registration
of the Aircraft and the creation and perfection of the security
interest therein in favor of Mortgagee for the benefit of Note
Holders, and (3) all costs and expenses incurred in connection
with any filings necessary to continue in the United States the
perfection of the security interest in the Aircraft and the Lease
in favor of Mortgagee for the benefit of Note Holders; and
(iii) to the effect that the tax and other indemnities in favor of
each person named as an indemnitee under any other Operative
Agreement afford each such person substantially the same
protection as provided prior to such change of registration (or
Lessee shall have agreed upon additional indemnities that,
together with such original indemnities, in the reasonable
judgment of Lessor and Mortgagee, afford such protection).
7.6.12 OTHER COMMERCIAL RELATIONS UNAFFECTED
Notwithstanding anything to the contrary set forth in any Operative
Agreement:
(a) Except as set forth in the Purchase Agreement Assignment, nothing
contained in the Operative Agreements shall constitute or be deemed to be a
waiver by Lessee of any rights, remedies or claims it may have against Airframe
Manufacturer or Engine Manufacturer or any subcontractor or supplier of either;
and the Operative Agreements do not and shall not be construed or deemed to
create any rights, waivers, immunities or indemnities in favor of Airframe
Manufacturer, Engine Manufacturer or any subcontractor or supplier of either
with respect to any such rights, remedies or claims of Lessee; and
(b) None of Airframe Manufacturer, by its execution and delivery of the
Consent and Agreement, and Engine Manufacturer, by its execution and delivery of
the Engine Consent and Agreement, shall be deemed to have waived any rights,
remedies or claims which Airframe Manufacturer or Engine Manufacturer (or any
subcontractor or supplier of either), as the case may be, may have against
Lessee; and the Operative Agreements do not and shall not be construed or deemed
to create any rights, waivers, immunities or indemnities in favor of Lessee with
respect to any such rights, remedies or claims of Airframe Manufacturer or
Engine Manufacturer (or any subcontractor or supplier of either).
7.6.13 INTEREST IN CERTAIN ENGINES
Each Participant, Owner Trustee, and Mortgagee agree, for the benefit of
each of the lessor, conditional seller, mortgagee or secured party of any
airframe or engine leased to, or purchased by, Lessee or any Permitted Sublessee
subject to a lease, conditional sale, trust indenture or other security
agreement that it will not acquire or claim, as against such lessor, conditional
seller, mortgagee or secured party, any right, title or interest in any engine
as the result of such engine being installed on the Airframe at any time while
such engine is subject to such lease, conditional sale, trust indenture or other
security agreement and owned by such lessor or conditional seller or subject to
a trust indenture or security interest in favor of such mortgagee or secured
party.
SECTION 8. CONFIDENTIALITY
Lessee, Owner Participant, Note Holders, Owner Trustee and Mortgagee shall
keep Annexes B, C and D and Schedules 1, 2, 3 and 4 to the Lease, the
Participation Agreement, the Purchase Agreement Assignment and the Tax Indemnity
Agreement confidential and shall not disclose, or cause to be disclosed, the
same to any Person, except (A) to prospective and permitted transferees of
Lessee's, Owner Participant's, a Note Holder's, a Liquidity Provider's, Owner
Trustee's, Mortgagee's or other Indenture Indemnitee's interest or their
respective counsel or special counsel, independent insurance brokers, auditors,
or other agents who agree to hold such information confidential, (B) to
Lessee's, Owner Participant's, a Note Holder's, a Liquidity Provider's, a Pass
Through Trustee's, Owner Trustee's, Mortgagee's or other Indenture Indemnitee's
counsel or special counsel, independent insurance brokers, auditors, or other
agents, Affiliates or investors who agree to hold such information confidential,
(C) as may be required by any statute, court or administrative order or decree,
legal process or governmental ruling or regulation, including those of any
applicable insurance regulatory bodies (including, without limitation, the
National Association of Insurance Commissioners), federal or state banking
examiners, Internal Revenue Service auditors or any stock exchange, (D) with
respect to Lessee and Owner Participant, by mutual agreement of such parties,
(E) with respect to a Note Holder or any Pass Through Trustee, to a nationally
recognized rating agency for the purpose of obtaining a rating on the Equipment
Notes or the Pass Through Trust Certificates or to support an NAIC rating for
the Equipment Notes or (F) such other Persons as are reasonably deemed necessary
by the disclosing party in order to protect the interests of such party or for
the purposes of enforcing such documents by such party; PROVIDED, that any and
all disclosures permitted by clauses (C), (D), (E) or (F) above shall be made
only to the extent necessary to meet the specific requirements or needs of the
Persons making such disclosures.
SECTION 9. INDEMNIFICATION AND EXPENSES
9.1 GENERAL INDEMNITY
9.1.1 INDEMNITY
Whether or not any of the transactions contemplated hereby are consummated,
Lessee shall indemnify, protect, defend and hold harmless each Indemnitee from,
against and in respect of, and shall pay on a net after-tax basis, any and all
Expenses of any kind or nature whatsoever that may be imposed on, incurred by or
asserted against any Indemnitee, relating to, resulting from, or arising out of
or in connection with, any one or more of the following:
(a) The Operative Agreements, the Pass Through Agreements, or the
enforcement of any of the terms of any of the Operative Agreements or the Pass
Through Agreements;
(b) The Aircraft, the Airframe, any Engine or any Part, including, without
limitation, with respect thereto, (i) the manufacture, design, purchase,
acceptance, nonacceptance or rejection, ownership, registration, reregistration,
deregistration, delivery, nondelivery, lease, sublease, assignment, possession,
use or non-use, operation, maintenance, testing, repair, overhaul, condition,
alteration, modification, addition, improvement, storage, airworthiness,
replacement, repair, sale, substitution, return, abandonment, redelivery or
other disposition of the Aircraft, any Engine or any Part, (ii) any claim or
penalty arising out of violations of applicable Laws by Lessee (or any Permitted
Sublessee), (iii) tort liability, whether or not arising out of the negligence
of any Indemnitee (whether active, passive or imputed), (iv) death or property
damage of passengers, shippers or others, (v) environmental control, noise or
pollution and (vi) any Liens in respect of the Aircraft, any Engine or any Part;
(c) The offer, sale, or delivery of any Equipment Notes, Pass Through
Certificates or any interest therein or represented thereby; and
(d) Any breach of or failure to perform or observe, or any other
noncompliance with, any covenant or agreement or other obligation to be
performed by Lessee under any Lessee Operative Agreement or any Pass Through
Agreement or the falsity of any representation or warranty of Lessee in any
Lessee Operative Agreement or any Pass Through Agreement other than in the Tax
Indemnity Agreement.
9.1.2 EXCEPTIONS
Notwithstanding anything contained in Section 9.1.1, Lessee shall not be
required to indemnify, protect, defend and hold harmless any Indemnitee pursuant
to Section 9.1.1 in respect of any Expense of such Indemnitee:
(a) For any Taxes or a loss of Tax benefit, whether or not Lessee is
required to indemnify therefor pursuant to Section 9.3 or the Tax Indemnity
Agreement;
(b) Except to the extent attributable to acts or events occurring prior
thereto, acts or events (other than acts or events related to the performance by
Lessee of its obligations pursuant to the terms of the Lessee Operative
Agreements) that occur after the earliest of: (i) with respect to the Airframe,
any Engine or any Part, the return of possession (it being understood that the
date of the placement of the Aircraft in storage as provided in Section 5 of the
Lease constitutes the date of return of the Aircraft under the Lease) of such
Airframe, Engine or Part pursuant to the terms of and in compliance with the
Lease (other than pursuant to Section 15 thereof, in which case Lessee's
liability under this Section 9.1 shall survive for so long as Lessor shall be
entitled to exercise remedies under such Section 15) or (ii) the termination of
the Term in accordance with the Lease;
(c) To the extent attributable to any Transfer (voluntary or
involuntary) by or on behalf of such Indemnitee of any Equipment Note or
interest therein, except (i) for out-of-pocket costs and expenses incurred as a
result of any such Transfer pursuant to the exercise of remedies under any
Operative Agreement resulting from a Lease Event of Default and (ii) as
otherwise required by the terms of Section 2.13 of the Trust Indenture or
Section 11 hereof;
(d) To the extent attributable to any Transfer (voluntary or involuntary)
by or on behalf of Owner Participant of any interest in the Aircraft, or the
Trust Estate except for out-of-pocket costs and expenses incurred as a result of
such Transfer, if, at the time of such Transfer, a Lease Event of Default shall
have occurred and be continuing;
(e) To the extent attributable to the gross negligence or willful
misconduct of such Indemnitee or any related Indemnitee (as defined below)
(other than gross negligence or willful misconduct imputed to such person by
reason of its interest in the Aircraft or any Operative Agreement);
(f) In the case of First Security, to the extent attributable to matters
enumerated in the proviso to Section 14;
(g) To the extent attributable to the incorrectness or breach of any
representation or warranty of such Indemnitee or any related Indemnitee
contained in or made pursuant to any Operative Agreement or any Pass Through
Agreement;
(h) To the extent attributable to the failure by such Indemnitee or any
related Indemnitee to perform or observe any agreement, covenant or condition on
its part to be performed or observed in any Operative Agreement or any Pass
Through Agreement;
(i) To the extent attributable to the offer or sale by such Indemnitee or
any related Indemnitee of any interest in the Aircraft, the Equipment Notes, the
Pass Through Trust Certificates, the Trust Estate or the Trust Agreement or any
similar interest, in violation of the Securities Act or other applicable
federal, state or foreign securities Laws (other than any thereof caused by the
acts or omissions of Lessee);
(j) (i) With respect to any Indemnitee (other than Mortgagee), to the
extent attributable to the failure of the Mortgagee to distribute funds received
and distributable by it in accordance with the Trust Indenture, (ii) with
respect to any Indemnitee (other than the Owner Trustee), to the extent
attributable to the failure of the Owner Trustee to distribute funds received
and distributable by it in accordance with the Trust Agreement, (iii) with
respect to any Indemnitee (other than the Subordination Agent), to the extent
attributable to the failure of the Subordination Agent to distribute funds
received and distributable by it in accordance with the Intercreditor Agreement,
(iv) with respect to any Indemnitee (other than the Pass Through Trustees), to
the extent attributable to the failure of a Pass Through Trustee to distribute
funds received and distributable by it in accordance with the Pass Through Trust
Agreements, (v) with respect to any Indemnitee (other than the Escrow Agent), to
the extent attributable to the failure of the Escrow Agent to pay funds received
and payable by it in accordance with any Escrow Agreement, (vi) with respect to
any Indemnitee (other than the Paying Agent), to the extent attributable to the
failure of the Paying Agent to distribute funds received and distributable by it
in accordance with any Escrow Agreement, (vii) to the extent attributable to the
failure of the Depositary to pay funds payable by it in accordance with any
Deposit Agreement, (viii) with respect to Mortgagee, to the extent attributable
to the negligence or willful misconduct of Mortgagee in the distribution of
funds received and distributable by it in accordance with the Trust Indenture,
(ix) with respect to Owner Trustee, to the extent attributable to the negligence
or willful misconduct of Owner Trustee in the distribution of funds received and
distributable by it in accordance with the Trust Agreement, (x) with respect to
the Subordination Agent, to the extent attributable to the negligence or willful
misconduct of the Subordination Agent in the distribution of funds received and
distributable by it in accordance with the Intercreditor Agreement, (xi) with
respect to the Pass Through Trustees, to the extent attributable to the
negligence or willful misconduct of a Pass Through Trustee in the distribution
of funds received and distributable by it in accordance with the Pass Through
Trust Agreements, (xii) with respect to the Escrow Agent, to the extent
attributable to the negligence or willful misconduct of the Escrow Agent in the
payment of funds received and payable by it in accordance with any Escrow
Agreement, and (xiii) with respect to the Paying Agent, to the extent
attributable to the negligence or willful misconduct of the Paying Agent in the
distribution of funds received and distributable by it in accordance with any
Escrow Agreement.
(k) Other than during the continuation of a Lease Event of Default,
to the extent attributable to the authorization or giving or withholding of any
future amendments, supplements, waivers or consents with respect to any
Operative Agreement or Pass Through Agreement other than such as have been
requested by Lessee or as are required by or made pursuant to the terms of the
Operative Agreements or Pass Through Agreements (unless such requirement results
from the actions of an Indemnitee not required by or made pursuant to the
Operative Agreements or the Pass Through Agreements);
(l) To the extent attributable to any amount which any Indemnitee expressly
agrees to pay or such Indemnitee expressly agrees shall not be paid by or be
reimbursed by Lessee;
(m) To the extent that it is an ordinary and usual operating or overhead
expense;
(n) With respect to the Owner Participant or the Owner Trustee, or
any related Indemnitee, to the extent attributable to the deregistration of the
Aircraft under the Act as a result of Owner Participant's or Owner Trustee's (or
any related Indemnitee of either) not being a Citizen of the United States as a
result of any act (other than reregistration of the Aircraft pursuant to Section
7.1.2 of the Lease) of Owner Participant or Owner Trustee, or any related
Indemnitee of either of the foregoing (not taken at the request of the Lessee);
(o) For any Lessor Lien attributable to such Indemnitee or any related
Indemnitee;
(p) If another provision of an Operative Agreement or a Pass Through
Agreement specifies the extent of Lessee's responsibility or obligation with
respect to such Expense, to the extent arising from other than failure of Lessee
to comply with such specified responsibility or obligation;
(q) To the extent constituting principal, Make-Whole Amount or interest on
the Equipment Notes attributable solely to an Event of Default not constituting
a Lease Event of Default; or
(r) To the extent incurred by or asserted against an Indemnitee as a result
of any "prohibited transaction", within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code.
For purposes of this Section 9.1, a Person shall be considered a "related"
Indemnitee with respect to an Indemnitee if such Person is an Affiliate or
employer of such Indemnitee, a director, officer, employee, agent, or servant of
such Indemnitee or any such Affiliate or a successor or permitted assignee of
any of the foregoing.
9.1.3 SEPARATE AGREEMENT
This Agreement constitutes a separate agreement with respect to each
Indemnitee and is enforceable directly by each such Indemnitee.
9.1.4 NOTICE
If a claim for any Expense that an Indemnitee shall be indemnified against
under this Section 9.1 is made, such Indemnitee shall give prompt written notice
thereof to Lessee. Notwithstanding the foregoing, the failure of any Indemnitee
to notify Lessee as provided in this Section 9.1.4, or in Section 9.1.5, shall
not release Lessee from any of its obligations to indemnify such Indemnitee
hereunder, except to the extent that such failure results in an additional
Expense to Lessee (in which event Lessee shall not be responsible for such
additional expense) or materially impairs Lessee's ability to contest such
claim.
9.1.5 NOTICE OF PROCEEDINGS; DEFENSE OF CLAIMS; LIMITATIONS
(a) In case any action, suit or proceeding shall be brought against any
Indemnitee for which Lessee is responsible under this Section 9.1, such
Indemnitee shall notify Lessee of the commencement thereof and Lessee may, at
its expense, participate in and to the extent that it shall wish (subject to the
provisions of the following paragraph), assume and control the defense thereof
and, subject to Section 9.1.5(c), settle or compromise the same.
(b) Lessee or its insurer(s) shall have the right, at its or their expense,
to investigate or, if Lessee or its insurer(s) shall agree not to dispute
liability to the Indemnitee giving notice of such action, suit or proceeding
under this Section 9.1.5 for indemnification hereunder or under any insurance
policies pursuant to which coverage is sought, control the defense of, any
action, suit or proceeding, relating to any Expense for which indemnification is
sought pursuant to this Section 9.1, and each Indemnitee shall cooperate with
Lessee or its insurer(s) with respect thereto; PROVIDED, that Lessee shall not
be entitled to control the defense of any such action, suit, proceeding or
compromise any such Expense during the continuance of any Lease Event of Default
arising under Section 14.1 of the Lease. In connection with any such action,
suit or proceeding being controlled by Lessee, such Indemnitee shall have the
right to participate therein, at its sole cost and expense, with counsel
reasonably satisfactory to Lessee; PROVIDED, that such Indemnitee's
participation does not, in the reasonable opinion of the independent counsel
appointed by the Lessee or its insurers to conduct such proceedings, interfere
with the defense of such case.
(c) In no event shall any Indemnitee enter into a settlement or other
compromise with respect to any Expense without the prior written consent of
Lessee, which consent shall not be unreasonably withheld or delayed, unless such
Indemnitee waives its right to be indemnified with respect to such Expense under
this Section 9.1.
(d) In the case of any Expense indemnified by the Lessee hereunder which is
covered by a policy of insurance maintained by Lessee pursuant to Section 11 of
the Lease, at Lessee's expense, each Indemnitee agrees to cooperate with the
insurers in the exercise of their rights to investigate, defend or compromise
such Expense as may be required to retain the benefits of such insurance with
respect to such Expense.
(e) If an Indemnitee is not a party to this Agreement, Lessee may require
such Indemnitee to agree in writing to the terms of this Section 9 and Section
15.8 prior to making any payment to such Indemnitee under this Section 9.
(f) Nothing herein shall be deemed to be an assumption by Lessee of
obligations of Owner Trustee with respect to, or a guarantee by Lessee of, any
amounts payable by Owner Trustee upon Equipment Notes or a guarantee of any
residual value of the Aircraft.
(g) Nothing contained in this Section 9.1.5 shall be deemed to require an
Indemnitee to contest any Expense or to assume responsibility for or control of
any judicial proceeding with respect thereto.
9.1.6 INFORMATION
Lessee will provide the relevant Indemnitee with such information not
within the control of such Indemnitee, as is in Lessee's control or is
reasonably available to Lessee, which such Indemnitee may reasonably request and
will otherwise cooperate with such Indemnitee so as to enable such Indemnitee to
fulfill its obligations under Section 9.1.5. The Indemnitee shall supply Lessee
with such information not within the control of Lessee, as is in such
Indemnitee's control or is reasonably available to such Indemnitee, which Lessee
may reasonably request to control or participate in any proceeding to the extent
permitted by Section 9.1.5.
9.1.7 EFFECT OF OTHER INDEMNITIES; SUBROGATION; FURTHER
ASSURANCES
Upon the payment in full by Lessee of any indemnity provided for under this
Agreement, Lessee, without any further action and to the full extent permitted
by Law, will be subrogated to all rights and remedies of the person indemnified
(other than with respect to any of such Indemnitee's insurance policies or in
connection with any indemnity claim such Indemnitee may have under Section 5.03
or Article VII of the Trust Indenture or Section 5.3 or 7 of the Trust
Agreement) in respect of the matter as to which such indemnity was paid. Each
Indemnitee will give such further assurances or agreements and cooperate with
Lessee to permit Lessee to pursue such claims, if any, to the extent reasonably
requested by Lessee and at Lessee's expense.
9.1.8 REFUNDS
If an Indemnitee receives any refund, in whole or in part, with respect to
any Expense paid by Lessee hereunder, it will promptly pay the amount refunded
(but not an amount in excess of the amount Lessee or any of its insurers has
paid in respect of such Expense) over to Lessee unless a Lease Event of Default
shall have occurred and be continuing, in which case such amounts shall be paid
over to Owner Trustee (or, so long as the Trust Indenture shall not have been
discharged, to Mortgagee) to hold as security for Lessee's obligations under the
Lessee Operative Agreements or, if requested by Lessee, applied to satisfy such
obligations.
9.2 EXPENSES
9.2.1 INVOICES AND PAYMENT
Each of the Owner Trustee, Mortgagee, the Owner Participant, Lessee, the
Pass Through Trustees, and the Subordination Agent shall promptly submit to
Lessee for its prompt approval (which shall not be unreasonably withheld) copies
of invoices in reasonable detail of the Transaction Expenses for which it is
responsible for providing information as they are received (but in no event
later than the 90th day after the Delivery Date). If so submitted and approved,
the Owner Participant agrees promptly, but in any event no later than the 105th
day after the Delivery Date, to pay (but not in excess of 2% of Lessor's Cost)
Transaction Expenses. Notwithstanding the foregoing, Lessee at its sole option
shall have the right to pay directly any and all Transaction Expenses. Lessee
shall be obligated to pay directly any and all Transaction Expenses which are in
excess of 2% of Lessor's Cost. If Owner Participant shall fail to pay any
Transaction Expense that it is obligated to pay hereunder, Lessee shall pay such
Transaction Expense. Any such payment by Lessee shall not affect Owner
Participant's obligations or Lessee's rights against Owner Participant for its
failure to make any such payment.
9.2.2 PAYMENT OF OTHER EXPENSES
Lessee shall pay (i) the ongoing fees and expenses of Owner Trustee and
Mortgagee, and (ii) all reasonable out-of-pocket costs and expenses (including
the reasonable fees and disbursements of counsel) incurred by any Participant
attributable to (A) any transfer of title to the Aircraft or any Engine
contemplated by Section 4.5 of the Lease or (B) any waiver, amendment or
modification of any Operative Agreement to the extent requested by Lessee.
9.2.3 PAYMENTS IF TRANSACTIONS DO NOT CLOSE
In the event that the transaction contemplated by this Agreement fails to
close as a result of the Owner Participant's failure to comply with its
obligations under this Agreement or any breach of a representation or warranty
of Owner Participant made in or pursuant to any Operative Agreement,
notwithstanding any other rights and remedies that the parties hereto shall have
against Owner Participant, the Owner Participant will be responsible for all of
its fees and expenses, including but not limited to the fees, expenses and
disbursements of its special counsel and the fees of the Appraiser referred to
in Section 5.1.2(xv).
9.3 GENERAL TAX INDEMNITY
9.3.1 GENERAL
Except as provided in Section 9.3.2, Lessee agrees that each payment of
Rent paid by Lessee pursuant to the Lease, and any other payment or indemnity
paid by Lessee to a Tax Indemnitee under any Operative Agreement, shall be free
of all withholdings or deductions with respect to Taxes of any nature (other
than U.S. federal, state or local withholding taxes on, based on or measured by
gross or net income), and in the event that Lessee shall be required by
applicable law to make any such withholding or deduction for any such payment
(x) Lessee shall make all such withholdings or deductions, (y) the amount
payable by Lessee shall be increased so that after making all required
withholdings or deductions such Tax Indemnitee receives the same amount that it
would have received had no such withholdings or deductions been made, and (z)
Lessee shall pay the full amount withheld or deducted to the relevant Taxing
Authority in accordance with applicable law. Lessee further agrees that, in the
event it is required to withhold from any payment of Basic Rent, Stipulated Loss
Value (and amounts determined by reference thereto), and amounts payable upon
exercise of Lessee's purchase option pursuant to Section 17.3 of the Lease, any
Tax imposed upon Owner Participant or Owner Trustee (including any withholding
Tax based on income or receipts of Owner Participant or Owner Trustee) and such
Tax is excluded from indemnification pursuant to Section 9.3.2, Lessee shall pay
such additional amount, if any, required so that the total amount paid by Lessee
(after making all required withholdings) is equal to (assuming timely payment of
the Equipment Notes prior to the relevant Payment Date) the aggregate principal
amount of scheduled installments due on the Equipment Notes outstanding on the
relevant Payment Date, together with accrued and unpaid interest, due on the
Equipment Notes; Owner Participant or Owner Trustee, as the case may be, shall
reimburse Lessee for any such additional amounts within two Business Days after
demand therefor. Except as provided in Section 9.3.2 and whether or not any of
the transactions contemplated hereby are consummated, Lessee shall pay,
indemnify, protect, defend and hold each Tax Indemnitee harmless from all Taxes
imposed by any Taxing Authority that may from time to time be imposed on or
asserted against any Tax Indemnitee or the Aircraft, the Airframe, any Engine or
any Part or any interest in any of the foregoing (whether or not indemnified
against by any other Person), upon or with respect to the Operative Agreements
or the transactions or payments contemplated thereby, including but not limited
to any Tax imposed upon or with respect to (x) the Aircraft, the Airframe, any
Engine, any Part, any Operative Agreement (including without limitation any
Equipment Notes) or any data or any other thing delivered or to be delivered
under an Operative Agreement, (y) the purchase, manufacture, acceptance,
rejection, sale, transfer of title, return, ownership, mortgaging, delivery,
transport, charter, rental, lease, re-lease, sublease, assignment, possession,
repossession, presence, use, condition, storage, preparation, maintenance,
modification, alteration, improvement, operation, registration, transfer or
change of registration, reregistration, repair, replacement, overhaul, location,
control, the imposition of any Lien (other than a Lessor Lien), financing,
refinancing requested by the Lessee, abandonment or other disposition of the
Aircraft, the Airframe, any Engine, any Part, any data or any other thing
delivered or to be delivered under an Operative Agreement or (z) rent, interest,
fees or any other income, proceeds, receipts or earnings, whether actual or
deemed, arising upon, in connection with, or in respect of, any of the Operative
Agreements (including the property or income or other proceeds with respect to
property held as part of the Trust Estate) or the transactions contemplated
thereby.
9.3.2 CERTAIN EXCEPTIONS
The provisions of Section 9.3.1 shall not apply to, and Lessee shall have
no liability hereunder for, Taxes:
(a) imposed on a Tax Indemnitee by the federal government of the United
States or any Taxing Authority or governmental subdivision of the United States
or therein (including any state or local Taxing Authority) (i) on, based on, or
measured by, gross or net income or gross or net receipts, including capital
gains taxes, excess profits taxes, minimum taxes from tax preferences,
alternative minimum taxes, branch profits taxes, accumulated earnings taxes,
personal holding company taxes, succession taxes and estate taxes, and any
withholding taxes on, based on or measured by gross or net income or receipts or
(ii) on, or with respect to, or measured by, capital or net worth or in the
nature of a franchise tax or a tax for the privilege of doing business (other
than, in the case of clause (i) or (ii), sales, use, license or property Taxes);
(b) imposed on a Tax Indemnitee by any Taxing Authority or governmental
subdivision thereof or therein outside of the United States (including any
Taxing Authority in or of a territory, possession or commonwealth of the United
States) (i) on, based on, or measured by, gross or net income or gross or net
receipts, including capital gains taxes, excess profits taxes, minimum taxes
from tax preferences, alternative minimum taxes, branch profits taxes,
accumulated earnings taxes, personal holding company taxes, succession taxes and
estate taxes, and any withholding taxes on, based on or measured by gross or net
income or receipts or (ii) on, or with respect to, or measured by, capital or
net worth or in the nature of a franchise tax or a tax for the privilege of
doing business (other than, in the case of clause (i) or (ii), (A) sales, use,
license or property Taxes, or (B) any Taxes imposed by any Taxing Authority
(other than a Taxing Authority within whose jurisdiction such Tax Indemnitee is
incorporated or organized or maintains its principal place of business) if such
Tax Indemnitee would not have been subject to Taxes of such type by such
jurisdiction but for (I) the location, use or operation of the Aircraft, the
Airframe, any Engine or any Part thereof by a Lessee Person within the
jurisdiction of the Taxing Authority imposing such Tax, or (II) the activities
of any Lessee Person (except for activities of a Lessee Person that is not an
Affiliate, successor or assign of the Lessee, which activities are unrelated to
the transactions contemplated by the Operative Agreements) in such jurisdiction,
including, but not limited to, use of any other aircraft by Lessee in such
jurisdiction, (III) the status of any Lessee Person as a foreign entity or as an
entity owned in whole or in part by foreign persons, (IV) Lessee having made (or
having been deemed to have made) payments to such Tax Indemnitee from the
relevant jurisdiction or (V) in the case of the Pass Through Trustees, any
Participant or any related Tax Indemnitee, the Lessee being incorporated,
organized, maintaining a place of business or conducting activities in such
jurisdiction);
(c) on, or with respect to, or measured by, any trustee fees, commissions
or compensation received by Owner Trustee, Pass Through Trustee, Subordination
Agent or Mortgagee;
(d) on the Trust or the Trust Estate that result from treatment of the
Trust or the Trust Estate as an entity, such as a corporation, separate and
apart from the Owner Participant;
(e) that are being contested as provided in Section 9.3.4 hereof;
(f) imposed on any Tax Indemnitee to the extent that such Taxes result from
the gross negligence or willful misconduct of such Tax Indemnitee or any
Affiliate thereof;
(g) imposed on or with respect to a Tax Indemnitee (including the
transferee in those cases in which the Tax on transfer is imposed on, or is
collected from, the transferee) as a result of a transfer or other disposition
(including a deemed transfer or disposition) by such Tax Indemnitee or a related
Tax Indemnitee (or, in the case of the Owner Participant, by Owner Trustee, or,
in the case of Taxes imposed on a transferee, by the transferor) of any interest
in the Aircraft, the Airframe, any Engine or any Part, the Rent (other than the
assignment of Rent to the Loan Trustee pursuant to the Trust Indenture), the
Trust, the Trust Estate, the Trust Indenture Estate, the Lease or any interest
arising under the Operative Agreements or any Equipment Note or a transfer or
disposition (including a deemed transfer or disposition) of any interest in a
Tax Indemnitee (other than (A) a substitution or replacement of the Aircraft,
the Airframe, any Engine or any Part by a Lessee Person that is treated for Tax
purposes as a transfer or disposition, (B) a transfer pursuant to an exercise of
remedies upon a Lease Event of Default that shall have occurred and have been
continuing, or (C) a transfer to Lessee pursuant to Section 17.3 of the Lease);
(h) Taxes in excess of those that would have been imposed had there not
been a transfer or other disposition by or to such Tax Indemnitee or a related
Tax Indemnitee described in paragraph (g) above;
(i) imposed on the Owner Participant and indemnified by Lessee pursuant to
the Tax Indemnity Agreement;
(j) imposed with respect to any period after the expiration or earlier
termination of the Term and, if required pursuant to the terms of the Lease, the
return of possession of the Aircraft to Lessor or placement in storage at the
request of Lessor in accordance with the Lease (provided that this exclusion (j)
shall not apply to Taxes imposed after such period arising as a result of
payments by Lessee under the Operative Agreements after such period);
(k) consisting of any interest, penalties or additions to tax imposed on a
Tax Indemnitee as a result of (in whole or in part) failure of such Tax
Indemnitee or a related Tax Indemnitee to file any return properly and timely,
unless such failure shall be caused by the failure of Lessee to fulfill its
obligations, if any, under Section 9.3.6 with respect to such return;
(l) resulting from, or that would not have been imposed but for, any Lessor
Liens arising as a result of claims against, or acts or omissions of, or
otherwise attributable to such Tax Indemnitee or a related Tax Indemnitee;
(m) imposed on any Tax Indemnitee as a result of the breach by such Tax
Indemnitee or a related Tax Indemnitee of any covenant of such Tax Indemnitee or
any Affiliate thereof contained in any Operative Agreement or the inaccuracy of
any representation or warranty by such Tax Indemnitee or any Affiliate thereof
in any Operative Agreement;
(n) in the nature of an intangible or similar Tax (i) upon or with respect
to the value or principal amount of the interest of Loan Participant or any Note
Holder in any Equipment Note or the loan evidenced thereby or (ii) upon or with
respect to the value of the interest of the Owner Participant in the Trust
Estate or the Trust, in each case only if such Taxes are in the nature of
franchise Taxes or result from the Tax Indemnitee doing business in the taxing
jurisdiction and are imposed because of the place of incorporation or the
activities unrelated to the transactions contemplated by the Operative
Agreements in the taxing jurisdiction of such Tax Indemnitee;
(o) that is included in Lessor's Cost and paid to the appropriate Taxing
Authority;
(p) imposed on a Tax Indemnitee by a Taxing Authority of a jurisdiction
outside the United States to the extent that such Taxes would not have been
imposed but for a connection between the Tax Indemnitee or a related Tax
Indemnitee and such jurisdiction imposing such Tax unrelated to the transactions
contemplated by the Operative Agreements; or
(q) Taxes relating to ERISA or Section 4975 of the Code.
For purposes hereof, a Tax Indemnitee and any other Tax Indemnitees that
are successors, assigns, agents, servants or Affiliates of such Tax Indemnitee
shall be related Tax Indemnitees.
9.3.3 PAYMENT
(a) Lessee's indemnity obligation to a Tax Indemnitee under this Section
9.3 shall equal the amount which, after taking into account any Tax imposed upon
the receipt or accrual of the amounts payable under this Section 9.3 and any tax
benefits actually recognized by such Tax Indemnitee as a result of the
indemnifiable Tax (including, without limitation, any benefits recognized as a
result of an indemnifiable Tax being utilized by such Tax Indemnitee as a credit
against Taxes not indemnifiable under this Section 9.3), shall equal the amount
of the Tax indemnifiable under this Section 9.3.
(b) At Lessee's request, the computation of the amount of any indemnity
payment owed by Lessee or any amount owed by a Tax Indemnitee to Lessee pursuant
to this Section 9.3 shall be verified and certified by an independent public
accounting firm selected by such Tax Indemnitee and reasonably satisfactory to
Lessee. Such verification shall be binding. The costs of such verification
(including the fee of such public accounting firm) shall be borne by Lessee
unless such verification shall result in an adjustment in Lessee's favor of 5%
or more of the net present value of the payment as computed by such Tax
Indemnitee, in which case the costs shall be paid by such Tax Indemnitee.
(c) Each Tax Indemnitee shall provide Lessee with such certifications,
information and documentation as shall be in such Tax Indemnitee's possession
and as shall be reasonably requested by Lessee to minimize any indemnity payment
pursuant to this Section 9.3; provided, that notwithstanding anything to the
contrary contained herein, no Tax Indemnitee shall be required to provide Lessee
with any Tax returns.
(d) Each Tax Indemnitee shall promptly forward to Lessee any written
notice, bill or advice received by it from any Taxing Authority concerning any
Tax for which it seeks indemnification under this Section 9.3. Lessee shall pay
any amount for which it is liable pursuant to this Section 9.3 directly to the
appropriate Taxing Authority if legally permissible or upon demand of a Tax
Indemnitee, to such Tax Indemnitee within 30 days of such demand (or, if a
contest occurs in accordance with Section 9.3.4, within 30 days after a Final
Determination (as defined below)), but in no event more than one Business Day
prior to the date the Tax to which such amount payable hereunder relates is due.
If requested by a Tax Indemnitee in writing, Lessee shall furnish to the
appropriate Tax Indemnitee the original or a certified copy of a receipt for
Lessee's payment of any Tax paid by Lessee or such other evidence of payment of
such Tax as is acceptable to such Tax Indemnitee. Lessee shall also furnish
promptly upon written request such data as any Tax Indemnitee may reasonably
require to enable such Tax Indemnitee to comply with the requirements of any
taxing jurisdiction unless such data is not reasonably available to Lessee or,
unless such data is specifically requested by a Taxing Authority, is not
customarily furnished by domestic air carriers under similar circumstances. For
purposes of this Section 9.3, a "Final Determination" shall mean (i) a decision,
judgment, decree or other order by any court of competent jurisdiction that
occurs pursuant to the provisions of Section 9.3.4, which decision, judgment,
decree or other order has become final and unappealable, (ii) a closing
agreement or settlement agreement entered into in accordance with Section 9.3.4
that has become binding and is not subject to further review or appeal (absent
fraud, misrepresentation, etc.), or (iii) the termination of administrative
proceedings and the expiration of the time for instituting a claim in a court
proceeding.
(e) If any Tax Indemnitee shall actually realize a tax savings by reason of
any Tax paid or indemnified by Lessee pursuant to this Section 9.3 (whether such
tax savings shall be by means of a foreign tax credit, depreciation or cost
recovery deduction or otherwise) and such savings is not otherwise taken into
account in computing such payment or indemnity such Tax Indemnitee shall pay to
Lessee an amount equal to the lesser of (i) the amount of such tax savings, plus
any additional tax savings recognized as the result of any payment made pursuant
to this sentence, when, as, if, and to the extent, realized or (ii) the amount
of all payments pursuant to this Section 9.3 by Lessee to such Tax Indemnitee
(less any payments previously made by such Tax Indemnitee to Lessee pursuant to
this Section 9.3.3 (e)) (and the excess, if any, of the amount described in
clause (i) over the amount described in clause (ii) shall be carried forward and
applied to reduce pro tanto any subsequent obligations of Lessee to make
payments to such Tax Indemnitee pursuant to this Section 9.3); provided, that
such Tax Indemnitee shall not be required to make any payment pursuant to this
sentence so long as a Lease Event of Default of a monetary nature has occurred
and is continuing. If a tax benefit is later disallowed or denied, the
disallowance or denial shall be treated as a Tax indemnifiable under Section
9.3.1 without regard to the provisions of Section 9.3.2 (other than Section
9.3.2 (f)). Each such Tax Indemnitee shall in good faith use reasonable efforts
in filing its tax returns and in dealing with Taxing Authorities to seek and
claim any such tax benefit.
9.3.4 CONTEST
(a) If a written claim is made against a Tax Indemnitee for Taxes with
respect to which Lessee could be liable for payment or indemnity hereunder, or
if a Tax Indemnitee makes a determination that a Tax is due for which Lessee
could have an indemnity obligation hereunder, such Tax Indemnitee shall promptly
give Lessee notice in writing of such claim (provided, that failure to so notify
Lessee shall not relieve Lessee of its indemnity obligations hereunder unless
such failure to notify effectively forecloses Lessee's rights to require a
contest of such claim) and shall take no action with respect to such claim
without the prior written consent of Lessee for 30 days following the receipt of
such notice by Lessee; provided, that, in the case of a claim made against a Tax
Indemnitee, if such Tax Indemnitee shall be required by law to take action prior
to the end of such 30-day period, such Tax Indemnitee shall, in such notice to
Lessee, so inform Lessee, and such Tax Indemnitee shall take no action for as
long as it is legally able to do so (it being understood that a Tax Indemnitee
shall be entitled to pay the Tax claimed and sue for a refund prior to the end
of such 30-day period if (i)(A) the failure to so pay the Tax would result in
substantial penalties (unless immediately reimbursed by Lessee) and the act of
paying the Tax would not materially prejudice the right to contest or (B) the
failure to so pay would result in criminal penalties and (ii) such Tax
Indemnitee shall take any action so required in connection with so paying the
Tax in a manner that is the least prejudicial to the pursuit of the contest). In
addition, such Tax Indemnitee shall (provided, that Lessee shall have agreed to
keep such information confidential other than to the extent necessary in order
to contest the claim) furnish Lessee with copies of any requests for information
from any Taxing Authority relating to such Taxes with respect to which Lessee
may be required to indemnify hereunder. If requested by Lessee in writing within
30 days after its receipt of such notice, such Tax Indemnitee shall, at the
expense of Lessee (including, without limitation, all reasonable costs, expenses
and reasonable attorneys' and accountants' fees and disbursements), in good
faith contest (or, if permitted by applicable law, allow Lessee to contest)
through appropriate administrative and judicial proceedings the validity,
applicability or amount of such Taxes by (I) resisting payment thereof, (II) not
paying the same except under protest if protest is necessary and proper or (III)
if the payment is made, using reasonable efforts to obtain a refund thereof in
an appropriate administrative and/or judicial proceeding. If requested to do so
by Lessee, the Tax Indemnitee shall appeal any adverse administrative or
judicial decision, except that the Tax Indemnitee shall not be required to
pursue any appeals to the United States Supreme Court. If and to the extent the
Tax Indemnitee is able to separate the contested issue or issues from other
issues arising in the same administrative or judicial proceeding that are
unrelated to the transactions contemplated by the Operative Agreements without,
in the good faith judgment of such Tax Indemnitee, adversely affecting such Tax
Indemnitee, such Tax Indemnitee shall permit Lessee to control the conduct of
any such proceeding and shall provide to Lessee (at Lessee's cost and expense)
with such information or data that is in such Tax Indemnitee's control or
possession that is reasonably necessary to conduct such contest. In the case of
a contest controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with
Lessee in good faith regarding the manner of contesting such claim and shall
keep Lessee reasonably informed regarding the progress of such contest. A Tax
Indemnitee shall not fail to take any action expressly required by this Section
9.3.4 (including, without limitation, any action regarding any appeal of an
adverse determination with respect to any claim) or settle or compromise any
claim without the prior written consent of the Lessee (except as contemplated by
Section 9.3.4(b) or (c)).
(b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be
required to pursue any contest (or to permit Lessee to pursue any contest)
unless (i) Lessee shall have agreed to pay such Tax Indemnitee on demand all
reasonable costs and expenses incurred by such Tax Indemnitee in connection with
contesting such Taxes, including, without limitation, all reasonable out of
pocket costs and expenses and reasonable attorneys' and accountants' fees and
disbursements, (ii) if such contest shall involve the payment of the claim,
Lessee shall advance the amount thereof (to the extent indemnified hereunder)
plus interest, penalties and additions to tax with respect thereto that are
required to be paid prior to the commencement of such contest on an
interest-free after-Tax basis to such Tax Indemnitee (and such Tax Indemnitee
shall promptly pay to the Lessee any net realized tax benefits resulting from
such advance including any tax benefits resulting from making such payment),
(iii) such Tax Indemnitee shall have reasonably determined that the action to be
taken will not result in any material risk of forfeiture, sale or loss of the
Aircraft (unless Lessee shall have made provisions to protect the interests of
any such Tax Indemnitee in a manner reasonably satisfactory to such Tax
Indemnitee) (provided, that such Tax Indemnitee agrees to notify Lessee in
writing promptly after it becomes aware of any such risk), (iv) no Lease Event
of Default shall have occurred and be continuing unless Lessee has provided
security for its obligations hereunder by advancing to such Tax Indemnitee
before proceeding or continuing with such contest, the amount of the Tax being
contested, plus any interest and penalties and an amount estimated in good faith
by such Tax Indemnitee for expenses, and (v) prior to commencing any judicial
action controlled by Lessee, Lessee shall have acknowledged its liability for
such claim hereunder, provided that Lessee shall not be bound by its
acknowledgment if the Final Determination articulates conclusions of law and
fact that demonstrate that Lessee has no liability for the contested amounts
hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release,
waive, compromise or settle any claim which may be indemnifiable by Lessee
pursuant to this Section 9.3 without the written permission of Lessee, Lessee's
obligation to indemnify such Tax Indemnitee with respect to such claim (and all
directly related claims and claims based on the outcome of such claim) shall
terminate, subject to Section 9.3.4(c), and subject to Section 9.3.4(c), such
Tax Indemnitee shall repay to Lessee any amount previously paid or advanced to
such Tax Indemnitee with respect to such claim, plus interest at the rate that
would have been payable by the relevant Taxing Authority with respect to a
refund of such Tax.
(c) Notwithstanding anything contained in this Section 9.3, a Tax
Indemnitee will not be required to contest the imposition of any Tax and shall
be permitted to settle or compromise any claim without Lessee's consent if such
Tax Indemnitee (i) shall waive its right to indemnity under this Section 9.3
with respect to such Tax (and any directly related claim and any claim the
outcome of which is determined based upon the outcome of such claim), (ii) shall
pay to Lessee any amount previously paid or advanced by Lessee pursuant to this
Section 9.3 with respect to such Tax, plus interest at the rate that would have
been payable by the relevant Taxing Authority with respect to a refund of such
Tax, and (iii) shall agree to discuss with Lessee the views or positions of any
relevant Taxing Authority with respect to the imposition of such Tax.
9.3.5 REFUND
If any Tax Indemnitee shall receive a refund of, or be entitled to a credit
against other liability for, all or any part of any Taxes paid, reimbursed or
advanced by Lessee, such Tax Indemnitee shall pay to Lessee within 30 days of
such receipt an amount equal to the lesser of (a) the amount of such refund or
credit plus any net tax benefit (taking into account any Taxes incurred by such
Tax Indemnitee by reason of the receipt of such refund or realization of such
credit) actually realized by such Tax Indemnitee as a result of any payment by
such Tax Indemnitee made pursuant to this sentence (including this clause (a))
and (b) such tax payment, reimbursement or advance by Lessee to such Tax
Indemnitee theretofore made pursuant to this Section 9.3 (and the excess, if
any, of the amount described in clause (a) over the amount described in clause
(b) shall be carried forward and applied to reduce pro tanto any subsequent
obligation of Lessee to make payments to such Tax Indemnitee pursuant to this
Section 9.3). If, in addition to such refund or credit, such Tax Indemnitee
shall receive (or be credited with) an amount representing interest on the
amount of such refund or credit, such Tax Indemnitee shall pay to Lessee within
30 days of such receipt or realization of such credit that proportion of such
interest that shall be fairly attributable to Taxes paid, reimbursed or advanced
by Lessee prior to the receipt of such refund or realization of such credit.
9.3.6 TAX FILING
If any report, return or statement is required to be filed with respect to
any Tax which is subject to indemnification under this Section 9.3, Lessee shall
timely file the same (except for any such report, return or statement which a
Tax Indemnitee has timely notified the Lessee in writing that such Tax
Indemnitee intends to file, or for which such Tax Indemnitee is required by law
to file, in its own name); provided, that the relevant Tax Indemnitee shall
furnish Lessee with any information in such Tax Indemnitee's possession or
control that is reasonably necessary to file any such return, report or
statement and is reasonably requested in writing by Lessee (it being understood
that the Tax Indemnitee shall not be required to furnish copies of its actual
tax returns, although it may be required to furnish relevant information
contained therein). Lessee shall either file such report, return or statement
and send a copy of such report, return or statement to such Tax Indemnitee, and
Owner Trustee if the Tax Indemnitee is not Owner Trustee, or, where Lessee is
not permitted to file such report, return or statement, it shall notify such Tax
Indemnitee of such requirement and prepare and deliver such report, return or
statement to such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee
within a reasonable time prior to the time such report, return or statement is
to be filed.
9.3.7 FORMS
Each Tax Indemnitee agrees to furnish from time to time to Lessee or Loan
Trustee or to such other person as Lessee or Loan Trustee may designate, at
Lessee's or Loan Trustee's request, such duly executed and properly completed
forms as may be necessary or appropriate in order to claim any reduction of or
exemption from any withholding or other Tax imposed by any Taxing Authority, if
(x) such reduction or exemption is available to such Tax Indemnitee and (y)
Lessee has provided such Tax Indemnitee with any information necessary to
complete such form not otherwise reasonably available to such Tax Indemnitee.
9.3.8 NON-PARTIES
If a Tax Indemnitee is not a party to this Agreement, Lessee may require
the Tax Indemnitee to agree in writing, in a form reasonably acceptable to
Lessee, to the terms of this Section 9.3 and Section 15.8 prior to making any
payment to such Tax Indemnitee under this Section 9.3.
9.3.9 SUBROGATION
Upon payment of any Tax by Lessee pursuant to this Section 9.3 to or on
behalf of a Tax Indemnitee, Lessee, without any further action, shall be
subrogated to any claims that such Tax Indemnitee may have relating thereto.
Such Tax Indemnitee shall cooperate with Lessee (to the extent such cooperation
does not result in any unreimbursed cost, expense or liability to such Tax
Indemnitee) to permit Lessee to pursue such claims.
9.3.10 FOREIGN TAX ON LOAN PAYMENTS
If an Owner Participant is incorporated or organized, or maintains a place
of business or conducts activities in, a country other than the United States or
in a territory, possession or commonwealth of the United States (within the
meaning of the tax law of that foreign jurisdiction) and if as a result thereof
any foreign Taxes (including withholding Taxes) are imposed on the Pass Through
Trustees, Pass Through Trusts, or Note Holders, then Owner Participant shall
reimburse Lessee for any payments Lessee is required to make to or on behalf of
any Pass Through Trustee, Pass Through Trust, or Note Holder under this Section
9.3 as a result of the imposition of such Taxes. The amount payable by Owner
Participant to Lessee shall be an amount which, after taking into account any
such Taxes, any Tax imposed upon the receipt or accrual by Lessee of such
payment by Owner Participant and any tax benefits or tax savings realized by
Lessee with respect to the payment of such withholding Tax or the payment
hereunder, shall equal the amount of Lessee's payment to or on behalf of such
Pass Through Trustee, or Note Holder.
9.4 PAYMENTS
Any payments made pursuant to Section 9.1 or 9.3 shall be due on the 60th
day after demand therefor and shall be made directly to the relevant Indemnitee
or Tax Indemnitee or to Lessee, in immediately available funds at such bank or
to such account as specified by such Indemnitee or Tax Indemnitee or Lessee, as
the case may be, in written directives to the payor, or, if no such direction
shall have been given, by check of the payor payable to the order of, and mailed
to, such Indemnitee or Tax Indemnitee or Lessee, as the case may be, by
certified mail, postage prepaid, at its address as set forth in this Agreement.
9.5 INTEREST
If any amount, payable by Lessee, any Indemnitee or any Tax Indemnitee
under Section 9.1 or 9.3 is not paid when due, the person obligated to make such
payment shall pay on demand, to the extent permitted by Law, to the person
entitled thereto, interest on any such amount for the period from and including
the due date for such amount to but excluding the date the same is paid, at the
Payment Due Rate. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
9.6 BENEFIT OF INDEMNITIES
The obligations of Lessee in respect of all indemnities, obligations,
adjustments and payments in Section 9.1 or 9.3 are expressly made for the
benefit of, and shall be enforceable by, the Indemnitee or Tax Indemnitee
entitled thereto, without declaring the Lease to be in default or taking other
action thereunder, and notwithstanding any provision of the Trust Indenture.
SECTION 10. ASSIGNMENT OR TRANSFER OF INTERESTS
10.1 PARTICIPANTS, OWNER TRUSTEE AND NOTE HOLDERS
10.1.1 OWNER PARTICIPANT
(a) During the Term, Owner Participant shall not Transfer any or all of its
right, title or interest in the Trust Estate or the Trust Agreement and to this
Agreement unless:
(i) The Transferee shall have full power, authority and legal right to
execute and deliver and to perform the obligations of Owner Participant
under this Agreement and the other Owner Participant Agreements and shall
provide reasonably satisfactory evidence of such power and authority to
Lessee, Owner Trustee and Mortgagee;
(ii) The Transferee shall enter into one or more legal, valid, binding
and enforceable agreements effective to confirm that such Transferee agrees
to be bound by all the terms of, and to undertake all of the obligations
arising after such transfer of, the transferring Owner Participant
contained in the Owner Participant Agreements and in which it makes
representations and warranties substantially the same as those contained in
Section 6.2 of the Participation Agreement;
(iii) Lessee shall not be obligated to pay any greater amount or incur
any greater obligation than that which it would have been obliged to pay or
incur under the Lease or other Lessee Operative Agreement if no transfer or
assignment had taken place, and the terms and conditions of this Lease and
the other Lessee Operative Agreements insofar as they relate to the rights
and obligations of Lessee or the Loan Participant shall not be altered;
(iv) Owner Participant shall deliver to Lessee, Owner Trustee and
Mortgagee an opinion of counsel reasonably satisfactory to each of them to
the effect that such agreement or agreements referred to in Section
10.1.1(a)(ii) and, if applicable, 10.1.1(a)(vi) are legal, binding and
enforceable in accordance with its or their terms and that such transfer
will not violate the Act, the registration provisions of the Securities
Act, or any other applicable Federal law;
(v) The Transferee is a Citizen of the United States (it being
understood that the existence of any such requirement is to be determined
without giving consideration to Section 47.9 of the FAA Regulations or any
other provision that may restrict Lessee's use or operation of the
Aircraft), or shall use a voting powers trust or similar arrangement in
order to hold an interest in the Trust Estate such that the Aircraft can be
registered in the United States (without giving consideration to Section
47.9 of the FAA Regulations); and
(vi) The Transferee shall be a single person and shall be either (A) a
Permitted Institution or (B) any other person (other than, without Lessee's
consent, a commercial air carrier, a commercial aircraft operator, a
freight forwarder or an Affiliate of any of the foregoing) the obligations
of which under the Owner Participant Agreements are guaranteed by a
Permitted Institution in any case, pursuant to a written guaranty, in form
and substance reasonably satisfactory to Lessee, Owner Trustee and
Mortgagee.
(b) Owner Participant shall give written notice to Lessee, Mortgagee and
Owner Trustee at least 10 days prior to any such Transfer, specifying the name
and address of the proposed Transferee, and providing financial statements of
the proposed Transferee evidencing satisfaction of the requirements described in
Section 10.1.1(a)(vi)(A) or (B) above.
(c) Any fees, charges and expenses, including the reasonable legal fees,
charges and expenses incurred by Lessee, Owner Participant, Mortgagee, any Note
Holder or Owner Trustee in connection with any Transfer by Owner Participant
permitted by this Section 10.1.1, or by the Transferee in any such case, will be
paid for by Owner Participant.
10.1.2 OWNER TRUSTEE
Owner Trustee may transfer its interests in the Trust Agreement pursuant to
Section 9 thereof.
10.1.3 NOTE HOLDERS
Subject to Section 7.5.2 hereof and Section 2.07 of the Trust Indenture,
any Note Holder may, at any time and from time to time, Transfer or grant
participations in all or any portion of the Equipment Notes and/or all or any
portion of its beneficial interest in its Equipment Notes and the Trust
Indenture Estate to any person (it being understood that the sale or issuance of
Pass Through Certificates by a Pass Through Trustee shall not be considered a
Transfer or participation); provided, that any participant in any such
participations shall not have any direct rights under the Operative Agreements
or any Lien on all or any part of the Aircraft or Trust Indenture Estate and
Lessee shall not have any increased liability or obligations as a result of any
such participation. In the case of any such Transfer, the Transferee, by
acceptance of Equipment Notes in connection with such Transfer, shall be deemed
to be bound by all of the covenants of Note Holders contained in the Operative
Agreements.
10.2 EFFECT OF TRANSFER
Upon any Transfer in accordance with Section 10.1.1, 10.1.2 or 10.1.3
(other than any Transfer by any Note Holder, to the extent it only grants
participations in Equipment Notes or in its beneficial interest therein),
Transferee shall be deemed an "Owner Participant," "Owner Trustee" or a "Note
Holder," respectively, for all purposes of this Agreement and the other
Operative Agreements and, in the case of a Transferee of any Participant or Note
Holder, shall be deemed to have paid its ratable portion of Lessor's Cost
previously made by Owner Participant or Loan Participant, respectively, making
such conveyance and represented by the interest being conveyed, and each
reference herein to Owner Participant, Owner Trustee or Note Holder,
respectively, shall thereafter be deemed a reference to such Transferee for all
purposes, and the transferring Owner Participant, Owner Trustee, Loan
Participant or Note Holder shall be released (except, in the case of Owner
Participant, to the extent of any guaranty provided by it under Section
10.1.1(a)(vi)) from all of its liabilities and obligations under this Agreement
and any other Operative Agreements to the extent such liabilities and
obligations arise after such Transfer and, in each case, to the extent such
liabilities and obligations are assumed by the Transferee; PROVIDED, that such
transferring Owner Participant, Owner Trustee or Note Holder (and its respective
Affiliates, successors, assigns, agents, servants, representatives, directors
and officers) will continue to have the benefit of any rights or indemnities
under any Operative Agreement vested or relating to circumstances, conditions,
acts or events prior to such Transfer.
SECTION 11. REFUNDING AND CERTAIN OTHER MATTERS
11.1 REFUNDING GENERALLY
Subject to Sections 11.2 and 11.4, in the event that at any time Lessee
shall have given written notice to Owner Participant, Owner Trustee, and
Mortgagee that Lessee is requesting a voluntary redemption of all, but not less
than all, of the outstanding Equipment Notes (in compliance with the provisions
of Sections 2.11 and 2.12 of the Trust Indenture) by Owner Trustee as part of a
refunding transaction, Owner Participant agrees to negotiate in good faith and
promptly conclude an agreement with Lessee as to the terms of such refunding
transaction (including the terms of any debt to be issued in connection with
such refunding transaction and the documentation to be executed in connection
therewith), and after Lessee and Owner Participant shall have concluded such an
agreement:
11.1.1 REFUNDING CERTIFICATE
Within ten Business Days after reaching such agreement, Owner Participant
will deliver to Lessee a Refunding Certificate. Within ten Business Days of its
receipt of the Refunding Certificate, Lessee may demand a verification pursuant
to Section 3.2.1(d) of the Lease of the information set forth in the Refunding
Certificate. Upon the acceptance by Lessee of the accuracy of the information
set forth in the Refunding Certificate or the determination pursuant to such
verification procedures of the Refunding Information, the appropriate parties
will take the actions specified in Sections 11.1.2 through 11.1.7 below.
11.1.2 FINANCING AGREEMENTS
The appropriate parties will enter into appropriate documentation (which
may include an underwriting agreement or similar private placement agreement)
with the institution or institutions to be named therein providing for (a) the
issuance and sale by Owner Trustee to such institution or institutions on the
Refunding Date of the New Debt and (b) the application of the proceeds of the
sale of the New Debt to the redemption of all such Equipment Notes on the
Refunding Date. Lessee, acting on behalf of Owner Trustee, shall give Mortgagee
at least 30 days' revocable prior written notice of the proposed date of the
optional redemption.
11.1.3 LEASE AMENDMENTS
As a condition to the closing of the refunding transaction, Lessee and
Owner Trustee will amend the Lease, as contemplated by Section 3.2.1(b) of the
Lease, to provide that (a) Basic Rent in respect of the period from and after
the Refunding Date shall be as provided in the Refunding Information and (b)
amounts payable in respect of Stipulated Loss Value and Termination Value, from
and after the Refunding Date shall be as provided in the Refunding Information.
11.1.4 SECURITY AGREEMENTS
Owner Trustee will enter into an agreement to provide for the securing
thereunder of the New Debt in like manner as the Equipment Notes and will enter
into such amendments and supplements to the Trust Indenture (or such new
indenture or other security agreement) and the other Operative Agreements as may
be necessary to effect such refunding.
11.1.5 EXPENSES
Whether or not such refunding transaction is consummated, Lessee shall pay
or reimburse all of the reasonable out-of-pocket expenses of all parties to such
refunding transaction, including, without limitation, any underwriting or
placement fees and the reasonable fees and expenses of such parties' counsel and
any related loan or commitment fees.
11.1.6 MAKE WHOLE AMOUNT
At the closing of such refunding, Owner Trustee shall pay, upon receipt of
the same from Lessee (which Lessee shall pay as Supplemental Rent as a condition
to the closing to the refunding transaction), to the Mortgagee for the account
of each Note Holder, the Make-Whole Amount, if any, payable to such Note Holder
under Section 2.11 of the Trust Indenture.
11.1.7 RETURN OF EQUIPMENT NOTES
Subject to compliance by Owner Trustee and Lessee with all applicable terms
and conditions for voluntary prepayment under the Trust Indenture and this
Agreement, each Note Holder will transfer to Owner Trustee the Equipment Notes
held by it for cancellation (and Owner Trustee shall cancel the same), against
receipt by such Note Holder of the then-outstanding principal amount of such
Equipment Notes, accrued and unpaid interest and Make-Whole Amount, if any,
thereon, together with payment in full of all other amounts then payable to such
Note Holder and Mortgagee hereunder or under the Trust Indenture.
11.2 LIMITATIONS ON OBLIGATION TO REFUND
Notwithstanding the foregoing, Owner Participant shall have no obligation
to proceed with any refunding transaction as contemplated by this Section 11:
(a) If such transaction would have, or creates a material risk of, an
adverse tax consequence to Owner Participant unless Lessee agrees to indemnify
Owner Participant against such adverse tax consequence;
(b) Unless Lessee indemnifies Owner Participant for any liability,
obligation (other than the obligation to pay principal and interest and related
payments in respect of the New Debt), cost or expense (including, without
limitation, reasonable attorneys' fees) related to or arising out of any such
refunding transaction;
(c) If a Lease Event of Default shall have occurred and be continuing; or
(d) If there shall have previously been consummated three refunding
transactions at Lessee's request pursuant to this Section 11.
11.3 EXECUTION OF CERTAIN DOCUMENTS
Lessee, Owner Participant, Owner Trustee and Mortgagee each agree to
execute any document necessary or advisable to implement this Section 11
(including, without limitation, the execution, delivery and/or provision of any
appropriate additional or modified amendment, representation, warranty,
certificate, opinion or other document that may reasonably be requested by
Lessee or any other person).
11.4 ERISA
Owner Participant shall not be obligated to conclude the proposed refunding
transaction unless the agreements utilized to effect such refunding contain an
agreement by the initial holders of the New Debt substantially the same as
Section 7.5.2(b) of this Agreement, except in the case of any refunding
transaction where the New Debt is sold in a public offering under the Securities
Act or a private placement intended for resale pursuant to Rule 144A under the
Securities Act, in which case the holders of the New Debt shall be subject to
the restrictions relating to ERISA substantially the same as those applicable to
the purchasers of the Pass Through Certificates, as described in the Prospectus
Supplement relating to the initial issuance and sale of the Pass Through
Certificates.
11.5 CONSENT TO OPTIONAL REDEMPTIONS
Each of Owner Participant, Owner Trustee and Mortgagee agrees with Lessee
not to cause an optional redemption of the Equipment Notes without Lessee's
consent except as set forth in Section 2.13 of the Trust Indenture.
SECTION 12. SECTION 1110
It is the intention of each of Lessee, Owner Participant, Loan Participant,
the Note Holders (such intention being evidenced by each of their acceptance of
an Equipment Note), Owner Trustee and Mortgagee that Owner Trustee, as lessor
under the Lease (and Mortgagee as assignee of Owner Trustee under the Trust
Indenture), shall be entitled to the benefits of Section 1110 in the event of a
case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.
SECTION 13. CHANGE OF CITIZENSHIP
13.1 GENERALLY
Without prejudice to the representations, warranties or covenants regarding
the status of any party hereto as a Citizen of the United States:
(a) Each of Lessee, First Security, WTC and Mortgagee agrees that it will,
immediately upon obtaining knowledge of any facts that would cast doubt upon its
continuing status as a Citizen of the United States and promptly upon public
disclosure of negotiations in respect of any transaction which would or might
adversely affect such status, notify in writing all parties hereto of all
relevant matters in connection therewith; and
(b) Owner Participant agrees that, in the event its status is to change or
has changed as a Citizen of the United States, or it makes public disclosure of
circumstances as a result of which it believes that such status is likely to
change, it will notify all the other parties to this Participation Agreement of
(i) such change in status promptly after obtaining Actual Knowledge thereof or
(ii) such belief as soon as practicable after such public disclosure but in any
event within ten Business Days after such public disclosure.
13.2 OWNER PARTICIPANT
Owner Participant agrees, solely for the benefit of Lessee and the Note
Holders that if, during such time as the Aircraft is registered in the United
States, (a) it shall not be a Citizen of the United States and (b) the Aircraft
shall be, or would therefore become, ineligible for registration in the name of
Owner Trustee under the Act and regulations then applicable thereunder (without
giving consideration to Section 47.9 of the FAA Regulations or any other
provision that may restrict Lessee's use or operation of the Aircraft), then
Owner Participant shall as soon as is reasonably practicable, but in any event
within 30 days after obtaining Actual Knowledge of such ineligibility and of
such loss of citizenship, (y) effect voting trust or other similar arrangements
(in which case any provisions contained in the Operative Agreements restricting
Owner Participant's or Owner Trustee's ability to amend the Trust Agreement
shall not apply to the extent necessary to permit the use of such a voting trust
or other similar arrangement) or take any other action as may be necessary to
prevent any deregistration or maintain the United States registration of the
Aircraft or (z) transfer in accordance with the terms of this Agreement all its
right, title and interest in and to this Agreement, the Trust Estate and the
Trust Agreement in accordance with Section 10.1.
13.3 OWNER TRUSTEE
Upon First Security giving any notice in accordance with Section 13.1(a),
Owner Trustee shall, subject to Section 9.1.1 of the Trust Agreement, resign as
Owner Trustee. Upon its receipt of such notice, Owner Participant shall as
promptly as practicable appoint a Citizen of the United States as successor
Owner Trustee pursuant to Section 9.1 of the Trust Agreement.
13.4 MORTGAGEE
Upon WTC giving any notice in accordance with Section 13.1(a), Mortgagee
shall (if and so long as such citizenship is necessary under the Act as in
effect at such time or, if it is not necessary, if and so long as Mortgagee's
citizenship could have any adverse effect on Lessee, any Participant or any Note
Holder), subject to Section 8.02 of the Trust Indenture, resign as Mortgagee
promptly upon its ceasing to be such a citizen.
SECTION 14. CONCERNING OWNER TRUSTEE
It is understood and agreed that, except as otherwise expressly provided
herein or in the Trust Agreement or the Trust Indenture, Owner Trustee is
entering into this Agreement solely in its capacity as trustee as provided in
the Trust Agreement and not in its individual capacity and in no case whatsoever
will it be liable or accountable in its individual capacity for any of the
statements, representations, warranties, agreements or obligations of Owner
Trustee hereunder, or for any loss in respect thereof, as to all of which the
parties agree to look solely to the Trust Estate; PROVIDED, that nothing in this
Section 14 shall be deemed to limit in scope or substance the personal liability
of First Security (a) to Owner Participant as expressly set forth in the Trust
Agreement, (b) in respect of the representations, warranties and agreements of
First Security expressly made as such herein or in any other Operative Agreement
to which it is a party, and (c) for the consequences of its own gross
negligence, willful misconduct, and, in receiving, handling or remitting of
funds only, its willful misconduct or simple negligence as a trustee.
SECTION 15. MISCELLANEOUS
15.1 AMENDMENTS
No provision of this Agreement may be amended, supplemented, waived,
modified, discharged, terminated or otherwise varied orally, but only by an
instrument in writing that specifically identifies the provision of this
Agreement that it purports to amend, supplement, waive, modify, discharge,
terminate or otherwise vary and is signed by the party against which the
enforcement of the amendment, supplement, waiver, modification, discharge,
termination or variance is sought. Each such amendment, supplement, waiver,
modification, discharge, termination or variance shall be effective only in the
specific instance and for the specific purpose for which it is given. No
provision of this Agreement shall be varied or contradicted by oral
communication, course of dealing or performance or other manner not set forth in
an agreement, document or instrument in writing and signed by the party against
which enforcement of the same is sought.
15.2 SEVERABILITY
If any provision hereof shall be held invalid, illegal or unenforceable in
any respect in any jurisdiction, then, to the extent permitted by Law, (a) all
other provisions hereof shall remain in full force and effect in such
jurisdiction and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction. If, however, any Law pursuant to which such provisions are held
invalid, illegal or unenforceable may be waived, such Law is hereby waived by
the parties hereto to the full extent permitted, to the end that this Agreement
shall be deemed to be a valid and binding agreement in all respects, enforceable
in accordance with its terms.
15.3 SURVIVAL
The indemnities set forth herein shall survive the delivery or return of
the Aircraft, the Transfer of any interest of Owner Participant in this
Agreement, the Trust Estate and the Trust Agreement, the Transfer of any
interest by any Note Holder of its Equipment Note and the expiration or other
termination of this Agreement or any other Operative Agreement.
15.4 REPRODUCTION OF DOCUMENTS
This Agreement, all annexes, schedules and exhibits hereto and all
agreements, instruments and documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed and (b) financial statements, certificates and other information
previously or hereafter furnished to any party hereto, may be reproduced by such
party by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process, and such party may destroy any original
documents so reproduced. Any such reproduction shall be as admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such party in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction likewise is
admissible in evidence.
15.5 COUNTERPARTS
This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts (or upon separate signature pages
bound together into one or more counterparts), each of which when so executed
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.
15.6 NO WAIVER
No failure on the part of any party hereto to exercise, and no delay by any
party hereto in exercising, any of its respective rights, powers, remedies or
privileges under this Agreement or provided at Law, in equity or otherwise shall
impair, prejudice or constitute a waiver of any such right, power, remedy or
privilege or be construed as a waiver of any breach hereof or default hereunder
or as an acquiescence therein nor shall any single or partial exercise of any
such right, power, remedy or privilege preclude any other or further exercise
thereof by it or the exercise of any other right, power, remedy or privilege by
it. No notice to or demand on any party hereto in any case shall, unless
otherwise required under this Agreement, entitle such party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any party hereto to any other or further action in any
circumstances without notice or demand.
15.7 NOTICES
Unless otherwise expressly permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers and other
communications required or permitted to be made, given, furnished or filed
hereunder shall be in writing (it being understood that the specification of a
writing in certain instances and not in others does not imply an intention that
a writing is not required as to the latter), shall refer specifically to this
Agreement or other applicable Operative Agreement, and shall be personally
delivered, sent by facsimile or telecommunication transmission (which in either
case provides written confirmation to the sender of its delivery), sent by
registered mail or certified mail, return receipt requested, postage prepaid, or
sent by overnight courier service, in each case to the respective address, or
facsimile number set forth for such party in Schedule 1, or to such other
address, facsimile or other number as each party hereto may hereafter specify by
notice to the other parties hereto. Each such notice, request, demand,
authorization, direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed (a) by facsimile
or telecommunication transmission, when confirmed, or (b) by registered or
certified mail, three Business Days after being deposited, properly addressed,
with the U.S. Postal Service.
15.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE
(A) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
(B) EACH PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS AND SUBMITS ITSELF
TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN THE
CITY AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT OR PROCEEDING WITH
RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
(C) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESS SET FORTH PURSUANT TO SECTION 15.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS
SECTION 15.8(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH
PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS
TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT
IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED
IN ANY ACTION OR PROCEEDING BASED THEREON.
(D) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY LEGAL ACTION OR PROCEEDING BROUGHT HEREUNDER IN ANY OF THE
ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT VENUE FOR THE ACTION OR PROCEEDING IS IMPROPER OR THAT THIS
AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH
COURTS.
(E) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
15.9 THIRD-PARTY BENEFICIARY
This Agreement is not intended to, and shall not, provide any person not a
party hereto (other than the Liquidity Provider, the Escrow Agent and the Paying
Agent, each of which is an intended third party beneficiary with respect to the
provisions of Section 9.1) with any rights of any nature whatsoever against any
of the parties hereto and no person not a party hereto (other than the Liquidity
Provider, the Escrow Agent and the Paying Agent, with respect to the provisions
of Section 9.1) shall have any right, power or privilege in respect of any party
hereto, or have any benefit or interest, arising out of this Agreement.
15.10 ENTIRE AGREEMENT
This Agreement, together with the other Operative Agreements, on and as of
the date hereof, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and all prior or contemporaneous
understandings or agreements, whether written or oral, among any of the parties
hereto with respect to such subject matter are hereby superseded in their
entireties.
15.11 FURTHER ASSURANCES
Each party hereto shall execute, acknowledge and deliver or shall cause to
be executed, acknowledged and delivered, all such further agreements,
instruments, certificates or documents, and shall do and cause to be done such
further acts and things, in any case, as any other party hereto shall reasonably
request in connection with the administration of, or to carry out more
effectively the purposes of, or to better assure and confirm into such other
party the rights and benefits to be provided under this Agreement and the other
Operative Agreements.
[This space intentionally left blank]
IN WITNESS WHEREOF, each of the parties has caused this Participation
Agreement to be duly executed and delivered as of the day and year first above
written.
CONTINENTAL AIRLINES, INC.,
Lessee
By___________________________
Name:
Title:
______________________,
Owner Participant
By___________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
not in its individual
capacity except as
expressly provided herein,
but solely as Owner Trustee
By___________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as
expressly provided herein,
but solely as Mortgagee
By___________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as
expressly provided herein,
but solely as Pass Through
Trustee under the Pass
Through Trust Agreement for
the Continental Airlines
Pass Through Trust,
1997-4A-0
By___________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as
expressly provided herein,
but solely as Pass Through
Trustee under the Pass
Through Trust Agreement for
the Continental Airlines
Pass Through Trust,
1997-4B-0
By___________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as
expressly provided herein,
but solely as Pass Through
Trustee under the Pass
Through Trust Agreement for
the Continental Airlines
Pass Through Trust,
1997-4C-0
By___________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual
capacity, except as
expressly provided herein,
but solely as
Subordination Agent
By________________________
Name:
Title:
ANNEX A
DEFINITIONS
GENERAL PROVISIONS
(a) In each Operative Agreement, unless otherwise expressly provided, a
reference to:
(i) each of "Lessee," "Lessor," "Loan Participant," "Owner Trustee,"
"Owner Participant," "Mortgagee," "Note Holder" or any other person
includes, without prejudice to the provisions of any Operative Agreement,
any successor in interest to it and any permitted transferee, permitted
purchaser or permitted assignee of it;
(ii) words importing the plural include the singular and words
importing the singular include the plural;
(iii) any agreement, instrument or document, or any annex, schedule or
exhibit thereto, or any other part thereof, includes, without prejudice to
the provisions of any Operative Agreement, that agreement, instrument or
document, or annex, schedule or exhibit, or part, respectively, as amended,
modified or supplemented from time to time in accordance with its terms and
in accordance with the Operative Agreements, and any agreement, instrument
or document entered into in substitution or replacement therefor
(including, without limitation, in the case of each Pass Through Trust
Agreement, the "Related Pass Through Trust Agreement" as defined therein);
(iv) any provision of any Law includes any such provision as amended,
modified, supplemented, substituted, reissued or reenacted prior to the
Delivery Date, and thereafter from time to time;
(v) the words "Agreement," "this Agreement," "hereby," "herein,"
"hereto," "hereof" and "hereunder" and words of similar import when used in
any Operative Agreement refer to such Operative Agreement as a whole and
not to any particular provision of such Operative Agreement;
(vi) the words "including," "including, without limitation,"
"including, but not limited to," and terms or phrases of similar import
when used in any Operative Agreement, with respect to any matter or thing,
mean including, without limitation, such matter or thing; and
(vii) a "Section," an "Exhibit," an "Annex" or a "Schedule" in any
Operative Agreement, or in any annex thereto, is a reference to a section
of, or an exhibit, an annex or a schedule to, such Operative Agreement or
such annex, respectively.
(b) Each exhibit, annex and schedule to each Operative Agreement is
incorporated in, and shall be deemed to be a part of, such Operative Agreement.
(c) Unless otherwise defined or specified in any Operative Agreement, all
accounting terms therein shall be construed and all accounting determinations
thereunder shall be made in accordance with GAAP.
(d) Headings used in any Operative Agreement are for convenience only and
shall not in any way affect the construction of, or be taken into consideration
in interpreting, such Operative Agreement.
(e) For purposes of each Operative Agreement, the occurrence and
continuance of a Lease Default or Lease Event of Default referred to in Section
14.5 shall not be deemed to prohibit the Lessee from taking any action or
exercising any right that is conditioned on no Lease Event of Default, Lease
Default or Special Default having occurred and be continuing if such Lease
Default or Lease Event of Default consists of the institution of reorganization
proceedings with respect to Lessee under Chapter 11 of the Bankruptcy Code and
the trustee or debtor-in-possession in such proceedings shall have (i) agreed to
perform its obligations under the Lease with the approval of the applicable
court and thereafter shall have continued to perform such obligations in
accordance with Section 1110 or (ii) shall have assumed the Lease with the
approval of the relevant court and thereafter shall have continued to perform
its obligations under the Lease.
DEFINED TERMS
"ACT" means part A of subtitle VII of title 49, United States Code.
"ACTUAL KNOWLEDGE" means (a) as it applies to Owner Trustee or Mortgagee,
as the case may be, actual knowledge of a responsible officer in the Corporate
Trust Department or the Corporate Trust Office, respectively, and (b) as it
applies to Owner Participant or Lessee, actual knowledge of a Vice President or
more senior officer of Owner Participant or Lessee, respectively, or any other
officer of Owner Participant or Lessee, respectively, having responsibility for
the transactions contemplated by the Operative Agreements; PROVIDED that each of
Lessee, Owner Participant, Owner Trustee and Mortgagee shall be deemed to have
"Actual Knowledge" of any matter as to which it has received notice from Lessee,
Owner Participant, any Note Holder, Owner Trustee or Mortgagee, such notice
having been given pursuant to Section 15.7 of the Participation Agreement.
"ADDITIONAL INSURED" is defined in Section D of Annex D to the Lease.
"ADVERSE CHANGE IN TAX LAW" means (a) for Lessee, a Change in Tax Law that
Lessee regards as one that could adversely affect the economic consequences of
the transactions contemplated by the Participation Agreement and the other
Operative Agreements that are anticipated by Lessee or (b) for Owner
Participant, any Change in Tax Law that would adversely affect any of the
following tax assumptions:
(i) For federal income tax purposes, the Lease will be a "true" lease
for purposes of the Code and Owner Participant will be treated as the owner
of the Aircraft and Lessee will be treated as the lessee thereof;
(ii) For federal income tax purposes, Owner Participant will be
entitled to depreciation or cost recovery deductions with respect to
Lessor' s Cost of the Aircraft; and
(iii) For federal income tax purposes, Owner Participant will be
entitled to deductions for interest payments on the Equipment Notes.
"AFFILIATE" means, with respect to any person, any other person directly or
indirectly controlling, controlled by or under common control with such person.
For 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 "controlling," "controlled by" and "under common control with"
have correlative meanings.
"AIRCRAFT" means, collectively, the Airframe and Engines.
"AIRCRAFT BILL OF SALE" means the full warranty bill of sale covering the
Aircraft delivered by Airframe Manufacturer to Owner Trustee on the Delivery
Date.
"AIRCRAFT DOCUMENTS" means all technical data, manuals and log books, and
all inspection, modification and overhaul records and other service, repair,
maintenance and technical records that are required by the FAA (or the relevant
Aviation Authority), to be maintained with respect to the Aircraft, Airframe,
Engines or Parts; and such term shall include all additions, renewals, revisions
and replacements of any such materials from time to time made, or required to be
made, by the FAA (or other Aviation Authority) regulations, and in each case in
whatever form and by whatever means or medium (including, without limitation,
microfiche, microfilm, paper or computer disk) such materials may be maintained
or retained by or on behalf of Lessee (PROVIDED, that all such materials shall
be maintained in the English language).
"AIRFRAME" means (a) the aircraft (excluding Engines or engines from time
to time installed thereon) manufactured by Airframe Manufacturer and identified
by Airframe Manufacturer's model number, United States registration number and
Airframe Manufacturer's serial number set forth in Lease Supplement No. 1 and
any Replacement Airframe and (b) any and all Parts incorporated or installed in
or attached or appurtenant to such airframe, and any and all Parts removed from
such airframe, unless title to such Parts shall not be vested in Lessor in
accordance with Section 8.1 and Annex C of the Lease. Upon substitution of a
Replacement Airframe under and in accordance with the Lease, such Replacement
Airframe shall become subject to the Lease and shall be the "Airframe" for all
purposes of the Lease and the other Operative Agreements and thereupon the
Airframe for which the substitution is made shall no longer be subject to the
Lease, and such replaced Airframe shall cease to be the "Airframe."
"AIRFRAME MANUFACTURER" means The Boeing Company, a Delaware corporation.
"AMORTIZATION AMOUNT" means, with respect to any Equipment Note, as of any
Payment Date, the amount determined by multiplying the percentage set forth
opposite such Payment Date on the Amortization Schedule by the Original Amount
of such Equipment Note.
"AMORTIZATION SCHEDULE" means, with respect to each Equipment Note, the
amortization schedule for such Equipment Note delivered pursuant to Section 2.02
of the Trust Indenture.
"APPRAISER" means a firm of internationally recognized, independent
aircraft appraisers.
"AVERAGE LIFE DATE" for any Equipment Note shall be the date which follows
the time of determination by a period equal to the Remaining Weighted Average
Life of such Equipment Note. "Remaining Weighted Average Life" on a given date
with respect to any Equipment Note shall be the number of days equal to the
quotient obtained by dividing (a) the sum of each of the products obtained by
multiplying (i) the amount of each then remaining scheduled payment of principal
of such Equipment Note by (ii) the number of days from and including such
determination date to but excluding the date on which such payment of principal
is scheduled to be made, by (b) the then outstanding principal amount of such
Equipment Note.
"AVIATION AUTHORITY" means the FAA or, if the Aircraft is permitted to be,
and is, registered with any other Government Entity under and in accordance with
Section 7.1.2 of the Lease, such other Government Entity.
"BANKRUPTCY CODE" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 ET SEQ.
"BASE LEASE TERM" means the period beginning on and including the
Commencement Date and ending on the Scheduled Expiration Date, or such earlier
date on which the Term terminates in accordance with the provisions of the
Lease.
"BASIC PASS THROUGH TRUST AGREEMENT" means the Pass Through Trust
Agreement, dated September 25, 1997, between Lessee and Pass Through Trustee,
but does not include any Trust Supplement.
"BASIC RENT" means the rent payable for the Aircraft pursuant to Section
3.2.1(a) of the Lease.
"BENEFICIAL OWNER" when used in relation to an Equipment Note means a
Person that, by reason of direct ownership, contract, share ownership or
otherwise, has the right to receive or participate in receiving, directly or
indirectly, payments of principal, interest or Make-Whole Amount in respect of
such Equipment Note; provided that a Person shall not be deemed to be a
Beneficial Owner of an Equipment Note solely because another Person in which
such a Person owns common stock or other equity securities is a registered
holder or Beneficial Owner of such Equipment Note unless such Person is an
Affiliate of such other Person.
"BFE" means all appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment of whatever nature sold by Lessee to Owner
Trustee pursuant to the BFE Bill of Sale.
"BFE AMOUNT" means the amount paid by Owner Trustee to Lessee to purchase
the BFE, and is designated by Dollar amount in Schedule 3 to the Participation
Agreement.
"BFE BILL OF SALE" means the full warranty bill of sale executed by Lessee
in favor of Owner Trustee, dated the Delivery Date, identifying and covering the
BFE.
"BILLS OF SALE" means the FAA Bill of Sale, the Aircraft Bill of Sale and
the BFE Bill of Sale.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized or required by law to close in New York,
New York, Houston, Texas, Wilmington, Delaware, or Salt Lake City, Utah.
"CASH EQUIVALENTS" means the following securities (which shall mature
within 90 days of the date of purchase thereof): (a) direct obligations of the
U.S. Government; (b) obligations fully guaranteed by the U.S. Government; (c)
certificates of deposit issued by, or bankers' acceptances of, or time deposits
or a deposit account with, Owner Trustee, Mortgagee or any bank, trust company
or national banking association incorporated or doing business under the laws of
the United States or any state thereof having a combined capital and surplus and
retained earnings of at least $500,000,000 and having a rate of "C" or better
from the Thomson BankWatch Service; or (d) commercial paper of any issuer doing
business under the laws of the United States or one of the states thereof and in
each case having a rating assigned to such commercial paper by Standard & Poor's
or Moody's equal to A1 or higher.
"CHANGE IN TAX LAW" means any amendment, modification, addition or change
in or to the provisions of the Code, any other federal tax statutes, the
Treasury Regulations promulgated thereunder, the Internal Revenue Service
Revenue Rulings, Revenue Procedures or other administrative or judicial
interpretations of the Code or the federal tax statutes that affects the tax
assumptions set forth in the Tax Indemnity Agreement or otherwise affects Owner
Participant's anticipated Net Economic Return (other than a change in the
alternative minimum tax or other change that results in Owner Participant being
subject to alternative minimum tax or unable to fully utilize tax benefits
because of its particular tax situation).
"CITIZEN OF THE UNITED STATES" is defined in Section 40102(a)(15) of the
Act and in the FAA Regulations.
"CLOSING" means the closing of the transactions contemplated by the
Participation Agreement on the Delivery Date.
"CODE" means the Internal Revenue Code of 1986, as amended; PROVIDED, that
when used in relation to a Plan, "Code" shall mean the Internal Revenue Code of
1986 and any regulations and rulings issued thereunder, all as amended and in
effect from time to time.
"COMMENCEMENT DATE" is defined in Schedule 1 to the Lease.
"COMMITMENT" means, for any Participant, the amount of its participation in
the payment of Lessor's Cost.
"COMMITMENT TERMINATION DATE" is defined in Schedule 3 to the Participation
Agreement.
"CONSENT AND AGREEMENT" means the Manufacturer Consent and Agreement
________, dated as of even date with the Participation Agreement, of Airframe
Manufacturer.
"CONTINUOUS STAY PERIOD" is defined in Section 4.04(a) of the Trust
Indenture.
"CORPORATE TRUST DEPARTMENT" or "TRUST OFFICE" means the principal
corporate trust office of Owner Trustee located from time to time at Owner
Trustee's address for notices under the Participation Agreement or such other
office at which Owner Trustee's corporate trust business shall be administered
which Owner Trustee shall have specified by notice in writing to Lessee,
Mortgagee and each Note Holder.
"CORPORATE TRUST OFFICE" means the principal office of Mortgagee located at
Mortgagee's address for notices under the Participation Agreement or such other
office at which Mortgagee's corporate trust business shall be administered which
Mortgagee shall have specified by notice in writing to Lessee, Owner Trustee and
each Note Holder.
"CRAF" means the Civil Reserve Air Fleet Program established pursuant to 10
U.S.C. Section 9511-13 or any similar substitute program.
"DEBT" means any liability for borrowed money, or any liability for the
payment of money in connection with any letter of credit transaction or any
other liabilities evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments.
"DEBT RATE" means, with respect to (i) any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I to the
Trust Indenture and (ii) any other purpose, with respect to any period, the
weighted average interest rate per annum during such period borne by the
outstanding Equipment Notes, excluding any interest payable at the Payment Due
Rate.
"DEFAULT" means any event or condition that with the giving of notice or
the lapse of time or both would become an Event of Default.
"DELAYED DELIVERY DATE" means a delayed Delivery Date notified to each
Participant, Owner Trustee and Mortgagee by Lessee pursuant to Section 4.3 of
the Participation Agreement, which delayed Delivery Date shall be a Business Day
not later than the Commitment Termination Date.
"DELIVERY DATE" means the Business Day specified in Lease Supplement No. 1
as the date on which, among other things, the Aircraft is delivered to and
accepted by Lessee under the Lease and the Closing occurs.
"DEPOSIT AGREEMENT" means each of the three Deposit Agreements between the
Depositary and the Escrow Agent, dated as of the Issuance Date, each of which
relates to one of the Pass Through Trusts, PROVIDED that, for purposes of any
obligation of Lessee, no amendment, modification or supplement to, or
substitution or replacement of, any such Deposit Agreement shall be effective
unless consented to by Lessee.
"DEPOSITARY" means Credit Suisse First Boston, New York branch, as
Depositary under each Deposit Agreement.
"DOLLARS," "UNITED STATES DOLLARS" or "$" means the lawful currency of the
United States.
"DOT" means the Department of Transportation of the United States or any
Government Entity succeeding to the functions of such Department of
Transportation.
"ENFORCEMENT DATE" is defined in Section 4.03 of the Trust Indenture.
"ENGINE" means (a) each of the engines manufactured by Engine Manufacturer
and identified by Engine Manufacturer's model number and Engine Manufacturer's
serial number set forth in Lease Supplement No. 1 and originally installed on
the Airframe on delivery thereof pursuant to the Lease, and any Replacement
Engine, in any case whether or not from time to time installed on such Airframe
or installed on any other airframe or aircraft, and (b) any and all Parts
incorporated or installed in or attached or appurtenant to such engine, and any
and all Parts removed from such engine, unless title to such Parts shall not be
vested in Lessor in accordance with Section 8.1 and Annex C of the Lease. Upon
substitution of a Replacement Engine under and in accordance with the Lease,
such Replacement Engine shall become subject to the Lease and shall be an
"Engine" for all purposes of the Lease and the other Operative Agreements and
thereupon the Engine for which the substitution is made shall no longer be
subject to the Lease, and such replaced Engine shall cease to be an "Engine."
"ENGINE CONSENT AND AGREEMENT" means the Engine Manufacturer Consent and
Agreement dated as of even date with the Participation Agreement, of Engine
Manufacturer.
"ENGINE MANUFACTURER" means [CFM INTERNATIONAL, A DELAWARE CORPORATION.]
[GENERAL ELECTRIC COMPANY, A NEW YORK CORPORATION.]
"EQUIPMENT NOTE REGISTER" is defined in Section 2.07 of the Trust
Indenture.
"EQUIPMENT NOTES" means and includes any equipment notes issued under the
Trust Indenture in the form specified in Section 2.01 thereof (as such form may
be varied pursuant to the terms of the Trust Indenture) and any Equipment Note
issued under the Trust Indenture in exchange for or replacement of any Equipment
Note.
"ERISA" means the Employee Retirement Income Security Act of 1974 and any
regulations and rulings issued thereunder all as amended and in effect from time
to time.
"ESCROW AGENT" means First Security Bank, National Association, as Escrow
Agent under each of the Escrow Agreements.
"ESCROW AGREEMENT" means each of the three Escrow and Paying Agent
Agreements, among the Escrow Agent, the Paying Agent, certain initial purchasers
of the Pass Through Certificates named therein and one of the Pass Through
Trustees, dated as of the Issuance Date, each of which relates to one of the
Pass Through Trusts, PROVIDED that, for purposes of any obligation of Lessee, no
amendment, modification or supplement to, or substitution or replacement of, any
such Escrow Agreement shall be effective unless consented to by Lessee.
"EVENT OF DEFAULT" is defined in Section 4.02 of the Trust Indenture.
"EVENT OF LOSS" means, with respect to the Aircraft, Airframe or any
Engine, any of the following circumstances, conditions or events with respect to
such property, for any reason whatsoever:
(a) the destruction of such property, damage to such property beyond
economic repair or rendition of such property permanently unfit for
normal use by Lessee;
(b) the actual or constructive total loss of such property or any damage
to such property, or requisition of title or use of such property,
which results in an insurance settlement with respect to such property
on the basis of a total loss or constructive or compromised total
loss;
(c) any theft, hijacking or disappearance of such property for a period of
180 consecutive days or more;
(d) any seizure, condemnation, confiscation, taking or requisition
(including loss of title) of such property by any Government Entity or
purported Government Entity (other than a requisition of use by a
Permitted Government Entity) for a period exceeding 180 consecutive
days or, if earlier, at the end of the Term;
(e) any seizure, condemnation, confiscation, taking or requisition of use
of such property by any Permitted Government Entity that continues
until the 30th day after the last day of the Term, PROVIDED that no
such Event of Loss shall exist if Lessor shall have elected not to
treat such event as an Event of Loss pursuant to Section 10.6 of the
Lease; and
(f) as a result of any law, rule, regulation, order or other action by the
Aviation Authority or by any Government Entity of the government of
registry of the Aircraft or by any Government Entity otherwise having
jurisdiction over the operation or use of the Aircraft, the use of
such property in the normal course of Lessee's business of passenger
air transportation is prohibited for a period of 180 consecutive days,
unless Lessee, prior to the expiration of such 180 day period, shall
have undertaken and shall be diligently carrying forward such steps as
may be necessary or desirable to permit the normal use of such
property by Lessee, but in any event if such use shall have been
prohibited for a period of two consecutive years, provided that no
Event of Loss shall be deemed to have occurred if such prohibition has
been applicable to Lessee's entire U.S. fleet of such property and
Lessee, prior to the expiration of such two-year period, shall have
conformed at least one unit of such property in its fleet to the
requirements of any such law, rule, regulation, order or other action
and commenced regular commercial use of the same in such jurisdiction
and shall be diligently carrying forward, in a manner which does not
discriminate against such property in so conforming such property,
steps which are necessary or desirable to permit the normal use of the
Aircraft by Lessee, but in any event if such use shall have been
prohibited for a period of three years or such use shall be prohibited
at the expiration of the Term.
"EXCLUDED PAYMENTS" means (i) indemnity payments paid or payable by Lessee
to or in respect of Owner Participant, or Owner Trustee in its individual
capacity, their respective Affiliates, successors and permitted assigns and
their directors, officers, employees, servants and agents pursuant to Section 9
of the Participation Agreement or any corresponding payments under the Lease,
(ii) proceeds of public liability insurance paid or payable as a result of
insurance claims made, or losses suffered, by Owner Trustee in its individual
capacity or by Owner Participant, that are payable directly to Owner Trustee in
its individual capacity, or Owner Participant, respectively, for their own
account, (iii) proceeds of insurance maintained with respect to the Aircraft by
Owner Participant or any Affiliate thereof for its or their own account or
benefit (whether directly or through Owner Trustee) and permitted under Section
11.2 of the Lease, (iv) all payments required to be made under the Tax Indemnity
Agreement by Lessee whether or not denominated as Supplemental Rent, (v) any
Transaction Expenses paid or payable by the Lessee to the Owner Trustee (to the
extent for its sole benefit) or the Owner Participant pursuant to the Lease or
the Participation Agreement, (vi) any amount payable to the Owner Participant by
any transferee as the purchase price of the Owner Participant's interest in the
Trust Estate, (vii) any interest that pursuant to the Operative Agreements may
from time to time accrue in respect of any of the amounts described in clauses
(i) through (vi) above, (viii) any right to enforce the payment of any amount
described in clauses (i) through (vii) above (PROVIDED, that the rights referred
to in this clause (viii) shall not be deemed to include the exercise of any
remedies provided for in the Lease other than the right to sue for specific
performance of any covenant to make such payment or to sue for damages in
respect of the breach of any such covenant) and (ix) any right to exercise any
election or option or make any decision or determination, or to give or receive
any notice, consent, waiver or approval, or to take any other action in respect
of, but in each case, only to the extent relating to, any Excluded Payments.
"EXPENSES" means any and all liabilities, obligations, losses, damages,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and disbursements
of legal counsel, accountants, appraisers, inspectors or other professionals,
and costs of investigation).
"FAA" means the Federal Aviation Administration of the United States or any
Government Entity succeeding to the functions of such Federal Aviation
Administration.
"FAA BILL OF SALE" means a bill of sale for the Aircraft on AC Form 8050-2
(or such other form as may be approved by the FAA) delivered to Owner Trustee on
the Delivery Date by Airframe Manufacturer.
"FAA FILED DOCUMENTS" means the Lease, Lease Supplement No. 1, the Trust
Indenture, the Trust Agreement, the initial Trust Indenture Supplement, the FAA
Bill of Sale and an application for registration of the Aircraft with the FAA in
the name of Owner Trustee.
"FAA REGULATIONS" means the Federal Aviation Regulations issued or
promulgated pursuant to the Act from time to time.
"FAIR MARKET RENTAL VALUE" means the fair market rental value in Dollars
for the Aircraft that would apply in an arm's-length transaction between an
informed and willing lessee under no compulsion to lease, and an informed and
willing lessor under no compulsion to lease, the Aircraft, for the applicable
Renewal Lease Term, assuming that (a) the Aircraft has been maintained in
accordance with, and is in the condition required by, the Lease, (b) payments of
rent would be made semiannually, and (c) the Aircraft would be leased during any
such Renewal Lease Term on the same terms and conditions as are set forth in the
Lease with respect to the Base Lease Term.
"FAIR MARKET SALES VALUE" means the fair market sales value in Dollars for
the Aircraft that would apply in an arm's-length transaction between an informed
and willing buyer under no compulsion to buy, and an informed and willing seller
under no compulsion to sell, the Aircraft, in a transaction that would close on
or about the relevant time of determination, assuming that (a) the Aircraft has
been maintained in accordance with, and is in the condition required by, the
Lease and (b) the Aircraft would be delivered to such informed and willing buyer
in the return condition required by the Lease.
"FINANCING STATEMENTS" means, collectively, UCC-1 (and, where appropriate,
UCC-3) financing statements (a) covering the Trust Indenture Estate, by Owner
Trustee, as debtor, showing Mortgagee as secured party, for filing in Utah and
each other jurisdiction that, in the opinion of Mortgagee, is necessary to
perfect its Lien on the Trust Indenture Estate and (b) covering the Lease and
the Aircraft, as a precautionary matter, by Lessee, as lessee, showing Owner
Trustee as lessor and Mortgagee as assignee of Owner Trustee, for filing in
Texas and each other jurisdiction that, in the opinion of Owner Trustee and
Mortgagee, is reasonably desirable.
"FIRST SECURITY" means First Security Bank, National Association, a
national banking association, not in its capacity as Owner Trustee under the
Trust Agreement, but in its individual capacity.
"FIXED RENEWAL LEASE TERM" means each term for which the Lease is extended
by Lessee, if any, pursuant to the first and second such extensions in
accordance with Section 17 of the Lease.
"GAAP" means generally accepted accounting principles as set forth in the
statements of financial accounting standards issued by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants, as
such principles may at any time or from time to time be varied by any applicable
financial accounting rules or regulations issued by the SEC and, with respect to
any person, shall mean such principles applied on a basis consistent with prior
periods except as may be disclosed in such person's financial statements.
"GOVERNMENT ENTITY" means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"GTA" means the General Terms Agreement as defined in the Purchase
Agreement Assignment.
"INDEMNITEE" means (i) First Security and Owner Trustee, (ii) WTC and
Mortgagee, (iii) each separate or additional trustee appointed pursuant to the
Trust Agreement or the Trust Indenture, (iv) each Participant, (v) the Trust
Estate and the Trust Indenture Estate, (vi) each Affiliate of the persons
described in clauses (i) through (iv), inclusive, (vii) the respective
directors, officers, employees, agents and servants of each of the persons
described in clauses (i) through (iv) inclusive and in clause (vi), (viii) the
successors and permitted assigns of the persons described in clauses (i) through
(iv), inclusive, and in clauses (vi) and (vii) and (ix) the Pass Through
Indemnitees; PROVIDED THAT the Pass Through Indemnitees are Indemnitees only for
purposes of Section 9.1 of the Participation Agreement. If any Indemnitee is
Airframe Manufacturer or Engine Manufacturer or any subcontractor or supplier of
either thereof, such Person shall be an Indemnitee only in its capacity as Owner
Participant, Loan Participant or Note Holder.
"INDENTURE AGREEMENTS" means the Participation Agreement, the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Engine Consent and Agreement, the Bills of Sale and any other
contract, agreement or instrument from time to time assigned or pledged under
the Trust Indenture.
"INDENTURE DEFAULT" means any condition, circumstance, act or event that,
with the giving of notice, the lapse of time or both, would constitute an
Indenture Event of Default.
"INDENTURE EVENT OF DEFAULT" means any one or more of the conditions,
circumstances, acts or events set forth in Section 4.02 of the Trust Indenture.
"INDENTURE INDEMNITEE" means (i) WTC and the Mortgagee, (ii) each separate
or additional trustee appointed pursuant to the Trust Indenture, (iii) the
Subordination Agent, (iv) each Liquidity Provider, (v) each Pass Through
Trustee, (vi) the Paying Agent, (vii) the Escrow Agent and (viii) each of the
respective directors, officers, employees, agents and servants of each of the
persons described in clauses (i) through (vii) inclusive above.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement among
the Pass Through Trustees, the Liquidity Providers and the Subordination Agent,
dated as of the Issuance Date, PROVIDED that, for purposes of any obligation of
Lessee, no amendment, modification or supplement to, or substitution or
replacement of, such Intercreditor Agreement shall be effective unless consented
to by Lessee.
"INTERIM LEASE TERM" means the period commencing on and including the
Delivery Date, and ending on and including the day immediately preceding the
Commencement Date or such earlier date on which the Term terminates in
accordance with the provisions of the Lease.
"INTERIM RENT" is defined in Schedule 1 to the Lease.
"IRS" means the Internal Revenue Service of the United States or any
Government Entity succeeding to the functions of such Internal Revenue Service.
"ISSUANCE DATE" means October 23, 1997.
"LAW" means (a) any constitution, treaty, statute, law, decree, regulation,
order, rule or directive of any Government Entity, and (b) any judicial or
administrative interpretation or application of, or decision under, any of the
foregoing.
"LEASE" or "LEASE AGREEMENT" means the Lease Agreement , dated as of even
date with the Participation Agreement, __________________ between Owner Trustee
and Lessee.
"LEASE DEFAULT" means any condition, circumstance, act or event that, with
the giving of notice, the lapse of time or both, would constitute a Lease Event
of Default.
"LEASE EVENT OF DEFAULT" means any one or more of the conditions,
circumstances, acts or events set forth in Section 14 of the Lease.
"LEASE SUPPLEMENT" means a supplement to the Lease, in the form of Exhibit
A to the Lease.
"LEASE SUPPLEMENT NO. 1" means the initial Lease Supplement, dated the
Delivery Date.
"LESSEE" means Continental Airlines, Inc., a Delaware corporation.
"LESSEE OPERATIVE AGREEMENTS" means the Participation Agreement, the Lease,
Lease Supplement No. 1, the Tax Indemnity Agreement, the BFE Bill of Sale, the
Purchase Agreement Assignment and each other agreement between Lessee and any
other party to the Participation Agreement, relating to the Transactions,
delivered on the Delivery Date.
"LESSEE PERSON" means Lessee, any sublessee, assignee, successor or other
user or person in possession of the Aircraft, Airframe or an Engine with or
without color of right, or any Affiliate of any of the foregoing (excluding any
Tax Indemnitee or any related Tax Indemnitee with respect thereto, or any person
using or claiming any rights with respect to the Aircraft, Airframe or an Engine
directly by or through any of the persons in this parenthetical, but not
excluding any Person claiming directly or indirectly through or under the
Lease).
"LESSEE'S ADVISOR" is defined in Schedule 3 to the Participation Agreement.
"LESSOR" means Owner Trustee in its capacity as lessor under the Lease.
"LESSOR LIEN" means, with respect to any person and in respect of any
property (including, without limitation, the Trust Estate, the Trust Indenture
Estate, the Aircraft, Airframe, Engines, Parts or Aircraft Documents) or any
payments, any Lien on such property or payments which (a) arises from claims
against such person (if such person is a trustee, whether in its individual
capacity or in its capacity as a trustee) not related to any of the transactions
contemplated by the Operative Agreements, (b) results from acts or omissions of
such person (if such person is a trustee, whether in its individual capacity or
in its capacity as a trustee) in violation of such person's obligations under
any of the terms of the Operative Agreements, or not related to the transactions
contemplated by the Operative Agreements, (c) is imposed as a result of Taxes
against such person (if such person is a trustee, whether in its individual
capacity or in its capacity as a trustee) or any of its Affiliates not required
to be indemnified by Lessee under the Participation Agreement, or (d) claims
against such person arising out of any transfer by such person of its interest
in the Aircraft, the Trust Estate or the Operative Agreements, other than a
Transfer permitted by the terms of the Operative Agreements or pursuant to the
exercise of remedies set forth in Section 15 of the Lease.
"LESSOR'S COST" means the aggregate of the amounts paid by Owner Trustee to
Airframe Manufacturer and Lessee to purchase the Aircraft and BFE pursuant to
the Purchase Agreement Assignment and the Participation Agreement, and is
designated by Dollar amount in Schedule 3 to the Participation Agreement.
"LIEN" means any mortgage, pledge, lien, charge, claim, encumbrance, lease
or security interest affecting the title to or any interest in property.
"LIQUIDITY FACILITIES" means the six Revolving Credit Agreements
(consisting of a separate Revolving Credit Agreement with each Liquidity
Provider with respect to each Pass Through Trust) between the Subordination
Agent, as borrower, and a Liquidity Provider, each dated as of the Issuance
Date, PROVIDED that, for purposes of any obligation of Lessee, no amendment,
modification or supplement to, or substitution or replacement of, any such
Liquidity Facility shall be effective unless consented to by Lessee.
"LIQUIDITY PROVIDER" means ABN AMRO Bank, N.V., acting through its Chicago
branch, or Westdeutsche Landesbank Girozentrale, acting through its New York
branch, each as a Class A Liquidity Provider, Class B Liquidity Provider and
Class C Liquidity Provider (as such terms are defined in the Intercreditor
Agreement) under the respective Liquidity Facilities, or any successor thereto.
"LOAN PARTICIPANTS" mean, until the Closing shall have been consummated,
the Pass Through Trustees, and after the Closing shall have been consummated,
each Note Holder.
"LOSS PAYMENT DATE" means the date on which payment is due pursuant to
Section 10.1.2(a)(i) of the Lease.
"MAINTENANCE PROGRAM" is defined in Annex C to the Lease.
"MAJORITY IN INTEREST OF NOTE HOLDERS" means as of a particular date of
determination, the holders of a majority in aggregate unpaid Original Amount of
all Equipment Notes outstanding as of such date (excluding any Equipment Notes
held by Owner Trustee, Lessee, or Owner Participant or any Affiliate of any such
party or any interests of Owner Trustee or Owner Participant therein by reason
of subrogation pursuant to Section 4.03 of the Trust Indenture (unless all
Equipment Notes then outstanding shall be held by Owner Trustee, Lessee, Owner
Participant or any Affiliate of any thereof)); PROVIDED that for the purposes of
directing any action or casting any vote or giving any consent, waiver or
instruction hereunder any Note Holder of an Equipment Note or Equipment Notes
may allocate, in such Note Holder's sole discretion, any fractional portion of
the principal amount of such Equipment Note or Equipment Notes in favor of or in
opposition to any such action, vote, consent, waiver or instruction.
"MAKE-WHOLE AMOUNT" means, with respect to any Equipment Note, an amount
(as determined by an independent investment banker of national standing) equal
to the excess, if any, of (a) the present value of the remaining scheduled
payments of principal and interest to maturity of such Equipment Note computed
by discounting such payments on a semiannual basis on each Payment Date
(assuming a 360-day year of twelve 30-day months) using a discount rate equal to
the Treasury Yield over (b) the outstanding principal amount of such Equipment
Note plus accrued interest to the date of determination. For purposes of
determining the Make-Whole Amount, "Treasury Yield" means, at the date of
determination with respect to any Equipment Note, the interest rate (expressed
as a decimal and, in the case of United States Treasury bills, converted to a
bond equivalent yield) determined to be the per annum rate equal to the
semi-annual yield to maturity for United States Treasury securities maturing on
the Average Life Date of such Equipment Note and trading in the public
securities markets either as determined by interpolation between the most recent
weekly average yield to maturity for two series of United States Treasury
securities, trading in the public securities markets, (A) one maturing as close
as possible to, but earlier than, the Average Life Date of such Equipment Note
and (B) the other maturing as close as possible to, but later than, the Average
Life Date of such Equipment Note, in each case as published in the most recent
H.15(519) or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Equipment Note is reported
on the most recent H.15(519), such weekly average yield to maturity as published
in such H.15(519) "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Amount shall
be the third Business Day prior to the applicable payment or redemption date and
the "most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable payment or redemption
date.
"MANUFACTURER'S PURCHASE PRICE" means the amount required to be paid to the
Airframe Manufacturer to purchase the Aircraft pursuant to the Purchase
Agreement Assignment.
"MATERIAL ADVERSE CHANGE" means, with respect to any person, any event,
condition or circumstance that materially and adversely affects such person's
business or consolidated financial condition, or its ability to observe or
perform its obligations, liabilities and agreements under the Operative
Agreements.
"MINIMUM LIABILITY INSURANCE AMOUNT" is defined in Schedule 1 to the Lease.
"MOODY'S" means Moody's Investors Service, Inc.
"MORTGAGED PROPERTY" is defined in Section 3.03 of the Trust Indenture.
"MORTGAGEE" means Wilmington Trust Company, a Delaware banking corporation,
not in its individual capacity but solely as loan trustee under the Trust
Indenture.
"MORTGAGEE AGREEMENTS" means, collectively, the Participation Agreement,
the Trust Indenture and each other agreement between Mortgagee and any other
party to the Participation Agreement, relating to the Transactions, delivered on
the Delivery Date.
"MORTGAGEE EVENT" means (i) in the event of a reorganization proceeding
involving the Lessee under Chapter 11 of the Bankruptcy Code, (A) the trustee in
such proceeding or the Lessee not assuming or agreeing to perform its
obligations under the Lease, as contemplated under Section 1110, 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) or (B) at any
time after agreeing to perform or assuming such obligations, such trustee or the
Lessee ceasing to perform such obligations with the result that the Continuous
Stay Period comes to an end or (ii) either the Equipment Notes shall have become
due and payable pursuant to Section 4.04(b) of the Trust Indenture or Mortgagee
has taken action or notified Owner Trustee that it intends to take action to
foreclose the Lien of the Trust Indenture or otherwise commence the exercise of
any significant remedy in accordance with Section 4.04(a) of the Trust
Indenture.
"NET ECONOMIC RETURN" means the Owner Participant's net after-tax yield
utilizing the multiple investment sinking fund method of analysis and aggregate
net after-tax cash flow, computed on the basis of the same methodology and
assumptions as were utilized by the initial Owner Participant in determining
Basic Rent, Stipulated Loss Value percentages and Termination Value percentages,
as of the Delivery Date, as such assumptions may be adjusted for events that
have been the basis for adjustments to Basic Rent pursuant to Section 3.2.1(b)
of the Lease or events giving rise to indemnity payments pursuant to Section 5
of the Tax Indemnity Agreement; PROVIDED, that, if the initial Owner Participant
shall have transferred its interest, Net Economic Return shall be calculated as
if the initial Owner Participant had retained its interest; PROVIDED FURTHER,
that, notwithstanding the preceding proviso, solely for purposes of Section 11
of the Participation Agreement and calculating any adjustments to Basic Rent,
Stipulated Loss Values and Termination Values in connection with a refunding
pursuant to such Section 11 at a time when Owner Participant is a transferee
(other than an Affiliate of the initial Owner Participant), the after-tax yield
(but not the after-tax cash flow) component of Net Economic Return shall be
calculated on the basis of the methodology and assumptions utilized by the
transferee Owner Participant as of the date on which it acquired its interest.
"NET PRESENT VALUE OF RENTS" means the present value, as of the date of
determination, discounted at 10% per annum, compounded semiannually to the date
of determination, of all unpaid Basic Rent payments during the then-remaining
portion of the Base Lease Term, expressed as a percentage of Lessor's Cost.
"NET WORTH" means, for any person, the excess of its total assets over its
total liabilities.
"NEW DEBT" means debt securities in an aggregate principal amount specified
in the Refunding Information.
"NON-U.S. PERSON" means any Person other than a United States person, as
defined in Section 7701(a)(30) of the Code.
"NOTE HOLDER" means at any time each registered holder of one or more
Equipment Notes.
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement, dated as of
the Issuance Date, among Continental Airlines, Inc., the Subordination Agent,
the Escrow Agent, the Paying Agent and the Pass Through Trustee under each Pass
Through Trust Agreement providing for, among other things, the issuance and sale
of certain equipment notes.
"OFFICER'S CERTIFICATE" means, in respect of any party to the Participation
Agreement, a certificate signed by the Chairman, the President, any Vice
President (including those with varying ranks such as Executive, Senior,
Assistant or Staff Vice President), the Treasurer or the Secretary of such
party.
"OPERATIVE AGREEMENTS" means, collectively, the Participation Agreement,
the Trust Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Engine Consent and Agreement, the Lease, Lease Supplement No. 1,
the Trust Indenture, the initial Trust Indenture Supplement, the Bills of Sale,
the Tax Indemnity Agreement and the Equipment Notes.
"OPERATIVE INDENTURES" means each of the indentures under which notes have
been issued and purchased by the Pass Through Trustees pursuant to the Note
Purchase Agreement.
"OP JURISDICTION" is defined in Schedule 3 to the Participation Agreement.
"ORIGINAL AMOUNT," with respect to an Equipment Note, means the stated
original principal amount of such Equipment Note and, with respect to all
Equipment Notes, means the aggregate stated original principal amounts of all
Equipment Notes.
"OWNER PARTICIPANT" means the person executing the Participation Agreement
as "Owner Participant" or, if a second person becomes an "Owner Participant"
pursuant to Section 10.1.1 of the Participation Agreement, both of such persons;
PROVIDED that if an Owner Participant Transfers 100% of its interest to a
successor Owner Participant, such transferring Owner Participant shall
thereafter no longer be considered an "Owner Participant".
"OWNER PARTICIPANT AGREEMENTS" means, collectively, the Participation
Agreement, the Tax Indemnity Agreement, the Trust Agreement and each other
agreement between Owner Participant and any other party to the Participation
Agreement relating to the Transactions, delivered on the Delivery Date.
"OWNER PARTICIPANT'S PERCENTAGE" means the percentage of Lessor's Cost
allocated to the Owner Participant in Schedule 2 to the Participation Agreement.
"OWNER TRUSTEE" means First Security Bank, National Association, a national
banking association, not in its individual capacity, except as expressly
provided in any Operative Agreement, but solely as Owner Trustee under the Trust
Agreement.
"OWNER TRUSTEE AGREEMENTS" means, collectively, the Participation
Agreement, the Lease, Lease Supplement No. 1, the Trust Agreement, the Trust
Indenture, the initial Trust Indenture Supplement, the Equipment Notes, the
Purchase Agreement Assignment, and each other agreement between Owner Trustee
and any other party to the Participation Agreement, relating to the
Transactions, delivered on the Delivery Date.
"PARTICIPANTS" means, collectively, Owner Participant and each Loan
Participant and "Participant" means Owner Participant or a Loan Participant,
individually.
"PARTICIPATION AGREEMENT" means the Participation Agreement dated as of
among Lessee, Owner Participant, Owner Trustee, the Pass Through Trustees,
Subordination Agent and Mortgagee.
"PARTS" means all appliances, parts, components, instruments,
appurtenances, accessories, furnishings, seats and other equipment of whatever
nature (other than (a) Engines or engines, and (b) any items leased by Lessee
from a third party other than Lessor)), that may from time to time be installed
or incorporated in or attached or appurtenant to the Airframe or any Engine.
"PASS THROUGH AGREEMENTS" means the Pass Through Trust Agreements, the Note
Purchase Agreement, the Deposit Agreements, the Escrow Agreements, the
Intercreditor Agreement, the Liquidity Facilities and the Fee Letters referred
to in Section 2.03 of each of the Liquidity Facilities, PROVIDED, that no
amendment, modification or supplement to, or substitution or replacement of, any
such Fee Letter shall be effective for purposes of any obligation of Lessee,
unless consented to by Lessee.
"PASS THROUGH CERTIFICATES" means the pass through certificates issued by
the Pass Through Trusts (and any other pass through certificates for which such
pass through certificates may be exchanged).
"PASS THROUGH INDEMNITEES" means (i) the Subordination Agent, the Paying
Agent, the Escrow Agent, the Liquidity Providers, and the Pass Through Trustees,
(ii) each Affiliate of a person described in the preceding clause (i), (iii) the
respective directors, officers, employees, agents and servants of each of the
persons described in the preceding clauses (i) and (ii) and (iv) the successors
and permitted assigns of the persons described in the preceding clauses (i),
(ii) and (iii).
"PASS THROUGH TRUST" means each of the three separate pass through trusts
created under the Pass Through Trust Agreements.
"PASS THROUGH TRUST AGREEMENT" means each of the three separate Trust
Supplements, together in each case with the Basic Pass Through Trust Agreement,
each dated as of the Issuance Date, by and between the Lessee and Pass Through
Trustee.
"PASS THROUGH TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as trustee under each Pass Through Trust Agreement.
"PASS THROUGH TRUSTEE AGREEMENTS" means the Participation Agreement, the
Pass Through Trust Agreements, the Note Purchase Agreement, the Deposit
Agreements, the Escrow Agreements, and the Intercreditor Agreement.
"PAYMENT DATE" means each January 2 and July 2 during the Term, commencing
with the first such date to occur after the Commencement Date.
"PAYMENT DUE RATE" is defined in Schedule 1 to the Lease.
"PAYMENT PERIOD" means each of the consecutive semiannual periods during
the Term ending on a Payment Date, the first such period commencing on and
including the Commencement Date.
"PAYING AGENT" means Wilmington Trust Company, as Paying Agent under each
of the Escrow Agreements.
"PERMITTED AIR CARRIER" means (i) any manufacturer of airframes or aircraft
engines, or any Affiliate of a manufacturer of airframes or aircraft engines,
(ii) any Permitted Foreign Air Carrier, (iii) any person approved in writing by
Lessor or (iv) any U.S. Air Carrier.
"PERMITTED COUNTRY" means any country listed on Schedule 5 to the Lease.
"PERMITTED FOREIGN AIR CARRIER" means any air carrier with its principal
executive offices in any Permitted Country and which is authorized to conduct
commercial airline operations and to operate jet aircraft similar to the
Aircraft under the applicable Laws of such Permitted Country.
"PERMITTED GOVERNMENT ENTITY" means (i) the U.S. Government or (ii) any
Government Entity if the Aircraft is then registered under the laws of the
country of such Government Entity.
"PERMITTED INSTITUTION" means (a) any bank, trust company, insurance
company, financial institution or corporation (other than, without Lessee's
consent, a commercial air carrier, a commercial aircraft operator, a freight
forwarder or Affiliate of any of the foregoing), in each case with a combined
capital and surplus or net worth of at least $50,000,000.
"PERMITTED LIEN" means any Lien described in clauses (a) through (g),
inclusive, of Section 6 of the Lease.
"PERMITTED SUBLEASE" means a sublease permitted under Section 7.2.7 of the
Lease.
"PERMITTED SUBLESSEE" means the sublessee under a Permitted Sublease.
"PERSONS" or "PERSONS" means individuals, firms, partnerships, joint
ventures, trusts, trustees, Government Entities, organizations, associations,
corporations, government agencies, committees, departments, authorities and
other bodies, corporate or incorporate, whether having distinct legal status or
not, or any member of any of the same.
"PLAN" means any employee benefit plan within the meaning of Section 3(3)
of ERISA, or any plan within the meaning of Section 4975(e)(1) of the Code.
"PRELIMINARY NOTICE" is defined in Section 17.1 of the Lease.
"PREMIUM TERMINATION DATE" means January 2, 2018 in the case of the Series
A Equipment Notes, January 2, 2017 in the case of the Series B Equipment Notes
and July 2, 2007 in the case of the Series C Equipment Notes.
"PTT PERCENTAGE" means, with respect to each Pass Through Trustee, the
percentage of Lessor's Cost allocated to such Pass Through Trustee in Schedule 2
to the Participation Agreement.
"PURCHASE AGREEMENT" means the Purchase Agreement between Airframe
Manufacturer and Lessee (including all exhibits thereto, together with all
letter agreements entered into that by their terms constitute part of such
Purchase Agreement), to the extent assigned pursuant to the Purchase Agreement
Assignment.
"PURCHASE AGREEMENT ASSIGNMENT" means the Purchase Agreement and Engine
Warranties Assignment , dated as of even date with the Participation Agreement,
between Lessee and Owner Trustee.
"PURCHASE DATE" means the last Business Day of the Base Lease Term or any
Renewal Lease Term, as specified in any Purchase Notice.
"PURCHASE NOTICE" is defined in Section 17.3.1 of the Lease.
"QIB" is defined in Section 2.08 of the Trust Indenture.
"REFUNDING CERTIFICATE" means a certificate of an authorized representative
of Owner Participant delivered pursuant to Section 11.1.1 of the Participation
Agreement, setting forth (a) the Refunding Date and (b) the following
information, subject to the limitations set forth in Section 11 of the
Participation Agreement: (i) the principal amount of debt to be issued by Owner
Trustee on the Refunding Date, (ii) the proposed adjusted debt/equity ratio and
(iii) the proposed revised schedules of Basic Rent, Stipulated Loss Value
percentages and Termination Value percentages, and the proposed Amortization
Schedules, calculated in accordance with Section 3.2.1 of the Lease.
"REFUNDING DATE" means the proposed date on which the outstanding Equipment
Notes will be redeemed and refinanced pursuant to Section 11 of the
Participation Agreement.
"REFUNDING INFORMATION" means the information set forth in the Refunding
Certificate (other than the Refunding Date) as such information may have been
revised by any verification procedures demanded by Lessee pursuant to Section
3.2.1(d) of the Lease.
"RENEWAL LEASE TERM" means, collectively, the Fixed Renewal Lease Terms and
the Subsequent Renewal Lease Terms, in each case, if any.
"RENEWAL NOTICE" is defined in Section 17.2.1 of the Lease.
"RENEWAL RENT" for the Aircraft means the rent payable therefor in respect
of a Renewal Lease Term determined pursuant to Section 17.2.2 of the Lease.
"RENT" means, collectively, Interim Rent, Basic Rent, Renewal Rent and
Supplemental Rent.
"REPLACEMENT AIRFRAME" means any airframe substituted for the Airframe
pursuant to Section 10 of the Lease.
"REPLACEMENT ENGINE" means an engine substituted for an Engine pursuant to
the Lease.
"RETURN ACCEPTANCE SUPPLEMENT" means a Return Acceptance Supplement, dated
as of the date the Aircraft is returned to Lessor pursuant to Section 5 of the
Lease, by Lessor and Lessee substantially in the form of Exhibit B to the Lease.
"SCHEDULED DELIVERY DATE" means the expected Delivery Date notified to each
Participant, Owner Trustee and Mortgagee by Lessee pursuant to Section 4.1 of
the Participation Agreement, which expected Delivery Date shall be a Business
Day not later than the Commitment Termination Date.
"SCHEDULED EXPIRATION DATE" is defined in Schedule 1 to the Lease.
"SCHEDULED RENEWAL TERM EXPIRATION DATE" means, in the case of the first
Fixed Renewal Lease Term, the second anniversary of the Scheduled Expiration
Date, in the case of the second Fixed Renewal Lease Term, the fourth anniversary
of the Scheduled Expiration Date and, in the case of any Subsequent Renewal
Lease Term, the day preceding the first anniversary of the commencement date of
such Subsequent Renewal Lease Term.
"SEC" means the Securities and Exchange Commission of the United States, or
any Government Entity succeeding to the functions of such Securities and
Exchange Commission.
"SECTION 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code or any
successor or analogous section of the federal bankruptcy Law in effect from time
to time.
"SECURED OBLIGATIONS" is defined in Section 2.06 of the Trust Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY" means a "security" as defined in Section 2(1) of the Securities
Act.
"SENIOR HOLDER" is defined in Section 2.14(c) of the Trust Indenture.
"SERIES" means any of Series A, Series B or Series C.
"SERIES A" or "SERIES A EQUIPMENT NOTES" means Equipment Notes issued under
the Trust Indenture and designated as "Series A" thereunder, in the Original
Amount and maturities and bearing interest as specified in Schedule I to the
Trust Indenture under the heading "Series A."
"SERIES B" or "SERIES B EQUIPMENT NOTES" means Equipment Notes issued under
the Trust Indenture and designated as "Series B" thereunder, in the Original
Amount and maturities and bearing interest as specified in Schedule I to the
Trust Indenture under the heading "Series B."
"SERIES C" or "SERIES C EQUIPMENT NOTES" means Equipment Notes issued under
the Trust Indenture and designated as "Series C" thereunder, in the Original
Amount and maturities and bearing interest as specified in Schedule I to the
Trust Indenture under the heading "Series C."
"SIMILAR AIRCRAFT" is defined in Schedule 1 to the Lease.
"SLV RATE" is defined in Schedule 1 to the Lease.
"SPECIAL DEFAULT" means (i) the failure by Lessee to pay any amount of
Interim Rent, Basic Rent, Renewal Rent, Stipulated Loss Value or Termination
Value when due or (ii) the occurrence of any Lease Default or Lease Event of
Default referred to in Section 14.5 of the Lease.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services.
"STIPULATED LOSS VALUE" means, with respect to the Aircraft, (a) during the
Base Lease Term, the amount determined by multiplying (i) the percentage set
forth in Schedule 3 to the Lease (as adjusted from time to time in accordance
with Section 3.2.1 of the Lease) opposite the Stipulated Loss Value Date by (ii)
Lessor's Cost and (b) during any Renewal Lease Term, the amount determined
pursuant to Section 17.2.3 of the Lease. Notwithstanding anything to the
contrary in any Operative Agreement, Stipulated Loss Value shall always be
sufficient to pay in full, as of the date of payment thereof (assuming timely
payment of the Equipment Notes prior to such date), the aggregate unpaid
principal amount of all Equipment Notes outstanding as of such date, together
with accrued and unpaid interest on all such Equipment Notes as of such date.
"STIPULATED LOSS VALUE DATE" means, for any month, the day in such month
specified in Schedule 3 to the Lease or, if such day is not a Business Day, the
immediately succeeding Business Day.
"SUBORDINATION AGENT" means Wilmington Trust Company, as subordination
agent under the Intercreditor Agreement.
"SUBORDINATION AGENT AGREEMENTS" means the Participation Agreement, the
Liquidity Facilities and the Intercreditor Agreement.
"SUBSEQUENT RENEWAL LEASE TERM" means each term for which the Lease is
extended by Lessee, if any, after the second Fixed Renewal Lease Term.
"SUPPLEMENTAL RENT" means, without duplication (a) all amounts,
liabilities, indemnities and obligations (other than Interim Rent, Basic Rent or
Renewal Rent but including Make-Whole Amount, if any) that Lessee assumes or
becomes obligated to or agrees to pay under any Lessee Operative Agreement to or
on behalf of Lessor or any other person, including, without limitation, payments
of Stipulated Loss Value, Termination Value and payments of indemnities under
Section 9 of the Participation Agreement, but excluding any amount as to which
Lessee is obligated to pay a pro rata share pursuant to clause (e) of this
definition, (b) (i) to the extent not payable (whether or not in fact paid)
under Section 6(a) of the Note Purchase Agreement (as originally in effect or
amended with the consent of the Owner Participant), an amount or amounts equal
to the fees payable to the relevant Liquidity Provider under Section 2.03 of
each Liquidity Facility and the related Fee Letter (as defined in the
Intercreditor Agreement) multiplied by a fraction the numerator of which shall
be the then outstanding aggregate principal amount of the Series A Equipment
Notes, Series B Equipment Notes and Series C Equipment Notes and the denominator
of which shall be the then outstanding aggregate principal amount of all "Series
A Equipment Notes", "Series B Equipment Notes" and "Series C Equipment Notes"
(each as defined in the Note Purchase Agreement); (ii) (x) the amount equal to
interest on any Downgrade Advance (other than any Applied Downgrade Advance)
payable under Section 3.07(e) of each Liquidity Facility minus Investment
Earnings from such Downgrade Advance multiplied by (y) the fraction specified in
the foregoing clause (i); (iii) (x) the amount equal to interest on any
Non-Extension Advance (other than any Applied Non-Extension Advance) payable
under Section 3.07(a)(i) of each Liquidity Facility minus Investment Earnings
from such Non-Extension Advance multiplied by (y) the fraction specified in the
forgoing clause (i); (iv) if any payment default shall have occurred and be
continuing with respect to interest on any Series A Equipment Notes, Series B
Equipment Notes or Series C Equipment Notes, (x) the excess, if any, of (1) an
amount equal to interest on any Unpaid Advance, Applied Downgrade Advance or
Applied Non-Extension Advance payable under Section 3.07(a) of each Liquidity
Facility over (2) the sum of Investment Earnings from any Final Advance plus any
amount of interest at the Payment Due Rate actually payable (whether or not in
fact paid) by Lessee in respect of the overdue scheduled interest on the
Equipment Notes in respect of which such Unpaid Advance, Applied Downgrade
Advance or Applied Non-Extension Advance was made multiplied by (y) a fraction
the numerator of which shall be the then aggregate overdue amounts of interest
on the Series A Equipment Notes, Series B Equipment Notes and Series C Equipment
Notes (other than interest becoming due and payable solely as a result of
acceleration of any such Equipment Notes) and the denominator of which shall be
the then aggregate overdue amounts of interest on all "Series A Equipment
Notes", "Series B Equipment Notes" and "Series C Equipment Notes" (each as
defined in the Note Purchase Agreement) (other than interest becoming due and
payable solely as a result of acceleration of any such "Equipment Notes"); and
(v) Lessee's pro rata share of any other amounts owed to the Liquidity Providers
by the Subordination Agent as borrower under each Liquidity Facility (other than
amounts due as repayment of advances thereunder or as interest on such
advances), except to the extent payable pursuant to clause (ii), (iii) or (iv)
above, (c) Lessee's pro rata share of all compensation and reimbursement of
expenses, disbursements and advances payable by Lessee under the Pass Through
Trust Agreements, (d) Lessee's pro rata share of all compensation and
reimbursement of expenses and disbursements payable to the Subordination Agent
under the Intercreditor Agreement except with respect to any income or franchise
taxes incurred by the Subordination Agent in connection with the transactions
contemplated by the Intercreditor Agreement, (e) Lessee's pro rata share of any
amount payable under Section 9.1 (and, if attributable thereto, Section 9.5) of
the Participation Agreement to any Pass Through Indemnitee to the extent such
amount relates to, results from or arises out of or in connection with (i) the
Pass Through Agreements or the enforcement of any of the terms of any of the
Pass Through Agreements, (ii) the offer, sale, or delivery or the Pass Through
Certificates or any interest therein or represented thereby or (iii) any breach
of or failure to perform or observe, or any other noncompliance with, any
covenant or agreement or other obligation to be performed by Lessee under any
Pass Through Agreement or the falsity of any representation or warranty of
Lessee in any Pass Through Agreement and (f) in the event Lessee requests any
amendment to any Operative Agreement or Pass Through Agreement, Lessee's pro
rata share of all reasonable fees and expenses (including, without limitation,
fees and disbursements of counsel) of the Escrow Agents and the Paying Agents in
connection therewith payable by the Pass Through Trustees under the Escrow
Agreements. As used herein, "Lessee's pro rata share" means as of any time a
fraction, the numerator of which is the principal balance then outstanding of
Equipment Notes and the denominator of which is the aggregate principal balance
then outstanding of all "Equipment Notes" (as such term is defined in each of
the Operative Indentures). For purposes of this definition, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral Account",
"Downgrade Advance", "Final Advance", "Investment Earnings", "Non-Extension
Advance" and "Unpaid Advance" shall have the meanings specified in each
Liquidity Facility.
"TAX ATTRIBUTE PERIOD" is defined in Section 1(e) of the Tax Indemnity
Agreement.
"TAX INDEMNITEE" means (a) First Security and Owner Trustee, (b) WTC and
Mortgagee, (c) each separate or additional trustee appointed pursuant to the
Trust Agreement or the Trust Indenture, (d) each Participant, (e) the Trust
Estate and the Trust Indenture Estate and (f) the respective successors,
assigns, agents and servants of the foregoing. For purposes of this definition,
the term "Owner Participant" shall include any member of an affiliated group
(within the meaning of Section 1504 of the Code) of which Owner Participant is,
or may become, a member if consolidated, joint or combined returns are filed for
such affiliated group for federal, state or local income tax purposes.
"TAX INDEMNITY AGREEMENT" means the Tax Indemnity Agreement, dated as of
even date with the Participation Agreement, between Lessee and Owner
Participant.
"TAXES" means all license, recording, documentary, registration and other
similar fees and all taxes, levies, imposts, duties, charges, assessments or
withholdings of any nature whatsoever imposed by any Taxing Authority, together
with any penalties, additions to tax, fines or interest thereon or additions
thereto.
"TAXING AUTHORITY" means any federal, state or local government or other
taxing authority in the United States, any foreign government or any political
subdivision or taxing authority thereof, any international taxing authority or
any territory or possession of the United States or any taxing authority
thereof.
"TERM" means the term, commencing on the Delivery Date, for which the
Aircraft is leased pursuant to Section 3 of the Lease, and shall include the
Interim Lease Term, the Base Lease Term and, if applicable, any Renewal Lease
Term; PROVIDED that if at the scheduled end of the Term the Aircraft or Airframe
is being used, or was within six (6) months prior thereto being used, by the
U.S. Government pursuant to CRAF, the Term shall be deemed extended for the
period necessary to accommodate usage of the Aircraft or Airframe pursuant to
CRAF plus six months thereafter, and Lessee shall be obligated to pay Basic Rent
with respect to any such period of extension at a semiannual rate equal to the
average of the Basic Rent paid during the Base Lease Term or the applicable
Renewal Lease Term, whichever shall have ended immediately prior to such
extension.
"TERMINATION DATE" means any Payment Date occurring after the fifth
anniversary of the Delivery Date on which the Lease shall terminate in
accordance with Section 9 of the Lease.
"TERMINATION VALUE" means, with respect to the Aircraft, the amount
determined by multiplying (a) the percentage set forth in Schedule 4 to the
Lease (as adjusted from time to time in accordance with Section 3.2.1 of the
Lease) opposite the Termination Value Date by (b) Lessor's Cost. Notwithstanding
anything to the contrary in any Operative Agreement, Termination Value shall
always be sufficient to pay in full, as of the date of payment thereof (assuming
timely payment of the Equipment Notes prior to such date), the aggregate unpaid
principal amount of all Equipment Notes outstanding as of such date, together
with accrued and unpaid interest on all such Equipment Notes as of such date.
"TERMINATION VALUE DATE" means, for any month, the day in such month
specified in Schedule 4 to the Lease or, if such day is not a Business Day, the
immediately succeeding Business Day.
"TRANSACTIONS" means the transactions contemplated by the Participation
Agreement and the other Operative Agreements.
"TRANSACTION EXPENSES" means: (i) the reasonable and actual fees, expenses
and disbursements incurred in connection with the negotiation, execution and
delivery of the Operative Agreements of (1) Richards, Layton & Finger, special
counsel for Mortgagee and the Loan Participants, such information to be
furnished by the Subordination Agent, (2) Ray, Quinney & Nebeker, special
counsel for the Owner Trustee under the Trust Agreement, such information to be
furnished by Owner Trustee, and(3) Lytle, Soule & Curlee, special counsel in
Oklahoma City, Oklahoma, such information to be furnished by Lessee, (ii) all
fees, taxes and other charges payable in connection with the recording or filing
of instruments and financing statements, such information to be furnished by
Lessee, (iii) the initial fee and reasonable and actual disbursements of Owner
Trustee under the Trust Agreement, such information to be furnished by the Owner
Trustee, (iv) the initial fee and reasonable and actual disbursements of
Mortgagee under the Trust Indenture, such information to be furnished by
Mortgagee, (v) the fee of the Appraiser with respect to the appraisal of the
Aircraft referred to in Section 5.1.2(xv) of the Participation Agreement, such
information to be furnished by the Owner Participant, (vi) the reasonable and
actual fees, out-of-pocket expenses and disbursements of special counsel to the
Owner Participant (as defined in Schedule 3 to the Participation Agreement),
such information to be furnished by the Owner Participant, and (vii) the equity
placement fee and reasonable disbursements of Lessee's Advisor, such information
to be furnished by Lessee.
"TRANSFER" means the transfer, sale, assignment or other conveyance of all
or any interest in any property, right or interest.
"TRANSFEREE" means a person to which any Owner Participant, Owner Trustee
or any Loan Participant or Note Holder purports or intends to Transfer any or
all of its right, title or interest in the Trust Estate or in its Equipment Note
and the Trust Indenture Estate, respectively, as described in Section 10.1.1(a),
10.1.2 or 10.1.3 (but excluding participants in any participation referred to in
Section 10.1.3), respectively, of the Participation Agreement.
"TRUST" means the trust created by the Trust Agreement.
"TRUST AGREEMENT" means the Trust Agreement , dated as of even date with
the Participation Agreement, between Owner Participant and Owner Trustee.
"TRUST ESTATE" means all estate, right, title and interest of Owner Trustee
in and to the Aircraft, the Lease, any Lease Supplement and the Purchase
Agreement including, without limitation, all amounts of Basic Rent and
Supplemental Rent including, without limitation, insurance proceeds and
requisition, indemnity or other payments of any kind for of with respect to the
Aircraft. Notwithstanding the foregoing, "Trust Estate" shall not include any
Excluded Payment.
"TRUST INDENTURE" means the Trust Indenture and Mortgage _____________,
dated as of even date with the Participation Agreement, between Owner Trustee
and Mortgagee.
"TRUST INDENTURE ESTATE" is defined in the "Granting Clause" of the Trust
Indenture.
"TRUST INDENTURE SUPPLEMENT" means a Trust Indenture and Mortgage
_____________ Supplement, substantially in the form of Exhibit A to the Trust
Indenture, with appropriate modifications to reflect the purpose for which it is
being used.
"TRUST SUPPLEMENT" means an agreement supplemental to the Basic Pass
Through Trust Agreement pursuant to which (i) a separate trust is created for
the benefit of the holders of the Pass Through Certificates of a class, (ii) the
issuance of the Pass Through Certificates of such class representing fractional
undivided interests in such trust is authorized and (iii) the terms of the Pass
Through Certificates of such class are established.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
"UNITED STATES" or "U.S." means the United States of America; PROVIDED,
that for geographic purposes, "United States" means, in aggregate, the 50 states
and the District of Columbia of the United States of America.
"U.S. AIR CARRIER" means any United States air carrier that is a Citizen of
the United States holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to chapter 447 of title 49 of the United
States Code for aircraft capable of carrying 10 or more individuals or 6000
pounds or more of cargo, and as to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the FAA Regulations, or
which may operate as an air carrier by certification or otherwise under any
successor or substitute provisions therefor or in the absence thereof.
"U.S. PERSON" means any Person described in Section 7701(a)(30) of the
Code.
"U.S. GOVERNMENT" means the federal government of the United States, or any
instrumentality or agency thereof the obligations of which are guaranteed by the
full faith and credit of the federal government of the United States.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, with respect to any specified
Debt, at the time of the determination thereof the number of years obtained by
dividing the then Remaining Dollar-years of such Debt by the then outstanding
principal amount of such Debt. The term "Remaining Dollar-years" shall mean the
amount obtained by (1) multiplying the amount of each then-remaining principal
payment on such Debt by the number of years (calculated at the nearest
one-twelfth) that will elapse between the date of determination of the Weighted
Average Life to Maturity of such Debt and the date of that required payment and
(2) totaling all the products obtained in clause (1) above.
"WET LEASE" means any arrangement whereby Lessee or a Permitted Sublessee
agrees to furnish the Aircraft, Airframe or any Engine to a third party pursuant
to which the Aircraft, Airframe or Engine shall at all times be in the
operational control of Lessee or a Permitted Sublessee, provided that Lessee's
obligations under this Lease shall continue in full force and effect
notwithstanding any such arrangement.
"WTC" means Wilmington Trust Company, a Delaware banking corporation, not
in its capacity as Mortgagee under the Trust Indenture, but in its individual
capacity.
|------------------------|
| SCHEDULE 1 |
| TO |
| PARTICIPATION AGREEMENT|
|------------------------|
ACCOUNTS; ADDRESSES
ACCOUNT FOR PAYMENTS ADDRESS FOR NOTICES
-------------------- -------------------
CONTINENTAL The Chase Manhattan Bank Continental Airlines, Inc.
AIRLINES, New York, New York 10081 2929 Allen Parkway
INC. Account No.: 910-2-499291 Suite 2010
ABA#: 021-000021 Houston, Texas 77019
Attention: Paul Trupia Attention: Executive Vice
Voice: 212-552-2829 President and Chief
Facsimile: 212-552-0107 Financial Officer
Reference: Continental Facsimile: (713) 520-6329
Lease _____
OWNER
PARTICIPANT
THE BOEING The Chase Manhattan Bank The Boeing Company
COMPANY New York, New York 10081 P.O. Box 3707
Account No.: 910-1-012764 Seattle, Washington 98124-3707
ABA#: 021-000021 Attention: Treasurer
Attention: Paul Trupia M/S 68-34
Voice: 212-552-2829 Facsimile: (206) 237-8746
Facsimile: 212-552-0107
Reference: Continental
Lease
FIRST First Security Bank, First Security Bank,
SECURITY National Association National Association
BANK, 79 South Main Street 79 South Main Street
NATIONAL Salt Lake City, Utah 84111 Salt Lake City, Utah 84111
ASSOCIATION Account No.: 051-0922115 Attention: Corporate Trust
Corporate Trust Department Department
ABA#: 124-0000-12 Facsimile: (801) 246-5053
Reference: Continental
Lease _____
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
MORTGAGEE ABA#: 021-000021 Wilmington, Delaware 19890
Attention: Corporate Trust Attention: Corporate Trust
Administration Administration
Reference: Continental Facsimile: (302) 651-8882
Lease _____
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
SUBORDINATION ABA#: 021-000021 Wilmington, Delaware 19890
AGENT Attention: Corporate Trust Attention: Corporate Trust
Administration Administration
Reference: Continental Facsimile: (302) 651-8882
Lease _____
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
PASS THROUGH ABA#: 021-000021 Wilmington, Delaware 19890
TRUSTEE FOR Attention: Corporate Trust Attention: Corporate Trust
THE 1997-4A Administration Administration
PASS THROUGH Reference: Continental Facsimile: (302) 651-8882
TRUST Lease ___
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
PASS THROUGH ABA#: 021-000021 Wilmington, Delaware 19890
TRUSTEE FOR Attention: Corporate Trust Attention: Corporate Trust
THE 1997-4B Administration Administration
PASS THROUGH Reference: Continental Facsimile: (302) 651-8882
TRUST Lease ___
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
PASS THROUGH ABA#: 021-000021 Wilmington, Delaware 19890
TRUSTEE FOR Attention: Corporate Trust Attention: Corporate Trust
THE 1997-4C Administration Administration
PASS THROUGH Reference: Continental Facsimile: (302) 651-8882
TRUST Lease ___
|------------------------|
| SCHEDULE 2 |
| TO |
| PARTICIPATION AGREEMENT|
|------------------------|
COMMITMENTS
PARTICIPANT PERCENTAGE OF LESSOR'S DOLLAR AMOUNT
COST
OWNER PARTICIPANT OWNER PARTICIPANT'S
PERCENTAGE
PASS THROUGH TRUSTEE LOAN PARTICIPANT'S
PTT PERCENTAGE
TOTAL 100%
|------------------------|
| SCHEDULE 3 |
| TO |
| PARTICIPATION AGREEMENT|
|------------------------|
CERTAIN TERMS
DEFINED TERM DEFINITION
BFE Amount _____________
Commitment Termination Date _____________
Lessor's Cost _____________
Lessee's Advisor
OP Jurisdiction _____________
Special counsel to the Owner _____________
Participant
-----------------------------------------------------------------------------
| CONFIDENTIAL: ANNEXES B, C AND D AND SCHEDULES 1, 2, 3 AND 4 OF THIS |
| LEASE AGREEMENT ARE SUBJECT TO RESTRICTIONS ON DISSEMINATION |
| SET FORTH IN SECTION 8 OF THE PARTICIPATION AGREEMENT (AS DEFINED HEREIN) |
-----------------------------------------------------------------------------
================================================================================
LEASE AGREEMENT ______
Dated as of _______________
Between
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
Not in its Individual Capacity,
except as expressly provided herein,
but solely as Owner Trustee,
Lessor
and
CONTINENTAL AIRLINES, INC.,
Lessee
--------------------------------------------------------
One Boeing Model [777-200] [737-524] [737-724] [737-824] Aircraft
Bearing United States Registration No. N______ and
Bearing Manufacturer's Serial No. ______ with two
[GE MODEL 90] [CFM MODEL 56-3-B1] [CFM MODEL 56-7B24]
[CFM MODEL 56-7B26] Engines
Bearing Engine Manufacturer's Serial Nos. ______ and ______
================================================================================
THE RIGHT, TITLE AND INTEREST OF LESSOR IN AND TO, AMONG OTHER THINGS,
THIS LEASE AGREEMENT HAS BEEN ASSIGNED TO AND IS SUBJECT TO A SECURITY INTEREST
IN FAVOR OF WILMINGTON TRUST COMPANY, A DELAWARE BANKING CORPORATION, AS
MORTGAGEE, UNDER THE TRUST INDENTURE AND MORTGAGE ______, DATED AS OF
_______________, FOR THE BENEFIT OF THE HOLDERS OF THE EQUIPMENT NOTES REFERRED
TO IN SUCH TRUST INDENTURE, ALL TO THE EXTENT PROVIDED IN SUCH TRUST INDENTURE.
THIS LEASE AGREEMENT HAS BEEN EXECUTED IN MULTIPLE COUNTERPARTS; TO THE EXTENT,
IF ANY, THAT THIS LEASE AGREEMENT CONSTITUTES CHATTEL PAPER (AS DEFINED IN THE
UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO
SECURITY INTEREST IN LESSOR'S RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE
AGREEMENT MAY BE PERFECTED THROUGH THE DELIVERY OR POSSESSION OF ANY COUNTERPART
OF THIS LEASE AGREEMENT OTHER THAN THE COUNTERPART OF THIS LEASE AGREEMENT THAT
CONTAINS THE ORIGINAL RECEIPT EXECUTED BY WILMINGTON TRUST COMPANY, AS
MORTGAGEE.
CONTENTS
SECTION 1. DEFINITIONS AND CONSTRUCTION.............................. 1
SECTION 2. DELIVERY AND ACCEPTANCE................................... 1
2.1 Delivery and Lease of Aircraft............................ 1
2.2 Acceptance by Lessee...................................... 2
SECTION 3. TERM AND RENT............................................. 2
3.1 Term...................................................... 2
3.2 Rent...................................................... 2
3.3 Payments.................................................. 6
SECTION 4. DISCLAIMER; CERTAIN AGREEMENTS OF LESSOR; SECTION
1110 MATTERS.............................................. 7
4.1 Disclaimer................................................ 7
4.2 Certain Agreements of Lessor.............................. 8
4.3 Quiet Enjoyment........................................... 8
4.4 Investment of Funds Held as Security...................... 8
4.5 Title Transfers by Lessor................................. 9
4.6 Lessor's Interest in Certain Engines...................... 10
4.7 Lease For U.S. Federal Income Tax Law Purposes;
Section 1110 of Bankruptcy Code........................... 10
SECTION 5. RETURN OF AIRCRAFT........................................ 10
5.1 Compliance with Annex B................................... 10
5.2 Storage and Related Matters............................... 10
5.3 Return of Other Engines................................... 11
5.4 Fuel...................................................... 11
SECTION 6. LIENS..................................................... 11
SECTION 7. REGISTRATION, OPERATION, POSSESSION, SUBLEASING AND
RECORDS................................................... 13
7.1 Registration and Operation................................ 13
7.2 Possession................................................ 15
7.3 Certain Limitations on Subleasing or Other
Relinquishment of Possession.............................. 19
SECTION 8. MAINTENANCE; REPLACEMENT AND POOLING OF PARTS;
ALTERATIONS, MODIFICATIONS AND ADDITIONS; OTHER
LESSEE COVENANTS.......................................... 20
8.1 Maintenance; Replacement and Pooling of Parts;
Alterations, Modifications and Additions.................. 20
8.2 Information, Certificates, Notices and Reports............ 20
SECTION 9. VOLUNTARY TERMINATION UPON OBSOLESCENCE................... 21
9.1 Right of Termination...................................... 21
9.2 Election by Lessor to Sell................................ 22
9.3 Retention of Aircraft by Lessor........................... 25
SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC....................... 26
10.1 Event of Loss With Respect to Aircraft.................... 26
10.2 Event of Loss With Respect to an Engine................... 29
10.3 Conditions to any Replacement............................. 30
10.4 Conveyance to Lessee...................................... 32
10.5 Application of Payments................................... 32
10.6 Requisition of Aircraft for Use........................... 33
10.7 Requisition of an Engine for Use.......................... 34
10.8 Application of Payments................................... 34
10.9 Application of Payments During Existence of a Lease
Event of Default.......................................... 34
SECTION 11. INSURANCE................................................. 35
11.1 Lessee's Obligation to Insure............................. 35
11.2 Insurance for Own Account................................. 35
11.3 Indemnification by Government in Lieu of Insurance........ 35
11.4 Application of Insurance Proceeds......................... 35
11.5 Application of Payments During Existence of Default....... 36
SECTION 12. INSPECTION................................................ 36
SECTION 13. ASSIGNMENT; MERGER; SUCCESSOR OWNER TRUSTEE............... 37
13.1 In General................................................ 37
13.2 Merger of Lessee.......................................... 37
13.3 Assignment Security for Lessor's Obligations.............. 38
13.4 Successor Owner Trustee................................... 39
SECTION 14. LEASE EVENTS OF DEFAULT................................... 39
14.1 Payments.................................................. 39
14.2 Insurance................................................. 40
14.3 Other Covenants........................................... 40
14.4 Representations and Warranties............................ 40
14.5 Bankruptcy and Insolvency................................. 41
SECTION 15. REMEDIES AND WAIVERS...................................... 42
15.1 Remedies.................................................. 42
15.2 Limitations Under CRAF.................................... 45
15.3 Right to Perform for Lessee............................... 46
15.4 Determination of Fair Market Rental Value and Fair
Market Sales Value........................................ 46
15.5 Remedies Cumulative....................................... 47
SECTION 16. LESSEE'S OBLIGATIONS; NO SETOFF, COUNTERCLAIM, ETC........ 47
SECTION 17. RENEWAL AND PURCHASE OPTIONS.............................. 48
17.1 Notices Generally......................................... 48
17.2 Renewal Options........................................... 48
17.3 Purchase Option........................................... 50
17.4 Appraisals................................................ 51
SECTION 18. MISCELLANEOUS............................................. 52
18.1 Amendments................................................ 52
18.2 Severability.............................................. 53
18.3 Third-Party Beneficiary................................... 53
18.4 Reproduction of Documents................................. 53
18.5 Counterparts.............................................. 54
18.6 Notices................................................... 54
18.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.......... 54
18.8 No Waiver................................................. 55
18.9 Entire Agreement.......................................... 56
ANNEXES, EXHIBITS AND SCHEDULES
- -------------------------------
ANNEX A Definitions
ANNEX B Return Conditions
ANNEX C Maintenance
ANNEX D Insurance
EXHIBIT A Form of Lease Supplement
EXHIBIT B Form of Return Acceptance Supplement
SCHEDULE 1 Certain Terms
SCHEDULE 2 Basic Rent
SCHEDULE 3 Stipulated Loss Value Schedule
SCHEDULE 4 Termination Value Schedule
SCHEDULE 5 Permitted Countries
SCHEDULE 6 Placards
LEASE AGREEMENT ______
LEASE AGREEMENT ______, dated as of _______________ (this "Agreement" or
"Lease"), between (a) FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, except as expressly
provided herein, but solely as Owner Trustee (this and all other capitalized
terms used but not defined herein shall have the respective meanings ascribed
thereto in Section 1 below) ("Lessor" or "Owner Trustee"), and (b) CONTINENTAL
AIRLINES, INC., a Delaware corporation ("Lessee").
RECITALS
A. Lessor and Lessee are parties to the Participation Agreement, pursuant
to which, among other things, Lessor and Lessee have agreed to enter into this
Agreement.
B. Pursuant to the Trust Agreement, Owner Participant has authorized
Lessor to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION
Capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in Annex A.
SECTION 2. DELIVERY AND ACCEPTANCE
2.1 DELIVERY AND LEASE OF AIRCRAFT
Lessor hereby agrees (subject to the satisfaction or waiver of the
conditions set forth in Section 5 of the Participation Agreement) to lease to
Lessee for the Term and Lessee hereby agrees (subject to the satisfaction or
waiver of the conditions set forth in Section 5 of the Participation Agreement)
to lease from Lessor for the Term, the Aircraft, commencing immediately upon
acquisition of the Aircraft by Lessor pursuant to the Purchase Agreement
Assignment.
2.2 ACCEPTANCE BY LESSEE
(a) By executing and delivering Lease Supplement No. 1, Lessee confirms to
Lessor that Lessee has duly and irrevocably accepted delivery of the Aircraft
for all purposes of this Agreement.
(b) Lessor has authorized one or more employees of Lessee, designated by
Lessee in writing, as the authorized representative or representatives of Lessor
to accept delivery of the Aircraft on behalf of Lessor pursuant to the Purchase
Agreement Assignment and the Participation Agreement. Lessee hereby agrees that
if delivery of the Aircraft shall be accepted by an employee or employees of
Lessee pursuant to such authorization by Lessor, such acceptance of delivery by
such employee or employees on behalf of Lessor shall, without further act,
irrevocably constitute acceptance by Lessee of the Aircraft for all purposes of
this Agreement.
SECTION 3. TERM AND RENT
3.1 TERM
The Aircraft shall be leased hereunder for the Term, unless this Agreement
or the leasing of the Aircraft is earlier terminated in accordance with any
provision of this Agreement. Lessee shall have the option to renew the leasing
of the Aircraft hereunder pursuant to, and subject to the terms and conditions
of, Section 17, for the Renewal Lease Term.
3.2 RENT
3.2.1 INTERIM RENT; BASIC RENT; ADJUSTMENTS TO
BASIC RENT AND CERTAIN OTHER AMOUNTS
(a) Lessee shall pay Interim Rent to Lessor on the last day of the Interim
Lease Term, which shall be allocated to the Interim Lease Term. During the Base
Lease Term, Lessee shall pay to Lessor, on each Payment Date, Basic Rent in the
amount equal to the percentage of Lessor's Cost specified in Schedule 2 for such
Payment Date, which shall be allocated to the Payment Period ending on such
Payment Date, if designated as a payment in arrears, or allocated to the Payment
Period commencing on such Payment Date, if designated as a payment in advance,
in each case as specified in Schedule 2, as such amount may be (i) adjusted
pursuant to Section 3.2.1(b) or (ii) increased in an amount equal to any
increase in the amount of interest due on the Equipment Notes on the relevant
Payment Date pursuant to Section 2(e) of the Registration Rights Agreement.
(b) Basic Rent, Stipulated Loss Values and Termination Values, shall be
subject to adjustment as follows:
(i) In the event that Transaction Expenses paid by Lessor pursuant
to Section 9.2 of the Participation Agreement are determined to be other
than 1.0% of Lessor's Cost, then in each case the Basic Rent percentages
set forth in Schedule 2, Stipulated Loss Value percentages set forth in
Schedule 3 and the Termination Value percentages set forth in Schedule 4
shall be recalculated (upwards or downwards) by the Owner Participant, on
or prior to the 120th day after the Delivery Date using the same methods
and assumptions used to calculate original Basic Rent, Stipulated Loss
Value and Termination Value percentages in order to (1) maintain the Owner
Participant's Net Economic Return and (2) minimize the Net Present Value
of Rents to Lessee to the extent possible consistent with clause (1)
hereof.
(ii) In the event of a refinancing as contemplated by Section 11 of
the Participation Agreement, then the Basic Rent percentages set forth in
Schedule 2, Stipulated Loss Value percentages set forth in Schedule 3 and
the Termination Value percentages set forth in Schedule 4 shall be
recalculated (upwards and downwards) by the Owner Participant as
contemplated by such Section to (1) maintain the Owner Participant's Net
Economic Return and (2) to the extent possible consistent with clause (1)
hereof, minimize the Net Present Value of Rents to Lessee.
(iii) In the event that Lessee is required to indemnify the Owner
Participant under the Tax Indemnity Agreement, then (A) in the event that
the Lessee agrees to satisfy such indemnity obligation pursuant to SECTION
__ OF THE TAX INDEMNITY AGREEMENT, the Basic Rent percentages set forth in
Schedule 2, and (B) in any event, the Stipulated Loss Value percentages
set forth in Schedule 3 and the Termination Value percentages set forth in
Schedule 4 shall be recalculated (upwards or downwards) by Owner
Participant, using the same methods and assumptions (except to the extent
such assumptions shall be varied to take into account the Tax Loss or
Foreign Tax Credit Loss (as each such term is defined in the Tax Indemnity
Agreement) that is the subject of such indemnification and any prior or
contemporaneous Tax Loss or Foreign Tax Credit Loss) used to calculate the
Basic Rent percentages, the Stipulated Loss Value percentages and the
Termination Value percentages on the Delivery Date, in order to (1)
maintain the Owner Participant's Net Economic Return and (2) to the extent
possible consistent with clause (1) hereof, minimize the Net Present Value
of Rents to Lessee.
(c) All adjustments pursuant to Section 3.2.1(b) shall be made as promptly
as practicable after either Owner Participant or Lessee gives notice to the
other that an event has occurred that requires an adjustment. Owner Participant
and Lessee shall give prompt notice to the other of any event requiring an
adjustment. Any recalculation of the percentages of Basic Rent, Stipulated Loss
Value and Termination Value shall be prepared by Owner Participant, subject to
verification at the request of Lessee in accordance with this Section 3.2.1(c),
on the basis of the same methodology and assumptions used by Owner Participant
in determining the percentages of Basic Rent, Stipulated Loss Value and
Termination Value as of the Delivery Date, except as such assumptions have been
modified to reflect the events giving rise to adjustments hereunder. Promptly
after an adjustment is made hereunder, Owner Participant shall deliver to Lessee
a description of such adjustment, setting forth in reasonable detail the
calculation thereof. All adjustments shall (i) be made so as to avoid
characterization of the Lease as a "disqualified leaseback or long-term
agreement" within the meaning of Section 467 of the Code unless such adjustments
are made in a manner that reflects the effect of such characterization and (ii)
be in compliance with the requirements of Sections 4.02(5), 4.07(l) and, on a
prospective basis, 4.08(1) of Revenue Procedure 75-28, except to the extent that
on the Delivery Date the Lease constituted a "disqualified leaseback or
long-term agreement" or was not in compliance with the regulations referred to
in clause (ii). All adjustments required pursuant to Section 3.2.1(b) shall be
set forth in a Lease Supplement or in an amendment to this Lease, and , promptly
after execution thereof by Lessor and Lessee, Lessee shall give a copy thereof
to Mortgagee.
(d) If Lessee believes that any calculations by Owner Participant pursuant
to Section 3.2.1(c) are in error, and if, after consultation, Lessee and Owner
Participant are unable to agree on an adjustment, then a nationally recognized
firm of accountants selected by Lessee and reasonably satisfactory to Owner
Participant shall verify such calculations. Owner Participant will make
available to such firm, but not, in any circumstances, to Lessee or any
representative of Lessee, the methodology and assumptions referred to in Section
3.2.1(c) and any modifications thereto made to reflect the events giving rise to
adjustments hereunder (subject to the execution by such firm of a
confidentiality agreement, reasonably acceptable to Owner Participant,
prohibiting disclosure of such methodology and assumptions to any third party).
The determination by such firm of accountants shall be final. Lessee will pay
the reasonable costs and expenses of such further verification by such
accountants, provided that if it results in a decrease in Basic Rent which
decreases the remaining Net Present Value of Rents by ten or more basis points
from the remaining Net Present Value of Rents as recalculated by the Owner
Participant, then the Owner Participant will pay such costs and expenses.
(e) Notwithstanding anything to the contrary in any Operative Agreement,
the amount of the payment of Basic Rent due and payable on each Payment Date
shall be at least sufficient to pay in full, as of such Payment Date (assuming
timely payment of the Equipment Notes prior to such Date), the aggregate
principal amount of scheduled installments due on the Equipment Notes
outstanding on such Payment Date, together with the accrued and unpaid interest
thereon, due on such Payment Date in respect of the Equipment Notes; provided,
however, that no installment of Basic Rent shall be increased to the extent such
increase would be based upon (i) any attachment or diversion of Basic Rent on
account of Lessor Liens, (ii) any modification of the payment terms of the
Equipment Notes, other than as required or permitted by any Operative Agreement
(including, without limitation, as permitted upon the occurrence of a Lease
Event of Default) or (iii) the acceleration of any Equipment Note or Equipment
Notes due solely to the occurrence of an Indenture Event of Default that does
not constitute a Lease Event of Default.
3.2.2 SUPPLEMENTAL RENT
Lessee shall pay to Lessor, or to whosoever shall be entitled thereto, any
and all Supplemental Rent when and as the same shall become due and owing.
Lessee will also pay to Lessor, or to whosoever shall be entitled thereto as
Supplemental Rent, to the extent permitted by applicable Law, interest at the
Payment Due Rate on any part of any amount of Rent (including, without
limitation, Supplemental Rent) not paid by 12:30 p.m., New York time, on the
date when due (so long as, in the case of any person not a party to the
Participation Agreement, Lessee had received timely notice of the account to
which such payment was required to be made), for the period from and including
the date on which the same was due to, but excluding, the date of payment in
full.
3.3 PAYMENTS
(a) Payments of Rent by Lessee shall be paid by wire transfer of
immediately available Dollars, not later than 12:30 p.m., New York time, on the
date when due, to the account of Lessor specified in Schedule 1 to the
Participation Agreement or to such other account in the United States as
directed by Lessor to Lessee in writing at least 10 Business Days prior to the
date such payment of Rent is due or, in the case of any payment of Supplemental
Rent expressly payable to a person other than Lessor, to the person that shall
be entitled thereto to such account in the United States as such person may
specify from time to time to Lessee at least 10 Business Days prior to the date
such payment of Rent is due.
(b) Except as otherwise expressly provided herein, whenever any payment of
Rent shall be due on a day that is not a Business Day, such payment shall be
made on the next day that is a Business Day, and, if such payment is made on
such next Business Day, no interest shall accrue on the amount of such payment
during such extension.
(c) So long as Lessee has not received written notice from the Mortgagee
that the Lien of the Trust Indenture has been discharged, and notwithstanding
Section 3.3(a), Lessor hereby directs, and Lessee agrees, that all payments of
Rent and all other amounts payable by Lessee hereunder, other than Excluded
Payments, shall be paid directly to Mortgagee on behalf of Lessor by wire
transfer of immediately available Dollars to the account of Mortgagee specified
in Schedule 1 to the Participation Agreement, or to such other account in the
United States as Mortgagee may specify by written notice to Lessor and Lessee at
least 10 Business Days prior to the date such payment of Rent is due.
(d) Excluded Payments shall be paid by wire transfer of immediately
available Dollars to the account of the person specified in the Participation
Agreement or, if not so specified, to such account in the United States as may
be specified by such person by written notice to Lessor and Lessee from time to
time at least 10 Business Days prior to the date such payment is required to be
made.
(e) All computations of interest under this Agreement shall be made on the
basis of a year of 360 days comprised of twelve 30-day months.
SECTION 4. DISCLAIMER; CERTAIN AGREEMENTS OF LESSOR; SECTION
1110 MATTERS
4.1 DISCLAIMER
LESSOR LEASES AND LESSEE TAKES THE AIRCRAFT "AS-IS, WHERE-IS." LESSEE
ACKNOWLEDGES AND AGREES THAT AS BETWEEN LESSEE AND EACH OF LESSOR, MORTGAGEE AND
ANY PARTICIPANT (i) LESSEE HAS SELECTED THE AIRCRAFT AND MANUFACTURER THEREOF
AND (ii) NONE OF LESSOR, MORTGAGEE AND ANY PARTICIPANT MAKES, HAS MADE OR SHALL
BE DEEMED TO HAVE MADE, AND EACH WILL BE DEEMED TO HAVE EXPRESSLY DISCLAIMED,
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO:
(v) THE AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION, ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE OR FOR ANY PARTICULAR
PURPOSE OF THE AIRFRAME, ANY ENGINE OR ANY PART THEREOF;
(w) THE QUALITY OF THE MATERIAL OR WORKMANSHIP WITH RESPECT TO THE
AIRFRAME, ANY ENGINE OR ANY PART THEREOF;
(x) THE ABSENCE OF LATENT OR ANY OTHER DEFECT IN THE AIRFRAME, ANY
ENGINE OR ANY PART THEREOF, WHETHER OR NOT DISCOVERABLE;
(y) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
COPYRIGHT OR THE LIKE; OR
(z) THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR ANY
OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE AIRFRAME, ANY ENGINE OR ANY PART THEREOF.
4.2 CERTAIN AGREEMENTS OF LESSOR
Unless a Lease Event of Default shall have occurred and be continuing,
Lessor agrees to make available to Lessee such rights as Lessor may have under
any warranty with respect to the Aircraft made, or made available, by Airframe
Manufacturer or Engine Manufacturer or any of their respective subcontractors or
suppliers, as the case may be, pursuant to and in accordance with the terms of
the Purchase Agreement Assignment.
4.3 QUIET ENJOYMENT
So long as no Lease Event of Default shall have occurred and be
continuing, Lessor shall not interfere with Lessee's rights hereunder to
continued possession, use and operation of, and quiet enjoyment of, the Aircraft
during the Term.
4.4 INVESTMENT OF FUNDS HELD AS SECURITY
4.4.1 INVESTMENT
Any moneys required to be paid to or retained by Lessor that are required
to be paid to Lessee or applied as provided herein shall, until paid to Lessee
as provided herein or applied as provided herein, be invested by Lessor from
time to time as directed in writing by Lessee (or, if Lessee fails to so direct,
by or as directed by Lessor in its sole discretion) and at the expense and risk
of Lessee in Cash Equivalents so long as such Cash Equivalents specified by
Lessee or Lessor, as the case may be, can be acquired by Lessor using its best
efforts; provided, that so long as the Lien of the Trust Indenture shall not
have been discharged, such moneys shall be invested and held by Mortgagee, as
assignee of Lessor, in accordance with this Lease and upon discharge of such
Lien, Mortgagee shall pay any such money held by it to Lessor to be held and
invested in accordance with this Section.
4.4.2 PAYMENT OF GAIN OR LOSS
Any net gain (including interest received) realized as the result of
investments pursuant to Section 4.4.1 (net of any fees, commissions and other
reasonable expenses, if any, incurred in connection with such investment) shall
be held and applied in the same manner as the principal amount is to be held and
applied hereunder. Lessee will promptly pay to Lessor, on demand, the amount of
any loss realized as the result of any such investment (together with any fees,
commissions and other reasonable expenses, if any, incurred in connection with
such investment), such amount so paid to be held and applied by Lessor as
contemplated in Section 4.4.1 above.
4.4.3 LIMITATION OF LIABILITY
All investments under this Section 4.4 shall be at the expense and risk of
Lessee, and Lessor and Mortgagee shall not be liable for any loss resulting from
any investment made under this Section 4.4 other than by reason of its willful
misconduct or gross negligence. Any such investment may be sold (without regard
to its maturity) by Lessor without instructions whenever such sale is necessary
to make a distribution required by this Lease.
4.5 TITLE TRANSFERS BY LESSOR
If Lessor shall be required to transfer title to the Aircraft, Airframe or
any Engine to Lessee or any other person pursuant to this Lease, then (a) Lessor
shall (1) transfer to Lessee or such other person, as the case may be, all of
Lessor's right, title and interest in and to the Aircraft, Airframe or such
Engine, as the case may be, free and clear of all Lessor Liens, (2) so long as
the Lien of the Trust Indenture has not been discharged, comply with the Trust
Indenture relating to the release of the Aircraft, Airframe or such Engine, (3)
assign to Lessee or such other person, as the case may be, if and to the extent
permitted under the Purchase Agreement, all warranties of Airframe Manufacturer
and Engine Manufacturer with respect to the Aircraft, Airframe or such Engine,
and (4) assign to Lessee or such other person, as the case may be, if and to the
extent permitted, all claims, if any, for damage to the Aircraft, Airframe or
such Engine, in each case free of Lessor Liens, and without recourse or warranty
of any kind whatsoever (except as to the transfer described in clause (1) above
and as to the absence of such Lessor Liens, as aforesaid), and (b) Lessor shall
promptly deliver to Lessee or such other person, as the case may be, a bill of
sale and agreements of assignment, evidencing such transfer and assignment, and
such other instruments of transfer, all in form and substance reasonably
satisfactory to Lessee (or such other person, as the case may be), as Lessee (or
such other person, as the case may be) may reasonably request.
4.6 LESSOR'S INTEREST IN CERTAIN ENGINES
Lessor hereby agrees for the benefit of each lessor, conditional seller,
indenture trustee or secured party of any engine leased to, or purchased by,
Lessee or any Permitted Sublessee subject to a lease, conditional sale, trust
indenture or other security agreement that Lessor, its successors and assigns
will not acquire or claim, as against such lessor, conditional seller, indenture
trustee or secured party, any right, title or interest in any engine as the
result of such engine being installed on the Airframe at any time while such
engine is subject to such lease, conditional sale, trust indenture or other
security agreement and owned by such lessor or conditional seller or subject to
a trust indenture or security interest in favor of such indenture trustee or
secured party.
4.7 LEASE FOR U.S. FEDERAL INCOME TAX LAW PURPOSES;
SECTION 1110 OF BANKRUPTCY CODE
(a) Lessee and Lessor agree that this Lease is, and shall be treated as, a
lease for U.S. federal income tax purposes of the Aircraft, Airframe, Engines
and Parts.
(b) It is the intention of each of Lessee and Lessor that Lessor (and
Mortgagee as assignee of Lessor under the Trust Indenture) shall be entitled to
the benefits of Section 1110 with respect to the right to take possession of the
Aircraft, Airframe, Engines and Parts as provided in this Lease.
SECTION 5. RETURN OF AIRCRAFT
5.1 COMPLIANCE WITH ANNEX B
Lessee shall comply with each of the provisions of Annex B hereto, which
provisions are hereby incorporated by this reference as if set forth in full
herein.
5.2 STORAGE AND RELATED MATTERS
If Lessor gives written notice to Lessee not less than 60 days nor more
than 120 days prior to the end of the Term requesting storage of the Aircraft
upon its return hereunder, Lessee will provide Lessor, or cause Lessor to be
provided, with outdoor parking facilities for the Aircraft for a period up to 30
days, commencing on the date of such return, and upon request of Lessor to
Lessee made at least 10 days prior to the end of such initial 30 day period, for
an additional 30 day period commencing upon expiration of such initial period,
at such storage facility in the 48 contiguous states of the United States as
Lessee may select. Lessee shall, at Lessor's written request, maintain insurance
(if available) for the Aircraft during such storage period, PROVIDED that Lessor
shall reimburse Lessee for Lessee's out-of-pocket cost of providing such
insurance. Such storage shall be at Lessor's risk, and Lessor shall pay all
applicable storage fees, except that Lessee shall pay the parking fees for the
initial 30 day storage period; PROVIDED that Lessee's obligation to provide
parking shall be subject to Lessor entering into an agreement prior to the
commencement of the storage period with the storage facility providing, among
other things, that Lessor shall bear all maintenance charges and other costs
(other than parking fees for the initial 30 day period) incurred.
5.3 RETURN OF OTHER ENGINES
In the event that any Engine owned by Lessor shall not be installed on the
Airframe at the time of return hereunder, Lessee shall be required to return the
Airframe hereunder with a Replacement Engine meeting the requirements of, and in
accordance with, Section 10 hereof and Annex B hereto. Thereupon, Lessor will
transfer to Lessee the Engine constituting part of such Aircraft but not
installed on such Airframe at the time of the return of the Airframe.
5.4 FUEL
Upon the return of the Airframe upon any termination of this Lease, Lessor
shall pay Lessee, as compensation for any fuel or oil contained in the fuel or
oil tanks of such Airframe, the value of such fuel or oil at the price paid by
Lessee for such fuel or oil, PROVIDED that if the Aircraft is being returned in
connection with the exercise of remedies pursuant to Section 15, Lessor shall
have no obligation to make such payment to Lessee until Lessor shall have been
paid all amounts due to it pursuant to Section 15.
SECTION 6. LIENS
Lessee shall not, directly or indirectly, create, incur, assume or suffer
to exist any Lien on or with respect to the Aircraft, the Airframe, any Engine
or any Part, title to any of the foregoing or any interest of Lessee therein, or
the Lessee's rights in and to this Lease or any Permitted Sublease, except (a)
the respective rights of Lessor, Mortgagee, the Participants or Lessee under the
Operative Agreements, or of any Permitted Sublessee under any Permitted
Sublease; (b) Lessor Liens; (c) the rights of others under agreements or
arrangements to the extent permitted by the terms of Sections 7.2 and 7.3; (d)
Liens for Taxes of Lessee (and its U.S. federal tax law consolidated group), or
Liens for Taxes of any Tax Indemnitee (and its U.S. federal tax law consolidated
group) for which Lessee is obligated to indemnify such Tax Indemnitee under any
of the Lessee Operative Agreements, in any such case either not yet due or being
contested in good faith by appropriate proceedings so long as such Liens and
such proceedings do not involve any material risk of the sale, forfeiture or
loss of the Aircraft, the Airframe, any Engine or the interest of any
Participant therein or impair the lien of the Trust Indenture; (e)
materialmen's, mechanics', workers', repairers', employees' or other like Liens
arising in the ordinary course of business for amounts the payment of which is
either not yet delinquent for more than 60 days or is being contested in good
faith by appropriate proceedings, so long as such Liens and such proceedings do
not involve any material risk of the sale, forfeiture or loss of the Aircraft,
the Airframe, any Engine or the interest of any Participant therein or impair
the lien of the Trust Indenture; (f) Liens arising out of any judgment or award
against Lessee (or against any Permitted Sublessee), so long as such judgment
shall, within 60 days after the entry thereof, have been discharged or vacated,
or execution thereof stayed pending appeal or shall have been discharged,
vacated or reversed within 60 days after the expiration of such stay, and so
long as during any such 60-day period there is not, or any such judgment or
award does not involve, any material risk of the sale, forfeiture or loss of the
Aircraft, the Airframe, any Engine or the interest of any Participant therein or
impair the lien of the Trust Indenture, and (g) any other Lien with respect to
which Lessee (or any Permitted Sublessee) shall have provided a bond, cash
collateral or other security adequate in the reasonable opinion of Lessor.
Lessee shall promptly take (or cause to be taken) such action as may be
necessary duly to discharge (by bonding or otherwise) any Lien not excepted
above if the same shall at any time arise in respect of the Aircraft, the
Airframe, any Engine or any Part during the Term.
SECTION 7. REGISTRATION, OPERATION, POSSESSION, SUBLEASING
AND RECORDS
7.1 REGISTRATION AND OPERATION
7.1.1 REGISTRATION AND RECORDATION
Subject to the compliance by Lessor and Owner Participant with their
respective obligations under Section 13 of the Participation Agreement, Lessee
shall cause the Aircraft to be, and at all times during the Term to remain, duly
registered with the FAA under the Act or with such other country of registry as
shall be permitted under Section 7.1.2 below, in the name of Lessor as owner and
lessor (except to the extent that such registration under the Act cannot be
effected with the FAA because of Lessor's or Owner Participant's failure to
comply with the citizenship requirements for registration of the Aircraft under
the Act). Lessor shall execute and deliver all such documents as Lessee (or any
Permitted Sublessee) may reasonably request for the purpose of effecting and
continuing such registration. Unless Mortgagee has given Lessee notice that the
Trust Indenture has been discharged, Lessee shall also cause the Trust Indenture
to be duly recorded and at all times maintained of record as a first-priority
perfected mortgage (subject to Permitted Liens) on the Aircraft, the Airframe
and each of the Engines (except to the extent such perfection or priority cannot
be maintained solely as a result of the failure by Lessor or Mortgagee to
execute and deliver any necessary documents).
7.1.2 REREGISTRATION
So long as no Lease Event of Default shall have occurred and be
continuing, Lessee may, by written notice to Lessor, request to change the
country of registration of the Aircraft. Any such change in registration shall
be effected only in compliance with, and subject to all of the conditions set
forth in, Section 7.6.11 of the Participation Agreement.
7.1.3 MARKINGS
If permitted by applicable Law, on or reasonably promptly after the
Delivery Date, Lessee will cause to be affixed to, and maintained in, the
cockpit of the Airframe and on each Engine, in each case, in a clearly visible
location (it being understood that the location of such placards, as identified
to the Owner Participant prior to the Delivery Date, shall be deemed to be in
compliance with this requirement), a placard of a reasonable size and shape
bearing the legend, in English, set forth in Schedule 6. Such placards may be
removed temporarily, if necessary, in the course of maintenance of the Airframe
or Engines. If any such placard is damaged or becomes illegible, Lessee shall
promptly replace it with a placard complying with the requirements of this
Section 7.1.3.
7.1.4 COMPLIANCE WITH LAWS
Lessee shall not, and shall not allow any other person to, operate, use,
maintain, service, repair or overhaul the Aircraft (a) in violation of any Law
binding on or applicable to the Aircraft, the Airframe or any Engine, or (b) in
violation of any airworthiness certificate, license or registration of any
Government Entity relating to the Aircraft, the Airframe or any Engine, except
(1) immaterial or non-recurring violations with respect to which corrective
measures are taken promptly by Lessee or a Permitted Sublessee, as the case may
be, upon discovery thereof, and (2) to the extent Lessee or any Permitted
Sublessee is contesting the validity or application of any such Law or
requirement relating to any such certificate, license or registration in good
faith in any reasonable manner which does not involve any material risk of the
sale, forfeiture or loss of the Aircraft, the Airframe, any Engine or the
interest of any Participant therein, any material risk of criminal liability or
of material civil penalty against Lessor, Mortgagee or any Participant or impair
the lien of the Trust Indentures.
7.1.5 OPERATION
Lessee agrees not to operate, use or locate the Aircraft, the Airframe or
any Engine, or allow the Aircraft, the Airframe or any Engine to be operated,
used or located (a) in any area excluded from coverage by any insurance required
by the terms of Section 11, except in the case of a requisition by the U.S.
Government where Lessee obtains an indemnity in lieu of such insurance from the
U.S. Government, or insurance from the U.S. Government, covering such area, in
accordance with Section 11.3 or (b) in any recognized area of hostilities unless
fully covered in accordance with Annex D by war-risk insurance as required by
the terms of Section 11 (including, without limitation, Section 11.3), unless in
any case referred to in this Section 7.1.5 the Aircraft is only temporarily
operated, used or located in such area as a result of an emergency, equipment
malfunction, navigational error, hijacking, weather condition or other similar
unforeseen circumstances, so long as Lessee diligently and in good faith
proceeds to remove the Aircraft from such area.
7.2 POSSESSION
Lessee will not, without the prior written consent of Lessor, sublease or
otherwise in any manner deliver, transfer or relinquish possession of the
Aircraft, the Airframe or any Engine or install any Engine, or permit any Engine
to be installed, on any airframe other than the Airframe; PROVIDED, HOWEVER,
subject to the provisions of Section 7.3, Lessee may, without such prior written
consent:
7.2.1 INTERCHANGE AND POOLING
Subject or permit any Permitted Sublessee to subject any Engine to normal
interchange agreements or pooling agreements or arrangements, in each case
customary in the commercial airline industry and entered into by Lessee or such
Permitted Sublessee, as the case may be, in the ordinary course of business;
PROVIDED, HOWEVER, that if Lessor's title to any such Engine is divested under
any such agreement or arrangement, then such Engine shall be deemed to have
suffered an Event of Loss as of the date of such divestiture, with the effect
that Lessee shall be required to replace such Engine with a Replacement Engine
meeting the requirements of, and in accordance with, Section 10.
7.2.2 TESTING AND SERVICE
Deliver or permit any Permitted Sublessee to deliver possession of the
Aircraft, Airframe, any Engine or any Part (i) to the manufacturer thereof or to
any third-party maintenance provider, for testing, service, repair, maintenance
or overhaul work on the Aircraft, Airframe, any Engine or any Part, or, to the
extent required or permitted by the terms of Annex C, for alterations or
modifications in or additions to the Aircraft, Airframe or any Engine or (ii) to
any Person for the purpose of transport to a Person referred to in the preceding
clause (i).
7.2.3 TRANSFER TO U.S. GOVERNMENT
Transfer or permit any Permitted Sublessee to transfer possession of the
Aircraft, Airframe or any Engine to the U.S. Government, in which event Lessee
shall promptly notify Lessor and Mortgagee in writing of any such transfer of
possession and, in the case of any transfer pursuant to CRAF, in such
notification shall identify by name, address and telephone numbers the
Contracting Office Representative or Representatives for the Military Airlift
Command of the United States Air Force to whom notices must be given and to whom
requests or claims must be made to the extent applicable under CRAF.
7.2.4 INSTALLATION OF ENGINES ON OWNED
AIRCRAFT
Install or permit any Permitted Sublessee to install an Engine on an
airframe owned by Lessee or such Permitted Sublessee, as the case may be, free
and clear of all Liens, except (a) Permitted Liens and those that do not apply
to the Engines and (b) the rights of third parties under normal interchange or
pooling agreements and arrangements of the type that would be permitted under
Section 7.2.1.
7.2.5 INSTALLATION OF ENGINES ON OTHER
AIRFRAMES
Install or permit any Permitted Sublessee to install an Engine on an
airframe leased to Lessee or such Permitted Sublessee, or purchased by Lessee or
such Permitted Sublessee subject to a mortgage, security agreement, conditional
sale or other secured financing arrangement, but only if (a) such airframe is
free and clear of all Liens, except (i) the rights of the parties to such lease,
or any such secured financing arrangement, covering such airframe and (ii) Liens
of the type permitted by clauses (a) and (b) of Section 7.2.4 and (b) Lessee or
Permitted Sublessee, as the case may be, shall have received from the lessor,
mortgagee, secured party or conditional seller, in respect of such airframe, a
written agreement (which may be a copy of the lease, mortgage, security
agreement, conditional sale or other agreement covering such airframe), whereby
such Person agrees that it will not acquire or claim any right, title or
interest in, or Lien on, such Engine by reason of such Engine being installed on
such airframe at any time while such Engine is subject to this Lease or is owned
by Lessor.
7.2.6 INSTALLATIONS OF ENGINES ON FINANCED
AIRCRAFT
Install or permit any Permitted Sublessee to install an Engine on an
airframe owned by Lessee or such Permitted Sublessee, leased to Lessee or such
Permitted Sublessee, or purchased by Lessee or such Permitted Sublessee subject
to a conditional sale or other security agreement under circumstances where
neither Section 7.2.4 or 7.2.5 is applicable; PROVIDED, HOWEVER, that any such
installation shall be deemed an Event of Loss with respect to such Engine, and
Lessee shall comply with Section 10.2 hereof in respect thereof.
7.2.7 SUBLEASING
With respect to the Aircraft, Airframe or any Engine, so long as no Lease
Event of Default shall have occurred and is continuing, enter into a sublease
with any Permitted Air Carrier, but only if:
(a) Lessee shall provide written notice to Lessor and Mortgagee (such
notice in the event of a sublease to a U.S. Air Carrier to be given promptly
after entering into any such sublease or, in the case of a sublease to any other
Permitted Air Carrier, 10 days in advance of entering into such sublease);
(b) At the time that Lessee enters into such sublease, such Permitted Air
Carrier shall not be subject to any bankruptcy, insolvency, liquidation,
reorganization, dissolution or similar proceeding, and shall not have
substantially all of its property in the possession of any liquidator, trustee,
receiver or similar person;
(c) Any such sublease (i) shall not extend beyond the expiration of the
Base Lease Term or any Renewal Lease Term then in effect unless Lessee shall
have irrevocably committed to purchase the Aircraft, (ii) shall include
provisions for the maintenance, operation, possession, inspection and insurance
of the Aircraft that are the same in all material respects as the applicable
provisions of this Lease and (iii) shall be expressly subject and subordinate to
all the terms of this Agreement and to the rights, powers and remedies of Lessor
hereunder, including, without limitation, Lessor's rights under Section 15 to
repossess the Aircraft, Airframe and Engines and to terminate such sublease upon
the occurrence of a Lease Event of Default;
(d) In connection with a sublease to a Permitted Foreign Air Carrier, (1)
the United States maintains diplomatic relations with the country of domicile of
such Permitted Foreign Air Carrier (or, in the case of Taiwan, diplomatic
relations at least as good as those in effect on the Delivery Date) and (2)
Lessee shall have furnished Lessor and Mortgagee a favorable opinion of counsel,
reasonably satisfactory to Lessor, in the country of domicile of such Permitted
Foreign Air Carrier, that (i) the terms of such sublease are the legal, valid
and binding obligations of the parties thereto enforceable under the laws of
such jurisdiction, (ii) it is not necessary for Owner Participant, Lessor or
Mortgagee to register or qualify to do business in such jurisdiction, if not
already so registered or qualified, as a result, in whole or in part, of the
proposed sublease, (iii) Lessor's title to, and Mortgagee's Lien in respect of,
the Aircraft, Airframe and Engines will be recognized in such jurisdiction, (iv)
the Laws of such jurisdiction of domicile require fair compensation by the
government of such jurisdiction, payable in a currency freely convertible into
Dollars, for the loss of title to the Aircraft, Airframe or Engines in the event
of the requisition by such government of such title (unless Lessee shall provide
insurance in the amounts required with respect to hull insurance under Section
11 covering the requisition of title to the Aircraft, Airframe or Engines by the
government of such jurisdiction so long as the Aircraft, Airframe or Engines are
subject to such sublease) and (v) the agreement of such Permitted Air Carrier
that its rights under the sublease are subject and subordinate to all the terms
of this Lease is enforceable against such Permitted Air Carrier under applicable
law;
(e) Lessee shall furnish to Lessor, Mortgagee and Owner Participant
evidence reasonably satisfactory to Lessor that the insurance required by
Section 11 remains in effect;
(f) All necessary documents shall have been duly filed, registered or
recorded in such public offices as may be required fully to preserve the title
of Lessor, and the first priority security interest (subject to Permitted Liens)
of Mortgagee, in the Aircraft, Airframe and Engines;
(g) Lessee shall reimburse Lessor, Mortgagee and Owner Participant for all
of their reasonable out-of-pocket fees and expenses, including, without
limitation, reasonable fees and disbursements of counsel, incurred by Lessor,
Mortgagee and Owner Participant in connection with any such sublease;
(h) For all purposes of this Section 7.2.7, the term "sublease" shall be
deemed to include interchange agreements with respect to the Aircraft or
Airframe; and
(i) No such sublease shall be made to a Permitted Foreign Air Carrier
prior to the close of the Tax Attribute Period, unless Lessee prepays on a
lump-sum basis any liability due under the Tax Indemnity Agreement as a result
of such sublease based upon the assumption that such sublease were to continue
for the remainder of the term of such sublease.
7.3 CERTAIN LIMITATIONS ON SUBLEASING OR OTHER
RELINQUISHMENT OF POSSESSION
Notwithstanding anything to the contrary in Section 7.2:
(a) The rights of any person that receives possession of the Aircraft in
accordance with Section 7.2 shall be subject and subordinate to all the terms of
this Lease, and to Lessor's rights, powers and remedies hereunder, including,
without limitation (i) Lessor's right to repossess the Aircraft pursuant to
Section 15, (ii) Lessor's right to terminate and avoid such sublease, delivery,
transfer or relinquishment of possession upon the occurrence of a Lease Event of
Default and (iii) the right to require such person to forthwith deliver the
Aircraft, the Airframe and Engines subject to such transfer upon the occurrence
of a Lease Event of Default;
(b) Lessee shall remain primarily liable hereunder for the performance of
all the terms of this Lease to the same extent as if such transfer had not
occurred, and no transfer of possession of the Aircraft, the Airframe, any
Engine or any Part shall in any way discharge or diminish any of Lessee's
obligations to Lessor hereunder or under any Operative Agreement;
(c) Lessee shall ensure that no sublease, delivery, transfer or
relinquishment permitted under Section 7.2 shall affect the United States
registration of the Aircraft, unless also made in accordance with the provisions
of Section 7.1.2.
(d) Any event that constitutes or would, with the passage of time,
constitute an Event of Loss under paragraph (c), (d), or (e) of the definition
of such term (as set forth in Annex A) shall not be deemed to violate the
provisions of Section 7.2; and
(e) Any Wet Lease shall not constitute a delivery, transfer or
relinquishment of possession for purposes of Section 7.2 and shall not be
prohibited by the terms hereof.
SECTION 8. MAINTENANCE; REPLACEMENT AND POOLING OF PARTS;
ALTERATIONS, MODIFICATIONS AND ADDITIONS; OTHER
LESSEE COVENANTS
8.1 MAINTENANCE; REPLACEMENT AND POOLING OF PARTS;
ALTERATIONS, MODIFICATIONS AND ADDITIONS
At all times during the Term, Lessee shall comply with, or cause to be
complied with, each of the provisions of Annex C, which provisions are hereby
incorporated by this reference as if set forth in full herein.
8.2 INFORMATION, CERTIFICATES, NOTICES AND REPORTS
8.2.1 FINANCIAL INFORMATION
Lessee will furnish to Lessor:
(a) Within 90 days after the end of each of the first three fiscal
quarters in each fiscal year of Lessee, a consolidated balance sheet
of Lessee as of the end of such quarter and related statements of
income and cash flows for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding
figures for the corresponding period in the preceding fiscal year,
prepared in accordance with GAAP; PROVIDED THAT so long as Lessee is
subject to the reporting requirements of the Securities Exchange Act
of 1934, a copy of Lessee's report on Form 10-Q for such fiscal
quarter (excluding exhibits) will satisfy this paragraph (a).
(b) Within 120 days after the end of each fiscal year of Lessee, a
consolidated balance sheet of Lessee as of the end of such fiscal
year and related statements of income and cash flows of Lessee for
such fiscal year, in comparative form with the preceding fiscal
year, prepared in accordance with GAAP, together with a report of
Lessee's independent certified public accountants with respect to
their audit of such financial statements; PROVIDED that so long as
Lessee is subject to the reporting requirements of the Securities
Exchange Act of 1934, a copy of Lessee's report on Form 10-K for
such fiscal year (excluding exhibits) will satisfy this paragraph
(b).
8.2.2 ANNUAL CERTIFICATE
Within 120 days after the close of each fiscal year of Lessee, Lessee
shall deliver to Lessor and Mortgagee an Officer's Certificate of Lessee to the
effect that such officer is familiar with or has reviewed or caused to be
reviewed the relevant terms of this Lease and the other Lessee Operative
Agreements and that such officer does not have knowledge of the existence as at
the date of such certificate of any Lease Event of Default.
8.2.3 INFORMATION FOR FILINGS
Lessee shall promptly furnish to Owner Participant or Lessor such
information (other than with respect to the citizenship of Owner Participant and
Lessor) within Lessee's or any Permitted Sublessee's possession, or reasonably
available to or obtainable by Lessee or such Permitted Sublessee, as may be
required to enable Lessor timely to file any reports required to be filed by it
as lessor under the Lease or to enable Owner Participant to timely file any
reports required to be filed by it, as the beneficiary of the Trust Estate, in
either case, with any Government Entity because of, or in connection with, the
interest of Owner Participant or Lessor in the Aircraft, Airframe or Engines,
this Lease or any other part of the Trust Estate; provided, however, that with
respect to any such information which Lessee reasonably deems commercially
sensitive or confidential, Owner Participant or Lessor, as the case may be,
shall afford Lessee a reasonable opportunity to seek from any such Government
Entity a waiver of the obligation of Owner Participant or Lessor to file any
such information, or shall consent to the filing of such information directly by
Lessee in lieu of filing by Owner Participant or Lessor, and if any such waiver
or consent is evidenced to the reasonable satisfaction of Owner Participant or
Lessor, as the case may be, then Lessee shall not be required to furnish such
information to Owner Participant or Lessor.
SECTION 9. VOLUNTARY TERMINATION UPON OBSOLESCENCE
9.1 RIGHT OF TERMINATION
(a) Lessee shall have the right at its option to terminate this Lease
during the Base Lease Term, effective only on a Termination Date occurring on or
after the fifth anniversary of the Delivery Date, if:
(i) Lessee makes a good faith determination that the Aircraft either
has become economically obsolete or is surplus to Lessee's requirements
and the Chief Financial Officer or Treasurer of Lessee so certifies in
writing to Lessor; and
(ii) written notice of Lessee's exercise of its option to terminate
this Agreement shall be given to Lessor not less than 90 days prior to the
proposed Termination Date specified in such notice.
(b) Lessor shall notify Lessee and Mortgagee of Lessor's intention to sell
or retain the Aircraft, as provided in this Section 9, no less than 30 days
after Lessee gives Lessor written notice pursuant to Section 9.1(a)(ii). Any
failure by Lessor to give such notice of its election shall be deemed to be an
election to sell the Aircraft, as provided in this Section 9.
(c) Any termination pursuant to this Section 9 shall become effective on
the date of the sale, if any, pursuant to Section 9.2 or upon the date of
termination and payment by Lessee and Lessor in accordance with Section 9.3 if
Lessor elects to retain the Aircraft.
9.2 ELECTION BY LESSOR TO SELL
9.2.1 BIDS; CLOSING OF SALE
Unless Lessor has given Lessee notice of Lessor's election to retain the
Aircraft, Lessee, as agent for Lessor, shall, until the date ten Business Days
prior to the proposed Termination Date, use commercially reasonable efforts to
obtain bids for a cash purchase of the Aircraft and Lessor may, if it desires to
do so, also seek to obtain such bids. In the event Lessee receives any bid,
Lessee shall promptly, and in any event at least ten Business Days prior to the
proposed date of sale, certify to Lessor in writing the amount and terms of such
bid, the proposed date of such sale and the name and address of the person (who
shall not be Lessee or any Affiliate of Lessee or any person with whom Lessee or
any such Affiliate has an arrangement for the future use of the Aircraft by
Lessee or any such Affiliate) submitting such bid. In the event Lessor receives
any bid on or prior to the date ten Business Days prior to the proposed
Termination Date, Lessor shall, at least ten Business Days prior to the proposed
date of sale, certify to Lessee in writing the amount and terms of such bid, the
proposed date of such sale and the name and address of the person submitting
such bid.
9.2.2 CLOSING OF SALE
(a) On the proposed Termination Date (i) Lessee shall deliver the Airframe
and Engines or engines constituting part of the Aircraft to the bidder, if any,
which shall have submitted the highest cash bid (net of applicable brokerage
commissions) on or before the date ten Business Days prior to such Termination
Date, in the same manner as if delivery were made to Lessor pursuant to Section
5 and Annex B and in full compliance with the terms thereof, and shall duly
transfer to Lessor title to any such engines not owned by Lessor, all in
accordance with the terms of Section 5 and Annex B, and (ii) Lessor shall
simultaneously therewith transfer the Airframe and Engines or engines to such
bidder, in the manner described in Section 4.5, against cash paid to Lessor in
the amount of such highest bid (net of applicable brokerage commissions and all
reasonable out-of-pocket fees and expenses incurred by Lessor, Mortgagee and
Owner Participant in connection with such sale and the related termination of
this Lease (collectively, the "Expenses of Sale")) and in the manner and in
funds of the type specified in Section 3.3.
(b) All proceeds of any sale described in Section 9.2.2(a) (net of the
Expenses of Sale) shall be paid to and retained by Lessor and, on such
Termination Date, and as a condition precedent to such sale and the delivery of
the Aircraft and Engines or engines to such bidder, Lessee shall pay to Lessor,
in the manner and in funds of the type specified in Section 3.3:
(i) all unpaid Basic Rent due at any time prior to such Termination
Date and all Basic Rent due on such Termination Date to the extent payable
in arrears with respect to the Payment Period then ended; plus
(ii) an amount equal to the excess, if any, of the Termination Value
for the Aircraft, computed as of such Termination Date, over the proceeds
of such sale (net of the Expenses of Sale); plus
(iii) as provided in Section 3.2.2, interest on the amounts
specified in the foregoing clause (i) at the Payment Due Rate from and
including the date on which any such amount was due to the date of payment
of such amount in full.
As a further condition precedent to such sale and delivery, Lessee shall
pay all Supplemental Rent due by Lessee to Lessor, Mortgagee or the Participants
under this Lease (including, without limitation, (A) Supplemental Rent in
respect of Make-Whole Amount, if any, payable pursuant to Section 2.10(b) of the
Trust Indenture in connection with a prepayment of the Equipment Notes upon such
sale, (B) all interest charges provided for hereunder or under any other Lessee
Operative Agreement with respect to the late payment of any amounts so payable,
and (C) the Expenses of Sale).
(c) Upon and subject to any such sale and receipt of proceeds by Lessor,
and full and final payment of all amounts described in Section 9.2.2(b), and
compliance by Lessee with all the other provisions of this Section 9.2,
(i) Lessor will transfer to Lessee, in accordance with Section 4.5,
any Engines constituting part of the Aircraft but which were not then
installed on the Airframe and sold therewith; and
(ii) the obligation of Lessee to pay Basic Rent, on or after the
Payment Date with reference to which Termination Value is computed, shall
cease, and the Term for the Aircraft shall end effective as of the date of
such sale.
(d) A sale of the Aircraft pursuant to this Section 9.2.2 shall take place
only on a Termination Date. Subject to Section 9.3, if no sale shall have
occurred on or as of the proposed Termination Date, this Agreement shall
continue in full force and effect, and all of Lessee's obligations shall
continue, including, without limitation, its obligation to pay Rent, in each
case, as if the notice under Section 9.1 shall not have been given and, subject
to Section 9.2.3(b), Lessee may give another notice pursuant to Section 9.1.
9.2.3 WITHDRAWAL OF NOTICE OF TERMINATION
(a) Lessee may withdraw any notice given pursuant to Section 9.1 at any
time on or before the date ten Business Days prior to the proposed Termination
Date, whereupon this Agreement shall continue in full force and effect and all
of Lessee's obligations shall continue, including, without limitation, its
obligation to pay Rent, in each case, as if the notice under Section 9.1 shall
not have been given and Lessee may give another notice pursuant to Section 9.1;
PROVIDED that Lessee shall not be entitled to give more than five notices
pursuant to Section 9.1.
(b) Lessee shall pay all reasonable out-of-pocket fees and expenses of
Lessor, Mortgagee and Owner Participant in connection with any notice of
termination withdrawn by Lessee or in connection with any notice of termination
pursuant to which a sale of the Aircraft fails to occur.
9.3 RETENTION OF AIRCRAFT BY LESSOR
(a) If Lessor shall elect to retain the Aircraft in accordance with
Section 9.1, on the proposed Termination Date:
(i) Lessor shall pay, or cause to be paid, in the manner and in
funds of the type specified in Section 3.3, to the Mortgagee an amount
sufficient to prepay all outstanding Equipment Notes pursuant to Section
2.10(b) of the Trust Indenture;
(ii) subject to receipt by Mortgagee of the funds described in
paragraph (i) above, Lessee shall deliver the Airframe and Engines or
engines constituting part of the Aircraft to Lessor pursuant to Section 5
and Annex B and in full compliance with the terms thereof, and shall duly
transfer to Lessor title to any such engines not owned by Lessor, all in
accordance with the terms of Section 5 and Annex B;
(iii) Lessee shall pay to Lessor, in the manner and in funds of the
type specified in Section 3.3:
(1) all unpaid Basic Rent due at any time prior to such
Termination Date and all Basic Rent due on such
Termination Date to the extent payable in arrears with
respect to the Payment Period then ended; plus
(2) as provided in Section 3.2.2, interest on the amounts
specified in the foregoing clause (1) at the Payment Due
Rate from and including the date on which any such
amount was due to the date of payment of such amount in
full; and
(iv) Lessee shall also pay all Supplemental Rent due and payable by
Lessee to Lessor, Mortgagee or the other Participants under this Lease
(other than any Supplemental Rent in respect of Make-Whole Amount, if any,
payable pursuant to Section 2.10(b) of the Trust Indenture in connection
with a prepayment of the Equipment Notes upon such sale), including
without limitation all interest charges provided for hereunder or under
any other Lessee Operative Agreement with respect to the late payment of
any amounts, so payable, and the reasonable out-of-pocket fees and
expenses incurred by Lessor, Mortgagee and Owner Participant in connection
with such termination and sale.
(b) Upon full and final payment to Lessor, Mortgagee and the Participants
of the amounts described in Section 9.3(a), and compliance by Lessee with all
the other applicable provisions of this Section 9.3,
(i) Lessor will transfer to Lessee, in accordance with Section 4.5,
any Engines constituting part of the Aircraft but which were not then
installed on the Airframe and sold therewith; and
(ii) The obligation of Lessee to pay Basic Rent otherwise due on or
after the Termination Date shall cease, and the Term for the Aircraft
shall end effective as of such Termination Date.
SECTION 10. LOSS, DESTRUCTION, REQUISITION, ETC.
10.1 EVENT OF LOSS WITH RESPECT TO AIRCRAFT
10.1.1 NOTICE AND ELECTION
(a) Upon the occurrence of an Event of Loss with respect to the Airframe,
and any Engine or Engines installed thereon at the time of such Event of Loss,
Lessee shall promptly (and in any event within 15 days after such occurrence)
give Lessor and Mortgagee written notice of such Event of Loss. Within 45 days
after such occurrence, Lessee shall give Lessor and Mortgagee written notice of
Lessee's election to make payment in respect of such Event of Loss, as provided
in Section 10.1.2, or to replace the Airframe, and any such Engines, as provided
in Section 10.1.3.
(b) Any failure by Lessee to give such notice of its election shall be
deemed to be an election of the option set forth in Section 10.1.2. In addition,
Lessee shall not be entitled to elect the option set forth in Section 10.1.3 if,
at the time Lessor receives such notice from Lessee, there shall have occurred
and be continuing a Special Default.
(c) For purposes of Section 10.1.2, an Event of Loss with respect to the
Airframe shall be deemed to constitute an Event of Loss with respect to the
Aircraft. For purposes of Section 10.1.3, any Engine not actually suffering an
Event of Loss shall not be required to be replaced.
10.1.2 PAYMENT OF LOSS AND TERMINATION OF LEASE
(a) If Lessee elects, in accordance with Section 10.1.1, to make payment
in respect of any such Event of Loss, then Lessee shall pay, in the manner and
in funds of the type specified in Section 3.3, the following amounts:
(i) on or before the Business Day next following the earlier of (x)
the 120th day following the date of the occurrence of such Event of Loss,
and (y) the fourth Business Day following the receipt of insurance
proceeds with respect to such occurrence (but in any event not earlier
than the date of Lessee's election under Section 10.1.1 to make payment
under this Section 10.1.2), Lessee shall pay to Lessor:
(1) all unpaid Interim Rent, Basic Rent or Renewal Rent, as the
case may be, due at any time prior to the Stipulated Loss
Value Date that is on or immediately preceding the Loss
Payment Date; plus
(2) the Stipulated Loss Value of the Aircraft computed as of the
Stipulated Loss Value Date used in the foregoing clause (1)
for the computation of unpaid Rent; plus
(3) if the Stipulated Loss Value Date used in the foregoing clause
(1) is a Payment Date on which Basic Rent payable in arrears
is due, the amount of such Basic Rent; plus
(4) as provided in Section 3.2.2, interest on the amount specified
in the foregoing clause (1) at the Payment Due Rate from and
including the date on which any such amount was due to the
date of payment of such amount in full; plus
(5) interest on the amounts specified in the foregoing clauses (2)
and (3) at the SLV Rate from and including the Stipulated Loss
Value Date used in the foregoing clause (1) for the
computation of unpaid Rent to the date such amount is due, and
thereafter at the Payment Due Rate to the date of payment of
such amounts in full; and
(ii) on or before the date required for payment of the amounts
specified in paragraph (i) above, Lessee shall also pay to Lessor,
Mortgagee and the other Participants all other amounts due and payable by
Lessee to Lessor, Mortgagee and the other Participants under this Lease,
the Participation Agreement or any other Lessee Operative Agreement.
(b) Upon payment in full of all amounts described in the foregoing
paragraph (a),(i) the obligation of Lessee to pay Interim Rent, Basic Rent or
Renewal Rent hereunder with respect to the Aircraft shall terminate, (ii) the
Term for the Aircraft shall end and (iii) Lessor will transfer the Aircraft to
Lessee, as-is and where-is, and subject to any insurer's salvage rights, but
otherwise in the manner described in Section 4.5.
10.1.3 REPLACEMENT OF AIRFRAME AND ENGINES
(a) If Lessee elects, in accordance with Section 10.1.1, to replace the
Airframe, and any Engines actually suffering the Event of Loss, then Lessee
shall, as promptly as possible and in any event within 120 days after the
occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, in
compliance with Section 10.3 and as replacement for the Airframe, and any such
Engine, title to a Replacement Airframe (which shall comply with paragraph (b)
below), and for each such Engine a Replacement Engine, in each case free and
clear of all Liens other than Permitted Liens. If Lessee makes such election,
but for any reason fails or is unable to effect such replacement within such
time period and in compliance with the requirements set forth in Section 10.3,
then Lessee shall be deemed to have initially made the election set forth in
Section 10.1.2 with the effect that Lessee shall immediately pay, in the manner
and in funds of the type specified in Section 3.3, the amounts required under,
and in accordance with, Section 10.1.2.
(b) Any such Replacement Airframe shall be an airframe that is the same
model as the Airframe to be replaced thereby, or an improved model, and that has
a value, utility and remaining useful life (without regard to hours or cycles
remaining until the next regular maintenance check), at least equal to the
Airframe to be replaced thereby (assuming that such Airframe had been maintained
in accordance with the Lease). Any such Replacement Engine shall meet the
requirements of, and be conveyed by Lessee to Lessor in accordance with, Section
10.2 (other than the notice requirement set forth in Section 10.2.1).
10.2 EVENT OF LOSS WITH RESPECT TO AN ENGINE
10.2.1 NOTICE
Upon the occurrence of an Event of Loss with respect to an Engine under
circumstances in which an Event of Loss with respect to the Airframe has not
occurred, Lessee shall promptly (and in any event within 15 days after such
occurrence) give Lessor written notice of such Event of Loss.
10.2.2 REPLACEMENT OF ENGINE
Lessee shall, promptly and in any event within 60 days after the
occurrence of such Event of Loss, convey or cause to be conveyed to Lessor, in
compliance with Section 10.3 and as replacement for the Engine with respect to
which any Event of Loss occurred, title to a Replacement Engine free and clear
of all Liens other than Permitted Liens. Such Replacement Engine shall be an
engine manufactured by Engine Manufacturer that is the same model as the Engine
to be replaced thereby, or an improved model, and that is suitable for
installation and use on the Airframe, and that has a value, utility and
remaining useful life (without regard to hours and cycles remaining until
overhaul) at least equal to the Engine to be replaced thereby (assuming that
such Engine had been maintained in accordance with the Lease).
10.2.3 ENGINE EXCHANGE
Upon not less than five (5) Business Days' prior written notice to Lessor,
Lessee may replace any Engine leased hereunder with another engine (the
"Exchanged Engine") meeting the requirements of Section 10.2.2. Such Exchanged
Engine shall be deemed to be a "Replacement Engine" and Lessor and Lessee shall
comply with the provisions of Section 10.3 with regard to the Exchanged Engine
and the Engine so replaced.
10.3 CONDITIONS TO ANY REPLACEMENT
10.3.1 DOCUMENTS
Prior to or at the time of conveyance of title to any Replacement Airframe
or Replacement Engine to Lessor, Lessee shall take each of the following
actions:
(a) furnish Lessor with a full warranty bill of sale duly conveying to
Lessor such Replacement Airframe or Replacement Engine, in form and substance
reasonably satisfactory to Lessor and cause such Replacement Airframe to be duly
registered in the name of Lessor pursuant to the Act;
(b) cause (i) a Lease Supplement subjecting such Replacement Airframe or
Replacement Engine to this Lease, duly executed by Lessee, to be delivered to
Lessor for execution and, upon such execution, to be filed for recordation with
the FAA pursuant to the Act, (ii) a Trust Indenture Supplement, subjecting such
Replacement Airframe or Replacement Engine to the Trust Indenture, to be
delivered to Lessor for execution and, upon execution, to be filed for
recordation with the FAA pursuant to the Act and (iii) such Financing Statements
and other filings, as Lessor or Mortgagee may reasonably request, duly executed
by Lessee and, to the extent applicable, Lessor and Mortgagee (and Lessor and
Mortgagee shall execute and deliver the same), to be filed in such locations as
any such party may reasonably request;
(c) furnish such evidence of compliance with the insurance provisions of
Section 11 with respect to such Replacement Airframe or Replacement Engine as
Lessor may reasonably request;
(d) furnish an opinion or opinions of Lessee's counsel (which may be
Lessee's legal department) reasonably satisfactory to Lessor and addressed to
Lessor and Mortgagee to the effect that (i) such full warranty bill of sale
referred to in Section 10.3.1(a) constitutes an effective instrument for the
conveyance of title to the Replacement Airframe or Replacement Engine and (ii)
in the case of a Replacement Airframe, Lessor and Mortgagee, as assignee of
Lessor, will be entitled to the benefits of Section 1110 with respect to the
Replacement Airframe, provided that such opinion referred to in this clause (ii)
need not be delivered to the extent that immediately prior to such replacement
the benefits of Section 1110 were not, solely by reason of a change in law or
court interpretation thereof, available to Lessor or Mortgagee, as assignee of
Lessor;
(e) furnish an opinion of Lessee's aviation law counsel reasonably
satisfactory to Lessor and addressed to Lessor and Mortgagee as to the due
registration of any such Replacement Airframe and the due filing for recordation
of each Lease Supplement and Trust Indenture Supplement with respect to such
Replacement Airframe or Replacement Engine under the Act;
(f) with respect to any Replacement Airframe, furnish an opinion of tax
counsel, selected by Owner Participant and reasonably satisfactory to Lessee, as
to the federal income tax consequences (without any requirement as to the nature
of such Federal income tax consequences) to Lessor and Owner Participant of any
such replacement;
(g) with respect to the replacement of the Airframe, and any Engine
installed thereon at the time of the subject Event of Loss, if requested by
Lessor and at Lessor's expense, furnish a certified report of a qualified
independent aircraft appraiser, reasonably satisfactory to Lessor, certifying
that such Replacement Airframe and any such Replacement Engine complies with the
value, utility and remaining useful life requirements set forth in Section
10.1.3(b).
Lessor and Lessee understand and agree that if at the time of any
replacement of the Airframe or any Engine, as contemplated in this Section 10,
the Airframe was registered in a jurisdiction other than the United States, then
the requirements set forth above in this Section 10.3.1 relating to compliance
with the requirements of the Act or the FAA, shall be deemed to refer to the
comparable applicable Law of, and the Aviation Authority of, such other
jurisdiction.
10.3.2 OTHER OBLIGATIONS
(a) Lessor and Lessee agree that, upon any Replacement Airframe becoming
the Airframe hereunder, and upon any Replacement Engine becoming an Engine
hereunder, this Lease shall continue to be, and shall be treated as, a lease for
U.S. federal income tax purposes of, among other things, such Replacement
Airframe and such Replacement Engine. Without limiting the foregoing, Lessee and
Lessor intend that Lessor shall, in all events, be entitled to the benefits of
Section 1110 with respect to any Replacement Airframe or Replacement Engine and
Lessee and Lessor shall cooperate and take such action as the other may
reasonably request so as to ensure that Lessor shall be entitled to such
benefits.
(b) No Event of Loss with respect to an Engine, or with respect to an
Airframe, shall result in, or otherwise allow or permit (other than as provided
in Section 10.1.2(b)), any reduction, deferral, discharge or other change in the
timing or amount of any Rent payable by Lessee hereunder, and (subject to such
Section 10.1.2(b)) Lessee shall pay all such Rent and other amounts as though
such Event of Loss had not occurred.
10.4 CONVEYANCE TO LESSEE
Upon compliance by Lessee with the applicable terms of Sections 10.1.3,
10.2 and 10.3.1, Lessor will transfer to Lessee the Airframe or Engine, as the
case may be, with respect to which such Event of Loss occurred, in accordance
with Section 4.5.
10.5 APPLICATION OF PAYMENTS
Any amounts, other than insurance proceeds in respect of damage or loss
not constituting an Event of Loss (the application of which is provided for in
Section 11), received at any time by Lessor, Lessee or any Permitted Sublessee
from any Government Entity or any other Person in respect of any Event of Loss
will be applied as follows:
10.5.1 REPLACEMENT OF AIRFRAME AND ENGINES
If such amounts are received with respect to the Airframe, and any Engine
installed thereon at the time of such Event of Loss, upon compliance by Lessee
with the applicable terms of Section 10.1.3 with respect to the Event of Loss
for which such amounts are received, such amounts shall be paid over to, or
retained by, Lessee.
10.5.2 LOSS OF ENGINE
If such amounts are received with respect to an Engine (other than an
Engine installed on the Airframe at the time such Airframe suffers an Event of
Loss), upon compliance by Lessee with the applicable terms of Section 10.2.2
with respect to the Event of Loss for which such amounts are received, such
amounts shall be paid over to, or retained by, Lessee.
10.5.3 PAYMENT OF LOSS
If such amounts are received, in whole or in part, with respect to the
Airframe, and Lessee makes, has made or is deemed to have made the election set
forth in Section 10.1.2, such amounts shall be applied as follows:
(a) FIRST, if the sum described in Section 10.1.2 has not then been paid
in full by Lessee, such amounts shall be paid to Lessor (or to Mortgagee so long
as Mortgagee has not given notice to Lessee that the Lien of the Trust Indenture
has been duly discharged, except with respect to Excluded Payments) to the
extent necessary to pay in full such sum;
(b) SECOND, the remainder, if any, shall be paid to Lessee.
10.6 REQUISITION OF AIRCRAFT FOR USE
If any Government Entity shall requisition for use the Airframe and the
Engines or engines installed thereon, and if the same does not constitute an
Event of Loss, Lessee shall promptly notify Lessor and Mortgagee of such
requisition and all of Lessee's obligations under this Agreement shall continue
to the same extent as if such requisition had not occurred; provided, HOWEVER,
that if the Airframe and Engines or engines installed thereon are not returned
to Lessor by Lessee at the end of the Term or within 30 days thereafter, and
Lessor, upon notice given not less than 30 days nor more than 120 days before
the end of the Term, shall have elected to treat such event as constituting an
Event of Loss with respect to the Aircraft, Lessee shall then be deemed to have
made the election set forth in Section 10.1.2 with the effect that Lessee shall
be obligated to pay the Stipulated Loss Value and all other amounts payable
pursuant to Section 10.1.2 with respect to the Aircraft as if an Event of Loss
had occurred as of the end of the Term. If Lessor shall not have elected to
treat such event as an Event of Loss, Lessee shall be obligated to return the
Airframe and Engines or engines to Lessor pursuant to, and in all other respects
to comply with the provisions of, Section 5 promptly upon their return by such
Government Entity, and Lessee shall pay to Lessor upon such return an amount
equal to the average daily Basic Rent payable by Lessee during the Term for each
day after the end of the Term to but excluding the day of such return, up to a
maximum of 30 days.
10.7 REQUISITION OF AN ENGINE FOR USE
If any Government Entity shall requisition for use any Engine but not the
Airframe, Lessee will replace such Engine by complying with the applicable terms
of Sections 10.2 and 10.3 to the same extent as if an Event of Loss had occurred
with respect to such Engine, and any payments received by Lessor or Lessee from
such Government Entity with respect to such requisition shall be paid or
retained in accordance with Section 10.5.2.
10.8 APPLICATION OF PAYMENTS
All payments received by Lessor or Lessee, or any Permitted Sublessee,
from any Government Entity for the use of the Airframe and Engines or engines
installed thereon during the Term shall be paid over to, or retained by, Lessee
and all payments received by Lessor or Lessee from any Government Entity for the
use of the Airframe and Engines or engines installed thereon after the Term
shall be paid over to, or retained by, Lessor; provided that, if such
requisition constitutes an Event of Loss, or Lessor has elected under Section
10.6 to treat such requisition as an Event of Loss, then all such payments shall
be paid over to Lessor (or to Mortgagee so long as Mortgagee has not given
notice to Lessee that the Lien of the Trust Indenture has been duly discharged),
and held as provided in Section 10.5.
10.9 APPLICATION OF PAYMENTS DURING EXISTENCE OF A
LEASE EVENT OF DEFAULT
Any amount described in this Section 10 that is payable or creditable to,
or retainable by, Lessee shall not be paid or credited to, or retained by,
Lessee if at the time such payment, credit or retention would otherwise occur a
Special Default shall have occurred and be continuing, but shall instead be held
by or paid over to Lessor (or to Mortgagee so long as Mortgagee has not given
notice to Lessee that the Trust Indenture has been duly discharged) as security
for the obligations of Lessee under this Lease and the other Lessee Operative
Agreements and shall be invested pursuant to Section 4.4 hereof unless and until
Lessor shall have demanded liquidated damages pursuant to Section 15.1.3 or
15.1.4 and such amount is applied, at the option of Lessor, or upon the written
request of Lessee to Lessor, from time to time during the continuance of a Lease
Event of Default, to Lessee's obligations under this Lease as and when due, it
being understood that any such application shall be made to such obligations of
Lessee as Lessor may determine in its sole discretion. At such time as there
shall not be continuing any Special Default, such amount shall be paid to Lessee
to the extent not previously applied in accordance with this Section 10.9.
SECTION 11. INSURANCE
11.1 LESSEE'S OBLIGATION TO INSURE
Lessee shall comply with, or cause to be complied with, each of the
provisions of Annex D, which provisions are hereby incorporated by this
reference as if set forth in full herein.
11.2 INSURANCE FOR OWN ACCOUNT
Nothing in Section 11 shall limit or prohibit (a) Lessee from maintaining
the policies of insurance required under Annex D with higher limits than those
specified in Annex D, or (b) Lessor, Mortgagee or Owner Participant from
obtaining insurance for its own account (and any proceeds payable under such
separate insurance shall be payable as provided in the policy relating thereto);
PROVIDED, HOWEVER, that no insurance may be obtained or maintained that would
limit or otherwise adversely affect the coverage of any insurance required to be
obtained or maintained by Lessee pursuant to this Section 11 and Annex D.
11.3 INDEMNIFICATION BY GOVERNMENT IN LIEU OF
INSURANCE
Lessor agrees to accept, in lieu of insurance against any risk with
respect to the Aircraft described in Annex D, indemnification from, or insurance
provided by, the U.S. Government, or upon the written consent of Lessor, other
Government Entity, against such risk in an amount that, when added to the amount
of insurance (including permitted self-insurance), if any, against such risk
that Lessee (or any Permitted Sublessee) may continue to maintain, in accordance
with this Section 11, during the period of such requisition or transfer, shall
be at least equal to the amount of insurance against such risk otherwise
required by this Section 11.
11.4 APPLICATION OF INSURANCE PROCEEDS
As between Lessor and Lessee, all insurance proceeds received as a result
of the occurrence of an Event of Loss with respect to the Aircraft or any Engine
under policies required to be maintained by Lessee pursuant to this Section 11
will be applied in accordance with Section 10.5. All proceeds of insurance
required to be maintained by Lessee, in accordance with Section 11 and Section B
of Annex D, in respect of any property damage or loss not constituting an Event
of Loss with respect to the Aircraft, Airframe or any Engine will be applied in
payment (or to reimburse Lessee) for repairs or for replacement property, and
any balance remaining after such repairs or replacement with respect to such
damage or loss shall be paid over to, or retained by, Lessee.
11.5 APPLICATION OF PAYMENTS DURING EXISTENCE OF DEFAULT
Any amount described in this Section 11 that is payable or creditable to,
or retainable by, Lessee shall not be paid or credited to, or retained by,
Lessee if at the time such payment, credit or retention would otherwise occur a
Special Default shall have occurred and be continuing, but shall instead be held
by or paid over to Lessor (or to Mortgagee so long as Mortgagee has not given
notice to Lessee that the Lien of the Trust Indenture has been duly discharged)
as security for the obligations of Lessee under this Lease and shall be invested
pursuant to Section 4.4 hereof unless and until Lessor shall have demanded
liquidated damages pursuant to Section 15.1.3 or 15.1.4 and such amount is
applied, at the option of Lessor, or upon the written request of Lessee to
Lessor, from time to time during the continuance of a Lease Event of Default, to
Lessee's obligations under this Lease and the other Lessee Operative Agreements
as and when due, it being understood that any such application shall be made to
such obligations of Lessee as Lessor may determine in its sole discretion. At
such time as there shall not be continuing any Special Default, such amount
shall be paid to Lessee to the extent not previously applied in accordance with
this Section 11.5.
SECTION 12. INSPECTION
(a) At all reasonable times Lessor, Mortgagee or the Owner Participant,
and their respective authorized representatives (the "Inspecting Parties") may
(not more than once every 12 months unless a Lease Event of Default has occurred
and is continuing then such inspection right shall not be so limited) inspect
the Aircraft, Airframe and Engines (including, without limitation, the Aircraft
Documents) and any such Inspecting Party may make copies of such Aircraft
Documents not reasonably deemed confidential by Lessee or such Permitted
Sublessee.
(b) Any inspection of the Aircraft hereunder shall be limited to a visual,
walk-around inspection and shall not include the opening of any panels, bays or
other components of the Aircraft, and no such inspection shall interfere with
Lessee's or any Permitted Sublessee's maintenance and operation of the Aircraft,
Airframe and Engines.
(c) With respect to such rights of inspection, Lessor, Owner Participant
and Mortgagee shall not have any duty or liability to make, or any duty or
liability by reason of not making, any such visit, inspection or survey.
(d) Each Inspecting Party shall bear its own expenses in connection with
any such inspection (including the cost of any copies made in accordance with
Section 12(a)).
SECTION 13. ASSIGNMENT; MERGER; SUCCESSOR OWNER TRUSTEE
13.1 IN GENERAL
This Lease and the other Lessee Operative Agreements shall be binding upon
and inure to the benefit of Lessor and Lessee and their respective successors
and permitted assigns. Except as otherwise expressly permitted by the terms of
the Lease or any other Lessee Operative Agreement, Lessee will not, without the
prior written consent of Lessor and Mortgagee, assign any of its rights under
this Lease. Except as otherwise provided herein (including, without limitation,
under the provisions of Section 15 hereof), Lessor and Mortgagee may not assign
or convey any of its right, title and interest in and to this Lease or the
Aircraft without the prior written consent of Lessee, such consent not to be
unreasonably withheld.
13.2 MERGER OF LESSEE
13.2.1 IN GENERAL
Lessee shall not consolidate with or merge into any other person under
circumstances in which Lessee is not the surviving corporation, or convey,
transfer or lease in one or more transactions all or substantially all of its
assets to any other person, unless:
(a) such person is organized, existing and in good standing under the Laws
of the United States, any State of the United States or the District Columbia
and, upon consummation of such transaction, such person will be a U.S. Air
Carrier;
(b) such person executes and delivers to Lessor and Mortgagee a duly
authorized, legal, valid, binding and enforceable agreement, reasonably
satisfactory in form and substance to Lessor, containing an effective assumption
by such person of the due and punctual performance and observance of each
covenant, agreement and condition in the Lessee Operative Agreements to be
performed or observed by Lessee;
(c) such person makes such filings and recordings with the FAA pursuant to
the Act as shall be necessary to evidence such consolidation or merger; and
(d) immediately after giving effect to such consolidation or merger no
Lease Event of Default shall have occurred and be continuing.
13.2.2 EFFECT OF MERGER
Upon any such consolidation or merger of Lessee with or into, or the
conveyance, transfer or lease by Lessee of all or substantially all of its
assets to, any Person in accordance with this Section 13.2, such Person will
succeed to, and be substituted for, and may exercise every right and power of,
Lessee under the Lessee Operative Agreements with the same effect as if such
person had been named as "Lessee" therein. No such consolidation or merger, or
conveyance, transfer or lease, shall have the effect of releasing Lessee or such
Person from any of the obligations, liabilities, covenants or undertakings of
Lessee under the Lease.
13.3 ASSIGNMENT SECURITY FOR LESSOR'S OBLIGATIONS
In order to secure the indebtedness evidenced by the Equipment Notes,
Lessor has agreed in the Trust Indenture, among other things, to assign to
Mortgagee this Lease and to mortgage the Aircraft, Airframe and Engines in favor
of Mortgagee, subject to the reservations and conditions therein set forth.
Lessee hereby accepts and consents to the assignment of all Lessor's right,
title and interest in and to this Lease pursuant to the terms of the Trust
Indenture. In accordance with Section 3.3(c), Lessee agrees to pay directly to
Mortgagee (or, after receipt by Lessee of notice from Mortgagee of the discharge
of the Lien of the Trust Indenture, to Lessor), all amounts of Rent (other than
Excluded Payments) due or to become due hereunder and assigned to Mortgagee and
Lessee agrees that Mortgagee's right to such payments hereunder shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, the circumstances set forth in Section 16 hereof.
Notwithstanding the foregoing assignment of this Lease, the obligations of
Lessee to Lessor to perform the terms and conditions of this Lease shall remain
in full force and effect.
13.4 SUCCESSOR OWNER TRUSTEE
Lessee agrees that in the case of the appointment of any successor Owner
Trustee pursuant to the terms of the Participation Agreement and the Trust
Agreement, such successor Owner Trustee shall, upon written notice by such
successor Owner Trustee to Lessee, succeed to all the rights, powers and title
of Lessor hereunder and shall be deemed to be Lessor and the owner of the
Aircraft and the other assets of the Trust Estate for all purposes hereof
without the necessity of any consent or approval by Lessee and without in any
way altering the terms of this Lease or Lessee's obligations hereunder. An
appointment and designation of a successor Owner Trustee shall not exhaust the
right to appoint and designate further successor or additional Owner Trustees
pursuant to the Participation Agreement and the Trust Agreement, and such right
may be exercised repeatedly as long as this Lease shall be in effect.
SECTION 14. LEASE EVENTS OF DEFAULT
The occurrence of any one or more of the following circumstances,
conditions, acts or events, for any reason whatsoever and whether any such
circumstance, condition, act or event shall be voluntary or involuntary or come
about or be effected by operation of Law or pursuant to or in compliance with
any judgment, decree, order, rule or regulation of any Government Entity, shall
constitute a Lease Event of Default so long as it shall not have been remedied:
14.1 PAYMENTS
Lessee shall fail to pay any amount of Interim Rent, Basic Rent, Renewal
Rent, Stipulated Loss Value or Termination Value within ten (10) Business Days
after the same shall have become due; or Lessee shall fail to pay any
Supplemental Rent (other than Stipulated Loss Value or Termination Value) when
due and such failure shall continue for a period in excess of ten (10) Business
Days from and after the date of any written notice to Lessee from Lessor of the
failure to make such payment when due; provided that any such failure to pay any
Excluded Payment shall not constitute a Lease Event of Default until written
notice is given by the Owner Participant to Lessee and Mortgagee that such
failure constitutes a Lease Event of Default and such failure shall have
continued for a period in excess of ten (10) Business Days after such notice.
14.2 INSURANCE
Lessee shall fail to carry and maintain, or cause to be carried and
maintained, insurance on and in respect of the Aircraft, Airframe and Engines in
accordance with the provisions of Section 11.
14.3 OTHER COVENANTS
Lessee shall fail to observe or perform (or caused to be observed and
performed) in any material respect any other covenant, agreement or obligation
set forth herein or in any other Lessee Operative Agreement (other than the
covenants, agreements and obligations set forth in the Tax Indemnity Agreement),
and such failure shall continue unremedied for a period of 30 days from and
after the date of written notice thereof to Lessee from Lessor or Mortgagee,
unless such failure is capable of being corrected and Lessee shall be diligently
proceeding to correct such failure, in which case there shall be no Lease Event
of Default unless and until such failure shall continue unremedied for a period
of 270 days after receipt of such notice.
14.4 REPRESENTATIONS AND WARRANTIES
Any representation or warranty made by Lessee herein, in the Participation
Agreement or in any other Lessee Operative Agreement (other than the
representations and warranties of Lessee in the Tax Indemnity Agreement) (a)
shall prove to have been untrue or inaccurate in any material respect as of the
date made, (b) such untrue or inaccurate representation or warranty is material
at the time in question, (c) and the same shall remain uncured (to the extent of
the adverse impact of such incorrectness on the interest of the Participants or
Lessor) for a period in excess of 30 days from and after the date of written
notice thereof from Lessor or Mortgagee to Lessee.
14.5 BANKRUPTCY AND INSOLVENCY
(a) Lessee shall consent to the appointment of or the taking of possession
by a receiver, trustee or liquidator of itself or of substantially all of its
property, or Lessee 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 Lessee
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 Lessee
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 Lessee's board of
directors shall adopt a resolution authorizing 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 Lessee, a receiver,
trustee or liquidator of Lessee or of substantially all of its property, or
substantially all of the property of Lessee shall be sequestered, and any such
order, judgment or decree of appointment or sequestration shall remain in force
undismissed, unstayed and unvacated for a period of 90 days after the date of
entry thereof; or
(c) a petition against Lessee 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 90 days thereafter, or if, under the provisions of any Law
providing for reorganization or winding-up of corporations which may apply to
Lessee, any court of competent jurisdiction assumes jurisdiction, custody or
control of Lessee or of substantially all of its property and such jurisdiction,
custody or control remains in force unrelinquished, unstayed and unterminated
for a period of 90 days.
SECTION 15. REMEDIES AND WAIVERS
15.1 REMEDIES
If any Lease Event of Default shall occur and be continuing, Lessor may,
at its option and at any time and from time to time, exercise any one or more of
the following remedies as Lessor in its sole discretion shall elect:
15.1.1 RETURN AND REPOSSESSION
Lessor may cause Lessee, upon giving written notice to Lessee, to return
promptly, and Lessee shall return promptly, the Airframe and Engines as Lessor
may so demand, to Lessor or its order in the manner and condition required by,
and otherwise in accordance with, all the provisions of Section 5 as if the
Airframe or Engine were being returned at the end of the Base Lease Term or any
Renewal Lease Term or Lessor, at its option, may enter upon the premises where
the Airframe or any Engine, or any Part thereof, are located and take immediate
possession of and remove the same by summary proceedings or otherwise, all
without liability accruing to Lessor for or by reason of such entry or taking of
possession, whether for the restoration of damage to property caused by such
taking or otherwise.
15.1.2 SALE AND USE
Lessor may sell the Airframe and/or any Engine at public or private sale,
at such times and places, and to such Persons (including Lessor, Mortgagee or
any Participant), as Lessor may determine; or Lessor may otherwise dispose of,
hold, use, operate, lease to others or keep idle the Airframe and/or any Engine,
as Lessor, in its sole discretion, may determine, all free and clear of any
rights of Lessee and without any duty to account to Lessee with respect to such
action or inaction or for any proceeds with respect thereto, except as
hereinafter set forth in this Section 15, and except to the extent that such
proceeds would constitute, under applicable Law, a mitigation of Lessor's
damages suffered or incurred as a result of the subject Lease Event of Default.
Lessor shall give Lessee at least 15 days prior written notice of the date fixed
for any public sale of the Airframe and/or any Engine or of the date on or after
which will occur the execution of any contract providing for any private sale.
15.1.3 CERTAIN LIQUIDATED DAMAGES
Whether or not Lessor shall have exercised, or shall thereafter at any
time exercise, any of its rights under Section 15.1.1 or 15.1.2 with respect to
the Airframe and/or any Engine, or any Part thereof, Lessor, by written notice
to Lessee specifying a payment date (which shall be the Stipulated Loss Value
Date next occurring not less than 10 days after the date of such notice), may
demand Lessee to pay to Lessor, and Lessee shall pay to Lessor, on the payment
date so specified and in the manner and in funds of the type specified in
Section 3.3, as liquidated damages for loss of a bargain and not as a penalty
(in lieu of the Interim Rent, Basic Rent or Renewal Rent, as the case may be,
for the Aircraft in respect of all periods commencing on or after the date
specified for payment in such notice), the following amounts:
(a) all unpaid Interim Rent, Basic Rent or Renewal Rent, as the case may
be, due at any time prior to the Stipulated Loss Value Date specified in such
notice; plus
(b) whichever of the following amounts Lessor, in its sole discretion
shall specify in such notice:
(i) an amount equal to the excess, if any, of the present value,
computed as of the Stipulated Loss Value Date specified in such notice,
discounted to such date at a rate per annum equal to the Debt Rate,
compounded semiannually, of all unpaid Interim Rent and Basic Rent during
the then remaining portion of the Base Lease Term or, if a Renewal Lease
Term has commenced, of all unpaid Renewal Rent during the remaining
portion of such Renewal Lease Term, over the Fair Market Rental Value of
the Aircraft for the remainder of the Term, after discounting such Fair
Market Rental Value to its then present value (at a rate per annum equal
to the Debt Rate, compounded semiannually) as of the Stipulated Loss Value
Date specified in such notice, or
(ii) an amount equal to the excess, if any, of the Stipulated Loss
Value for the Aircraft, computed as of the Stipulated Loss Value Date
specified in such notice, over the Fair Market Sales Value of the
Aircraft, as of the Stipulated Loss Value Date specified in such notice;
plus
(c) interest on the amounts specified in the foregoing clause (a) at the
Payment Due Rate from and including the date on which any such amount was due to
the date of payment of such amount; plus
(d) interest on the amount specified in the foregoing clause (b)(i) or
(b)(ii), according to Lessor's election, at the Payment Due Rate from and
including the Stipulated Loss Value Date specified in such notice to the date of
payment of such amount.
15.1.4 LIQUIDATED DAMAGES UPON SALE
If Lessor, pursuant to Section 15.1.2 or applicable Law, shall have sold
the Airframe and/or any Engine, Lessor, in lieu of exercising its rights under
Section 15.1.3 with respect to the Aircraft, Airframe or any Engine, as the case
may be, may, if Lessor shall so elect, upon giving written notice to Lessee,
demand Lessee to pay Lessor, and Lessee shall pay to Lessor, on the date of such
sale and in the manner and in funds of the type specified in Section 3.3, as
liquidated damages for loss of a bargain and not as a penalty (in lieu of the
Interim Rent, Basic Rent or Renewal Rent, as the case may be, for the Aircraft
in respect of all periods commencing on or after the date of such sale), the
following amounts:
(a) all unpaid Interim Rent, Basic Rent or Renewal Rent, as the case may
be, due at any time prior to the Stipulated Loss Value Date on or
immediately preceding the date of such sale; plus
(b) an amount equal to the excess, if any, of (i) the Stipulated Loss
Value of the Aircraft, computed as of the Stipulated Loss Value Date
used in the foregoing clause (a) for the computation of unpaid Rent,
over (ii) the proceeds of such sale, minus all reasonable costs of
Lessor and Mortgagee in connection with the sale; plus
(c) if the date of such sale is not a Stipulated Loss Value Date, an
amount equal to interest on the outstanding principal amount of the
Equipment Notes at the rate per annum borne thereby from and
including the Stipulated Loss Value Date used in the foregoing
clause (a) for the computation of unpaid Rent to the date of such
sale; plus
(d) interest on the amounts specified in the foregoing clause (a) at the
Payment Due Rate from and including the date on which any such
amount was due to the date of payment of such amount; plus
(e) interest on the sum of the amounts specified in the foregoing clause
(b) at the Payment Due Rate from and including the date of such sale
to the date of payment of such amounts.
15.1.5 RESCISSION
Lessor may (i) at its option, rescind or terminate this Lease as to the
Aircraft, Airframe or any Engine, or any Part thereof, or (ii) exercise any
other right or remedy that may be available to it under applicable Law or
proceed by appropriate court action to enforce the terms hereof.
15.1.6 OTHER REMEDIES
In addition to the foregoing remedies (but without duplication of amounts
otherwise paid under this Section 15), Lessee shall be liable for any and all
unpaid Rent due hereunder before, during or after (except as otherwise provided
herein) the exercise of any of the foregoing remedies and for all reasonable
attorneys' fees and other costs and expenses of Lessor, Mortgagee the Owner
Participant and the Note Holders, including, without limitation, interest on
overdue Rent at the rate as herein provided, incurred by reason of the
occurrence of any Lease Event of Default or the exercise of Lessor's remedies
with respect thereto, including all reasonable costs and expenses incurred in
connection with the return of the Airframe or any Engine, in accordance with the
terms of Section 5 or in placing the Airframe or any Engine, in the condition
and airworthiness required by Section 5.
15.2 LIMITATIONS UNDER CRAF
Notwithstanding the provisions of Section 15.1, during any period that the
Aircraft, Airframe or any Engine is subject to CRAF in accordance with the
provisions of Section 7.2.3 and in the possession of the U.S. Government, Lessor
shall not, as a result of any Lease Event of Default, exercise its remedies
hereunder in such manner as to limit Lessee's control under this Lease (or any
Permitted Sublessee's control under any Permitted Sublease) of the Aircraft,
Airframe or such Engine, unless at least 30 days' (or such other period as may
then be applicable under CRAF) written notice of default hereunder shall have
been given by Lessor or Mortgagee by registered or certified mail to Lessee (and
any Permitted Sublessee) with a copy to the Contracting Officer Representative
or Representatives for the Military Airlift Command of the United States Air
Force to whom notices must be given under the contract governing Lessee's (or
any Permitted Sublessee's) participation in CRAF with respect to the Aircraft,
Airframe or any Engine.
15.3 RIGHT TO PERFORM FOR LESSEE
If Lessee (i) fails to make any payment of Rent required to be made by it
hereunder or (ii) fails to perform or comply with any of its agreements
contained herein and such failure continues for a period of thirty days after
written notice thereof is given by Lessor or Mortgagee to Lessee, Lessor or
Mortgagee may (but shall not be obligated to) make such payment or perform or
comply with such agreement, and the amount of such payment and the amount of the
expenses of Lessor or Mortgagee incurred in connection with such payment or the
performance of or compliance with such agreement, as the case may be, together
with interest thereon at the Payment Due Rate, shall be deemed Supplemental
Rent, payable by Lessee upon demand by Lessor or Mortgagee, whichever is
entitled thereto. No such payment, performance or compliance shall be deemed to
cure any Lease Default or Lease Event of Default or otherwise relieve Lessee of
its obligations with respect thereto.
15.4 DETERMINATION OF FAIR MARKET RENTAL VALUE AND FAIR
MARKET SALES VALUE
For the purpose of this Section 15, the "Fair Market Rental Value" or the
"Fair Market Sales Value" of the Aircraft, Airframe or any Engine, shall be
determined on an "as is, where is" basis and shall take into account customary
brokerage and other out-of-pocket fees and expenses which typically would be
incurred in connection with a re-lease or sale of the Aircraft, Airframe or any
Engine. Any such determination shall be made by an Appraiser selected by Lessor
and the costs and expenses associated therewith shall be borne by Lessee, unless
Lessor does not obtain possession of the Aircraft, Airframe and Engines pursuant
to this Section 15, in which case an Appraiser shall not be appointed and Fair
Market Rental Value and Fair Market Sales Value for purposes of this Section 15
shall be zero.
15.5 REMEDIES CUMULATIVE
Nothing contained in this Lease shall be construed to limit in any way any
right, power, remedy or privilege of Lessor hereunder or under any other
Operative Agreement or now or hereafter existing at law or in equity. Each and
every right, power, remedy and privilege hereby given to, or retained by, Lessor
in this Lease shall be in addition to and not in limitation of every other
right, power, remedy and privilege given under the Operative Agreements or now
or hereafter existing at law or in equity. Each and every right, power, remedy
and privilege of Lessor under this Lease and any other Operative Agreement may
be exercised from time to time or simultaneously and as often and in such order
as may be deemed expedient by Lessor. All such rights, powers, remedies and
privileges shall be cumulative and not mutually exclusive, and the exercise of
one shall not be deemed a waiver of the right to exercise any other. Lessee
hereby waives to the extent permitted by applicable Law any right which it may
have to require Lessor to choose or elect remedies.
SECTION 16. LESSEE'S OBLIGATIONS; NO SETOFF, COUNTERCLAIM,
ETC.
(a) Lessee's obligation to pay Rent hereunder shall be absolute and
unconditional, and shall not be affected by any event or circumstance,
including, without limitation: (i) any setoff, counterclaim, recoupment, defense
or other right that Lessee may have against Lessor, Mortgagee, any Participant,
any Note Holder, or any other Person for any reason whatsoever; (ii) any defect
in the title, airworthiness, condition, design, operation or fitness for use of,
or any damage to or loss or destruction of, the Aircraft, Airframe or any
Engine, or any interruption or cessation in the use or possession thereof by
Lessee for any reason whatsoever; (iii) any insolvency, bankruptcy,
reorganization or similar proceedings by or against Lessee or any other Person;
or (iv) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
(b) If for any reason whatsoever this Lease shall be terminated in whole
or in part by operation of law or otherwise except as specifically provided
herein, Lessee nonetheless agrees to pay an amount equal to each Rent payment at
the time such payment would have become due and payable in accordance with the
terms hereof had this Agreement not been terminated in whole or in part. Lessee
hereby waives, to the extent permitted by applicable law, any and all rights
that it may now have or that at any time hereafter may be conferred upon it, by
statute or otherwise, to terminate, cancel, quit or surrender this Agreement,
except in accordance with the express terms hereof.
(c) Nothing set forth in this Section 16 shall be construed to prohibit
Lessee from separately pursuing any claim that it may have from time to time
against Lessor or any other Person with respect to any matter (other than the
absolute and unconditional nature of Lessee's obligations hereunder to pay Rent,
and other than the matters specified in paragraphs (a) and (b) above).
SECTION 17. RENEWAL AND PURCHASE OPTIONS
17.1 NOTICES GENERALLY
(a) At least 120 days prior to the Scheduled Expiration Date or, if a
Renewal Lease Term is then in effect, prior to the Scheduled Renewal Term
Expiration Date of such Renewal Lease Term, Lessee may provide notice to Lessor
that Lessee may exercise either the option to extend the leasing of the Aircraft
for a Renewal Lease Term pursuant to Section 17.2 or the option to purchase the
Aircraft on the Scheduled Expiration Date or Scheduled Renewal Term Expiration
Date of such Renewal Lease Term, as the case may be, pursuant to Section 17.3 (a
"Preliminary Notice").
(b) If any such Preliminary Notice is given by Lessee, then Lessee may
provide a further notice specifying which option it intends to elect, with
respect to the relevant period, pursuant to Section 17.2.1 or 17.3.1, as the
case may be.
17.2 RENEWAL OPTIONS
17.2.1 RENEWAL NOTICE
(a) If Lessee has given a Preliminary Notice, as specified in Section
17.1, and subject to the terms and conditions of this Section 17.2, Lessee may
exercise its option to extend the leasing of the Aircraft hereunder until the
next Scheduled Renewal Term Expiration Date, on the same terms, provisions and
conditions (except as contemplated by this Section 17) set forth herein and in
the other Lessee Operative Agreements with respect to the Base Lease Term, by
delivery of a notice (a "Renewal Notice") to Lessor not less than 90 days prior
to (i) if the Base Lease Term is then in effect, the Scheduled Expiration Date,
or (ii) if a Renewal Lease Term is then in effect, the Scheduled Renewal Term
Expiration Date for such Renewal Lease Term.
(b) Notwithstanding anything to the contrary in this Agreement or any
other Operative Agreement:
(i) No Preliminary Notice or Renewal Notice shall be binding on
Lessor or oblige Lessor to extend the leasing of the Aircraft hereunder
for a Renewal Lease Term if any Lease Event of Default shall have occurred
and be continuing on and as of the date that such Renewal Lease Term would
otherwise commence.
(ii) Any Renewal Notice shall be revocable by Lessee until 10
Business Days after the Renewal Rent is determined in accordance with
Sections 17.2.2 and unless revoked by written notice by Lessee to Lessor
shall thereafter become irrevocable and shall constitute an unconditional
obligation of Lessee to extend the leasing of the Aircraft hereunder for
the Renewal Lease Term to which such Renewal Notice relates.
(iii) Lessee shall not be entitled to give any Renewal Notice if it
has (x) not delivered a Preliminary Notice or (y) delivered a Purchase
Notice to Lessor.
17.2.2 RENEWAL RENT
(a) During the Renewal Lease Term, Lessee shall pay to Lessor on each
Payment Date, in the manner and in the funds of the type specified in Section
3.3, Renewal Rent in arrears.
(b) The Renewal Rent payable by Lessee on each Payment Date during any
Fixed Renewal Lease Term shall be the lower of (i) an amount equal to one-half
of the average of the semiannual Basic Rent amounts payable during the Base
Lease Term and(ii) the Fair Market Rental Value of the Aircraft for such Renewal
Lease Term. The Renewal Rent payable by Lessee on each Payment Date during any
Subsequent Renewal Lease Term shall be the Fair Market Rental Value of the
Aircraft for such Renewal Lease Term. Any such Fair Market Rental Value shall be
determined not more than 120 days and not less than 100 days prior to the date
of commencement of such Renewal Lease Term by mutual agreement of Lessor and
Lessee or, if they shall be unable to agree, by an appraisal in accordance with
Section 17.4.
17.2.3 STIPULATED LOSS AND TERMINATION VALUES
(a) For any Renewal Lease Term, Stipulated Loss Value Dates and
Termination Value Dates shall be extended throughout such Renewal Lease Term on
the same days and for the same months as during the Base Lease Term.
(b) Stipulated Loss Value and Termination Value amounts that are payable
during any such Renewal Lease Term shall be determined at the same time that the
Renewal Rent for such Renewal Lease Term is determined under Section 17.2.2.
Stipulated Loss Values and Termination Values for any such Renewal Lease Term
shall, commencing on the first day of such Renewal Lease Term, be equal to the
Fair Market Sales Value of the Aircraft, computed as of the first day of such
Renewal Lease Term, and shall decline ratably on a monthly basis to the Fair
Market Sales Value of the Aircraft as of the last day of such Renewal Lease
Term.
(c) Any Fair Market Sales Value of the Aircraft, for purposes of
calculating Stipulated Loss Value and Termination Value amounts applicable
during any such Renewal Lease Term, shall be determined by mutual agreement of
Lessor and Lessee or, if they shall be unable to agree, by an appraisal in
accordance with Section 17.4.
17.3 PURCHASE OPTION
17.3.1 PURCHASE NOTICE
(a) Subject to Section 17.1 and the terms and conditions of this Section
17.3, Lessee may elect to purchase the Aircraft, on any Purchase Date, at a
purchase price equal to the lesser of 50% of Lessor's Cost and the Fair Market
Sales Value of the Aircraft computed as of the Purchase Date.
(b) Lessee may exercise such option to purchase the Aircraft, by delivery
of a notice (a "Purchase Notice") to Lessor not less than 90 days prior to the
Purchase Date specified in such Purchase Notice.
(c) Notwithstanding anything to the contrary in this Agreement or any
other Operative Agreement:
(i) Any Purchase Notice (whether delivered or deemed to have been
delivered) shall be revocable until 10 Business Days after the
determination of the Fair Market Sales Value in accordance with Section
17.3.2 and unless revoked by written notice by Lessee to Lessor shall
thereafter become irrevocable and shall constitute an unconditional
obligation of Lessee to purchase the Aircraft under this Section 17.3.
(ii) Lessee shall not be entitled to give any Purchase Notice in
respect of any Purchase Date if it has delivered a Renewal Notice for a
Renewal Lease Term that would commence immediately following such Purchase
Date.
17.3.2 DETERMINATION OF FAIR MARKET SALES VALUE
The Fair Market Sales Value of the Aircraft shall be determined not more
than 120 days and not less than 100 days prior to the applicable Purchase Date
by mutual agreement of Lessor and Lessee or, if they shall be unable to agree,
by an appraisal in accordance with Section 17.4.
17.3.3 TITLE
Upon full and final payment by Lessee of (a) the applicable purchase price
of the Aircraft, (b) all unpaid Rent due and payable through and including the
Purchase Date and (c) all other amounts due and payable by Lessee under this
Agreement, Lessor will transfer to Lessee title to the Aircraft in accordance
with Section 4.5.
17.4 APPRAISALS
Whenever Fair Market Rental Value or Fair Market Sales Value of the
Aircraft is required to be determined by an appraisal under this Section 17,
Lessee and Lessor shall appoint a mutually satisfactory Appraiser to conduct
such appraisal. If Lessee and Lessor fail to agree upon a satisfactory Appraiser
then each shall promptly appoint a separate Appraiser and such Appraisers shall
jointly determine such amount. If either Lessee or Lessor fails to so appoint an
Appraiser, the determination of the single Appraiser appointed shall be final.
If two Appraisers are appointed and within 7 days after the appointment of the
latter of such two Appraisers, they cannot agree upon such amount, such two
Appraisers shall, within 8 days after such latter appointment, appoint a third
Appraiser and such amount shall be determined by such three Appraisers, who
shall make their separate appraisals within 7 days following the appointment of
the third Appraiser, and any determination so made shall be conclusive and
binding upon Lessor and Lessee. If no such third Appraiser is appointed within
such 8-day period, either Lessor or Lessee may apply to the American Arbitration
Association to make such appointment, and both parties shall be bound by such
appointment. The foregoing appraisal procedure shall in any event be completed
no less than 125 days before the end of the Base Lease Term or the current
Renewal Lease Term, as the case may be. If three Appraisers are appointed and
the difference between the determination which is farther from the middle
determination and the middle determination is more than 125% of the difference
between the middle determination and the third determination, then such farther
determination shall be excluded, the remaining two determinations shall be
averaged and such average shall be final and binding upon Lessor and Lessee.
Otherwise, the average of all three determinations shall be final and binding
upon Lessor and Lessee. The fees and expenses of all such Appraisers and such
appraisal procedure shall be borne equally by Lessee and Lessor, PROVIDED that
if Lessee elects not to renew this Lease or purchase the Aircraft following the
conclusion of such appraisal, Lessee shall pay all expenses of such appraisal.
SECTION 18. MISCELLANEOUS
18.1 AMENDMENTS
No provision of this Agreement may be amended, supplemented, waived,
modified, discharged, terminated or otherwise varied orally, but only by an
instrument in writing that specifically identifies the provision of this
Agreement that it purports to amend, supplement, waive, modify, discharge,
terminate or otherwise vary and is signed by Lessor and Lessee. Each such
amendment, supplement, waiver, modification, discharge, termination or variance
shall be effective only in the specific instance and for the specific purpose
for which it is given. No provision of this Agreement shall be varied or
contradicted by oral communication, course of dealing or performance or other
manner not set forth in an agreement, document or instrument in writing and
signed by Lessor and Lessee.
18.2 SEVERABILITY
If any provision hereof shall be held invalid, illegal or unenforceable in
any respect in any jurisdiction, then, to the extent permitted by Law (a) all
other provisions hereof shall remain in full force and effect in such
jurisdiction and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction. If, however, any Law pursuant to which such provisions are held
invalid, illegal or unenforceable may be waived, such Law is hereby waived by
the parties hereto to the full extent permitted, to the end that this Agreement
shall be deemed to be a valid and binding agreement in all respects, enforceable
in accordance with its terms.
18.3 THIRD-PARTY BENEFICIARY
This Agreement is not intended to, and shall not, provide any person not a
party hereto (other than Mortgagee, the Participants, the Indenture Indemnitees
and the Persons referred to in Section 4.6) with any rights of any nature
whatsoever against either of the parties hereto, and no person not a party
hereto (other than Mortgagee, the Participants, the Indenture Indemnitees and
the Persons referred to in Section 4.6) shall have any right, power or privilege
in respect of, or have any benefit or interest arising out of, this Agreement.
18.4 REPRODUCTION OF DOCUMENTS
This Agreement, all annexes, schedules and exhibits hereto and all
agreements, instruments and documents relating hereto, including, without
limitation (a) consents, waivers and modifications that may hereafter be
executed and (b) financial statements, certificates and other information
previously or hereafter furnished to any party hereto, may be reproduced by such
party by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process, and such party may destroy any original
documents so reproduced. Any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by such party in the regular course of business) and any enlargement, facsimile
or further reproduction of such reproduction likewise is admissible in evidence.
18.5 COUNTERPARTS
This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts (or upon separate signature pages
bound together into one or more counterparts), each of which when so executed
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.
18.6 NOTICES
Unless otherwise expressly permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers and other
communications required or permitted to be made, given, furnished or filed
hereunder shall be in writing (it being understood that the specification of a
writing in certain instances and not in others does not imply an intention that
a writing is not required as to the latter), shall refer specifically to this
Agreement and shall be personally delivered, sent by facsimile or
telecommunication transmission (which in either case provides written
confirmation to the sender of its delivery), sent by registered mail or
certified mail, return receipt requested, postage prepaid, or sent by overnight
courier service, in each case to the respective address or facsimile number set
forth for such party in Schedule 1 to the Participation Agreement, or to such
other address or number as either party hereto may hereafter specify by notice
to the other party hereto. Each such notice, request, demand, authorization,
direction, consent, waiver or other communication shall be effective when
received or, if made, given, furnished or filed (a) by facsimile or
telecommunication transmission, when confirmed, or (b) by registered or
certified mail, three Business Days after being deposited, properly addressed,
with the U.S. Postal Service.
18.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE
(A) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
(B) EACH PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS AND SUBMITS
ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
IN THE CITY AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT OR PROCEEDING
WITH RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT.
(C) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESS SET FORTH PURSUANT TO SECTION 18.6. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS
SECTION 18.7(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH
PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS
TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT
IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED
IN ANY ACTION OR PROCEEDING BASED THEREON.
(D) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY LEGAL ACTION OR PROCEEDING BROUGHT HEREUNDER IN ANY OF THE
ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT VENUE FOR THE ACTION OR PROCEEDING IS IMPROPER OR THAT THIS
AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH
COURTS.
(E) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
18.8 NO WAIVER
No failure on the part of Lessor to exercise, and no delay by Lessor in
exercising, any of its rights, powers, remedies or privileges under this
Agreement or provided at Law, in equity or otherwise shall impair, prejudice or
constitute a waiver of any such right, power, remedy or privilege or be
construed as a waiver of any breach hereof or default hereunder or as an
acquiescence therein, nor shall any single or partial exercise of any such
right, power, remedy or privilege preclude any other or further exercise thereof
by Lessor or the exercise of any other right, power, remedy or privilege by
Lessor. No notice to or demand on Lessee in any case shall, unless otherwise
required under this Agreement, entitle Lessee to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
Lessor to any other or further action in any circumstances without notice or
demand.
18.9 ENTIRE AGREEMENT
This Agreement, together with the other Operative Agreements, on and as of
the date hereof constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and all prior or contemporaneous
understandings or agreements, whether written or oral, between the parties
hereto with respect to such subject matter are hereby superseded in their
entireties.
[This space intentionally left blank.]
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Agreement to be duly executed as of the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its individual capacity,
except as expressly provided herein, but
solely as Owner Trustee under the Trust
Agreement
By__________________________________________
Name:
Title:
CONTINENTAL AIRLINES, INC.,
as Lessee
By__________________________________________
Name:
Title:
Receipt of this original counterpart of the foregoing Lease Agreement is
hereby acknowledged on this ____ day of _________, _______.
WILMINGTON TRUST COMPANY,
as Mortgagee
By__________________________________________
Name:
Title:
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Agreement to be duly executed as of the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its individual capacity,
except as expressly provided herein, but
solely as Owner Trustee under the Trust
Agreement
By__________________________________________
Name:
Title:
CONTINENTAL AIRLINES, INC.,
as Lessee
By__________________________________________
Name:
Title:
ANNEX A
[SEE LEASED AIRCRAFT PARTICIPATION AGREEMENT ANNEX A]
ANNEXES B-D
[OMITTED AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
|---------------------------------|
| EXHIBIT B - LEASE SUPPLEMENT |
| LEASE AGREEMENT ___ |
|---------------------------------|
LEASE SUPPLEMENT NO.__
LEASE SUPPLEMENT No. __, dated ________, 199_, between FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, but solely as Owner Trustee under the Trust Agreement
_____, dated as of _____________, with the Owner Participant named therein (such
Owner Trustee, in its capacity as such Owner Trustee being herein called
"Lessor"), and CONTINENTAL AIRLINES, INC., a Delaware corporation, as Lessee
("Lessee").
Lessor and Lessee have heretofore entered into that certain Lease
Agreement ______, dated as of ______________, relating to one Boeing Model
__________ aircraft (herein called the "Lease" and the defined terms therein
being hereinafter used with the same meanings). The Lease provides for the
execution and delivery of this Lease Supplement for the purpose of leasing the
Airframe and Engines under the Lease as and when delivered by Lessor to Lessee
in accordance with the terms thereof.
The Lease relates to the Airframe and Engines described below, and a
counterpart of the Lease to which this Lease Supplement is attached and of which
this Lease Supplement is a part, is being filed for recordation on the date
hereof with the Federal Aviation Administration as one document.
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:
1. Lessee has been duly authorized by Lessor to accept, and does hereby
irrevocably accept on behalf of Lessor delivery of the Aircraft from Airframe
Manufacturer under, and for all purposes of, the Aircraft Bill of Sale, the
Participation Agreement and the Purchase Agreement Assignment.
2. Lessor hereby delivers and leases to Lessee under the Lease and Lessee
hereby accepts and leases from Lessor under the Lease the following described
Boeing __________ aircraft (the "Aircraft"), which Aircraft as of the date
hereof consists of the following components:
(i) Airframe: U.S. Registration No. ___________;
manufacturer's serial no. ___________; and
(ii) Engines: two (2) _________________________ engines
bearing, respectively, manufacturer's serial nos. ___________
and ____________(each of which engines has 750 or more rated
takeoff horsepower or the equivalent of such horsepower).
3. The Delivery Date of the Aircraft is the date of this Lease Supplement
set forth in the opening paragraph hereof.
4. Lessee hereby confirms to Lessor that Lessee has duly and irrevocably
accepted the Aircraft under and for all purposes hereof, of the Lease and of the
other Lessee Operative Agreements.
5. All of the terms and provisions of this Lease Supplement are hereby
incorporated by reference in the Lease to the same extent as if fully set forth
therein.
6. This Lease Supplement 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
instrument.
7. To the extent, if any, that this Lease Supplement constitutes chattel
paper (as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction), no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
original executed counterpart, which shall be identified as the counterpart
containing the receipt therefor executed by the Mortgagee on the signature page
thereof.
[This space intentionally left blank.]
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Supplement to be duly executed as of the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its individual capacity,
except as expressly provided herein, but
solely as Owner Trustee under the Trust
Agreement
By__________________________________________
Name:
Title:
CONTINENTAL AIRLINES, INC.,
as Lessee
By__________________________________________
Name:
Title:
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease
Supplement to be duly executed as of the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its individual capacity,
except as expressly provided herein, but
solely as Owner Trustee under the Trust
Agreement
By__________________________________________
Name:
Title:
CONTINENTAL AIRLINES, INC.,
as Lessee
By__________________________________________
Name:
Title:
Receipt of this original counterpart of the foregoing Lease Supplement is
hereby acknowledged on this ____ day of _________, __________.
WILMINGTON TRUST COMPANY,
as Mortgagee
By__________________________________________
Name:
Title:
|---------------------------------|
| EXHIBIT B - LEASE SUPPLEMENT |
| LEASE AGREEMENT ___ |
|---------------------------------|
RETURN ACCEPTANCE SUPPLEMENT
RETURN ACCEPTANCE SUPPLEMENT dated ________, between FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, but solely as Owner Trustee under the Trust Agreement _____________,
dated as of ________________________, with the Owner Participant named therein
(such Owner Trustee, in its capacity as such Owner Trustee being herein called
"Lessor"), and CONTINENTAL AIRLINES, INC., a Delaware corporation, as Lessee
("Lessee").
Lessor and Lessee have heretofore entered into that certain Lease
Agreement _________________, dated as of _______________, relating to one Boeing
Model ___________________ aircraft (herein called the "Lease" and the defined
terms therein being hereinafter used with the same meanings). The Lease relates
to the Airframe and Engines described below.
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:
1. This Return Acceptance Supplement is executed by Lessor and
Lessee to confirm that on the date hereof the following described Airframe and
Engines were returned by Lessor to Lessee:
(i) Airframe: U.S. Registration No. ________________;
manufacturer's serial no. __________________; and
(ii) Engines: two (2) _____________________ engines
bearing, respectively, manufacturer's serial nos.
____________________________ and _________________________.
2. This Return Acceptance Supplement is intended to be delivered in
- ---------------------.
3. Lessor and Lessee agree that the return of the Aircraft is in
compliance with Section 5 and Annex B of the Lease, except as set forth below:
4. Lessor and Lessee agree that the Lease is terminated, except for
the provisions thereof that expressly survive termination.
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Return
Acceptance Supplement to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION
as Lessor, not in its individual capacity,
except as expressly provided herein, but
solely as Owner Trustee under the Trust
Agreement
By__________________________________________
Name:
Title:
CONTINENTAL AIRLINES, INC.,
as Lessee
By__________________________________________
Name:
Title:
SCHEDULES 1-4
[OMMITTED AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
|----------------------------------|
| SCHEDULE 5 - PERMITTED COUNTRIES |
| LEASE AGREEMENT ___ |
|----------------------------------|
PERMITTED COUNTRIES
Argentina Morocco
Australia Netherlands
Austria New Zealand
Bahamas Norway
Belgium Paraguay
Brazil Peoples Republic of China
Canada Philippines
Chile Portugal
Denmark Republic of China (Taiwan)
Egypt Singapore
Ecuador South Africa
Finland South Korea
France Spain
Germany Sweden
Greece Switzerland
Hungary Thailand
Iceland Tobago
India Trinidad
Indonesia United Kingdom
Ireland Uruguay
Italy Venezuela
Japan
Luxembourg
Malaysia
Malta
Mexico
|----------------------------------|
| SCHEDULE 6 - PLACARDS |
| LEASE AGREEMENT ___ |
|----------------------------------|
PLACARDS
Leased from
First Security Bank, National Association,
not in its individual capacity but solely as
Owner Trustee, Owner and Lessor
and
Mortgaged to
Wilmington Trust Company,
not in its individual capacity but solely as Mortgagee
- --------------------------------------------------------------------------------
TRUST INDENTURE AND MORTGAGE ___
Dated as of ____________, 199_
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,
Owner Trustee
and
WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Mortgagee,
Mortgagee
- --------------------------------------------------------------------------------
EQUIPMENT NOTES COVERING
ONE BOEING ________ AIRCRAFT
BEARING U.S. REGISTRATION MARK N_____
LEASED BY CONTINENTAL AIRLINES, INC.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
GRANTING CLAUSE ...................................................... 1
ARTICLE I
DEFINITIONS
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. Form of Equipment Notes............................. 8
SECTION 2.02. Issuance and Terms of Equipment Notes............... 13
SECTION 2.03. Payments from Trust Indenture Estate Only........... 15
SECTION 2.04. Method of Payment................................... 16
SECTION 2.05. Application of Payments............................. 18
SECTION 2.06. Termination of Interest in Trust Indenture Estate... 19
SECTION 2.07. Registration Transfer and Exchange of Equipment
Notes............................................... 19
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes............................................... 20
SECTION 2.09. Payment of Expenses on Transfer; Cancellation....... 21
SECTION 2.10. Mandatory Redemptions of Equipment Notes............ 21
SECTION 2.11. Voluntary Redemptions of Equipment Notes............ 21
SECTION 2.12. Redemptions; Notice of Redemption................... 22
SECTION 2.13. Option to Purchase Equipment Notes.................. 22
SECTION 2.14. Subordination....................................... 24
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution............................. 25
SECTION 3.02. Event of Loss; Replacement; Voluntary Termination;
Optional Redemption................................. 26
SECTION 3.03. Payments After Event of Default..................... 27
SECTION 3.04. Certain Payments.................................... 29
SECTION 3.05. Other Payments...................................... 30
SECTION 3.06. Payments to Owner Trustee........................... 30
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF MORTGAGEE
SECTION 4.01. Covenants of Owner Trustee.......................... 31
SECTION 4.02. Event of Default.................................... 32
SECTION 4.03. Certain Rights...................................... 34
SECTION 4.04. Remedies............................................ 35
SECTION 4.05. Return of Aircraft, Etc............................. 38
SECTION 4.06. Remedies Cumulative................................. 40
SECTION 4.07. Discontinuance of Proceedings....................... 40
SECTION 4.08. Waiver of Past Defaults............................. 40
SECTION 4.09. Appointment of Receiver............................. 41
SECTION 4.10. Mortgagee Authorized to Execute Bills of Sale, Etc.. 41
SECTION 4.11. Rights of Note Holders to Receive Payment........... 41
ARTICLE V
DUTIES OF THE MORTGAGEE
SECTION 5.01. Notice of Event of Default.......................... 41
SECTION 5.02. Action Upon Instructions; Certain Rights and
Limitations......................................... 42
SECTION 5.03. Indemnification..................................... 45
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions........................................ 45
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions........................................ 46
SECTION 5.06. Replacement Airframes and Replacement Engines....... 46
SECTION 5.07. Indenture Supplements for Replacements.............. 46
SECTION 5.08. Effect of Replacement............................... 47
SECTION 5.09. Investment of Amounts Held by Mortgagee............. 47
ARTICLE VI
THE OWNER TRUSTEE AND THE MORTGAGEE
SECTION 6.01. Acceptance of Trusts and Duties..................... 48
SECTION 6.02. Absence of Duties................................... 48
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents........................................... 49
SECTION 6.04. No Segregation of Monies; No Interest............... 49
SECTION 6.05. Reliance; Agreements; Advice of Counsel............. 50
SECTION 6.06. Capacity in Which Acting............................ 50
SECTION 6.07. Compensation........................................ 50
SECTION 6.08. Instructions from Note Holders...................... 51
ARTICLE VII
INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification............................ 51
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee................... 52
SECTION 8.02. Resignation of Mortgagee; Appointment of Successor.. 52
SECTION 8.03. Appointment of Additional and Separate Trustees..... 53
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations............... 55
SECTION 9.02. Trustees Protected.................................. 57
SECTION 9.03. Documents Mailed to Note Holders.................... 57
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Indenture Supplement................................ 57
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture...................... 58
SECTION 10.02. No Legal Title to Trust Indenture Estate in Note
Holders............................................. 58
SECTION 10.03. Sale of Aircraft by Mortgagee Is Binding............ 58
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Mortgagee, Owner Participant, Note Holders
and the other Indenture Indemnitees................. 59
SECTION 10.05. Notices............................................. 59
SECTION 10.06. Severability........................................ 59
SECTION 10.07. No Oral Modification or Continuing Waivers.......... 59
SECTION 10.08. Successors and Assigns.............................. 60
SECTION 10.09. Headings............................................ 60
SECTION 10.10. Normal Commercial Relations......................... 60
SECTION 10.11. Governing Law; Counterpart Form..................... 60
SECTION 10.12. Voting By Note Holders.............................. 61
SECTION 10.13. Bankruptcy.......................................... 61
EXHIBIT A Form of Trust Indenture and Mortgage Supplement
SCHEDULE I Equipment Notes Amortization and Interest Rates
TRUST INDENTURE AND MORTGAGE ___
TRUST INDENTURE AND MORTGAGE ___, dated as of ___________, 199_
("Trust Indenture"), between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity, except as
expressly stated herein, but solely as Owner Trustee under the Trust Agreement
referred to below (together with its successors under the Trust Agreement, the
"Owner Trustee"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation,
not in its individual capacity, except as expressly stated herein, but solely as
Mortgagee hereunder (together with its successors hereunder, the "Mortgagee").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and the Owner Trustee in its individual
capacity have entered into the Trust Agreement whereby, among other things, (i)
the Owner Trustee has established a certain trust for the use and benefit of the
Owner Participant subject, however, to the Trust Indenture Estate created
pursuant hereto for the use and benefit of, and with the priority of payment to,
the holders of Equipment Notes issued hereunder, and (ii) the Owner Trustee has
been authorized and directed to execute and deliver this Agreement;
WHEREAS, the parties hereto desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner Trustee of the
Equipment Notes and (ii) to provide for the assignment, mortgage and pledge by
the Owner Trustee to the Mortgagee, as part of the Trust Indenture Estate
hereunder, among other things, of all of the Owner Trustee's right, title and
interest in and to the Aircraft and, except as hereinafter expressly provided,
all of the Owner Trustee's right, title and interest in, to and under the Lease
and the Participation Agreement and all payments and other amounts received
hereunder or thereunder in accordance with the terms hereof or thereof, as
security for, among other things, the Owner Trustee's and the Lessee's
obligations to the Noteholders and the Indenture Indemnitees;
WHEREAS, all things have been done to make the Equipment Notes, when
executed by the Owner Trustee and authenticated and delivered by the Mortgagee
hereunder, the valid, binding and enforceable obligations of the Owner Trustee;
and
WHEREAS, all things necessary to make this Trust Indenture the valid,
binding and legal obligation of the Owner Trustee for the uses and purposes
herein set forth, in accordance with its terms, have been done and performed and
have happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that, to
secure the prompt payment of the Original Amount of, interest on, Make-Whole
Amount, if any, and all other amounts due with respect to, all Equipment Notes
from time to time outstanding hereunder according to their tenor and effect and
to secure the performance and observance by the Owner Trustee of all the
agreements, covenants and provisions contained herein and in the Participation
Agreement and the Equipment Notes, for the benefit of the Note Holders, the Loan
Participants and each of the Indenture Indemnitees and the prompt payment of all
amounts from time to time owing hereunder, under the Participation Agreement and
the Lease to the Loan Participants, the Note Holders or any Indenture Indemnitee
by the Owner Trustee or the Lessee and for the uses and purposes and subject to
the terms and provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes by the
holders thereof, and for other good and valuable consideration the receipt and
adequacy whereof are hereby acknowledged, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Mortgagee, its successors in trust and
assigns, for the security and benefit of the Loan Participants, the Note Holders
and each of the Indenture Indemnitees, a first priority security interest in and
mortgage lien on all right, title and interest of the Owner Trustee in, to and
under the following described property, rights and privileges, whether now or
hereafter acquired, other than Excluded Payments (which, collectively, excluding
Excluded Payments but including all property hereafter specifically subject to
the Lien of this Trust Indenture by the terms hereof or any supplement hereto,
are included within, and are referred to as, the "Trust Indenture Estate"), to
wit:
(1) The Airframe which is one Boeing ______ aircraft with the FAA
Registration number of N_____ and the manufacturer's serial number of
_______ and Engines, each of which Engines is a
____________________________ engine with the manufacturer's serial numbers
of _____ and _____, is of 750 or more rated takeoff horsepower or the
equivalent of such horsepower (such Airframe and Engines more particularly
described in the Indenture Supplement executed and delivered as provided
herein) as the same is now and will hereafter be constituted, whether now
owned by the Owner Trustee or hereafter acquired, leased or intended to be
leased under the Lease, and in the case of such Engines, whether or not any
such Engine shall be installed in or attached to the Airframe or any other
airframe, together with (a) all Parts of whatever nature, which are from
time to time included within the definitions of "Airframe" or "Engines",
whether now owned or hereafter acquired, including all substitutions,
renewals and replacements of and additions, improvements, accessions and
accumulations to the Airframe and Engines (other than additions,
improvements, accessions and accumulations which constitute appliances,
parts, instruments, appurtenances, accessories, furnishings or other
equipment excluded from the definition of Parts) and (b) all Aircraft
Documents;
(2) All right, title, interest, claims and demands of the Owner
Trustee, as Lessor, in, to and under the Lease, together with all rights,
powers, privileges, options and other benefits of the Owner Trustee as
lessor under the Lease, including the immediate and continuing right to
receive and collect all Rent, income, revenues, issues, profits, insurance
proceeds, condemnation awards and other payments, tenders and security now
or hereafter payable to or receivable by the Lessor under the Lease
pursuant thereto, and, subject to Section 5.02 hereof, the right to make
all waivers and agreements, to give and receive copies of all notices and
other instruments or communications, to accept surrender or redelivery of
the Aircraft or any part thereof, as well as all the rights, powers and
remedies on the part of the Owner Trustee as Lessor under the Lease, to
take such action upon the occurrence of a Lease Event of Default
thereunder, including the commencement, conduct and consummation of legal,
administrative or other proceedings, as shall be permitted by the Lease or
by Law, and to do any and all other things whatsoever which the Owner
Trustee or any lessor is or may be entitled to do under or in respect of
the Lease and any right to restitution from the Lessee or any other Person
in respect of any determination of invalidity of the Lease;
[(3) Each Permitted Sublease assignment and each assigned Permitted
Sublease (to the extent assigned under such Permitted Sublease assignment),
and including, without limitation, all rents or other payments of any kind
made under such assigned Permitted Sublease (to the extent assigned under
such Permitted Sublease assignment);]
[(3)/(4)] All right, title, interest, claims and demands of the Owner
Trustee in, to and under:
(a) the Purchase Agreement and the GTA;
(b) the Purchase Agreement Assignment, with the Consent and
Agreement and the Engine Consent and Agreement attached thereto;
(c) the Bills of Sale; and
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
(d) any and all other contracts, agreements and instruments
relating to the Airframe and Engines or any rights or interests
therein to which the Owner Trustee is now or may hereafter be a party;
together with all rights, powers, privileges, licenses, easements,
options and other benefits of the Owner Trustee under each contract,
agreement and instrument referred to in this clause [(3)/(4)], including
the right to receive and collect all payments to the Owner Trustee
thereunder now or hereafter payable to or receivable by the Owner Trustee
pursuant thereto and, subject to Section 5.02 hereof, the right to make all
waivers and agreements, to give and receive notices and other instruments
or communications, or to take any other action under or in respect of any
thereof or to take such action upon the occurrence of a default thereunder,
including the commencement, conduct and consummation of legal,
administrative or other proceedings, as shall be permitted thereby or by
Law, and to do any and all other things which the Owner Trustee is or may
be entitled to do thereunder and any right to restitution from the Lessee,
the Owner Participant or any other Person in respect of any determination
of invalidity of any thereof;
[(4)/(5)] All rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the Lien of this Trust
Indenture, including all payments or proceeds payable to the Owner Trustee
after termination of the Lease with respect to the Aircraft as the result
of the sale, lease or other disposition thereof, and all estate, right,
title and interest of every nature whatsoever of the Owner Trustee in and
to the same;
[(5)/(6)] Without limiting the generality of the foregoing, all
insurance and requisition proceeds with respect to the Aircraft or any part
thereof, including the insurance required under Section 11 of the Lease;
[(6)/(7)] Without limiting the generality of the foregoing, all rights
of the Owner Trustee to amounts paid or payable by Lessee to the Owner
Trustee under the Participation Agreement and all rights of the Owner
Trustee to enforce payments of any such amounts thereunder;
[(7)/(8)] Without limiting the generality of the foregoing, all monies
and securities from time to time deposited or required to be deposited with
the Mortgagee pursuant to any terms of this Trust Indenture or the Lease or
required hereby or by the Lease to be held by the Mortgagee hereunder as
security for the obligations of the Lessee under the Lease or of the Owner
Trustee hereunder; and
[(8)/(9)] All proceeds of the foregoing; excluding, however, in all
events from each of foregoing clauses (1) through [(8)/(9)] inclusive all
Excluded Payments and the right to specifically enforce the same or to sue
for damages for the breach thereof as provided in Section 5.02 hereof.
Concurrently with the delivery of this Trust Indenture, the Owner
Trustee will deliver to the Mortgagee the original executed counterpart of the
Lease and the Lease Supplement No. 1 (to each of which a chattel paper receipt
is attached), and executed copies of the Participation Agreement, the Purchase
Agreement and the GTA (to the extent assigned by the Purchase Agreement
Assignment), the Purchase Agreement Assignment, with the Consent and Agreement
and the Engine Consent and Agreement attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, and its successors and assigns, in trust for the equal and
proportionate benefit and security of the Loan Participants, the Note Holders
and the Indenture Indemnitees, except as provided in Section 2.14 and Article
III hereof without any preference, distinction or priority of any one Equipment
Note over any other by reason of priority of time of issue, sale, negotiation,
date of maturity thereof or otherwise for any reason whatsoever, and for the
uses and purposes and in all cases and as to all property specified in
paragraphs (1) through [(8)] inclusive above, subject to the terms and
provisions set forth in this Trust Indenture.
It is expressly agreed that anything herein contained to the contrary
notwithstanding, the Owner Trustee shall remain liable under the Indenture
Agreements, to perform all of the obligations assumed by it thereunder, except
to the extent prohibited or excluded from doing so pursuant to the terms and
provisions thereof, and the Mortgagee, the Loan Participants, the Note Holders
and the Indenture Indemnitees shall have no obligation or liability under the
Indenture Agreements, by reason of or arising out of the assignment hereunder,
nor shall the Mortgagee, the Loan Participants, the Note Holders or the
Indenture Indemnitees be required or obligated in any manner to perform or
fulfill any obligations of the Owner Trustee under or pursuant to the Indenture
Agreements, or, except as herein expressly provided, to make any payment, or to
make any inquiry as to the nature or sufficiency of any payment received by it,
or present or file any claim, or take any action to collect or enforce the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
The Owner Trustee does hereby constitute the Mortgagee the true and
lawful attorney of the Owner Trustee, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of substitution,
and with full power (in the name of the Owner Trustee or otherwise) to ask for,
require, demand, receive, compound and give acquittance for any and all monies
and claims for monies (in each case including insurance and requisition proceeds
but in all cases excluding Excluded Payments) due and to become due under or
arising out of the Indenture Agreements, and all other property which now or
hereafter constitutes part of the Trust Indenture Estate, to endorse any checks
or other instruments or orders in connection therewith and to file any claims or
to take any action or to institute any proceedings which the Mortgagee may deem
to be necessary or advisable in the premises. Without limiting the generality of
the foregoing, but subject to the rights of the Owner Trustee and the Owner
Participant under Sections 2.13, 4.03 and 4.04(a) hereof, during the continuance
of any Event of Default under this Trust Indenture, the Mortgagee shall have the
right under such power of attorney to accept any offer in connection with the
exercise of remedies as set forth herein of any purchaser to purchase the
Airframe and Engines and upon such purchase to execute and deliver in the name
of and on behalf of the Owner Trustee an appropriate bill of sale and other
instruments of transfer relating to the Airframe and Engines, when purchased by
such purchaser, and to perform all other necessary or appropriate acts with
respect to any such purchase, and in its discretion to file any claim or take
any other action or proceedings, either in its own name or in the name of the
Owner Trustee or otherwise, which the Mortgagee may deem necessary or
appropriate to protect and preserve the right, title and interest of the
Mortgagee in and to such Rents and other sums and the security intended to be
afforded hereby; PROVIDED, HOWEVER, that no action of the Mortgagee pursuant to
this paragraph shall increase the obligations or liabilities of the Owner
Trustee to any Person beyond those obligations and liabilities specifically set
forth in this Trust Indenture and in the other Operative Agreements. Under the
Lease, Lessee is directed, so long as this Trust Indenture shall not have been
fully discharged, to make all payments of Rent (other than Excluded Payments)
and all other amounts which are required to be paid to or deposited with the
Owner Trustee pursuant to the Lease (other than Excluded Payments) directly to,
or as directed by, the Mortgagee at such address or addresses as the Mortgagee
shall specify, for application as provided in this Trust Indenture. The Owner
Trustee agrees that promptly upon receipt thereof, it will transfer to the
Mortgagee any and all monies from time to time received by it constituting part
of the Trust Indenture Estate, for distribution by the Mortgagee pursuant to
this Trust Indenture, except that the Owner Trustee shall accept for
distribution pursuant to the Trust Agreement any amounts distributed to it by
the Mortgagee under this Trust Indenture.
The Owner Trustee agrees that at any time and from time to time, upon
the written request of the Mortgagee, the Owner Trustee will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all such
further instruments and documents as the Mortgagee may reasonably deem necessary
or desirable to perfect, preserve or protect the mortgage, security interests
and assignments created or intended to be created hereby or to obtain for the
Mortgagee the full benefits of the assignment hereunder and of the rights and
powers herein granted.
The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, and the Lien
hereof shall not have been released pursuant to Section 10.01 hereof, any of its
right, title or interest hereby assigned, to anyone other than the Mortgagee,
and that it will not, except as otherwise provided in this Trust Indenture and
except with respect to Excluded Payments to which it is entitled, (i) accept any
payment from Lessee [or any Permitted Sublessee] under any Indenture
Agreement, (ii) enter into any agreement amending or supplementing any Indenture
Agreement, (iii) execute any waiver or modification of, or consent under, the
terms of, or exercise any rights, powers or privileges under, any Indenture
Agreement, (iv) settle or compromise any claim arising under any Indenture
Agreement or (v) submit or consent to the submission of any dispute, difference
or other matter arising under or in respect of any Indenture Agreement to
arbitration thereunder.
The Owner Trustee does hereby agree that it will not without the
written consent of the Mortgagee:
(a) receive or collect or agree to the receipt or collection of any
payment (other than Excluded Payments) of Rent, including Basic Rent, Stipulated
Loss Value, Termination Value or any other payment to be made pursuant to
Section 9 or 10 of the Lease prior to the date for the payment thereof provided
for by the Lease or assign, transfer or hypothecate (other than to the Mortgagee
hereunder) any payment of Rent, including Basic Rent, Stipulated Loss Value,
Termination Value or any other payment to be made pursuant to Section 9 or 10 of
the Lease, then due or to accrue in the future under the Lease in respect of the
Airframe and Engines; or
(b) except as contemplated by the Trust Agreement in connection with
the appointment of a successor owner trustee, sell, mortgage, transfer, assign
or hypothecate (other than to the Mortgagee hereunder) its interest in the
Airframe and Engines or any part thereof or in any amount to be received by it
from the use or disposition of the Airframe and Engines, other than amounts
distributed to it pursuant to Article III hereof.
It is hereby further agreed that any and all property described or
referred to in the granting clauses hereof which is hereafter acquired by the
Owner Trustee shall IPSO FACTO, and without any other conveyance, assignment or
act on the part of the Owner Trustee or the Mortgagee, become and be subject to
the Lien herein granted as fully and completely as though specifically described
herein, but nothing contained in this paragraph shall be deemed to modify or
change the obligations of the Owner Trustee contained in the foregoing
paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and does
hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any other Owner Trustee Agreement.
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Notwithstanding the Granting Clause or any of the preceding
paragraphs, there is hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excluded Payments. Further,
nothing in the Granting Clause or the preceding paragraphs shall impair any of
the rights of the Owner Trustee or the Owner Participant under Section 2.13,
4.03, 4.04, 4.08, 5.02 or 5.03 hereof.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto
as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed in the manner described, in Annex A to the Lease.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. FORM OF EQUIPMENT NOTES
The Equipment Notes shall be substantially in the form set forth
below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED
UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH
REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS OWNER TRUSTEE UNDER
TRUST AGREEMENT ___ DATED AS OF _______________, 199_. SERIES [_____] LIMITED
RECOURSE EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION WITH THE BOEING MODEL
_______ AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N_____.
No. ____ Date: [ __________, 199__ ]
$-----------------------
INTEREST RATE MATURITY DATE
------------- -------------
[-----------] [------------]
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement ___, dated as of ____________,
199_, between the Owner Participant named therein and First Security Bank,
National Association (herein as such Trust Agreement may be supplemented or
amended from time to time called the "Trust Agreement"), hereby promises to pay
to __________________, or the registered assignee thereof, the principal sum of
$____________ (the "Original Amount"), together with interest on the amount of
the Original Amount remaining unpaid from time to time (calculated on the basis
of a year of 360 days comprised of twelve 30-day months) from the date hereof
until paid in full at a rate per annum equal to the Debt Rate. The Original
Amount of this Equipment Note shall be payable in installments on the dates set
forth in Schedule I hereto equal to the corresponding percentage of the Original
Amount of this Equipment Note set forth in Schedule I hereto. Accrued but unpaid
interest shall be due and payable in semiannual installments commencing on
_____________, 199_, and thereafter on April 1 and October 1 of each year, to
and including _______________. Notwithstanding the foregoing, the final payment
made on this Equipment Note shall be in an amount sufficient to discharge in
full the unpaid Original Amount and all accrued and unpaid interest on, and any
other amounts due under, this Equipment Note. Notwithstanding anything to the
contrary contained herein, if any date on which a payment under this Equipment
Note becomes due and payable is not a Business Day, then such payment shall not
be made on such scheduled date but shall be made on the next succeeding Business
Day and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Mortgage ___, dated as of _____________, 199_, between the Owner
Trustee and Wilmington Trust Company (the "Mortgagee"), as the same may be
amended or supplemented from time to time. All other capitalized terms used in
this Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Payment Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).
All payments of Original Amount, interest, Make-Whole Amount, if any,
and other amounts, if any, to be made by the Owner Trustee hereunder and under
the Trust Indenture or the Participation Agreement shall be payable only from
the income and proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Trust Estate to the extent included in
the Trust Indenture Estate to enable the Mortgagee to make such payments in
accordance with the terms of Section 2.03 and Article III of the Trust
Indenture, and each holder hereof, by its acceptance of this Equipment Note,
agrees that it will look solely to the income and proceeds from the Trust
Indenture Estate to the extent available for distribution to the holder hereof
as above provided and that none of the Owner Participant, the Owner Trustee and
the Mortgagee is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof for any
amounts payable or any liability under this Equipment Note or, except as
provided in the Trust Indenture or in the Participation Agreement, for any
liability under the Trust Indenture or the Participation Agreement; PROVIDED,
HOWEVER, that nothing herein contained shall limit, restrict or impair the right
of the Mortgagee, subject always to the terms and provisions of the Trust
Indenture, to accelerate the maturity of this Equipment Note upon occurrence of
an Event of Default under the Trust Indenture in accordance with Section 4.04(b)
of the Trust Indenture, to bring suit and obtain a judgment against the Owner
Trustee on this Equipment Note for purposes of realizing upon the Trust
Indenture Estate and to exercise all rights and remedies provided under the
Trust Indenture or otherwise realize upon the Trust Indenture Estate as provided
under the Trust Indenture.
There shall be maintained an Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate Trust
Office of the Mortgagee or at the office of any successor in the manner provided
in Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due hereunder shall
be payable in Dollars in immediately available funds at the Corporate Trust
Office of the Mortgagee, or as otherwise provided in the Trust Indenture. Each
such payment shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in the case of any
final payment with respect to this Equipment Note, the Equipment Note shall be
surrendered promptly thereafter to the Mortgagee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Trust Indenture, each payment of the Original
Amount, Make-Whole Amount, if any, and interest received by it hereunder shall
be applied, FIRST, to the payment of accrued interest on this Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, or, to the extent permitted by Law, any overdue interest and
other amounts hereunder) to the date of such payment, SECOND, to the payment of
the Original Amount of this Equipment Note then due, THIRD, to the payment of
Make-Whole Amount, if any, and any other amount due hereunder or under the Trust
Indenture, and FOURTH, the balance, if any, remaining thereafter, to the payment
of installments of the Original Amount of this Equipment Note remaining unpaid
in the inverse order of their maturity.
This Equipment Note is one of the Equipment Notes referred to in the
Trust Indenture which have been or are to be issued by the Owner Trustee
pursuant to the terms of the Trust Indenture. The Trust Indenture Estate is held
by the Mortgagee as security, in part, for the Equipment Notes. The provisions
of this Equipment Note are subject to the Trust Indenture. Reference is hereby
made to the Trust Indenture for a complete statement of the rights and
obligations of the holder of, and the nature and extent of the security for,
this Equipment Note and the rights and obligations of the holders of, and the
nature and extent of the security for, any other Equipment Notes executed and
delivered under the Trust Indenture, as well as for a statement of the terms and
conditions of the Trust created by the Trust Indenture, to all of which terms
and conditions in the Trust Indenture each holder hereof agrees by its
acceptance of this Equipment Note.
As provided in the Trust Indenture and subject to certain limitations
therein set forth, this Equipment Note is exchangeable for a like aggregate
Original Amount of Equipment Notes of different authorized denominations, as
requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of this
Equipment Note, the Owner Trustee and the Mortgagee shall treat the person in
whose name this Equipment Note is registered as the owner hereof for all
purposes, whether or not this Equipment Note be overdue, and neither the Owner
Trustee nor the Mortgagee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in Sections
2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. This Equipment
Note is also subject to exchange and to purchase by the Owner Participant or the
Owner Trustee as provided in Section 2.13 of the Trust Indenture but not
otherwise. In addition, this Equipment Note may be accelerated as provided in
Section 4.04 of the Trust Indenture.
[The indebtedness evidenced by this Equipment Note is, to the extent
and in the manner provided in the Trust Indenture, subordinate and subject in
right of payment to the prior payment in full of the Secured Obligations (as
defined in the Trust Indenture) in respect of [Series A Equipment Notes
[Series A and Series B Equipment Notes], and this Equipment Note is issued
subject to such provisions. The Note Holder of this Equipment Note, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Mortgagee on his behalf to take such action as may be necessary
or appropriate to effectuate the subordination as provided in the Trust
Indenture and (c) appoints the Mortgagee his attorney-in-fact for such
purpose.]
Unless the certificate of authentication hereon has been executed by
or on behalf of the Mortgagee by manual signature, this Equipment Note shall not
be entitled to any benefit under the Trust Indenture or be valid or obligatory
for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Note
to be executed in its corporate name by its officer thereunto duly authorized on
the date hereof.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
not in its individual capacity
but solely as Owner Trustee
By:____________________________________
Name:
Title:
___________________
To be inserted in the case of a Series B Equipment Note.
To be inserted in the case of a Series C Equipment Note.
To be inserted for each Equipment Note other than any Series A Equipment
Note.
MORTGAGEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned
Trust Indenture.
WILMINGTON TRUST COMPANY, as Mortgagee
By:____________________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTE AMORTIZATION
PERCENTAGE OF
ORIGINAL AMOUNT
PAYMENT DATE TO BE PAID
- -------------------------------------- ---------------------------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES
The Equipment Notes shall be dated the date of issuance thereof, shall
be issued in three separate series consisting of Series A, Series B and Series C
and in the maturities and principal amounts and shall bear interest as specified
in Schedule I hereto. On the date of the consummation of the Transaction, each
Equipment Note shall be issued to the Subordination Agent on behalf of the Pass
Through Trustees under the Pass Through Trust Agreements. The Equipment Notes
shall be issued in registered form only. The Equipment Notes shall be issued in
denominations of $1,000 and integral multiples thereof, except that one
Equipment Note of each Series may be in an amount that is not an integral
multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate (calculated
on the basis of a year of 360 days comprised of twelve 30-day months) on the
unpaid Original Amount thereof from time to time outstanding, payable in arrears
on _____________, 199_, and on each ________ and ____________ thereafter until
maturity. The Original Amount of each Equipment Note shall be payable on the
dates and in the installments equal to the corresponding percentage of the
Original Amount as set forth in Schedule I hereto which shall be attached as
Schedule I to the Equipment Notes. Notwithstanding the foregoing, the final
payment made under each Equipment Note shall be in an amount sufficient to
discharge in full the unpaid Original Amount and all accrued and unpaid interest
on, and any other amounts due under, such Equipment Note. Each Equipment Note
shall bear interest at the Payment Due Rate (calculated on the basis of a year
of 360 days comprised of twelve 30-day months) on any part of the Original
Amount, Make-Whole Amount, if any, and, to the extent permitted by applicable
Law, interest and any other amounts payable thereunder not paid when due for any
period during which the same shall be overdue, in each case for the period the
same is overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise). Notwithstanding anything to the
contrary contained herein, if any date on which a payment under any Equipment
Note becomes due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next succeeding Business
Day and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment during such extension.
The Owner Trustee agrees to pay to the Mortgagee for distribution in
accordance with Section 3.04 hereof: (i) to the extent not payable (whether or
not in fact paid) under Section 6(a) of the Note Purchase Agreement (as
originally in effect or amended with the consent of the Owner Participant), an
amount equal to the fees payable to the relevant Liquidity Provider under
Section 2.03 of each Liquidity Facility and the related Fee Letter (as defined
in the Intercreditor Agreement) multiplied by a fraction the numerator of which
shall be the then outstanding aggregate principal amount of the Series A
Equipment Notes, Series B Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the then outstanding aggregate principal amount of
all "Series A Equipment Notes", "Series B Equipment Notes" and "Series C
Equipment Notes" (each as defined in the Note Purchase Agreement); (ii) (x) the
amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07(e) of each Liquidity Facility
minus Investment Earnings from such Downgrade Advance multiplied by (y) the
fraction specified in the foregoing clause (i); (iii) (x) the amount equal to
interest on any Non-Extension Advance (other than any Applied Non-Extension
Advance) payable under Section 3.07(a)(i) of each Liquidity Facility minus
Investment Earnings from such Non-Extension Advance multiplied by (y) the
fraction specified in the foregoing clause (i); and (iv) if any payment default
shall have occurred and be continuing with respect to interest on any Series A
Equipment Note, Series B Equipment Note or Series C Equipment Note, (x) the
excess, if any, of (1) the amount equal to interest on any Unpaid Advance,
Applied Downgrade Advance or Applied Non-Extension Advance payable under Section
3.07(a)(i) of each Liquidity Facility OVER (2) the sum of Investment Earnings
from any Final Advance PLUS any amount of interest at the Payment Due Rate
actually payable (whether or not in fact paid) by the Owner Trustee on the
overdue scheduled interest on the Equipment Notes in respect of which such
Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance was
made multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series A Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes (other than interest becoming due
and payable solely as a result of acceleration of any such Equipment Notes) and
the denominator of which shall be the then aggregate overdue amounts of interest
on all "Series A Equipment Notes", "Series B Equipment Notes" and "Series C
Equipment Notes" (each as defined in the Note Purchase Agreement) (other than
interest becoming due and payable solely as a result of acceleration of any such
"Equipment Notes"). For purposes of this paragraph, the terms "Applied Downgrade
Advance", "Applied Non-Extension Advance", "Cash Collateral Account", "Downgrade
Advance", "Final Advance", "Investment Earnings", "Non-Extension Advance" and
"Unpaid Advance" shall have the meanings specified in each Liquidity Facility or
the Intercreditor Agreement referred to therein.
The Equipment Notes shall be executed on behalf of the Owner Trustee
by its President or one of its Vice Presidents, Assistant Vice Presidents or
Assistant Secretaries or other authorized officer. Equipment Notes bearing the
signatures of individuals who were at any time the proper officers of the Owner
Trustee shall bind the Owner Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Equipment Notes or did not hold such offices at the respective
dates of such Equipment Notes. The Owner Trustee may from time to time execute
and deliver Equipment Notes with respect to the Aircraft to the Mortgagee for
authentication upon original issue and such Equipment Notes shall thereupon be
authenticated and delivered by the Mortgagee upon the written request of the
Owner Trustee signed by a Vice President or Assistant Vice President or other
authorized officer of the Owner Trustee; PROVIDED, HOWEVER, that each such
request shall specify the aggregate Original Amount of all Equipment Notes to be
authenticated hereunder on original issue with respect to the Aircraft. No
Equipment Note shall be secured by or entitled to any benefit under this Trust
Indenture or be valid or obligatory for any purposes, unless there appears on
such Equipment Note a certificate of authentication in the form provided for
herein executed by the Mortgagee by the manual signature of one of its
authorized officers and such certificate upon any Equipment Notes be conclusive
evidence, and the only evidence, that such Equipment Note has been duly
authenticated and delivered hereunder.
The aggregate Original Amount of the Equipment Notes issued hereunder
shall not exceed __% of Lessor's Cost.
SECTION 2.03. PAYMENTS FROM TRUST INDENTURE ESTATE ONLY
(a) Without impairing any of the other rights, powers, remedies,
privileges, liens or security interests of the Note Holders under this Trust
Indenture, each Note Holder, by its acceptance of an Equipment Note, agrees that
as between it and the Owner Trustee, except as expressly provided in this Trust
Indenture, the Participation Agreement or any other Operative Agreement, (i) the
obligation to make all payments of the Original Amount of, interest on,
Make-Whole Amount, if any, and all other amounts due with respect to the
Equipment Notes, and the performance by the Owner Trustee of every obligation or
covenant contained in this Trust Indenture and in the Participation Agreement or
any of the other Operative Agreements, shall be payable only from the income and
proceeds from the Trust Estate to the extent included in the Trust Indenture
Estate and only to the extent that the Owner Trustee shall have sufficient
income or proceeds from the Trust Estate to the extent included in the Trust
Indenture Estate to enable the Mortgagee to make such payments in accordance
with the terms of Article III hereof, and all of the statements,
representations, covenants and agreements made by the Owner Trustee (when made
in such capacity) contained in this Trust Indenture and any agreement referred
to herein other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate; therefore, anything contained in this Trust
Indenture or such other agreements to the contrary notwithstanding (except for
any express provisions or representations that the Owner Trustee is responsible
for, or is making, in its individual capacity, for which there would be personal
liability of the Owner Trustee), no recourse shall be had with respect to this
Trust Indenture or such other agreements against the Owner Trustee in its
individual capacity or against any institution or person which becomes a
successor trustee or co-trustee or any officer, director, trustee, servant or
direct or indirect parent or controlling Person or Persons of any of them, and
(ii) none of the Owner Trustee, in its individual capacity, the Owner
Participant, the Mortgagee and any officer, director, trustee, servant,
employee, agent or direct or indirect parent or controlling Person or Persons of
any of them shall have any personal liability for any amounts payable hereunder,
under the Participation Agreement or any of the other Operative Agreements or
under the Equipment Notes except as expressly provided herein, in the Lease or
in the Participation Agreement; PROVIDED, HOWEVER, that nothing contained in
this Section 2.03(a) shall be construed to limit the exercise and enforcement in
accordance with the terms of this Trust Indenture or such other agreements of
rights and remedies against the Trust Indenture Estate.
(b) If (i) all or any part of the Trust Estate becomes the property
of, or the Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (ii) pursuant to such
reorganization provisions, including Section 1111(b) of the Bankruptcy Code, the
Owner Trustee (in its individual capacity) or the Owner Participant is required,
by reason of the Owner Trustee (in its individual capacity) or the Owner
Participant being held to have recourse liability to any Note Holder or the
Mortgagee, directly or indirectly (other than the recourse liability of the
Owner Trustee (in its individual capacity) or the Owner Participant under the
Participation Agreement, the Lease or this Trust Indenture or by separate
agreement), to make payment on account of any amount payable as principal,
Make-Whole Amount, if any, interest or other amounts on the Equipment Notes and
(iii) any Note Holder or the Mortgagee actually receives any Excess Amount (as
hereinafter defined) which reflects any payment by the Owner Trustee (in its
individual capacity) or the Owner Participant on account of clause (ii) above,
then such Note Holder or the Mortgagee, as the case may be, shall promptly
refund to the Owner Trustee (in its individual capacity) or the Owner
Participant (whichever shall have made such payment) such Excess Amount.
For purposes of this Section 2.03(b), "Excess Amount" means the amount
by which such payment exceeds the amount that would have been received by a Note
Holder or the Trustee if the Owner Trustee (in its individual capacity) or the
Owner Participant had not become subject to the recourse liability referred to
in clause (ii) above. Nothing contained in this Section 2.03(b) shall prevent a
Note Holder or the Mortgagee from enforcing any personal recourse obligation
(and retaining the proceeds thereof) of the Owner Trustee (in its individual
capacity) or the Owner Participant under the Participation Agreement, the Lease
or this Trust Indenture (and any exhibits or annexes hereto or thereto) or from
retaining any amount paid by Owner Participant under Section 2.13 or 4.03
hereof.
SECTION 2.04. METHOD OF PAYMENT
(a) The Original Amount of, interest on, Make-Whole Amount, if any,
and other amounts due under each Equipment Note or hereunder will be payable in
Dollars by wire transfer of immediately available funds not later than 12:30
p.m., New York City time, on the due date of payment to the Mortgagee at the
Corporate Trust Office for distribution among the Note Holders in the manner
provided herein. The Owner Trustee shall not have any responsibility for the
distribution of such payment to any Note Holder. Notwithstanding the foregoing
or any provision in any Equipment Note to the contrary, the Mortgagee will use
reasonable efforts to pay or cause to be paid, if so directed in writing by any
Note Holder (with a copy to the Owner Trustee), all amounts paid by the Owner
Trustee hereunder and under such holder's Equipment Note or Equipment Notes to
such holder or a nominee therefor (including all amounts distributed pursuant to
Article III of this Trust Indenture) by transferring, or causing to be
transferred, by wire transfer of immediately available funds in Dollars, prior
to 2:00 p.m., New York City time, on the due date of payment, to an account
maintained by such holder with a bank located in the continental United States
the amount to be distributed to such holder, for credit to the account of such
holder maintained at such bank. If the Mortgagee shall fail to make any such
payment as provided in the immediately foregoing sentence after its receipt of
funds at the place and prior to the time specified above, the Mortgagee, in its
individual capacity and not as trustee, agrees to compensate such holders for
loss of use of funds at the Debt Rate until such payment is made and the
Mortgagee shall be entitled to any interest earned on such funds until such
payment is made. Any payment made hereunder shall be made without any
presentment or surrender of any Equipment Note, except that, in the case of the
final payment in respect of any Equipment Note, such Equipment Note shall be
surrendered to the Mortgagee for cancellation promptly after such payment.
Notwithstanding any other provision of this Trust Indenture to the contrary, the
Mortgagee shall not be required to make, or cause to be made, wire transfers as
aforesaid prior to the first Business Day on which it is practicable for the
Mortgagee to do so in view of the time of day when the funds to be so
transferred were received by it if such funds were received after 12:30 p.m.,
New York City time, at the place of payment. Prior to the due presentment for
registration of transfer of any Equipment Note, the Owner Trustee and the
Mortgagee shall deem and treat the Person in whose name any Equipment Note is
registered on the Equipment Note Register as the absolute owner and holder of
such Equipment Note for the purpose of receiving payment of all amounts payable
with respect to such Equipment Note and for all other purposes, and none of the
Owner Trustee or the Mortgagee shall be affected by any notice to the contrary.
So long as any signatory to the Participation Agreement or nominee thereof shall
be a registered Note Holder, all payments to it shall be made to the account of
such Note Holder specified in Schedule I thereto and otherwise in the manner
provided in or pursuant to the Participation Agreement unless it shall have
specified some other account or manner of payment by notice to the Mortgagee
consistent with this Section 2.04.
(b) The Mortgagee, as agent for the Owner Trustee, shall exclude and
withhold at the appropriate rate from each payment of Original Amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or under
each Equipment Note (and such exclusion and withholding shall constitute payment
in respect of such Equipment Note) any and all United States withholding taxes
applicable thereto as required by Law. The Mortgagee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
United States taxes or similar charges are required to be withheld with respect
to any amounts payable hereunder or in respect of the Equipment Notes, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to the Owner Trustee and the Lessee) appropriate receipts
showing the payment thereof, together with such additional documentary evidence
as any such Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Mortgagee a properly completed, accurate and currently effective U.S. Internal
Revenue Service Form 1001 or W-8 (or such successor form or forms as may be
required by the United States Treasury Department) during the calendar year in
which the payment hereunder or under the Equipment Note(s) held by such holder
is made (but prior to the making of such payment), or in either of the two
preceding calendar years, and has not notified the Mortgagee of the withdrawal
or inaccuracy of such form prior to the date of such payment (and the Mortgagee
has no reason to believe that any information set forth in such form is
inaccurate), the Mortgagee shall withhold only the amount, if any, required by
Law (after taking into account any applicable exemptions properly claimed by the
Note Holder) to be withheld from payments hereunder or under the Equipment Notes
held by such holder in respect of United States federal income tax. If a Note
Holder (x) which is a Non-U.S. Person has furnished to the Mortgagee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
4224 in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order to
properly avoid withholding of United States federal income tax), for each
calendar year in which a payment is made (but prior to the making of any payment
for such year), and has not notified the Mortgagee of the withdrawal or
inaccuracy of such certificate or form prior to the date of such payment (and
the Mortgagee has no reason to believe that any information set forth in such
form is inaccurate) or (y) which is a U.S. Person has furnished to the Mortgagee
a properly completed, accurate and currently effective U.S. Internal Revenue
Service Form W-9, if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from payments
in respect of United States federal income tax. If any Note Holder has notified
the Mortgagee that any of the foregoing forms or certificates is withdrawn or
inaccurate, or if such holder has not filed a form claiming an exemption from
United States withholding tax or if the Code or the regulations thereunder or
the administrative interpretation thereof is at any time after the date hereof
amended to require such withholding of United States federal income taxes from
payments under the Equipment Notes held by such holder, the Mortgagee agrees to
withhold from each payment due to the relevant Note Holder withholding taxes at
the appropriate rate under Law and will, on a timely basis as more fully
provided above, deposit such amounts with an authorized depository and make such
returns, statements, receipts and other documentary evidence in connection
therewith as required by Law.
Neither the Owner Trustee nor the Owner Participant shall have any
liability for the failure of the Mortgagee to withhold taxes in the manner
provided for herein or for any false, inaccurate or untrue evidence provided by
any Note Holder hereunder.
SECTION 2.05. APPLICATION OF PAYMENTS
In the case of each Equipment Note, each payment of Original Amount,
Make-Whole Amount, if any, and interest due thereon shall be applied:
First: to the payment of accrued interest on such Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and to the extent permitted by Law, any overdue interest
and any other overdue amounts thereunder) to the date of such payment;
Second: to the payment of the Original Amount of such Equipment Note
(or a portion thereof) then due thereunder;
Third: to the payment of Make-Whole Amount, if any, and any other
amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the payment of
the Original Amount of such Equipment Note remaining unpaid (provided that
such Equipment Note shall not be subject to redemption except as provided
in Sections 2.10, 2.11 and 2.12 hereof).
The amounts paid pursuant to clause "Fourth" above shall be applied to
the installments of Original Amount of such Equipment Note in the inverse order
of their normal maturity.
SECTION 2.06. Termination of Interest in Trust Indenture Estate
No Note Holder nor any other Indenture Indemnitee shall, as such, have
any further interest in, or other right with respect to, the Trust Indenture
Estate when and if the Original Amount of, Make-Whole Amount, if any, and
interest on and other amounts due under all Equipment Notes held by such Note
Holder and all other sums then due and payable to such Note Holder, such
Indenture Indemnitee or the Mortgagee hereunder (including, without limitation,
under the third paragraph of Section 2.02 hereof) and under the other Operative
Agreements by the Owner Trustee and the Lessee (collectively, the "Secured
Obligations") shall have been paid in full.
SECTION 2.07. REGISTRATION TRANSFER AND EXCHANGE OF EQUIPMENT NOTES
The Mortgagee shall keep a register (the "Equipment Note Register") in
which the Mortgagee shall provide for the registration of Equipment Notes and
the registration of transfers of Equipment Notes. No such transfer shall be
given effect unless and until registration hereunder shall have occurred. The
Equipment Note Register shall be kept at the Corporate Trust Office of the
Mortgagee. The Mortgagee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Mortgagee at the
Corporate Trust Office, together with a written request from the registered
holder thereof for the issuance of a new Equipment Note, specifying, in the case
of a surrender for transfer, the name and address of the new holder or holders.
Upon surrender for registration of transfer of any Equipment Note, the Owner
Trustee shall execute, and the Mortgagee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Equipment
Notes of a like aggregate Original Amount and of the same series. At the option
of the Note Holder, Equipment Notes may be exchanged for other Equipment Notes
of any authorized denominations of a like aggregate Original Amount, upon
surrender of the Equipment Notes to be exchanged to the Mortgagee at the
Corporate Trust Office. Whenever any Equipment Notes are so surrendered for
exchange, the Owner Trustee shall execute, and the Mortgagee shall authenticate
and deliver, the Equipment Notes which the Note Holder making the exchange is
entitled to receive. All Equipment Notes issued upon any registration of
transfer or exchange of Equipment Notes (whether under this Section 2.07 or
under Section 2.08 hereof or otherwise under this Trust Indenture) shall be the
valid obligations of the Owner Trustee evidencing the same respective
obligations, and entitled to the same security and benefits under this Trust
Indenture, as the Equipment Notes surrendered upon such registration of transfer
or exchange. Every Equipment Note presented or surrendered for registration of
transfer shall (if so required by the Mortgagee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Mortgagee duly executed by the Note Holder or such holder's attorney duly
authorized in writing, and the Mortgagee shall require evidence satisfactory to
it as to the compliance of any such transfer with the Securities Act, and the
securities Laws of any applicable state. The Mortgagee shall make a notation on
each new Equipment Note of the amount of all payments of Original Amount
previously made on the old Equipment Note or Equipment Notes with respect to
which such new Equipment Note is issued and the date to which interest on such
old Equipment Note or Equipment Notes has been paid. Interest shall be deemed to
have been paid on such new Equipment Note to the date on which interest shall
have been paid on such old Equipment Note, and all payments of the Original
Amount marked on such new Equipment Note, as provided above, shall be deemed to
have been made thereon. The Owner Trustee shall not be required to exchange any
surrendered Equipment Notes as provided above during the ten-day period
preceding the due date of any payment on such Equipment Note. The Owner Trustee
shall in all cases deem the Person in whose name any Equipment Note shall have
been issued and registered as the absolute owner and holder of such Equipment
Note for the purpose of receiving payment of all amounts payable by the Owner
Trustee with respect to such Equipment Note and for all purposes until a notice
stating otherwise is received from the Mortgagee and such change is reflected on
the Equipment Note Register. The Mortgagee will promptly notify the Owner
Trustee and the Lessee of each registration of a transfer of an Equipment Note.
Any such transferee of an Equipment Note, by its acceptance of an Equipment
Note, agrees to the provisions of the Participation Agreement applicable to Note
Holders, and shall be deemed to have covenanted to the parties to the
Participation Agreement as to the matters covenanted by the original Loan
Participant in the Participation Agreement. Subject to compliance by the Note
Holder and its transferee (if any) of the requirements set forth in this Section
2.07, Mortgagee and Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes upon transfer or exchange within 10 Business Days of the date an
Equipment Note is surrendered for transfer or exchange.
SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN EQUIPMENT NOTES
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of such
Equipment Note, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Equipment Note, payable in the same Original Amount
dated the same date and captioned as issued in connection with the Aircraft. If
the Equipment Note being replaced has become mutilated, such Equipment Note
shall be surrendered to the Mortgagee and a photocopy thereof shall be furnished
to the Owner Trustee. If the Equipment Note being replaced has been destroyed,
lost or stolen, the holder of such Equipment Note shall furnish to the Owner
Trustee and the Mortgagee such security or indemnity as may be required by them
to save the Owner Trustee and the Mortgagee harmless and evidence satisfactory
to the Owner Trustee and the Mortgagee of the destruction, loss or theft of such
Equipment Note and of the ownership thereof. If a "qualified institutional
buyer" of the type referred to in paragraph (a)(1)(i)(A), (B), (D) or (E) of
Rule 144A under the Securities Act (a "QIB") is the holder of any such
destroyed, lost or stolen Equipment Note, then the written indemnity of such
QIB, signed by an authorized officer thereof, in favor of, delivered to and in
form reasonably satisfactory to Lessee, Owner Trustee and Mortgagee shall be
accepted as satisfactory indemnity and security and no further indemnity or
security shall be required as a condition to the execution and delivery of such
new Equipment Note. Subject to compliance by the Note Holder of the requirements
set forth in this Section 2.08, Mortgagee and Owner Trustee shall use all
reasonable efforts to issue new Equipment Notes within 10 Business Days of the
date of the written request therefor from the Note Holder.
SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Mortgagee, as
Equipment Note Registrar, may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Equipment Notes.
(b) The Mortgagee shall cancel all Equipment Notes surrendered for
replacement, redemption, transfer, exchange, payment or cancellation and shall
destroy the canceled Equipment Notes.
SECTION 2.10. MANDATORY REDEMPTIONS OF EQUIPMENT NOTES
(a) On the date on which Lessee is required pursuant to Section 10.1.2
of the Lease to make payment for an Event of Loss with respect to the Aircraft,
all of the Equipment Notes shall be redeemed in whole at a redemption price
equal to 100% of the unpaid Original Amount thereof, together with all accrued
interest thereon to the date of redemption and all other Secured Obligations
owed or then due and payable to the Note Holders but without Make-Whole Amount.
(b) If the Lease is terminated with respect to the Aircraft by Lessee
pursuant to Section 9 thereof, on the date the Lease is so terminated, all the
Equipment Notes shall be redeemed in whole at a redemption price equal to 100%
of the unpaid Original Amount thereof, together with accrued interest thereon to
the date of redemption and all other amounts then due and payable hereunder and
under the Participation Agreement and all other Operative Agreements to the Note
Holders plus, if such redemption is made prior to the Premium Termination Date,
Make-Whole Amount, if any.
SECTION 2.11. VOLUNTARY REDEMPTIONS OF EQUIPMENT NOTES
All (but not less than all) of the Equipment Notes may be redeemed by
the Owner Trustee in connection with a transaction described in, and subject to
the terms and conditions of, Section 11 of the Participation Agreement upon at
least 30 days' revocable prior written notice to the Mortgagee and the Note
Holders, and the Equipment Notes shall, as provided in Section 11 of the
Participation Agreement, be redeemed in whole at a redemption price equal to
100% of the unpaid Original Amount thereof, together with accrued interest
thereon to the date of redemption and all other Secured Obligations owed or then
due and payable to the Note Holders plus (except as provided in Section 11 of
the Participation Agreement), if such redemption is made prior to the Premium
Termination Date, Make-Whole Amount, if any.
SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION
(a) Neither any redemption of any Equipment Note nor any purchase by
the Owner Trustee of any Equipment Note may be made except to the extent and in
the manner expressly permitted by this Trust Indenture. No purchase of any
Equipment Note may be made by the Mortgagee.
(b) Notice of redemption or purchase with respect to the Equipment
Notes shall be given by the Mortgagee by first-class mail, postage prepaid,
mailed not less than 25 nor more than 60 days prior to the applicable redemption
date, to each Note Holder of such Equipment Notes to be redeemed or purchased,
at such Note Holder's address appearing in the Equipment Note Register; PROVIDED
that, in the case of a redemption to be made pursuant to Section 2.10(b) or
Section 2.11, such notice shall be revocable and shall be deemed revoked in the
event that the Lease does not in fact terminate on the specified termination
date or if notice of such redemption shall have been given in connection with a
refinancing of Equipment Notes and the Mortgagee receives written notice of such
revocation from the Lessee or the Owner Trustee not later than three days prior
to the redemption date. All notices of redemption shall state: (1) the
redemption date, (2) the applicable basis for determining the redemption price,
(3) that on the redemption date, the redemption price will become due and
payable upon each such Equipment Note, and that, if any such Equipment Notes are
then outstanding, interest on such Equipment Notes shall cease to accrue on and
after such redemption date, and (4) the place or places where such Equipment
Notes are to be surrendered for payment of the redemption price.
(c) On or before the redemption date, the Owner Trustee (or any person
on behalf of the Owner Trustee) shall, to the extent an amount equal to the
redemption price for the Equipment Notes to be redeemed or purchased on the
redemption date shall not then be held in the Trust Indenture Estate, deposit or
cause to be deposited with the Mortgagee by 12:00 noon on the redemption date in
immediately available funds the redemption price of the Equipment Notes to be
redeemed or purchased.
(d) Notice of redemption or purchase having been given as aforesaid
(and not deemed revoked as contemplated in the proviso to Section 2.12(b)), the
Equipment Notes to be redeemed or purchased shall, on the redemption date,
become due and payable at the Corporate Trust Office of the Mortgagee or at any
office or agency maintained for such purposes pursuant to Section 2.07, and from
and after such redemption date (unless there shall be a default in the payment
of the redemption price) any such Equipment Notes then outstanding shall cease
to bear interest. Upon surrender of any such Equipment Note for redemption or
purchase in accordance with said notice, such Equipment Note shall be redeemed
at the redemption price. If any Equipment Note called for redemption or purchase
shall not be so paid upon surrender thereof for redemption, the principal amount
thereof shall, until paid, continue to bear interest from the applicable
redemption date at the interest rate in effect for such Equipment Note as of
such redemption date.
SECTION 2.13. OPTION TO PURCHASE EQUIPMENT NOTES
The Owner Trustee and the Owner Participant may, upon the events and
subject to the terms and conditions and for the price set forth in this Section
2.13, purchase all but not less than all of the Equipment Notes outstanding
hereunder, and each Note Holder agrees that it will, upon such events and
subject to such terms and conditions and upon receipt of such price, sell,
assign, transfer and convey to such purchaser or its nominee (without recourse
or warranty of any kind except against Liens on such Equipment Notes arising by,
through or under such holder), all of the right, title and interest of such Note
Holder in and to the Equipment Notes held by it, and such purchaser or its
nominee shall assume all of such holder's obligations under the Participation
Agreement and hereunder.
Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant at any time following the occurrence of
any of the following events, and in any such event the purchase price thereof
shall equal for each Equipment Note, the aggregate unpaid Original Amount
thereof, plus accrued and unpaid interest thereon to, but not including, the
date of purchase and all other Secured Obligations owed, or then due and payable
hereunder, to the holder thereof (including under the third paragraph of Section
2.02 hereof). Such option to purchase the Equipment Notes may be exercised (x)
upon a Mortgagee Event or (y) in the event there shall have occurred and be
continuing a Lease Event of Default or (z) upon either the Equipment Notes
becoming due and payable pursuant to Section 4.04(b) hereof or the Mortgagee
taking action or notifying the Owner Trustee that it intends to take action to
foreclose the Lien of this Trust Indenture or otherwise commence the exercise of
any significant remedy under this Trust Indenture or the Lease, PROVIDED that if
such option is exercised pursuant to clause (y) at a time prior to the Premium
Termination Date when there shall have occurred and be continuing for less than
120 days a Lease Event of Default, the purchase price thereof shall equal the
price provided in the preceding sentence plus the Make-Whole Amount, if any.
Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant giving irrevocable written notice of its
election of such option to the Mortgagee, which notice shall specify a date for
such purchase within 15 days of the date of such notice. The Mortgagee shall not
exercise any of the remedies hereunder and, without the consent of the Owner
Trustee or the Owner Participant, under the Lease, during the period from the
date of the giving of such notice until the date on which such purchase is
required to occur pursuant to the terms of the preceding sentence.
If the Owner Trustee or the Owner Participant on or before the date of
such purchase shall so request, the Note Holders will comply with all the
provisions of Section 2.07 to enable new Equipment Notes to be issued to the
Owner Trustee or the Owner Participant or its nominee in such denominations as
the Owner Trustee or the Owner Participant shall request. All taxes, charges and
expenses required pursuant to Section 2.09 in connection with the issuance of
such new Equipment Note shall be borne by the Owner Participant.
SECTION 2.14. SUBORDINATION
(a) The Owner Trustee and, by acceptance of its Equipment Notes of any
Series, each Note Holder of such Series, hereby agree that no payment or
distribution shall be made on or in respect of the Secured Obligations owed to
such Note Holder of such Series, including any payment or distribution of cash,
property or securities after the commencement of a proceeding of the type
referred to in Section 4.02(g) hereof, except as expressly provided in Article
III hereof.
(b) By the acceptance of its Equipment Notes of any Series (other than
Series A), each Note Holder of such Series agrees that in the event that such
Note Holder, in its capacity as a Note Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to receive under this Section 2.14 or Article III hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.14(c) hereof) and will forthwith turn over such payment to the
Mortgagee in the form received to be applied as provided in Article III hereof.
(c) As used in this Section 2.14, the term "Senior Holder" shall mean,
(i) the Note Holders of Series A until the Secured Obligations in respect of
Series A Equipment Notes have been paid in full, (ii) after the Secured
Obligations in respect of Series A Equipment Notes have been paid in full, the
Note Holders of Series B until the Secured Obligations in respect of Series B
Equipment Notes have been paid in full and (iii) after the Secured Obligations
in respect of Series B Equipment Notes have been paid in full, the Note Holders
of Series C until the Secured Obligations in respect of Series C Equipment Notes
have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. BASIC RENT DISTRIBUTION
Except as otherwise provided in Sections 3.02 and 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments of
Basic Rent and any payment received by the Mortgagee pursuant to Section 4.03
hereof shall be promptly distributed in the following order of priority:
First, (i) so much of such installment or payment as shall be required to
pay in full the aggregate amount of the payment or payments of
Original Amount and interest (as well as any interest on any
overdue Original Amount and, to the extent permitted by Law, on
any overdue interest) then due under all Series A Equipment Notes
shall be distributed to the Note Holders of Series A ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each Series
A Equipment Note bears to the aggregate amount of the payments
then due under all Series A Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such
installment or payment remaining as shall be required to pay in
full the aggregate amount of the payment or payments of Original
Amount and interest (as well as any interest on any overdue
Original Amount and, to the extent permitted by Law, on interest)
then due under all Series B Equipment Notes shall be distributed
to the Note Holders of Series B ratably, without priority of one
over the other, in the proportion that the amount of such payment
or payments then due under each Series B Equipment Note bears to
the aggregate amount of the payments then due under all Series B
Equipment Notes; and
(iii) after giving effect to paragraph (ii) above, so much of such
installment or payment remaining as shall be required to pay in
full the aggregate amount of the payment or payments of Original
Amount and interest (as well as any interest on any overdue
Original Amount and, to the extent permitted by Law, on any
overdue interest) then due under all Series C Equipment Notes
shall be distributed to the Note Holders of Series C ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each Series
C Equipment Note bears to the aggregate amount of the payments
then due under all Series C Equipment Notes; and
Second, the balance, if any, of such installment remaining thereafter
shall be distributed to the Owner Trustee; PROVIDED, HOWEVER,
that if an Event of Default shall have occurred and be
continuing, then such balance shall not be distributed as
provided in this clause "Second" but shall be held by the
Mortgagee as part of the Trust Indenture Estate and invested in
accordance with Section 5.09 hereof until whichever of the
following shall first occur: (i) all Events of Default shall have
been cured or waived, in which event such balance shall be
distributed as provided in this clause "Second", (ii) Section
3.03 hereof shall be applicable, in which event such balance
shall be distributed in accordance with the provisions of such
Section 3.03, or (iii) the 120th day after the receipt of such
payment in which case such payment shall be distributed as
provided in this clause "Second".
SECTION 3.02. EVENT OF LOSS; REPLACEMENT; VOLUNTARY TERMINATION;
OPTIONAL REDEMPTION
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Mortgagee (i) with respect to the Airframe or the Airframe and
one or more Engines as the result of an Event of Loss, (ii) pursuant to a
voluntary termination of the Lease pursuant to Section 9 thereof, or (iii)
pursuant to an optional redemption of the Equipment Notes pursuant to Section 11
of the Participation Agreement shall be applied to redemption of the Equipment
Notes and to all other Secured Obligations by applying such funds in the
following order of priority:
First, (a) to reimburse the Mortgagee and the Note Holders for any
reasonable costs or expenses incurred in connection with such
redemption for which they are entitled to reimbursement, or
indemnity by Lessee, under the Operative Agreements and then (b)
to pay any other amounts then due to the Mortgagee, the Note
Holders and the other Indenture Indemnitees under this Trust
Indenture, the Participation Agreement or the Equipment Notes;
Second, (i) to pay the amounts specified in paragraph (i) of clause "Third"
of Section 3.03 hereof plus Make-Whole Amount, if any, then due
and payable in respect of the Series A Equipment Notes;
(ii) after giving effect to paragraph (i) above, to pay the amounts
specified in paragraph (ii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in
respect of the Series B Equipment Notes; and
(iii) after giving effect to paragraph (ii) above, to pay the amounts
specified in paragraph (iii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in
respect of the Series C Equipment Notes; and
THIRD, as provided in clause "Fourth" of Section 3.03 hereof;
PROVIDED, HOWEVER, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in Section 10 of the Lease and in accordance with Section 5.06 hereof, any
insurance, condemnation or similar proceeds which result from such Event of Loss
and are paid over to the Mortgagee shall be held by the Mortgagee as permitted
by Section 6.04 hereof (provided that such moneys shall be invested as provided
in Section 5.09 hereof) as additional security for the obligations of Lessee
under the Lessee Operative Agreements and, unless otherwise applied pursuant to
the Lease, such proceeds (and such investment earnings) shall be released to the
Lessee at the Lessee's written request upon the release of such damaged Airframe
or Engine and the replacement thereof as provided in the Lease.
SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Mortgagee (including any amounts
realized by the Mortgagee from the exercise of any remedies pursuant to Section
15 of the Lease or Article IV hereof) after an Event of Default shall have
occurred and be continuing and after the declaration specified in Section
4.04(b) hereof, as well as all payments or amounts then held by the Mortgagee as
part of the Trust Indenture Estate, shall be promptly distributed by the
Mortgagee in the following order of priority:
FIRST, so much of such payments or amounts as shall be required to (i)
reimburse the Mortgagee or WTC for any tax (except to the extent
resulting from a failure of the Mortgagee to withhold taxes
pursuant to Section 2.04(b) hereof), expense or other loss
(including, without limitation, all amounts to be expended at the
expense of, or charged upon the rents, revenues, issues, products
and profits of, the property included in the Trust Indenture
Estate (all such property being herein called the "Mortgaged
Property") pursuant to Section 4.05(b) hereof) incurred by the
Mortgagee or WTC (to the extent not previously reimbursed), the
expenses of any sale, or other proceeding, reasonable attorneys'
fees and expenses, court costs, and any other expenditures
incurred or expenditures or advances made by the Mortgagee, WTC
or the Note Holders in the protection, exercise or enforcement of
any right, power or remedy or any damages sustained by the
Mortgagee, WTC or any Note Holder, liquidated or otherwise, upon
such Event of Default shall be applied by the Mortgagee as
between itself, WTC and the Note Holders in reimbursement of such
expenses and any other expenses for which the Mortgagee, WTC or
the Note Holders are entitled to reimbursement under any
Operative Agreement and (ii) all amounts payable to the other
Indenture Indemnitees hereunder and under the Participation
Agreement and the Lease; and in the case the aggregate amount to
be so distributed is insufficient to pay as aforesaid in clauses
(i) and (ii), then ratably, without priority of one over the
other, in proportion to the amounts owed each hereunder;
SECOND, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Note Holders for
payments made pursuant to Section 5.03 hereof (to the extent not
previously reimbursed) shall be distributed to such then existing
or prior Note Holders ratably, without priority of one over the
other, in accordance with the amount of the payment or payments
made by each such then existing or prior Note Holder pursuant to
said Section 5.03 hereof;
THIRD, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Original Amount of
all Series A Equipment Notes, and the accrued but unpaid interest
and other amounts due thereon (other than Make-Whole Amount which
shall not be due and payable) and all other Secured Obligations
in respect of the Series A Equipment Notes (other than Make-Whole
Amount) to the date of distribution, shall be distributed to the
Note Holders of Series A, and in case the aggregate amount so to
be distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of all
Series A Equipment Notes held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Amount, if any) to the date of
distribution, bears to the aggregate unpaid Original Amount of
all Series A Equipment Notes held by all such holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Amount) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of such
payments or amounts remaining as shall be required to pay in full
the aggregate unpaid Original Amount of all Series B Equipment
Notes, and the accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Amount which shall not be due and
payable) and all other Secured Obligations in respect of the
Series B Equipment Notes (other than Make-Whole Amount) to the
date of distribution, shall be distributed to the Note Holders of
Series B, and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that
the aggregate unpaid Original Amount of all Series B Equipment
Notes held by each holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder (other than the
Make-Whole Amount, if any) to the date of distribution, bears to
the aggregate unpaid Original Amount of all Series B Equipment
Notes held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than the Make-Whole
Amount) to the date of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of such
payments or amounts remaining as shall be required to pay in full
the aggregate unpaid Original Amount of all Series C Equipment
Notes, and the accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Amount which shall not be due and
payable) and all other Secured Obligations in respect of the
Series C Equipment Notes (other than Make-Whole Amount) to the
date of distribution, shall be distributed to the Note Holders of
Series C, and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that
the aggregate unpaid Original Amount of all Series C Equipment
Notes held by each holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder (other than the
Make-Whole Amount, if any) to the date of distribution, bears to
the aggregate unpaid Original Amount of all Series C Equipment
Notes held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than the Make-Whole
Amount) to the date of distribution; and
FOURTH, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner Trustee.
No Make-Whole Amount shall be due and payable on the Equipment Notes
as a consequence of the acceleration of the Equipment Notes as a result of an
Event of Default.
SECTION 3.04. CERTAIN PAYMENTS
(a) Any payments received by the Mortgagee for which no provision as
to the application thereof is made in this Trust Indenture and for which such
provision is made in the Lease or the Participation Agreement shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms of the Lease or the Participation Agreement, as the case may be.
(b) Notwithstanding anything to the contrary contained in this Article
III, the Mortgagee will distribute promptly upon receipt any indemnity payment
received by it from the Owner Trustee or Lessee in respect of the Mortgagee in
its individual capacity, any Note Holder or any other Indenture Indemnitee, in
each case whether pursuant to Section 9 of the Participation Agreement or as
Supplemental Rent, directly to the Person entitled thereto. Any payment received
by the Mortgagee under the third paragraph of Section 2.02 shall be distributed
to the Subordination Agent to be distributed in accordance with the terms of the
Intercreditor Agreement.
(c) Notwithstanding anything to the contrary contained in this Article
III, any payments received by the Mortgagee which constitute Excluded Payments
shall be distributed promptly upon receipt by the Mortgagee directly to the
Person or Persons entitled thereto.
(d) Notwithstanding any provision of this Trust Indenture to the
contrary, any amounts held by Mortgagee pursuant to the terms of the Lease [or
any Permitted Sublease assignment] shall be held by the Mortgagee as
security for the obligations of Lessee under the Lessee Operative Agreements
and, if and when required by the Lease, paid and/or applied in accordance with
the applicable provisions of the Lease.
SECTION 3.05. OTHER PAYMENTS
Any payments received by the Mortgagee for which no provision as to
the application thereof is made in the Lease, the Participation Agreement,
elsewhere in this Trust Indenture or in any other Operative Agreement shall be
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
distributed by the Mortgagee to the extent received or realized at any time (i)
prior to the payment in full of all Secured Obligations due the Note Holders, in
the order of priority specified in Section 3.01 hereof subject to the proviso
thereto, and (ii) after payment in full of all Secured Obligations, in the
following order of priority:
FIRST, to the extent payments or amounts described in clause "First" of
Section 3.03 hereof are otherwise obligations of Lessee under the
Operative Agreements or for which the Lessee is obligated to
indemnify against thereunder, in the manner provided in clause
"First" of Section 3.03 hereof, and
SECOND, in the manner provided in clause "Fourth" of Section 3.03 hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and
3.04 hereof, all payments received and amounts realized by the Mortgagee under
the Lease or otherwise with respect to the Aircraft (including, without
limitation, all amounts realized upon the sale or release of the Aircraft after
the termination of the Lease with respect thereto), to the extent received or
realized at any time after payment in full of all Secured Obligations due the
Note Holders, shall be distributed by the Mortgagee in the order of priority
specified in clause (ii) of the immediately preceding sentence of this Section
3.05.
SECTION 3.06. PAYMENTS TO OWNER TRUSTEE
Any amounts distributed hereunder by the Mortgagee to the Owner
Trustee shall be paid to the Owner Trustee (within the time limits contemplated
by Section 2.04(a)) by wire transfer of funds of the type received by the
Mortgagee at such office and to such account or accounts of such entity or
entities as shall be designated by notice from the Owner Trustee to the
Mortgagee from time to time. The Owner Trustee hereby notifies the Mortgagee
that unless and until the Mortgagee receives notice to the contrary from the
Owner Trustee, all amounts to be distributed to the Owner Trustee pursuant to
clause "Second" of Section 3.01 or clause "Fourth" of Section 3.03 hereof shall
be distributed by wire transfer of funds of the type received by the Mortgagee
to the Owner Participant's account (within the time limits contemplated by
Section 2.04(a)) specified in Schedule 1 to the Participation Agreement.
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF MORTGAGEE
SECTION 4.01. COVENANTS OF OWNER TRUSTEE
The Owner Trustee hereby covenants and agrees (the covenants and
agreements only in clause (b) below being made by the Owner Trustee in its
individual capacity) as follows:
(a) the Owner Trustee will duly and punctually pay the Original Amount
of, Make-Whole Amount, if any, and interest on and other amounts due under the
Equipment Notes and hereunder in accordance with the terms of the Equipment
Notes and this Trust Indenture and all amounts, if any, payable by it to the
Note Holders under the Participation Agreement or Section 9 of the Lease;
(b) the Owner Trustee in its individual capacity covenants and agrees
that it shall not, directly or indirectly, cause or permit to exist a Lessor
Lien attributable to it in its individual capacity with respect to the Aircraft
or any other portion of the Trust Estate; that it will promptly, at its own
expense, take such action as may be necessary to duly discharge such Lessor Lien
attributable to it in its individual capacity; and that it will make restitution
to the Trust Indenture Estate for any actual diminution of the assets of the
Trust Estate resulting from such Lessor Liens attributable to it in its
individual capacity;
(c) in the event the Owner Trustee shall have Actual Knowledge of an
Event of Default, a Default or an Event of Loss, the Owner Trustee will give
prompt written notice of such Event of Default, Default or Event of Loss to the
Mortgagee, each Note Holder, Lessee and the Owner Participant;
(d) the Owner Trustee will furnish to the Note Holders and the
Mortgagee, promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished to the
Owner Trustee under the Lease, including, without limitation, a copy of any
Termination Notice and a copy of each report or notice received pursuant to
Section 9 or 8.2 or Annex D, Paragraph E of the Lease to the extent that the
same shall not have been furnished or is not required to be furnished by the
Lessee to the Note Holders or the Mortgagee pursuant to the Lease;
(e) except with the consent of the Mortgagee (acting pursuant to
instructions given in accordance with Section 9.01 hereof) or as provided in
Sections 2 and 11 of the Participation Agreement, the Owner Trustee will not
contract for, create, incur, assume or suffer to exist any Debt, and will not
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing, or otherwise), endorse or otherwise be or become contingently liable,
directly or indirectly, in connection with the Debt of any other person; and
(f) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing thereof to
Lessee and the carrying out of the transactions contemplated hereby and by the
Lease, the Participation Agreement and the Trust Agreement and the other
Operative Agreements.
SECTION 4.02. EVENT OF DEFAULT
"Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) any Lease Event of Default (provided that any such Lease Event of
Default caused solely by a failure of Lessee to pay to the Owner Trustee or the
Owner Participant when due any amount that is included in the definition of
Excluded Payments shall not constitute an Event of Default unless notice is
given by the Owner Trustee to the Mortgagee that such failure shall constitute
an Event of Default); or
(b) the failure of the Owner Trustee to pay when due any payment of
Original Amount of, interest on, Make-Whole Amount, if any, or other amount due
and payable under any Equipment Note or hereunder (other than as a result of a
Lease Event of Default or a Lease Default) and such failure shall have continued
unremedied for ten Business Days in the case of any payment of Original Amount
or interest or Make-Whole Amount, if any, thereon and, in the case of any other
amount, for ten Business Days after the Owner Trustee or the Owner Participant
receives written demand from the Mortgagee or any Note Holder; or
(c) any Lien required to be discharged by the Owner Trustee, in its
individual capacity pursuant to Section 4.01(b) hereof or in its individual or
trust capacity pursuant to Section 7.3.1 of the Participation Agreement, or by
the Owner Participant pursuant to Section 7.2.1 of the Participation Agreement
shall remain undischarged for a period of 30 days after the Owner Trustee or the
Owner Participant, as the case may be, shall have received written notice from
the Mortgagee or any Note Holder of such Lien; or
(d) any representation or warranty made by the Owner Participant or
the Owner Trustee in the Participation Agreement or this Trust Indenture or in
any certificate furnished by the Owner Participant or the Owner Trustee to the
Mortgagee or any Note Holder in connection with the transactions contemplated by
the Operative Agreements shall prove to have been false or incorrect when made
in any material respect and continues to be material and adverse to the
interests of the Mortgagee or the Note Holders; and if such misrepresentation is
capable of being corrected and if such correction is being sought diligently,
such misrepresentation shall not have been corrected within 60 days (or, without
affecting Section 4.02(f) hereof, in the case of the representation made in
Section 6.3.6 or 6.2.6 of the Participation Agreement as to citizenship of the
Owner Trustee in its individual capacity or of the Owner Participant,
respectively, as soon as is reasonably practicable but in any event within 60
days) following notice thereof from the Mortgagee or any Note Holder to the
Owner Trustee or the Owner Participant, as the case may be; or
(e) other than as provided in (c) above or (f) below, any failure by
the Owner Trustee or Owner Participant to observe or perform any other covenant
or obligation of the Owner Trustee or Owner Participant, as the case may be, for
the benefit of the Mortgagee or the Note Holders contained in the Participation
Agreement, Section 4.2.1 of the Trust Agreement, the Equipment Notes or this
Trust Indenture which is not remedied within a period of 60 days after notice
thereof has been given to the Owner Trustee and the Owner Participant; or
(f) if at any time when the Aircraft is registered under the Laws of
the United States, the Owner Participant shall not be a "citizen of the United
States" within the meaning of Section 40102(a)(15) of Part A of Subtitle VII of
Title 49, United States Code, and as the result thereof the registration of the
Aircraft under the Federal Aviation Act, and regulations then applicable
thereunder, shall cease to be effective; provided that no Event of Default shall
be deemed to have occurred under this paragraph (f) unless such circumstances
continue unremedied for more than 30 days after the Owner Participant has Actual
Knowledge of the state of facts that resulted in such ineffectiveness and of
such loss of citizenship; or
(g) at any time either (i) the commencement of an involuntary case or
other proceeding in respect of the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate under the federal bankruptcy Laws, as now constituted
or hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar Law in the United States or seeking the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Owner Participant, the Owner Trustee, the Trust or the
Trust Estate or for all or substantially all of its property, or seeking the
winding-up or liquidation of its affairs and the continuation of any such case
or other proceeding undismissed and unstayed for a period of 60 consecutive
days; or (ii) the commencement by the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate of a voluntary case or proceeding under the federal
bankruptcy Laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar Law in the
United States, or the consent by the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Owner Participant, the Owner Trustee, the Trust or the
Trust Estate or for all or substantially all of its property, or the making by
the Owner Participant, the Owner Trustee, the Trust or the Trust Estate of any
assignment for the benefit of creditors or the Owner Participant or the Owner
Trustee shall take any action to authorize any of the foregoing; PROVIDED,
HOWEVER, that an event referred to in this Section 4.02(g) with respect to the
Owner Participant shall not constitute an Event of Default if within 30 days of
the commencement of the case or proceeding a final non-appealable order,
judgment or decree shall be entered in such case or proceeding by a court or a
trustee, custodian, receiver or liquidator, to the effect that, no part of the
Trust Estate (except for the Owner Participant's beneficial interest therein)
and no right, title or interest under the Trust Indenture Estate shall be
included in, or be subject to, any declaration or adjudication of, or
proceedings with respect to, the bankruptcy, insolvency or liquidation of the
Owner Participant referred to in this Section 4.02(g).
SECTION 4.03. CERTAIN RIGHTS
The Mortgagee shall give the Note Holders, the Owner Trustee and the
Owner Participant prompt written notice of any Event of Default of which the
Mortgagee has Actual Knowledge and shall give the Note Holders, the Owner
Trustee and the Owner Participant not less than ten Business Days' prior written
notice of the date (the "Enforcement Date") on or after which the Mortgagee may,
subject to the limitation set forth in Section 4.04(a), commence and consummate
the exercise of any remedy or remedies described in Section 4.04, 4.05 or 4.06
hereof; provided, however, that in the event the Mortgagee shall have validly
terminated the Lease, the Mortgagee shall not sell or lease, or otherwise afford
the use of, the Aircraft or any portion thereof to the Lessee or any Affiliate
thereof. Without limiting the generality of the foregoing, the Mortgagee shall
give the Owner Trustee, the Owner Participant and the Lessee at least ten
Business Days' prior written notice (which may be given concurrently with notice
of the Enforcement Date) of any declaration of the Lease to be in default
pursuant to Sections 14 and 15 of the Lease or any termination of the Lease or
of the exercise of any remedy or remedies pursuant to Section 15 of the Lease.
If an Event of Default shall have occurred and be continuing, the Owner Trustee
shall have the rights set forth below, any of which may be exercised directly by
the Owner Participant.
If as a result of the occurrence of an Event of Default in respect of
the nonpayment by Lessee of Basic Rent due under the Lease, the Mortgagee shall
have insufficient funds to make any payment of Original Amount and interest on
any Equipment Note on the day it becomes due and payable, the Owner Trustee may,
but shall not be obligated to pay the Mortgagee prior to the Enforcement Date,
in the manner provided in Section 2.04 hereof, for application in accordance
with Section 3.01 hereof, an amount equal to the portion of the Original Amount
and interest (including interest, if any, on any overdue payments of such
portion of Original Amount and interest) then due and payable on the Equipment
Notes, and, unless the Owner Trustee has cured Events of Default in respect of
payments of Basic Rent on each of the [three] [six] immediately preceding
Basic Rent payment dates, or the Owner Trustee has cured [six] [eight]
___________________
Insert appropriate term for Owner Participant
Insert appropriate term for Owner Participant
previous Events of Default in respect of payments of Basic Rent, such payment by
the Owner Trustee shall, solely for purposes of this Trust Indenture be deemed
to cure any Event of Default which would otherwise have arisen on account of the
nonpayment by Lessee of such installment of Basic Rent (but not any other
Default or Event of Default which shall have occurred and be continuing).
If any Event of Default (other than in respect of the nonpayment of
Basic Rent by the Lessee) which can be cured by the payment of money has
occurred, the Owner Trustee may, but shall not be obligated to, cure such Event
of Default by making such payment prior to the Enforcement Date as is necessary
to accomplish the observance or performance of the defaulted covenant, condition
or agreement to the party entitled to the same.
Except as hereinafter in this Section 4.03 provided, the Owner Trustee
shall not, as a result of exercising the right to cure any such Event of
Default, obtain any Lien on any of the Mortgaged Property or any Rent payable
under the Lease for or on account of costs or expenses incurred in connection
with the exercise of such right, nor shall any claim of the Owner Trustee
against Lessee or any other party for the repayment of such costs or expenses
impair the prior right and security interest of the Mortgagee in and to the
Mortgaged Property. Upon any payment by the Owner Trustee pursuant to the first
or second preceding paragraphs of this Section 4.03, the Owner Trustee shall be
subrogated to the rights of the Mortgagee and the Note Holders in respect of the
Basic Rent which was overdue at the time of such payment and interest payable by
the Lessee on account of its being overdue and any Supplemental Rent in respect
of the reimbursement of amounts paid by Owner Trustee pursuant to the
immediately preceding paragraph (but in either case shall have no rights as a
secured party hereunder), and thereafter, the Owner Trustee shall be entitled
(so long as the application thereof shall not give rise to an Event of Default
hereunder) to receive such overdue Basic Rent or Supplemental Rent, as the case
may be, and interest thereon upon receipt thereof by the Mortgagee; PROVIDED,
HOWEVER, that (i) if the Original Amount and interest on the Equipment Notes
shall have become due and payable pursuant to Section 4.04(b) hereof, such
subrogation shall, until the Secured Obligations shall have been paid in full,
be subordinate to the rights of the Mortgagee, the Note Holders and the
Indenture Indemnitees in respect of such payment of overdue Basic Rent,
Supplemental Rent and such interest and (ii) the Owner Trustee shall not
otherwise attempt to recover any such amount paid by it on behalf of the Lessee
pursuant to this Section 4.03 except by demanding of the Lessee payment of such
amount, or by commencing an action at law against the Lessee and obtaining and
enforcing a judgment against the Lessee for the payment of such amount or taking
appropriate action in a pending action at law against the Lessee (PROVIDED, that
at no time while an Event of Default shall have occurred and be continuing shall
any such demand be made or shall any such action be commenced (or continued) and
any amounts nevertheless received by the Owner Trustee in respect thereof shall
be held in trust for the benefit of, and promptly paid to, the Mortgagee for
distribution as provided in Section 3.03 hereof).
Neither the Owner Trustee nor the Owner Participant shall have the
right to cure any Lease Event of Default or Lease Default except as specified in
this Section 4.03.
SECTION 4.04. REMEDIES
(a) If an Event of Default shall have occurred and be continuing and
so long as the same shall continue unremedied, then and in every such case the
Mortgagee may, subject to the second and third paragraphs of this Section
4.04(a), exercise any or all of the rights and powers and pursue any and all of
the remedies pursuant to this Article IV and shall have and may exercise all of
the rights and remedies of a secured party under the Uniform Commercial Code
and, in the event such Event of Default is also a Lease Event of Default, any
and all of the remedies pursuant to Section 15 of the Lease [and pursuant to any
Permitted Sublease assignment] and may take possession of all or any part of
the properties covered or intended to be covered by the Lien created hereby or
pursuant hereto and may exclude the Owner Participant, the Owner Trustee and
Lessee and all persons claiming under any of them wholly or partly therefrom;
provided, that the Mortgagee shall give the Owner Trustee and the Owner
Participant twenty days' prior written notice of its intention to sell the
Aircraft, and provided, further, that in the event the Mortgagee shall have
validly terminated the Lease, the Mortgagee shall not sell or lease, or
otherwise afford the use of, the Aircraft or any portion thereof to the Lessee
or any Affiliate thereof. Unless an Event of Default not resulting from or
relating to a Lease Event of Default has occurred and is continuing, the Owner
Participant may bid at the sale and become the purchaser. Without limiting any
of the foregoing, it is understood and agreed that the Mortgagee may exercise
any right of sale of the Aircraft available to it, even though it shall not have
taken possession of the Aircraft and shall not have possession thereof at the
time of such sale.
Anything in this Trust Indenture to the contrary notwithstanding, the
Mortgagee shall not be entitled to exercise any remedy hereunder as a result of
an Event of Default which arises solely by reason of one or more events or
circumstances which constitute a Lease Event of Default unless the Mortgagee as
security assignee of the Owner Trustee shall have exercised or concurrently be
exercising one or more of the dispossessory remedies provided for in Section 15
of the Lease with respect to the Aircraft; PROVIDED, HOWEVER, that such
requirement to exercise one or more of such remedies under the Lease shall not
apply in circumstances where the Mortgagee is, and has been, for a continuous
period in excess of 60 days or such other period as may be specified in Section
1110(a)(1)(A) of the Bankruptcy Code (such 60-day or other period being the "New
Section 1110 Period"), involuntarily stayed or prohibited by applicable law or
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
court order from exercising such remedies under the Lease (a "Continuous Stay
Period"); PROVIDED FURTHER, HOWEVER, that the requirement to exercise one or
more of such remedies under the Lease shall nonetheless be applicable during a
Continuous Stay Period subsequent to the expiration of the New Section 1110
Period to the extent that the continuation of such Continuous Stay Period
subsequent to the expiration of the New Section 1110 Period (A) results from an
agreement by the trustee or the debtor-in-possession in such proceeding during
the New Section 1110 Period with the approval of the relevant court to perform
the Lease in accordance with Section 1110(a)(1)(A) of the Bankruptcy Code and
continues to perform as required by Section 1110(a)(1)(A-B) of the Bankruptcy
Code or (B) is an extension of the New Section 1110 Period with the consent of
the Mortgagee pursuant to Section 1110(b) of the Bankruptcy Code or (C) results
from the Lessee's assumption during the New Section 1110 Period with the
approval of the relevant court of the Lease pursuant to Section 365 of the
Bankruptcy Code and Lessee's continuous performance of the Lease as so assumed
or (D) is the consequence of the Mortgagee's own failure to give any requisite
notice to any person. In the event that the applicability of Section 1110 of the
Bankruptcy Code to the Aircraft is being contested by Lessee in judicial
proceedings, both of the Mortgagee and the Owner Trustee shall have the right to
participate in such proceedings; provided that any such participation by the
Owner Trustee shall not affect in any way any rights or remedy of the Mortgagee
hereunder.
It is expressly understood and agreed that, subject only to the two
preceding paragraphs, the inability, described in such paragraphs, of the
Mortgagee to exercise any right or remedy under the Lease shall in no event and
under no circumstances prevent the Mortgagee from exercising any or all of its
rights, powers and remedies under this Trust Indenture, including, without
limitation, this Article IV.
(b) If an Event of Default shall have occurred and be continuing, then
and in every such case the Mortgagee may (and shall, upon receipt of a written
demand therefor from a Majority in Interest of Note Holders), subject to Section
4.03 hereof, at any time, by delivery of written notice or notices to the Owner
Trustee and the Owner Participant, declare all the Equipment Notes to be due and
payable, whereupon the unpaid Original Amount of all Equipment Notes then
outstanding, together with accrued but unpaid interest thereon (without
Make-Whole Amount) and other amounts due thereunder, shall immediately become
due and payable without presentment, demand, protest or notice, all of which are
hereby waived; PROVIDED that if an Event of Default referred to in clause (g) of
Section 4.02 hereof shall have occurred or a Lease Event of Default under
Section 14.5 of the Lease shall have occurred, then and in every such case the
unpaid Original Amount then outstanding, together with accrued but unpaid
interest and all other amounts due thereunder and hereunder shall immediately
and without further act become due and payable without presentment, demand,
protest or notice, all of which are hereby waived; PROVIDED FURTHER that in the
event of a reorganization proceeding involving the Lessee instituted under
Chapter 11 of the Bankruptcy Code, if no Lease Event of Default (including any
Lease Event of Default set forth in Section 14.3 of the Lease) and no other
Event of Default (other than the failure to pay the Original Amount of the
Equipment Notes which by such declaration shall have become payable) exists at
any time after the consummation of such proceeding, such declaration shall be
automatically rescinded without any further action on the part of any Note
Holder.
This Section 4.04(b), however, is subject to the condition that, if at
any time after the Original Amount of the Equipment Notes shall have become so
due and payable, and before any judgment or decree for the payment of the money
so due, or any thereof, shall be entered, all overdue payments of interest upon
the Equipment Notes and all other amounts payable under the Equipment Notes
(except the Original Amount of the Equipment Notes which by such declaration
shall have become payable) shall have been duly paid, and every other Default
and Event of Default with respect to any covenant or provision of this Trust
Indenture shall have been cured, then and in every such case a Majority in
Interest of Note Holders may (but shall not be obligated to), by written
instrument filed with the Mortgagee, rescind and annul the Mortgagee's
declaration (or such automatic acceleration) and its consequences; but no such
rescission or annulment shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.
Any acceleration pursuant to this Section 4.04(b) shall be
automatically rescinded and any related declaration of an Event of Default
annulled in the event that the Owner Trustee shall have cured, in accordance
with Section 4.03 hereof, the Event of Default that resulted in such
acceleration or declaration.
(c) The Note Holders shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 4.04, to credit against any purchase
price bid at such sale by such holder all or any part of the unpaid obligations
owing to such Note Holder and secured by the Lien of this Trust Indenture (only
to the extent that such purchase price would have been paid to such Note Holder
pursuant to Article III hereof if such purchase price were paid in cash and the
foregoing provisions of this subsection (c) were not given effect).
(d) In the event of any sale of the Trust Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Trust Indenture, the
unpaid Original Amount of all Equipment Notes then outstanding, together with
accrued interest thereon (without Make-Whole Amount), and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement (or its designee) is a
Note Holder, the Mortgagee will not be authorized or empowered to acquire title
to any Mortgaged Property or take any action with respect to any Mortgaged
Property so acquired by it if such acquisition or action would cause any Trust
to fail to qualify as a "grantor trust" for federal income tax purposes.
SECTION 4.05. RETURN OF AIRCRAFT, ETC.
(a) If an Event of Default shall have occurred and be continuing and
the Equipment Notes have been accelerated, subject to Section 4.03 hereof and
unless the Owner Trustee or the Owner Participant shall have elected to purchase
the Equipment Notes, at the request of the Mortgagee, the Owner Trustee shall
promptly execute and deliver to the Mortgagee such instruments of title and
other documents as the Mortgagee may deem necessary or advisable to enable the
Mortgagee or an agent or representative designated by the Mortgagee, at such
time or times and place or places as the Mortgagee may specify, to obtain
possession of all or any part of the Mortgaged Property included in the Trust
Indenture Estate to which the Mortgagee shall at the time be entitled hereunder.
If the Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Mortgagee, the Mortgagee may
(i) obtain a judgment conferring on the Mortgagee the right to immediate
possession and requiring the Owner Trustee to execute and deliver such
instruments and documents to the Mortgagee, to the entry of which judgment the
Owner Trustee hereby specifically consents to the fullest extent permitted by
Law, and (ii) pursue all or part of such Mortgaged Property wherever it may be
found and, in the event that a Lease Event of Default has occurred and is
continuing, may enter any of the premises of Lessee wherever such Mortgaged
Property may be or be supposed to be and search for such Mortgaged Property and
take possession of and remove such Mortgaged Property. All expenses of obtaining
such judgment or of pursuing, searching for and taking such property shall,
until paid, be secured by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Mortgagee may, from time
to time, at the expense of the Mortgaged Property, make all such expenditures
for maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modifications or alterations to and of the Mortgaged
Property, as it may deem proper. In each such case, the Mortgagee shall have the
right to maintain, use, operate, store, insure, lease, control, manage, dispose
of, modify or alter the Mortgaged Property and to carry on the business and to
exercise all rights and powers of the Owner Participant and the Owner Trustee
relating to the Mortgaged Property, as the Mortgagee shall deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, modification or alteration of the Mortgaged Property or any part
thereof as the Mortgagee may determine, and the Mortgagee shall be entitled to
collect and receive directly all tolls, rents (including Rent), revenues,
issues, income, products and profits of the Mortgaged Property and every part
thereof, except Excluded Payments, without prejudice, however, to the right of
the Mortgagee under any provision of this Trust Indenture to collect and receive
all cash held by, or required to be deposited with, the Mortgagee hereunder
other than Excluded Payments. Such tolls, rents (including Rent), revenues,
issues, income, products and profits shall be applied to pay the expenses of the
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, improvement, modification or alteration of the Mortgaged Property
and of conducting the business thereof, and to make all payments which the
Mortgagee may be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Mortgaged Property or any part
thereof (including the employment of engineers and accountants to examine,
inspect and make reports upon the properties and books and records of the Owner
Trustee), and all other payments which the Mortgagee may be required or
authorized to make under any provision of this Trust Indenture, as well as just
and reasonable compensation for the services of the Mortgagee, and of all
persons properly engaged and employed by the Mortgagee with respect hereto.
SECTION 4.06. REMEDIES CUMULATIVE
Each and every right, power and remedy given to the Mortgagee
specifically or otherwise in this Trust Indenture shall be cumulative and shall
be in addition to every 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 be exercised from time to time and as often and in such order as may be
deemed expedient by the Mortgagee, 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 the Mortgagee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of the
Owner Trustee or Lessee or to be an acquiescence therein.
SECTION 4.07. DISCONTINUANCE OF PROCEEDINGS
In case the Mortgagee shall have instituted any proceeding to enforce
any right, power or remedy under this Trust Indenture by foreclosure, entry or
otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Mortgagee, then and in
every such case the Owner Trustee, the Mortgagee and Lessee shall, subject to
any determination in such proceedings, be restored to their former positions and
rights hereunder with respect to the Mortgaged Property, and all rights,
remedies and powers of the Owner Trustee, the Mortgagee or Lessee shall continue
as if no such proceedings had been instituted.
SECTION 4.08. WAIVER OF PAST DEFAULTS
Upon written instruction from a Majority in Interest of Note Holders,
the Mortgagee shall waive any past Default hereunder and its consequences and
upon any such waiver such Default shall cease to exist and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Trust Indenture, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon; provided, that in the absence of
written instructions from all the Note Holders, the Mortgagee shall not waive
any Default (i) in the payment of the Original Amount, Make-Whole Amount, if
any, and interest and other amounts due under any Equipment Note then
outstanding, or (ii) in respect of a covenant or provision hereof which, under
Article IX hereof, cannot be modified or amended without the consent of each
Note Holder.
SECTION 4.09. APPOINTMENT OF RECEIVER
The Mortgagee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Mortgagee or any successor or nominee
thereof) for all or any part of the Mortgaged Property, whether such
receivership be incidental to a proposed sale of the Mortgaged Property or the
taking of possession thereof or otherwise, and the Owner Trustee hereby consents
to the appointment of such a receiver and will not oppose any such appointment.
Any receiver appointed for all or any part of the Mortgaged Property shall be
entitled to exercise all the rights and powers of the Mortgagee with respect to
the Mortgaged Property.
SECTION 4.10. MORTGAGEE AUTHORIZED TO EXECUTE BILLS OF SALE, ETC.
Subject to the provisions of this Trust Indenture, the Owner Trustee
irrevocably appoints the Mortgagee the true and lawful attorney-in-fact of the
Owner Trustee (which appointment is coupled with an interest) in its name and
stead and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery for the enforcement of the Lien of this Trust Indenture,
whether pursuant to foreclosure or power of sale, assignments and other
instruments as may be necessary or appropriate, with full power of substitution,
the Owner Trustee hereby ratifying and confirming all that such attorney or any
substitute shall do by virtue hereof in accordance with applicable law.
Nevertheless, if so requested by the Mortgagee or any purchaser, the Owner
Trustee shall ratify and confirm any such sale, assignment, transfer or
delivery, by executing and delivering to the Mortgagee or such purchaser all
bills of sale, assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
SECTION 4.11. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Trust Indenture, the right
of any Note Holder to receive payment of principal of, and premium, if any, and
interest on an Equipment Note on or after the respective due dates expressed in
such Equipment Note, or to bring suit for the enforcement of any such payment on
or after such respective dates in accordance with the terms hereof, shall not be
impaired or affected without the consent of such Note Holder.
ARTICLE V
DUTIES OF THE MORTGAGEE
SECTION 5.01. NOTICE OF EVENT OF DEFAULT
If the Mortgagee shall have Actual Knowledge of an Event of Default or
of a Default arising from a failure to pay Rent, the Mortgagee shall give prompt
written notice thereof to the Owner Trustee, the Owner Participant, Lessee, and
each Note Holder. Subject to the terms of Sections 2.13, 4.03, 4.04, 4.08, 5.02
and 5.03 hereof, the Mortgagee shall take such action, or refrain from taking
such action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the Mortgagee
shall be instructed in writing by a Majority in Interest of Note Holders.
Subject to the provisions of Section 5.03, if the Mortgagee shall not have
received instructions as above provided within 20 days after mailing notice of
such Event of Default to the Note Holders, the Mortgagee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to such
Event of Default or Default as it shall determine advisable in the best
interests of the Note Holders; PROVIDED, HOWEVER, that the Mortgagee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest of
Note Holders. For all purposes of this Trust Indenture, in the absence of Actual
Knowledge on the part of the Mortgagee, the Owner Trustee or the Owner
Participant, the Mortgagee, the Owner Trustee or the Owner Participant, as the
case may be, shall not be deemed to have knowledge of a Default or an Event of
Default (except, in the case of the Mortgagee, the failure of Lessee to pay any
installment of Basic Rent within one Business Day after the same shall become
due, if any portion of such installment was then required to be paid to the
Mortgagee, which failure shall constitute knowledge of a Default) unless
notified in writing by Lessee, the Owner Trustee, the Owner Participant or one
or more Note Holders.
SECTION 5.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND LIMITATIONS
(a) Subject to the terms of Sections 2.13, 4.03, 4.04(a) and (b),
4.08, 5.01 and 5.03 hereof, upon the written instructions at any time and from
time to time of a Majority in Interest of Note Holders, the Mortgagee shall,
subject to the terms of this Section 5.02, take such of the following actions as
may be specified in such instructions: (i) give such notice or direction or
exercise such right, remedy or power hereunder as shall be specified in such
instructions; (ii) give such notice or direction or exercise such right, remedy
or power under the Lease, the Participation Agreement, the Purchase Agreement,
the Purchase Agreement Assignment, or any other part of the Trust Indenture
Estate as shall be specified in such instructions; and (iii) approve as
satisfactory to the Mortgagee all matters required by the terms of the Lease to
be satisfactory to the Owner Trustee, it being understood that without the
written instructions of a Majority in Interest of Note Holders, the Mortgagee
shall not approve any such matter as satisfactory to the Mortgagee; provided,
that anything contained in this Trust Indenture, the Lease or the other
Operative Agreements to the contrary notwithstanding, but subject to the next
paragraph hereof:
(1) the Owner Trustee or the Owner Participant, may, without the
consent of the Mortgagee, demand, collect, sue for or otherwise obtain all
amounts included in Excluded Payments from Lessee and seek legal or
equitable remedies to require Lessee to maintain the insurance coverage
referred to in Section 11 of the Lease [(or the comparable provisions of
any assigned Permitted Sublease)] provided, that the rights referred
to in this clause (1) shall not be deemed to include the exercise of any
remedies provided for in Section 15 of the Lease other than the right to
proceed by appropriate court action, either at Law or in equity, to enforce
payment by Lessee of such amounts included in Excluded Payments or
performance by Lessee of such insurance covenant or to recover damages for
the breach thereof or for specific performance of any other term of the
Lease [(or the comparable provisions of any assigned Permitted
Sublease)];
(2) (A) the Mortgagee shall not, without the consent of the Owner
Trustee, enter into, execute or deliver amendments or modifications in
respect of any of the provisions of the Lease[, any assigned Permitted
Sublease or any Permitted Sublease assignment], and (B) unless a
Mortgagee Event shall have occurred and be continuing, the Mortgagee shall
not, without the consent of the Owner Trustee, which consent shall not be
withheld if no right or interest of the Owner Trustee or the Owner
Participant shall be diminished or impaired thereby, (i) enter into,
execute or deliver waivers or consents in respect of any of the provisions
of the Lease, or (ii) approve any accountants, engineers, appraisers or
counsel as satisfactory to render services for or issue opinions to the
Owner Trustee pursuant to the Operative Agreements, provided that whether
or not any Mortgagee Event has occurred and is continuing, the Owner
Trustee's consent shall be required with respect to any waivers or consents
in respect of any of the provisions of Section 5, 7 or 11 of the Lease, or
of any other Section of the Lease to the extent such action shall affect
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
(y) the amount or timing of, or the right to enforce payment of any
Excluded Payment or (z) the amount or timing of any amounts payable by the
Lessee under the Lease as originally executed (or as subsequently modified
with the consent of the Owner Trustee) which, absent the occurrence and
continuance of an Event of Default hereunder, would be distributable to the
Owner Trustee under Article III hereof;
(3) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee and the Owner
Participant shall have the right, together with the Mortgagee, (i) to receive
from Lessee [or any Permitted Sublessee] certificates and other documents
and information which Lessee is required to give or furnish to the Owner Trustee
or the Lessor pursuant to any Operative Agreement and (ii) to inspect in
accordance with the Lease the Airframe and Engines and all Aircraft Documents;
(4) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee shall have the right
to adjust upwards Rent, Stipulated Loss Values and Termination Values as
provided in Section 3.2.1 of the Lease;
(5) so long as no Mortgagee Event has occurred and is continuing, the
Owner Trustee shall have the right, to the exclusion of the Mortgagee, to adjust
Basic Rent, Stipulated Loss Values and Termination Values as provided in Section
3.2 of the Lease or to adjust downward any installment or amount of Basic Rent,
Stipulated Loss Value or Termination Value, as such installments and amounts are
set forth in Schedules 2, 3 and 4, respectively, to the Lease, to the extent of
the portion of such installment or amount that would, under Section 3.01, 3.02
or 3.03 hereof, as the case may be, be distributable to the Owner Trustee or the
Owner Participant;
(6) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee may, without the
consent of the Mortgagee, (i) solicit and make bids with respect to the Aircraft
under Section 9 of the Lease in respect of a termination of the Lease by Lessee
pursuant to Section 9 thereof, (ii) determine Fair Market Sales Value and Fair
Market Rental Value under Section 17 of the Lease for all purposes except
following a Mortgagee Event pursuant to Section 15 of the Lease, and (iii) make
an election pursuant to and in accordance with the provisions of Sections
9.1(b), 9.2 and 9.3 of the Lease; and
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
(7) so long as no Mortgagee Event shall have occurred and be
continuing, all other rights of the "Lessor" under the Lease [or any assigned
Permitted Sublease] shall be exercised by the Owner Trustee to the
exclusion of the Mortgagee including, without limitation, the right to (i)
exercise all rights with respect to Lessee's use and operation, modification or
maintenance of the Aircraft and any Engine which the Lease specifically confers
on the Lessor, and (ii) consent to and approve any assignment pursuant to
Section 13 of the Lease; PROVIDED that the foregoing shall not (x) limit (A) any
rights separately granted to the Mortgagee under the Operative Agreements or (B)
the right of the Mortgagee to receive any funds to be delivered to the "Lessor"
under the Lease (except with respect to Excluded Payments) and under the
Purchase Agreement or (y) confer upon the Owner Trustee the right to adversely
affect the validity or enforceability of the lien of this Indenture.
Notwithstanding anything to the contrary contained herein (including
this Section 5.02), the Mortgagee shall have the right, to the exclusion of the
Owner Trustee and the Owner Participant, to (A) declare the Lease to be in
default under Section 15 thereof and (B) subject only to the provisions of
Sections 4.03, 4.04(a) and (b) and 2.14 hereof, exercise the remedies set forth
in such Section 15 (other than in connection with Excluded Payments and provided
that each of the Owner Trustee, Owner Participant and Mortgagee shall
independently retain the rights set forth in clause (ii) of Section 15.1.5 of
the Lease) at any time that a Lease Event of Default shall have occurred and be
continuing. Further and for the avoidance of doubt, and anything to the contrary
contained herein (including this Section 5.02), in no event may the Owner
Trustee amend or otherwise modify the provisions of Section 3.2.1(e) of the
Lease or of the final sentence of the definition of Stipulated Loss Value or
Termination Value, in any such case, without the prior written consent of the
Mortgagee.
The Mortgagee will execute and the Owner Trustee will file or cause to
be filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of a
Majority in Interest of Note Holders (which instructions shall be accompanied by
the form of such continuation statement so to be filed). The Mortgagee will
furnish to each Note Holder (and, during the continuation of a Mortgagee Event,
to the Owner Trustee and Owner Participant), promptly upon receipt thereof,
duplicates or copies of all reports, notices, requests, demands, certificates
and other instruments furnished to the Mortgagee under the Lease or hereunder,
including, without limitation, a copy of any Termination Notice (as defined in
the Lease) and a copy of each report or notice received pursuant to Section 9
and Paragraph E of Annex D of the Lease, respectively to the extent that the
same shall not have been furnished to such holder pursuant hereto or the Lease.
_________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease Event of
Default under and in accordance with Section 4.03 hereof, on request of a
Majority in Interest of Note Holders, the Mortgagee shall declare the Lease to
be in default pursuant to Section 15 thereof and exercise those remedies
specified by such Note Holders. The Mortgagee agrees to provide to the Note
Holders, the Owner Trustee and the Owner Participant concurrently with such
declaration by the Mortgagee, notice of such declaration by the Mortgagee.
SECTION 5.03. INDEMNIFICATION
The Mortgagee shall not be required to take any action or refrain from
taking any action under Section 5.01 (other than the first sentence thereof),
5.02 or Article IV hereof unless the Mortgagee shall have been indemnified to
its reasonable satisfaction against any liability, cost or expense (including
counsel fees) which may be incurred in connection therewith pursuant to a
written agreement with one or more Note Holders. The Mortgagee agrees that it
shall look solely to the Note Holders for the satisfaction of any indemnity
(except expenses for foreclosure of the type referred to in clause "First" of
Section 3.03 hereof) owed to it pursuant to this Section 5.03. The Mortgagee
shall not be under any obligation to take any action under this Trust Indenture
or any other Operative Agreement and nothing herein or therein shall require the
Mortgagee to expend or risk its own funds or otherwise incur the risk of any
financial liability in the performance 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 written indemnity of any Note Holder who is a QIB, signed by an
authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to the Mortgagee shall be accepted as reasonable assurance of
adequate indemnity). The Mortgagee shall not be required to take any action
under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV
hereof, nor shall any other provision of this Trust Indenture or any other
Operative Agreement be deemed to impose a duty on the Mortgagee to take any
action, if the Mortgagee shall have been advised by counsel that such action is
contrary to the terms hereof or of the Lease or is otherwise contrary to Law.
SECTION 5.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST INDENTURE OR
INSTRUCTIONS
The Mortgagee shall not have any duty or obligation to use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Trust Indenture Estate, or to otherwise take
or refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Trust Indenture Estate, except as expressly
provided by the terms of this Trust Indenture or as expressly provided in
written instructions from Note Holders as provided in this Trust Indenture; and
no implied duties or obligations shall be read into this Trust Indenture against
the Mortgagee. The Mortgagee 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 7.01 hereof), promptly take such action
as may be necessary duly to discharge all liens and encumbrances on any part of
the Trust Indenture Estate which result from claims against it in its individual
capacity not related to the ownership of the Aircraft or the administration of
the Trust Indenture Estate or any other transaction pursuant to this Trust
Indenture or any document included in the Trust Indenture Estate.
SECTION 5.05. NO ACTION EXCEPT UNDER LEASE, TRUST INDENTURE OR
INSTRUCTIONS
The Owner Trustee and the Mortgagee agree that they will not use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Indenture Estate except (i) as
required by the terms of the Lease or (ii) in accordance with the powers granted
to, or the authority conferred upon, the Owner Trustee and the Mortgagee
pursuant to this Trust Indenture and in accordance with the express terms
hereof.
SECTION 5.06. REPLACEMENT AIRFRAMES AND REPLACEMENT ENGINES
At any time an Airframe or Engine is to be replaced under or pursuant
to Section 10 of the Lease by a Replacement Airframe or Replacement Engine, if
no Lease Event of Default is continuing, the Owner Trustee shall direct the
Mortgagee to execute and deliver to the Owner Trustee an appropriate instrument
releasing such Airframe and/or Engine as appropriate from the Lien of this Trust
Indenture and the Mortgagee shall execute and deliver such instrument as
aforesaid, but only upon compliance by Lessee with the applicable provisions of
Section 10 of the Lease.
SECTION 5.07. INDENTURE SUPPLEMENTS FOR REPLACEMENTS
If a Replacement Airframe or Replacement Engine is being substituted
as contemplated by Section 10 of the Lease, the Owner Trustee and the Mortgagee
agree for the benefit of the Note Holders and Lessee, subject to fulfillment of
the conditions precedent and compliance by Lessee with its obligations set forth
in Section 10 of the Lease and the requirements of Section 5.06 hereof with
respect to such Replacement Airframe or Replacement Engine, to execute and
deliver a Lease Supplement and a Trust Indenture Supplement, as applicable, as
contemplated by Section 10 of the Lease.
SECTION 5.08. EFFECT OF REPLACEMENT
In the event of the substitution of an Airframe or of a Replacement
Engine pursuant to Section 10 of the Lease, all provisions of this Trust
Indenture relating to the Airframe or Engine or Engines being replaced shall be
applicable to such Replacement Airframe or Replacement Engine or Engines with
the same force and effect as if such Replacement Airframe or Replacement Engine
or Engines were the same airframe or engine or engines, as the case may be, as
the Airframe or Engine or Engines being replaced but for the Event of Loss with
respect to the Airframe or Engine or Engines being replaced.
SECTION 5.09. INVESTMENT OF AMOUNTS HELD BY MORTGAGEE
Any amounts held by the Mortgagee as assignee of the Owner Trustee's
rights to hold monies for security pursuant to Section 4.4 of the Lease shall be
held in accordance with the terms of such Section and the Mortgagee agrees, for
the benefit of Lessee, to perform the duties of the Owner Trustee under such
Section. Any amounts held by the Mortgagee pursuant to the proviso to the first
sentence of Section 3.01, pursuant to Section 3.02, or pursuant to any provision
of any other Operative Agreement providing for amounts to be held by the
Mortgagee which are not distributed pursuant to the other provisions of Article
III hereof shall be invested by the Mortgagee from time to time in Cash
Equivalents as directed by the Owner Trustee so long as the Mortgagee may
acquire the same using its best efforts. Unless otherwise expressly provided in
this Trust Indenture, any income realized as a result of any such investment,
net of the Mortgagee's reasonable fees and expenses in making such investment,
shall be held and applied by the Mortgagee in the same manner as the principal
amount of such investment is to be applied and any losses, net of earnings and
such reasonable fees and expenses, shall be charged against the principal amount
invested. The Mortgagee shall not be liable for any loss resulting from any
investment required to be made by it under this Trust Indenture other than by
reason of its willful misconduct or gross negligence, and any such investment
may be sold (without regard to its maturity) by the Mortgagee without
instructions whenever such sale is necessary to make a distribution required by
this Trust Indenture.
ARTICLE VI
THE OWNER TRUSTEE AND THE MORTGAGEE
SECTION 6.01. ACCEPTANCE OF TRUSTS AND DUTIES
The Mortgagee accepts the duties hereby created and applicable to it
and agrees to perform the same but only upon the terms of this Trust Indenture
and agrees to receive and disburse all monies constituting part of the Trust
Indenture Estate in accordance with the terms hereof. The Owner Trustee, in its
individual capacity, and the Mortgagee, in its individual capacity, shall not be
answerable or accountable under any circumstances, except (i) for their own
willful misconduct or gross negligence (other than for the handling of funds,
for which the standard of accountability shall be willful misconduct or
negligence), (ii) in the case of the Mortgagee, as provided in the fourth
sentence of Section 2.04(a) hereof and the last sentence of Section 5.04 hereof,
and (iii) for liabilities that may result, in the case of the Owner Trustee,
from the inaccuracy of any representation or warranty of the Owner Trustee
expressly made in its individual capacity in the Participation Agreement or in
Section 4.01(b) or 6.03 hereof (or in any certificate furnished to the Mortgagee
or any Note Holder in connection with the transactions contemplated by the
Operative Agreements) or, in the case of the Mortgagee (in its individual
capacity), from the inaccuracy of any representation or warranty of the
Mortgagee (in its individual capacity) in the Participation Agreement or
expressly made hereunder. Neither the Owner Trustee nor the Mortgagee shall be
liable for any action or inaction of the other or of the Owner Participant.
SECTION 6.02. ABSENCE OF DUTIES
In the case of the Mortgagee, except in accordance with written
instructions furnished pursuant to Section 5.01 or 5.02 hereof, and except as
provided in, and without limiting the generality of, Sections 5.03, 5.04 and
6.08 hereof and, in the case of the Owner Trustee, except as provided in Section
4.01(b) hereof, the Owner Trustee and the Mortgagee shall have no duty (i) to
see to any registration of the Aircraft or any recording or filing of the Lease
or of this Trust Indenture or any other document, or to see to the maintenance
of any such registration, recording or filing, (ii) to see to any insurance on
the Aircraft or to effect or maintain any such insurance, whether or not Lessee
shall be in default with respect thereto, (iii) to see to the payment or
discharge of any lien or encumbrance of any kind against any part of the Trust
Estate or the Trust Indenture Estate, (iv) to confirm, verify or inquire into
the failure to receive any financial statements from Lessee, or (v) to inspect
the Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Lessee's covenants under the Lease [or any of the Permitted
Sublessee's covenants under any assigned Permitted Sublease] with respect
to the Aircraft. The Owner Participant shall not have any duty or responsibility
hereunder, including, without limitation, any of the duties mentioned in clauses
(i) through (v) above; provided, that nothing contained in this sentence shall
limit any obligations of the Owner Participant under the Participation Agreement
or relieve the Owner Participant from any restriction under Section 4.03 hereof.
SECTION 6.03. NO REPRESENTATIONS OR WARRANTIES AS TO AIRCRAFT OR
DOCUMENTS
NEITHER THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY NOR THE
OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE TRUST
AGREEMENT, MAKES OR SHALL BE DEEMED TO HAVE MADE AND EACH HEREBY EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN,
QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, except the Owner Trustee in its individual capacity
warrants that (i) the Owner Trustee has received on the Delivery Date whatever
title was conveyed to it, and (ii) the Aircraft is free and clear of Lessor
Liens attributable to the Owner Trustee in its individual capacity. Neither the
Owner Trustee, in its individual capacity or as Owner Trustee under the Trust
Agreement, nor the Mortgagee, in its individual or trust capacities, makes or
shall be deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Trust Indenture, the Trust Agreement, the
Participation Agreement, the Equipment Notes, the Lease, the Purchase Agreement
or the Purchase Agreement Assignment with the Consent and Agreement and the
Engine Consent and Agreement attached thereto, or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner Trustee made in its individual capacity and the
representations and warranties of the Mortgagee in its individual capacity, in
each case expressly made in this Trust Indenture or in the Participation
Agreement. The Loan Participants, the Note Holders and the Owner Participant
make no representation or warranty hereunder whatsoever.
SECTION 6.04. NO SEGREGATION OF MONIES; NO INTEREST
Any monies paid to or retained by the Mortgagee pursuant to any
provision hereof and not then required to be distributed to the Note Holders,
Lessee or the Owner Trustee as provided in Article III hereof need not be
segregated in any manner except to the extent required by Law or Section 4.4 of
the Lease and Section 5.09 hereof, and may be deposited under such general
conditions as may be prescribed by Law, and the Mortgagee shall not be liable
for any interest thereon (except that the Mortgagee shall invest all monies held
as directed by Lessee so long as no Lease Event of Default or Lease Default has
occurred and is continuing (or in the absence of such direction, by the Majority
In Interest of Note Holders) in Cash Equivalents; PROVIDED, however, that any
payments received, or applied hereunder, by the Mortgagee shall be accounted for
by the Mortgagee so that any portion thereof paid or applied pursuant hereto
shall be identifiable as to the source thereof.
SECTION 6.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL
Neither the Owner Trustee nor the Mortgagee shall incur any 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. The Owner Trustee and the Mortgagee may accept a copy of a
resolution of the Board of Directors (or Executive Committee thereof) of any
party to the Participation Agreement, certified by the Secretary or an Assistant
Secretary thereof as duly adopted and in full force and effect, as conclusive
evidence that such resolution has been duly adopted and that the same is in full
force and effect. As to the aggregate unpaid Original Amount of Equipment Notes
outstanding as of any date, the Owner Trustee may for all purposes hereof rely
on a certificate signed by any Vice President or other authorized corporate
trust officer of the Mortgagee. As to any fact or matter relating to Lessee the
manner of which is not specifically described herein, the Owner Trustee and the
Mortgagee may for all purposes hereof rely on a certificate, signed by a duly
authorized officer of Lessee, as to such fact or matter, and such certificate
shall constitute full protection to the Owner Trustee and the Mortgagee for any
action taken or omitted to be taken by them in good faith in reliance thereon.
The Mortgagee shall assume, and shall be fully protected in assuming, that the
Owner Trustee is authorized by the Trust Agreement to enter into this Trust
Indenture and to take all action to be taken by it pursuant to the provisions
hereof, and shall not inquire into the authorization of the Owner Trustee with
respect thereto. In the administration of the trusts hereunder, the Owner
Trustee and the Mortgagee each may execute any of the trusts or powers hereof
and perform its powers and duties hereunder directly or through agents or
attorneys and may, at the expense of the Trust Indenture Estate, advise with
counsel, accountants and other skilled persons to be selected and retained by
it, and the Owner Trustee and the Mortgagee shall not be liable for anything
done, suffered or omitted in good faith by them in accordance with the written
advice or written opinion of any such counsel, accountants or other skilled
persons.
SECTION 6.06. CAPACITY IN WHICH ACTING
The Owner Trustee acts hereunder solely as trustee as herein and in
the Trust Agreement provided, and not in its individual capacity, except as
otherwise expressly provided herein, in the Trust Agreement and in the
Participation Agreement.
SECTION 6.07. COMPENSATION
The Mortgagee shall be entitled to reasonable compensation, including
expenses and disbursements (including the reasonable fees and expenses of
counsel), for all services rendered hereunder and shall, on and subsequent to an
Event of Default hereunder, have a priority claim on the Trust Indenture Estate
for the payment of such compensation, to the extent that such compensation shall
not be paid by Lessee, and shall have the right, on and subsequent to an Event
of Default hereunder, to use or apply any monies held by it hereunder in the
Trust Indenture Estate toward such payments. The Mortgagee agrees that it shall
have no right against the Loan Participants, the Note Holders, the Owner Trustee
or the Owner Participant for any fee as compensation for its services as trustee
under this Trust Indenture.
SECTION 6.08. INSTRUCTIONS FROM NOTE HOLDERS
In the administration of the trusts created hereunder, the Mortgagee
shall have the right to seek instructions from a Majority in Interest of Note
Holders should any provision of this Trust Indenture appear to conflict with any
other provision herein or should the Mortgagee's duties or obligations hereunder
be unclear, and the Mortgagee shall incur no liability in refraining from acting
until it receives such instructions. The Mortgagee shall be fully protected for
acting in accordance with any instructions received under this Section 6.08.
ARTICLE VII
INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE
SECTION 7.01. SCOPE OF INDEMNIFICATION
The Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, hereby agrees, whether or not any of the transactions contemplated
hereby shall be consummated, except as to matters covered by any indemnity
furnished as contemplated by Section 5.03 hereof and except as otherwise
provided in Section 2.03 or 2.04(b) hereof, to assume liability for, and does
hereby indemnify, protect, save and keep harmless the Mortgagee (in its
individual and trust capacities), and its successors, assigns, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by the Mortgagee on or
measured by any compensation received by the Mortgagee for its services under
this Trust Indenture), claims, actions, suits, costs, expenses or disbursements
(including legal fees and expenses) of any kind and nature whatsoever, which may
be imposed on, incurred by or asserted against the Mortgagee (whether or not
also indemnified against by any other person under any other document) in any
way relating to or arising out of this Trust Indenture or any other Operative
Agreement to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, non-acceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether or
not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration of
the Trust Indenture Estate or the action or inaction of the Mortgagee hereunder
except only in the case of willful misconduct or gross negligence (or negligence
in the case of handling funds) of the Mortgagee in the performance of its duties
hereunder or resulting from the inaccuracy of any representation or warranty of
the Mortgagee (in its individual capacity) referred to in Section 6.03 hereof,
or as provided in Section 6.01 hereof or in the last sentence of Section 5.04
hereof, or as otherwise excluded by the terms of Section 9.1 or 9.3 of the
Participation Agreement from Lessee's indemnities under such Sections. In
addition, if necessary, the Mortgagee shall be entitled to indemnification from
the Trust Indenture Estate for any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement indemnified against pursuant
to this Section 7.01 to the extent not reimbursed by Lessee or others, but
without releasing any of them from their respective agreements of reimbursement;
and to secure the same the Mortgagee shall have a prior Lien on the Trust
Indenture Estate. Without limiting the foregoing, the Mortgagee agrees that,
prior to seeking indemnification from the Trust Indenture Estate, it will
demand, and diligently pursue in good faith (but with no duty to exhaust all
legal remedies therefor), indemnification available to the Mortgagee from Lessee
under the Lease or the Participation Agreement.
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. NOTICE OF SUCCESSOR OWNER TRUSTEE
In the case of any appointment of a successor to the Owner Trustee
pursuant to the Trust Agreement including upon any merger, conversion,
consolidation or sale of substantially all of the corporate trust business of
the Owner Trustee pursuant to the Trust Agreement, the successor Owner Trustee
shall give prompt written notice thereof to the Mortgagee, Lessee and the Note
Holders.
SECTION 8.02. RESIGNATION OF MORTGAGEE; APPOINTMENT OF SUCCESSOR
(a) The Mortgagee or any successor thereto may resign at any time
without cause by giving at least 30 days' prior written notice to Lessee, the
Owner Trustee, the Owner Participant and each Note Holder, such resignation to
be effective upon the acceptance of the trusteeship by a successor Mortgagee. In
addition, a Majority in Interest of Note Holders may at any time (but only with
the consent of the Lessee, which consent shall not be unreasonably withheld,
except that such consent shall not be necessary if a Lease Event of Default is
continuing) remove the Mortgagee without cause by an instrument in writing
delivered to the Owner Trustee, Lessee, the Owner Participant and the Mortgagee,
and the Mortgagee shall promptly notify each Note Holder thereof in writing,
such removal to be effective upon the acceptance of the trusteeship by a
successor Mortgagee. In the case of the resignation or removal of the Mortgagee,
a Majority in Interest of Note Holders may appoint a successor Mortgagee by an
instrument signed by such holders, which successor, so long as no Lease Event of
Default shall have occurred and be continuing, shall be subject to Lessee's
reasonable approval. If a successor Mortgagee shall not have been appointed
within 30 days after such notice of resignation or removal, the Mortgagee, the
Owner Trustee, the Owner Participant or any Note Holder may apply to any court
of competent jurisdiction to appoint a successor Mortgagee to act until such
time, if any, as a successor shall have been appointed as above provided. The
successor Mortgagee so appointed by such court shall immediately and without
further act be superseded by any successor Mortgagee appointed as above
provided.
(b) Any successor Mortgagee, however appointed, shall execute and
deliver to the Owner Trustee, the predecessor Mortgagee and the Lessee an
instrument accepting such appointment and assuming the obligations of the
Mortgagee under the Participation Agreement arising from and after the time of
such appointment, and thereupon such successor Mortgagee, without further act,
shall become vested with all the estates, properties, rights, powers and duties
of the predecessor Mortgagee hereunder in the trust hereunder applicable to it
with like effect as if originally named the Mortgagee herein; but nevertheless
upon the written request of such successor Mortgagee, such predecessor Mortgagee
shall execute and deliver an instrument transferring to such successor
Mortgagee, upon the trusts herein expressed applicable to it, all the estates,
properties, rights and powers of such predecessor Mortgagee, and such
predecessor Mortgagee shall duly assign, transfer, deliver and pay over to such
successor Mortgagee all monies or other property then held by such predecessor
Mortgagee hereunder.
(c) Any successor Mortgagee, however appointed, shall be a bank or
trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Chicago, Illinois; Hartford, Connecticut;
Wilmington, Delaware; or Boston, Massachusetts and having (or whose obligations
under the Operative Agreements are guaranteed by an affiliated entity having) a
combined capital and surplus of at least $100,000,000, if there be such an
institution willing, able and legally qualified to perform the duties of the
Mortgagee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Mortgagee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Mortgagee shall be a
party, or any corporation to which substantially all the corporate trust
business of the Mortgagee may be transferred, shall, subject to the terms of
paragraph (c) of this Section 8.02, be a successor Mortgagee and the Mortgagee
under this Trust Indenture without further act.
SECTION 8.03. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES
(a) Whenever (i) the Mortgagee shall deem it necessary or desirable in
order to conform to any Law of any jurisdiction in which all or any part of the
Trust Indenture Estate shall be situated or to make any claim or bring any suit
with respect to or in connection with the Trust Indenture Estate, this Trust
Indenture, any other Indenture Agreement, the Equipment Notes or any of the
transactions contemplated by the Participation Agreement, (ii) the Mortgagee
shall be advised by counsel satisfactory to it that it is so necessary or
prudent in the interests of the Note Holders (and the Mortgagee shall so advise
the Owner Trustee and Lessee), or (iii) the Mortgagee shall have been requested
to do so by a Majority in Interest of Note Holders, then in any such case, the
Mortgagee and, upon the written request of the Mortgagee, the Owner Trustee,
shall execute and deliver an indenture supplemental hereto and such other
instruments as may from time to time be necessary or advisable either (1) to
constitute one or more bank or trust companies or one or more persons approved
by the Mortgagee, either to act jointly with the Mortgagee as additional trustee
or trustees of all or any part of the Trust Indenture Estate, or to act as
separate trustee or trustees of all or any part of the Trust Indenture Estate,
in each case with such rights, powers, duties and obligations consistent with
this Trust Indenture as may be provided in such supplemental indenture or other
instruments as the Mortgagee or a Majority in Interest of Note Holders may deem
necessary or advisable, or (2) to clarify, add to or subtract from the rights,
powers, duties and obligations theretofore granted any such additional or
separate trustee, subject in each case to the remaining provisions of this
Section 8.03. If the Owner Trustee shall not have taken any action requested of
it under this Section 8.03(a) that is permitted or required by its terms within
15 days after the receipt of a written request from the Mortgagee so to do, or
if an Event of Default shall have occurred and be continuing, the Mortgagee may
act under the foregoing provisions of this Section 8.03(a) without the
concurrence of the Owner Trustee, and the Owner Trustee hereby irrevocably
appoints (which appointment is coupled with an interest) the Mortgagee, its
agent and attorney-in-fact to act for it under the foregoing provisions of this
Section 8.03(a) in either of such contingencies. The Mortgagee may, in such
capacity, execute, deliver and perform any such supplemental indenture, or any
such instrument, as may be required for the appointment of any such additional
or separate trustee or for the clarification of, addition to or subtraction from
the rights, powers, duties or obligations theretofore granted to any such
additional or separate trustee. In case any additional or separate trustee
appointed under this Section 8.03(a) shall die, become incapable of acting,
resign or be moved, all the assets, property, rights, powers, trusts, duties and
obligations of such additional or separate trustee shall revert to the Mortgagee
until a successor additional or separate trustee is appointed as provided in
this Section 8.03(a).
(b) No additional or separate trustee shall be entitled to exercise
any of the rights, powers, duties and obligations conferred upon the Mortgagee
in respect of the custody, investment and payment of monies and all monies
received by any such additional or separate trustee from or constituting part of
the Trust Indenture Estate or otherwise payable under any Operative Agreement to
the Mortgagee shall be promptly paid over by it to the Mortgagee. All other
rights, powers, duties and obligations conferred or imposed upon any additional
or separate trustee shall be exercised or performed by the Mortgagee and such
additional or separate trustee jointly except to the extent that applicable Law
of any jurisdiction in which any particular act is to be performed renders the
Mortgagee incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations (including the holding of title to all or
part of the Trust Indenture Estate in any such jurisdiction) shall be exercised
and performed by such additional or separate trustee. No additional or separate
trustee shall take any discretionary action except on the instructions of the
Mortgagee or a Majority in Interest of Note Holders. No trustee hereunder shall
be personally liable by reason of any act or omission of any other trustee
hereunder, except that the Mortgagee shall be liable for the consequences of its
lack of reasonable care in selecting, and the Mortgagee's own actions in acting
with, any additional or separate trustee. Each additional or separate trustee
appointed pursuant to this Section 8.03 shall be subject to, and shall have the
benefit of Articles IV through VIII and Article X hereof insofar as they apply
to the Mortgagee. The powers of any additional or separate trustee appointed
pursuant to this Section 8.03 shall not in any case exceed those of the
Mortgagee hereunder.
(c) If at any time the Trustee shall deem it no longer necessary or in
order to conform to any such Law or take any such action or shall be advised by
such counsel that it is no longer so necessary or desirable in the interest of
the Note Holders, or in the event that the Mortgagee shall have been requested
to do so in writing by a Majority in Interest of Note Holders, the Mortgagee
and, upon the written request of the Mortgagee, the Owner Trustee, shall execute
and deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate trustee. The
Mortgagee may act on behalf of the Owner Trustee under this Section 8.03(c) when
and to the extent it could so act under Section 8.03(a) hereof.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS
(a) Except as provided in Section 5.02 hereof, the Owner Trustee
agrees it shall not enter into any amendment of or supplement to the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and Agreement
or the Engine Consent and Agreement, or execute and deliver any written waiver
or modification of, or consent under, the terms of the Lease, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement or the
Engine Consent and Agreement, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by the Mortgagee and a
Majority in Interest of Note Holders. Anything to the contrary contained herein
notwithstanding, without the necessity of the consent of any of the Note Holders
or the Mortgagee, (i) any Excluded Payments payable to the Owner Participant may
be modified, amended, changed or waived in such manner as shall be agreed to by
the Owner Participant and Lessee and (ii) the Owner Trustee and Lessee may enter
into amendments of or additions to the Lease to modify Section 5 (except to the
extent that such amendment would affect the rights or exercise of remedies under
Section 15 of the Lease) or Section 17 of the Lease so long as such amendments,
modifications and changes do not and would not affect the time of, or reduce the
amount of, Rent payments (except to the extent expressly permitted by Section
5.02 hereof) until after the payment in full of all Secured Obligations or
otherwise adversely affect the Note Holders.
(b) Without limiting the provisions of Section 9.01 hereof, the
Mortgagee agrees with the Note Holders that it shall not enter into any
amendment, waiver or modification of, supplement or consent to this Trust
Indenture, the Lease, the Purchase Agreement, the Purchase Agreement Assignment,
the Consent and Agreement, the Engine Consent and Agreement or the Participation
Agreement, or any other agreement included in the Trust Indenture Estate, unless
such supplement, amendment, waiver, modification or consent is consented to in
writing by a Majority in Interest of Note Holders, but upon the written request
of a Majority in Interest of Note Holders, the Trustee shall from time to time
enter into any such supplement or amendment, or execute and deliver any such
waiver, modification or consent, as may be specified in such request and as may
be (in the case of any such amendment, supplement or modification), to the
extent such agreement is required, agreed to by the Owner Trustee and Lessee or,
as may be appropriate, the Airframe Manufacturer or the Engine Manufacturer;
PROVIDED, HOWEVER, that, without the consent of each holder of an affected
Equipment Note then outstanding and of each Liquidity Provider, no such
amendment of or supplement to this Trust Indenture, the Lease, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
Engine Consent and Agreement or the Participation Agreement or waiver or
modification of the terms of, or consent under, any thereof, shall (i) modify
any of the provisions of this Section 9.01, or of Article II or III or Section
4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof, Section 13.3, 14 (except to add an
Event of Default) or 16 of the Lease, Section 15.1 of the Participation
Agreement, the definitions of "Event of Default," "Default," "Lease Event of
Default," "Lease Default," "Majority in Interest of Note Holders," "Make-Whole
Amount" or "Note Holder," or the percentage of Note Holders required to take or
approve any action hereunder, (ii) reduce the amount, or change the time of
payment or method of calculation of any amount, of Original Amount, Make-Whole
Amount, if any, or interest with respect to any Equipment Note, or alter or
modify the provisions of Article III hereof with respect to the order of
priorities in which distribution thereunder shall be made as among the Note
Holders, the Owner Trustee and Lessee, (iii) reduce, modify or amend any
indemnities in favor of the Owner Trustee, the Mortgagee or the Note Holders
(except that the Owner Trustee (in its individual capacity) or the Mortgagee, as
the case may be, may consent to any waiver or reduction of an indemnity payable
to it), (iv) consent to any change in the Trust Indenture or the Lease which
would permit redemption of Equipment Notes earlier than permitted under Section
2.10 or 2.11 hereof or the purchase or exchange of the Equipment Notes other
than as permitted by Section 2.13 hereof, (v) except as contemplated by the
Lease or the Participation Agreement, reduce the amount or extend the time of
payment of Basic Rent, Stipulated Loss Value, or Termination Value for the
Aircraft in each case as set forth in the Lease, or modify, amend or supplement
the Lease or consent to any assignment of the Lease, in either case releasing
Lessee from its obligations in respect of the payment of Basic Rent, Stipulated
Loss Value or Termination Value for the Aircraft or altering the absolute and
unconditional character of the obligations of Lessee to pay Rent as set forth in
Sections 3 and 16 of the Lease or (vi) permit the creation of any Lien on the
Trust Indenture Estate or any part thereof other than Permitted Liens or deprive
any Note Holder of the benefit of the Lien of this Trust Indenture on the Trust
Indenture Estate, except as provided in connection with the exercise of remedies
under Article IV hereof.
(c) At any time after the date hereof, the Owner Trustee and the
Mortgagee may enter into one or more agreements supplemental hereto without the
consent of any Note Holder for any of the following purposes: (i) (a) to cure
any defect or inconsistency herein or in the Equipment Notes, or to make any
change not inconsistent with the provisions hereof (PROVIDED that such change
does not adversely affect the interests of any Note Holder in its capacity
solely as Note Holder) or (b) to cure any ambiguity or correct any mistake; (ii)
to evidence the succession of another party as the Owner Trustee in accordance
with the terms of the Trust Agreement or to evidence the succession of a new
trustee hereunder pursuant hereto, the removal of the trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or additional
trustee or trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Mortgagee or to make any other provisions with respect
to matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Note Holders in its capacity solely as
Note Holder; (iv) to correct or amplify the description of any property at any
time subject to the Lien of this Trust Indenture or better to assure, convey and
confirm unto the Mortgagee any property subject or required to be subject to the
Lien of this Trust Indenture, the Airframe or Engines or any Replacement
Airframe or Replacement Engine; (v) to add to the covenants of the Owner Trustee
for the benefit of the Note Holders, or to surrender any rights or power herein
conferred upon the Owner Trustee, the Owner Participant or the Lessee; (vi) to
add to the rights of the Note Holders; and (vii) to include on the Equipment
Notes any legend as may be required by Law.
SECTION 9.02. TRUSTEES PROTECTED
If, in the opinion of the institution acting as Owner Trustee under
the Trust Agreement or the institution acting as Mortgagee hereunder, any
document required to be executed by it pursuant to the terms of Section 9.01
hereof affects any right, duty, immunity or indemnity with respect to such
institution under this Trust Indenture or the Lease, such institution may in its
discretion decline to execute such document.
SECTION 9.03. DOCUMENTS MAILED TO NOTE HOLDERS
Promptly after the execution by the Owner Trustee or the Mortgagee of
any document entered into pursuant to Section 9.01 hereof, the Mortgagee shall
mail, by first class mail, postage prepaid, a copy thereof to Lessee and to each
Note Holder at its address last set forth in the Equipment Note Register, but
the failure of the Mortgagee to mail such copies shall not impair or affect the
validity of such document.
SECTION 9.04. NO REQUEST NECESSARY FOR LEASE SUPPLEMENT OR TRUST
INDENTURE SUPPLEMENT
No written request or consent of the Mortgagee, the Note Holders or
the Owner Participant pursuant to Section 9.01 hereof shall be required to
enable the Owner Trustee to enter into any Lease Supplement specifically
required by the terms of the Lease or to execute and deliver a Trust Indenture
Supplement specifically required by the terms hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. TERMINATION OF TRUST INDENTURE
Upon (or at any time after) payment in full of the Original Amount of,
Make-Whole Amount, if any, and interest on and all other amounts due under all
Equipment Notes and provided that there shall then be no other Secured
Obligations due to the Indenture Indemnitees, the Note Holders and the Mortgagee
hereunder or under the Participation Agreement or any other Operative Agreement,
the Owner Trustee shall direct the Mortgagee to execute and deliver to or as
directed in writing by the Owner Trustee an appropriate instrument releasing the
Aircraft and the Engines from the Lien of this Trust Indenture and releasing the
Lease, the Purchase Agreement, the Purchase Agreement Assignment with the
Consent and Agreement and the Engine Consent and Agreement attached thereto from
the assignment and pledge thereof hereunder and the Mortgagee shall execute and
deliver such instrument as aforesaid and give written notice thereof to Lessee;
PROVIDED, HOWEVER, that this Trust Indenture and the trusts created hereby shall
earlier terminate and this Trust Indenture shall be of no further force or
effect upon any sale or other final disposition by the Mortgagee of all property
constituting part of the Trust Indenture Estate and the final distribution by
the Mortgagee of all monies or other property or proceeds constituting part of
the Trust Indenture Estate in accordance with the terms hereof. Except as
aforesaid otherwise provided, this Trust Indenture and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
SECTION 10.02. NO LEGAL TITLE TO TRUST INDENTURE ESTATE IN NOTE
HOLDERS
No holder of an Equipment Note shall have legal title to any part of
the Trust Indenture Estate. No transfer, by operation of law or otherwise, of
any Equipment Note or other right, title and interest of any Note Holder in and
to the Trust Indenture Estate or hereunder shall operate to terminate this Trust
Indenture or entitle such holder or any successor or transferee of such holder
to an accounting or to the transfer to it of any legal title to any part of the
Trust Indenture Estate.
SECTION 10.03. SALE OF AIRCRAFT BY MORTGAGEE IS BINDING
Any sale or other conveyance of the Trust Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the Mortgagee
made pursuant to the terms of this Trust Indenture shall bind the Note Holders
and shall be effective to transfer or convey all right, title and interest of
the Trustee, the Owner Trustee, the Owner Participant and such holders in and to
such Trust Indenture Estate or part thereof. No purchaser or other grantee shall
be required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any sale or
other proceeds with respect thereto by the Mortgagee.
SECTION 10.04. TRUST INDENTURE FOR BENEFIT OF OWNER TRUSTEE,
MORTGAGEE, OWNER PARTICIPANT, NOTE HOLDERS AND THE OTHER INDENTURE INDEMNITEES
Nothing in this Trust Indenture, whether express or implied, shall be
construed to give any person other than the Owner Trustee, the Mortgagee, the
Owner Participant, the Note Holders and the other Indenture Indemnitees, any
legal or equitable right, remedy or claim under or in respect of this Trust
Indenture.
SECTION 10.05. 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 Trust Indenture to be made, given,
furnished or filed shall be in writing, personally delivered or mailed by
certified mail, postage prepaid, or by facsimile or confirmed telex, and (i) if
to the Owner Trustee, addressed to it at 79 South Main Street, Salt Lake City,
Utah 84111 with a copy to the Owner Participant addressed as provided in clause
(iii) below, (ii) if to Mortgagee, addressed to it at its office at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration, facsimile number (302) 651-8882, (iii) if to any
Participant, Lessee, any Note Holder or any other Indenture Indemnitee,
addressed to such party at such address as such party shall have furnished by
notice to the Owner Trustee and the Mortgagee, or, until an address is so
furnished, addressed to the address of such party (if any) set forth on Schedule
1 to the Participation Agreement or in the Equipment Note Register. Whenever any
notice in writing is required to be given by the Owner Trustee, any Participant
or the Mortgagee or any Note Holder to any of the other of them, such notice
shall be deemed given and such requirement satisfied when such notice is
received, or if such notice is mailed by certified mail, postage prepaid, three
Business Days after being mailed, addressed as provided above. Any party hereto
may change the address to which notices to such party will be sent by giving
notice of such change to the other parties to this Trust Indenture.
SECTION 10.06. SEVERABILITY
Any provision of this Trust Indenture 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. Any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 10.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS
No term or provision of this Trust Indenture or the Equipment Notes
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Owner Trustee and the Mortgagee, in
compliance with Section 9.01 hereof. Any waiver of the terms hereof or of any
Equipment Note shall be effective only in the specific instance and for the
specific purpose given.
SECTION 10.08. 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 permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Note Holder
shall bind the successors and assigns of such holder. This Trust Indenture and
the Trust Indenture Estate shall not be affected by any amendment or supplement
to the Trust Agreement or by any other action taken under or in respect of the
Trust Agreement, except that each reference in this Trust Indenture to the Trust
Agreement shall mean the Trust Agreement as amended and supplemented from time
to time to the extent permitted hereby, thereby and by the Participation
Agreement. Each Note Holder by its acceptance of an Equipment Note agrees to be
bound by this Trust Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 10.09. 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 10.10. NORMAL COMMERCIAL RELATIONS
Anything contained in this Trust Indenture to the contrary
notwithstanding, Owner Trustee, Mortgagee, any Participant or any bank or other
Affiliate of such Participant may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with Lessee
[or any Permitted Sublessee], fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of loans
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
or other extensions of credit to Lessee for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.
SECTION 10.11. GOVERNING LAW; COUNTERPART FORM
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may
be executed by the parties hereto in separate counterparts (or upon separate
signature pages bound together into one or more 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 instrument.
SECTION 10.12. VOTING BY NOTE HOLDERS
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
SECTION 10.13. BANKRUPTCY
It is the intention of the parties that the Owner Trustee, as lessor
under the Lease (and the Mortgagee as assignee of the Owner Trustee hereunder),
shall be entitled to the benefits of Section 1110 with respect to the right to
take possession of the Aircraft, Airframe, Engines and Parts as provided in the
Lease in the event of a case under Chapter 11 of the Bankruptcy Code in which
Lessee is a debtor, and in any instance where more than one construction is
possible of the terms and conditions hereof or any other pertinent Operative
Agreement, each such party agrees that a construction which would preserve such
benefits shall control over any construction which would not preserve such
benefits.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture and Mortgage to be duly executed by their respective officers thereof
duly authorized as of the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
not in its individual capacity,
except as expressly provided herein,
but solely as Owner Trustee,
Owner Trustee
By:____________________________________
Name:_______________________________
Title:______________________________
WILMINGTON TRUST COMPANY, as
Mortgagee
By:____________________________________
Name:_______________________________
Title:______________________________
EXHIBIT A
TO TRUST INDENTURE AND MORTGAGE ___
TRUST INDENTURE AND MORTGAGE ___ SUPPLEMENT
This TRUST INDENTURE AND MORTGAGE ___ SUPPLEMENT NO. 1, dated
___________, 199_ (herein called this "Trust Indenture Supplement") of FIRST
SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely
as Owner Trustee (herein called the "Owner Trustee") under that certain Trust
Agreement ___ dated as of ___________, 199_ (the "Trust Agreement"), between the
Owner Trustee and the Owner Participant named therein.
W I T N E S S E T H:
WHEREAS, the Trust Indenture and Mortgage ___, dated as of
____________, 199_ (as amended and supplemented to the date hereof, the "Trust
Indenture") between the Owner Trustee and Wilmington Trust Company, as Mortgagee
(the "Mortgagee"), provides for the execution and delivery of a supplement
thereto substantially in the form hereof, which shall particularly describe the
Aircraft, and shall specifically mortgage such Aircraft to the Mortgagee; and
WHEREAS, each of the Trust Agreement and Trust Indenture relates to
the Airframe and Engines described below, and a counterpart of the Trust
Indenture is attached hereto and made a part hereof and this Trust Indenture
Supplement, together with such counterpart of the Trust Indenture, is being
filed for recordation on the date hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth that the
Owner Trustee hereby confirms that the Lien of the Trust Indenture on the Trust
Indenture Estate covers all of Owner Trustee's right, title and interest in and
to the following described property:
AIRFRAME
One airframe identified as follows:
FAA
REGISTRATION MANUFACTURER'S
MANUFACTURER MODEL NUMBER SERIAL NUMBER
- --------------------- ----------------- ------------------ ------------------
The Boeing Company
together with all of the Owner Trustee s right, title and interest in and to all
Parts of whatever nature, whether now owned or hereinafter acquired and which
are from time to time incorporated or installed in or attached to said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
MANUFACTURER MANUFACTURER'S MODEL SERIAL NUMBER
- -------------------- ------------------------------------ --------------------
together with all of Owner Trustee's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereafter acquired and which are
from time to time incorporated or installed in or attached to either of such
engines.
Together with all of Owner Trustee's right, title and interest in and
to (a) all Parts of whatever nature, which from time to time are included within
the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations which
constitute appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment excluded from the definition of Parts) and (b)
all Aircraft Documents.
As further security for the obligations referred to above and secured
by the Trust Indenture and hereby, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged and confirmed, and
does hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Mortgagee, its successors and assigns, for the security and
benefit of the Loan Participants, the Note Holders and the Indenture
Indemnitees, in the trust created by the Trust Indenture, all of the right,
title and interest of the Owner Trustee in, to and under the Lease Supplement of
even date herewith covering the property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, its successors and assigns, in trust for the equal and proportionate
benefit and security of the Loan Participants, the Note Holders and the
Indenture Indemnitees, except as provided in Section 2.14 and Article III of the
Trust Indenture without any preference, distinction or priority of any one
Equipment Note over any other by reason of priority of time of issue, sale,
negotiation, date of maturity thereof or otherwise for any reason whatsoever,
and for the uses and purposes and subject to the terms and provisions set forth
in the Trust Indenture.
This Trust Indenture Supplement shall be construed as supplemental to
the Trust Indenture and shall form a part thereof. The Trust Indenture is each
hereby incorporated by reference herein and is hereby ratified, approved and
confirmed.
AND, FURTHER, the Owner Trustee hereby acknowledges that the Aircraft
referred to in this Trust Indenture Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee covered by all the terms and conditions of the
Trust Agreement, subject to the pledge and mortgage thereof under the Trust
Indenture.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust Indenture
Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Owner Trustee,
Owner Trustee
By:____________________________________
Name:
Title:
TRUST INDENTURE AND MORTGAGE
SCHEDULE I
ORIGINAL AMOUNT INTEREST RATE
--------------- -------------
Series A:
Series B:
Series C:
TRUST INDENTURE AND MORTGAGE
Equipment Note Amortization
PERCENTAGE OF
ORIGINAL AMOUNT
PAYMENT DATE TO BE PAID
- ------------------------------------- -----------------------------------------
================================================================================
TRUST AGREEMENT ____
Dated as of ______________
Between
[__________________________]
and
FIRST SECURITY BANK, NATIONAL
ASSOCIATION
_____________________________________
One Boeing Model _____________Aircraft
Bearing Manufacturer's Serial No. ___________
================================================================================
CONTENTS
SECTION 1. DEFINITIONS.................................................. 1
SECTION 2. DECLARATION OF TRUST......................................... 1
SECTION 3. AUTHORIZATION; CONDITIONS PRECEDENT.......................... 1
3.1 Authorization................................................ 1
3.2 Conditions Precedent......................................... 3
SECTION 4. RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST ESTATE................................. 3
4.1 Payments from Trust Estate Only.............................. 3
4.2 Distribution of Payments..................................... 4
4.3 Method of Payments........................................... 5
SECTION 5. DUTIES OF OWNER TRUSTEE...................................... 6
5.1 Notice of Event of Default................................... 6
5.2 Action upon Instructions..................................... 6
5.3 Limitations on Duties........................................ 7
5.4 No Duties except as Specified; No Action
except as Specified.......................................... 7
5.5 Satisfaction of Conditions Precedent......................... 8
5.6 Fixed Investment Trust....................................... 9
SECTION 6. OWNER TRUSTEE................................................ 9
6.1 Acceptance of Trusts and Duties.............................. 9
6.2 Absence of Certain Duties.................................... 10
6.3 No Representations or Warranties as to Certain Matters....... 11
6.4 No Segregation of Monies; Interest........................... 12
6.5 Reliance upon Certificates, Counsel and Agents............... 12
6.6 Not Acting in Individual Capacity............................ 13
6.7 Fees; Compensation........................................... 13
6.8 Tax Returns.................................................. 13
SECTION 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT....... 14
SECTION 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST..................... 16
8.1 Transfer of Interest......................................... 16
8.2 Actions of Owner Participants................................ 16
SECTION 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES........................ 17
9.1 Resignation of Owner Trustee; Appointment of Successor....... 17
9.2 Co-Trustees and Separate Trustees............................ 19
SECTION 10. SUPPLEMENTS AND AMENDMENTS TO TRUST
AGREEMENT AND OTHER DOCUMENTS................................ 21
10.1 Supplements and Amendments and Delivery Thereof.............. 21
10.2 Discretion as to Execution of Documents...................... 22
10.3 Absence of Requirements as to Form........................... 22
10.4 Distribution of Documents.................................... 22
10.5 No Request Needed as to Lease Supplement
and Trust Indenture Supplement............................... 22
SECTION 11. MISCELLANEOUS................................................ 23
11.1 Termination of Trust Agreement............................... 23
11.2 Termination at Option of the Owner Participant............... 23
11.3 Owner Participant Has No Legal Title in Trust Estate......... 24
11.4 Assignment, Sale, etc. of Aircraft........................... 24
11.5 Trust Agreement for Benefit of Certain Parties Only.......... 24
11.6 Citizenship of Owner Participant............................. 25
11.7 Notices...................................................... 25
11.8 Severability................................................. 25
11.9 Waivers, Etc................................................. 26
11.10 Counterparts................................................. 26
11.11 Binding Effect, Etc.......................................... 26
11.12 Headings; References......................................... 26
11.13 Governing Law................................................ 26
TRUST AGREEMENT _______
This TRUST AGREEMENT ______, dated as of ________________, between
[_________], a Delaware corporation ("Owner Participant"), and FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association (in its individual
capacity, "First Security" and otherwise not in its individual capacity but
solely as trustee hereunder, "Owner Trustee").
WITNESSETH:
SECTION 1. DEFINITIONS
Capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in Annex A to the Lease.
SECTION 2. DECLARATION OF TRUST
First Security hereby declares that it will hold the Trust Estate as
Owner Trustee upon the trusts hereinafter set forth for the use and benefit of
Owner Participant, subject, however, to the provisions of and the Lien created
by the Trust Indenture and to the provisions of the Lease and the Participation
Agreement.
SECTION 3. AUTHORIZATION; CONDITIONS PRECEDENT
3.1 AUTHORIZATION
In respect of the Aircraft, Owner Participant hereby authorizes and directs
Owner Trustee to, and Owner Trustee agrees for the benefit of Owner Participant
that it will, on and after the Delivery Date, subject (except with respect to
Section 3.1(a)) to due compliance with the terms of Section 3.2:
(a) execute and deliver the Participation Agreement, the Trust Indenture,
the Lease and the other Owner Trustee Agreements (in the respective forms in
which they are delivered from time to time by Owner Participant to Owner
Trustee);
(b) subject to the terms of this Trust Agreement, exercise (i) its rights
and perform its duties under the Participation Agreement, (ii) the rights and
perform the duties of Lessor under the Lease and (iii) its rights and perform
its duties under the Trust Indenture and the other Owner Trustee Agreements;
(c) execute, issue and deliver to Mortgagee for authentication and further
delivery to the Subordination Agent the Equipment Notes in the amount and as
provided in Section 2 of the Participation Agreement;
(d) purchase the Aircraft pursuant to the Purchase Agreement as assigned to
Owner Trustee pursuant to the Purchase Agreement Assignment;
(e) accept from Airframe Manufacturer the delivery of the Aircraft Bill of
Sale, the FAA Bill of Sale and the invoice with respect to such Aircraft and
from Lessee the delivery of the BFE Bill of Sale and the invoice with respect to
such BFE;
(f) effect the registration of the Aircraft with the FAA in the name of
Owner Trustee by filing or causing to be filed with the FAA: (i) the FAA Bill of
Sale; (ii) an Aircraft Registration Application in the name of Owner Trustee
(including, without limitation, an affidavit from Owner Trustee in compliance
with the provisions of Section 47.7(c)(2) of the FAA Regulations); and (iii)
this Trust Agreement;
(g) execute and deliver the Financing Statements referred to in Section
5.1.2 (xxii) of the Participation Agreement, together with all other agreements,
documents and instruments referred to in Section 5 of the Participation
Agreement to which Owner Trustee is to be a party;
(h) make payment of Lessor's Cost for the Aircraft from the aggregate
amount of the Commitments for the Aircraft of Owner Participant and Loan
Participants, to the extent received by Owner Trustee, in the manner provided in
the Participation Agreement;
(i) execute and deliver Lease Supplement No. 1 covering the Aircraft;
(j) execute and deliver a Trust Indenture Supplement covering the Aircraft;
and
(k) execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the direction of
Owner Participant, as Owner Participant may deem necessary or advisable in
connection with the transactions contemplated by this Trust Agreement and the
other Operative Agreements.
3.2 CONDITIONS PRECEDENT
The rights and obligations of Owner Trustee to take the actions required by
Section 3.1 shall be subject to the following conditions precedent:
(a) Owner Trustee shall have received the notice described in Section 5.1.1
of the Participation Agreement, when and as required thereby, or shall have been
deemed to have waived such notice in accordance with Section 5.1.1 of the
Participation Agreement;
(b) Each Participant shall have made the full amount of its Commitment
specified in Section 2.1 of the Participation Agreement available to Owner
Trustee, in immediately available funds, in accordance with Sections 2 and 4 of
the Participation Agreement; and
(c) Owner Participant shall have notified Owner Trustee that the terms and
conditions of Section 5 of the Participation Agreement, insofar as they relate
to conditions precedent to performance by Owner Participant of its obligations
thereunder, have been either fulfilled to the satisfaction of, or waived by,
Owner Participant. Owner Participant shall, by instructing Owner Trustee to
release the full amount of its Commitment then held by Owner Trustee as provided
in Section 2 of the Participation Agreement, be deemed to have found
satisfactory to it, or waived, all such conditions precedent.
SECTION 4. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM
THE TRUST ESTATE
4.1 PAYMENTS FROM TRUST ESTATE ONLY
Except as provided in Section 7, all payments to be made by Owner Trustee
under this Trust Agreement shall be made only from (a) in the case of funds made
available in accordance with Section 4 of the Participation Agreement, the
Commitments (except as otherwise provided in Section 14 of the Participation
Agreement) and (b) in the case of all other payments, the income from and
proceeds of the Trust Estate to the extent that Owner Trustee shall have
received sufficient income or proceeds from the Trust Estate to make such
payments. Owner Participant agrees that it will look solely (y) in the case of
funds made available in accordance with Section 4 of the Participation
Agreement, to the Commitments and any income therefrom (except as otherwise
provided in Section 14 of the Participation Agreement) and (z) in the case of
all other payments, to the income from and proceeds of the Trust Estate to the
extent available for distribution to Owner Participant as provided in this Trust
Agreement. Except as provided in Section 7, Owner Participant agrees that First
Security is neither personally liable to Owner Participant for any amounts
payable nor subject to any other liability under this Trust Agreement.
4.2 DISTRIBUTION OF PAYMENTS
4.2.1 PAYMENTS TO MORTGAGEE
Until the Trust Indenture shall have been discharged pursuant to Section
10.01 thereof, all Rent, insurance proceeds and requisition or other payments of
any kind included in the Trust Estate (other than Excluded Payments) payable to
Owner Trustee shall be payable directly to Mortgagee (and, if any of the same
are received by Owner Trustee, shall upon receipt be paid over to Mortgagee
without deduction, set-off or adjustment of any kind) for distribution in
accordance with the provisions of Article III of the Trust Indenture; PROVIDED,
that any payments received by Owner Trustee from (a) Lessee with respect to
Owner Trustee's fees and disbursements or (b) Owner Participant pursuant to
Section 7 shall not be paid over to Mortgagee but shall be retained by Owner
Trustee and applied toward the purpose for which such payments were made.
4.2.2 PAYMENTS TO OWNER TRUSTEE, OTHER PARTIES
After the Trust Indenture shall have been discharged pursuant to Section
10.01 thereof, any payment of the type referred to in Section 4.2.1 (other than
Excluded Payments) received by Owner Trustee, any payment received from
Mortgagee (other than Excluded Payments) and any other amount received as part
of the Trust Estate and for the application or distribution of which no
provision is made in this Trust Agreement shall be distributed forthwith upon
receipt by Owner Trustee in the following order of priority: FIRST, so much of
such payment as shall be required to reimburse Owner Trustee for any expenses
not otherwise reimbursed as to which Owner Trustee is entitled to be so
reimbursed pursuant to the provisions hereof shall be retained by Owner Trustee;
SECOND, so much of the remainder for which provision as to the application
thereof is contained in the Lease or any of the other Operative Agreements shall
be applied and distributed in accordance with the terms of the Lease or such
other Operative Agreement; and THIRD, the balance, if any, shall be paid to
Owner Participant.
4.2.3 CERTAIN DISTRIBUTIONS TO OWNER PARTICIPANT
All amounts from time to time distributable by Mortgagee to Owner
Participant pursuant to the Trust Indenture shall, if paid to Owner Trustee, be
distributed by Owner Trustee to Owner Participant in accordance with the
provisions of Article III of the Trust Indenture; PROVIDED, that any payments
received by Owner Trustee from (a) Lessee with respect to Owner Trustee's fees
and disbursements or (b) Owner Participant pursuant to Section 7 shall not be
paid over to Owner Participant but shall be retained by Owner Trustee and
applied toward the purpose for which such payments were made.
4.2.4 EXCLUDED PAYMENTS
Any Excluded Payments received by Owner Trustee shall be paid by Owner
Trustee to the Person to whom such Excluded Payments are payable under the
provisions of the Participation Agreement, the Tax Indemnity Agreement or the
Lease.
4.2.5 MULTIPLE OWNER PARTICIPANTS
If, as a result of a transfer by Owner Participant under Section 8.1, there
is more than one Owner Participant under this Trust Agreement, each such Owner
Participant shall hold in proportion to its respective beneficial interest in
the Trust Estate an undivided beneficial interest in the entire Trust Estate and
is entitled to receive ratably with any other Owner Participant payments
distributable by Owner Trustee under this Trust Agreement. No Owner Participant
shall have legal title to the Aircraft or any other portion of the Trust Estate.
4.3 METHOD OF PAYMENTS
Owner Trustee shall make distributions or cause distributions to be made to
Owner Participant pursuant to this Section 4 by transferring the amount to be
distributed by wire transfer in immediately available funds on the day received
(or on the next succeeding Business Day if the funds to be so distributed shall
not have been received by Owner Trustee by 12:00 noon, New York City time, and
which funds Owner Trustee shall not have been reasonably able to distribute to
Owner Participant on the day received) to Owner Participant's account set forth
in Schedule 1 to the Participation Agreement or to such other account or
accounts of Owner Participant as Owner Participant may designate from time to
time in writing to Owner Trustee; PROVIDED, that Owner Trustee shall use
reasonable efforts to invest overnight, in investments that would be permitted
under Section 4.4 of the Lease, all funds received by it at or later than 12:00
noon, New York City time, and which funds Owner Trustee shall not have been
reasonably able to distribute to Owner Participant on the day received).
SECTION 5. DUTIES OF OWNER TRUSTEE
5.1 NOTICE OF EVENT OF DEFAULT
(a) If Owner Trustee shall have knowledge of a Lease Default or a Lease
Event of Default or an Indenture Default or an Indenture Event of Default, Owner
Trustee shall give to Owner Participant, Mortgagee and Lessee prompt telephonic
or telex notice thereof followed by prompt confirmation thereof by certified
mail, postage prepaid, PROVIDED, that (i) in the case of an event which with the
passage of time would constitute an Indenture Event of Default of the type
referred to in paragraph (c) or (e) of Section 4.02 of the Trust Indenture, such
notice shall in no event be furnished later than ten days after Owner Trustee
shall first have knowledge of such event and (ii) in the case of a
misrepresentation by Owner Trustee which with the passage of time would
constitute an Indenture Event of Default of the type referred to in paragraph
(d) of Section 4.02 of the Trust Indenture, such notice shall in no event be
furnished later than ten days after Owner Trustee shall first have knowledge of
such event.
(b) Subject to the terms of Section 5.3, Owner Trustee shall take such
action or shall refrain from taking such action, not inconsistent with the
provisions of the Trust Indenture, with respect to such Lease Default, Lease
Event of Default, Indenture Default or Indenture Event of Default or other event
as Owner Trustee shall be directed in writing by Owner Participant. For all
purposes of this Trust Agreement, the Lease and the other Operative Agreements,
in the absence of Actual Knowledge of Owner Trustee, Owner Trustee shall not be
deemed to have knowledge of a Lease Default, Lease Event of Default, Indenture
Default or Indenture Event of Default unless notified in writing by Mortgagee,
Owner Participant or Lessee.
5.2 ACTION UPON INSTRUCTIONS
Subject to the terms of Sections 5.1 and 5.3, upon the written instructions
at any time and from time to time of Owner Participant, Owner Trustee will take
such of the following actions, not inconsistent with the provisions of the Lease
and the Trust Indenture, as may be specified in such instructions: (a) give such
notice or direction or exercise such right, remedy or power under this Trust
Agreement or any of the other Owner Trustee Agreements or in respect of all or
any part of the Trust Estate, or take such other action, as shall be specified
in such instructions (including entering into such agreements and instruments as
shall be necessary under Section 10); (b) take such action to preserve or
protect the Trust Estate (including the discharge of Liens) as may be specified
in such instructions; (c) approve as satisfactory to it all matters required by
the terms of the Lease or the other Operative Agreements to be satisfactory to
Owner Trustee, it being understood that without written instructions of Owner
Participant, Owner Trustee shall not approve any such matter as satisfactory to
it; (d) subject to the rights of Lessee under the Operative Agreements, after
the expiration or earlier termination of the Lease, convey all of Owner
Trustee's right, title and interest in and to the Aircraft for such amount, on
such terms and to such purchaser or purchasers as shall be designated in such
instructions, or retain, lease or otherwise dispose of, or from time to time
take such other action with respect to, the Aircraft on such terms as shall be
designated in such instructions; and (e) take or refrain from taking such other
action or actions as may be specified in such instructions.
5.3 LIMITATIONS ON DUTIES
Owner Trustee shall not be required to take any action under Section 5.1
(other than the giving of the notices referred to therein) or 5.2 if Owner
Trustee shall reasonably believe such action is not adequately indemnified by
Owner Participant under Section 7, unless Lessee or Owner Participant agrees to
furnish such additional indemnity as shall reasonably be required, in manner and
form satisfactory to Owner Trustee, and, in addition to the extent not otherwise
paid pursuant to the provisions of the Lease or of the Participation Agreement,
to pay the reasonable compensation of Owner Trustee for the services performed
or to be performed by it pursuant to such direction and any reasonable fees and
disbursements of counsel or agents employed by Owner Trustee in connection
therewith. Owner Trustee shall not be required to take any action under Section
5.1 or 5.2 (other than the giving of the notices referred to therein) if Owner
Trustee shall have been advised by counsel that such action is contrary to the
terms of any of the Owner Trustee Agreements or is otherwise contrary to Law and
Owner Trustee has delivered to Owner Participant written notice of the basis for
its refusal to act.
5.4 NO DUTIES EXCEPT AS SPECIFIED; NO ACTION EXCEPT AS SPECIFIED
5.4.1 NO DUTIES EXCEPT AS SPECIFIED
Owner Trustee shall not have any duty or obligation to manage, control,
use, sell, dispose of or otherwise deal with the Aircraft or any other part of
the Trust Estate or to otherwise take or refrain from taking any action under,
or in connection with, any of the Owner Trustee Agreements, except as expressly
required by the terms of any of the Owner Trustee Agreements, or (to the extent
not inconsistent with the provisions of the Trust Indenture) as expressly
provided by the terms hereof or in a written instruction from Owner Participant
received pursuant to the terms of Section 5.1 or 5.2, and no implied duties or
obligations shall be read into this Trust Agreement against Owner Trustee. First
Security agrees that it will, in its individual capacity and at its own cost or
expense (but without any right of indemnity in respect of any such cost or
expense hereunder or under the Participation Agreement), promptly take such
action as may be necessary to duly discharge and satisfy in full all Lessor
Liens attributable to it in its individual capacity which it is required to
discharge pursuant to Section 7.3.1 of the Participation Agreement and otherwise
comply with the terms of said Section binding upon it.
5.4.2 NO ACTION EXCEPT AS SPECIFIED
Owner Trustee shall have no power, right or authority to, and agrees that
it will not, manage, control, use, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Trust Estate except (a) as expressly required
by the terms of any of the Owner Trustee Agreements, (b) as expressly provided
by the terms hereof or (c) as expressly provided in written instructions from
Owner Participant pursuant to Section 5.1 or 5.2.
5.5 SATISFACTION OF CONDITIONS PRECEDENT
Anything in this Trust Agreement to the contrary notwithstanding, Owner
Trustee shall, subject to the satisfaction of special counsel for Owner Trustee
of the occurrence of all the applicable conditions precedent specified in
Section 3.2, comply with the provisions of Section 3.1.
5.6 FIXED INVESTMENT TRUST
Notwithstanding anything in this Trust Agreement to the contrary, Owner
Trustee shall not be authorized and shall have no power to "vary the investment"
of Owner Participant within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that Owner Trustee shall have the power
and authority to fulfill its obligations under Section 4.3 hereof, Section 4.3.3
of the Participation Agreement and Section 4.4 of the Lease.
SECTION 6. OWNER TRUSTEE
6.1 ACCEPTANCE OF TRUSTS AND DUTIES
First Security accepts the trusts hereby created and agrees to perform the
same as Owner Trustee but only upon the terms hereof and the Trust Indenture
applicable to it. Owner Trustee also agrees to receive and disburse all monies
received by it constituting part of the Trust Estate pursuant to the terms
hereof. First Security shall not be answerable or accountable under any
circumstances, except for (a) its own willful misconduct or gross negligence
(including, without limitation, in connection with any activities of Owner
Trustee in violation of Section 5.4.2), (b) its failure (in its individual
capacity) to perform its obligations under Section 5.4.1, (c) its or Owner
Trustee's failure to use ordinary care to receive or disburse funds or to comply
with the first sentence of Section 6.8, (d) liabilities that may result from the
inaccuracy of any representation or breach of warranty of it in its individual
capacity (or from the failure by it in its individual capacity to perform any
covenant) in this Trust Agreement, the Trust Indenture, the Lease or the
Participation Agreement or elsewhere in any of the other Operative Agreements,
(e) taxes, fees or other charges on, based on or measured by any fees,
commissions or compensation received by First Security in connection with the
transactions contemplated by this Trust Agreement and the other Operative
Agreements to which it (in its individual capacity or as Owner Trustee) is a
party, (f) for its or Owner Trustee's failure to use ordinary care in receiving
or disbursing funds or in connection with its obligation to invest funds
pursuant to Section 4 of the Participation Agreement, Section 4.4 of the Lease
or Section 4.3 hereof, (g) for any liability on the part of Owner Trustee
arising out of its negligence or willful or negligent misconduct in connection
with its obligations under Section 5.1 (other than the first sentence thereof),
6.8 or 9.2 hereof or Section 4.01 of the Trust Indenture. First Security shall
have no obligation to advance its individual funds for any purpose, and Owner
Trustee shall have no obligation to distribute to Owner Participant, Lessee or
any third party any amounts to be paid to Owner Trustee until such amounts are
collected by Owner Trustee.
6.2 ABSENCE OF CERTAIN DUTIES
(a) Except in accordance with written instructions furnished pursuant to
Section 5.1 or 5.2 and except as provided in, and without limiting the
generality of, Sections 3.1 and 5.4.1 and the last sentence of Section 9.1.2,
and subject to Section 4.01 of the Trust Indenture, neither Owner Trustee nor
First Security shall have any duty (i) to see to any recording or filing of any
Operative Agreement or of any supplement to any thereof or to see to the
maintenance of any such recording or filing or any other filing of reports with
the FAA or other governmental agencies, except that of First Security to comply
with the FAA reporting requirements set forth in 14 C.F.R. Section 47.45 and 14
C.F.R. Section 47.51, and Owner Trustee shall, to the extent that information
for that purpose is timely supplied by Lessee pursuant to any of the Operative
Agreements, complete and timely submit (and furnish Owner Participant with a
copy of) any and all reports relating to the Aircraft that may from time to time
be required by the FAA or any government or governmental authority having
jurisdiction, (ii) to see to any insurance on the Aircraft or to effect or
maintain any such insurance, whether or not Lessee shall be in default with
respect thereto, other than to forward to Owner Participant copies of all
reports and other written information which Owner Trustee receives from Lessee
pursuant to Section 11 of the Lease, (iii) except as provided in Section 7.3.1
or 7.3.2 of the Participation Agreement, Section 4.01 of the Trust Indenture or
Section 5.4 or 6.1 hereof, to see to the payment or discharge of any tax,
assessment or other governmental charge or any lien or encumbrance of any kind
owing with respect to or assessed or levied against any part of the Trust
Indenture Estate or the Trust Estate, except as provided in Section 6.3.9 of the
Participation Agreement or (iv) to inspect Lessee's books and records with
respect to the Aircraft at any time permitted pursuant to the Lease.
(b) Notwithstanding clause (a), Owner Trustee will furnish to Mortgagee and
Owner Participant, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to Owner Trustee under the Lease or any other
Operative Agreement except to the extent to which a responsible officer of Owner
Trustee reasonably believes (and confirms by telephone call with Owner
Participant) that duplicates or copies thereof have already been furnished to
Owner Participant by some other person.
6.3 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN
MATTERS
NEITHER FIRST SECURITY NOR OWNER TRUSTEE MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS
FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE
ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, THE ABSENCE
OF ANY STRICT LIABILITY OBLIGATION OR ANY OTHER REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF WHATSOEVER,
except that First Security warrants to Owner Participant that on the Delivery
Date Owner Trustee shall have received whatever title to the Aircraft that was
conveyed to it and that the Aircraft shall, on the Delivery Date and during the
Term, be free of Lessor Liens attributable to First Security or (b) any
representation or warranty as to the validity, legality or enforceability of
this Trust Agreement or any other Operative Agreement to which First Security,
in its individual capacity or as Owner Trustee, is a party, or any other
document or instrument, or as to the correctness of any statement contained in
any thereof except to the extent that any such statement is expressly made
herein or therein by such party as a representation by First Security, in its
individual capacity or as Owner Trustee, as the case may be, and except that
First Security hereby represents and warrants that it has all corporate power
and authority to execute, deliver and perform this Trust Agreement and that this
Trust Agreement has been, and (assuming due authorization, execution and
delivery by Owner Participant of this Trust Agreement) the other Operative
Agreements to which it or Owner Trustee is a party have been (or at the time of
execution and delivery of any such instrument by it or Owner Trustee under this
Trust Agreement or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of itself or Owner Trustee, as the case may be, and
that this Trust Agreement constitutes the legal, valid and binding obligation of
First Security or Owner Trustee, as the case may be, enforceable against First
Security or Owner Trustee, as the case may be, in accordance with its terms.
6.4 NO SEGREGATION OF MONIES; INTEREST
Monies received by Owner Trustee under this Trust Agreement need not be
segregated in any manner except to the extent required by Law, or except as
provided in written instructions from Owner Participant, and shall be invested
as provided in Section 4.3 hereof or Section 4.4 of the Lease.
6.5 RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS
Owner Trustee shall incur no liability to anyone in acting in good faith in
reliance upon and in accordance with any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper reasonably believed by it to be genuine and reasonably
believed by it to be signed by the proper party or parties. Unless other
evidence in respect thereof is specifically prescribed in this Trust Agreement,
any request, direction, order or demand of Owner Participant or Lessee mentioned
in this Trust Agreement or in any of the other Owner Trustee Agreements shall be
sufficiently evidenced by written instruments signed by the Chairman of the
Board, the President, any Vice President or any other officer and in the name of
Owner Participant or Lessee, as the case may be. Owner Trustee may accept a copy
of a resolution of the Board of Directors or Executive Committee of Lessee,
certified by the Secretary or an Assistant Secretary of Lessee as duly adopted
and in full force and effect, as conclusive evidence that such resolution has
been duly adopted by said Board of Directors or Executive Committee and that the
same is in full force and effect. As to any fact or matter the manner of
ascertainment of which is not specifically described in this Trust Agreement,
Owner Trustee may, absent Actual Knowledge to the contrary, for all purposes
rely on a certificate signed by the Chairman of the Board, the President, any
Vice President or any other officer of Lessee, and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of Lessee, as to such fact
or matter, and such certificate shall constitute full protection to Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon and in accordance therewith. In the administration of trusts
under this Trust Agreement, Owner Trustee may execute any of the trusts or
powers and perform its powers and duties under this Trust Agreement directly or
through agents or attorneys and may, at the expense of the Trust Estate, consult
with counsel, accountants and other skilled persons to be selected and employed
by it. Owner Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons.
6.6 NOT ACTING IN INDIVIDUAL CAPACITY
In acting under this Trust Agreement, First Security acts solely as Owner
Trustee and not in its individual capacity except as otherwise expressly
provided in this Trust Agreement or in the other Operative Agreements to which
it is a party; and, except as may be otherwise expressly provided in this Trust
Agreement, the Lease, the Participation Agreement and the Trust Indenture, all
persons, other than the Owner Participant as provided in this Trust Agreement or
the Trust Indenture, having any claim against Owner Trustee by reason of the
transactions contemplated hereby shall look only to the Trust Estate for payment
or satisfaction thereof except to the extent provided in Section 6.1 or
otherwise as Owner Trustee shall expressly agree otherwise in writing.
6.7 FEES; COMPENSATION
Lessee or Owner Participant shall pay the Transaction Expenses of Owner
Trustee pursuant to Section 9.2 of the Participation Agreement. The Trust Estate
shall not have any liability for any such fees and expenses; PROVIDED, that the
foregoing shall not limit the obligations of Owner Participant under Sections
5.3 and 7; PROVIDED, that Owner Trustee shall have a Lien upon the Trust Estate
for any such fee not paid by Lessee or Owner Participant, as the case may be, as
contemplated by Section 9.2 of the Participation Agreement and such Lien shall
entitle Owner Trustee to priority as to payment thereof over payment to any
other Person under this Trust Agreement; PROVIDED, that such Lien shall be
subject and subordinate in all events to the Lien of the Trust Indenture; and
PROVIDED, FURTHER, that Owner Trustee shall have no right to exercise, and shall
not exercise, any rights or remedies Owner Trustee may have with respect to such
Lien unless and until the Secured Obligations have been paid and performed in
full.
6.8 TAX RETURNS
Owner Trustee shall be responsible for the keeping of all appropriate books
and records relating to the receipt and disbursement of all monies under this
Trust Agreement or any agreement contemplated hereby. Owner Participant shall be
responsible for causing to be prepared and filed all income tax returns required
to be filed by Owner Participant. Owner Trustee shall be responsible for causing
to be prepared, at the request of Owner Participant and at the expense of
Lessee, all income tax returns required to be filed with respect to the trust
created hereby and shall execute and file such returns; PROVIDED, that Owner
Trustee shall send promptly a completed copy of such return to Owner Participant
not more than sixty nor less than fifteen days prior to the due date of the
return, PROVIDED, that Owner Trustee shall have timely received all necessary
information to complete and deliver to Owner Participant such return. Owner
Participant, upon request, will furnish Owner Trustee with all such information
as may be reasonably required from Owner Participant in connection with the
preparation of such income tax returns. Owner Trustee shall keep copies of all
returns delivered to or filed by it.
SECTION 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT
Owner Participant hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and hereby
indemnifies, protects, saves and keeps harmless, First Security and its
successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any Taxes
which are not required to be indemnified by Lessee pursuant to Section 9.1 or
9.3 of the Participation Agreement and excluding any taxes payable by First
Security on or measured by any compensation received by First Security for its
services under this Trust Agreement), claims, actions, suits, costs, expenses or
disbursements (including, without limitation, reasonable legal fees and
expenses, but excluding internal costs and expenses such as salaries and
overhead, and including, without limitation, any liability of an owner, any
strict liability and any liability without fault) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against First
Security (whether or not also indemnified against by Lessee under the Lease or
under the Participation Agreement or also indemnified against by any other
Person; PROVIDED, that Owner Participant shall be subrogated to the rights of
Owner Trustee against Lessee or any other indemnitor) in any way relating to or
arising out of this Trust Agreement or any of the other Operative Agreements or
the enforcement of any of the terms of any thereof, or in any way relating to or
arising out of the manufacture, purchase, acceptance, nonacceptance, rejection,
ownership, delivery, lease, possession, use, operation, condition, sale, return
or other disposition of the Aircraft (including, without limitation, latent and
other defects, whether or not discoverable, and any claim for patent, trademark
or copyright infringement), or in any way relating to or arising out of the
administration of the Trust Estate or the action or inaction of Owner Trustee,
under this Trust Agreement, except (a) in the case of gross negligence or
willful misconduct on the part of First Security, in its individual capacity or
as Owner Trustee, in the performance or nonperformance of its duties under this
Trust Agreement or under any of the other Owner Trustee Agreements or (b) those
Claims resulting from the inaccuracy of any representation or warranty of First
Security (or from the failure of First Security to perform any of its covenants)
in Section 6.3, in Section 6.03 of the Trust Indenture, in Section 4 of the
Lease, in Section 6.3 of the Participation Agreement or elsewhere in any of the
Operative Agreements or (c) as may result from a breach by First Security of its
covenant in the last sentence of Section 5.4.1 or (d) in the case of the failure
to use ordinary care on the part of First Security, in its individual capacity
or as Owner Trustee, in the receipt or disbursement of funds or in connection
with its obligation to invest funds pursuant to Section 4 of the Participation
Agreement, Section 4.4 of the Lease or Section 4.3 hereof or in compliance with
the provisions of the first sentence of Section 6.8 or (e) any liability on the
part of Owner Trustee arising out of its negligence or willful or negligent
misconduct in connection with its obligations under Section 5.1, 6.8 or 9.2
hereof or Section 4.01 of the Trust Indenture, or (f) those claims arising under
any circumstances or upon any terms where Lessee would not have been required to
indemnify First Security pursuant to Section 9.1 or 9.3 of the Participation
Agreement; PROVIDED, that before asserting its right to indemnification, if any,
pursuant to this Section 7, First Security shall first demand its corresponding
right to indemnification pursuant to Section 9 of the Participation Agreement
(but need not exhaust any or all remedies available thereunder). The indemnities
contained in this Section 7 extend to First Security only in its individual
capacity and shall not be construed as indemnities of the Trust Indenture Estate
or the Trust Estate (except to the extent, if any, that First Security has been
reimbursed by the Trust Indenture Estate or the Trust Estate for amounts covered
by the indemnities contained in this Section 7). The indemnities contained in
this Section 7 shall survive the termination of this Trust Agreement. In
addition, if necessary, First Security shall be entitled to indemnification from
the Trust Estate, subject to the Lien of the Trust Indenture, for any liability,
obligation, loss, damage, penalty, tax, claim, action, suit, cost, expense or
disbursement indemnified against pursuant to this Section 7 to the extent not
reimbursed by Lessee, Owner Participant or others, but without releasing any of
them from their respective agreements of reimbursement; and, to secure the same
First Security shall have a lien on the Trust Estate, subject to the lien of the
Trust Indenture and subject further to the provisions of Section 6.7, which
shall be prior to any interest therein of Owner Participant. The payor of any
indemnity under this Section 7 shall be subrogated to any right of the person
indemnified in respect of the matter as to which such indemnity was paid.
SECTION 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST
8.1 TRANSFER OF INTEREST
All provisions of Section 10 of the Participation Agreement shall (with the
same force and effect as if set forth in full in this Section 8.1) be applicable
to any assignment, conveyance or other transfer by Owner Participant of any of
its right, title or interest in and to the Participation Agreement, the Trust
Estate or this Trust Agreement. If there is more than one Owner Participant, no
assignment, conveyance or other transfer by an Owner Participant of any of its
right, title or interest in and to this Trust Agreement or the Trust Estate
shall be valid unless each other Owner Participant's prior written consent
(which consent may be withheld in the sole discretion of such other Owner
Participant) is given to such assignment, conveyance or other transfer.
8.2 ACTIONS OF OWNER PARTICIPANTS
If at any time prior to the termination of this Trust Agreement there is
more than one Owner Participant, then, subject to Section 11.5, during such
time, if any action is required to be taken by all Owner Participants and
whenever any direction, authorization, approval, consent, instruction or other
action is permitted to be given or taken by Owner Participant, it shall be given
or taken only upon unanimous agreement of all Owner Participants; PROVIDED, that
the termination of this Trust Agreement pursuant to Section 11.2 may be effected
upon the election of any Owner Participant.
SECTION 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES
9.1 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF
SUCCESSOR
9.1.1 RESIGNATION OR REMOVAL
Owner Trustee or any successor Owner Trustee (a) shall resign if required
to do so pursuant to Section 13.3 of the Participation Agreement or upon
obtaining Actual Knowledge of any facts that would cast doubt upon its
continuing status as a Citizen of the United States and (b) may resign at any
time without cause by giving at least 60 days' prior written notice to Owner
Participant, Mortgagee and Lessee, such resignation to be effective upon the
assumption of the trusts hereunder by the successor Owner Trustee under Section
9.1.2. In addition, Owner Participant may at any time remove Owner Trustee, with
or without cause by a notice in writing delivered to Owner Trustee, Mortgagee
and Lessee, such removal to be effective upon the assumption of the trusts
hereunder by the successor Owner Trustee under Section 9.1.2, PROVIDED, that, in
the case of a removal without cause, unless a Lease Event of Default shall have
occurred and be continuing, such removal shall be subject to the consent of
Lessee (which consent shall not be unreasonably withheld). In the case of the
resignation or removal of Owner Trustee, Owner Participant may appoint a
successor Owner Trustee by an instrument signed by Owner Participant, with,
unless a Lease Event of Default shall have occurred and be continuing, the
consent of Lessee (which consent shall not be unreasonably withheld). If a
successor Owner Trustee shall not have been appointed within 30 days after such
notice of resignation or removal, Owner Trustee, any Owner Participant, Lessee
or Mortgagee may apply to any court of competent jurisdiction to appoint a
successor Owner Trustee to act until such time, if any, as a successor shall
have been appointed as above provided. Any successor Owner Trustee so appointed
by such court shall immediately and without further act be superseded by any
successor Owner Trustee appointed as above provided within one year from the
date of the appointment by such court.
9.1.2 EXECUTION AND DELIVERY OF DOCUMENTS,
ETC.
Any successor Owner Trustee, however appointed, shall execute and deliver
to the predecessor Owner Trustee, with a copy to Owner Participant, Lessee and
Mortgagee, an instrument accepting such appointment and assuming the obligations
of Owner Trustee, in its individual capacity and as Owner Trustee, under the
Owner Trustee Agreements, and thereupon such successor Owner Trustee, without
further act, shall become vested with all the estates, properties, rights,
powers, duties and trusts of the predecessor Owner Trustee in the trusts under
this Trust Agreement with like effect as if originally named Owner Trustee in
this Trust Agreement; but nevertheless, upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trusts herein expressed, all the estates, properties, rights, powers and trusts
of such predecessor Owner Trustee, and such predecessor Owner Trustee shall duly
assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon the
trusts herein expressed. Upon the appointment of any successor Owner Trustee
under this Section 9.1, the predecessor Owner Trustee will execute such
documents as are provided to it by such successor Owner Trustee and will take
such further actions as are requested of it by such successor Owner Trustee as
are required to cause registration of the Aircraft included in the Trust Estate
to be transferred upon the records of the FAA, or other governmental authority
having jurisdiction, into the name of the successor Owner Trustee.
9.1.3 QUALIFICATIONS
Any successor Owner Trustee, however appointed, shall be a Citizen of the
United States and shall also be a bank or trust company organized under the Laws
of the United States or any state thereof having a combined capital and surplus
of at least $100,000,000, if there be such an institution willing, able and
legally qualified to perform the duties of Owner Trustee under this Trust
Agreement upon reasonable or customary terms. No such successor Owner Trustee
shall be located in a jurisdiction which creates material adverse consequences
for Lessee (unless such material adverse consequences would be created by
substantially all jurisdictions where major banking or trust institutions are
located).
9.1.4 MERGER, ETC.
Any corporation into which First Security may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which First Security shall be a party, or any
corporation to which substantially all the corporate trust business of First
Security may be transferred, shall, subject to the terms of Section 9.1.3, be
Owner Trustee under this Trust Agreement without further act, PROVIDED, that
such corporation shall not also be the Mortgagee.
9.2 CO-TRUSTEES AND SEPARATE TRUSTEES
(a) If at any time it shall be necessary or prudent in order to conform to
any Law of any jurisdiction in which all or any part of the Trust Estate is
located, or Owner Trustee being advised by counsel shall determine that it is so
necessary or prudent in the interest of Owner Participant or Owner Trustee, or
Owner Trustee shall have been directed to do so by Owner Participant, Owner
Trustee and Owner Participant shall execute and deliver an agreement
supplemental hereto and all other instruments and agreements necessary or proper
to constitute another bank or trust company or one or more persons (any or all
of which shall be a Citizen of the United States) approved by Owner Trustee and
Owner Participant, either to act as co-trustee, jointly with Owner Trustee, or
to act as separate trustee under this Trust Agreement (any such co-trustee or
separate trustee being herein sometimes referred to as an "additional trustee").
In the event Owner Participant shall not have joined in the execution of such
agreements' supplemental hereto within ten days after the receipt of a written
request from Owner Trustee so to do, or in case a Lease Event of Default or
Indenture Event of Default shall occur and be continuing, Owner Trustee may act
under the foregoing provisions of this Section 9.2 without the concurrence of
Owner Participant; and Owner Participant hereby appoints Owner Trustee its agent
and attorney-in-fact to act for it under the foregoing provisions of this
Section 9.2 in either of such contingencies.
(b) Every additional trustee under this Trust Agreement shall, to the
extent permitted by Law, be appointed and act, and Owner Trustee and its
successors shall act, subject to the following provisions and conditions:
(i) All powers, duties, obligations and rights conferred upon Owner
Trustee in respect of the custody, control and management of monies, the
Aircraft or documents authorized to be delivered under this Trust Agreement
or under the Participation Agreement shall be exercised solely by Owner
Trustee;
(ii) All other rights, powers, duties and obligations conferred or
imposed upon Owner Trustee shall be conferred or imposed upon and exercised
or performed by Owner Trustee and such additional trustee jointly, except
to the extent that under any Law of any jurisdiction in which any
particular act or acts are to be performed (including the holding of title
to the Trust Estate) Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such additional trustee;
(iii) No power given to, or which it is provided hereby may be
exercised by, any such additional trustee shall be exercised under this
Trust Agreement by such additional trustee, except jointly with, or with
the consent in writing of, Owner Trustee;
(iv) No trustee under this Trust Agreement shall be personally liable
by reason of any action or omission of any other trustee under this Trust
Agreement;
(v) Owner Participant, at any time, by an instrument in writing may
remove any such additional trustee. In the event that Owner Participant
shall not have joined in the execution of any such instrument within ten
days after the receipt of a written request from Owner Trustee so to do,
Owner Trustee shall have the power to remove any such additional trustee
without the concurrence of Owner Participant; and Owner Participant hereby
appoints Owner Trustee its agent and attorney-in-fact to act for it in such
connection in such contingency; and
(vi) No appointment of, or action by, any additional trustee will
relieve Owner Trustee of any of its obligations under, or otherwise affect
any of the terms of, the Trust Indenture or affect the interests of
Mortgagee or the Certificate Holders in the Trust Indenture Estate.
(c) In case any separate trustee under this Section 9.2 shall die, become
incapable of acting, resign or be removed, the title to the Trust Estate and all
rights and duties of such separate trustee shall, so far as permitted by Law,
vest in and be exercised by Owner Trustee, without the appointment of a
successor to such separate trustee.
SECTION 10. SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT AND OTHER DOCUMENTS
10.1 SUPPLEMENTS AND AMENDMENTS AND DELIVERY THEREOF
10.1.1 SUPPLEMENTS AND AMENDMENTS
Subject to Section 7.2.2 of the Participation Agreement, this Trust
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by Owner Trustee and Owner Participant. Subject to
Section 10.2, Section 9.01 of the Trust Indenture and Section 7.6.7 of the
Participation Agreement, Owner Trustee will execute any amendment, supplement or
other modification of this Trust Agreement or of any other Owner Trustee
Agreement which it is requested in writing to execute by Owner Participant,
except that Owner Trustee shall not execute any such amendment, supplement or
other modification which, by the express provisions of any of the above
documents, requires the consent of any other party unless such consent shall
have been obtained; and PROVIDED, that, without the prior written consent of
Owner Participant, (a) no such supplement, amendment or modification shall (i)
modify any of the provisions of Section 4 or this Section 10.1, (ii) reduce,
modify or amend any indemnities in favor of Owner Participant as set forth in
Section 9 of the Participation Agreement or in the Tax Indemnity Agreement,
(iii) reduce the amount or extend the time of payment of Basic Rent,
Supplemental Rent, Stipulated Loss Value or Termination Value as set forth in
the Lease (except in accordance with Section 3 of the Lease) or (iv) modify any
of the rights of Owner Participant under the Trust Indenture and (b) no such
supplement, amendment or modification shall require Owner Participant to invest
or advance funds or shall entail any additional personal liability or the
surrender of any indemnification, claim or individual right on the part of Owner
Participant with respect to any agreement or obligation.
10.1.2 DELIVERY OF AMENDMENTS AND SUPPLEMENTS
TO CERTAIN PARTIES
A signed copy of each amendment or supplement referred to in Section 10.1.1
to which Lessee is not a party shall be delivered promptly by Owner Trustee to
Lessee, and a signed copy of each amendment or supplement referred to in Section
10.1.1 shall be delivered promptly by Owner Trustee to Mortgagee.
10.2 DISCRETION AS TO EXECUTION OF DOCUMENTS
Prior to executing any document required to be executed by it pursuant to
the terms of Section 10.1, Owner Trustee shall be entitled to receive an opinion
of its counsel to the effect that the execution of such document is authorized
under this Trust Agreement. If in the opinion of Owner Trustee any such document
adversely affects any right, duty, immunity or indemnity in favor of Owner
Trustee under this Trust Agreement or under any other Owner Trustee Agreement,
Owner Trustee may in its discretion decline to execute such document unless
Owner Trustee is furnished with indemnification from Lessee or any other party
upon terms and in amounts reasonably satisfactory to Owner Trustee to protect
the Trust Estate and the Owner Trustee against any and all liabilities, costs
and expenses arising out of the execution of such documents.
10.3 ABSENCE OF REQUIREMENTS AS TO FORM
It shall not be necessary for any written request furnished pursuant to
Section 10.1 to specify the particular form of the proposed documents to be
executed pursuant to such Section 10.1, but it shall be sufficient if such
request shall indicate the substance thereof.
10.4 DISTRIBUTION OF DOCUMENTS
Promptly after the execution by Owner Trustee of any document entered into
pursuant to Section 10.1, Owner Trustee shall mail, by certified mail, postage
prepaid, a conformed copy thereof to Owner Participant, but the failure of Owner
Trustee to mail such conformed copy shall not impair or affect the validity of
such document.
10.5 NO REQUEST NEEDED AS TO LEASE SUPPLEMENT AND
TRUST INDENTURE SUPPLEMENT
No written request pursuant to Section 10.1 shall be required to enable
Owner Trustee to enter into, pursuant to Section 3.1 and the Lease or the Trust
Indenture, as the case may be, the Lease Supplement with Lessee and the Trust
Indenture Supplement.
SECTION 11. MISCELLANEOUS
11.1 TERMINATION OF TRUST AGREEMENT
This Trust Agreement and the trusts created hereby shall be of no further
force or effect upon the earlier of (a) both the final discharge of the Trust
Indenture pursuant to Section 10.01 thereof and the sale or other final
disposition by Owner Trustee of all property constituting part of the Trust
Estate and the final distribution by Owner Trustee of all monies or other
property or proceeds constituting part of the Trust Estate in accordance with
Section 4, PROVIDED, that at such time Lessee shall have fully complied with all
of the terms of the Lease and the Participation Agreement or (b) 21 years less
one day after the death of the last survivor of all of the descendants of the
grandparents of David C. Rockefeller living on the date of the earliest
execution of this Trust Agreement by any party hereto, but if this Trust
Agreement and the trusts created hereby shall be or become authorized under
applicable Law to be valid for a period commencing on the 21st anniversary of
the death of such last survivor (or, without limiting the generality of the
foregoing, if legislation shall become effective providing for the validity of
this Trust Agreement and the trusts created hereby for a period in gross
exceeding the period for which this Trust Agreement and the trusts created
hereby are hereinabove stated to extend and be valid), then this Trust Agreement
and the trusts created hereby shall not terminate under this clause (b) but
shall extend to and continue in effect, but only if such nontermination and
extension shall then be valid under applicable Law, until the day preceding such
date as the same shall, under applicable Law, cease to be valid; otherwise this
Trust Agreement and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof. Except as expressly set forth in
Section 11.2, this Trust Agreement and the trusts created hereby may not be
revoked by Owner Participant.
11.2 TERMINATION AT OPTION OF THE OWNER PARTICIPANT
Notwithstanding Section 11.1 hereof, this Agreement and trust created
hereby shall terminate and the Trust Estate shall be distributed to the Owner
Participant, and this Agreement shall be of no further force and effect, upon
the election of the Owner Participant by notice to the Owner Trustee, if such
notice shall be accompanied by the written agreement (in form and substance
satisfactory to the Owner Trustee) of the Owner Participant assuming all
obligations of the Owner Trustee under or contemplated by the Operative
Agreements or incurred by it as trustee hereunder and releasing the Owner
Trustee therefrom; provided, however, that such notice may be given only after
the time the Lien of the Trust Indenture is discharged under Section 10.01 of
the Trust Indenture and after the Lease shall no longer be in effect.
11.3 OWNER PARTICIPANT HAS NO LEGAL TITLE IN TRUST
ESTATE
No Owner Participant shall have legal title to any part of the Trust
Estate. No transfer, by operation of Law or otherwise, of any right, title and
interest of Owner Participant in and to the Trust Estate under this Trust
Agreement shall operate to terminate this Trust Agreement or the trusts under
this Trust Agreement or entitle any successors or transferees of Owner
Participant to an accounting or to the transfer of legal title to any part of
the Trust Estate.
11.4 ASSIGNMENT, SALE, ETC. OF AIRCRAFT
Any assignment, sale, transfer or other conveyance of the Aircraft by Owner
Trustee made pursuant to the terms of this Trust Agreement or of the Lease or
the Participation Agreement shall bind Owner Participant and shall be effective
to transfer or convey all right, title and interest of Owner Trustee and Owner
Participant in and to the Aircraft. No purchaser or other grantee shall be
required to inquire as to the authorization, necessity, expediency or regularity
of such assignment, sale, transfer or conveyance or as to the application of any
sale or other proceeds with respect thereto by Owner Trustee.
11.5 TRUST AGREEMENT FOR BENEFIT OF CERTAIN PARTIES
ONLY
Except for the terms of Section 10 of the Participation Agreement
incorporated in Section 8 and except as otherwise provided in Sections 5.1, 6.7,
9, 10.1 and 11.1, nothing in this Trust Agreement, whether express or implied,
shall be construed to give any person other than Owner Trustee and Owner
Participant any legal or equitable right, remedy or claim under or in respect of
this Trust Agreement; and this Trust Agreement shall be held to be for the sole
and exclusive benefit of Owner Trustee and Owner Participant.
11.6 CITIZENSHIP OF OWNER PARTICIPANT
If at any time there shall be more than one Owner Participant, then any
Owner Participant who shall cease to be a Citizen of the United States shall
have no voting or similar rights under this Trust Agreement and shall have no
right to direct, influence or limit the exercise of, or to prevent the direction
or influence of, or place any limitation on the exercise of, Owner Trustee's
authority or to remove Owner Trustee.
11.7 NOTICES
Unless otherwise expressly permitted by the terms of this Trust Agreement,
all notices, requests, demands, authorizations, directions, consents, waivers
and other communications required or permitted to be made, given, furnished or
filed under this Trust Agreement shall be in writing, shall refer specifically
to this Trust Agreement and shall be personally delivered, sent by telecopy,
telex or other means of electronic facsimile or telecommunication transmission,
sent by registered mail or certified mail, return receipt requested, postage
prepaid, or sent by overnight courier service, in each case to the respective
telex, telecopy or other number or address set forth for such party in Schedule
1 to the Participation Agreement, or to such other telex, telecopy or other
number or address as each party hereto may hereafter specify by notice to the
other parties hereto. Each such notice, request, demand, authorization,
direction, consent, waiver or other communication shall be effective when
received or, if made, given, furnished or filed (a) by telecopy or other means
of electronic facsimile or telecommunication transmission, when confirmed, or
(b) by registered or certified mail, three Business Days after being deposited,
properly addressed, in the U.S. mail.
11.8 SEVERABILITY
If any provision of this Trust Agreement shall be held invalid, illegal or
unenforceable in any respect in any jurisdiction, then, to the extent permitted
by Law, (a) all other provisions hereof shall remain in full force and effect in
such jurisdiction and (b) such invalidity, illegality or unenforceability shall
not affect the validity, legality or enforceability of such provision in any
other jurisdiction. If, however, any Law pursuant to which such provisions are
held invalid, illegal or unenforceable may be waived, such Law is hereby waived
by the parties hereto to the full extent permitted, to the end that this Trust
Agreement shall be deemed to be a valid and binding agreement in all respects,
enforceable in accordance with its terms.
11.9 WAIVERS, ETC.
No term or provision hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing entered into in
compliance with the terms of Section 10; and any waiver of the terms hereof
shall be effective only in the specific instance and for the specific purpose
given.
11.10 COUNTERPARTS
This Trust Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.
11.11 BINDING EFFECT, ETC.
All covenants and agreements contained in this Trust Agreement shall be
binding upon, and inure to the benefit of, Owner Trustee and its successors and
assigns, and Owner Participant and its successors and, to the extent permitted
by Section 8, assigns. Any request, notice, direction, consent, waiver or other
instrument or action by Owner Participant shall bind its successors and assigns.
11.12 HEADINGS; REFERENCES
The headings and the table of contents used in this Trust Agreement are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof and shall not in any way affect the construction of, or be
taken into consideration in interpreting, this Trust Agreement.
11.13 GOVERNING LAW
THIS TRUST AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE
STATE OF UTAH , INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
[This space intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
___________________________________
By ________________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION
By ________________________________
Name:
Title:
- --------------------------------------------------------------------------------
TRUST INDENTURE AND MORTGAGE ___
Dated as of ____________, 199_
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,
Owner Trustee
and
WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Mortgagee,
Mortgagee
- --------------------------------------------------------------------------------
EQUIPMENT NOTES COVERING
ONE BOEING ________ AIRCRAFT
BEARING U.S. REGISTRATION MARK N_____
LEASED BY CONTINENTAL AIRLINES, INC.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
GRANTING CLAUSE........................................................ 1
ARTICLE I
DEFINITIONS
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. Form of Equipment Notes.............................. 8
SECTION 2.02. Issuance and Terms of Equipment Notes................ 13
SECTION 2.03. Payments from Trust Indenture Estate Only............ 16
SECTION 2.04. Method of Payment.................................... 18
SECTION 2.05. Application of Payments.............................. 20
SECTION 2.06. Termination of Interest in Trust Indenture
Estate............................................... 21
SECTION 2.07. Registration Transfer and Exchange of Equipment
Notes................................................ 21
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes................................................ 22
SECTION 2.09. Payment of Expenses on Transfer; Cancellation........ 23
SECTION 2.10. Mandatory Redemptions of Equipment Notes............. 23
SECTION 2.11. Voluntary Redemptions of Equipment Notes............. 23
SECTION 2.12 Redemptions; Notice of Redemption.................... 24
SECTION 2.13. Option to Purchase Equipment Notes................... 25
SECTION 2.14. Subordination........................................ 26
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution.............................. 27
SECTION 3.02. Event of Loss; Replacement; Voluntary
Termination; Optional Redemption..................... 28
SECTION 3.03. Payments After Event of Default...................... 29
SECTION 3.04. Certain Payments..................................... 32
SECTION 3.05. Other Payments....................................... 32
SECTION 3.06. Payments to Owner Trustee............................ 33
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF MORTGAGEE
SECTION 4.01. Covenants of Owner Trustee........................... 33
SECTION 4.02. Event of Default..................................... 35
SECTION 4.03. Certain Rights....................................... 37
SECTION 4.04. Remedies............................................. 39
SECTION 4.05. Return of Aircraft, Etc.............................. 42
SECTION 4.06. Remedies Cumulative.................................. 43
SECTION 4.07. Discontinuance of Proceedings........................ 43
SECTION 4.08. Waiver of Past Defaults.............................. 43
SECTION 4.09. Appointment of Receiver.............................. 44
SECTION 4.10. Mortgagee Authorized to Execute Bills of Sale, Etc... 44
SECTION 4.11. Rights of Note Holders to Receive Payment............ 44
ARTICLE V
DUTIES OF THE MORTGAGEE
SECTION 5.01. Notice of Event of Default........................... 45
SECTION 5.02. Action Upon Instructions; Certain Rights and
Limitations.......................................... 45
SECTION 5.03. Indemnification...................................... 49
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions......................................... 49
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions......................................... 50
SECTION 5.06. Replacement Airframes and Replacement Engines........ 50
SECTION 5.07. Indenture Supplements for Replacements............... 50
SECTION 5.08. Effect of Replacement................................ 50
SECTION 5.09. Investment of Amounts Held by Mortgagee.............. 51
ARTICLE VI
THE OWNER TRUSTEE AND THE MORTGAGEE
SECTION 6.01. Acceptance of Trusts and Duties...................... 51
SECTION 6.02. Absence of Duties.................................... 52
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents............................................ 52
SECTION 6.04. No Segregation of Monies; No Interest................ 53
SECTION 6.05. Reliance; Agreements; Advice of Counsel.............. 53
SECTION 6.06. Capacity in Which Acting............................. 54
SECTION 6.07. Compensation......................................... 54
SECTION 6.08. Instructions from Note Holders....................... 54
ARTICLE VII
INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification............................. 55
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee.................... 56
SECTION 8.02. Resignation of Mortgagee; Appointment of Successor... 56
SECTION 8.03. Appointment of Additional and Separate Trustees...... 57
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations................ 59
SECTION 9.02. Trustees Protected................................... 61
SECTION 9.03. Documents Mailed to Note Holders..................... 61
SECTION 9.04. No Request Necessary for Lease Supplement or
Trust Indenture Supplement........................... 62
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture....................... 62
SECTION 10.02. No Legal Title to Trust Indenture Estate in Note
Holders.............................................. 62
SECTION 10.03. Sale of Aircraft by Mortgagee Is Binding............. 63
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee,
Mortgagee, Owner Participant and Note Holders........ 63
SECTION 10.05. Notices.............................................. 63
SECTION 10.06. Severability......................................... 64
SECTION 10.07. No Oral Modification or Continuing Waivers........... 64
SECTION 10.08. Successors and Assigns............................... 64
SECTION 10.09. Headings............................................. 64
SECTION 10.10. Normal Commercial Relations.......................... 64
SECTION 10.11. Governing Law; Counterpart Form...................... 65
SECTION 10.12. Voting By Note Holders............................... 65
SECTION 10.13. Bankruptcy........................................... 65
EXHIBIT A Form of Trust Indenture and Mortgage Supplement
SCHEDULE I Equipment Notes Amortization and Interest Rates
TRUST INDENTURE AND MORTGAGE ___
TRUST INDENTURE AND MORTGAGE ___, dated as of ___________, 199_
("Trust Indenture"), between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity, except as
expressly stated herein, but solely as Owner Trustee under the Trust Agreement
referred to below (together with its successors under the Trust Agreement, the
"Owner Trustee"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation,
not in its individual capacity, except as expressly stated herein, but solely as
Mortgagee hereunder (together with its successors hereunder, the "Mortgagee").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and the Owner Trustee in its individual
capacity have entered into the Trust Agreement whereby, among other things, (i)
the Owner Trustee has established a certain trust for the use and benefit of the
Owner Participant subject, however, to the Trust Indenture Estate created
pursuant hereto for the use and benefit of, and with the priority of payment to,
the holders of Equipment Notes issued hereunder, and (ii) the Owner Trustee has
been authorized and directed to execute and deliver this Agreement;
WHEREAS, the parties hereto desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner Trustee of the
Equipment Notes and (ii) to provide for the assignment, mortgage and pledge by
the Owner Trustee to the Mortgagee, as part of the Trust Indenture Estate
hereunder, among other things, of all of the Owner Trustee s right, title and
interest in and to the Aircraft and, except as hereinafter expressly provided,
all of the Owner Trustee s right, title and interest in, to and under the Lease
and the Participation Agreement and all payments and other amounts received
hereunder or thereunder in accordance with the terms hereof or thereof, as
security for, among other things, the Owner Trustee s obligations to the
Noteholders;
WHEREAS, all things have been done to make the Equipment Notes, when
executed by the Owner Trustee and authenticated and delivered by the Mortgagee
hereunder, the valid, binding and enforceable obligations of the Owner Trustee;
and
WHEREAS, all things necessary to make this Trust Indenture the valid,
binding and legal obligation of the Owner Trustee for the uses and purposes
herein set forth, in accordance with its terms, have been done and performed and
have happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that, to
secure the prompt payment of the Original Amount of, interest on, Make-Whole
Amount, if any, and all other amounts due with respect to, all Equipment Notes
from time to time outstanding hereunder according to their tenor and effect and
to secure the performance and observance by the Owner Trustee of all the
agreements, covenants and provisions contained herein and in the Participation
Agreement and the Equipment Notes, for the benefit of the Note Holders and the
Loan Participants and the prompt payment of all amounts from time to time owing
hereunder and under Participation Agreement to the Loan Participants and/or the
Note Holders by the Owner Trustee and for the uses and purposes and subject to
the terms and provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes by the
holders thereof, and for other good and valuable consideration the receipt and
adequacy whereof are hereby acknowledged, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Mortgagee, its successors in trust and
assigns, for the security and benefit of the Loan Participants and the Note
Holders, a first priority security interest in and mortgage lien on all right,
title and interest of the Owner Trustee in, to and under the following described
property, rights and privileges, whether now or hereafter acquired, other than
Excluded Payments (which, collectively, excluding Excluded Payments but
including all property hereafter specifically subject to the Lien of this Trust
Indenture by the terms hereof or any supplement hereto, are included within, and
are referred to as, the "Trust Indenture Estate"), to wit:
(1) The Airframe which is one Boeing ______ aircraft with the FAA
Registration number of N_____ and the manufacturer s serial number of
_______ and _________ Engines, each of which Engines is a
____________________________ engine with the manufacturer s serial numbers
of _____ and _____, is of 750 or more rated takeoff horsepower or the
equivalent of such horsepower (such Airframe and Engines more particularly
described in the Indenture Supplement executed and delivered as provided
herein) as the same is now and will hereafter be constituted, whether now
owned by the Owner Trustee or hereafter acquired, leased or intended to be
leased under the Lease, and in the case of such Engines, whether or not any
such Engine shall be installed in or attached to the Airframe or any other
airframe, together with (a) all Parts of whatever nature, which are from
time to time included within the definitions of "Airframe" or "Engines",
whether now owned or hereafter acquired, including all substitutions,
renewals and replacements of and additions, improvements, accessions and
accumulations to the Airframe and Engines (other than additions,
improvements, accessions and accumulations which constitute appliances,
parts, instruments, appurtenances, accessories, furnishings or other
equipment excluded from the definition of Parts) and (b) all Aircraft
Documents;
(2) All right, title, interest, claims and demands of the Owner
Trustee, as Lessor, in, to and under the Lease, together with all rights,
powers, privileges, options and other benefits of the Owner Trustee as
lessor under the Lease, including the immediate and continuing right to
receive and collect all Rent, income, revenues, issues, profits, insurance
proceeds, condemnation awards and other payments, tenders and security now
or hereafter payable to or receivable by the Lessor under the Lease
pursuant thereto, and, subject to Section 5.02 hereof, the right to make
all waivers and agreements, to give and receive copies of all notices and
other instruments or communications, to accept surrender or redelivery of
the Aircraft or any part thereof, as well as all the rights, powers and
remedies on the part of the Owner Trustee as Lessor under the Lease, to
take such action upon the occurrence of a Lease Event of Default
thereunder, including the commencement, conduct and consummation of legal,
administrative or other proceedings, as shall be permitted by the Lease or
by Law, and to do any and all other things whatsoever which the Owner
Trustee or any lessor is or may be entitled to do under or in respect of
the Lease and any right to restitution from the Lessee or any other Person
in respect of any determination of invalidity of the Lease;
[(3) Each Permitted Sublease assignment and each assigned Permitted
Sublease (to the extent assigned under such Permitted Sublease assignment),
and including, without limitation, all rents or other payments of any kind
made under such assigned Permitted Sublease (to the extent assigned under
such Permitted Sublease assignment);]
[(3)/(4)] All right, title, interest, claims and demands of the Owner
Trustee in, to and under:
(a) the Purchase Agreement and the GTA;
(b) the Purchase Agreement Assignment, with the Consent and
Agreement and the Engine Consent and Agreement attached thereto;
(c) the Bills of Sale; and
(d) any and all other contracts, agreements and instruments
relating to the Airframe and Engines or any rights or interests
therein to which the Owner Trustee is now or may hereafter be a party;
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
together with all rights, powers, privileges, licenses, easements,
options and other benefits of the Owner Trustee under each contract,
agreement and instrument referred to in this clause [(3)/(4)], including
the right to receive and collect all payments to the Owner Trustee
thereunder now or hereafter payable to or receivable by the Owner Trustee
pursuant thereto and, subject to Section 5.02 hereof, the right to make all
waivers and agreements, to give and receive notices and other instruments
or communications, or to take any other action under or in respect of any
thereof or to take such action upon the occurrence of a default thereunder,
including the commencement, conduct and consummation of legal,
administrative or other proceedings, as shall be permitted thereby or by
Law, and to do any and all other things which the Owner Trustee is or may
be entitled to do thereunder and any right to restitution from the Lessee,
the Owner Participant or any other Person in respect of any determination
of invalidity of any thereof;
[(4)/(5)] All rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the Lien of this Trust
Indenture, including all payments or proceeds payable to the Owner Trustee
after termination of the Lease with respect to the Aircraft as the result
of the sale, lease or other disposition thereof, and all estate, right,
title and interest of every nature whatsoever of the Owner Trustee in and
to the same;
[(5)/(6)] Without limiting the generality of the foregoing, all
insurance and requisition proceeds with respect to the Aircraft or any part
thereof, including the insurance required under Section 11 of the Lease;
[(6)/(7)] Without limiting the generality of the foregoing, all rights
of the Owner Trustee to amounts paid or payable by Lessee to the Owner
Trustee under the Participation Agreement and all rights of the Owner
Trustee to enforce payments of any such amounts thereunder;
[(7)/(8)] Without limiting the generality of the foregoing, all monies
and securities from time to time deposited or required to be deposited with
the Mortgagee pursuant to any terms of this Trust Indenture or the Lease or
required hereby or by the Lease to be held by the Mortgagee hereunder as
security for the obligations of the Lessee under the Lease or of the Owner
Trustee hereunder; and
[(8)/(9)] All proceeds of the foregoing; excluding, however, in all
events from each of foregoing clauses (1) through [(8)/(9)] inclusive all
Excluded Payments and the right to specifically enforce the same or to sue
for damages for the breach thereof as provided in Section 5.02 hereof.
Concurrently with the delivery of this Trust Indenture, the Owner
Trustee will deliver to the Mortgagee the original executed counterpart of the
Lease and the Lease Supplement No. 1 (to each of which a chattel paper receipt
is attached), and executed copies of the Participation Agreement, the Purchase
Agreement and the GTA (to the extent assigned by the Purchase Agreement
Assignment), the Purchase Agreement Assignment, with the Consent and Agreement
and the Engine Consent and Agreement attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, and its successors and assigns, in trust for the equal and
proportionate benefit and security of the Loan Participants and the Note
Holders, except as provided in Section 2.14 and Article III hereof without any
preference, distinction or priority of any one Equipment Note over any other by
reason of priority of time of issue, sale, negotiation, date of maturity thereof
or otherwise for any reason whatsoever, and for the uses and purposes and in all
cases and as to all property specified in paragraphs (1) through [(8)] inclusive
above, subject to the terms and provisions set forth in this Trust Indenture.
It is expressly agreed that anything herein contained to the contrary
notwithstanding, the Owner Trustee shall remain liable under the Indenture
Agreements, to perform all of the obligations assumed by it thereunder, except
to the extent prohibited or excluded from doing so pursuant to the terms and
provisions thereof, and the Mortgagee, the Loan Participants and the Note
Holders shall have no obligation or liability under the Indenture Agreements, by
reason of or arising out of the assignment hereunder, nor shall the Mortgagee,
the Loan Participants or the Note Holders be required or obligated in any manner
to perform or fulfill any obligations of the Owner Trustee under or pursuant to
the Indenture Agreements, or, except as herein expressly provided, to make any
payment, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or present or file any claim, or take any action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
The Owner Trustee does hereby constitute the Mortgagee the true and
lawful attorney of the Owner Trustee, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of substitution,
and with full power (in the name of the Owner Trustee or otherwise) to ask for,
require, demand, receive, compound and give acquittance for any and all monies
and claims for monies (in each case including insurance and requisition proceeds
but in all cases excluding Excluded Payments) due and to become due under or
arising out of the Indenture Agreements, and all other property which now or
hereafter constitutes part of the Trust Indenture Estate, to endorse any checks
or other instruments or orders in connection therewith and to file any claims or
to take any action or to institute any proceedings which the Mortgagee may deem
to be necessary or advisable in the premises. Without limiting the generality of
the foregoing, but subject to the rights of the Owner Trustee and the Owner
Participant under Sections 2.13, 4.03 and 4.04(a) hereof, during the continuance
of any Event of Default under this Trust Indenture, the Mortgagee shall have the
right under such power of attorney to accept any offer in connection with the
exercise of remedies as set forth herein of any purchaser to purchase the
Airframe and Engines and upon such purchase to execute and deliver in the name
of and on behalf of the Owner Trustee an appropriate bill of sale and other
instruments of transfer relating to the Airframe and Engines, when purchased by
such purchaser, and to perform all other necessary or appropriate acts with
respect to any such purchase, and in its discretion to file any claim or take
any other action or proceedings, either in its own name or in the name of the
Owner Trustee or otherwise, which the Mortgagee may deem necessary or
appropriate to protect and preserve the right, title and interest of the
Mortgagee in and to such Rents and other sums and the security intended to be
afforded hereby; PROVIDED, HOWEVER, that no action of the Mortgagee pursuant to
this paragraph shall increase the obligations or liabilities of the Owner
Trustee to any Person beyond those obligations and liabilities specifically set
forth in this Trust Indenture and in the other Operative Agreements. Under the
Lease, Lessee is directed, so long as this Trust Indenture shall not have been
fully discharged, to make all payments of Rent (other than Excluded Payments)
and all other amounts which are required to be paid to or deposited with the
Owner Trustee pursuant to the Lease (other than Excluded Payments) directly to,
or as directed by, the Mortgagee at such address or addresses as the Mortgagee
shall specify, for application as provided in this Trust Indenture. The Owner
Trustee agrees that promptly upon receipt thereof, it will transfer to the
Mortgagee any and all monies from time to time received by it constituting part
of the Trust Indenture Estate, for distribution by the Mortgagee pursuant to
this Trust Indenture, except that the Owner Trustee shall accept for
distribution pursuant to the Trust Agreement any amounts distributed to it by
the Mortgagee under this Trust Indenture.
The Owner Trustee agrees that at any time and from time to time, upon
the written request of the Mortgagee, the Owner Trustee will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all such
further instruments and documents as the Mortgagee may reasonably deem necessary
or desirable to perfect, preserve or protect the mortgage, security interests
and assignments created or intended to be created hereby or to obtain for the
Mortgagee the full benefits of the assignment hereunder and of the rights and
powers herein granted.
The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, and the Lien
hereof shall not have been released pursuant to Section 10.01 hereof, any of its
right, title or interest hereby assigned, to anyone other than the Mortgagee,
and that it will not, except as otherwise provided in this Trust Indenture and
except with respect to Excluded Payments to which it is entitled, (i) accept any
payment from Lessee [or any Permitted Sublessee] under any Indenture
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Agreement, (ii) enter into any agreement amending or supplementing any Indenture
Agreement, (iii) execute any waiver or modification of, or consent under, the
terms of, or exercise any rights, powers or privileges under, any Indenture
Agreement, (iv) settle or compromise any claim arising under any Indenture
Agreement or (v) submit or consent to the submission of any dispute, difference
or other matter arising under or in respect of any Indenture Agreement to
arbitration thereunder.
The Owner Trustee does hereby agree that it will not without the
written consent of the Mortgagee:
(a) receive or collect or agree to the receipt or collection of any
payment (other than Excluded Payments) of Rent, including Basic Rent, Stipulated
Loss Value, Termination Value or any other payment to be made pursuant to
Section 9 or 10 of the Lease prior to the date for the payment thereof provided
for by the Lease or assign, transfer or hypothecate (other than to the Mortgagee
hereunder) any payment of Rent, including Basic Rent, Stipulated Loss Value,
Termination Value or any other payment to be made pursuant to Section 9 or 10 of
the Lease, then due or to accrue in the future under the Lease in respect of the
Airframe and Engines; or
(b) except as contemplated by the Trust Agreement in connection with
the appointment of a successor owner trustee, sell, mortgage, transfer, assign
or hypothecate (other than to the Mortgagee hereunder) its interest in the
Airframe and Engines or any part thereof or in any amount to be received by it
from the use or disposition of the Airframe and Engines, other than amounts
distributed to it pursuant to Article III hereof.
It is hereby further agreed that any and all property described or
referred to in the granting clauses hereof which is hereafter acquired by the
Owner Trustee shall IPSO FACTO, and without any other conveyance, assignment or
act on the part of the Owner Trustee or the Mortgagee, become and be subject to
the Lien herein granted as fully and completely as though specifically described
herein, but nothing contained in this paragraph shall be deemed to modify or
change the obligations of the Owner Trustee contained in the foregoing
paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and does
hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any other Owner Trustee Agreement.
Notwithstanding the Granting Clause or any of the preceding
paragraphs, there is hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excluded Payments. Further,
nothing in the Granting Clause or the preceding paragraphs shall impair any of
the rights of the Owner Trustee or the Owner Participant under Section 2.13,
4.03, 4.04, 4.08, 5.02 or 5.03 hereof.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto
as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed in the manner described, in Annex A to the Lease.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. FORM OF EQUIPMENT NOTES.
The Equipment Notes shall be substantially in the form set forth
below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED
UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH
REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS OWNER TRUSTEE UNDER
TRUST AGREEMENT ___ DATED AS OF _______________, 199_. SERIES [_____] LIMITED
RECOURSE EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION WITH THE BOEING MODEL
_______ AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N_____.
No. ____ Date: [ __________, 199__ ]
$-----------------------
INTEREST RATE MATURITY DATE
------------- -------------
[-----------] [------------]
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement ___, dated as of ____________,
199_, between the Owner Participant named therein and First Security Bank,
National Association (herein as such Trust Agreement may be supplemented or
amended from time to time called the "Trust Agreement"), hereby promises to pay
to __________________, or the registered assignee thereof, the principal sum of
$____________ (the "Original Amount"), together with interest on the amount of
the Original Amount remaining unpaid from time to time (calculated on the basis
of a year of 360 days comprised of twelve 30-day months) from the date hereof
until paid in full at a rate per annum equal to the Debt Rate. The Original
Amount of this Equipment Note shall be payable in installments on the dates set
forth in Schedule I hereto equal to the corresponding percentage of the Original
Amount of this Equipment Note set forth in Schedule I hereto. Accrued but unpaid
interest shall be due and payable in semiannual installments commencing on
_____________, 199_, and thereafter on January 2 and July 2 of each year, to and
including _______________. Notwithstanding the foregoing, the final payment made
on this Equipment Note shall be in an amount sufficient to discharge in full the
unpaid Original Amount and all accrued and unpaid interest on, and any other
amounts due under, this Equipment Note. Notwithstanding anything to the contrary
contained herein, if any date on which a payment under this Equipment Note
becomes due and payable is not a Business Day, then such payment shall not be
made on such scheduled date but shall be made on the next succeeding Business
Day and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Mortgage ___, dated as of _____________, 199_, between the Owner
Trustee and Wilmington Trust Company (the "Mortgagee"), as the same may be
amended or supplemented from time to time. All other capitalized terms used in
this Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Payment Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).
All payments of Original Amount, interest, Make-Whole Amount, if any,
and other amounts, if any, to be made by the Owner Trustee hereunder and under
the Trust Indenture or the Participation Agreement shall be payable only from
the income and proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Trust Estate to the extent included in
the Trust Indenture Estate to enable the Mortgagee to make such payments in
accordance with the terms of Section 2.03 and Article III of the Trust
Indenture, and each holder hereof, by its acceptance of this Equipment Note,
agrees that it will look solely to the income and proceeds from the Trust
Indenture Estate to the extent available for distribution to the holder hereof
as above provided and that none of the Owner Participant, the Owner Trustee and
the Mortgagee is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof for any
amounts payable or any liability under this Equipment Note or, except as
provided in the Trust Indenture or in the Participation Agreement, for any
liability under the Trust Indenture or the Participation Agreement; PROVIDED,
HOWEVER, that nothing herein contained shall limit, restrict or impair the right
of the Mortgagee, subject always to the terms and provisions of the Trust
Indenture, to accelerate the maturity of this Equipment Note upon occurrence of
an Event of Default under the Trust Indenture in accordance with Section 4.04(b)
of the Trust Indenture, to bring suit and obtain a judgment against the Owner
Trustee on this Equipment Note for purposes of realizing upon the Trust
Indenture Estate and to exercise all rights and remedies provided under the
Trust Indenture or otherwise realize upon the Trust Indenture Estate as provided
under the Trust Indenture.
There shall be maintained an Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate Trust
Office of the Mortgagee or at the office of any successor in the manner provided
in Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due hereunder shall
be payable in Dollars in immediately available funds at the Corporate Trust
Office of the Mortgagee, or as otherwise provided in the Trust Indenture. Each
such payment shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in the case of any
final payment with respect to this Equipment Note, the Equipment Note shall be
surrendered promptly thereafter to the Mortgagee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Trust Indenture, each payment of the Original
Amount, Make-Whole Amount, if any, and interest received by it hereunder shall
be applied, FIRST, to the payment of accrued interest on this Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, or, to the extent permitted by Law, any overdue interest and
other amounts hereunder) to the date of such payment, SECOND, to the payment of
the Original Amount of this Equipment Note then due, THIRD, to the payment of
Make-Whole Amount, if any, and any other amount due hereunder or under the Trust
Indenture, and FOURTH, the balance, if any, remaining thereafter, to the payment
of installments of the Original Amount of this Equipment Note remaining unpaid
in the inverse order of their maturity.
This Equipment Note is one of the Equipment Notes referred to in the
Trust Indenture which have been or are to be issued by the Owner Trustee
pursuant to the terms of the Trust Indenture. The Trust Indenture Estate is held
by the Mortgagee as security, in part, for the Equipment Notes. The provisions
of this Equipment Note are subject to the Trust Indenture. Reference is hereby
made to the Trust Indenture for a complete statement of the rights and
obligations of the holder of, and the nature and extent of the security for,
this Equipment Note and the rights and obligations of the holders of, and the
nature and extent of the security for, any other Equipment Notes executed and
delivered under the Trust Indenture, as well as for a statement of the terms and
conditions of the Trust created by the Trust Indenture, to all of which terms
and conditions in the Trust Indenture each holder hereof agrees by its
acceptance of this Equipment Note.
As provided in the Trust Indenture and subject to certain limitations
therein set forth, this Equipment Note is exchangeable for a like aggregate
Original Amount of Equipment Notes of different authorized denominations, as
requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of this
Equipment Note, the Owner Trustee and the Mortgagee shall treat the person in
whose name this Equipment Note is registered as the owner hereof for all
purposes, whether or not this Equipment Note be overdue, and neither the Owner
Trustee nor the Mortgagee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in Sections
2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. This Equipment
Note is also subject to exchange and to purchase by the Owner Participant or the
Owner Trustee as provided in Section 2.13 of the Trust Indenture but not
otherwise. In addition, this Equipment Note may be accelerated as provided in
Section 4.04 of the Trust Indenture.
[The indebtedness evidenced by this Equipment Note is, to the extent
and in the manner provided in the Trust Indenture, subordinate and subject in
right of payment to the prior payment in full of the Secured Obligations (as
defined in the Trust Indenture) in respect of [Series A Equipment Notes]
[Series A and Series B Equipment Notes], and this Equipment Note is issued
subject to such provisions. The Note Holder of this Equipment Note, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Mortgagee on his behalf to take such action as may be necessary
or appropriate to effectuate the subordination as provided in the Trust
Indenture and (c) appoints the Mortgagee his attorney-in-fact for such
purpose.]
Unless the certificate of authentication hereon has been executed by
or on behalf of the Mortgagee by manual signature, this Equipment Note shall not
be entitled to any benefit under the Trust Indenture or be valid or obligatory
for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Note
to be executed in its corporate name by its officer thereunto duly authorized on
the date hereof.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
not in its individual capacity
but solely as Owner Trustee
By:____________________________________
Name:
Title:
___________________
To be inserted in the case of a Series B Equipment Note.
To be inserted in the case of a Series C Equipment Note.
To be inserted for each Equipment Note other than any Series A Equipment
Note.
MORTGAGEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned
Trust Indenture.
WILMINGTON TRUST COMPANY, as
Mortgagee
By:_____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTE AMORTIZATION
Percentage of
Original Amount
Payment Date to be Paid
- -------------------------------------- ---------------------------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES.
The Equipment Notes shall be dated the date of issuance thereof, shall
be issued in three separate series consisting of Series A, Series B and Series C
and in the maturities and principal amounts and shall bear interest as specified
in Schedule I hereto. On the date of the consummation of the Transaction, each
Equipment Note shall be issued to the Subordination Agent on behalf of the Pass
Through Trustees under the Pass Through Trust Agreements. The Equipment Notes
shall be issued in registered form only. The Equipment Notes shall be issued in
denominations of $1,000 and integral multiples thereof, except that one
Equipment Note of each Series may be in an amount that is not an integral
multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate (calculated
on the basis of a year of 360 days comprised of twelve 30-day months) on the
unpaid Original Amount thereof from time to time outstanding, payable in arrears
on _____________, 199_, and on each January 2 and July 2 thereafter until
maturity. The Original Amount of each Equipment Note shall be payable on the
dates and in the installments equal to the corresponding percentage of the
Original Amount as set forth in Schedule I hereto which shall be attached as
Schedule I to the Equipment Notes. Notwithstanding the foregoing, the final
payment made under each Equipment Note shall be in an amount sufficient to
discharge in full the unpaid Original Amount and all accrued and unpaid interest
on, and any other amounts due under, such Equipment Note. Each Equipment Note
shall bear interest at the Payment Due Rate (calculated on the basis of a year
of 360 days comprised of twelve 30-day months) on any part of the Original
Amount, Make-Whole Amount, if any, and, to the extent permitted by applicable
Law, interest and any other amounts payable thereunder not paid when due for any
period during which the same shall be overdue, in each case for the period the
same is overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise). Notwithstanding anything to the
contrary contained herein, if any date on which a payment under any Equipment
Note becomes due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next succeeding Business
Day and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment during such extension.
The Owner Trustee agrees to pay to the Mortgagee for distribution in
accordance with Section 3.04 hereof: (i) any and all indemnity amounts received
by the Owner Trustee which are payable by the Lessee to (x) WTC and the
Mortgagee, (y) each separate or additional Trustee appointed pursuant to the
Trust Indenture and (z) the Pass Through Indemnitees pursuant to Section 9 of
the Participation Agreement; (ii) to the extent not payable (whether or not in
fact paid) under Section 6(a) of the Note Purchase Agreement (as originally in
effect or amended with the consent of the Owner Participant), an amount equal to
the fees payable to the relevant Liquidity Provider under Section 2.03 of each
Liquidity Facility and the related Fee Letter (as defined in the Intercreditor
Agreement) multiplied by a fraction the numerator of which shall be the then
outstanding aggregate principal amount of the Series A Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes and the denominator of which shall
be the then outstanding aggregate principal amount of all "Series A Equipment
Notes", "Series B Equipment Notes" and "Series C Equipment Notes" (each as
defined in the Note Purchase Agreement); (iii) (x) the amount equal to interest
on any Downgrade Advance (other than any Applied Downgrade Advance) payable
under Section 3.07(e) of each Liquidity Facility minus Investment Earnings from
such Downgrade Advance multiplied by (y) the fraction specified in the foregoing
clause (ii); (iv) (x) the amount equal to interest on any Non-Extension Advance
(other than any Applied Non-Extension Advance) payable under Section 3.07(a)(i)
of each Liquidity Facility minus Investment Earnings from such Non-Extension
Advance multiplied by (y) the fraction specified in the foregoing clause (ii);
(v) any amounts owed to the Liquidity Providers by the Subordination Agent as
borrower under the second sentence of Section 7.05 of each Liquidity Facility
(other than as a result of any "prohibited transaction" within the meaning of
Section 406 of the Employee Retirement Income Security Act of 1974, as amended,
or Section 4975(c)(1) of the Internal Revenue Code of 1986, as amended)
multiplied by the fraction specified in the foregoing clause (ii); and (vi) if
any payment default shall have occurred and be continuing with respect to
interest on any Series A Equipment Note, Series B Equipment Note or Series C
Equipment Note, (x) the excess, if any, of (1) the amount equal to interest on
any Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
payable under Section 3.07(a)(i) of each Liquidity Facility OVER (2) the sum of
Investment Earnings from any Final Advance plus any amount of interest at the
Payment Due Date actually payable (whether or not in fact paid) by the Owner
Trustee on the overdue scheduled interest on the Equipment Notes in respect of
which such Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension
Advance was made, multiplied by (y) a fraction the numerator of which shall be
the then aggregate overdue amounts of interest on the Series A Equipment Notes,
Series B Equipment Notes and Series C Equipment Notes (other than interest
becoming due and payable solely as a result of acceleration of any such
Equipment Notes) and the denominator of which shall be the then aggregate
overdue amounts of interest on all "Series A Equipment Notes", "Series B
Equipment Notes" and "Series C Equipment Notes" (each as defined in the Note
Purchase Agreement) (other than interest becoming due and payable solely as a
result of acceleration of any such "Equipment Notes"). For purposes of this
paragraph, the terms "Applied Downgrade Advance", "Applied Non-Extension
Advance", "Cash Collateral Account", "Downgrade Advance", "Final Advance",
"Investment Earnings", "Non-Extension Advance" and "Unpaid Advance" shall have
the meanings specified in each Liquidity Facility or the Intercreditor Agreement
referred to therein.
The Equipment Notes shall be executed on behalf of the Owner Trustee
by its President or one of its Vice Presidents, Assistant Vice Presidents or
Assistant Secretaries or other authorized officer. Equipment Notes bearing the
signatures of individuals who were at any time the proper officers of the Owner
Trustee shall bind the Owner Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Equipment Notes or did not hold such offices at the respective
dates of such Equipment Notes. The Owner Trustee may from time to time execute
and deliver Equipment Notes with respect to the Aircraft to the Mortgagee for
authentication upon original issue and such Equipment Notes shall thereupon be
authenticated and delivered by the Mortgagee upon the written request of the
Owner Trustee signed by a Vice President or Assistant Vice President or other
authorized officer of the Owner Trustee; PROVIDED, HOWEVER, that each such
request shall specify the aggregate Original Amount of all Equipment Notes to be
authenticated hereunder on original issue with respect to the Aircraft. No
Equipment Note shall be secured by or entitled to any benefit under this Trust
Indenture or be valid or obligatory for any purposes, unless there appears on
such Equipment Note a certificate of authentication in the form provided for
herein executed by the Mortgagee by the manual signature of one of its
authorized officers and such certificate upon any Equipment Notes be conclusive
evidence, and the only evidence, that such Equipment Note has been duly
authenticated and delivered hereunder.
The aggregate Original Amount of the Equipment Notes issued hereunder
shall not exceed __% of Lessor s Cost.
SECTION 2.03. PAYMENTS FROM TRUST INDENTURE ESTATE ONLY.
(a) Without impairing any of the other rights, powers, remedies,
privileges, liens or security interests of the Note Holders under this Trust
Indenture, each Note Holder, by its acceptance of an Equipment Note, agrees that
as between it and the Owner Trustee, except as expressly provided in this Trust
Indenture, the Participation Agreement or any other Operative Agreement, (i) the
obligation to make all payments of the Original Amount of, interest on,
Make-Whole Amount, if any, and all other amounts due with respect to the
Equipment Notes, and the performance by the Owner Trustee of every obligation or
covenant contained in this Trust Indenture and in the Participation Agreement or
any of the other Operative Agreements, shall be payable only from the income and
proceeds from the Trust Estate to the extent included in the Trust Indenture
Estate and only to the extent that the Owner Trustee shall have sufficient
income or proceeds from the Trust Estate to the extent included in the Trust
Indenture Estate to enable the Mortgagee to make such payments in accordance
with the terms of Article III hereof, and all of the statements,
representations, covenants and agreements made by the Owner Trustee (when made
in such capacity) contained in this Trust Indenture and any agreement referred
to herein other than the Trust Agreement, unless expressly otherwise stated, are
made and intended only for the purpose of binding the Trust Estate and
establishing the existence of rights and remedies which can be exercised and
enforced against the Trust Estate; therefore, anything contained in this Trust
Indenture or such other agreements to the contrary notwithstanding (except for
any express provisions or representations that the Owner Trustee is responsible
for, or is making, in its individual capacity, for which there would be personal
liability of the Owner Trustee), no recourse shall be had with respect to this
Trust Indenture or such other agreements against the Owner Trustee in its
individual capacity or against any institution or person which becomes a
successor trustee or co-trustee or any officer, director, trustee, servant or
direct or indirect parent or controlling Person or Persons of any of them, and
(ii) none of the Owner Trustee, in its individual capacity, the Owner
Participant, the Mortgagee and any officer, director, trustee, servant,
employee, agent or direct or indirect parent or controlling Person or Persons of
any of them shall have any personal liability for any amounts payable hereunder,
under the Participation Agreement or any of the other Operative Agreements or
under the Equipment Notes except as expressly provided herein, in the Lease or
in the Participation Agreement; PROVIDED, HOWEVER, that nothing contained in
this Section 2.03(a) shall be construed to limit the exercise and enforcement in
accordance with the terms of this Trust Indenture or such other agreements of
rights and remedies against the Trust Indenture Estate. These provisions are not
intended as any release or discharge of the indebtedness represented by the
Equipment Notes and the Trust Indenture, but are intended only as a covenant not
to sue the Owner Participant, the Owner Trustee or the Mortgagee in their
individual capacities, except as expressly provided herein or in the
Participation Agreement, for a deficiency with respect to such indebtedness, the
indebtedness represented by this Trust Indenture and the Equipment Notes to
remain in full force and effect as fully as though these provisions were not
contained in this Trust Indenture. The Owner Trustee hereby acknowledges that
the Note Holders have expressly reserved all their rights and remedies against
the Trust Indenture Estate, including the right, in the event of a default in
the payment of all or part of the Original Amount of, interest on, Make-Whole
Amount, if any, or any other amount due with respect to any Equipment Note
within the periods provided for in Section 4.02(b) hereof, or upon the
occurrence and continuation of any other Event of Default under this Trust
Indenture, to foreclose upon this Trust Indenture, and/or to receive the
proceeds from the Trust Indenture Estate and otherwise to enforce any other
right under this Trust Indenture. Nothing in this Section 2.03(a) shall (x)
release the Owner Participant from personal liability, or constitute a covenant
not to sue the Owner Participant, for any breach by it of any of its covenants,
representations or warranties contained in the Participation Agreement or for
any of the payments it has agreed to make pursuant to the Participation
Agreement or (y) release the Owner Trustee or constitute a covenant not to sue
the Owner Trustee for any breach by it of any representations, warranties or
covenants of the Owner Trustee contained in the Operative Agreements or (z)
release the Owner Trustee in its individual capacity from personal liability, or
constitute a covenant not to sue the Owner Trustee in its individual capacity
for any breach by it of any representations, warranties or covenants of the
Owner Trustee made in its individual capacity in the Operative Agreements.
(b) If (i) all or any part of the Trust Estate becomes the property
of, or the Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (ii) pursuant to such
reorganization provisions, including Section 1111(b) of the Bankruptcy Code, the
Owner Trustee (in its individual capacity) or the Owner Participant is required,
by reason of the Owner Trustee (in its individual capacity) or the Owner
Participant being held to have recourse liability to any Note Holder or the
Mortgagee, directly or indirectly (other than the recourse liability of the
Owner Trustee (in its individual capacity) or the Owner Participant under the
Participation Agreement, the Lease or this Trust Indenture or by separate
agreement), to make payment on account of any amount payable as principal,
Make-Whole Amount, if any, interest or other amounts on the Equipment Notes and
(iii) any Note Holder or the Mortgagee actually receives any Excess Amount (as
hereinafter defined) which reflects any payment by the Owner Trustee (in its
individual capacity) or the Owner Participant on account of clause (ii) above,
then such Note Holder or the Mortgagee, as the case may be, shall promptly
refund to the Owner Trustee (in its individual capacity) or the Owner
Participant (whichever shall have made such payment) such Excess Amount.
For purposes of this Section 2.03(b), "Excess Amount" means the amount
by which such payment exceeds the amount that would have been received by a Note
Holder or the Trustee if the Owner Trustee (in its individual capacity) or the
Owner Participant had not become subject to the recourse liability referred to
in clause (ii) above. Nothing contained in this Section 2.03(b) shall prevent a
Note Holder or the Mortgagee from enforcing any personal recourse obligation
(and retaining the proceeds thereof) of the Owner Trustee (in its individual
capacity) or the Owner Participant under the Participation Agreement, the Lease
or this Trust Indenture (and any exhibits or annexes hereto or thereto) or from
retaining any amount paid by Owner Participant under Section 2.13 or 4.03
hereof.
SECTION 2.04. METHOD OF PAYMENT.
(a) The Original Amount of, interest on, Make-Whole Amount, if any,
and other amounts due under each Equipment Note or hereunder will be payable in
Dollars by wire transfer of immediately available funds not later than 12:30
p.m., New York City time, on the due date of payment to the Mortgagee at the
Corporate Trust Office for distribution among the Note Holders in the manner
provided herein. The Owner Trustee shall not have any responsibility for the
distribution of such payment to any Note Holder. Notwithstanding the foregoing
or any provision in any Equipment Note to the contrary, the Mortgagee will use
reasonable efforts to pay or cause to be paid, if so directed in writing by any
Note Holder (with a copy to the Owner Trustee), all amounts paid by the Owner
Trustee hereunder and under such holder s Equipment Note or Equipment Notes to
such holder or a nominee therefor (including all amounts distributed pursuant to
Article III of this Trust Indenture) by transferring, or causing to be
transferred, by wire transfer of immediately available funds in Dollars, prior
to 2:00 p.m., New York City time, on the due date of payment, to an account
maintained by such holder with a bank located in the continental United States
the amount to be distributed to such holder, for credit to the account of such
holder maintained at such bank. If the Mortgagee shall fail to make any such
payment as provided in the immediately foregoing sentence after its receipt of
funds at the place and prior to the time specified above, the Mortgagee, in its
individual capacity and not as trustee, agrees to compensate such holders for
loss of use of funds at the Debt Rate until such payment is made and the
Mortgagee shall be entitled to any interest earned on such funds until such
payment is made. Any payment made hereunder shall be made without any
presentment or surrender of any Equipment Note, except that, in the case of the
final payment in respect of any Equipment Note, such Equipment Note shall be
surrendered to the Mortgagee for cancellation promptly after such payment.
Notwithstanding any other provision of this Trust Indenture to the contrary, the
Mortgagee shall not be required to make, or cause to be made, wire transfers as
aforesaid prior to the first Business Day on which it is practicable for the
Mortgagee to do so in view of the time of day when the funds to be so
transferred were received by it if such funds were received after 12:30 p.m.,
New York City time, at the place of payment. Prior to the due presentment for
registration of transfer of any Equipment Note, the Owner Trustee and the
Mortgagee shall deem and treat the Person in whose name any Equipment Note is
registered on the Equipment Note Register as the absolute owner and holder of
such Equipment Note for the purpose of receiving payment of all amounts payable
with respect to such Equipment Note and for all other purposes, and none of the
Owner Trustee or the Mortgagee shall be affected by any notice to the contrary.
So long as any signatory to the Participation Agreement or nominee thereof shall
be a registered Note Holder, all payments to it shall be made to the account of
such Note Holder specified in Schedule I thereto and otherwise in the manner
provided in or pursuant to the Participation Agreement unless it shall have
specified some other account or manner of payment by notice to the Mortgagee
consistent with this Section 2.04.
(b) The Mortgagee, as agent for the Owner Trustee, shall exclude and
withhold at the appropriate rate from each payment of Original Amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or under
each Equipment Note (and such exclusion and withholding shall constitute payment
in respect of such Equipment Note) any and all United States withholding taxes
applicable thereto as required by Law. The Mortgagee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
United States taxes or similar charges are required to be withheld with respect
to any amounts payable hereunder or in respect of the Equipment Notes, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to the Owner Trustee and the Lessee) appropriate receipts
showing the payment thereof, together with such additional documentary evidence
as any such Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Mortgagee a properly completed, accurate and currently effective U.S. Internal
Revenue Service Form 1001 or W-8 (or such successor form or forms as may be
required by the United States Treasury Department) during the calendar year in
which the payment hereunder or under the Equipment Note(s) held by such holder
is made (but prior to the making of such payment), or in either of the two
preceding calendar years, and has not notified the Mortgagee of the withdrawal
or inaccuracy of such form prior to the date of such payment (and the Mortgagee
has no reason to believe that any information set forth in such form is
inaccurate), the Mortgagee shall withhold only the amount, if any, required by
Law (after taking into account any applicable exemptions properly claimed by the
Note Holder) to be withheld from payments hereunder or under the Equipment Notes
held by such holder in respect of United States federal income tax. If a Note
Holder (x) which is a Non-U.S. Person has furnished to the Mortgagee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
4224 in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order to
properly avoid withholding of United States federal income tax), for each
calendar year in which a payment is made (but prior to the making of any payment
for such year), and has not notified the Mortgagee of the withdrawal or
inaccuracy of such certificate or form prior to the date of such payment (and
the Mortgagee has no reason to believe that any information set forth in such
form is inaccurate) or (y) which is a U.S. Person has furnished to the Mortgagee
a properly completed, accurate and currently effective U.S. Internal Revenue
Service Form W-9, if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from payments
in respect of United States federal income tax. If any Note Holder has notified
the Mortgagee that any of the foregoing forms or certificates is withdrawn or
inaccurate, or if such holder has not filed a form claiming an exemption from
United States withholding tax or if the Code or the regulations thereunder or
the administrative interpretation thereof is at any time after the date hereof
amended to require such withholding of United States federal income taxes from
payments under the Equipment Notes held by such holder, the Mortgagee agrees to
withhold from each payment due to the relevant Note Holder withholding taxes at
the appropriate rate under Law and will, on a timely basis as more fully
provided above, deposit such amounts with an authorized depository and make such
returns, statements, receipts and other documentary evidence in connection
therewith as required by Law.
Neither the Owner Trustee nor the Owner Participant shall have any
liability for the failure of the Mortgagee to withhold taxes in the manner
provided for herein or for any false, inaccurate or untrue evidence provided by
any Note Holder hereunder, and Mortgagee shall pay, indemnify, protect, defend
and hold the Owner Participant and the Owner Trustee harmless on an after-tax
basis against any Taxes imposed as a result of such failure by the Mortgagee.
SECTION 2.05. APPLICATION OF PAYMENTS.
In the case of each Equipment Note, each payment of Original Amount,
Make-Whole Amount, if any, and interest due thereon shall be applied:
First: to the payment of accrued interest on such Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and to the extent permitted by Law, any overdue interest
and any other overdue amounts thereunder) to the date of such payment;
Second: to the payment of the Original Amount of such Equipment Note
(or a portion thereof) then due thereunder;
Third: to the payment of Make-Whole Amount, if any, and any other
amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the payment of
the Original Amount of such Equipment Note remaining unpaid (provided that
such Equipment Note shall not be subject to redemption except as provided
in Sections 2.10, 2.11 and 2.12 hereof).
The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Original Amount of such Equipment Note in the inverse order of
their normal maturity.
SECTION 2.06. TERMINATION OF INTEREST IN TRUST INDENTURE ESTATE.
No Note Holder shall, as such, have any further interest in, or other
right with respect to, the Trust Indenture Estate when and if the Original
Amount of, Make-Whole Amount, if any, and interest on and other amounts due
under all Equipment Notes held by such Note Holder and all other sums then due
and payable to such Note Holder or the Mortgagee hereunder (including, without
limitation, under the third paragraph of Section 2.02 hereof) and under the
other Operative Agreements by the Owner Trustee (collectively, the "Secured
Obligations") shall have been paid in full.
SECTION 2.07. REGISTRATION TRANSFER AND EXCHANGE OF EQUIPMENT NOTES.
The Mortgagee shall keep a register (the "Equipment Note Register") in
which the Mortgagee shall provide for the registration of Equipment Notes and
the registration of transfers of Equipment Notes. No such transfer shall be
given effect unless and until registration hereunder shall have occurred. The
Equipment Note Register shall be kept at the Corporate Trust Office of the
Mortgagee. The Mortgagee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Mortgagee at the
Corporate Trust Office, together with a written request from the registered
holder thereof for the issuance of a new Equipment Note, specifying, in the case
of a surrender for transfer, the name and address of the new holder or holders.
Upon surrender for registration of transfer of any Equipment Note, the Owner
Trustee shall execute, and the Mortgagee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Equipment
Notes of a like aggregate Original Amount and of the same series. At the option
of the Note Holder, Equipment Notes may be exchanged for other Equipment Notes
of any authorized denominations of a like aggregate Original Amount, upon
surrender of the Equipment Notes to be exchanged to the Mortgagee at the
Corporate Trust Office. Whenever any Equipment Notes are so surrendered for
exchange, the Owner Trustee shall execute, and the Mortgagee shall authenticate
and deliver, the Equipment Notes which the Note Holder making the exchange is
entitled to receive. All Equipment Notes issued upon any registration of
transfer or exchange of Equipment Notes (whether under this Section 2.07 or
under Section 2.08 hereof or otherwise under this Trust Indenture) shall be the
valid obligations of the Owner Trustee evidencing the same respective
obligations, and entitled to the same security and benefits under this Trust
Indenture, as the Equipment Notes surrendered upon such registration of transfer
or exchange. Every Equipment Note presented or surrendered for registration of
transfer shall (if so required by the Mortgagee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Mortgagee duly executed by the Note Holder or such holder s attorney duly
authorized in writing, and the Mortgagee shall require evidence satisfactory to
it as to the compliance of any such transfer with the Securities Act, and the
securities Laws of any applicable state. The Mortgagee shall make a notation on
each new Equipment Note of the amount of all payments of Original Amount
previously made on the old Equipment Note or Equipment Notes with respect to
which such new Equipment Note is issued and the date to which interest on such
old Equipment Note or Equipment Notes has been paid. Interest shall be deemed to
have been paid on such new Equipment Note to the date on which interest shall
have been paid on such old Equipment Note, and all payments of the Original
Amount marked on such new Equipment Note, as provided above, shall be deemed to
have been made thereon. The Owner Trustee shall not be required to exchange any
surrendered Equipment Notes as provided above during the ten-day period
preceding the due date of any payment on such Equipment Note. The Owner Trustee
shall in all cases deem the Person in whose name any Equipment Note shall have
been issued and registered as the absolute owner and holder of such Equipment
Note for the purpose of receiving payment of all amounts payable by the Owner
Trustee with respect to such Equipment Note and for all purposes until a notice
stating otherwise is received from the Mortgagee and such change is reflected on
the Equipment Note Register. The Mortgagee will promptly notify the Owner
Trustee and the Lessee of each registration of a transfer of an Equipment Note.
Any such transferee of an Equipment Note, by its acceptance of an Equipment
Note, agrees to the provisions of the Participation Agreement applicable to Note
Holders, and shall be deemed to have covenanted to the parties to the
Participation Agreement as to the matters covenanted by the original Loan
Participant in the Participation Agreement. Subject to compliance by the Note
Holder and its transferee (if any) of the requirements set forth in this Section
2.07, Mortgagee and Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes upon transfer or exchange within 10 Business Days of the date an
Equipment Note is surrendered for transfer or exchange.
SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN EQUIPMENT NOTES.
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the holder of such
Equipment Note, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Equipment Note, payable in the same Original Amount
dated the same date and captioned as issued in connection with the Aircraft. If
the Equipment Note being replaced has become mutilated, such Equipment Note
shall be surrendered to the Mortgagee and a photocopy thereof shall be furnished
to the Owner Trustee. If the Equipment Note being replaced has been destroyed,
lost or stolen, the holder of such Equipment Note shall furnish to the Owner
Trustee and the Mortgagee such security or indemnity as may be required by them
to save the Owner Trustee and the Mortgagee harmless and evidence satisfactory
to the Owner Trustee and the Mortgagee of the destruction, loss or theft of such
Equipment Note and of the ownership thereof. If a "qualified institutional
buyer" of the type referred to in paragraph (a)(1)(i)(A), (B), (D) or (E) of
Rule 144A under the Securities Act (a "QIB") is the holder of any such
destroyed, lost or stolen Equipment Note, then the written indemnity of such
QIB, signed by an authorized officer thereof, in favor of, delivered to and in
form reasonably satisfactory to Lessee, Owner Trustee and Mortgagee shall be
accepted as satisfactory indemnity and security and no further indemnity or
security shall be required as a condition to the execution and delivery of such
new Equipment Note. Subject to compliance by the Note Holder of the requirements
set forth in this Section 2.08, Mortgagee and Owner Trustee shall use all
reasonable efforts to issue new Equipment Notes within 10 Business Days of the
date of the written request therefor from the Note Holder.
SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Mortgagee, as
Equipment Note Registrar, may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Equipment Notes.
(b) The Mortgagee shall cancel all Equipment Notes surrendered for
replacement, redemption, transfer, exchange, payment or cancellation and shall
destroy the canceled Equipment Notes.
SECTION 2.10. MANDATORY REDEMPTIONS OF EQUIPMENT NOTES.
(a) On the date on which Lessee is required pursuant to Section 10.1.2
of the Lease to make payment for an Event of Loss with respect to the Aircraft,
all of the Equipment Notes shall be redeemed in whole at a redemption price
equal to 100% of the unpaid Original Amount thereof, together with all accrued
interest thereon to the date of redemption and all other Secured Obligations
owed or then due and payable to the Note Holders but without Make-Whole Amount.
(b) If the Lease is terminated with respect to the Aircraft by Lessee
pursuant to Section 9 thereof, on the date the Lease is so terminated, all the
Equipment Notes shall be redeemed in whole at a redemption price equal to 100%
of the unpaid Original Amount thereof, together with accrued interest thereon to
the date of redemption and all other amounts then due and payable hereunder and
under the Participation Agreement and all other Operative Agreements to the Note
Holders plus, if such redemption is made prior to the Premium Termination Date,
Make-Whole Amount, if any.
SECTION 2.11. VOLUNTARY REDEMPTIONS OF EQUIPMENT NOTES.
All (but not less than all) of the Equipment Notes may be redeemed by
the Owner Trustee in connection with a transaction described in, and subject to
the terms and conditions of, Section 11 of the Participation Agreement upon at
least 30 days revocable prior written notice to the Mortgagee and the Note
Holders, and the Equipment Notes shall, as provided in Section 11 of the
Participation Agreement, be redeemed in whole at a redemption price equal to
100% of the unpaid Original Amount thereof, together with accrued interest
thereon to the date of redemption and all other Secured Obligations owed or then
due and payable to the Note Holders plus (except as provided in Section 11 of
the Participation Agreement), if such redemption is made prior to the Premium
Termination Date, Make-Whole Amount, if any.
SECTION 2.12 REDEMPTIONS; NOTICE OF REDEMPTION.
(a) Neither any redemption of any Equipment Note nor any purchase by
the Owner Trustee of any Equipment Note may be made except to the extent and in
the manner expressly permitted by this Trust Indenture. No purchase of any
Equipment Note may be made by the Mortgagee.
(b) Notice of redemption or purchase with respect to the Equipment
Notes shall be given by the Mortgagee by first-class mail, postage prepaid,
mailed not less than 25 nor more than 60 days prior to the applicable redemption
date, to each Note Holder of such Equipment Notes to be redeemed or purchased,
at such Note Holder s address appearing in the Equipment Note Register; PROVIDED
that, in the case of a redemption to be made pursuant to Section 2.10(b) or
Section 2.11, such notice shall be revocable and shall be deemed revoked in the
event that the Lease does not in fact terminate on the specified termination
date or if notice of such redemption shall have been given in connection with a
refinancing of Equipment Notes and the Mortgagee receives written notice of such
revocation from the Lessee or the Owner Trustee not later than three days prior
to the redemption date. All notices of redemption shall state: (1) the
redemption date, (2) the applicable basis for determining the redemption price,
(3) that on the redemption date, the redemption price will become due and
payable upon each such Equipment Note, and that, if any such Equipment Notes are
then outstanding, interest on such Equipment Notes shall cease to accrue on and
after such redemption date, and (4) the place or places where such Equipment
Notes are to be surrendered for payment of the redemption price.
(c) On or before the redemption date, the Owner Trustee (or any person
on behalf of the Owner Trustee) shall, to the extent an amount equal to the
redemption price for the Equipment Notes to be redeemed or purchased on the
redemption date shall not then be held in the Trust Indenture Estate, deposit or
cause to be deposited with the Mortgagee by 12:00 noon on the redemption date in
immediately available funds the redemption price of the Equipment Notes to be
redeemed or purchased.
(d) Notice of redemption or purchase having been given as aforesaid
(and not deemed revoked as contemplated in the proviso to Section 2.12(b)), the
Equipment Notes to be redeemed or purchased shall, on the redemption date,
become due and payable at the Corporate Trust Office of the Mortgagee or at any
office or agency maintained for such purposes pursuant to Section 2.07, and from
and after such redemption date (unless there shall be a default in the payment
of the redemption price) any such Equipment Notes then outstanding shall cease
to bear interest. Upon surrender of any such Equipment Note for redemption or
purchase in accordance with said notice, such Equipment Note shall be redeemed
at the redemption price. If any Equipment Note called for redemption or purchase
shall not be so paid upon surrender thereof for redemption, the principal amount
thereof shall, until paid, continue to bear interest from the applicable
redemption date at the interest rate in effect for such Equipment Note as of
such redemption date.
SECTION 2.13. OPTION TO PURCHASE EQUIPMENT NOTES.
The Owner Trustee and the Owner Participant may, upon the events and
subject to the terms and conditions and for the price set forth in this Section
2.13, purchase all but not less than all of the Equipment Notes outstanding
hereunder, and each Note Holder agrees that it will, upon such events and
subject to such terms and conditions and upon receipt of such price, sell,
assign, transfer and convey to such purchaser or its nominee (without recourse
or warranty of any kind except against Liens on such Equipment Notes arising by,
through or under such holder), all of the right, title and interest of such Note
Holder in and to the Equipment Notes held by it, and such purchaser or its
nominee shall assume all of such holder s obligations under the Participation
Agreement and hereunder.
Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant at any time following the occurrence of
any of the following events, and in any such event the purchase price thereof
shall equal for each Equipment Note, the aggregate unpaid Original Amount
thereof, plus accrued and unpaid interest thereon to, but not including, the
date of purchase and all other Secured Obligations owed, or then due and payable
hereunder, to the holder thereof (including under the third paragraph of Section
2.02 hereof). Such option to purchase the Equipment Notes may be exercised (x)
upon a Mortgagee Event or (y) in the event there shall have occurred and be
continuing a Lease Event of Default PROVIDED that if such option is exercised
pursuant to clause (y) at a time prior to the Premium Termination Date when
there shall have occurred and be continuing for less than 120 days a Lease Event
of Default, the purchase price thereof shall equal the price provided in the
preceding sentence plus the Make-Whole Amount, if any.
Such option to purchase the Equipment Notes may be exercised by the
Owner Trustee or the Owner Participant giving written notice of its election of
such option to the Mortgagee, which notice shall specify a date for such
purchase within 30 days of the date of such notice. The Mortgagee shall not
exercise any of the remedies hereunder and, without the consent of the Owner
Trustee or the Owner Participant, under the Lease, during the period from the
time that an exercise by the Owner Participant of such option to purchase
becomes irrevocable until the date on which such purchase is required to occur
pursuant to the terms of the preceding sentence. Such election to purchase the
Equipment Notes shall become irrevocable upon the sixteenth day following the
giving of written notice as provided above.
If the Owner Trustee or the Owner Participant on or before the date of
such purchase shall so request, the Note Holders will comply with all the
provisions of Section 2.07 to enable new Equipment Notes to be issued to the
Owner Trustee or the Owner Participant or its nominee in such denominations as
the Owner Trustee or the Owner Participant shall request. All taxes, charges and
expenses required pursuant to Section 2.09 in connection with the issuance of
such new Equipment Note shall be borne by the Owner Participant.
SECTION 2.14. SUBORDINATION.
(a) The Owner Trustee and, by acceptance of its Equipment Notes of any
Series, each Note Holder of such Series, hereby agree that no payment or
distribution shall be made on or in respect of the Secured Obligations owed to
such Note Holder of such Series, including any payment or distribution of cash,
property or securities after the commencement of a proceeding of the type
referred to in Section 4.02(g) hereof, except as expressly provided in Article
III hereof.
(b) By the acceptance of its Equipment Notes of any Series (other than
Series A), each Note Holder of such Series agrees that in the event that such
Note Holder, in its capacity as a Note Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to receive under this Section 2.14 or Article III hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.14(c) hereof) and will forthwith turn over such payment to the
Mortgagee in the form received to be applied as provided in Article III hereof.
(c) As used in this Section 2.14, the term "Senior Holder" shall mean,
(i) the Note Holders of Series A until the Secured Obligations in respect of
Series A Equipment Notes have been paid in full, (ii) after the Secured
Obligations in respect of Series A Equipment Notes have been paid in full, the
Note Holders of Series B until the Secured Obligations in respect of Series B
Equipment Notes have been paid in full and (iii) after the Secured Obligations
in respect of Series B Equipment Notes have been paid in full, the Note Holders
of Series C until the Secured Obligations in respect of Series C Equipment Notes
have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. BASIC RENT DISTRIBUTION.
Except as otherwise provided in Sections 3.02 and 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments of
Basic Rent and any payment received by the Mortgagee pursuant to Section 4.03
hereof shall be promptly distributed in the following order of priority:
FIRST, (i) so much of such installment or payment as shall be
required to pay in full the aggregate ----- amount of
the payment or payments of Original Amount and interest
(as well as any interest on any overdue Original Amount
and, to the extent permitted by Law, on any overdue
interest) then due under all Series A Equipment Notes
shall be distributed to the Note Holders of Series A
ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments
then due under each Series A Equipment Note bears to
the aggregate amount of the payments then due under all
Series A Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of
such installment or payment remaining as shall be
required to pay in full the aggregate amount of the
payment or payments of Original Amount and interest (as
well as any interest on any overdue Original Amount
and, to the extent permitted by Law, on interest) then
due under all Series B Equipment Notes shall be
distributed to the Note Holders of Series B ratably,
without priority of one over the other, in the
proportion that the amount of such payment or payments
then due under each Series B Equipment Note bears to
the aggregate amount of the payments then due under all
Series B Equipment Notes; and
(iii) after giving effect to paragraph (ii) above, so much of
such installment or payment remaining as shall be
required to pay in full the aggregate amount of the
payment or payments of Original Amount and interest (as
well as any interest on any overdue Original Amount
and, to the extent permitted by Law, on any overdue
interest) then due under all Series C Equipment Notes
shall be distributed to the Note Holders of Series C
ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments
then due under each Series C Equipment Note bears to
the aggregate amount of the payments then due under all
Series C Equipment Notes; and
SECOND, the balance, if any, of such installment remaining
thereafter shall be distributed to the Owner Trustee;
PROVIDED, HOWEVER, that if an Event of Default shall
have occurred and be continuing, then such balance
shall not be distributed as provided in this clause
"Second" but shall be held by the Mortgagee as part of
the Trust Indenture Estate and invested in accordance
with Section 5.09 hereof until whichever of the
following shall first occur: (i) all Events of Default
shall have been cured or waived, in which event such
balance shall be distributed as provided in this clause
"Second", (ii) Section 3.03 hereof shall be applicable,
in which event such balance shall be distributed in
accordance with the provisions of such Section 3.03, or
(iii) the 120th day after the receipt of such payment
in which case such payment shall be distributed as
provided in this clause "Second".
SECTION 3.02. EVENT OF LOSS; REPLACEMENT; VOLUNTARY TERMINATION;
OPTIONAL REDEMPTION.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Mortgagee (i) with respect to the Airframe or the Airframe and
one or more Engines as the result of an Event of Loss, (ii) pursuant to a
voluntary termination of the Lease pursuant to Section 9 thereof, or (iii)
pursuant to an optional redemption of the Equipment Notes pursuant to Section 11
of the Participation Agreement shall be applied to redemption of the Equipment
Notes and to all other Secured Obligations by applying such funds in the
following order of priority:
FIRST, (a) to reimburse the Mortgagee and the Note Holders for any
reasonable costs or expenses incurred in connection
with such redemption for which they are entitled to
reimbursement, or indemnity by Lessee, under the
Operative Agreements and then (b) to pay any other
amounts then due to the Mortgagee and the Note Holders
under this Trust Indenture, the Participation Agreement
or the Equipment Notes;
SECOND, (i) to pay the amounts specified in paragraph (i) of clause
"Third" of Section 3.03 hereof plus Make-Whole Amount,
if any, then due and payable in respect of the Series A
Equipment Notes;
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "Third"
of Section 3.03 hereof plus Make-Whole Amount, if any,
then due and payable in respect of the Series B
Equipment Notes; and
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "Third"
of Section 3.03 hereof plus Make-Whole Amount, if any,
then due and payable in respect of the Series C
Equipment Notes; and
THIRD, as provided in clause "Fourth" of Section 3.03 hereof;
PROVIDED, HOWEVER, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in Section 10 of the Lease and in accordance with Section 5.06 hereof, any
insurance, condemnation or similar proceeds which result from such Event of Loss
and are paid over to the Mortgagee shall be held by the Mortgagee as permitted
by Section 6.04 hereof (provided that such moneys shall be invested as provided
in Section 5.09 hereof) as additional security for the obligations of Lessee
under the Lessee Operative Agreements and, unless otherwise applied pursuant to
the Lease, such proceeds (and such investment earnings) shall be released to the
Lessee at the Lessee s written request upon the release of such damaged Airframe
or Engine and the replacement thereof as provided in the Lease.
SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Mortgagee (including any amounts
realized by the Mortgagee from the exercise of any remedies pursuant to Section
15 of the Lease or Article IV hereof) after an Event of Default shall have
occurred and be continuing and after the declaration specified in Section
4.04(b) hereof, as well as all payments or amounts then held by the Mortgagee as
part of the Trust Indenture Estate, shall be promptly distributed by the
Mortgagee in the following order of priority:
FIRST, so much of such payments or amounts as shall be required to
reimburse the Mortgagee or WTC for any tax (except to the
extent resulting from a failure of the Mortgagee to withhold
taxes pursuant to Section 2.04(b) hereof), expense or other
loss (including, without limitation, all amounts to be
expended at the expense of, or charged upon the rents,
revenues, issues, products and profits of, the property
included in the Trust Indenture Estate (all such property
being herein called the "Mortgaged Property") pursuant to
Section 4.05(b) hereof) incurred by the Mortgagee or WTC (to
the extent not previously reimbursed), the expenses of any
sale, or other proceeding, reasonable attorneys fees and
expenses, court costs, and any other expenditures incurred
or expenditures or advances made by the Mortgagee, WTC or
the Note Holders in the protection, exercise or enforcement
of any right, power or remedy or any damages sustained by
the Mortgagee, WTC or any Note Holder, liquidated or
otherwise, upon such Event of Default shall be applied by
the Mortgagee as between itself, WTC and the Note Holders in
reimbursement of such expenses and any other expenses for
which the Mortgagee, WTC or the Note Holders are entitled to
reimbursement under any Operative Agreement and (ii) any and
all amounts payable to WTC or the Mortgagee hereunder; and
in the case the aggregate amount to be so distributed is
insufficient to pay as aforesaid in clauses (i) and (ii),
then ratably, without priority of one over the other, in
proportion to the amounts owed each hereunder;
SECOND, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Note
Holders for payments made pursuant to Section 5.03 hereof
(to the extent not previously reimbursed) shall be
distributed to such then existing or prior Note Holders
ratably, without priority of one over the other, in
accordance with the amount of the payment or payments made
by each such then existing or prior Note Holder pursuant to
said Section 5.03 hereof;
THIRD, (i) so much of such payments or amounts remaining as shall
be required to pay in full the aggregate unpaid
Original Amount of all Series A Equipment Notes, and
the accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Amount which shall not
be due and payable) and all other Secured Obligations
in respect of the Series A Equipment Notes (other than
Make-Whole Amount) to the date of distribution, shall
be distributed to the Note Holders of Series A, and in
case the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of
all Series A Equipment Notes held by each holder plus
the accrued but unpaid interest and other amounts due
hereunder or thereunder (other than Make-Whole Amount,
if any) to the date of distribution, bears to the
aggregate unpaid Original Amount of all Series A
Equipment Notes held by all such holders plus the
accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Amount) to the date of
distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required
to pay in full the aggregate unpaid Original Amount of
all Series B Equipment Notes, and the accrued but
unpaid interest and other amounts due thereon (other
than Make-Whole Amount which shall not be due and
payable) and all other Secured Obligations in respect
of the Series B Equipment Notes (other than Make-Whole
Amount) to the date of distribution, shall be
distributed to the Note Holders of Series B, and in
case the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of
all Series B Equipment Notes held by each holder plus
the accrued but unpaid interest and other amounts due
hereunder or thereunder (other than the Make-Whole
Amount, if any) to the date of distribution, bears to
the aggregate unpaid Original Amount of all Series B
Equipment Notes held by all such holders plus the
accrued but unpaid interest and other amounts due
thereon (other than the Make-Whole Amount) to the date
of distribution; and
(iii) after giving effect to paragraph (ii) above, so much
of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Original
Amount of all Series C Equipment Notes, and the accrued
but unpaid interest and other amounts due thereon
(other than Make-Whole Amount which shall not be due
and payable) and all other Secured Obligations in
respect of the Series C Equipment Notes (other than
Make-Whole Amount) to the date of distribution, shall
be distributed to the Note Holders of Series C, and in
case the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of
all Series C Equipment Notes held by each holder plus
the accrued but unpaid interest and other amounts due
hereunder or thereunder (other than the Make-Whole
Amount, if any) to the date of distribution, bears to
the aggregate unpaid Original Amount of all Series C
Equipment Notes held by all such holders plus the
accrued but unpaid interest and other amounts due
thereon (other than the Make-Whole Amount) to the date
of distribution; and
FOURTH, the balance, if any, of such payments or amounts
remaining thereafter shall be distributed to the Owner
Trustee.
No Make-Whole Amount shall be due and payable on the Equipment Notes
as a consequence of the acceleration of the Equipment Notes as a result of an
Event of Default.
SECTION 3.04. CERTAIN PAYMENTS.
(a) Any payments received by the Mortgagee for which no provision as
to the application thereof is made in this Trust Indenture and for which such
provision is made in the Lease or the Participation Agreement shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms of the Lease or the Participation Agreement, as the case may be.
(b) Notwithstanding anything to the contrary contained in this Article
III, the Mortgagee will distribute promptly upon receipt any indemnity payment
received by it from the Owner Trustee or Lessee in respect of the Mortgagee in
its individual capacity, any Note Holder, (i) WTC and the Mortgagee, (ii) each
separate or additional Trustee appointed pursuant to the Trust Indenture or
(iii) the Pass Through Indemnitees , in each case whether pursuant to Section 9
of the Participation Agreement or as Supplemental Rent, directly to the Person
entitled thereto. Subject to the foregoing sentence of this Section 3.04(b), any
payment received by the Mortgagee under the third paragraph of Section 2.02
shall be distributed to the Subordination Agent to be distributed in accordance
with the terms of the Intercreditor Agreement.
(c) Notwithstanding anything to the contrary contained in this Article
III, any payments received by the Mortgagee which constitute Excluded Payments
shall be distributed promptly upon receipt by the Mortgagee directly to the
Person or Persons entitled thereto.
(d) Notwithstanding any provision of this Trust Indenture to the
contrary, any amounts held by Mortgagee pursuant to the terms of the Lease [or
any Permitted Sublease assignment] shall be held by the Mortgagee as
security for the obligations of Lessee under the Lessee Operative Agreements
and, if and when required by the Lease, paid and/or applied in accordance with
the applicable provisions of the Lease.
SECTION 3.05. OTHER PAYMENTS.
Any payments received by the Mortgagee for which no provision as to
the application thereof is made in the Lease, the Participation Agreement,
elsewhere in this Trust Indenture or in any other Operative Agreement shall be
distributed by the Mortgagee to the extent received or realized at any time (i)
prior to the payment in full of all Secured Obligations due the Note Holders, in
the order of priority specified in Section 3.01 hereof subject to the proviso
thereto, and (ii) after payment in full of all Secured Obligations, in the
following order of priority:
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
FIRST, to the extent payments or amounts described in clause "First" of
Section 3.03 hereof are otherwise obligations of Lessee under the
Operative Agreements or for which the Lessee is obligated to
indemnify against thereunder, in the manner provided in clause
"First" of Section 3.03 hereof, and
SECOND, in the manner provided in clause "Fourth" of Section 3.03 hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and
3.04 hereof, all payments received and amounts realized by the Mortgagee under
the Lease or otherwise with respect to the Aircraft (including, without
limitation, all amounts realized upon the sale or release of the Aircraft after
the termination of the Lease with respect thereto), to the extent received or
realized at any time after payment in full of all Secured Obligations due the
Note Holders, shall be distributed by the Mortgagee in the order of priority
specified in clause (ii) of the immediately preceding sentence of this Section
3.05.
SECTION 3.06. PAYMENTS TO OWNER TRUSTEE.
Any amounts distributed hereunder by the Mortgagee to the Owner
Trustee shall be paid to the Owner Trustee (within the time limits contemplated
by Section 2.04(a)) by wire transfer of funds of the type received by the
Mortgagee at such office and to such account or accounts of such entity or
entities as shall be designated by notice from the Owner Trustee to the
Mortgagee from time to time. The Owner Trustee hereby notifies the Mortgagee
that unless and until the Mortgagee receives notice to the contrary from the
Owner Trustee, all amounts to be distributed to the Owner Trustee pursuant to
clause "Second" of Section 3.01 or clause "Fourth" of Section 3.03 hereof shall
be distributed by wire transfer of funds of the type received by the Mortgagee
to the Owner Participant s account (within the time limits contemplated by
Section 2.04(a)) specified in Schedule 1 to the Participation Agreement.
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF MORTGAGEE
SECTION 4.01. COVENANTS OF OWNER TRUSTEE.
The Owner Trustee hereby covenants and agrees (the covenants and
agreements only in clause (b) below being made by the Owner Trustee in its
individual capacity) as follows:
(a) the Owner Trustee will duly and punctually pay the Original Amount
of, Make-Whole Amount, if any, and interest on and other amounts due under the
Equipment Notes and hereunder in accordance with the terms of the Equipment
Notes and this Trust Indenture and all amounts, if any, payable by it to the
Note Holders under the Participation Agreement or Section 9 of the Lease;
(b) the Owner Trustee in its individual capacity covenants and agrees
that it shall not, directly or indirectly, cause or permit to exist a Lessor
Lien attributable to it in its individual capacity with respect to the Aircraft
or any other portion of the Trust Estate; that it will promptly, at its own
expense, take such action as may be necessary to duly discharge such Lessor Lien
attributable to it in its individual capacity; and that it will make restitution
to the Trust Indenture Estate for any actual diminution of the assets of the
Trust Estate resulting from such Lessor Liens attributable to it in its
individual capacity;
(c) in the event the Owner Trustee shall have Actual Knowledge of an
Event of Default, a Default or an Event of Loss, the Owner Trustee will give
prompt written notice of such Event of Default, Default or Event of Loss to the
Mortgagee, each Note Holder, Lessee and the Owner Participant;
(d) the Owner Trustee will furnish to the Note Holders and the
Mortgagee, promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished to the
Owner Trustee under the Lease, including, without limitation, a copy of any
Termination Notice and a copy of each report or notice received pursuant to
Section 9 or 8.2 or Annex D, Paragraph E of the Lease to the extent that the
same shall not have been furnished or is not required to be furnished by the
Lessee to the Note Holders or the Mortgagee pursuant to the Lease;
(e) except with the consent of the Mortgagee (acting pursuant to
instructions given in accordance with Section 9.01 hereof) or as provided in
Sections 2, 11 and 16 of the Participation Agreement, the Owner Trustee will not
contract for, create, incur, assume or suffer to exist any Debt, and will not
guarantee (directly or indirectly or by an instrument having the effect of
assuring another s payment or performance on any obligation or capability of so
doing, or otherwise), endorse or otherwise be or become contingently liable,
directly or indirectly, in connection with the Debt of any other person; and
(f) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing thereof to
Lessee and the carrying out of the transactions contemplated hereby and by the
Lease, the Participation Agreement and the Trust Agreement and the other
Operative Agreements.
SECTION 4.02. EVENT OF DEFAULT.
"Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) any Lease Event of Default (provided that any such Lease Event of
Default caused solely by a failure of Lessee to pay to the Owner Trustee or the
Owner Participant when due any amount that is included in the definition of
Excluded Payments shall not constitute an Event of Default unless notice is
given by the Owner Trustee to the Mortgagee that such failure shall constitute
an Event of Default); or
(b) the failure of the Owner Trustee to pay when due any payment of
Original Amount of, interest on, Make-Whole Amount, if any, or other amount due
and payable under any Equipment Note or hereunder (other than as a result of a
Lease Event of Default or a Lease Default) and such failure shall have continued
unremedied for ten Business Days in the case of any payment of Original Amount
or interest or Make-Whole Amount, if any, thereon and, in the case of any other
amount, for ten Business Days after the Owner Trustee or the Owner Participant
receives written demand from the Mortgagee or any Note Holder; or
(c) any Lien required to be discharged by the Owner Trustee, in its
individual capacity pursuant to Section 4.01(b) hereof or in its individual or
trust capacity pursuant to Section 7.3.1 of the Participation Agreement, or by
the Owner Participant pursuant to Section 7.2.1 of the Participation Agreement
shall remain undischarged for a period of 30 days after the Owner Trustee or the
Owner Participant, as the case may be, shall have received written notice from
the Mortgagee or any Note Holder of such Lien; or
(d) any representation or warranty made by the Owner Participant or
the Owner Trustee in the Participation Agreement or this Trust Indenture or in
any certificate furnished by the Owner Participant or the Owner Trustee to the
Mortgagee or any Note Holder in connection with the transactions contemplated by
the Operative Agreements shall prove to have been false or incorrect when made
in any material respect and continues to be material and adverse to the
interests of the Mortgagee or the Note Holders; and if such misrepresentation is
capable of being corrected and if such correction is being sought diligently,
such misrepresentation shall not have been corrected within 60 days (or, without
affecting Section 4.02(f) hereof, in the case of the representation made in
Section 6.3.6 or 6.2.6 of the Participation Agreement as to citizenship of the
Owner Trustee in its individual capacity or of the Owner Participant,
respectively, as soon as is reasonably practicable but in any event within 60
days) following notice thereof from the Mortgagee or any Note Holder to the
Owner Trustee or the Owner Participant, as the case may be; or
(e) other than as provided in (c) above or (f) below, any failure by
the Owner Trustee or Owner Participant to observe or perform any other covenant
or obligation of the Owner Trustee or Owner Participant, as the case may be, for
the benefit of the Mortgagee or the Note Holders contained in the Participation
Agreement, Section 4.2.1 of the Trust Agreement, the Equipment Notes or this
Trust Indenture which is not remedied within a period of 60 days after notice
thereof has been given to the Owner Trustee and the Owner Participant; or
(f) if at any time when the Aircraft is registered under the Laws of
the United States, the Owner Participant shall not be a "citizen of the United
States" within the meaning of Section 40102(a)(15) of Part A of Subtitle VII of
Title 49, United States Code, and as the result thereof the registration of the
Aircraft under the Federal Aviation Act, and regulations then applicable
thereunder, shall cease to be effective; provided that no Event of Default shall
be deemed to have occurred under this paragraph (f) unless such circumstances
continue unremedied for more than 60 days after the Owner Participant has Actual
Knowledge of the state of facts that resulted in such ineffectiveness and of
such loss of citizenship; or
(g) at any time either (i) the commencement of an involuntary case or
other proceeding in respect of the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate under the federal bankruptcy Laws, as now constituted
or hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar Law in the United States or seeking the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Owner Participant, the Owner Trustee, the Trust or the
Trust Estate or for all or substantially all of its property, or seeking the
winding-up or liquidation of its affairs and the continuation of any such case
or other proceeding undismissed and unstayed for a period of 60 consecutive
days; or (ii) the commencement by the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate of a voluntary case or proceeding under the federal
bankruptcy Laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar Law in the
United States, or the consent by the Owner Participant, the Owner Trustee, the
Trust or the Trust Estate to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Owner Participant, the Owner Trustee, the Trust or the
Trust Estate or for all or substantially all of its property, or the making by
the Owner Participant, the Owner Trustee, the Trust or the Trust Estate of any
assignment for the benefit of creditors or the Owner Participant or the Owner
Trustee shall take any action to authorize any of the foregoing; PROVIDED,
HOWEVER, that an event referred to in this Section 4.02(g) with respect to the
Owner Participant shall not constitute an Event of Default if within 30 days of
the commencement of the case or proceeding a final non-appealable order,
judgment or decree shall be entered in such case or proceeding by a court or a
trustee, custodian, receiver or liquidator, to the effect that, no part of the
Trust Estate (except for the Owner Participant s beneficial interest therein)
and no right, title or interest under the Trust Indenture Estate shall be
included in, or be subject to, any declaration or adjudication of, or
proceedings with respect to, the bankruptcy, insolvency or liquidation of the
Owner Participant referred to in this Section 4.02(g).
SECTION 4.03. CERTAIN RIGHTS.
The Mortgagee shall give the Note Holders, the Owner Trustee and the
Owner Participant prompt written notice of any Event of Default of which the
Mortgagee has Actual Knowledge and shall give the Note Holders, the Owner
Trustee and the Owner Participant not less than ten Business Days prior written
notice of the date (the "Enforcement Date") on or after which the Mortgagee may,
subject to the limitation set forth in Section 4.04(a), commence and consummate
the exercise of any remedy or remedies described in Section 4.04, 4.05 or 4.06
hereof; provided, however, that in the event the Mortgagee shall have validly
terminated the Lease, the Mortgagee shall not sell or lease, or otherwise afford
the use of, the Aircraft or any portion thereof to the Lessee or any Affiliate
thereof. Without limiting the generality of the foregoing, the Mortgagee shall
give the Owner Trustee, the Owner Participant and the Lessee at least ten
Business Days prior written notice (which may be given concurrently with notice
of the Enforcement Date) of any declaration of the Lease to be in default
pursuant to Sections 14 and 15 of the Lease or any termination of the Lease or
of the exercise of any remedy or remedies pursuant to Section 15 of the Lease.
If an Event of Default shall have occurred and be continuing, the Owner Trustee
shall have the rights set forth below, any of which may be exercised directly by
the Owner Participant.
If as a result of the occurrence of an Event of Default in respect of
the nonpayment by Lessee of Basic Rent due under the Lease, the Mortgagee shall
have insufficient funds to make any payment of Original Amount and interest on
any Equipment Note on the day it becomes due and payable, the Owner Trustee may,
but shall not be obligated to pay the Mortgagee prior to the Enforcement Date,
in the manner provided in Section 2.04 hereof, for application in accordance
with Section 3.01 hereof, an amount equal to the portion of the Original Amount
and interest (including interest, if any, on any overdue payments of such
portion of Original Amount and interest) then due and payable on the Equipment
Notes, and, unless the Owner Trustee has cured Events of Default in respect of
payments of Basic Rent on each of the three immediately preceding Basic Rent
payment dates (or, for so long as any Affiliate of The Boeing Company is the
Owner Participant, six immediately preceding Basic Rent payment dates), or the
Owner Trustee has cured six previous Events of Default (or for so long as any
Affiliate of The Boeing Company is the Owner Participant, eight previous Events
of Default) in respect of payments of Basic Rent, such payment by the Owner
Trustee shall, solely for purposes of this Trust Indenture be deemed to cure any
Event of Default which would otherwise have arisen on account of the nonpayment
by Lessee of such installment of Basic Rent (but not any other Default or Event
of Default which shall have occurred and be continuing).
If any Event of Default (other than in respect of the nonpayment of
Basic Rent by the Lessee) which can be cured by the payment of money has
occurred, the Owner Trustee may, but shall not be obligated to, cure such Event
of Default by making such payment prior to the Enforcement Date as is necessary
to accomplish the observance or performance of the defaulted covenant, condition
or agreement to the party entitled to the same.
Except as hereinafter in this Section 4.03 provided, the Owner Trustee
shall not, as a result of exercising the right to cure any such Event of
Default, obtain any Lien on any of the Mortgaged Property or any Rent payable
under the Lease for or on account of costs or expenses incurred in connection
with the exercise of such right, nor shall any claim of the Owner Trustee
against Lessee or any other party for the repayment of such costs or expenses
impair the prior right and security interest of the Mortgagee in and to the
Mortgaged Property. Upon any payment by the Owner Trustee pursuant to the first
or second preceding paragraphs of this Section 4.03, the Owner Trustee shall be
subrogated to the rights of the Mortgagee and the Note Holders in respect of the
Basic Rent which was overdue at the time of such payment and interest payable by
the Lessee on account of its being overdue and any Supplemental Rent in respect
of the reimbursement of amounts paid by Owner Trustee pursuant to the
immediately preceding paragraph (but in either case shall have no rights as a
secured party hereunder), and thereafter, the Owner Trustee shall be entitled
(so long as the application thereof shall not give rise to an Event of Default
hereunder) to receive such overdue Basic Rent or Supplemental Rent, as the case
may be, and interest thereon upon receipt thereof by the Mortgagee; PROVIDED,
HOWEVER, that (i) if the Original Amount and interest on the Equipment Notes
shall have become due and payable pursuant to Section 4.04(b) hereof, such
subrogation shall, until the Secured Obligations shall have been paid in full,
be subordinate to the rights of the Mortgagee and the Note Holders in respect of
such payment of overdue Basic Rent, Supplemental Rent and such interest and (ii)
the Owner Trustee shall not be entitled to seek to recover any such payment (or
any payment in lieu thereof) except pursuant to the foregoing right of
subrogation.
Neither the Owner Trustee nor the Owner Participant shall have the
right to cure any Lease Event of Default or Lease Default except as specified in
this Section 4.03.
SECTION 4.04. REMEDIES.
(a) If an Event of Default shall have occurred and be continuing and
so long as the same shall continue unremedied, then and in every such case the
Mortgagee may, subject to the second and third paragraphs of this Section
4.04(a), exercise any or all of the rights and powers and pursue any and all of
the remedies pursuant to this Article IV and shall have and may exercise all of
the rights and remedies of a secured party under the Uniform Commercial Code
and, in the event such Event of Default is also a Lease Event of Default, any
and all of the remedies pursuant to Section 15 of the Lease [and pursuant to any
Permitted Sublease assignment] and may take possession of all or any part of
the properties covered or intended to be covered by the Lien created hereby or
pursuant hereto and may exclude the Owner Participant, the Owner Trustee and
Lessee and all persons claiming under any of them wholly or partly therefrom;
provided, that the Mortgagee shall give the Owner Trustee and the Owner
Participant twenty days prior written notice of its intention to sell the
Aircraft, and provided, further, that in the event the Mortgagee shall have
validly terminated the Lease, the Mortgagee shall not sell or lease, or
otherwise afford the use of, the Aircraft or any portion thereof to the Lessee
or any Affiliate thereof. Unless an Event of Default not resulting from or
relating to a Lease Event of Default has occurred and is continuing, the Owner
Participant may bid at the sale and become the purchaser. Without limiting any
of the foregoing, it is understood and agreed that the Mortgagee may exercise
any right of sale of the Aircraft available to it, even though it shall not have
taken possession of the Aircraft and shall not have possession thereof at the
time of such sale.
Anything in this Trust Indenture to the contrary notwithstanding, the
Mortgagee shall not be entitled to exercise any remedy hereunder as a result of
an Event of Default which arises solely by reason of one or more events or
circumstances which constitute a Lease Event of Default unless the Mortgagee as
security assignee of the Owner Trustee shall have exercised or concurrently be
exercising one or more of the dispossessory remedies provided for in Section 15
of the Lease with respect to the Aircraft; PROVIDED, HOWEVER, that such
requirement to exercise one or more of such remedies under the Lease shall not
apply in circumstances where the Mortgagee is, and has been, for a continuous
period in excess of 60 days or such other period as may be specified in Section
1110(a)(1)(A) of the Bankruptcy Code (such 60-day or other period being the "New
Section 1110 Period"), involuntarily stayed or prohibited by applicable law or
court order from exercising such remedies under the Lease (a "Continuous Stay
Period"); PROVIDED FURTHER, HOWEVER, that the requirement to exercise one or
more of such remedies under the Lease shall nonetheless be applicable during a
Continuous Stay Period subsequent to the expiration of the New Section 1110
Period to the extent that the continuation of such Continuous Stay Period
subsequent to the expiration of the New Section 1110 Period (A) results from an
agreement by the trustee or the debtor-in-possession in such proceeding during
the New Section 1110 Period with the approval of the relevant court to perform
the Lease in accordance with Section 1110(a)(1)(A) of the Bankruptcy Code and
continues to perform as required by Section 1110(a)(1)(A-B) of the Bankruptcy
Code or (B) is an extension of the New Section 1110 Period with the consent of
the Mortgagee pursuant to Section 1110(b) of the Bankruptcy Code or (C) results
from the Lessee s assumption during the New Section 1110 Period with the
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
approval of the relevant court of the Lease pursuant to Section 365 of the
Bankruptcy Code and Lessee s continuous performance of the Lease as so assumed
or (D) is the consequence of the Mortgagee s own failure to give any requisite
notice to any person. In the event that the applicability of Section 1110 of the
Bankruptcy Code to the Aircraft is being contested by Lessee in judicial
proceedings, both of the Mortgagee and the Owner Trustee shall have the right to
participate in such proceedings; provided that any such participation by the
Owner Trustee shall not affect in any way any rights or remedy of the Mortgagee
hereunder.
It is expressly understood and agreed that, subject only to the two
preceding paragraphs, the inability, described in such paragraphs, of the
Mortgagee to exercise any right or remedy under the Lease shall in no event and
under no circumstances prevent the Mortgagee from exercising any or all of its
rights, powers and remedies under this Trust Indenture, including, without
limitation, this Article IV.
(b) If an Event of Default shall have occurred and be continuing, then
and in every such case the Mortgagee may (and shall, upon receipt of a written
demand therefor from a Majority in Interest of Note Holders), subject to Section
4.03 hereof, at any time, by delivery of written notice or notices to the Owner
Trustee and the Owner Participant, declare all the Equipment Notes to be due and
payable, whereupon the unpaid Original Amount of all Equipment Notes then
outstanding, together with accrued but unpaid interest thereon (without
Make-Whole Amount) and other amounts due thereunder, shall immediately become
due and payable without presentment, demand, protest or notice, all of which are
hereby waived; PROVIDED that if an Event of Default referred to in clause (g) of
Section 4.02 hereof shall have occurred, then and in every such case the unpaid
Original Amount then outstanding, together with accrued but unpaid interest and
all other amounts due thereunder and hereunder shall immediately and without
further act become due and payable without presentment, demand, protest or
notice, all of which are hereby waived; PROVIDED FURTHER that in the event of a
reorganization proceeding involving the Lessee instituted under Chapter 11 of
the Bankruptcy Code, if no Lease Event of Default (including any Lease Event of
Default set forth in Section 14.3 of the Lease) and no other Event of Default
(other than the failure to pay the Original Amount of the Equipment Notes which
by such declaration shall have become payable) exists at any time after the
consummation of such proceeding, such declaration shall be automatically
rescinded without any further action on the part of any Note Holder.
This Section 4.04(b), however, is subject to the condition that, if at
any time after the Original Amount of the Equipment Notes shall have become so
due and payable, and before any judgment or decree for the payment of the money
so due, or any thereof, shall be entered, all overdue payments of interest upon
the Equipment Notes and all other amounts payable under the Equipment Notes
(except the Original Amount of the Equipment Notes which by such declaration
shall have become payable) shall have been duly paid, and every other Default
and Event of Default with respect to any covenant or provision of this Trust
Indenture shall have been cured, then and in every such case a Majority in
Interest of Note Holders may (but shall not be obligated to), by written
instrument filed with the Mortgagee, rescind and annul the Mortgagee s
declaration (or such automatic acceleration) and its consequences; but no such
rescission or annulment shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.
Any acceleration pursuant to this Section 4.04(b) shall be
automatically rescinded and any related declaration of an Event of Default
annulled in the event that the Owner Trustee shall have cured, in accordance
with Section 4.03 hereof, the Event of Default that resulted in such
acceleration or declaration.
(c) The Note Holders shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 4.04, to credit against any purchase
price bid at such sale by such holder all or any part of the unpaid obligations
owing to such Note Holder and secured by the Lien of this Trust Indenture (only
to the extent that such purchase price would have been paid to such Note Holder
pursuant to Article III hereof if such purchase price were paid in cash and the
foregoing provisions of this subsection (c) were not given effect).
(d) In the event of any sale of the Trust Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Trust Indenture, the
unpaid Original Amount of all Equipment Notes then outstanding, together with
accrued interest thereon (without Make-Whole Amount), and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement (or its designee) is a
Note Holder, the Mortgagee will not be authorized or empowered to acquire title
to any Mortgaged Property or take any action with respect to any Mortgaged
Property so acquired by it if such acquisition or action would cause any Trust
to fail to qualify as a "grantor trust" for federal income tax purposes.
SECTION 4.05. RETURN OF AIRCRAFT, ETC.
(a) If an Event of Default shall have occurred and be continuing and
the Equipment Notes have been accelerated, subject to Section 4.03 hereof and
unless the Owner Trustee or the Owner Participant shall have elected to purchase
the Equipment Notes, at the request of the Mortgagee, the Owner Trustee shall
promptly execute and deliver to the Mortgagee such instruments of title and
other documents as the Mortgagee may deem necessary or advisable to enable the
Mortgagee or an agent or representative designated by the Mortgagee, at such
time or times and place or places as the Mortgagee may specify, to obtain
possession of all or any part of the Mortgaged Property included in the Trust
Indenture Estate to which the Mortgagee shall at the time be entitled hereunder.
If the Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Mortgagee, the Mortgagee may
(i) obtain a judgment conferring on the Mortgagee the right to immediate
possession and requiring the Owner Trustee to execute and deliver such
instruments and documents to the Mortgagee, to the entry of which judgment the
Owner Trustee hereby specifically consents to the fullest extent permitted by
Law, and (ii) pursue all or part of such Mortgaged Property wherever it may be
found and, in the event that a Lease Event of Default has occurred and is
continuing, may enter any of the premises of Lessee wherever such Mortgaged
Property may be or be supposed to be and search for such Mortgaged Property and
take possession of and remove such Mortgaged Property. All expenses of obtaining
such judgment or of pursuing, searching for and taking such property shall,
until paid, be secured by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Mortgagee may, from time
to time, at the expense of the Mortgaged Property, make all such expenditures
for maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modifications or alterations to and of the Mortgaged
Property, as it may deem proper. In each such case, the Mortgagee shall have the
right to maintain, use, operate, store, insure, lease, control, manage, dispose
of, modify or alter the Mortgaged Property and to carry on the business and to
exercise all rights and powers of the Owner Participant and the Owner Trustee
relating to the Mortgaged Property, as the Mortgagee shall deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, modification or alteration of the Mortgaged Property or any part
thereof as the Mortgagee may determine, and the Mortgagee shall be entitled to
collect and receive directly all tolls, rents (including Rent), revenues,
issues, income, products and profits of the Mortgaged Property and every part
thereof, except Excluded Payments, without prejudice, however, to the right of
the Mortgagee under any provision of this Trust Indenture to collect and receive
all cash held by, or required to be deposited with, the Mortgagee hereunder
other than Excluded Payments. Such tolls, rents (including Rent), revenues,
issues, income, products and profits shall be applied to pay the expenses of the
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, improvement, modification or alteration of the Mortgaged Property
and of conducting the business thereof, and to make all payments which the
Mortgagee may be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Mortgaged Property or any part
thereof (including the employment of engineers and accountants to examine,
inspect and make reports upon the properties and books and records of the Owner
Trustee), and all other payments which the Mortgagee may be required or
authorized to make under any provision of this Trust Indenture, as well as just
and reasonable compensation for the services of the Mortgagee, and of all
persons properly engaged and employed by the Mortgagee with respect hereto.
SECTION 4.06. REMEDIES CUMULATIVE.
Each and every right, power and remedy given to the Mortgagee
specifically or otherwise in this Trust Indenture shall be cumulative and shall
be in addition to every 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 be exercised from time to time and as often and in such order as may be
deemed expedient by the Mortgagee, 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 the Mortgagee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of the
Owner Trustee or Lessee or to be an acquiescence therein.
SECTION 4.07. DISCONTINUANCE OF PROCEEDINGS.
In case the Mortgagee shall have instituted any proceeding to enforce
any right, power or remedy under this Trust Indenture by foreclosure, entry or
otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Mortgagee, then and in
every such case the Owner Trustee, the Mortgagee and Lessee shall, subject to
any determination in such proceedings, be restored to their former positions and
rights hereunder with respect to the Mortgaged Property, and all rights,
remedies and powers of the Owner Trustee, the Mortgagee or Lessee shall continue
as if no such proceedings had been instituted.
SECTION 4.08. WAIVER OF PAST DEFAULTS.
Upon written instruction from a Majority in Interest of Note Holders,
the Mortgagee shall waive any past Default hereunder and its consequences and
upon any such waiver such Default shall cease to exist and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Trust Indenture, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon; provided, that in the absence of
written instructions from all the Note Holders, the Mortgagee shall not waive
any Default (i) in the payment of the Original Amount, Make-Whole Amount, if
any, and interest and other amounts due under any Equipment Note then
outstanding, or (ii) in respect of a covenant or provision hereof which, under
Article IX hereof, cannot be modified or amended without the consent of each
Note Holder.
SECTION 4.09. APPOINTMENT OF RECEIVER.
The Mortgagee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Mortgagee or any successor or nominee
thereof) for all or any part of the Mortgaged Property, whether such
receivership be incidental to a proposed sale of the Mortgaged Property or the
taking of possession thereof or otherwise, and the Owner Trustee hereby consents
to the appointment of such a receiver and will not oppose any such appointment.
Any receiver appointed for all or any part of the Mortgaged Property shall be
entitled to exercise all the rights and powers of the Mortgagee with respect to
the Mortgaged Property.
SECTION 4.10. MORTGAGEE AUTHORIZED TO EXECUTE BILLS OF SALE, ETC.
Subject to the provisions of this Trust Indenture, the Owner Trustee
irrevocably appoints the Mortgagee the true and lawful attorney-in-fact of the
Owner Trustee (which appointment is coupled with an interest) in its name and
stead and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery for the enforcement of the Lien of this Trust Indenture,
whether pursuant to foreclosure or power of sale, assignments and other
instruments as may be necessary or appropriate, with full power of substitution,
the Owner Trustee hereby ratifying and confirming all that such attorney or any
substitute shall do by virtue hereof in accordance with applicable law.
Nevertheless, if so requested by the Mortgagee or any purchaser, the Owner
Trustee shall ratify and confirm any such sale, assignment, transfer or
delivery, by executing and delivering to the Mortgagee or such purchaser all
bills of sale, assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
SECTION 4.11. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Trust Indenture, the right
of any Note Holder to receive payment of principal of, and premium, if any, and
interest on an Equipment Note on or after the respective due dates expressed in
such Equipment Note, or to bring suit for the enforcement of any such payment on
or after such respective dates in accordance with the terms hereof, shall not be
impaired or affected without the consent of such Note Holder.
ARTICLE V
DUTIES OF THE MORTGAGEE
SECTION 5.01. NOTICE OF EVENT OF DEFAULT.
If the Mortgagee shall have Actual Knowledge of an Event of Default or
of a Default arising from a failure to pay Rent, the Mortgagee shall give prompt
written notice thereof to the Owner Trustee, the Owner Participant, Lessee, and
each Note Holder. Subject to the terms of Sections 2.13, 4.03, 4.04, 4.08, 5.02
and 5.03 hereof, the Mortgagee shall take such action, or refrain from taking
such action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the Mortgagee
shall be instructed in writing by a Majority in Interest of Note Holders.
Subject to the provisions of Section 5.03, if the Mortgagee shall not have
received instructions as above provided within 20 days after mailing notice of
such Event of Default to the Note Holders, the Mortgagee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to such
Event of Default or Default as it shall determine advisable in the best
interests of the Note Holders; PROVIDED, HOWEVER, that the Mortgagee may not
sell the Aircraft or any Engine without the consent of a Majority in Interest of
Note Holders. For all purposes of this Trust Indenture, in the absence of Actual
Knowledge on the part of the Mortgagee, the Owner Trustee or the Owner
Participant, the Mortgagee, the Owner Trustee or the Owner Participant, as the
case may be, shall not be deemed to have knowledge of a Default or an Event of
Default (except, in the case of the Mortgagee, the failure of Lessee to pay any
installment of Basic Rent within one Business Day after the same shall become
due, if any portion of such installment was then required to be paid to the
Mortgagee, which failure shall constitute knowledge of a Default) unless
notified in writing by Lessee, the Owner Trustee, the Owner Participant or one
or more Note Holders.
SECTION 5.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND
LIMITATIONS.
(a) Subject to the terms of Sections 2.13, 4.03, 4.04(a) and (b),
4.08, 5.01 and 5.03 hereof, upon the written instructions at any time and from
time to time of a Majority in Interest of Note Holders, the Mortgagee shall,
subject to the terms of this Section 5.02, take such of the following actions as
may be specified in such instructions: (i) give such notice or direction or
exercise such right, remedy or power hereunder as shall be specified in such
instructions; (ii) give such notice or direction or exercise such right, remedy
or power under the Lease, the Participation Agreement, the Purchase Agreement,
the Purchase Agreement Assignment, or any other part of the Trust Indenture
Estate as shall be specified in such instructions; and (iii) approve as
satisfactory to the Mortgagee all matters required by the terms of the Lease to
be satisfactory to the Owner Trustee, it being understood that without the
written instructions of a Majority in Interest of Note Holders, the Mortgagee
shall not approve any such matter as satisfactory to the Mortgagee; provided,
that anything contained in this Trust Indenture, the Lease or the other
Operative Agreements to the contrary notwithstanding, but subject to the next
paragraph hereof:
(1) the Owner Trustee or the Owner Participant, may, without the
consent of the Mortgagee, demand, collect, sue for or otherwise obtain all
amounts included in Excluded Payments from Lessee and seek legal or
equitable remedies to require Lessee to maintain the insurance coverage
referred to in Section 11 of the Lease [(or the comparable provisions of
any assigned Permitted Sublease)] provided, that the rights referred to
in this clause (1) shall not be deemed to include the exercise of any
remedies provided for in Section 15 of the Lease other than the right to
proceed by appropriate court action, either at Law or in equity, to enforce
payment by Lessee of such amounts included in Excluded Payments or
performance by Lessee of such insurance covenant or to recover damages for
the breach thereof or for specific performance of any other term of the
Lease [(or the comparable provisions of any assigned Permitted
Sublease)];
(2) (A) the Mortgagee shall not, without the consent of the Owner
Trustee, enter into, execute or deliver amendments or modifications in
respect of any of the provisions of the Lease[, any assigned Permitted
Sublease or any Permitted Sublease assignment], and (B) unless a
Mortgagee Event shall have occurred and be continuing, the Mortgagee shall
not, without the consent of the Owner Trustee, which consent shall not be
withheld if no right or interest of the Owner Trustee or the Owner
Participant shall be diminished or impaired thereby, (i) enter into,
execute or deliver waivers or consents in respect of any of the provisions
of the Lease, or (ii) approve any accountants, engineers, appraisers or
counsel as satisfactory to render services for or issue opinions to the
Owner Trustee pursuant to the Operative Agreements, provided that whether
or not any Mortgagee Event has occurred and is continuing, the Owner
Trustee s consent shall be required with respect to any waivers or consents
in respect of any of the provisions of Section 5, 7 or 11 of the Lease, or
of any other Section of the Lease to the extent such action shall affect
(y) the amount or timing of, or the right to enforce payment of any
Excluded Payment or (z) the amount or timing of any amounts payable by the
Lessee under the Lease as originally executed (or as subsequently modified
with the consent of the Owner Trustee) which, absent the occurrence and
continuance of an Event of Default hereunder, would be distributable to the
Owner Trustee under Article III hereof;
(3) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee and the Owner
Participant shall have the right, together with the Mortgagee, (i) to receive
from Lessee [or any Permitted Sublessee] certificates and other documents
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
and information which Lessee is required to give or furnish to the Owner Trustee
or the Lessor pursuant to any Operative Agreement and (ii) to inspect in
accordance with the Lease the Airframe and Engines and all Aircraft Documents;
(4) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee shall have the right
to adjust upwards Rent, Stipulated Loss Values and Termination Values as
provided in Section 3.2.1 of the Lease or pursuant to a transfer under Section
10.1.1 of the Participation Agreement;
(5) so long as no Mortgagee Event has occurred and is continuing, the
Owner Trustee shall have the right, to the exclusion of the Mortgagee, to adjust
Basic Rent, Stipulated Loss Values and Termination Values as provided in Section
3.2 of the Lease or to adjust downward any installment or amount of Basic Rent,
Stipulated Loss Value or Termination Value, as such installments and amounts are
set forth in Schedules 2, 3 and 4, respectively, to the Lease, to the extent of
the portion of such installment or amount that would, under Section 3.01, 3.02
or 3.03 hereof, as the case may be, be distributable to the Owner Trustee or the
Owner Participant;
(6) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee may, without the
consent of the Mortgagee, (i) solicit and make bids with respect to the Aircraft
under Section 9 of the Lease in respect of a termination of the Lease by Lessee
pursuant to Section 9 thereof, (ii) determine Fair Market Sales Value and Fair
Market Rental Value under Section 17 of the Lease for all purposes except
following a Mortgagee Event pursuant to Section 15 of the Lease, and (iii) make
an election pursuant to and in accordance with the provisions of Sections
9.1(b), 9.2 and 9.3 of the Lease; and
(7) so long as no Mortgagee Event shall have occurred and be
continuing, all other rights of the "Lessor" under the Lease [or any assigned
Permitted Sublease] shall be exercised by the Owner Trustee to the
exclusion of the Mortgagee including, without limitation, the right to (i)
exercise all rights with respect to Lessee s use and operation, modification or
maintenance of the Aircraft and any Engine which the Lease specifically confers
on the Lessor, and (ii) consent to and approve any assignment pursuant to
Section 13 of the Lease; PROVIDED that the foregoing shall not (x) limit (A) any
rights separately granted to the Mortgagee under the Operative Agreements or (B)
the right of the Mortgagee to receive any funds to be delivered to the "Lessor"
under the Lease (except with respect to Excluded Payments) and under the
Purchase Agreement or (y) confer upon the Owner Trustee the right to adversely
affect the validity or enforceability of the lien of this Indenture.
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Notwithstanding anything to the contrary contained herein (including
this Section 5.02), the Mortgagee shall have the right, to the exclusion of the
Owner Trustee and the Owner Participant, to (A) declare the Lease to be in
default under Section 15 thereof and (B) subject only to the provisions of
Sections 4.03, 4.04(a) and (b) and 2.14 hereof, exercise the remedies set forth
in such Section 15 (other than in connection with Excluded Payments and provided
that each of the Owner Trustee, Owner Participant and Mortgagee shall
independently retain the rights set forth in clause (ii) of Section 15.1.5 of
the Lease) at any time that a Lease Event of Default shall have occurred and be
continuing. Further and for the avoidance of doubt, and anything to the contrary
contained herein (including this Section 5.02), in no event may the Owner
Trustee amend or otherwise modify the provisions of Section 3.2.1(e) of the
Lease or of the final sentence of the definition of Stipulated Loss Value or
Termination Value, in any such case, without the prior written consent of the
Mortgagee.
The Mortgagee will execute and the Owner Trustee will file or cause to
be filed such continuation statements with respect to financing statements
relating to the security interest created hereunder in the Trust Indenture
Estate as may be specified from time to time in written instructions of a
Majority in Interest of Note Holders (which instructions shall be accompanied by
the form of such continuation statement so to be filed). The Mortgagee will
furnish to each Note Holder (and, during the continuation of a Mortgagee Event,
to the Owner Trustee and Owner Participant), promptly upon receipt thereof,
duplicates or copies of all reports, notices, requests, demands, certificates
and other instruments furnished to the Mortgagee under the Lease or hereunder,
including, without limitation, a copy of any Termination Notice (as defined in
the Lease) and a copy of each report or notice received pursuant to Section 9
and Paragraph E of Annex D of the Lease, respectively to the extent that the
same shall not have been furnished to such holder pursuant hereto or the Lease.
(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease Event of
Default under and in accordance with Section 4.03 hereof, on request of a
Majority in Interest of Note Holders, the Mortgagee shall declare the Lease to
be in default pursuant to Section 15 thereof and exercise those remedies
specified by such Note Holders. The Mortgagee agrees to provide to the Note
Holders, the Owner Trustee and the Owner Participant concurrently with such
declaration by the Mortgagee, notice of such declaration by the Mortgagee.
SECTION 5.03. INDEMNIFICATION.
The Mortgagee shall not be required to take any action or refrain from
taking any action under Section 5.01 (other than the first sentence thereof),
5.02 or Article IV hereof unless the Mortgagee shall have been indemnified to
its reasonable satisfaction against any liability, cost or expense (including
counsel fees) which may be incurred in connection therewith pursuant to a
written agreement with one or more Note Holders. The Mortgagee agrees that it
shall look solely to the Note Holders for the satisfaction of any indemnity
(except expenses for foreclosure of the type referred to in clause "First" of
Section 3.03 hereof) owed to it pursuant to this Section 5.03. The Mortgagee
shall not be under any obligation to take any action under this Trust Indenture
or any other Operative Agreement and nothing herein or therein shall require the
Mortgagee to expend or risk its own funds or otherwise incur the risk of any
financial liability in the performance 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 written indemnity of any Note Holder who is a QIB, signed by an
authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to the Mortgagee shall be accepted as reasonable assurance of
adequate indemnity). The Mortgagee shall not be required to take any action
under Section 5.01 (other than the first sentence thereof) or 5.02 or Article IV
hereof, nor shall any other provision of this Trust Indenture or any other
Operative Agreement be deemed to impose a duty on the Mortgagee to take any
action, if the Mortgagee shall have been advised by counsel that such action is
contrary to the terms hereof or OF THE LEASE OR IS OTHERWISE CONTRARY TO LAW.
SECTION 5.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST INDENTURE OR
INSTRUCTIONS.
The Mortgagee shall not have any duty or obligation to use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Trust Indenture Estate, or to otherwise take
or refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Trust Indenture Estate, except as expressly
provided by the terms of this Trust Indenture or as expressly provided in
written instructions from Note Holders as provided in this Trust Indenture; and
no implied duties or obligations shall be read into this Trust Indenture against
the Mortgagee. The Mortgagee 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 7.01 hereof), promptly take such action
as may be necessary duly to discharge all liens and encumbrances on any part of
the Trust Indenture Estate which result from claims against it in its individual
capacity not related to the ownership of the Aircraft or the administration of
the Trust Indenture Estate or any other transaction pursuant to this Trust
Indenture or any document included in the Trust Indenture Estate.
SECTION 5.05. NO ACTION EXCEPT UNDER LEASE, TRUST INDENTURE OR
INSTRUCTIONS.
The Owner Trustee and the Mortgagee agree that they will not use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Indenture Estate except (i) as
required by the terms of the Lease or (ii) in accordance with the powers granted
to, or the authority conferred upon, the Owner Trustee and the Mortgagee
pursuant to this Trust Indenture and in accordance with the express terms
hereof.
SECTION 5.06. REPLACEMENT AIRFRAMES AND REPLACEMENT ENGINES.
At any time an Airframe or Engine is to be replaced under or pursuant
to Section 10 of the Lease by a Replacement Airframe or Replacement Engine, if
no Lease Event of Default is continuing, the Owner Trustee shall direct the
Mortgagee to execute and deliver to the Owner Trustee an appropriate instrument
releasing such Airframe and/or Engine as appropriate from the Lien of this Trust
Indenture and the Mortgagee shall execute and deliver such instrument as
aforesaid, but only upon compliance by Lessee with the applicable provisions of
Section 10 of the Lease.
SECTION 5.07. INDENTURE SUPPLEMENTS FOR REPLACEMENTS.
If a Replacement Airframe or Replacement Engine is being substituted
as contemplated by Section 10 of the Lease, the Owner Trustee and the Mortgagee
agree for the benefit of the Note Holders and Lessee, subject to fulfillment of
the conditions precedent and compliance by Lessee with its obligations set forth
in Section 10 of the Lease and the requirements of Section 5.06 hereof with
respect to such Replacement Airframe or Replacement Engine, to execute and
deliver a Lease Supplement and a Trust Indenture Supplement, as applicable, as
contemplated by Section 10 of the Lease.
SECTION 5.08. EFFECT OF REPLACEMENT.
In the event of the substitution of an Airframe or of a Replacement
Engine pursuant to Section 10 of the Lease, all provisions of this Trust
Indenture relating to the Airframe or Engine or Engines being replaced shall be
applicable to such Replacement Airframe or Replacement Engine or Engines with
the same force and effect as if such Replacement Airframe or Replacement Engine
or Engines were the same airframe or engine or engines, as the case may be, as
the Airframe or Engine or Engines being replaced but for the Event of Loss with
respect to the Airframe or Engine or Engines being replaced.
SECTION 5.09. INVESTMENT OF AMOUNTS HELD BY MORTGAGEE.
Any amounts held by the Mortgagee as assignee of the Owner Trustee s
rights to hold monies for security pursuant to Section 4.4 of the Lease shall be
held in accordance with the terms of such Section and the Mortgagee agrees, for
the benefit of Lessee, to perform the duties of the Owner Trustee under such
Section. Any amounts held by the Mortgagee pursuant to the proviso to the first
sentence of Section 3.01, pursuant to Section 3.02, or pursuant to any provision
of any other Operative Agreement providing for amounts to be held by the
Mortgagee which are not distributed pursuant to the other provisions of Article
III hereof shall be invested by the Mortgagee from time to time in Cash
Equivalents as directed by the Owner Trustee so long as the Mortgagee may
acquire the same using its best efforts. Unless otherwise expressly provided in
this Trust Indenture, any income realized as a result of any such investment,
net of the Mortgagee s reasonable fees and expenses in making such investment,
shall be held and applied by the Mortgagee in the same manner as the principal
amount of such investment is to be applied and any losses, net of earnings and
such reasonable fees and expenses, shall be charged against the principal amount
invested. The Mortgagee shall not be liable for any loss resulting from any
investment required to be made by it under this Trust Indenture other than by
reason of its willful misconduct or gross negligence, and any such investment
may be sold (without regard to its maturity) by the Mortgagee without
instructions whenever such sale is necessary to make a distribution required by
this Trust Indenture.
ARTICLE VI
THE OWNER TRUSTEE AND THE MORTGAGEE
SECTION 6.01. ACCEPTANCE OF TRUSTS AND DUTIES.
The Mortgagee accepts the duties hereby created and applicable to it
and agrees to perform the same but only upon the terms of this Trust Indenture
and agrees to receive and disburse all monies constituting part of the Trust
Indenture Estate in accordance with the terms hereof. The Owner Trustee, in its
individual capacity, and the Mortgagee, in its individual capacity, shall not be
answerable or accountable under any circumstances, except (i) for their own
willful misconduct or gross negligence (other than for the handling of funds,
for which the standard of accountability shall be willful misconduct or
negligence), (ii) in the case of the Mortgagee, as provided in the fourth
sentence of Section 2.04(a) hereof and the last sentence of Section 5.04 hereof,
and (iii) for liabilities that may result, in the case of the Owner Trustee,
from the inaccuracy of any representation or warranty of the Owner Trustee
expressly made in its individual capacity in the Participation Agreement or in
Section 4.01(b) or 6.03 hereof (or in any certificate furnished to the Mortgagee
or any Note Holder in connection with the transactions contemplated by the
Operative Agreements) or, in the case of the Mortgagee (in its individual
capacity), from the inaccuracy of any representation or warranty of the
Mortgagee (in its individual capacity) in the Participation Agreement or
expressly made hereunder. Neither the Owner Trustee nor the Mortgagee shall be
liable for any action or inaction of the other or of the Owner Participant.
SECTION 6.02. ABSENCE OF DUTIES.
In the case of the Mortgagee, except in accordance with written
instructions furnished pursuant to Section 5.01 or 5.02 hereof, and except as
provided in, and without limiting the generality of, Sections 5.03, 5.04 and
6.08 hereof and, in the case of the Owner Trustee, except as provided in Section
4.01(b) hereof, the Owner Trustee and the Mortgagee shall have no duty (i) to
see to any registration of the Aircraft or any recording or filing of the Lease
or of this Trust Indenture or any other document, or to see to the maintenance
of any such registration, recording or filing, (ii) to see to any insurance on
the Aircraft or to effect or maintain any such insurance, whether or not Lessee
shall be in default with respect thereto, (iii) to see to the payment or
discharge of any lien or encumbrance of any kind against any part of the Trust
Estate or the Trust Indenture Estate, (iv) to confirm, verify or inquire into
the failure to receive any financial statements from Lessee, or (v) to inspect
the Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Lessee s covenants under the Lease [or any of the Permitted
Sublessee s covenants under any assigned Permitted Sublease] with respect
to the Aircraft. The Owner Participant shall not have any duty or responsibility
hereunder, including, without limitation, any of the duties mentioned in clauses
(i) through (v) above; provided, that nothing contained in this sentence shall
limit any obligations of the Owner Participant under the Participation Agreement
or relieve the Owner Participant from any restriction under Section 4.03 hereof.
SECTION 6.03. NO REPRESENTATIONS OR WARRANTIES AS TO AIRCRAFT OR
DOCUMENTS.
NEITHER THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY NOR THE
OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE TRUST
AGREEMENT, MAKES OR SHALL BE DEEMED TO HAVE MADE AND EACH HEREBY EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN,
QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, except the Owner Trustee in its individual capacity
warrants that (i) the Owner Trustee has received on the Delivery Date whatever
title was conveyed to it, and (ii) the Aircraft is free and clear of Lessor
Liens attributable to the Owner Trustee in its individual capacity. Neither the
Owner Trustee, in its individual capacity or as Owner Trustee under the Trust
Agreement, nor the Mortgagee, in its individual or trust capacities, makes or
shall be deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Trust Indenture, the Trust Agreement, the
___________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
Participation Agreement, the Equipment Notes, the Lease, the Purchase Agreement
or the Purchase Agreement Assignment with the Consent and Agreement and the
Engine Consent and Agreement attached thereto, or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner Trustee made in its individual capacity and the
representations and warranties of the Mortgagee in its individual capacity, in
each case expressly made in this Trust Indenture or in the Participation
Agreement. The Loan Participants, the Note Holders and the Owner Participant
make no representation or warranty hereunder whatsoever.
SECTION 6.04. NO SEGREGATION OF MONIES; NO INTEREST.
Any monies paid to or retained by the Mortgagee pursuant to any
provision hereof and not then required to be distributed to the Note Holders,
Lessee or the Owner Trustee as provided in Article III hereof need not be
segregated in any manner except to the extent required by Law or Section 4.4 of
the Lease and Section 5.09 hereof, and may be deposited under such general
conditions as may be prescribed by Law, and the Mortgagee shall not be liable
for any interest thereon (except that the Mortgagee shall invest all monies held
as directed by Lessee so long as no Lease Event of Default or Lease Default has
occurred and is continuing (or in the absence of such direction, by the Majority
In Interest of Note Holders) in Cash Equivalents; PROVIDED, however, that any
payments received, or applied hereunder, by the Mortgagee shall be accounted for
by the Mortgagee so that any portion thereof paid or applied pursuant hereto
shall be identifiable as to the source thereof.
SECTION 6.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL.
Neither the Owner Trustee nor the Mortgagee shall incur any 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. The Owner Trustee and the Mortgagee may accept a copy of a
resolution of the Board of Directors (or Executive Committee thereof) of any
party to the Participation Agreement, certified by the Secretary or an Assistant
Secretary thereof as duly adopted and in full force and effect, as conclusive
evidence that such resolution has been duly adopted and that the same is in full
force and effect. As to the aggregate unpaid Original Amount of Equipment Notes
outstanding as of any date, the Owner Trustee may for all purposes hereof rely
on a certificate signed by any Vice President or other authorized corporate
trust officer of the Mortgagee. As to any fact or matter relating to Lessee the
manner of which is not specifically described herein, the Owner Trustee and the
Mortgagee may for all purposes hereof rely on a certificate, signed by a duly
authorized officer of Lessee, as to such fact or matter, and such certificate
shall constitute full protection to the Owner Trustee and the Mortgagee for any
action taken or omitted to be taken by them in good faith in reliance thereon.
The Mortgagee shall assume, and shall be fully protected in assuming, that the
Owner Trustee is authorized by the Trust Agreement to enter into this Trust
Indenture and to take all action to be taken by it pursuant to the provisions
hereof, and shall not inquire into the authorization of the Owner Trustee with
respect thereto. In the administration of the trusts hereunder, the Owner
Trustee and the Mortgagee each may execute any of the trusts or powers hereof
and perform its powers and duties hereunder directly or through agents or
attorneys and may, at the expense of the Trust Indenture Estate, advise with
counsel, accountants and other skilled persons to be selected and retained by
it, and the Owner Trustee and the Mortgagee shall not be liable for anything
done, suffered or omitted in good faith by them in accordance with the written
advice or written opinion of any such counsel, accountants or other skilled
persons.
SECTION 6.06. CAPACITY IN WHICH ACTING.
The Owner Trustee acts hereunder solely as trustee as herein and in
the Trust Agreement provided, and not in its individual capacity, except as
otherwise expressly provided herein, in the Trust Agreement and in the
Participation Agreement.
SECTION 6.07. COMPENSATION.
The Mortgagee shall be entitled to reasonable compensation, including
expenses and disbursements (including the reasonable fees and expenses of
counsel), for all services rendered hereunder and shall, on and subsequent to an
Event of Default hereunder, have a priority claim on the Trust Indenture Estate
for the payment of such compensation, to the extent that such compensation shall
not be paid by Lessee, and shall have the right, on and subsequent to an Event
of Default hereunder, to use or apply any monies held by it hereunder in the
Trust Indenture Estate toward such payments. The Mortgagee agrees that it shall
have no right against the Loan Participants, the Note Holders, the Owner Trustee
or the Owner Participant for any fee as compensation for its services as trustee
under this Trust Indenture.
SECTION 6.08. INSTRUCTIONS FROM NOTE HOLDERS.
In the administration of the trusts created hereunder, the Mortgagee
shall have the right to seek instructions from a Majority in Interest of Note
Holders should any provision of this Trust Indenture appear to conflict with any
other provision herein or should the Mortgagee s duties or obligations hereunder
be unclear, and the Mortgagee shall incur no liability in refraining from acting
until it receives such instructions. The Mortgagee shall be fully protected for
acting in accordance with any instructions received under this Section 6.08.
ARTICLE VII
INDEMNIFICATION OF MORTGAGEE BY OWNER TRUSTEE
SECTION 7.01. SCOPE OF INDEMNIFICATION.
The Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, hereby agrees, whether or not any of the transactions contemplated
hereby shall be consummated, except as to matters covered by any indemnity
furnished as contemplated by Section 5.03 hereof and except as otherwise
provided in Section 2.03 or 2.04(b) hereof, to assume liability for, and does
hereby indemnify, protect, save and keep harmless the Mortgagee (in its
individual and trust capacities), and its successors, assigns, agents and
servants, from and against any and all liabilities, obligations, losses,
damages, penalties, taxes (excluding any taxes payable by the Mortgagee on or
measured by any compensation received by the Mortgagee for its services under
this Trust Indenture), claims, actions, suits, costs, expenses or disbursements
(including legal fees and expenses) of any kind and nature whatsoever, which may
be imposed on, incurred by or asserted against the Mortgagee (whether or not
also indemnified against by any other person under any other document) in any
way relating to or arising out of this Trust Indenture or any other Operative
Agreement to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, non-acceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether or
not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration of
the Trust Indenture Estate or the action or inaction of the Mortgagee hereunder
except only in the case of willful misconduct or gross negligence (or negligence
in the case of handling funds) of the Mortgagee in the performance of its duties
hereunder or resulting from the inaccuracy of any representation or warranty of
the Mortgagee (in its individual capacity) referred to in Section 6.03 hereof,
or as provided in Section 6.01 hereof or in the last sentence of Section 5.04
hereof, or as otherwise excluded by the terms of Section 9.1 or 9.3 of the
Participation Agreement from Lessee s indemnities under such Sections. In
addition, if necessary, the Mortgagee shall be entitled to indemnification from
the Trust Indenture Estate for any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement indemnified against pursuant
to this Section 7.01 to the extent not reimbursed by Lessee or others, but
without releasing any of them from their respective agreements of reimbursement;
and to secure the same the Mortgagee shall have a prior Lien on the Trust
Indenture Estate. Without limiting the foregoing, the Mortgagee agrees that,
prior to seeking indemnification from the Trust Indenture Estate, it will
demand, and diligently pursue in good faith (but with no duty to exhaust all
legal remedies therefor), indemnification available to the Mortgagee from Lessee
under the Lease or the Participation Agreement.
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. NOTICE OF SUCCESSOR OWNER TRUSTEE.
In the case of any appointment of a successor to the Owner Trustee
pursuant to the Trust Agreement including upon any merger, conversion,
consolidation or sale of substantially all of the corporate trust business of
the Owner Trustee pursuant to the Trust Agreement, the successor Owner Trustee
shall give prompt written notice thereof to the Mortgagee, Lessee and the Note
Holders.
SECTION 8.02. RESIGNATION OF MORTGAGEE; APPOINTMENT OF SUCCESSOR.
(a) The Mortgagee or any successor thereto may resign at any time
without cause by giving at least 30 days prior written notice to Lessee, the
Owner Trustee, the Owner Participant and each Note Holder, such resignation to
be effective upon the acceptance of the trusteeship by a successor Mortgagee. In
addition, a Majority in Interest of Note Holders may at any time (but only with
the consent of the Lessee, which consent shall not be unreasonably withheld,
except that such consent shall not be necessary if a Lease Event of Default is
continuing) remove the Mortgagee without cause by an instrument in writing
delivered to the Owner Trustee, Lessee, the Owner Participant and the Mortgagee,
and the Mortgagee shall promptly notify each Note Holder thereof in writing,
such removal to be effective upon the acceptance of the trusteeship by a
successor Mortgagee. In the case of the resignation or removal of the Mortgagee,
a Majority in Interest of Note Holders may appoint a successor Mortgagee by an
instrument signed by such holders, which successor, so long as no Lease Event of
Default shall have occurred and be continuing, shall be subject to Lessee s
reasonable approval. If a successor Mortgagee shall not have been appointed
within 30 days after such notice of resignation or removal, the Mortgagee, the
Owner Trustee, the Owner Participant or any Note Holder may apply to any court
of competent jurisdiction to appoint a successor Mortgagee to act until such
time, if any, as a successor shall have been appointed as above provided. The
successor Mortgagee so appointed by such court shall immediately and without
further act be superseded by any successor Mortgagee appointed as above
provided.
(b) Any successor Mortgagee, however appointed, shall execute and
deliver to the Owner Trustee, the predecessor Mortgagee and the Lessee an
instrument accepting such appointment and assuming the obligations of the
Mortgagee under the Participation Agreement arising from and after the time of
such appointment, and thereupon such successor Mortgagee, without further act,
shall become vested with all the estates, properties, rights, powers and duties
of the predecessor Mortgagee hereunder in the trust hereunder applicable to it
with like effect as if originally named the Mortgagee herein; but nevertheless
upon the written request of such successor Mortgagee, such predecessor Mortgagee
shall execute and deliver an instrument transferring to such successor
Mortgagee, upon the trusts herein expressed applicable to it, all the estates,
properties, rights and powers of such predecessor Mortgagee, and such
predecessor Mortgagee shall duly assign, transfer, deliver and pay over to such
successor Mortgagee all monies or other property then held by such predecessor
Mortgagee hereunder.
(c) Any successor Mortgagee, however appointed, shall be a bank or
trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Chicago, Illinois; Hartford, Connecticut;
Wilmington, Delaware; or Boston, Massachusetts and having (or whose obligations
under the Operative Agreements are guaranteed by an affiliated entity having) a
combined capital and surplus of at least $100,000,000, if there be such an
institution willing, able and legally qualified to perform the duties of the
Mortgagee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Mortgagee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Mortgagee shall be a
party, or any corporation to which substantially all the corporate trust
business of the Mortgagee may be transferred, shall, subject to the terms of
paragraph (c) of this Section 8.02, be a successor Mortgagee and the Mortgagee
under this Trust Indenture without further act.
SECTION 8.03. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES.
(a) Whenever (i) the Mortgagee shall deem it necessary or desirable in
order to conform to any Law of any jurisdiction in which all or any part of the
Trust Indenture Estate shall be situated or to make any claim or bring any suit
with respect to or in connection with the Trust Indenture Estate, this Trust
Indenture, any other Indenture Agreement, the Equipment Notes or any of the
transactions contemplated by the Participation Agreement, (ii) the Mortgagee
shall be advised by counsel satisfactory to it that it is so necessary or
prudent in the interests of the Note Holders (and the Mortgagee shall so advise
the Owner Trustee and Lessee), or (iii) the Mortgagee shall have been requested
to do so by a Majority in Interest of Note Holders, then in any such case, the
Mortgagee and, upon the written request of the Mortgagee, the Owner Trustee,
shall execute and deliver an indenture supplemental hereto and such other
instruments as may from time to time be necessary or advisable either (1) to
constitute one or more bank or trust companies or one or more persons approved
by the Mortgagee, either to act jointly with the Mortgagee as additional trustee
or trustees of all or any part of the Trust Indenture Estate, or to act as
separate trustee or trustees of all or any part of the Trust Indenture Estate,
in each case with such rights, powers, duties and obligations consistent with
this Trust Indenture as may be provided in such supplemental indenture or other
instruments as the Mortgagee or a Majority in Interest of Note Holders may deem
necessary or advisable, or (2) to clarify, add to or subtract from the rights,
powers, duties and obligations theretofore granted any such additional or
separate trustee, subject in each case to the remaining provisions of this
Section 8.03. If the Owner Trustee shall not have taken any action requested of
it under this Section 8.03(a) that is permitted or required by its terms within
15 days after the receipt of a written request from the Mortgagee so to do, or
if an Event of Default shall have occurred and be continuing, the Mortgagee may
act under the foregoing provisions of this Section 8.03(a) without the
concurrence of the Owner Trustee, and the Owner Trustee hereby irrevocably
appoints (which appointment is coupled with an interest) the Mortgagee, its
agent and attorney-in-fact to act for it under the foregoing provisions of this
Section 8.03(a) in either of such contingencies. The Mortgagee may, in such
capacity, execute, deliver and perform any such supplemental indenture, or any
such instrument, as may be required for the appointment of any such additional
or separate trustee or for the clarification of, addition to or subtraction from
the rights, powers, duties or obligations theretofore granted to any such
additional or separate trustee. In case any additional or separate trustee
appointed under this Section 8.03(a) shall die, become incapable of acting,
resign or be moved, all the assets, property, rights, powers, trusts, duties and
obligations of such additional or separate trustee shall revert to the Mortgagee
until a successor additional or separate trustee is appointed as provided in
this Section 8.03(a).
(b) No additional or separate trustee shall be entitled to exercise
any of the rights, powers, duties and obligations conferred upon the Mortgagee
in respect of the custody, investment and payment of monies and all monies
received by any such additional or separate trustee from or constituting part of
the Trust Indenture Estate or otherwise payable under any Operative Agreement to
the Mortgagee shall be promptly paid over by it to the Mortgagee. All other
rights, powers, duties and obligations conferred or imposed upon any additional
or separate trustee shall be exercised or performed by the Mortgagee and such
additional or separate trustee jointly except to the extent that applicable Law
of any jurisdiction in which any particular act is to be performed renders the
Mortgagee incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations (including the holding of title to all or
part of the Trust Indenture Estate in any such jurisdiction) shall be exercised
and performed by such additional or separate trustee. No additional or separate
trustee shall take any discretionary action except on the instructions of the
Mortgagee or a Majority in Interest of Note Holders. No trustee hereunder shall
be personally liable by reason of any act or omission of any other trustee
hereunder, except that the Mortgagee shall be liable for the consequences of its
lack of reasonable care in selecting, and the Mortgagee s own actions in acting
with, any additional or separate trustee. Each additional or separate trustee
appointed pursuant to this Section 8.03 shall be subject to, and shall have the
benefit of Articles IV through VIII and Article X hereof insofar as they apply
to the Mortgagee. The powers of any additional or separate trustee appointed
pursuant to this Section 8.03 shall not in any case exceed those of the
Mortgagee hereunder.
(c) If at any time the Trustee shall deem it no longer necessary or in
order to conform to any such Law or take any such action or shall be advised by
such counsel that it is no longer so necessary or desirable in the interest of
the Note Holders, or in the event that the Mortgagee shall have been requested
to do so in writing by a Majority in Interest of Note Holders, the Mortgagee
and, upon the written request of the Mortgagee, the Owner Trustee, shall execute
and deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate trustee. The
Mortgagee may act on behalf of the Owner Trustee under this Section 8.03(c) when
and to the extent it could so act under Section 8.03(a) hereof.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS.
(a) Except as provided in Section 5.02 hereof, the Owner Trustee
agrees it shall not enter into any amendment of or supplement to the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and Agreement
or the Engine Consent and Agreement, or execute and deliver any written waiver
or modification of, or consent under, the terms of the Lease, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement or the
Engine Consent and Agreement, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by the Mortgagee and a
Majority in Interest of Note Holders. Anything to the contrary contained herein
notwithstanding, without the necessity of the consent of any of the Note Holders
or the Mortgagee, (i) any Excluded Payments payable to the Owner Participant may
be modified, amended, changed or waived in such manner as shall be agreed to by
the Owner Participant and Lessee and (ii) the Owner Trustee and Lessee may enter
into amendments of or additions to the Lease to modify Section 5 (except to the
extent that such amendment would affect the rights or exercise of remedies under
Section 15 of the Lease) or Section 17 of the Lease so long as such amendments,
modifications and changes do not and would not affect the time of, or reduce the
amount of, Rent payments (except to the extent expressly permitted by Section
5.02 hereof) until after the payment in full of all Secured Obligations or
otherwise adversely affect the Note Holders.
(b) Without limiting the provisions of Section 9.01 hereof, the
Mortgagee agrees with the Note Holders that it shall not enter into any
amendment, waiver or modification of, supplement or consent to this Trust
Indenture, the Lease, the Purchase Agreement, the Purchase Agreement Assignment,
the Consent and Agreement, the Engine Consent and Agreement or the Participation
Agreement, or any other agreement included in the Trust Indenture Estate, unless
such supplement, amendment, waiver, modification or consent is consented to in
writing by a Majority in Interest of Note Holders, but upon the written request
of a Majority in Interest of Note Holders, the Trustee shall from time to time
enter into any such supplement or amendment, or execute and deliver any such
waiver, modification or consent, as may be specified in such request and as may
be (in the case of any such amendment, supplement or modification), to the
extent such agreement is required, agreed to by the Owner Trustee and Lessee or,
as may be appropriate, the Airframe Manufacturer or the Engine Manufacturer;
PROVIDED, HOWEVER, that, without the consent of each holder of an affected
Equipment Note then outstanding and of each Liquidity Provider, no such
amendment of or supplement to this Trust Indenture, the Lease, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
Engine Consent and Agreement or the Participation Agreement or waiver or
modification of the terms of, or consent under, any thereof, shall (i) modify
any of the provisions of this Section 9.01, or of Article II or III or Section
4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof, Section 13.3, 14 (except to add an
Event of Default) or 16 of the Lease, Section 15.1 of the Participation
Agreement, the definitions of "Event of Default," "Default," "Lease Event of
Default," "Lease Default," "Majority in Interest of Note Holders," "Make-Whole
Amount" or "Note Holder," or the percentage of Note Holders required to take or
approve any action hereunder, (ii) reduce the amount, or change the time of
payment or method of calculation of any amount, of Original Amount, Make-Whole
Amount, if any, or interest with respect to any Equipment Note, or alter or
modify the provisions of Article III hereof with respect to the order of
priorities in which distribution thereunder shall be made as among the Note
Holders, the Owner Trustee and Lessee, (iii) reduce, modify or amend any
indemnities in favor of the Owner Trustee, the Mortgagee or the Note Holders
(except that the Owner Trustee (in its individual capacity) or the Mortgagee, as
the case may be, may consent to any waiver or reduction of an indemnity payable
to it), (iv) consent to any change in the Trust Indenture or the Lease which
would permit redemption of Equipment Notes earlier than permitted under Section
2.10 or 2.11 hereof or the purchase or exchange of the Equipment Notes other
than as permitted by Section 2.13 hereof, (v) except as contemplated by the
Lease or the Participation Agreement, reduce the amount or extend the time of
payment of Basic Rent, Stipulated Loss Value, or Termination Value for the
Aircraft in each case as set forth in the Lease, or modify, amend or supplement
the Lease or consent to any assignment of the Lease, in either case releasing
Lessee from its obligations in respect of the payment of Basic Rent, Stipulated
Loss Value or Termination Value for the Aircraft or altering the absolute and
unconditional character of the obligations of Lessee to pay Rent as set forth in
Sections 3 and 16 of the Lease or (vi) permit the creation of any Lien on the
Trust Indenture Estate or any part thereof other than Permitted Liens or deprive
any Note Holder of the benefit of the Lien of this Trust Indenture on the Trust
Indenture Estate, except as provided in connection with the exercise of remedies
under Article IV hereof.
(c) At any time after the date hereof, the Owner Trustee and the
Mortgagee may enter into one or more agreements supplemental hereto without the
consent of any Note Holder for any of the following purposes: (i) (a) to cure
any defect or inconsistency herein or in the Equipment Notes, or to make any
change not inconsistent with the provisions hereof (PROVIDED that such change
does not adversely affect the interests of any Note Holder in its capacity
solely as Note Holder) or (b) to cure any ambiguity or correct any mistake; (ii)
to evidence the succession of another party as the Owner Trustee in accordance
with the terms of the Trust Agreement or to evidence the succession of a new
trustee hereunder pursuant hereto, the removal of the trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or additional
trustee or trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Mortgagee or to make any other provisions with respect
to matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Note Holders in its capacity solely as
Note Holder; (iv) to correct or amplify the description of any property at any
time subject to the Lien of this Trust Indenture or better to assure, convey and
confirm unto the Mortgagee any property subject or required to be subject to the
Lien of this Trust Indenture, the Airframe or Engines or any Replacement
Airframe or Replacement Engine; (v) to add to the covenants of the Owner Trustee
for the benefit of the Note Holders, or to surrender any rights or power herein
conferred upon the Owner Trustee, the Owner Participant or the Lessee; (vi) to
add to the rights of the Note Holders; and (vii) to include on the Equipment
Notes any legend as may be required by Law.
SECTION 9.02. TRUSTEES PROTECTED.
If, in the opinion of the institution acting as Owner Trustee under
the Trust Agreement or the institution acting as Mortgagee hereunder, any
document required to be executed by it pursuant to the terms of Section 9.01
hereof affects any right, duty, immunity or indemnity with respect to such
institution under this Trust Indenture or the Lease, such institution may in its
discretion decline to execute such document.
SECTION 9.03. DOCUMENTS MAILED TO NOTE HOLDERS.
Promptly after the execution by the Owner Trustee or the Mortgagee of
any document entered into pursuant to Section 9.01 hereof, the Mortgagee shall
mail, by first class mail, postage prepaid, a copy thereof to Lessee and to each
Note Holder at its address last set forth in the Equipment Note Register, but
the failure of the Mortgagee to mail such copies shall not impair or affect the
validity of such document.
SECTION 9.04. NO REQUEST NECESSARY FOR LEASE SUPPLEMENT OR TRUST
INDENTURE SUPPLEMENT.
No written request or consent of the Mortgagee, the Note Holders or
the Owner Participant pursuant to Section 9.01 hereof shall be required to
enable the Owner Trustee to enter into any Lease Supplement specifically
required by the terms of the Lease or to execute and deliver a Trust Indenture
Supplement specifically required by the terms hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. TERMINATION OF TRUST INDENTURE.
Upon (or at any time after) payment in full of the Original Amount of,
Make-Whole Amount, if any, and interest on and all other amounts due under all
Equipment Notes and provided that there shall then be no other Secured
Obligations due to the Note Holders and the Mortgagee hereunder or under the
Participation Agreement or any other Operative Agreement, the Owner Trustee
shall direct the Mortgagee to execute and deliver to or as directed in writing
by the Owner Trustee an appropriate instrument releasing the Aircraft and the
Engines from the Lien of this Trust Indenture and releasing the Lease, the
Purchase Agreement, the Purchase Agreement Assignment with the Consent and
Agreement and the Engine Consent and Agreement attached thereto from the
assignment and pledge thereof hereunder and the Mortgagee shall execute and
deliver such instrument as aforesaid and give written notice thereof to Lessee;
PROVIDED, HOWEVER, that this Trust Indenture and the trusts created hereby shall
earlier terminate and this Trust Indenture shall be of no further force or
effect upon any sale or other final disposition by the Mortgagee of all property
constituting part of the Trust Indenture Estate and the final distribution by
the Mortgagee of all monies or other property or proceeds constituting part of
the Trust Indenture Estate in accordance with the terms hereof. Except as
aforesaid otherwise provided, this Trust Indenture and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.
SECTION 10.02. NO LEGAL TITLE TO TRUST INDENTURE ESTATE IN NOTE
HOLDERS.
No holder of an Equipment Note shall have legal title to any part of
the Trust Indenture Estate. No transfer, by operation of law or otherwise, of
any Equipment Note or other right, title and interest of any Note Holder in and
to the Trust Indenture Estate or hereunder shall operate to terminate this Trust
Indenture or entitle such holder or any successor or transferee of such holder
to an accounting or to the transfer to it of any legal title to any part of the
Trust Indenture Estate.
SECTION 10.03. SALE OF AIRCRAFT BY MORTGAGEE IS BINDING.
Any sale or other conveyance of the Trust Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the Mortgagee
made pursuant to the terms of this Trust Indenture shall bind the Note Holders
and shall be effective to transfer or convey all right, title and interest of
the Trustee, the Owner Trustee, the Owner Participant and such holders in and to
such Trust Indenture Estate or part thereof. No purchaser or other grantee shall
be required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any sale or
other proceeds with respect thereto by the Mortgagee.
SECTION 10.04. TRUST INDENTURE FOR BENEFIT OF OWNER TRUSTEE,
MORTGAGEE, OWNER PARTICIPANT AND NOTE HOLDERS.
Nothing in this Trust Indenture, whether express or implied, shall be
construed to give any person other than the Owner Trustee, the Mortgagee, the
Owner Participant, and the Note Holders, any legal or equitable right, remedy or
claim under or in respect of this Trust Indenture.
SECTION 10.05. 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 Trust Indenture to be made, given,
furnished or filed shall be in writing, personally delivered or mailed by
certified mail, postage prepaid, or by facsimile or confirmed telex, and (i) if
to the Owner Trustee, addressed to it at 79 South Main Street, Salt Lake City,
Utah 84111 with a copy to the Owner Participant addressed as provided in clause
(iii) below, (ii) if to Mortgagee, addressed to it at its office at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration, facsimile number (302) 651-8882, (iii) if to any
Participant, Lessee, or any Note Holder, addressed to such party at such address
as such party shall have furnished by notice to the Owner Trustee and the
Mortgagee, or, until an address is so furnished, addressed to the address of
such party (if any) set forth on Schedule 1 to the Participation Agreement or in
the Equipment Note Register. Whenever any notice in writing is required to be
given by the Owner Trustee, any Participant or the Mortgagee or any Note Holder
to any of the other of them, such notice shall be deemed given and such
requirement satisfied when such notice is received, or if such notice is mailed
by certified mail, postage prepaid, three Business Days after being mailed,
addressed as provided above. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the other
parties to this Trust Indenture.
SECTION 10.06. SEVERABILITY.
Any provision of this Trust Indenture 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. Any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 10.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS.
No term or provision of this Trust Indenture or the Equipment Notes
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Owner Trustee and the Mortgagee, in
compliance with Section 9.01 hereof. Any waiver of the terms hereof or of any
Equipment Note shall be effective only in the specific instance and for the
specific purpose given.
SECTION 10.08. 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 permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Note Holder
shall bind the successors and assigns of such holder. This Trust Indenture and
the Trust Indenture Estate shall not be affected by any amendment or supplement
to the Trust Agreement or by any other action taken under or in respect of the
Trust Agreement, except that each reference in this Trust Indenture to the Trust
Agreement shall mean the Trust Agreement as amended and supplemented from time
to time to the extent permitted hereby, thereby and by the Participation
Agreement. Each Note Holder by its acceptance of an Equipment Note agrees to be
bound by this Trust Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 10.09. 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 10.10. NORMAL COMMERCIAL RELATIONS.
Anything contained in this Trust Indenture to the contrary
notwithstanding, Owner Trustee, Mortgagee, any Participant or any bank or other
Affiliate of such Participant may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with Lessee
[or any Permitted Sublessee], fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of loans
or other extensions of credit to Lessee for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.
________________
Insert bracketed language if the Lease provides for the assignment of a
permitted sublease.
SECTION 10.11. GOVERNING LAW; COUNTERPART FORM.
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may
be executed by the parties hereto in separate counterparts (or upon separate
signature pages bound together into one or more 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 instrument.
SECTION 10.12. VOTING BY NOTE HOLDERS.
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
SECTION 10.13. BANKRUPTCY.
It is the intention of the parties that the Owner Trustee, as lessor
under the Lease (and the Mortgagee as assignee of the Owner Trustee hereunder),
shall be entitled to the benefits of Section 1110 with respect to the right to
take possession of the Aircraft, Airframe, Engines and Parts as provided in the
Lease in the event of a case under Chapter 11 of the Bankruptcy Code in which
Lessee is a debtor, and in any instance where more than one construction is
possible of the terms and conditions hereof or any other pertinent Operative
Agreement, each such party agrees that a construction which would preserve such
benefits shall control over any construction which would not preserve such
benefits.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture and Mortgage to be duly executed by their respective officers thereof
duly authorized as of the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
not in its individual capacity, except
as expressly provided herein, but
solely as Owner Trustee, as Owner
Trustee
By:______________________________________
Name:_________________________________
Title:________________________________
WILMINGTON TRUST COMPANY, as
Mortgagee
By:______________________________________
Name:_________________________________
Title:________________________________
EXHIBIT A
TO TRUST INDENTURE AND MORTGAGE ___
TRUST INDENTURE AND MORTGAGE ___ SUPPLEMENT
This TRUST INDENTURE AND MORTGAGE ___ SUPPLEMENT NO. 1, dated
___________, 199_ (herein called this "Trust Indenture Supplement") of FIRST
SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely
as Owner Trustee (herein called the "Owner Trustee") under that certain Trust
Agreement ___ dated as of ___________, 199_ (the "Trust Agreement"), between the
Owner Trustee and the Owner Participant named therein.
W I T N E S S E T H:
WHEREAS, the Trust Indenture and Mortgage ___, dated as of
____________, 199_ (as amended and supplemented to the date hereof, the "Trust
Indenture") between the Owner Trustee and Wilmington Trust Company, as Mortgagee
(the "Mortgagee"), provides for the execution and delivery of a supplement
thereto substantially in the form hereof, which shall particularly describe the
Aircraft, and shall specifically mortgage such Aircraft to the Mortgagee; and
WHEREAS, each of the Trust Agreement and Trust Indenture relates to
the Airframe and Engines described below, and a counterpart of the Trust
Indenture is attached hereto and made a part hereof and this Trust Indenture
Supplement, together with such counterpart of the Trust Indenture, is being
filed for recordation on the date hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth that the
Owner Trustee hereby confirms that the Lien of the Trust Indenture on the Trust
Indenture Estate covers all of Owner Trustee s right, title and interest in and
to the following described property:
AIRFRAME
One airframe identified as follows:
FAA
REGISTRATION MANUFACTURER'S
MANUFACTURER MODEL NUMBER SERIAL NUMBER
- --------------------- ----------------- ------------------ ------------------
The Boeing Company
together with all of the Owner Trustee s right, title and interest in and to all
Parts of whatever nature, whether now owned or hereinafter acquired and which
are from time to time incorporated or installed in or attached to said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
MANUFACTURER MANUFACTURER'S MODEL SERIAL NUMBER
- -------------------- ------------------------------------ --------------------
together with all of Owner Trustee s right, title and interest in and to all
Parts of whatever nature, whether now owned or hereafter acquired and which are
from time to time incorporated or installed in or attached to either of such
engines.
Together with all of Owner Trustee s right, title and interest in and
to (a) all Parts of whatever nature, which from time to time are included within
the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations which
constitute appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment excluded from the definition of Parts) and (b)
all Aircraft Documents.
As further security for the obligations referred to above and secured
by the Trust Indenture and hereby, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged and confirmed, and
does hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Mortgagee, its successors and assigns, for the security and
benefit of the Loan Participants and the Note Holders, in the trust created by
the Trust Indenture, all of the right, title and interest of the Owner Trustee
in, to and under the Lease Supplement of even date herewith covering the
property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, its successors and assigns, in trust for the equal and proportionate
benefit and security of the Loan Participants and the Note Holders, except as
provided in Section 2.14 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Equipment Note over any other by
reason of priority of time of issue, sale, negotiation, date of maturity thereof
or otherwise for any reason whatsoever, and for the uses and purposes and
subject to the terms and provisions set forth in the Trust Indenture.
This Trust Indenture Supplement shall be construed as supplemental to
the Trust Indenture and shall form a part thereof. The Trust Indenture is each
hereby incorporated by reference herein and is hereby ratified, approved and
confirmed.
AND, FURTHER, the Owner Trustee hereby acknowledges that the Aircraft
referred to in this Trust Indenture Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee covered by all the terms and conditions of the
Trust Agreement, subject to the pledge and mortgage thereof under the Trust
Indenture.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust Indenture
Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Owner Trustee,
Owner Trustee
By:______________________________________
Name:
Title:
TRUST INDENTURE AND MORTGAGE
SCHEDULE I
ORIGINAL AMOUNT INTEREST RATE
--------------- -------------
Series A:
Series B:
Series C:
TRUST INDENTURE AND MORTGAGE
Equipment Note Amortization
PERCENTAGE OF
ORIGINAL AMOUNT
PAYMENT DATE TO BE PAID
- ------------------------------------- -----------------------------------------
-----------------------------------------------------------------------
| CONFIDENTIAL: SUBJECT TO RESTRICTIONS ON DISSEMINATION |
| SET FORTH IN SECTION 7 OF THIS AGREEMENT |
-----------------------------------------------------------------------
================================================================================
PARTICIPATION AGREEMENT ___
Dated as of ______
Among
CONTINENTAL AIRLINES, INC.,
Owner,
and
WILMINGTON TRUST COMPANY,
Not in its individual capacity
except as expressly provided herein,
but solely as Mortgagee, Subordination Agent
under the Intercreditor Agreement and Pass Through
Trustee under each of the Pass Through Trust Agreements
----------------------------
One Boeing Model ___ Aircraft
Bearing Manufacturer's Serial No. ___
and U.S. Registration No. ___
================================================================================
CONTENTS
SECTION 1. DEFINITIONS AND CONSTRUCTION............................ 2
SECTION 2. SECURED LOANS; CLOSING.................................. 2
2.1 Making of Loans and Issuance of
Equipment Notes................................ 2
2.2 Closing......................................... 3
SECTION 3. [Intentionally omitted]................................. 3
SECTION 4. CONDITIONS PRECEDENT.................................... 3
4.1 Conditions Precedent to the
Obligations of the Pass Through
Trustees ...................................... 3
4.2 Conditions Precedent to Obligations
of Mortgagee................................... 7
4.3 Conditions Precedent to Obligations
of Owner....................................... 8
4.4 Post-Registration Opinion....................... 9
SECTION 5. REPRESENTATIONS AND WARRANTIES.......................... 9
5.1 Owner's Representations and
Warranties..................................... 9
5.2 WTC's Representations and Warranties............ 12
SECTION 6. COVENANTS, UNDERTAKINGS AND AGREEMENTS.................. 16
6.1 Covenants of Owner.............................. 16
6.2 Covenants of WTC................................ 18
6.3 Covenants of Note Holders....................... 19
6.4 Agreements...................................... 21
SECTION 7. CONFIDENTIALITY......................................... 24
SECTION 8. INDEMNIFICATION AND EXPENSES............................ 25
8.1 General Indemnity............................... 25
8.2 Expenses........................................ 32
8.3 General Tax Indemnity........................... 32
8.4 Payments........................................ 43
8.5 Interest........................................ 43
8.6 Benefit of Indemnities.......................... 44
SECTION 9. ASSIGNMENT OR TRANSFER OF INTEREST...................... 44
9.1 Note Holders.................................... 44
9.2 Effect of Transfer.............................. 44
SECTION 10. SECTION 1110............................................ 45
SECTION 11. CHANGE OF CITIZENSHIP................................... 45
11.1 Generally....................................... 45
11.2 Mortgagee....................................... 45
SECTION 12. MISCELLANEOUS........................................... 45
12.1 Amendments...................................... 45
12.2 Severability.................................... 46
12.3 Survival........................................ 46
12.4 Reproduction of Documents....................... 46
12.5 Counterparts.................................... 47
12.6 No Waiver....................................... 47
12.7 Notices......................................... 47
12.8 GOVERNING LAW; SUBMISSION TO
JURISDICTION; VENUE............................. 48
12.9 Third-Party Beneficiary......................... 49
12.10 Entire Agreement................................ 49
12.11 Further Assurances.............................. 49
SCHEDULES AND EXHIBITS
SCHEDULE 1 - Accounts; Addresses
SCHEDULE 2 - Commitments
SCHEDULE 3 - Certain Terms
SCHEDULE 4 - Permitted Countries
EXHIBIT A - Opinion of special counsel to Owner
EXHIBIT B - Opinion of corporate counsel to Owner
EXHIBIT C - Opinion of special counsel to Mortgagee
and to Pass Through Trustees
EXHIBIT D - Opinion of special counsel in Oklahoma City, Oklahoma
PARTICIPATION AGREEMENT ____
PARTICIPATION AGREEMENT , dated as of (this "Agreement"), among (a)
CONTINENTAL AIRLINES, INC., a Delaware corporation ("Owner"), (b) WILMINGTON
TRUST COMPANY, a Delaware banking corporation, not in its individual capacity,
except as expressly provided herein, but solely as Mortgagee (in its capacity as
Mortgagee, "Mortgagee" and in its individual capacity, "WTC"), (c) WILMINGTON
TRUST COMPANY, not in its individual capacity, except as expressly provided
herein, but solely as Pass Through Trustee under each of the Pass Through Trust
Agreements (each, a "Pass Through Trustee") and (d) WILMINGTON TRUST COMPANY,
not in its individual capacity, except as expressly provided herein, but solely
as Subordination Agent under the Intercreditor Agreement ("Subordination
Agent").
RECITALS
A. Owner and Airframe Manufacturer have entered into the Purchase
Agreement, pursuant to which, among other things, Airframe Manufacturer has
agreed to manufacture and sell to Owner and Owner has agreed to purchase from
Airframe Manufacturer, certain aircraft, including the Aircraft.
B. Pursuant to each of the Pass Through Trust Agreements, the Pass Through
Trusts were created and the Pass Through Certificates were issued and sold.
C. Each Pass Through Trustee has agreed to use a portion of the proceeds
from the issuance and sale of the Pass Through Certificates issued by each Pass
Through Trust to purchase from Owner, on behalf of the related Pass Through
Trust, the Equipment Note bearing the same interest rate as the Pass Through
Certificates issued by such Pass Through Trust.
D. Owner and Mortgagee, concurrently with the execution and delivery
hereof, have entered into the Trust Indenture for the benefit of the Note
Holders, pursuant to which, among other things, Owner agrees (1) to issue
Equipment Notes, in the amounts and otherwise as provided in the Trust
Indenture, and (2) to mortgage, pledge and assign to Mortgagee all of Owner's
right, title and interest in the Collateral to secure the Secured Obligations,
including, without limitation, Owner's obligations under the Equipment Notes.
E. The parties hereto wish to set forth in this Agreement the terms and
conditions upon and subject to which the aforesaid transactions shall be
effected.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS AND CONSTRUCTION
Capitalized terms used but not defined herein (including in the initial
paragraph and Recitals above) shall have the respective meanings set forth or
incorporated by reference, and shall be construed and interpreted in the manner
described, in Annex A to the Trust Indenture.
SECTION 2. SECURED LOANS; CLOSING
2.1 MAKING OF LOANS AND ISSUANCE OF EQUIPMENT NOTES
Subject to the terms and conditions of this Agreement, on the date hereof
or on such other date agreed to by the parties hereto (the "Closing Date"):
(a) Each Pass Through Trustee listed on Schedule 2 shall make a secured
loan to the Owner in the amount in Dollars opposite such Trustee's
name on Schedule 2; and
(b) The Owner shall issue, pursuant to and in accordance with the
provisions of Article II of the Trust Indenture, to the Subordination
Agent as the registered holder on behalf of each such Pass Through
Trustee, one or more Equipment Notes, dated the Closing Date, of the
Series set forth opposite such Trustee's name on Schedule 2, in an
aggregate principal amount equal to the secured loan made by each such
Pass Through Trustee.
In addition, the Owner shall have the option to issue the Series D
Equipment Notes on or after the Closing Date, subject to the terms of the Note
Purchase Agreement. If Series D Equipment Notes are issued after the Closing
Date, the Note Holder of such Equipment Notes shall be entitled to execute a
counterpart to this Agreement and become a party hereto.
2.2 CLOSING
(a) The Closing of the transactions contemplated hereby shall take place
at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York,
New York 10004, or at such other place as the parties shall agree.
(b) All payments pursuant to this Section 2 shall be made in immediately
available funds to such accounts set forth in Schedule 1 hereto.
SECTION 3. [INTENTIONALLY OMITTED]
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PASS THROUGH
TRUSTEES
The obligation of each Pass Through Trustee listed on Schedule 2 to make
the secured loan described in Section 2.1(a) and to participate in the
transactions contemplated by this Agreement on the Closing Date is subject to
the fulfillment, prior to or on the Closing Date, of the following conditions
precedent:
4.1.1 EQUIPMENT NOTES
The Owner shall have tendered the Equipment Notes to be issued to such
Pass Through Trustees to the Mortgagee for authentication and the Mortgagee
shall have authenticated such Equipment Notes to be issued to such Pass Through
Trustees and shall have tendered the Equipment Notes to the Subordination Agent
on behalf of such Pass Through Trustee, against receipt of the loan proceeds, in
accordance with Section 2.1.
4.1.2 DELIVERY OF DOCUMENTS
The Subordination Agent on behalf of each such Pass Through Trustee shall
have received executed counterparts or conformed copies of the following
documents:
(i) this Agreement;
(ii) the Trust Indenture;
(iii) the initial Trust Indenture Supplement;
(iv) the broker's report and insurance certificates required by
Section 4.06 of the Trust Indenture;
(v) the Consent and Agreement and the Engine Consent and Agreement;
(vi) the Bills of Sale;
(vii) (A) a copy of the Certificate of Incorporation and By-Laws of
Owner and resolutions of the board of directors of Owner and/or the
executive committee thereof, in each case certified as of the Closing Date,
by the Secretary or an Assistant Secretary of Owner, duly authorizing the
execution, delivery and performance by Owner of the Operative Agreements to
which it is party required to be executed and delivered by Owner on or
prior to the Closing Date in accordance with the provisions hereof and
thereof; and (B) an incumbency certificate of Owner as to the person or
persons authorized to execute and deliver the Operative Agreements on
behalf of Owner;
(viii) an Officer's Certificate of Owner, dated as of the Closing
Date, stating that its representations and warranties set forth in this
Agreement are true and correct as of the Closing Date (or, to the extent
that any such representation and warranty expressly relates to an earlier
date, true and correct as of such earlier date);
(ix) the Financing Statements;
(x) the following opinions of counsel, in each case dated the Closing
Date:
(A) an opinion of Hughes Hubbard & Reed LLP, special counsel to
Owner, substantially in the form of Exhibit A;
(B) an opinion of Owner's Legal Department, substantially in the
form of Exhibit B;
(C) an opinion of Richards, Layton & Finger, special counsel to
Mortgagee and to the Pass Through Trustees, substantially in the form
of Exhibit C;
(D) an opinion of Lytle Soule & Curlee, special counsel in
Oklahoma City, Oklahoma, substantially in the form of Exhibit D; and
(xi) a copy of a current, valid Standard Certificate of Airworthiness
for the Aircraft duly issued by the FAA, together with a copy of a duly
executed application for registration of the Aircraft with the FAA in the
name of the Owner.
4.1.3 PERFECTED SECURITY INTEREST
On the Closing Date, after giving effect to the filing of the FAA Filed
Documents and the Financing Statements, Mortgagee shall have received a duly
perfected first priority security interest in all of Owner's right, title and
interest in the Aircraft, subject only to Permitted Liens.
4.1.4 VIOLATION OF LAW
No change shall have occurred after the date of this Agreement in any
applicable Law that makes it a violation of Law for (a) Owner, any Pass Through
Trustee, Subordination Agent or Mortgagee to execute, deliver and perform the
Operative Agreements to which any of them is a party or (b) any Pass Through
Trustee to make the loan contemplated by Section 2.1, to acquire an Equipment
Note or to realize the benefits of the security afforded by the Trust Indenture.
4.1.5 REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations and warranties of each other party to this Agreement
made, in each case, in this Agreement and in any other Operative Agreement to
which it is a party, shall be true and accurate in all material respects as of
the Closing Date (unless any such representation and warranty shall have been
made with reference to a specified date, in which case such representation and
warranty shall be true and accurate as of such specified date) and each other
party to this Agreement shall have performed and observed, in all material
respects, all of its covenants, obligations and agreements in this Agreement and
in any other Operative Agreement to which it is a party to be observed or
performed by it as of the Closing Date.
4.1.6 NO EVENT OF DEFAULT
On the Closing Date, no event shall have occurred and be continuing, or
would result from the mortgage of the Aircraft, which constitutes a Default or
an Event of Default.
4.1.7 NO EVENT OF LOSS
No Event of Loss with respect to the Airframe or any Engine shall have
occurred and no circumstance, condition, act or event that, with the giving of
notice or lapse of time or both, would give rise to or constitute an Event of
Loss with respect to the Airframe or any Engine shall have occurred.
4.1.8 TITLE
Owner shall have good title (subject to filing and recordation of the FAA
Bill of Sale with the FAA) to the Aircraft, free and clear of all Liens, except
Permitted Liens.
4.1.9 CERTIFICATION
The Aircraft shall have been duly certificated by the FAA as to type and
airworthiness in accordance with the terms of the Purchase Agreement.
4.1.10 SECTION 1110
Mortgagee shall be entitled to the benefits of Section 1110 (as currently
in effect) with respect to the right to take possession of the Airframe and
Engines as provided in the Trust Indenture in the event of a case under Chapter
11 of the Bankruptcy Code in which Owner is a debtor.
4.1.11 FILING
On the Closing Date (a) the FAA Filed Documents shall have been duly filed
for recordation (or shall be in the process of being so duly filed for
recordation) with the FAA in accordance with the Act and (b) each Financing
Statement shall have been duly filed (or shall be in the process of being so
duly filed) in the appropriate jurisdiction.
4.1.12 NO PROCEEDINGS
No action or proceeding shall have been instituted, nor shall any action
be threatened in writing, before any Government Entity, nor shall any order,
judgment or decree have been issued or proposed to be issued by any Government
Entity, to set aside, restrain, enjoin or prevent the completion and
consummation of this Agreement or any other Operative Agreement or the
transactions contemplated hereby or thereby.
4.1.13 GOVERNMENTAL ACTION
All appropriate action required to have been taken prior to the Closing
Date by the FAA, or any governmental or political agency, subdivision or
instrumentality of the United States, in connection with the transactions
contemplated by this Agreement shall have been taken, and all orders, permits,
waivers, authorizations, exemptions and approvals of such entities required to
be in effect on the Closing Date in connection with the transactions
contemplated by this Agreement shall have been issued.
4.1.14 NOTE PURCHASE AGREEMENT
The conditions precedent to the obligations of the Pass Through Trustees
and the other requirements relating to the Aircraft and the Equipment Notes set
forth in the Note Purchase Agreement shall have been satisfied.
4.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF MORTGAGEE
The obligation of Mortgagee to authenticate the Equipment Notes on the
Closing Date is subject to the satisfaction or waiver by Mortgagee, on or prior
to the Closing Date, of the conditions precedent set forth below in this Section
4.2.
4.2.1 DOCUMENTS
Executed originals of the agreements, instruments, certificates or
documents described in Section 4.1.2 shall have been received by Mortgagee,
except as specifically provided therein, unless the failure to receive any such
agreement, instrument, certificate or document is the result of any action or
inaction by Mortgagee.
4.2.2 OTHER CONDITIONS PRECEDENT
Each of the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6 and
4.1.10 shall have been satisfied unless the failure of any such condition to be
satisfied is the result of any action or inaction by Mortgagee.
4.3 CONDITIONS PRECEDENT TO OBLIGATIONS OF OWNER
The obligation of Owner to participate in the transaction contemplated
hereby on the Closing Date is subject to the satisfaction or waiver by Owner, on
or prior to the Closing Date, of the conditions precedent set forth below in
this Section 4.3.
4.3.1 DOCUMENTS
Executed originals of the agreements, instruments, certificates or
documents described in Section 4.1.2 shall have been received by Owner, except
as specifically provided therein, and shall be satisfactory to Owner, unless the
failure to receive any such agreement, instrument, certificate or document is
the result of any action or inaction by Owner. In addition, the Owner shall have
received the following:
(i) (A) an incumbency certificate of WTC as to the person or persons
authorized to execute and deliver the Operative Agreements on behalf of WTC
and (B) a copy of the Certificate of Incorporation and By-Laws and general
authorizing resolution of the board of directors (or executive committee)
or other satisfactory evidence of authorization of WTC, certified as of the
Closing Date by the Secretary or Assistant or Attesting Secretary of WTC,
which authorize the execution, delivery and performance by WTC of the
Operative Agreements to which it is a party; and
(ii) an Officer's Certificate of WTC, dated as of the Closing Date,
stating that its representations and warranties in its individual capacity
or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the case
may be, set forth in this Agreement are true and correct as of the Closing
Date (or, to the extent that any such representation and warranty expressly
relates to an earlier date, true and correct as of such earlier date);
4.3.2 OTHER CONDITIONS PRECEDENT
Each of the conditions set forth in Sections 4.1.4, 4.1.5, 4.1.6, 4.1.7,
4.1.8, 4.1.9, 4.1.10, 4.1.11, 4.1.12 and 4.1.13 shall have been satisfied or
waived by Owner, unless the failure of any such condition to be satisfied is the
result of any action or inaction by Owner.
4.4 POST-REGISTRATION OPINION
Promptly upon the registration of the Aircraft and the recordation of the
FAA Filed Documents pursuant to the Act, Owner will cause Lytle Soule & Curlee,
special counsel in Oklahoma City, Oklahoma, to deliver to Owner, each Pass
Through Trustee and Mortgagee a favorable opinion or opinions addressed to each
of them with respect to such registration and recordation.
SECTION 5. REPRESENTATIONS AND WARRANTIES
5.1 OWNER'S REPRESENTATIONS AND WARRANTIES
Owner represents and warrants to each Pass Through Trustee, Subordination
Agent and Mortgagee that:
5.1.1 ORGANIZATION; QUALIFICATION
Owner is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware and has the corporate power and
authority to conduct the business in which it is currently engaged and to own or
hold under lease its properties and to enter into and perform its obligations
under the Operative Agreements to which it is party. Owner is duly qualified to
do business as a foreign corporation in good standing in each jurisdiction in
which the nature and extent of the business conducted by it, or the ownership of
its properties, requires such qualification, except where the failure to be so
qualified would not give rise to a Material Adverse Change to Owner.
5.1.2 CORPORATE AUTHORIZATION
Owner has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval of
stockholders required by its Certificate of Incorporation or By-Laws) to
authorize the execution and delivery of each of the Operative Agreements to
which it is party, and the performance of its obligations thereunder.
5.1.3 NO VIOLATION
The execution and delivery by Owner of the Operative Agreements to which
it is party, the performance by Owner of its obligations thereunder and the
consummation by Owner on the Closing Date of the transactions contemplated
thereby, do not and will not (a) violate any provision of the Certificate of
Incorporation or By-Laws of Owner, (b) violate any Law applicable to or binding
on Owner or (c) violate or constitute any default under (other than any
violation or default that would not result in a Material Adverse Change to
Owner), or result in the creation of any Lien (other than as permitted under the
Trust Indenture) upon the Aircraft under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, lease, loan or other
material agreement, instrument or document to which Owner is a party or by which
Owner or any of its properties is bound.
5.1.4 APPROVALS
The execution and delivery by Owner of the Operative Agreements to which
Owner is a party, the performance by Owner of its obligations thereunder and the
consummation by Owner on the Closing Date of the transactions contemplated
thereby do not and will not require the consent or approval of, or the giving of
notice to, or the registration with, or the recording or filing of any documents
with, or the taking of any other action in respect of, (a) any trustee or other
holder of any Debt of Owner and (b) any Government Entity, other than the filing
of (x) the FAA Filed Documents and the Financing Statements (and continuation
statements periodically) and (y) filings, recordings, notices or other
ministerial actions pursuant to any routine recording, contractual or regulatory
requirements applicable to it.
5.1.5 VALID AND BINDING AGREEMENTS
The Operative Agreements to which Owner is a party have been duly
authorized, executed and delivered by Owner and, assuming the due authorization,
execution and delivery thereof by the other party or parties thereto, constitute
the legal, valid and binding obligations of Owner and are enforceable against
Owner in accordance with the respective terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar Laws affecting the rights of
creditors generally and general principles of equity, whether considered in a
proceeding at law or in equity.
5.1.6 REGISTRATION AND RECORDATION
Except for (a) the registration of the Aircraft with the FAA pursuant to
the Act in the name of Owner, (b) the filing for recordation (and recordation)
of the FAA Filed Documents, (c) the filing of the Financing Statements (and
continuation statements relating thereto at periodic intervals), and (d) the
affixation of the nameplates referred to in Section 4.02(f) of the Trust
Indenture, no further action, including any filing or recording of any document
(including any financing statement in respect thereof under Article 9 of the
UCC) is necessary in order to establish and perfect Mortgagee's security
interest in the Aircraft as against Owner and any other Person, in each case, in
any applicable jurisdictions in the United States.
5.1.7 CHIEF EXECUTIVE OFFICE
The chief executive office (as such term is defined in Article 9 of the
UCC) of Owner is located at 2929 Allen Parkway, Houston, Texas 77019.
5.1.8 NO EVENT OF LOSS
No Event of Loss has occurred with respect to the Airframe or any Engine,
and, to the Actual Knowledge of Owner, no circumstance, condition, act or event
has occurred that, with the giving of notice or lapse of time or both gives rise
to or constitutes an Event of Loss with respect to the Airframe or any Engine.
5.1.9 COMPLIANCE WITH LAWS
(a) Owner is a Citizen of the United States and a U.S. Air Carrier.
(b) Owner holds all licenses, permits and franchises from the appropriate
Government Entities necessary to authorize Owner to lawfully engage in air
transportation and to carry on scheduled commercial passenger service as
currently conducted, except where the failure to so hold any such license,
permit or franchise would not give rise to a Material Adverse Change to Owner.
(c) Owner is not an "investment company" or a company controlled by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
5.1.10 SECURITIES LAWS
Neither Owner nor any person authorized to act on its behalf has directly
or indirectly offered any beneficial interest or Security relating to the
ownership of the Aircraft, or any of the Equipment Notes or any other interest
in or security under the Trust Indenture, for sale to, or solicited any offer to
acquire any such interest or security from, or has sold any such interest or
security to, any person in violation of the Securities Act.
5.1.11 BROKER'S FEES
No Person acting on behalf of Owner is or will be entitled to any broker's
fee, commission or finder's fee in connection with the Transactions, other than
the fees and expenses payable by Owner in connection with the sale of the Pass
Through Certificates.
5.1.12 SECTION 1110
Mortgagee is entitled to the benefits of Section 1110 (as currently in
effect) with respect to the right to take possession of the Airframe and Engines
as provided in the Trust Indenture in the event of a case under Chapter 11 of
the Bankruptcy Code in which Owner is a debtor.
5.2 WTC'S REPRESENTATIONS AND WARRANTIES
WTC represents and warrants (with respect to Section 5.2.10, solely in its
capacity as Subordination Agent) to Owner that:
5.2.1 ORGANIZATION, ETC.
WTC is a Delaware banking corporation duly organized, validly existing and
in good standing under the Laws of the State of Delaware, holding a valid
certificate to do business as a Delaware banking corporation with banking
authority to execute and deliver, and perform its obligations under, the Pass
Through Trustee Agreements and the Operative Agreements to which it is a party.
5.2.2 CORPORATE AUTHORIZATION
WTC has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval of
stockholders required by Law or by its Certificate of Incorporation or By-Laws)
to authorize the execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Pass Through Trustee Agreements and the Operative Agreements to which it is
a party and the performance of its obligations thereunder.
5.2.3 NO VIOLATION
The execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Pass Through Trustee Agreements and the Operative Agreements to which it is
a party, the performance by WTC, in its individual capacity or as Mortgagee, a
Pass Through Trustee or Subordination Agent, as the case may be, of its
obligations thereunder and the consummation on the Closing Date of the
transactions contemplated thereby, do not and will not (a) violate any provision
of the Certificate of Incorporation or By-Laws of WTC, (b) violate any Law
applicable to or binding on WTC, in its individual capacity or (except in the
case of any Law relating to any Plan) as Mortgagee, a Pass Through Trustee or
Subordination Agent, or (c) violate or constitute any default under (other than
any violation or default that would not result in a Material Adverse Change to
WTC, in its individual capacity or Mortgagee, a Pass Through Trustee or
Subordination Agent), or result in the creation of any Lien (other than the Lien
of the Trust Indenture) upon any property of WTC, in its individual capacity or
as Mortgagee, a Pass Through Trustee or Subordination Agent, or any of WTC's
subsidiaries under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other agreement, instrument or
document to which WTC, in its individual capacity or as Mortgagee, a Pass
Through Trustee or Subordination Agent, is a party or by which WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, or any of their respective properties is bound.
5.2.4 APPROVALS
The execution and delivery by WTC, in its individual capacity or as
Mortgagee, a Pass Through Trustee or Subordination Agent, as the case may be, of
the Pass Through Trustee Agreements and the Operative Agreements to which it is
a party, the performance by WTC, in its individual capacity or as Mortgagee, a
Pass Through Trustee or Subordination Agent, as the case may be, of its
obligations thereunder and the consummation on the Closing Date by WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, as the case may be, of the transactions contemplated thereby do not and
will not require the consent, approval or authorization of, or the giving of
notice to, or the registration with, or the recording or filing of any documents
with, or the taking of any other action in respect of, (a) any trustee or other
holder of any Debt of WTC or (b) any Government Entity, other than the filing of
the FAA Filed Documents and the Financing Statements.
5.2.5 VALID AND BINDING AGREEMENTS
The Pass Through Trustee Agreements and the Operative Agreements to which
it is a party have been duly authorized, executed and delivered by WTC and,
assuming the due authorization, execution and delivery by the other party or
parties thereto, constitute the legal, valid and binding obligations of WTC, in
its individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, as the case may be, and are enforceable against WTC, in its individual
capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the
case may be, in accordance with the respective terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar Laws affecting the rights of creditors
generally and general principles of equity, whether considered in a proceeding
at law or in equity.
5.2.6 CITIZENSHIP
WTC is a Citizen of the United States.
5.2.7 NO LIENS
On the Closing Date, there are no Liens attributable to WTC in respect of
all or any part of the Collateral.
5.2.8 LITIGATION
There are no pending or, to the Actual Knowledge of WTC, threatened
actions or proceedings against WTC, in its individual capacity or as Mortgagee,
a Pass Through Trustee or Subordination Agent, before any court, administrative
agency or tribunal which, if determined adversely to WTC, in its individual
capacity or as Mortgagee, a Pass Through Trustee or Subordination Agent, as the
case may be, would materially adversely affect the ability of WTC, in its
individual capacity or as Mortgagee, a Pass Through Trustee or Subordination
Agent, as the case may be, to perform its obligations under any of the Mortgagee
Agreements, the Pass Through Trustee Agreements or the Subordination Agent
Agreements.
5.2.9 SECURITIES LAWS
Neither WTC nor any person authorized to act on its behalf has directly or
indirectly offered any beneficial interest or Security relating to the ownership
of the Aircraft or any interest in the Collateral or any of the Equipment Notes
or any other interest in or security under the Collateral for sale to, or
solicited any offer to acquire any such interest or security from, or has sold
any such interest or security to, any Person other than the Subordination Agent
and the Pass Through Trustees, except for the offering and sale of the Pass
Through Certificates.
5.2.10 INVESTMENT
The Equipment Notes to be acquired by the Subordination Agent are being
acquired by it for the account of the Pass Through Trustees, for investment and
not with a view to any resale or distribution thereof, except that, subject to
the restrictions on transfer set forth in Section 9, the disposition by it of
its Equipment Notes shall at all times be within its control.
5.2.11 TAXES
There are no Taxes payable by any Pass Through Trustee or WTC, as the case
may be, imposed by the State of Delaware or any political subdivision or taxing
authority thereof in connection with the execution, delivery and performance by
such Pass Through Trustee or WTC, as the case may be, of this Agreement or any
of the Pass Through Trustee Agreements (other than franchise or other taxes
based on or measured by any fees or compensation received by any such Pass
Through Trustee or WTC, as the case may be, for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust Agreements),
and there are no Taxes payable by any Pass Through Trustee or WTC, as the case
may be, imposed by the State of Delaware or any political subdivision thereof in
connection with the acquisition, possession or ownership by any such Pass
Through Trustee of any of the Equipment Notes (other than franchise or other
taxes based on or measured by any fees or compensation received by any such Pass
Through Trustee or WTC, as the case may be, for services rendered in connection
with the transactions contemplated by any of the Pass Through Trust Agreements),
and, assuming that the trusts created by the Pass Through Trust Agreements will
not be taxable as corporations, but, rather, each will be characterized as a
grantor trust under subpart E, Part I of Subchapter J of the Code or as a
partnership under Subchapter K of the Code, such trusts will not be subject to
any Taxes imposed by the State of Delaware or any political subdivision thereof;
5.2.12 BROKER'S FEES
No Person acting on behalf of WTC, in its individual capacity or as
Mortgagee, any Pass Through Trustee or Subordination Agent, is or will be
entitled to any broker's fee, commission or finder's fee in connection with the
Transactions.
SECTION 6. COVENANTS, UNDERTAKINGS AND AGREEMENTS
6.1 COVENANTS OF OWNER
Owner covenants and agrees, at its own cost and expense, with Note Holder
and Mortgagee as follows:
6.1.1 CORPORATE EXISTENCE; U.S. AIR CARRIER
Owner shall at all times maintain its corporate existence, except as
permitted by Section 4.07 of the Trust Indenture, and shall at all times remain
a U.S. Air Carrier.
6.1.2 NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE
Owner will give Mortgagee timely written notice (but in any event within
30 days prior to the expiration of the period of time specified under applicable
Law to prevent lapse of perfection) of any relocation of its chief executive
office (as such term is defined in Article 9 of the UCC) from its then present
location and will promptly take any action required by Section 6.1.3(c) as a
result of such relocation.
6.1.3 CERTAIN ASSURANCES
(a) Owner shall duly execute, acknowledge and deliver, or shall cause to
be executed, acknowledged and delivered, all such further agreements,
instruments, certificates or documents, and shall do and cause to be done such
further acts and things, in any case, as Mortgagee shall reasonably request for
accomplishing the purposes of this Agreement and the other Operative Agreements,
PROVIDED THAT any instrument or other document so executed by Owner will not
expand any obligations or limit any rights of Owner in respect of the
transactions contemplated by any Operative Agreement.
(b) Owner shall promptly take such action with respect to the recording,
filing, re-recording and refiling of the Trust Indenture and any supplements
thereto, including, without limitation, the initial Trust Indenture Supplement,
as shall be necessary to continue the perfection and priority of the Lien
created by the Trust Indenture.
(c) Owner, at its sole cost and expense, will cause the FAA Filed
Documents, the Financing Statements and all continuation statements (and any
amendments necessitated by any combination, consolidation or merger of the
Owner, or any relocation of its chief executive office) in respect of the
Financing Statements to be prepared and, subject only to the execution and
delivery thereof by Mortgagee, duly and timely filed and recorded, or filed for
recordation, to the extent permitted under the Act (with respect to the FAA
Filed Documents) or the UCC or similar law of any other applicable jurisdiction
(with respect to such other documents).
(d) If the Aircraft has been registered in a country other than the United
States pursuant to Section 4.02(e) of the Trust Indenture, Owner will furnish to
Mortgagee annually after such registration, commencing with the calendar year
after such registration is effected, an opinion of special counsel reasonably
satisfactory to Mortgagee stating that, in the opinion of such counsel, either
that (i) such action has been taken with respect to the recording, filing,
rerecording and refiling of the Operative Agreements and any supplements and
amendments thereto as is necessary to establish, perfect and protect the Lien
created by the Trust Indenture, reciting the details of such actions, or (ii) no
such action is necessary to maintain the perfection of such Lien.
6.1.4 SECURITIES LAWS
Neither Owner nor any person authorized to act on its behalf will directly
or indirectly offer any beneficial interest or Security relating to the
ownership of the Aircraft or any interest in any of the Equipment Notes or any
other interest in or security under the Trust Indenture, for sale to, or solicit
any offer to acquire any such interest or security from, or sell any such
interest or security to, any person in violation of the Securities Act or
applicable state or foreign securities Laws.
6.2 COVENANTS OF WTC
WTC in its individual capacity or as Mortgagee, each Pass Through Trustee
or Subordination Agent, as the case may be, covenants and agrees with Owner as
follows:
6.2.1 LIENS
WTC (a) will not directly or indirectly create, incur, assume or suffer to
exist any Lien attributable to it on or with respect to all or any part of the
Collateral or the Aircraft, (b) will, at its own cost and expense, promptly take
such action as may be necessary to discharge any Lien attributable to WTC on all
or any part of the Collateral or the Aircraft and (c) will personally hold
harmless and indemnify Owner, each Note Holder, each of their respective
Affiliates, successors and permitted assigns, and the Collateral from and
against (i) any and all Expenses, and (ii) any interference with the possession,
operation or other use of all or any part of the Aircraft, imposed on, incurred
by or asserted against any of the foregoing as a consequence of any such Lien.
6.2.2 SECURITIES ACT
WTC in its individual capacity or as Mortgagee, a Pass Through Trustee or
Subordination Agent, will not offer any beneficial interest or Security relating
to the ownership of the Aircraft or any interest in the Collateral, or any of
the Equipment Notes or any other interest in or security under the Trust
Indenture for sale to, or solicit any offer to acquire any such interest or
security from, or sell any such interest or security to, any Person in violation
of the Securities Act or applicable state or foreign securities Laws, provided
that the foregoing shall not be deemed to impose on WTC any responsibility with
respect to any such offer, sale or solicitation by any other party hereto.
6.2.3 PERFORMANCE OF AGREEMENTS
WTC, in its individual capacity and as Mortgagee, a Pass Through Trustee
or Subordination Agent, as the case may be, shall perform its obligations under
the Pass Through Trustee Agreements and the Operative Agreements in accordance
with the terms thereof.
6.2.4 WITHHOLDING TAXES
WTC shall indemnify (on an after-tax basis) and hold harmless Owner
against any United States withholding taxes (and related interest, penalties and
additions to tax) as a result of the failure by WTC to withhold on payments to
any Note Holder if such Note Holder failed to provide to Mortgagee necessary
certificates or forms to substantiate the right to exemption from such
withholding tax.
6.3 COVENANTS OF NOTE HOLDERS
Each Note Holder (including Subordination Agent) as to itself only
covenants and agrees with Owner and Mortgagee as follows:
6.3.1 WITHHOLDING TAXES
Such Note Holder (if it is a Non-U.S. Person) agrees to indemnify (on an
after-tax basis) and hold harmless Owner and Mortgagee against any United States
withholding taxes (and related interest, penalties and additions to tax) as a
result of the inaccuracy or invalidity of any certificate or form provided by
such Note Holder to Mortgagee in connection with such withholding taxes. Any
amount payable hereunder shall be paid within 30 days after receipt by a Note
Holder of a written demand therefor.
6.3.2 TRANSFER; COMPLIANCE
(a) Such Note Holder will (i) not transfer any Equipment Note or interest
therein in violation of the Securities Act or applicable state or foreign
securities Law; PROVIDED, that the foregoing provisions of this section shall
not be deemed to impose on such Note Holder any responsibility with respect to
any such offer, sale or solicitation by any other party hereto, and (ii) perform
and comply with the obligations specified to be imposed on it (as a Note Holder)
under each of the Trust Indenture and the form of Equipment Note set forth in
the Trust Indenture.
(b) Except for the transfer of the interests of each Pass Through Trustee
in the Equipment Notes to the trustee of the Related Trust (as defined in each
Pass Through Trust Agreement) in accordance with the Pass Through Trust
Agreement, each Note Holder will not sell, assign, convey, exchange or otherwise
transfer any Equipment Note or any interest in, or represented by, any Equipment
Note (it being understood that this provision is not applicable to the Pass
Through Certificates) unless the proposed transferee thereof first provides
Owner with both of the following:
(i) a written representation and covenant that either (a) no portion
of the funds it uses to purchase, acquire and hold such Equipment Note or
interest directly or indirectly constitutes, or may be deemed under the
Code or ERISA or any rulings, regulations or court decisions thereunder to
constitute, the assets of any Plan or (b) the transfer, and subsequent
holding, of such Equipment Note or interest shall not involve or give rise
to a transaction that constitutes a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975(c)(1) of the Code involving
Owner, a Pass Through Trustee, the Subordination Agent or the proposed
transferee (other than a transaction that is exempted from the prohibitions
of such sections by applicable provisions of ERISA or the Code or
administrative exemptions or regulations issued thereunder); and
(ii) a written covenant that it will not transfer any Equipment Note
or any interest in, or represented by, any Equipment Note unless the
subsequent transferee also makes the representation described in clause (i)
above and agrees to comply with this clause (ii).
6.4 AGREEMENTS
6.4.1 QUIET ENJOYMENT
Each Pass Through Trustee, Subordination Agent, each Note Holder and
Mortgagee agrees as to itself with Owner that, so long as no Event of Default
shall have occurred and be continuing, such Person shall not (and shall not
permit any Affiliate or other Person claiming by, through or under it to)
interfere with Owner's rights in accordance with the Indenture to the quiet
enjoyment, possession and use of the Aircraft.
6.4.2 CONSENTS
Each Pass Through Trustee, Subordination Agent and Mortgagee covenants and
agrees, for the benefit of Owner, that it shall not unreasonably withhold its
consent to any consent or approval requested of it under the terms of any of the
Operative Agreements which by its terms is not to be unreasonably withheld.
6.4.3 INSURANCE
Each Pass Through Trustee, Subordination Agent, Mortgagee and each Note
Holder agrees not to obtain or maintain insurance for its own account as
permitted by Section 4.06 of the Trust Indenture if such insurance would limit
or otherwise adversely affect the coverage of any insurance required to be
obtained or maintained by Owner pursuant to Section 4.06 of the Trust Indenture.
6.4.4 EXTENT OF INTEREST OF NOTE HOLDERS
A Note Holder shall not, as such, have any further interest in, or other
right with respect to, the Collateral when and if the principal and Make-Whole
Amount, if any, of and interest on the Equipment Note held by such Holder, and
all other sums, then due and payable to such Holder hereunder and under any
other Operative Agreement, shall have been paid in full.
6.4.5 FOREIGN REGISTRATION
Each Note Holder and Mortgagee hereby agree, for the benefit of Owner but
subject to the provisions of Section 4.02(b) of the Trust Indenture:
(a) that Owner shall be entitled to register the Aircraft or cause the
Aircraft to be registered in a country other than the United States subject to
compliance with the following:
(i) each of the following requirements is satisfied:
(A) no Special Default or Event of Default shall have occurred and be
continuing at the time of such registration;
(B) such proposed change of registration is made in connection with a
Permitted Lease to a Permitted Air Carrier;
(C) such country is a country with which the United States then
maintains normal diplomatic relations or, if Taiwan, the United
States then maintains diplomatic relations at least as good as
those in effect on the Closing Date;
(ii) the Mortgagee shall have received an opinion of counsel (subject
to customary exceptions) reasonably satisfactory to the Mortgagee addressed
to Mortgagee as to the effect that:
(A) such country would recognize the Owner's ownership interest
in the Aircraft;
(B) after giving effect to such change in registration, the Lien
of the Trust Indenture on the Owner's right, title and interest in and
to the Aircraft shall continue as a valid and duly perfected first
priority security interest and all filing, recording or other action
necessary to protect the same shall have been accomplished (or, if
such opinion cannot be given at the time of such proposed change in
registration because such change in registration is not yet effective,
(1) the opinion shall detail what filing, recording or other action is
necessary and (2) the Mortgagee shall have received a certificate from
Owner that all possible preparations to accomplish such filing,
recording and other action shall have been done, and such filing,
recording and other action shall be accomplished and a supplemental
opinion to that effect shall be delivered to the Mortgagee on or prior
to the effective date of such change in registration;
(C) unless Owner or the Permitted Air Carrier shall have agreed
to provide insurance covering the risk of requisition of use of the
Aircraft by the government of such country (so long as the Aircraft is
registered under the laws of such country), the laws of such country
require fair compensation by the government of such country payable in
currency freely convertible into Dollars and freely removable from
such country (without license or permit, unless Owner prior to such
proposed reregistration has obtained such license or permit) for the
taking or requisition by such government of such use; and
(D) it is not necessary, solely as a consequence of such change
in registration and without giving effect to any other activity of the
Mortgagee (or any Affiliate of the Mortgagee), for the Mortgagee to
qualify to do business in such jurisdiction as a result of such
reregistration in order to exercise any rights or remedies with
respect to the Aircraft.
(b) In addition, as a condition precedent to any change in registration
Owner shall have given to Mortgagee assurances reasonably satisfactory to
Mortgagee:
(i) to the effect that the provisions of Section 4.06 of the Trust
Indenture have been complied with after giving effect to such
change of registration;
(ii) of the payment by Owner of all reasonable out-of-pocket expenses
of each Note Holder and Mortgagee in connection with such change
of registry, including, without limitation (1) the reasonable
fees and disbursements of counsel to Mortgagee, (2) any filing or
recording fees, Taxes or similar payments incurred in connection
with the change of registration of the Aircraft and the creation
and perfection of the security interest therein in favor of
Mortgagee for the benefit of Note Holders, and (3) all costs and
expenses incurred in connection with any filings necessary to
continue in the United States the perfection of the security
interest in the Aircraft in favor of Mortgagee for the benefit of
Note Holders; and
(iii)to the effect that the tax and other indemnities in favor of
each person named as an indemnitee under any other Operative
Agreement afford each such person substantially the same
protection as provided prior to such change of registration (or
Owner shall have agreed upon additional indemnities that,
together with such original indemnities, in the reasonable
judgment of Mortgagee, afford such protection).
6.4.6 INTEREST IN CERTAIN ENGINES
Each Note Holder and Mortgagee agree, for the benefit of each of the
lessor, conditional seller, mortgagee or secured party of any airframe or engine
leased to, or purchased by, Owner or any Permitted Lessee subject to a lease,
conditional sale, trust indenture or other security agreement that it will not
acquire or claim, as against such lessor, conditional seller, mortgagee or
secured party, any right, title or interest in any engine as the result of such
engine being installed on the Airframe at any time while such engine is subject
to such lease, conditional sale, trust indenture or other security agreement and
owned by such lessor or conditional seller or subject to a trust indenture or
security interest in favor of such mortgagee or secured party.
SECTION 7. CONFIDENTIALITY
Owner, Note Holders and Mortgagee shall keep the Participation Agreement
and Annex B to the Trust Indenture confidential and shall not disclose, or cause
to be disclosed, the same to any Person, except (A) to prospective and permitted
transferees of Owner's, a Note Holder's, a Liquidity Provider's, Mortgagee's or
other Indenture Indemnitee's interest or their respective counsel or special
counsel, independent insurance brokers, auditors, or other agents who agree to
hold such information confidential, (B) to Owner's, a Note Holder's, a Liquidity
Provider's, a Pass Through Trustee's, Mortgagee's or other Indenture
Indemnitee's counsel or special counsel, independent insurance brokers,
auditors, or other agents, Affiliates or investors who agree to hold such
information confidential, (C) as may be required by any statute, court or
administrative order or decree, legal process or governmental ruling or
regulation, including those of any applicable insurance regulatory bodies
(including, without limitation, the National Association of Insurance
Commissioners), federal or state banking examiners, Internal Revenue Service
auditors or any stock exchange, (D) with respect to a Note Holder or any Pass
Through Trustee, to a nationally recognized rating agency for the purpose of
obtaining a rating on the Equipment Notes or the Pass Through Certificates or to
support an NAIC rating for the Equipment Notes or (E) such other Persons as are
reasonably deemed necessary by the disclosing party in order to protect the
interests of such party or for the purposes of enforcing such documents by such
party; provided, that any and all disclosures permitted by clauses (C), (D), or
(E) above shall be made only to the extent necessary to meet the specific
requirements or needs of the Persons making such disclosures.
SECTION 8. INDEMNIFICATION AND EXPENSES
8.1 GENERAL INDEMNITY
8.1.1 INDEMNITY
Whether or not any of the transactions contemplated hereby are
consummated, Owner shall indemnify, protect, defend and hold harmless each
Indemnitee from, against and in respect of, and shall pay on a net after-tax
basis, any and all Expenses of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against any Indemnitee, relating to, resulting from,
or arising out of or in connection with, any one or more of the following:
(a) The Operative Agreements, the Pass Through Agreements, or the
enforcement of any of the terms of any of the Operative Agreements or the Pass
Through Agreements;
(b) The Aircraft, the Airframe, any Engine or any Part, including, without
limitation, with respect thereto, (i) the manufacture, design, purchase,
acceptance, nonacceptance or rejection, ownership, registration, reregistration,
deregistration, delivery, nondelivery, lease, sublease, assignment, possession,
use or non-use, operation, maintenance, testing, repair, overhaul, condition,
alteration, modification, addition, improvement, storage, airworthiness,
replacement, repair, sale, substitution, return, abandonment, redelivery or
other disposition of the Aircraft, any Engine or any Part, (ii) any claim or
penalty arising out of violations of applicable Laws by Owner (or any Permitted
Lessee), (iii) tort liability, whether or not arising out of the negligence of
any Indemnitee (whether active, passive or imputed), (iv) death or property
damage of passengers, shippers or others, (v) environmental control, noise or
pollution and (vi) any Liens in respect of the Aircraft, any Engine or any Part;
(c) The offer, sale, or delivery of any Equipment Notes, Pass Through
Certificates or any interest therein or represented thereby; and
(d) Any breach of or failure to perform or observe, or any other
noncompliance with, any covenant or agreement or other obligation to be
performed by Owner under any Operative Agreement to which it is party or any
Pass Through Agreement or the falsity of any representation or warranty of Owner
in any Operative Agreement to which it is party or any Pass Through Agreement.
8.1.2 EXCEPTIONS
Notwithstanding anything contained in Section 8.1.1, Owner shall not be
required to indemnify, protect, defend and hold harmless any Indemnitee pursuant
to Section 8.1.1 in respect of any Expense of such Indemnitee:
(a) For any Taxes or a loss of Tax benefit, whether or not Owner is
required to indemnify therefor pursuant to Section 8.3;
(b) Except to the extent attributable to acts or events occurring prior
thereto, acts or events (other than acts or events related to the performance by
Owner of its obligations pursuant to the terms of the Operative Agreements) that
occur after the Trust Indenture is required to be terminated in accordance with
Section 11.01 of the Trust Indenture; PROVIDED, that nothing in this clause (b)
shall be deemed to exclude or limit any claim that any Indemnitee may have under
applicable Law by reason of an Event of Default or for damages from Owner for
breach of Owner's covenants contained in the Operative Agreements or to release
Owner from any of its obligations under the Operative Agreements that expressly
provide for performance after termination of the Trust Indenture;
(c) To the extent attributable to any Transfer (voluntary or involuntary)
by or on behalf of such Indemnitee of any Equipment Note or interest therein,
except for out-of-pocket costs and expenses incurred as a result of any such
Transfer pursuant to the exercise of remedies under any Operative Agreement;
(d) [Intentionally Omitted]
(e) To the extent attributable to the gross negligence or willful
misconduct of such Indemnitee or any related Indemnitee (as defined below)
(other than gross negligence or willful misconduct imputed to such person by
reason of its interest in the Aircraft or any Operative Agreement);
(f) [Intentionally Omitted]
(g) To the extent attributable to the incorrectness or breach of any
representation or warranty of such Indemnitee or any related Indemnitee
contained in or made pursuant to any Operative Agreement or any Pass Through
Agreement;
(h) To the extent attributable to the failure by such Indemnitee or any
related Indemnitee to perform or observe any agreement, covenant or condition on
its part to be performed or observed in any Operative Agreement or any Pass
Through Agreement;
(i) To the extent attributable to the offer or sale by such Indemnitee or
any related Indemnitee of any interest in the Aircraft, the Equipment Notes, the
Pass Through Certificates, or any similar interest, in violation of the
Securities Act or other applicable federal, state or foreign securities Laws
(other than any thereof caused by acts or omissions of Owner);
(j) (i) With respect to any Indemnitee (other than Mortgagee), to the
extent attributable to the failure of the Mortgagee to distribute funds received
and distributable by it in accordance with the Trust Indenture, (ii) with
respect to any Indemnitee (other than the Subordination Agent), to the extent
attributable to the failure of the Subordination Agent to distribute funds
received and distributable by it in accordance with the Intercreditor Agreement,
(iii) with respect to any Indemnitee (other than the Pass Through Trustees), to
the extent attributable to the failure of a Pass Through Trustee to distribute
funds received and distributable by it in accordance with the Pass Through Trust
Agreements, (iv) with respect to any Indemnitee (other than the Escrow Agent),
to the extent attributable to the failure of the Escrow Agent to pay funds
received and payable by it in accordance with any Escrow Agreement, (v) with
respect to any Indemnitee (other than the Paying Agent), to the extent
attributable to the failure of the Paying Agent to distribute funds received and
distributable by it in accordance with any Escrow Agreement, (vi) to the extent
attributable to the failure of the Depositary to pay funds payable by it in
accordance with any Deposit Agreement, (vii) with respect to Mortgagee, to the
extent attributable to the negligence or willful misconduct of Mortgagee in the
distribution of funds received and distributable by it in accordance with the
Trust Indenture, (viii) with respect to the Subordination Agent, to the extent
attributable to the negligence or willful misconduct of the Subordination Agent
in the distribution of funds received and distributable by it in accordance with
the Intercreditor Agreement, (ix) with respect to the Pass Through Trustees, to
the extent attributable to the negligence or willful misconduct of a Pass
Through Trustee in the distribution of funds received and distributable by it in
accordance with the Pass Through Trust Agreements, (x) with respect to the
Escrow Agent, to the extent attributable to the negligence or willful misconduct
of the Escrow Agent in the payment of funds received and payable by it in
accordance with any Escrow Agreement, and (xi) with respect to the Paying Agent,
to the extent attributable to the negligence or willful misconduct of the Paying
Agent in the distribution of funds received and distributable by it in
accordance with any Escrow Agreement;
(k) Other than during the continuation of an Event of Default, to the
extent attributable to the authorization or giving or withholding of any future
amendments, supplements, waivers or consents with respect to any Operative
Agreement or Pass Through Agreement other than such as have been requested by
Owner or as are required by or made pursuant to the terms of the Operative
Agreements or Pass Through Agreements (unless such requirement results from the
actions of an Indemnitee not required by or made pursuant to the Operative
Agreements or the Pass Through Agreements);
(l) To the extent attributable to any amount which any Indemnitee
expressly agrees to pay or such Indemnitee expressly agrees shall not be paid by
or be reimbursed by Owner;
(m) To the extent that it is an ordinary and usual operating or overhead
expense;
(n) [Intentionally Omitted]
(o) For any Lien attributable to such Indemnitee or any related
Indemnitee;
(p) If another provision of an Operative Agreement or a Pass Through
Agreement specifies the extent of Owner's responsibility or obligation with
respect to such Expense, to the extent arising from other than failure of Owner
to comply with such specified responsibility or obligation; or
(q) To the extent incurred by or asserted against an Indemnitee as a
result of any "prohibited transaction", within the meaning of Section 406 of
ERISA or Section 4975(c)(1) of the Code.
For purposes of this Section 8.1, a Person shall be considered a "related"
Indemnitee with respect to an Indemnitee if such Person is an Affiliate or
employer of such Indemnitee, a director, officer, employee, agent, or servant of
such Indemnitee or any such Affiliate or a successor or permitted assignee of
any of the foregoing.
8.1.3 SEPARATE AGREEMENT
This Agreement constitutes a separate agreement with respect to each
Indemnitee and is enforceable directly by each such Indemnitee.
8.1.4 NOTICE
If a claim for any Expense that an Indemnitee shall be indemnified against
under this Section 8.1 is made, such Indemnitee shall give prompt written notice
thereof to Owner. Notwithstanding the foregoing, the failure of any Indemnitee
to notify Owner as provided in this Section 8.1.4, or in Section 8.1.5, shall
not release Owner from any of its obligations to indemnify such Indemnitee
hereunder, except to the extent that such failure results in an additional
Expense to Owner (in which event Owner shall not be responsible for such
additional expense) or materially impairs Owner's ability to contest such claim.
8.1.5 NOTICE OF PROCEEDINGS; DEFENSE OF CLAIMS;
LIMITATIONS
(a) In case any action, suit or proceeding shall be brought against any
Indemnitee for which Owner is responsible under this Section 8.1, such
Indemnitee shall notify Owner of the commencement thereof and Owner may, at its
expense, participate in and to the extent that it shall wish (subject to the
provisions of the following paragraph), assume and control the defense thereof
and, subject to Section 8.1.5(c), settle or compromise the same.
(b) Owner or its insurer(s) shall have the right, at its or their expense,
to investigate or, if Owner or its insurer(s) shall agree not to dispute
liability to the Indemnitee giving notice of such action, suit or proceeding
under this Section 8.1.5 for indemnification hereunder or under any insurance
policies pursuant to which coverage is sought, control the defense of, any
action, suit or proceeding, relating to any Expense for which indemnification is
sought pursuant to this Section 8.1, and each Indemnitee shall cooperate with
Owner or its insurer(s) with respect thereto; PROVIDED, that Owner shall not be
entitled to control the defense of any such action, suit, proceeding or
compromise any such Expense during the continuance of any Event of Default. In
connection with any such action, suit or proceeding being controlled by Owner,
such Indemnitee shall have the right to participate therein, at its sole cost
and expense, with counsel reasonably satisfactory to Owner; PROVIDED, that such
Indemnitee's participation does not, in the reasonable opinion of the
independent counsel appointed by the Owner or its insurers to conduct such
proceedings, interfere with the defense of such case.
(c) In no event shall any Indemnitee enter into a settlement or other
compromise with respect to any Expense without the prior written consent of
Owner, which consent shall not be unreasonably withheld or delayed, unless such
Indemnitee waives its right to be indemnified with respect to such Expense under
this Section 8.1.
(d) In the case of any Expense indemnified by the Owner hereunder which is
covered by a policy of insurance maintained by Owner pursuant to Section 4.06 of
the Indenture, at Owner's expense, each Indemnitee agrees to cooperate with the
insurers in the exercise of their rights to investigate, defend or compromise
such Expense as may be required to retain the benefits of such insurance with
respect to such Expense.
(e) If an Indemnitee is not a party to this Agreement, Owner may require
such Indemnitee to agree in writing to the terms of this Section 8 and Section
12.8 prior to making any payment to such Indemnitee under this Section 8.
(f) Nothing contained in this Section 8.1.5 shall be deemed to require an
Indemnitee to contest any Expense or to assume responsibility for or control of
any judicial proceeding with respect thereto.
8.1.6 INFORMATION
Owner will provide the relevant Indemnitee with such information not
within the control of such Indemnitee, as is in Owner's control or is reasonably
available to Owner, which such Indemnitee may reasonably request and will
otherwise cooperate with such Indemnitee so as to enable such Indemnitee to
fulfill its obligations under Section 8.1.5. The Indemnitee shall supply Owner
with such information not within the control of Owner, as is in such
Indemnitee's control or is reasonably available to such Indemnitee, which Owner
may reasonably request to control or participate in any proceeding to the extent
permitted by Section 8.1.5.
8.1.7 EFFECT OF OTHER INDEMNITIES; SUBROGATION;
FURTHER ASSURANCES
Upon the payment in full by Owner of any indemnity provided for under this
Agreement, Owner, without any further action and to the full extent permitted by
Law, will be subrogated to all rights and remedies of the person indemnified
(other than with respect to any of such Indemnitee's insurance policies or in
connection with any indemnity claim such Indemnitee may have under Section 6.03
or 8.01 of the Trust Indenture) in respect of the matter as to which such
indemnity was paid. Each Indemnitee will give such further assurances or
agreements and cooperate with Owner to permit Owner to pursue such claims, if
any, to the extent reasonably requested by Owner and at Owner's expense.
8.1.8 REFUNDS
If an Indemnitee receives any refund, in whole or in part, with respect to
any Expense paid by Owner hereunder, it will promptly pay the amount refunded
(but not an amount in excess of the amount Owner or any of its insurers has paid
in respect of such Expense) over to Owner unless an Event of Default shall have
occurred and be continuing, in which case such amounts shall be paid over to
Mortgagee to hold as security for Owner's obligations under the Operative
Agreements or, if requested by Owner, applied to satisfy such obligations.
8.2 EXPENSES
8.2.1 INVOICES AND PAYMENT
The Mortgagee, the Pass Through Trustees and the Subordination Agent shall
promptly submit to Owner for its prompt approval (which shall not be
unreasonably withheld) copies of invoices in reasonable detail of the
Transaction Expenses for which it is responsible for providing information as
they are received (but in no event later than the 90th day after the Closing
Date). If so submitted and approved, the Owner agrees promptly, but in any event
no later than the 105th day after the Closing Date, to pay Transaction Expenses.
8.2.2 PAYMENT OF OTHER EXPENSES
Owner shall pay (i) the ongoing fees and expenses of Mortgagee, and (ii)
all reasonable out-of-pocket costs and expenses (including the reasonable fees
and disbursements of counsel) incurred by Mortgagee or any Note Holder
attributable to any waiver, amendment or modification of any Operative Agreement
to the extent requested by Owner.
8.3 GENERAL TAX INDEMNITY
8.3.1 GENERAL
Except as provided in Section 8.3.2, Owner agrees that each payment paid
by Owner under the Equipment Notes, and any other payment or indemnity paid by
Owner to a Tax Indemnitee under any Operative Agreement, shall be free of all
withholdings or deductions with respect to Taxes of any nature (other than U.S.
federal, state or local withholding taxes on, based on or measured by gross or
net income), and in the event that Owner shall be required by applicable law to
make any such withholding or deduction for any such payment (x) Owner shall make
all such withholdings or deductions, (y) the amount payable by Owner shall be
increased so that after making all required withholdings or deductions such Tax
Indemnitee receives the same amount that it would have received had no such
withholdings or deductions been made, and (z) Owner shall pay the full amount
withheld or deducted to the relevant Taxing Authority in accordance with
applicable law. Except as provided in Section 8.3.2 and whether or not any of
the transactions contemplated hereby are consummated, Owner shall pay,
indemnify, protect, defend and hold each Tax Indemnitee harmless from all Taxes
imposed by any Taxing Authority that may from time to time be imposed on or
asserted against any Tax Indemnitee or the Aircraft, the Airframe, any Engine or
any Part or any interest in any of the foregoing (whether or not indemnified
against by any other Person), upon or with respect to the Operative Agreements
or the transactions or payments contemplated thereby, including but not limited
to any Tax imposed upon or with respect to (x) the Aircraft, the Airframe, any
Engine, any Part, any Operative Agreement (including without limitation any
Equipment Notes) or any data or any other thing delivered or to be delivered
under an Operative Agreement, (y) the purchase, manufacture, acceptance,
rejection, sale, transfer of title, return, ownership, mortgaging, delivery,
transport, charter, rental, lease, re-lease, sublease, assignment, possession,
repossession, presence, use, condition, storage, preparation, maintenance,
modification, alteration, improvement, operation, registration, transfer or
change of registration, reregistration, repair, replacement, overhaul, location,
control, the imposition of any Lien, financing, refinancing requested by the
Owner, abandonment or other disposition of the Aircraft, the Airframe, any
Engine, any Part, any data or any other thing delivered or to be delivered under
an Operative Agreement or (z) interest, fees or any other income, proceeds,
receipts or earnings, whether actual or deemed, arising upon, in connection
with, or in respect of, any of the Operative Agreements (including the property
or income or other proceeds with respect to property held as part of the
Collateral) or the transactions contemplated thereby.
8.3.2 CERTAIN EXCEPTIONS
The provisions of Section 8.3.1 shall not apply to, and Owner shall have
no liability hereunder for, Taxes:
(a) imposed on a Tax Indemnitee by the federal government of the United
States or any Taxing Authority or governmental subdivision of the United States
or therein (including any state or local Taxing Authority) (i) on, based on, or
measured by, gross or net income or gross or net receipts, including capital
gains taxes, excess profits taxes, minimum taxes from tax preferences,
alternative minimum taxes, branch profits taxes, accumulated earnings taxes,
personal holding company taxes, succession taxes and estate taxes, and any
withholding taxes on, based on or measured by gross or net income or receipts or
(ii) on, or with respect to, or measured by, capital or net worth or in the
nature of a franchise tax or a tax for the privilege of doing business (other
than, in the case of clause (i) or (ii), sales, use, license or property Taxes);
(b) imposed on a Tax Indemnitee by any Taxing Authority or governmental
subdivision thereof or therein outside of the United States (including any
Taxing Authority in or of a territory, possession or commonwealth of the United
States) (i) on, based on, or measured by, gross or net income or gross or net
receipts, including capital gains taxes, excess profits taxes, minimum taxes
from tax preferences, alternative minimum taxes, branch profits taxes,
accumulated earnings taxes, personal holding company taxes, succession taxes and
estate taxes, and any withholding taxes on, based on or measured by gross or net
income or receipts or (ii) on, or with respect to, or measured by, capital or
net worth or in the nature of a franchise tax or a tax for the privilege of
doing business (other than, in the case of clause (i) or (ii), (A) sales, use,
license or property Taxes, or (B) any Taxes imposed by any Taxing Authority
(other than a Taxing Authority within whose jurisdiction such Tax Indemnitee is
incorporated or organized or maintains its principal place of business) if such
Tax Indemnitee would not have been subject to Taxes of such type by such
jurisdiction but for (I) the location, use or operation of the Aircraft, the
Airframe, any Engine or any Part thereof by an Owner Person within the
jurisdiction of the Taxing Authority imposing such Tax, or (II) the activities
of any Owner Person in such jurisdiction, including, but not limited to, use of
any other aircraft by Owner in such jurisdiction, (III) the status of any Owner
Person as a foreign entity or as an entity owned in whole or in part by foreign
persons, (IV) Owner having made (or having been deemed to have made) payments to
such Tax Indemnitee from the relevant jurisdiction or (V) in the case of the
Pass Through Trustees, the Note Holders or any related Tax Indemnitee, the Owner
being incorporated or organized or maintaining a place of business or conducting
activities in such jurisdiction);
(c) on, or with respect to, or measured by, any trustee fees, commissions
or compensation received by the Pass Through Trustee, Subordination Agent or
Mortgagee;
(d) that are being contested as provided in Section 8.3.4 hereof;
(e) imposed on any Tax Indemnitee to the extent that such Taxes result
from the gross negligence or willful misconduct of such Tax Indemnitee or any
Affiliate thereof;
(f) imposed on or with respect to a Tax Indemnitee (including the
transferee in those cases in which the Tax on transfer is imposed on, or is
collected from, the transferee) as a result of a transfer or other disposition
(including a deemed transfer or disposition) by such Tax Indemnitee or a related
Tax Indemnitee of any interest in the Aircraft, the Airframe, any Engine or any
Part, any interest arising under the Operative Agreements or any Equipment Note
or as a result of a transfer or disposition (including a deemed transfer or
disposition) of any interest in a Tax Indemnitee (other than (A) a substitution
or replacement of the Aircraft, the Airframe, any Engine or any Part by an Owner
Person that is treated for Tax purposes as a transfer or disposition, or (B) a
transfer pursuant to an exercise of remedies upon an Event of Default that shall
have occurred and have been continuing);
(g) Taxes in excess of those that would have been imposed had there not
been a transfer or other disposition by or to such Tax Indemnitee or a related
Tax Indemnitee described in paragraph (f) above;
(h) consisting of any interest, penalties or additions to tax imposed on a
Tax Indemnitee as a result of (in whole or in part) failure of such Tax
Indemnitee or a related Tax Indemnitee to file any return properly and timely,
unless such failure shall be caused by the failure of Owner to fulfill its
obligations, if any, under Section 8.3.6 with respect to such return;
(i) resulting from, or that would not have been imposed but for, any Liens
arising as a result of claims against, or acts or omissions of, or otherwise
attributable to such Tax Indemnitee or a related Tax Indemnitee that the Owner
is not obligated to discharge under the Operative Agreements;
(j) imposed on any Tax Indemnitee as a result of the breach by such Tax
Indemnitee or a related Tax Indemnitee of any covenant of such Tax Indemnitee or
any Affiliate thereof contained in any Operative Agreement or the inaccuracy of
any representation or warranty by such Tax Indemnitee or any Affiliate thereof
in any Operative Agreement;
(k) in the nature of an intangible or similar Tax (i) upon or with respect
to the value or principal amount of the interest of any Note Holder in any
Equipment Note or the loan evidenced thereby but only if such Taxes are in the
nature of franchise Taxes or result from the Tax Indemnitee doing business in
the taxing jurisdiction and are imposed because of the place of incorporation or
the activities unrelated to the transactions contemplated by the Operative
Agreements in the taxing jurisdiction of such Tax Indemnitee;
(l) imposed on a Tax Indemnitee by a Taxing Authority of a jurisdiction
outside the United States to the extent that such Taxes would not have been
imposed but for a connection between the Tax Indemnitee or a related Tax
Indemnitee and such jurisdiction imposing such Tax unrelated to the transactions
contemplated by the Operative Agreements; or
(m) Taxes relating to ERISA or Section 4975 of the Code.
For purposes hereof, a Tax Indemnitee and any other Tax Indemnitees that
are successors, assigns, agents, servants or Affiliates of such Tax Indemnitee
shall be related Tax Indemnitees.
8.3.3 PAYMENT
(a) Owner's indemnity obligation to a Tax Indemnitee under this Section
8.3 shall equal the amount which, after taking into account any Tax imposed upon
the receipt or accrual of the amounts payable under this Section 8.3 and any tax
benefits actually recognized by such Tax Indemnitee as a result of the
indemnifiable Tax (including, without limitation, any benefits recognized as a
result of an indemnifiable Tax being utilized by such Tax Indemnitee as a credit
against Taxes not indemnifiable under this Section 8.3), shall equal the amount
of the Tax indemnifiable under this Section 8.3.
(b) At Owner's request, the computation of the amount of any indemnity
payment owed by Owner or any amount owed by a Tax Indemnitee to Owner pursuant
to this Section 8.3 shall be verified and certified by an independent public
accounting firm selected by such Tax Indemnitee and reasonably satisfactory to
Owner. Such verification shall be binding. The costs of such verification
(including the fee of such public accounting firm) shall be borne by Owner
unless such verification shall result in an adjustment in Owner's favor of 5% or
more of the net present value of the payment as computed by such Tax Indemnitee,
in which case the costs shall be paid by such Tax Indemnitee.
(c) Each Tax Indemnitee shall provide Owner with such certifications,
information and documentation as shall be in such Tax Indemnitee's possession
and as shall be reasonably requested by Owner to minimize any indemnity payment
pursuant to this Section 8.3; provided, that notwithstanding anything to the
contrary contained herein, no Tax Indemnitee shall be required to provide Owner
with any Tax returns.
(d) Each Tax Indemnitee shall promptly forward to Owner any written
notice, bill or advice received by it from any Taxing Authority concerning any
Tax for which it seeks indemnification under this Section 8.3. Owner shall pay
any amount for which it is liable pursuant to this Section 8.3 directly to the
appropriate Taxing Authority if legally permissible or upon demand of a Tax
Indemnitee, to such Tax Indemnitee within 30 days of such demand (or, if a
contest occurs in accordance with Section 8.3.4, within 30 days after a Final
Determination (as defined below)), but in no event more than one Business Day
prior to the date the Tax to which such amount payable hereunder relates is due.
If requested by a Tax Indemnitee in writing, Owner shall furnish to the
appropriate Tax Indemnitee the original or a certified copy of a receipt for
Owner's payment of any Tax paid by Owner or such other evidence of payment of
such Tax as is acceptable to such Tax Indemnitee. Owner shall also furnish
promptly upon written request such data as any Tax Indemnitee may reasonably
require to enable such Tax Indemnitee to comply with the requirements of any
taxing jurisdiction unless such data is not reasonably available to Owner or,
unless such data is specifically requested by a Taxing Authority, is not
customarily furnished by domestic air carriers under similar circumstances. For
purposes of this Section 8.3, a "Final Determination" shall mean (i) a decision,
judgment, decree or other order by any court of competent jurisdiction that
occurs pursuant to the provisions of Section 8.3.4, which decision, judgment,
decree or other order has become final and unappealable, (ii) a closing
agreement or settlement agreement entered into in accordance with Section 8.3.4
that has become binding and is not subject to further review or appeal (absent
fraud, misrepresentation, etc.), or (iii) the termination of administrative
proceedings and the expiration of the time for instituting a claim in a court
proceeding.
(e) If any Tax Indemnitee shall actually realize a tax savings by reason
of any Tax paid or indemnified by Owner pursuant to this Section 8.3 (whether
such tax savings shall be by means of a foreign tax credit, depreciation or cost
recovery deduction or otherwise) and such savings is not otherwise taken into
account in computing such payment or indemnity such Tax Indemnitee shall pay to
Owner an amount equal to the lesser of (i) the amount of such tax savings, plus
any additional tax savings recognized as the result of any payment made pursuant
to this sentence, when, as, if, and to the extent, realized or (ii) the amount
of all payments pursuant to this Section 8.3 by Owner to such Tax Indemnitee
(less any payments previously made by such Tax Indemnitee to Owner pursuant to
this Section 8.3.3 (e)) (and the excess, if any, of the amount described in
clause (i) over the amount described in clause (ii) shall be carried forward and
applied to reduce pro tanto any subsequent obligations of Owner to make payments
to such Tax Indemnitee pursuant to this Section 8.3); provided, that such Tax
Indemnitee shall not be required to make any payment pursuant to this sentence
so long as a Lease Event of Default of a monetary nature has occurred and is
continuing. If a tax benefit is later disallowed or denied, the disallowance or
denial shall be treated as a Tax indemnifiable under Section 8.3.1 without
regard to the provisions of Section 8.3.2 (other than Section 8.3.2 (f)). Each
such Tax Indemnitee shall in good faith use reasonable efforts in filing its tax
returns and in dealing with Taxing Authorities to seek and claim any such tax
benefit.
8.3.4 CONTEST
(a) If a written claim is made against a Tax Indemnitee for Taxes with
respect to which Owner could be liable for payment or indemnity hereunder, or if
a Tax Indemnitee makes a determination that a Tax is due for which Owner could
have an indemnity obligation hereunder, such Tax Indemnitee shall promptly give
Owner notice in writing of such claim (provided, that failure to so notify Owner
shall not relieve Owner of its indemnity obligations hereunder unless such
failure to notify effectively forecloses Owner's rights to require a contest of
such claim) and shall take no action with respect to such claim without the
prior written consent of Owner for 30 days following the receipt of such notice
by Owner; provided, that, in the case of a claim made against a Tax Indemnitee,
if such Tax Indemnitee shall be required by law to take action prior to the end
of such 30-day period, such Tax Indemnitee shall, in such notice to Owner, so
inform Owner, and such Tax Indemnitee shall take no action for as long as it is
legally able to do so (it being understood that a Tax Indemnitee shall be
entitled to pay the Tax claimed and sue for a refund prior to the end of such
30-day period if (i)(A) the failure to so pay the Tax would result in
substantial penalties (unless immediately reimbursed by Owner) and the act of
paying the Tax would not materially prejudice the right to contest or (B) the
failure to so pay would result in criminal penalties and (ii) such Tax
Indemnitee shall take any action so required in connection with so paying the
Tax in a manner that is the least prejudicial to the pursuit of the contest). In
addition, such Tax Indemnitee shall (provided, that Owner shall have agreed to
keep such information confidential other than to the extent necessary in order
to contest the claim) furnish Owner with copies of any requests for information
from any Taxing Authority relating to such Taxes with respect to which Owner may
be required to indemnify hereunder. If requested by Owner in writing within 30
days after its receipt of such notice, such Tax Indemnitee shall, at the expense
of Owner (including, without limitation, all reasonable costs, expenses and
reasonable attorneys' and accountants' fees and disbursements), in good faith
contest (or, if permitted by applicable law, allow Owner to contest) through
appropriate administrative and judicial proceedings the validity, applicability
or amount of such Taxes by (I) resisting payment thereof, (II) not paying the
same except under protest if protest is necessary and proper or (III) if the
payment is made, using reasonable efforts to obtain a refund thereof in an
appropriate administrative and/or judicial proceeding. If requested to do so by
Owner, the Tax Indemnitee shall appeal any adverse administrative or judicial
decision, except that the Tax Indemnitee shall not be required to pursue any
appeals to the United States Supreme Court. If and to the extent the Tax
Indemnitee is able to separate the contested issue or issues from other issues
arising in the same administrative or judicial proceeding that are unrelated to
the transactions contemplated by the Operative Agreements without, in the good
faith judgment of such Tax Indemnitee, adversely affecting such Tax Indemnitee,
such Tax Indemnitee shall permit Owner to control the conduct of any such
proceeding and shall provide to Owner (at Owner's cost and expense) with such
information or data that is in such Tax Indemnitee's control or possession that
is reasonably necessary to conduct such contest. In the case of a contest
controlled by a Tax Indemnitee, such Tax Indemnitee shall consult with Owner in
good faith regarding the manner of contesting such claim and shall keep Owner
reasonably informed regarding the progress of such contest. A Tax Indemnitee
shall not fail to take any action expressly required by this Section 8.3.4
(including, without limitation, any action regarding any appeal of an adverse
determination with respect to any claim) or settle or compromise any claim
without the prior written consent of the Owner (except as contemplated by
Section 8.3.4(b) or (c)).
(b) Notwithstanding the foregoing, in no event shall a Tax Indemnitee be
required to pursue any contest (or to permit Owner to pursue any contest) unless
(i) Owner shall have agreed to pay such Tax Indemnitee on demand all reasonable
costs and expenses incurred by such Tax Indemnitee in connection with contesting
such Taxes, including, without limitation, all reasonable out of pocket costs
and expenses and reasonable attorneys' and accountants' fees and disbursements,
(ii) if such contest shall involve the payment of the claim, Owner shall advance
the amount thereof (to the extent indemnified hereunder) plus interest,
penalties and additions to tax with respect thereto that are required to be paid
prior to the commencement of such contest on an interest-free after-Tax basis to
such Tax Indemnitee (and such Tax Indemnitee shall promptly pay to the Owner any
net realized tax benefits resulting from such advance including any tax benefits
resulting from making such payment), (iii) such Tax Indemnitee shall have
reasonably determined that the action to be taken will not result in any
material risk of forfeiture, sale or loss of the Aircraft (unless Owner shall
have made provisions to protect the interests of any such Tax Indemnitee in a
manner reasonably satisfactory to such Tax Indemnitee) (provided, that such Tax
Indemnitee agrees to notify Owner in writing promptly after it becomes aware of
any such risk), (iv) no Lease Event of Default shall have occurred and be
continuing unless Owner has provided security for its obligations hereunder by
advancing to such Tax Indemnitee before proceeding or continuing with such
contest, the amount of the Tax being contested, plus any interest and penalties
and an amount estimated in good faith by such Tax Indemnitee for expenses, and
(v) prior to commencing any judicial action controlled by Owner, Owner shall
have acknowledged its liability for such claim hereunder, provided that Owner
shall not be bound by its acknowledgment if the Final Determination articulates
conclusions of law and fact that demonstrate that Owner has no liability for the
contested amounts hereunder. Notwithstanding the foregoing, if any Tax
Indemnitee shall release, waive, compromise or settle any claim which may be
indemnifiable by Owner pursuant to this Section 8.3 without the written
permission of Owner, Owner's obligation to indemnify such Tax Indemnitee with
respect to such claim (and all directly related claims and claims based on the
outcome of such claim) shall terminate, subject to Section 8.3.4(c), and subject
to Section 8.3.4(c), such Tax Indemnitee shall repay to Owner any amount
previously paid or advanced to such Tax Indemnitee with respect to such claim,
plus interest at the rate that would have been payable by the relevant Taxing
Authority with respect to a refund of such Tax.
(c) Notwithstanding anything contained in this Section 8.3, a Tax
Indemnitee will not be required to contest the imposition of any Tax and shall
be permitted to settle or compromise any claim without Owner's consent if such
Tax Indemnitee (i) shall waive its right to indemnity under this Section 8.3
with respect to such Tax (and any directly related claim and any claim the
outcome of which is determined based upon the outcome of such claim), (ii) shall
pay to Owner any amount previously paid or advanced by Owner pursuant to this
Section 8.3 with respect to such Tax, plus interest at the rate that would have
been payable by the relevant Taxing Authority with respect to a refund of such
Tax, and (iii) shall agree to discuss with Owner the views or positions of any
relevant Taxing Authority with respect to the imposition of such Tax.
8.3.5 REFUND
If any Tax Indemnitee shall receive a refund of, or be entitled to a
credit against other liability for, all or any part of any Taxes paid,
reimbursed or advanced by Owner, such Tax Indemnitee shall pay to Owner within
30 days of such receipt an amount equal to the lesser of (a) the amount of such
refund or credit plus any net tax benefit (taking into account any Taxes
incurred by such Tax Indemnitee by reason of the receipt of such refund or
realization of such credit) actually realized by such Tax Indemnitee as a result
of any payment by such Tax Indemnitee made pursuant to this sentence (including
this clause (a)) and (b) such tax payment, reimbursement or advance by Owner to
such Tax Indemnitee theretofore made pursuant to this Section 8.3 (and the
excess, if any, of the amount described in clause (a) over the amount described
in clause (b) shall be carried forward and applied to reduce pro tanto any
subsequent obligation of Owner to make payments to such Tax Indemnitee pursuant
to this Section 8.3). If, in addition to such refund or credit, such Tax
Indemnitee shall receive (or be credited with) an amount representing interest
on the amount of such refund or credit, such Tax Indemnitee shall pay to Owner
within 30 days of such receipt or realization of such credit that proportion of
such interest that shall be fairly attributable to Taxes paid, reimbursed or
advanced by Owner prior to the receipt of such refund or realization of such
credit.
8.3.6 TAX FILING
If any report, return or statement is required to be filed with respect to
any Tax which is subject to indemnification under this Section 8.3, Owner shall
timely file the same (except for any such report, return or statement which a
Tax Indemnitee has timely notified the Owner in writing that such Tax Indemnitee
intends to file, or for which such Tax Indemnitee is required by law to file, in
its own name); provided, that the relevant Tax Indemnitee shall furnish Owner
with any information in such Tax Indemnitee's possession or control that is
reasonably necessary to file any such return, report or statement and is
reasonably requested in writing by Owner (it being understood that the Tax
Indemnitee shall not be required to furnish copies of its actual tax returns,
although it may be required to furnish relevant information contained therein).
Owner shall either file such report, return or statement and send a copy of such
report, return or statement to such Tax Indemnitee, or, where Owner is not
permitted to file such report, return or statement, it shall notify such Tax
Indemnitee of such requirement and prepare and deliver such report, return or
statement to such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee
within a reasonable time prior to the time such report, return or statement is
to be filed.
8.3.7 FORMS
Each Tax Indemnitee agrees to furnish from time to time to Owner or
Mortgagee or to such other person as Owner or Mortgagee may designate, at
Owner's or Mortgagee's request, such duly executed and properly completed forms
as may be necessary or appropriate in order to claim any reduction of or
exemption from any withholding or other Tax imposed by any Taxing Authority, if
(x) such reduction or exemption is available to such Tax Indemnitee and (y)
Owner has provided such Tax Indemnitee with any information necessary to
complete such form not otherwise reasonably available to such Tax Indemnitee.
8.3.8 NON-PARTIES
If a Tax Indemnitee is not a party to this Agreement, Owner may require
the Tax Indemnitee to agree in writing, in a form reasonably acceptable to
Owner, to the terms of this Section 8.3 and Section 15.8 prior to making any
payment to such Tax Indemnitee under this Section 8.3.
8.3.9 SUBROGATION
Upon payment of any Tax by Owner pursuant to this Section 8.3 to or on
behalf of a Tax Indemnitee, Owner, without any further action, shall be
subrogated to any claims that such Tax Indemnitee may have relating thereto.
Such Tax Indemnitee shall cooperate with Owner (to the extent such cooperation
does not result in any unreimbursed cost, expense or liability to such Tax
Indemnitee) to permit Owner to pursue such claims.
8.4 PAYMENTS
Any payments made pursuant to Section 8.1 or 8.3 shall be due on the 60th
day after demand therefor and shall be made directly to the relevant Indemnitee
or Tax Indemnitee or to Owner, in immediately available funds at such bank or to
such account as specified by such Indemnitee or Tax Indemnitee or Owner, as the
case may be, in written directives to the payor, or, if no such direction shall
have been given, by check of the payor payable to the order of, and mailed to,
such Indemnitee or Tax Indemnitee or Owner, as the case may be, by certified
mail, postage prepaid, at its address as set forth in this Agreement.
8.5 INTEREST
If any amount, payable by Owner, any Indemnitee or any Tax Indemnitee
under Section 8.1 or 8.3 is not paid when due, the person obligated to make such
payment shall pay on demand, to the extent permitted by Law, to the person
entitled thereto, interest on any such amount for the period from and including
the due date for such amount to but excluding the date the same is paid, at the
Payment Due Rate. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
8.6 BENEFIT OF INDEMNITIES
The obligations of Owner in respect of all indemnities, obligations,
adjustments and payments in Section 8.1 or 8.3 are expressly made for the
benefit of, and shall be enforceable by, the Indemnitee or Tax Indemnitee
entitled thereto, notwithstanding any provision of the Trust Indenture.
SECTION 9. ASSIGNMENT OR TRANSFER OF INTEREST
9.1 NOTE HOLDERS
Subject to Section 6.3.2 hereof and Section 2.07 of the Trust Indenture,
any Note Holder may, at any time and from time to time, Transfer or grant
participations in all or any portion of the Equipment Notes and/or all or any
portion of its beneficial interest in its Equipment Notes to any person (it
being understood that the sale or issuance of Pass Through Certificates by a
Pass Through Trustee shall not be considered a Transfer or participation);
PROVIDED, that any participant in any such participations shall not have any
direct rights under the Operative Agreements or any Lien on all or any part of
the Aircraft or the Collateral and Owner shall not have any increased liability
or obligations as a result of any such participation. In the case of any such
Transfer, the Transferee, by acceptance of Equipment Notes in connection with
such Transfer, shall be deemed to be bound by all of the covenants of Note
Holders contained in the Operative Agreements.
9.2 EFFECT OF TRANSFER
Upon any Transfer in accordance with Section 9.1 (other than any Transfer
by any Note Holder, to the extent it only grants participations in Equipment
Notes or in its beneficial interest therein), Transferee shall be deemed a "Note
Holder," for all purposes of this Agreement and the other Operative Agreements,
and the transferring Note Holder shall be released from all of its liabilities
and obligations under this Agreement and any other Operative Agreements to the
extent such liabilities and obligations arise after such Transfer and, in each
case, to the extent such liabilities and obligations are assumed by the
Transferee; PROVIDED, that such transferring Note Holder (and its respective
Affiliates, successors, assigns, agents, servants, representatives, directors
and officers) will continue to have the benefit of any rights or indemnities
under any Operative Agreement vested or relating to circumstances, conditions,
acts or events prior to such Transfer.
SECTION 10. SECTION 1110
It is the intention of each of the Owner, the Note Holders (such intention
being evidenced by each of their acceptance of an Equipment Note), and Mortgagee
that Mortgagee shall be entitled to the benefits of Section 1110 in the event of
a case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor.
SECTION 11. CHANGE OF CITIZENSHIP
11.1 GENERALLY
Without prejudice to the representations, warranties or covenants
regarding the status of any party hereto as a Citizen of the United States, each
of Owner, WTC and Mortgagee agrees that it will, immediately upon obtaining
knowledge of any facts that would cast doubt upon its continuing status as a
Citizen of the United States and promptly upon public disclosure of negotiations
in respect of any transaction which would or might adversely affect such status,
notify in writing all parties hereto of all relevant matters in connection
therewith.
11.2 MORTGAGEE
Upon WTC giving any notice in accordance with Section 11.1, Mortgagee
shall (if and so long as such citizenship is necessary under the Act as in
effect at such time or, if it is not necessary, if and so long as Mortgagee's
citizenship could have any adverse effect on Owner, or any Note Holder), subject
to Section 9.02 of the Trust Indenture, resign as Mortgagee promptly upon its
ceasing to be such a citizen.
SECTION 12. MISCELLANEOUS
12.1 AMENDMENTS
No provision of this Agreement may be amended, supplemented, waived,
modified, discharged, terminated or otherwise varied orally, but only by an
instrument in writing that specifically identifies the provision of this
Agreement that it purports to amend, supplement, waive, modify, discharge,
terminate or otherwise vary and is signed by the party against which the
enforcement of the amendment, supplement, waiver, modification, discharge,
termination or variance is sought. Each such amendment, supplement, waiver,
modification, discharge, termination or variance shall be effective only in the
specific instance and for the specific purpose for which it is given. No
provision of this Agreement shall be varied or contradicted by oral
communication, course of dealing or performance or other manner not set forth in
an agreement, document or instrument in writing and signed by the party against
which enforcement of the same is sought.
12.2 SEVERABILITY
If any provision hereof shall be held invalid, illegal or unenforceable in
any respect in any jurisdiction, then, to the extent permitted by Law, (a) all
other provisions hereof shall remain in full force and effect in such
jurisdiction and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction. If, however, any Law pursuant to which such provisions are held
invalid, illegal or unenforceable may be waived, such Law is hereby waived by
the parties hereto to the full extent permitted, to the end that this Agreement
shall be deemed to be a valid and binding agreement in all respects, enforceable
in accordance with its terms.
12.3 SURVIVAL
The indemnities set forth herein shall survive the delivery or return of
the Aircraft, the Transfer of any interest by any Note Holder of its Equipment
Note and the expiration or other termination of this Agreement or any other
Operative Agreement.
12.4 REPRODUCTION OF DOCUMENTS
This Agreement, all schedules and exhibits hereto and all agreements,
instruments and documents relating hereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed and (b)
financial statements, certificates and other information previously or hereafter
furnished to any party hereto, may be reproduced by such party by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process, and such party may destroy any original documents so
reproduced. Any such reproduction shall be as admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by such
party in the regular course of business) and any enlargement, facsimile or
further reproduction of such reproduction likewise is admissible in evidence.
12.5 COUNTERPARTS
This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts (or upon separate signature pages
bound together into one or more counterparts), each of which when so executed
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.
12.6 NO WAIVER
No failure on the part of any party hereto to exercise, and no delay by
any party hereto in exercising, any of its respective rights, powers, remedies
or privileges under this Agreement or provided at Law, in equity or otherwise
shall impair, prejudice or constitute a waiver of any such right, power, remedy
or privilege or be construed as a waiver of any breach hereof or default
hereunder or as an acquiescence therein nor shall any single or partial exercise
of any such right, power, remedy or privilege preclude any other or further
exercise thereof by it or the exercise of any other right, power, remedy or
privilege by it. No notice to or demand on any party hereto in any case shall,
unless otherwise required under this Agreement, entitle such party to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any party hereto to any other or further action in any
circumstances without notice or demand.
12.7 NOTICES
Unless otherwise expressly permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers and other
communications required or permitted to be made, given, furnished or filed
hereunder shall be in writing (it being understood that the specification of a
writing in certain instances and not in others does not imply an intention that
a writing is not required as to the latter), shall refer specifically to this
Agreement or other applicable Operative Agreement, and shall be personally
delivered, sent by facsimile or telecommunication transmission (which in either
case provides written confirmation to the sender of its delivery), sent by
registered mail or certified mail, return receipt requested, postage prepaid, or
sent by overnight courier service, in each case to the respective address, or
facsimile number set forth for such party in Schedule 1, or to such other
address, facsimile or other number as each party hereto may hereafter specify by
notice to the other parties hereto. Each such notice, request, demand,
authorization, direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed (a) by facsimile
or telecommunication transmission, when confirmed, or (b) by registered or
certified mail, three Business Days after being deposited, properly addressed,
with the U.S. Postal Service.
12.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE
(A) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
(B) EACH PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS AND SUBMITS
ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
IN THE CITY AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT OR PROCEEDING
WITH RESPECT TO ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT.
(C) EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY
MAILING COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE
ADDRESS SET FORTH PURSUANT TO SECTION 12.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS
SECTION 12.8(C), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON SUCH
PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS AGENTS
TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR AFFECT
IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED
IN ANY ACTION OR PROCEEDING BASED THEREON.
(D) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY LEGAL ACTION OR PROCEEDING BROUGHT HEREUNDER IN ANY OF THE
ABOVE-NAMED COURTS, THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT VENUE FOR THE ACTION OR PROCEEDING IS IMPROPER OR THAT THIS
AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH
COURTS.
(E) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
12.9 THIRD-PARTY BENEFICIARY
This Agreement is not intended to, and shall not, provide any person not a
party hereto (other than the Indenture Indemnitees, each of which is an intended
third party beneficiary with respect to the provisions of Section 8.1 and the
persons referred to in Section 6.4.6, which are intended third party
beneficiaries with respect to such Section) with any rights of any nature
whatsoever against any of the parties hereto and no person not a party hereto
(other than the Indenture Indemnitees, with respect to the provisions of Section
8.1, and the persons referred to in Section 6.4.6 with respect to the provisions
of such Section) shall have any right, power or privilege in respect of any
party hereto, or have any benefit or interest, arising out of this Agreement.
12.10 ENTIRE AGREEMENT
This Agreement, together with the other Operative Agreements, on and as of
the date hereof, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and all prior or contemporaneous
understandings or agreements, whether written or oral, among any of the parties
hereto with respect to such subject matter are hereby superseded in their
entireties.
12.11 FURTHER ASSURANCES
Each party hereto shall execute, acknowledge and deliver or shall cause to
be executed, acknowledged and delivered, all such further agreements,
instruments, certificates or documents, and shall do and cause to be done such
further acts and things, in any case, as any other party hereto shall reasonably
request in connection with the administration of, or to carry out more
effectually the purposes of, or to better assure and confirm into such other
party the rights and benefits to be provided under this Agreement and the other
Operative Agreements.
[This space intentionally left blank]
IN WITNESS WHEREOF, each of the parties has caused this Participation
Agreement to be duly executed and delivered as of the day and year first above
written.
CONTINENTAL AIRLINES, INC.,
Owner
By__________________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity, except as
expressly provided herein, but solely as
Mortgagee
By__________________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly
provided herein, but solely as Pass
Through Trustee under the Pass Through
Trust Agreement for the Continental
Airlines Pass Through Trust, 1997-4A-0
By__________________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly
provided herein, but solely as Pass
Through Trustee under the Pass Through
Trust Agreement for the Continental
Airlines Pass Through Trust, 1997-4B-0
By__________________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly
provided herein, but solely as Pass
Through Trustee under the Pass Through
Trust Agreement for the Continental
Airlines Pass Through Trust, 1997-4C-0
By__________________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly
provided herein, but solely as
Subordination Agent
By__________________________________________
Name:
Title:
----------------------------------
| SCHEDULE 1 |
| TO |
| PARTICIPATION AGREEMENT |
----------------------------------
ACCOUNTS; ADDRESSES
ACCOUNT FOR PAYMENTS ADDRESS FOR NOTICES
-------------------- -------------------
CONTINENTAL The Chase Manhattan Bank Continental Airlines, Inc.
AIRLINES, New York, New York 10081 2929 Allen Parkway
INC. Account No.: 910-2-499291 Suite 2010
ABA#: 021-000021 Houston, Texas 77019
Attention: Paul Trupia Attention: Executive Vice
Voice: 212-552-2829 President and Chief
Facsimile: 212-552-0107 Financial Officer
Reference: Continental ____ Facsimile: (713) 520-6329
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, Account No.: 920-1-014363 1100 North Market Street
MORTGAGEE ABA#: 021-000021 Wilmington, Delaware 19890
Attention: Corporate Trust Attention: Corporate Trust
Administration Administration
Reference: Continental ____ Facsimile: (302) 651-8882
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
SUBORDINATION ABA#: 021-000021 Wilmington, Delaware 19890
AGENT Attention: Corporate Trust Attention: Corporate Trust
Administration Administration
Reference: Continental ____ Facsimile: (302) 651-8882
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
PASS THROUGH ABA#: 021-000021 Wilmington, Delaware 19890
TRUSTEE FOR Attention: Corporate Trust Attention: Corporate Trust
THE 1997-4A Administration Administration
PASS THROUGH Reference: Continental ____ Facsimile: (302) 651-8882
TRUST
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
PASS THROUGH ABA#: 021-000021 Wilmington, Delaware 19890
TRUSTEE FOR Attention: Corporate Trust Attention: Corporate Trust
THE 1997-4B Administration Administration
PASS THROUGH Reference: Continental ____ Facsimile: (302) 651-8882
TRUST
WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
PASS THROUGH ABA#: 021-000021 Wilmington, Delaware 19890
TRUSTEE FOR Attention: Corporate Trust Attention: Corporate Trust
THE 1997-4C Administration Administration
PASS THROUGH Reference: Continental ____ Facsimile: (302) 651-8882
TRUST
[WILMINGTON The Chase Manhattan Bank Wilmington Trust Company
TRUST New York, New York 10081 One Rodney Square
COMPANY, AS Account No.: 920-1-014363 1100 North Market Street
PASS THROUGH ABA#: 021-000021 Wilmington, Delaware 19890
TRUSTEE FOR Attention: Corporate Trust Attention: Corporate Trust
THE 1997-4D Administration Administration
PASS THROUGH Reference: Continental ____ Facsimile: (302) 651-8882
TRUST]
----------------------------------
| SCHEDULE 2 - COMMITMENTS |
| PARTICIPATION AGREEMENT |
----------------------------------
COMMITMENTS
PASS THROUGH SERIES OF DOLLAR AMOUNT
TRUSTEE EQUIPMENT NOTES OF LOAN
- ------------------ -------------------------- -----------------------
----------------------------------
| SCHEDULE 3 - CERTAIN TERMS |
| PARTICIPATION AGREEMENT |
----------------------------------
[OMITTED AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
----------------------------------
|SCHEDULE 4 - PERMITTED COUNTRIES|
| PARTICIPATION AGREEMENT |
----------------------------------
PERMITTED COUNTRIES
Argentina Netherlands
Australia New Zealand
Austria Norway
Bahamas Paraguay
Belgium People's Republic of China
Brazil Philippines
Canada Portugal
Chile Republic of China (Taiwan)
Denmark Singapore
Egypt South Africa
Ecuador South Korea
Finland Spain
France Sweden
Germany Switzerland
Greece Thailand
Hungary Tobago
Iceland Trinidad
India United Kingdom
Indonesia Uruguay
Ireland Venezuela
Italy
Japan
Luxembourg
Malaysia
Malta
Mexico
Morocco
- --------------------------------------------------------------------------------
TRUST INDENTURE AND MORTGAGE _______
Dated as of _______ __, 199_
Between
CONTINENTAL AIRLINES, INC.,
Owner
and
WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Mortgagee,
Mortgagee
- --------------------------------------------------------------------------------
EQUIPMENT NOTES COVERING
ONE BOEING _______ AIRCRAFT
BEARING U.S. REGISTRATION MARK N_____
AND MANUFACTURER'S SERIAL NO. _____
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
GRANTING CLAUSE ........................................................... 1
ARTICLE I DEFINITIONS.................................................. 4
ARTICLE II THE EQUIPMENT NOTES.......................................... 4
SECTION 2.01. Form of Equipment Notes............................... 4
SECTION 2.02. Issuance and Terms of Equipment Notes................. 9
SECTION 2.03. [Intentionally Omitted]............................... 11
SECTION 2.04. Method of Payment..................................... 11
SECTION 2.05. Application of Payments............................... 13
SECTION 2.06. Termination of Interest in Collateral................. 14
SECTION 2.07. Registration Transfer and Exchange of Equipment
Notes................................................. 14
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes................................................. 15
SECTION 2.09. Payment of Expenses on Transfer; Cancellation......... 15
SECTION 2.10. Mandatory Redemptions of Equipment Notes.............. 16
SECTION 2.11. Voluntary Redemptions of Equipment Notes.............. 16
SECTION 2.12. Redemptions; Notice of Redemption..................... 16
SECTION 2.13. Subordination......................................... 17
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS............ 18
SECTION 3.01. Basic Distributions................................... 18
SECTION 3.02. Event of Loss; Replacement; Optional Redemption....... 19
SECTION 3.03. Payments After Event of Default....................... 20
SECTION 3.04. Certain Payments...................................... 22
SECTION 3.05. Other Payments........................................ 22
ARTICLE IV COVENANTS OF THE OWNER....................................... 23
SECTION 4.01. Liens................................................. 23
SECTION 4.02. Possession, Operation and Use, Maintenance,
Registration and Markings............................. 23
SECTION 4.03. Inspection............................................ 28
SECTION 4.04. Replacement and Pooling of Parts, Alterations,
Modifications and Additions; Substitution of Engines.. 28
SECTION 4.05. Loss, Destruction or Requisition...................... 33
SECTION 4.06. Insurance............................................. 36
SECTION 4.07. Merger of Owner....................................... 37
ARTICLE V EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE..................... 38
SECTION 5.01. Event of Default...................................... 38
TABLE OF CONTENTS
(Continued)
PAGE
----
SECTION 5.02. Remedies.............................................. 39
SECTION 5.03. Return of Aircraft, Etc............................... 40
SECTION 5.04. Remedies Cumulative................................... 41
SECTION 5.05. Discontinuance of Proceedings......................... 42
SECTION 5.06. Waiver of Past Defaults............................... 42
SECTION 5.07. Appointment of Receiver............................... 42
SECTION 5.08. Mortgagee Authorized to Execute Bills of Sale, Etc.... 42
SECTION 5.09. Rights of Note Holders to Receive Payment............. 43
ARTICLE VI DUTIES OF THE MORTGAGEE...................................... 43
SECTION 6.01. Notice of Event of Default............................ 43
SECTION 6.02. Action Upon Instructions; Certain Rights and
Limitations........................................... 43
SECTION 6.03. Indemnification....................................... 44
SECTION 6.04. No Duties Except as Specified in Trust Indenture or
Instructions.......................................... 44
SECTION 6.05. No Action Except Under Trust Indenture or
Instructions.......................................... 45
SECTION 6.06. Investment of Amounts Held by Mortgagee............... 45
ARTICLE VII THE MORTGAGEE................................................ 45
SECTION 7.01. Acceptance of Trusts and Duties....................... 45
SECTION 7.02. Absence of Duties..................................... 46
SECTION 7.03. No Representations or Warranties as to Aircraft or
Documents............................................. 46
SECTION 7.04. No Segregation of Monies; No Interest................. 46
SECTION 7.05. Reliance; Agreements; Advice of Counsel............... 47
SECTION 7.06. Compensation.......................................... 47
SECTION 7.07. Instructions from Note Holders........................ 48
ARTICLE VIII INDEMNIFICATION.............................................. 48
SECTION 8.01. Scope of Indemnification.............................. 48
ARTICLE IX SUCCESSOR AND SEPARATE TRUSTEES.............................. 48
SECTION 9.01. Resignation of Mortgagee; Appointment of Successor.... 48
SECTION 9.02. Appointment of Additional and Separate Trustees....... 49
ARTICLE X SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND
OTHER DOCUMENTS.............................................. 51
SECTION 10.01. Instructions of Majority; Limitations................. 51
SECTION 10.02. Mortgagee Protected................................... 52
TABLE OF CONTENTS
(Continued)
PAGE
----
SECTION 10.03. Documents Mailed to Note Holders....................... 52
SECTION 10.04. No Request Necessary for Trust Indenture Supplement.... 52
ARTICLE XI MISCELLANEOUS................................................. 52
SECTION 11.01. Termination of Trust Indenture......................... 52
SECTION 11.02. No Legal Title to Collateral in Note Holders........... 53
SECTION 11.03. Sale of Aircraft by Mortgagee Is Binding............... 53
SECTION 11.04. Trust Indenture for Benefit of Owner, Mortgagee, Note
Holders and the other Indenture Indemnitees............ 53
SECTION 11.05. Notices................................................ 53
SECTION 11.06. Severability........................................... 54
SECTION 11.07. No Oral Modification or Continuing Waivers............. 54
SECTION 11.08. Successors and Assigns................................. 54
SECTION 11.09. Headings............................................... 54
SECTION 11.10. Normal Commercial Relations............................ 55
SECTION 11.11. Governing Law; Counterpart Form........................ 55
SECTION 11.12. Voting By Note Holders................................. 55
SECTION 11.13. Bankruptcy............................................. 55
ANNEX A Definitions
ANNEX B Insurance
EXHIBIT A Form of Trust Indenture and Mortgage Supplement
SCHEDULE I Equipment Notes Amortization and Interest Rates
TRUST INDENTURE AND MORTGAGE ___
TRUST INDENTURE AND MORTGAGE ___, dated as of ______________ __, 199_
("Trust Indenture"), between CONTINENTAL AIRLINES, INC., a Delaware corporation
("Owner"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in
its individual capacity, except as expressly stated herein, but solely as
Mortgagee hereunder (together with its successors hereunder, the "Mortgagee").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the parties hereto desire by this Trust Indenture, among other
things, (i) to provide for the issuance by the Owner of the Equipment Notes and
(ii) to provide for the assignment, mortgage and pledge by the Owner to the
Mortgagee, as part of the Collateral hereunder, among other things, of all of
the Owner's right, title and interest in and to the Aircraft and, except as
hereinafter expressly provided, all payments and other amounts received
hereunder in accordance with the terms hereof, as security for, among other
things, the Owner's obligations to the Note Holders and the Indenture
Indemnitees;
WHEREAS, all things have been done to make the Equipment Notes, when
executed by the Owner and authenticated and delivered by the Mortgagee
hereunder, the valid, binding and enforceable obligations of the Owner; and
WHEREAS, all things necessary to make this Trust Indenture the valid,
binding and legal obligation of the Owner for the uses and purposes herein set
forth, in accordance with its terms, have been done and performed and have
happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that, to
secure the prompt payment of the Original Amount of, interest on, Make-Whole
Amount, if any, and all other amounts due with respect to, all Equipment Notes
from time to time outstanding hereunder according to their tenor and effect and
to secure the performance and observance by the Owner of all the agreements,
covenants and provisions contained herein and in the Participation Agreement and
in the Equipment Notes, for the benefit of the Note Holders and each of the
Indenture Indemnitees, and in consideration of the premises and of the covenants
herein contained, and of the acceptance of the Equipment Notes by the holders
thereof, and for other good and valuable consideration the receipt and adequacy
whereof are hereby acknowledged, the Owner has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Mortgagee, its successors in trust and assigns, for the
security and benefit of, the Note Holders and each of the Indenture Indemnitees,
a first priority security interest in and mortgage lien on all right, title and
interest of the Owner in, to and under the following described property, rights
and privileges, whether now or hereafter acquired (which, collectively, together
with all property hereafter specifically subject to the Lien of this Trust
Indenture by the terms hereof or any supplement hereto, are included within, and
are referred to as, the "Collateral"), to wit:
(1) The Airframe which is one Boeing _______ aircraft with the FAA
Registration number of N_____ and the manufacturer's serial number of _____ and
Engines, each of which Engines is a ____________________________ engine with the
manufacturer's serial numbers of _____ and _____, is of 750 or more rated
takeoff horsepower or the equivalent of such horsepower (such Airframe and
Engines more particularly described in the Trust Indenture Supplement executed
and delivered as provided herein) as the same is now and will hereafter be
constituted, whether now owned by the Owner or hereafter acquired, and in the
case of such Engines, whether or not any such Engine shall be installed in or
attached to the Airframe or any other airframe, together with (a) all Parts of
whatever nature, which are from time to time included within the definitions of
"Airframe" or "Engines", whether now owned or hereafter acquired, including all
substitutions, renewals and replacements of and additions, improvements,
accessions and accumulations to the Airframe and Engines (other than additions,
improvements, accessions and accumulations which constitute appliances, parts,
instruments, appurtenances, accessories, furnishings or other equipment excluded
from the definition of Parts) and (b) all Aircraft Documents;
(2) The Purchase Agreement and the Bills of Sale to the extent the same
relate to continuing rights of the Owner in respect of any warranty, indemnity
or agreement, express or implied, as to title, materials, workmanship, design or
patent infringement or related matters with respect to the Airframe or the
Engines (reserving to the Owner, however, all of the Owner's other rights and
interest in and to the Purchase Agreement) together with all rights, powers,
privileges, options and other benefits of the Owner thereunder (subject to such
reservation) with respect to the Airframe or the Engines, including, without
limitation, the right to make all waivers and agreements, to give and receive
all notices and other instruments or communications, to take such action upon
the occurrence of a default thereunder, including the commencement, conduct and
consummation of legal, administrative or other proceedings, as shall be
permitted thereby or by law, and to do any and all other things which the Owner
is or may be entitled to do thereunder (subject to such reservation), subject,
with respect to the Purchase Agreement, to the terms and conditions of the
Consent and Agreement and the Engine Consent and Agreement;
(3) All proceeds with respect to the requisition of title to or use of
the Aircraft or any Engine by any Government Entity or from the sale or other
disposition of the Aircraft, the Airframe, any Engine or other property
described in any of these Granting Clauses by the Mortgagee pursuant to the
terms of this Trust Indenture, and all insurance proceeds with respect to the
Aircraft, the Airframe, any Engine or any part thereof, but excluding any
insurance maintained by the Owner and not required under Section 4.06;
(4) All rents, revenues and other proceeds collected by the Mortgagee
pursuant to Section 5.03(b) and all monies and securities from time to time
deposited or required to be deposited with the Mortgagee by or for the account
of the Owner pursuant to any terms of this Trust Indenture held or required to
be held by the Mortgagee hereunder; and
(5) All proceeds of the foregoing.
PROVIDED, HOWEVER, that notwithstanding any of the foregoing
provisions, so long as no Event of Default shall have occurred and be
continuing, (a) the Mortgagee shall not take or cause to be taken any action
contrary to the Owner's right hereunder to quiet enjoyment of the Airframe and
Engines, and to possess, use, retain and control the Airframe and Engines and
all revenues, income and profits derived therefrom, and (b) the Owner shall have
the right, to the exclusion of the Mortgagee, with respect to the Purchase
Agreement, to exercise in the Owner's name all rights and powers of the buyer
under the Purchase Agreement (other than to amend, modify or waive any of the
warranties or indemnities contained therein, except in the exercise of the
Owner's reasonable business judgment) and to retain any recovery or benefit
resulting from the enforcement of any warranty or indemnity under the Purchase
Agreement; and PROVIDED FURTHER THAT, notwithstanding the occurrence or
continuation of an Event of Default, the Mortgagee shall not enter into any
amendment of the Purchase Agreement which would increase the obligations of the
Owner thereunder.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, and its successors and assigns, in trust for the equal and
proportionate benefit and security of the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.13 and Article III hereof, without
any preference, distinction or priority of any one Equipment Note over any other
by reason of priority of time of issue, sale, negotiation, date of maturity
thereof or otherwise for any reason whatsoever, and for the uses and purposes
and in all cases and as to all property specified in paragraphs (1) through (5)
inclusive above, subject to the terms and provisions set forth in this Trust
Indenture.
It is expressly agreed that anything herein contained to the contrary
notwithstanding, the Owner shall remain liable under the Indenture Agreements to
perform all of the obligations assumed by it thereunder, except to the extent
prohibited or excluded from doing so pursuant to the terms and provisions
thereof, and the Mortgagee, the Note Holders and the Indenture Indemnitees shall
have no obligation or liability under the Indenture Agreements by reason of or
arising out of the assignment hereunder, nor shall the Mortgagee, the Note
Holders or the Indenture Indemnitees be required or obligated in any manner to
perform or fulfill any obligations of the Owner under or pursuant to the
Indenture Agreements, or, except as herein expressly provided, to make any
payment, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or present or file any claim, or take any action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
The Owner does hereby constitute the Mortgagee the true and lawful
attorney of the Owner, irrevocably, granted for good and valuable consideration
and coupled with an interest and with full power of substitution, and with full
power (in the name of the Owner or otherwise) to ask for, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies (in each case including insurance and requisition proceeds) due and to
become due under or arising out of the Indenture Agreements, and all other
property which now or hereafter constitutes part of the Collateral, to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or to take any action or to institute any proceedings which the
Mortgagee may deem to be necessary or advisable in the premises; PROVIDED that
the Mortgagee shall not exercise any such rights except upon the occurrence and
during the continuance of an Event of Default hereunder.
The Owner agrees that at any time and from time to time, upon the
written request of the Mortgagee, the Owner will promptly and duly execute and
deliver or cause to be duly executed and delivered any and all such further
instruments and documents (including without limitation UCC continuation
statements) as the Mortgagee may reasonably deem necessary to perfect, preserve
or protect the mortgage, security interests and assignments created or intended
to be created hereby or to obtain for the Mortgagee the full benefits of the
assignment hereunder and of the rights and powers herein granted.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto as
follows: ARTICLE I
DEFINITIONS
Capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed in the
manner described, in Annex A hereto.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. FORM OF EQUIPMENT NOTES
The Equipment Notes shall be substantially in the form set forth below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE
SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY
NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH
APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH REGISTRATIONS IS
AVAILABLE.
CONTINENTAL AIRLINES, INC.
SERIES [_____] EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION WITH THE
BOEING MODEL _______ AIRCRAFT BEARING UNITED STATES REGISTRATION
NUMBER N_____.
No. ____ Date: [__________, ____]
____________________
INTEREST RATE MATURITY DATE
- ------------- -------------
[___________] [___________]
CONTINENTAL AIRLINES, INC., a Delaware corporation ("Owner"), hereby
promises to pay to __________________, or the registered assignee thereof, the
principal sum of $____________ (the "Original Amount"), together with interest
on the amount of the Original Amount remaining unpaid from time to time
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) from the date hereof until paid in full at a rate per annum equal to the
Debt Rate. The Original Amount of this Equipment Note shall be payable in
installments on the dates set forth in Schedule I hereto equal to the
corresponding percentage of the Original Amount of this Equipment Note set forth
in Schedule I hereto. Accrued but unpaid interest shall be due and payable in
semiannual installments commencing on ______, __ 199_, and thereafter on January
2 and July 2 of each year, to and including _______________. Notwithstanding the
foregoing, the final payment made on this Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Original Amount and all accrued and
unpaid interest on, and any other amounts due under, this Equipment Note.
Notwithstanding anything to the contrary contained herein, if any date on which
a payment under this Equipment Note becomes due and payable is not a Business
Day, then such payment shall not be made on such scheduled date but shall be
made on the next succeeding Business Day and if such payment is made on such
next succeeding Business Day, no interest shall accrue on the amount of such
payment during such extension.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Mortgage ________, dated as of _______ __, 199_, between the Owner
and Wilmington Trust Company (the "Mortgagee"), as the same may be amended or
supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Payment Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).
There shall be maintained an Equipment Note Register for the purpose of
registering transfers and exchanges of Equipment Notes at the Corporate Trust
Office of the Mortgagee or at the office of any successor in the manner provided
in Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due hereunder shall
be payable in Dollars in immediately available funds at the Corporate Trust
Office of the Mortgagee, or as otherwise provided in the Trust Indenture. Each
such payment shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in the case of any
final payment with respect to this Equipment Note, the Equipment Note shall be
surrendered promptly thereafter to the Mortgagee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Trust Indenture, each payment of the Original
Amount, Make-Whole Amount, if any, and interest received by it hereunder shall
be applied, FIRST, to the payment of accrued interest on this Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, or, to the extent permitted by Law, any overdue interest and
other amounts hereunder) to the date of such payment, SECOND, to the payment of
the Original Amount of this Equipment Note then due, THIRD, to the payment of
Make-Whole Amount, if any, and any other amount due hereunder or under the Trust
Indenture, and FOURTH, the balance, if any, remaining thereafter, to the payment
of installments of the Original Amount of this Equipment Note remaining unpaid
in the inverse order of their maturity.
This Equipment Note is one of the Equipment Notes referred to in the
Trust Indenture which have been or are to be issued by the Owner pursuant to the
terms of the Trust Indenture. The Collateral is held by the Mortgagee as
security, in part, for the Equipment Notes. The provisions of this Equipment
Note are subject to the Trust Indenture. Reference is hereby made to the Trust
Indenture for a complete statement of the rights and obligations of the holder
of, and the nature and extent of the security for, this Equipment Note and the
rights and obligations of the holders of, and the nature and extent of the
security for, any other Equipment Notes executed and delivered under the Trust
Indenture, as well as for a statement of the terms and conditions of the Trust
created by the Trust Indenture, to all of which terms and conditions in the
Trust Indenture each holder hereof agrees by its acceptance of this Equipment
Note.
As provided in the Trust Indenture and subject to certain limitations
therein set forth, this Equipment Note is exchangeable for a like aggregate
Original Amount of Equipment Notes of different authorized denominations, as
requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of this Equipment
Note, the Owner and the Mortgagee shall treat the person in whose name this
Equipment Note is registered as the owner hereof for all purposes, whether or
not this Equipment Note be overdue, and neither the Owner nor the Mortgagee
shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in Sections
2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. In addition, this
Equipment Note may be accelerated as provided in Section 5.02 of the Trust
Indenture.
[The indebtedness evidenced by this Equipment Note is, to the extent
and in the manner provided in the Trust Indenture, subordinate and subject in
right of payment to the prior payment in full of the Secured Obligations (as
defined in the Trust Indenture) in respect of [Series A Equipment Notes]
[Series A and Series B Equipment Notes] [Series A, Series B and Series C
Equipment Notes] and this Equipment Note is issued subject to such
provisions. The Note Holder of this Equipment Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Mortgagee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Trust Indenture and (c)
appoints the Mortgagee his attorney-in-fact for such purpose.]
Unless the certificate of authentication hereon has been executed by or
on behalf of the Mortgagee by manual signature, this Equipment Note shall not be
entitled to any benefit under the Trust Indenture or be valid or obligatory for
any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner has caused this Equipment Note to be
executed in its corporate name by its officer thereunto duly authorized on the
date hereof.
CONTINENTAL AIRLINES, INC.
By:______________________________
Name:
Title:
_______________
To be inserted in the case of a Series B Equipment Note.
To be inserted in the case of a Series C Equipment Note.
To be inserted in the case of Series D Equipment Notes.
To be inserted for each Equipment Note other than any Series A Equipment
Note.
MORTGAGEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned
Trust Indenture.
WILMINGTON TRUST COMPANY, as
Mortgagee
By:____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTE AMORTIZATION
PAYMENT DATE PERCENTAGE OF ORIGINAL AMOUNT TO BE PAID
- ------------ ----------------------------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES
The Equipment Notes shall be dated the date of issuance thereof, shall
be issued in three separate series (or if the Series D is issued, four separate
series) consisting of Series A, Series B, Series C and, if issued, Series D and
in the maturities and principal amounts and shall bear interest as specified in
Schedule I hereto (or, in the case of the Series D if issued after the Closing
Date, as specified in an amendment to this Trust Indenture). On the date
thereof, each Series A, Series B and Series C Equipment Note shall be issued to
the Subordination Agent on behalf of the Pass Through Trustee under the
applicable Pass Through Trust Agreement. Owner shall have the option to issue
the Series D Equipment Notes at or after the Closing. The Equipment Notes shall
be issued in registered form only. The Equipment Notes shall be issued in
denominations of $1,000 and integral multiples thereof, except that one
Equipment Note of each Series may be in an amount that is not an integral
multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate (calculated on
the basis of a year of 360 days comprised of twelve 30-day months) on the unpaid
Original Amount thereof from time to time outstanding, payable in arrears on
____ __, 199_, and on each January 2 and July 2 thereafter until maturity. The
Original Amount of each Equipment Note shall be payable on the dates and in the
installments equal to the corresponding percentage of the Original Amount as set
forth in Schedule I hereto which shall be attached as Schedule I to the
Equipment Notes (or, in the case of the Series D Equipment Notes if issued after
the Closing Date, as set forth in an amendment to this Trust Indenture, which
payment schedule shall be attached as Schedule I to the Series D Equipment
Notes). Notwithstanding the foregoing, the final payment made under each
Equipment Note shall be in an amount sufficient to discharge in full the unpaid
Original Amount and all accrued and unpaid interest on, and any other amounts
due under, such Equipment Note. Each Equipment Note shall bear interest at the
Payment Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any part of the Original Amount, Make-Whole Amount, if
any, and, to the extent permitted by applicable Law, interest and any other
amounts payable thereunder not paid when due for any period during which the
same shall be overdue, in each case for the period the same is overdue. Amounts
shall be overdue if not paid when due (whether at stated maturity, by
acceleration or otherwise). Notwithstanding anything to the contrary contained
herein, if any date on which a payment under any Equipment Note becomes due and
payable is not a Business Day then such payment shall not be made on such
scheduled date but shall be made on the next succeeding Business Day and if such
payment is made on such next succeeding Business Day, no interest shall accrue
on the amount of such payment during such extension.
The Owner agrees to pay to the Mortgagee for distribution in accordance
with Section 3.04 hereof: (i) to the extent not payable (whether or not in fact
paid) under Section 6(a) of the Note Purchase Agreement, an amount equal to the
fees payable to the relevant Liquidity Provider under Section 2.03 of each
Liquidity Facility and the related Fee Letter (as defined in the Intercreditor
Agreement) multiplied by a fraction the numerator of which shall be the then
outstanding aggregate principal amount of the Series A Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes and the denominator of which shall
be the then outstanding aggregate principal amount of all "Series A Equipment
Notes," "Series B Equipment Notes" and "Series C Equipment Notes" (each as
defined in the Note Purchase Agreement); (ii) (x) the amount equal to interest
on any Downgrade Advance (other than any Applied Downgrade Advance) payable
under Section 3.07(e) of each Liquidity Facility minus Investment Earnings from
such Downgrade Advance multiplied by (y) the fraction specified in the foregoing
clause (i); (iii) (x) the amount equal to interest on any Non-Extension Advance
(other than any Applied Non-Extension Advance) payable under Section 3.07(a)(i)
of each Liquidity Facility minus Investment Earnings from such Non-Extension
Advance multiplied by (y) the fraction specified in the foregoing clause (i);
(iv) if any payment default shall have occurred and be continuing with respect
to interest on any Series A Equipment Notes, Series B Equipment Notes or Series
C Equipment Notes, (x) the excess, if any, of (1) an amount equal to interest on
any Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
payable under Section 3.07(a)(i) of each Liquidity Facility over (2) the sum of
Investment Earnings from any Final Advance plus any amount of interest at the
Payment Due Rate actually payable (whether or not in fact paid) by Owner on the
overdue scheduled interest on the Equipment Notes in respect of which such
Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance was
made multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series A Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes (other than interest becoming due
and payable solely as a result of acceleration of any such Equipment Notes) and
the denominator of which shall be the then aggregate overdue amounts of interest
on all "Series A Equipment Notes," "Series B Equipment Notes" and "Series C
Equipment Notes" (each as defined in the Note Purchase Agreement) (other than
interest becoming due and payable solely as a result of acceleration of any such
"Equipment Notes"); and (v) Owner's pro rata share of any other amounts owed to
the Liquidity Providers by the Subordination Agent as borrower under each
Liquidity Facility other than amounts due as repayment of advances thereunder or
as interest on such advances, except to the extent payable pursuant to clause
(ii), (iii) or (iv) above, (c) Owner's pro rata share of all compensation and
reimbursement of expenses, disbursements and advances payable by Owner under the
Pass Through Trust Agreements, (d) Owner's pro rata share of all compensation
and reimbursement of expenses and disbursements payable to the Subordination
Agent under the Intercreditor Agreement except with respect to any income or
franchise taxes incurred by the Subordination Agent in connection with the
transactions contemplated by the Intercreditor Agreement and (e) in the event
Owner requests any amendment to any Operative Agreement or Pass Through
Agreement, Owner's pro rata share of all reasonable fees and expenses
(including, without limitation, fees and disbursements of counsel) of the Escrow
Agents and the Paying Agents in connection therewith payable by the Pass Through
Trustees under the Escrow Agreements. As used herein, "Owner's pro rata share"
means as of any time a fraction, the numerator of which is the principal balance
then outstanding of Equipment Notes and the denominator of which is the
aggregate principal balance then outstanding of all "Equipment Notes" (as such
term is defined in each of the Operative Indentures). For purposes of this
paragraph, the terms "Applied Downgrade Advance", "Applied Non-Extension
Advance", "Cash Collateral Account", "Downgrade Advance", "Final Advance",
"Investment Earnings", "Non-Extension Advance" and "Unpaid Advance" shall have
the meanings specified in each Liquidity Facility.
The Equipment Notes shall be executed on behalf of the Owner by one of
its authorized officers. Equipment Notes bearing the signatures of individuals
who were at any time the proper officers of the Owner shall bind the Owner,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Equipment Notes or did
not hold such offices at the respective dates of such Equipment Notes. The Owner
may from time to time execute and deliver Equipment Notes with respect to the
Aircraft to the Mortgagee for authentication upon original issue and such
Equipment Notes shall thereupon be authenticated and delivered by the Mortgagee
upon the written request of the Owner signed by an authorized officer of the
Owner. No Equipment Note shall be secured by or entitled to any benefit under
this Trust Indenture or be valid or obligatory for any purposes, unless there
appears on such Equipment Note a certificate of authentication in the form
provided for herein executed by the Mortgagee by the manual signature of one of
its authorized officers and such certificate upon any Equipment Notes be
conclusive evidence, and the only evidence, that such Equipment Note has been
duly authenticated and delivered hereunder.
The aggregate Original Amount of the Equipment Notes issued hereunder
shall not exceed the amount set forth as the maximum therefor on Schedule I
hereto.
SECTION 2.03. [INTENTIONALLY OMITTED]
SECTION 2.04. METHOD OF PAYMENT
(a) The Original Amount of, interest on, Make-Whole Amount, if
any, and other amounts due under each Equipment Note or hereunder will be
payable in Dollars by wire transfer of immediately available funds not later
than 12:30 PM, New York time, on the due date of payment to the Mortgagee at the
Corporate Trust Office for distribution among the Note Holders in the manner
provided herein. The Owner shall not have any responsibility for the
distribution of such payment to any Note Holder. Notwithstanding the foregoing
or any provision in any Equipment Note to the contrary, the Mortgagee will use
reasonable efforts to pay or cause to be paid, if so directed in writing by any
Note Holder (with a copy to the Owner), all amounts paid by the Owner hereunder
and under such holder's Equipment Note or Equipment Notes to such holder or a
nominee therefor (including all amounts distributed pursuant to Article III of
this Trust Indenture) by transferring, or causing to be transferred, by wire
transfer of immediately available funds in Dollars, prior to 2:00 p.m., New York
City time, on the due date of payment, to an account maintained by such holder
with a bank located in the continental United States the amount to be
distributed to such holder, for credit to the account of such holder maintained
at such bank. If the Mortgagee shall fail to make any such payment as provided
in the immediately foregoing sentence after its receipt of funds at the place
and prior to the time specified above, the Mortgagee, in its individual capacity
and not as trustee, agrees to compensate such holders for loss of use of funds
at Debt Rate until such payment is made and the Mortgagee shall be entitled to
any interest earned on such funds until such payment is made. Any payment made
hereunder shall be made without any presentment or surrender of any Equipment
Note, except that, in the case of the final payment in respect of any Equipment
Note, such Equipment Note shall be surrendered to the Mortgagee for cancellation
promptly after such payment. Notwithstanding any other provision of this Trust
Indenture to the contrary, the Mortgagee shall not be required to make, or cause
to be made, wire transfers as aforesaid prior to the first Business Day on which
it is practicable for the Mortgagee to do so in view of the time of day when the
funds to be so transferred were received by it if such funds were received after
12:30 PM, New York time, at the place of payment. Prior to the due presentment
for registration of transfer of any Equipment Note, the Owner and the Mortgagee
shall deem and treat the Person in whose name any Equipment Note is registered
on the Equipment Note Register as the absolute owner and holder of such
Equipment Note for the purpose of receiving payment of all amounts payable with
respect to such Equipment Note and for all other purposes, and none of the Owner
or the Mortgagee shall be affected by any notice to the contrary. So long as any
signatory to the Participation Agreement or nominee thereof shall be a
registered Note Holder, all payments to it shall be made to the account of such
Note Holder specified in Schedule I thereto and otherwise in the manner provided
in or pursuant to the Participation Agreement unless it shall have specified
some other account or manner of payment by notice to the Mortgagee consistent
with this Section 2.04.
(b) The Mortgagee, as agent for the Owner, shall exclude and
withhold at the appropriate rate from each payment of Original Amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or under
each Equipment Note (and such exclusion and withholding shall constitute payment
in respect of such Equipment Note) any and all United States withholding taxes
applicable thereto as required by Law. The Mortgagee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
United States taxes or similar charges are required to be withheld with respect
to any amounts payable hereunder or in respect of the Equipment Notes, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Note Holders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof it will deliver to each Note
Holder (with a copy to the Owner) appropriate receipts showing the payment
thereof, together with such additional documentary evidence as any such Note
Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Mortgagee a properly completed, accurate and currently effective U.S. Internal
Revenue Service Form 1001 or W-8 (or such successor form or forms as may be
required by the United States Treasury Department) during the calendar year in
which the payment hereunder or under the Equipment Note(s) held by such holder
is made (but prior to the making of such payment), or in either of the two
preceding calendar years, and has not notified the Mortgagee of the withdrawal
or inaccuracy of such form prior to the date of such payment (and the Mortgagee
has no reason to believe that any information set forth in such form is
inaccurate), the Mortgagee shall withhold only the amount, if any, required by
Law (after taking into account any applicable exemptions properly claimed by the
Note Holder) to be withheld from payments hereunder or under the Equipment Notes
held by such holder in respect of United States federal income tax. If a Note
Holder (x) which is a Non-U.S. Person has furnished to the Mortgagee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
4224 in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order to
properly avoid withholding of United States federal income tax), for each
calendar year in which a payment is made (but prior to the making of any payment
for such year), and has not notified the Mortgagee of the withdrawal or
inaccuracy of such certificate or form prior to the date of such payment (and
the Mortgagee has no reason to believe that any information set forth in such
form is inaccurate) or (y) which is a U.S. Person has furnished to the Mortgagee
a properly completed, accurate and currently effective U.S. Internal Revenue
Service Form W-9, if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from payments
in respect of United States federal income tax. If any Note Holder has notified
the Mortgagee that any of the foregoing forms or certificates is withdrawn or
inaccurate, or if such holder has not filed a form claiming an exemption from
United States withholding tax or if the Code or the regulations thereunder or
the administrative interpretation thereof is at any time after the date hereof
amended to require such withholding of United States federal income taxes from
payments under the Equipment Notes held by such holder, the Mortgagee agrees to
withhold from each payment due to the relevant Note Holder withholding taxes at
the appropriate rate under Law and will, on a timely basis as more fully
provided above, deposit such amounts with an authorized depository and make such
returns, statements, receipts and other documentary evidence in connection
therewith as required by Law.
Owner shall not have any liability for the failure of the Mortgagee to
withhold taxes in the manner provided for herein or for any false, inaccurate or
untrue evidence provided by any Note Holder hereunder.
SECTION 2.05. APPLICATION OF PAYMENTS
In the case of each Equipment Note, each payment of Original Amount,
Make-Whole Amount, if any, and interest due thereon shall be applied:
First: to the payment of accrued interest on such Equipment Note (as
well as any interest on any overdue Original Amount, any overdue Make-Whole
Amount, if any, and to the extent permitted by Law, any overdue interest
and any other overdue amounts thereunder) to the date of such payment;
Second: to the payment of the Original Amount of such Equipment Note
(or a portion thereof) then due thereunder;
Third: to the payment of Make-Whole Amount, if any, and any other
amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the payment of
the Original Amount of such Equipment Note remaining unpaid (provided that
such Equipment Note shall not be subject to redemption except as provided
in Sections 2.10, 2.11 and 2.12 hereof).
The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Original Amount of such Equipment Note in the inverse order of
their maturity.
SECTION 2.06. TERMINATION OF INTEREST IN COLLATERAL
No Note Holder nor any other Indenture Indemnitee shall, as such, have
any further interest in, or other right with respect to, the Collateral when and
if the Original Amount of, Make-Whole Amount, if any, and interest on and other
amounts due under all Equipment Notes held by such Note Holder and all other
sums then due and payable to such Note Holder, such Indenture Indemnitee or the
Mortgagee hereunder (including, without limitation, under the third paragraph of
Section 2.02 hereof) and under the other Operative Agreements by the Owner
(collectively, the "Secured Obligations") shall have been paid in full.
SECTION 2.07. REGISTRATION TRANSFER AND EXCHANGE OF EQUIPMENT NOTES
The Mortgagee shall keep a register (the "Equipment Note Register") in
which the Mortgagee shall provide for the registration of Equipment Notes and
the registration of transfers of Equipment Notes. No such transfer shall be
given effect unless and until registration hereunder shall have occurred. The
Equipment Note Register shall be kept at the Corporate Trust Office of the
Mortgagee. The Mortgagee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Mortgagee at the
Corporate Trust Office, together with a written request from the registered
holder thereof for the issuance of a new Equipment Note, specifying, in the case
of a surrender for transfer, the name and address of the new holder or holders.
Upon surrender for registration of transfer of any Equipment Note, the Owner
shall execute, and the Mortgagee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Equipment Notes of a
like aggregate Original Amount and of the same series. At the option of the Note
Holder, Equipment Notes may be exchanged for other Equipment Notes of any
authorized denominations of a like aggregate Original Amount, upon surrender of
the Equipment Notes to be exchanged to the Mortgagee at the Corporate Trust
Office. Whenever any Equipment Notes are so surrendered for exchange, the Owner
shall execute, and the Mortgagee shall authenticate and deliver, the Equipment
Notes which the Note Holder making the exchange is entitled to receive. All
Equipment Notes issued upon any registration of transfer or exchange of
Equipment Notes (whether under this Section 2.07 or under Section 2.08 hereof or
otherwise under this Trust Indenture) shall be the valid obligations of the
Owner evidencing the same respective obligations, and entitled to the same
security and benefits under this Trust Indenture, as the Equipment Notes
surrendered upon such registration of transfer or exchange. Every Equipment Note
presented or surrendered for registration of transfer, shall (if so required by
the Mortgagee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Mortgagee duly executed by the Note Holder
or such holder's attorney duly authorized in writing, and the Mortgagee shall
require evidence satisfactory to it as to the compliance of any such transfer
with the Securities Act, and the securities Laws of any applicable state. The
Mortgagee shall make a notation on each new Equipment Note of the amount of all
payments of Original Amount previously made on the old Equipment Note or
Equipment Notes with respect to which such new Equipment Note is issued and the
date to which interest on such old Equipment Note or Equipment Notes has been
paid. Interest shall be deemed to have been paid on such new Equipment Note to
the date on which interest shall have been paid on such old Equipment Note, and
all payments of the Original Amount marked on such new Equipment Note, as
provided above, shall be deemed to have been made thereon. The Owner shall not
be required to exchange any surrendered Equipment Notes as provided above during
the ten-day period preceding the due date of any payment on such Equipment Note.
The Owner shall in all cases deem the Person in whose name any Equipment Note
shall have been issued and registered as the absolute owner and holder of such
Equipment Note for the purpose of receiving payment of all amounts payable by
the Owner with respect to such Equipment Note and for all purposes until a
notice stating otherwise is received from the Mortgagee and such change is
reflected on the Equipment Note Register. The Mortgagee will promptly notify the
Owner of each registration of a transfer of an Equipment Note. Any such
transferee of an Equipment Note, by its acceptance of an Equipment Note, agrees
to the provisions of this Trust Indenture and the Participation Agreement
applicable to Note Holders, including Sections 6.3, 6.4 and 9.1 thereof and
shall be deemed to have covenanted to the parties to the Participation Agreement
as to the matters covenanted by the original Note Holder in the Participation
Agreement. Subject to compliance by the Note Holder and its transferee (if any)
of the requirements set forth in this Section 2.07, Mortgagee and Owner shall
use all reasonable efforts to issue new Equipment Notes upon transfer or
exchange within 10 Business Days of the date an Equipment Note is surrendered
for transfer or exchange.
SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN EQUIPMENT NOTES
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner shall, upon the written request of the holder of such
Equipment Note, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Equipment Note, payable in the same Original Amount
dated the same date and captioned as issued in connection with the Aircraft. If
the Equipment Note being replaced has become mutilated, such Equipment Note
shall be surrendered to the Mortgagee and a photocopy thereof shall be furnished
to the Owner. If the Equipment Note being replaced has been destroyed, lost or
stolen, the holder of such Equipment Note shall furnish to the Owner and the
Mortgagee such security or indemnity as may be required by them to save the
Owner and the Mortgagee harmless and evidence satisfactory to the Owner and the
Mortgagee of the destruction, loss or theft of such Equipment Note and of the
ownership thereof. If a "qualified institutional buyer" of the type referred to
in paragraph (a)(1)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act
(a "QIB") is the holder of any such destroyed, lost or stolen Equipment Note,
then the written indemnity of such QIB, signed by an authorized officer thereof,
in favor of, delivered to and in form reasonably satisfactory Owner shall be
accepted as satisfactory indemnity and security and no further indemnity or
security shall be required as a condition to the execution and delivery of such
new Equipment Note. Subject to compliance by the Note Holder with the
requirements set forth in this Section 2.08, Mortgagee and Owner shall use all
reasonable efforts to issue new Equipment Notes within 10 Business Days of the
date of the written request therefor from the Note Holder.
SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Mortgagee, as
Equipment Note Registrar, may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Equipment Notes.
(b) The Mortgagee shall cancel all Equipment Notes surrendered for
replacement, redemption, transfer, exchange, payment or cancellation and shall
destroy the canceled Equipment Notes.
SECTION 2.10. MANDATORY REDEMPTIONS OF EQUIPMENT NOTES
On the date on which the Owner is required pursuant to Section 4.05
hereof to make payment for an Event of Loss with respect to the Airframe, all of
the Equipment Notes shall be redeemed in whole at a redemption price equal to
100% of the unpaid Original Amount thereof, together with all accrued interest
thereon to the date of redemption and all other Secured Obligations owed or then
due and payable to the Note Holders but without Make-Whole Amount.
SECTION 2.11. VOLUNTARY REDEMPTIONS OF EQUIPMENT NOTES
All (but not less than all) of the Equipment Notes may be redeemed by
the Owner upon at least 30 days' revocable prior written notice to the Mortgagee
and the Note Holders, and the Equipment Notes shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Original Amount thereof, together
with accrued interest thereon to the date of redemption and all other Secured
Obligations owed or then due and payable to the Note Holders plus, if such
redemption is made prior to the Premium Termination Date, Make-Whole Amount, if
any.
SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION
(a) No redemption of any Equipment Note may be made except to the
extent and in the manner expressly permitted by this Trust Indenture. No
purchase of any Equipment Note may be made by the Mortgagee.
(b) Notice of redemption with respect to the Equipment Notes shall
be given by the Mortgagee by first-class mail, postage prepaid, mailed not less
than 25 nor more than 60 days prior to the applicable redemption date, to each
Note Holder of such Equipment Notes to be redeemed, at such Note Holder's
address appearing in the Equipment Note Register; provided that such notice
shall be revocable by written notice from the Owner to Mortgagee given not later
than three days prior to the redemption date. All notices of redemption shall
state: (1) the redemption date, (2) the applicable basis for determining the
redemption price, (3) that on the redemption date, the redemption price will
become due and payable upon each such Equipment Note, and that, if any such
Equipment Notes are then outstanding, interest on such Equipment Notes shall
cease to accrue on and after such redemption date, and (4) the place or places
where such Equipment Notes are to be surrendered for payment of the redemption
price.
(c) On or before the redemption date, the Owner (or any person on
behalf of the Owner) shall, to the extent an amount equal to the redemption
price for the Equipment Notes to be redeemed on the redemption date shall not
then be held by the Mortgagee, deposit or cause to be deposited with the
Mortgagee by 12:30 PM New York time on the redemption date in immediately
available funds the redemption price of the Equipment Notes to be redeemed.
(d) Notice of redemption having been given as aforesaid, the
Equipment Notes to be redeemed shall, on the redemption date, become due and
payable at the Corporate Trust Office of the Mortgagee or at any office or
agency maintained for such purposes pursuant to Section 2.07, and from and after
such redemption date (unless there shall be a default in the payment of the
redemption price) any such Equipment Notes then outstanding shall cease to bear
interest. Upon surrender of any such Equipment Note for redemption in accordance
with said notice, such Equipment Note shall be redeemed at the redemption price.
If any Equipment Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal amount thereof shall, until paid, continue
to bear interest from the applicable redemption date at the interest rate in
effect for such Equipment Note as of such redemption date.
SECTION 2.13. SUBORDINATION
(a) The Owner and, by acceptance of its Equipment Notes of any
Series, each Note Holder of such Series, hereby agree that no payment or
distribution shall be made on or in respect of the Secured Obligations owed to
such Note Holder of such Series, including any payment or distribution of cash,
property or securities after the commencement of a proceeding of the type
referred to in Section 5.01(v), (vi) or (vii) hereof, except as expressly
provided in Article III hereof.
(b) By the acceptance of its Equipment Notes of any Series (other
than Series A), each Note Holder of such Series agrees that in the event that
such Note Holder, in its capacity as a Note Holder, shall receive any payment or
distribution on any Secured Obligations in respect of such Series which it is
not entitled to receive under this Section 2.13 or Article III hereof, it will
hold any amount so received in trust for the Senior Holder (as defined in
Section 2.13(c) hereof) and will forthwith turn over such payment to the
Mortgagee in the form received to be applied as provided in Article III hereof.
(c) As used in this Section 2.13, the term "Senior Holder" shall
mean, (i) the Note Holders of Series A until the Secured Obligations in respect
of Series A Equipment Notes have been paid in full, (ii) after the Secured
Obligations in respect of Series A Equipment Notes have been paid in full, the
Note Holders of Series B until the Secured Obligations in respect of Series B
Equipment Notes have been paid in full and (iii) after the Secured Obligations
in respect of Series B Equipment Notes have been paid in full, the Note Holders
of Series C until the Secured Obligations in respect of Series C Equipment Notes
have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS
SECTION 3.01. BASIC DISTRIBUTIONS
Except as otherwise provided in Sections 3.02 and 3.03 hereof, each
periodic payment of principal or interest on the Equipment Notes received by the
Mortgagee shall be promptly distributed in the following order of priority:
(i) so much of such payment as shall be required to pay in full the
aggregate amount of the payment or payments of Original Amount and
interest (as well as any interest on any overdue Original Amount and,
to the extent permitted by Law, on any overdue interest) then due
under all Series A Equipment Notes shall be distributed to the Note
Holders of Series A ratably, without priority of one over the other,
in the proportion that the amount of such payment or payments then due
under each Series A Equipment Note bears to the aggregate amount of
the payments then due under all Series A Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such payment
remaining as shall be required to pay in full the aggregate amount of
the payment or payments of Original Amount and interest (as well as
any interest on any overdue Original Amount and, to the extent
permitted by Law, on any overdue interest) then due under all Series B
Equipment Notes shall be distributed to the Note Holders of Series B
ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series
B Equipment Note bears to the aggregate amount of the payments then
due under all Series B Equipment Notes;
(iii)after giving effect to paragraph (ii) above, so much of such payment
remaining as shall be required to pay in full the aggregate amount of
the payment or payments of Original Amount and interest (as well as
any interest on any overdue Original Amount and, to the extent
permitted by Law, on any overdue interest) then due under all Series C
Equipment Notes shall be distributed to the Note Holders of Series C
ratably, without priority of one over the other, in the proportion
that the amount of such payment or payments then due under each Series
C Equipment Note bears to the aggregate amount of the payments then
due under all Series C Equipment Notes; and
(iv) if any Series D Equipment Notes have been issued, after giving effect
to paragraph (iii) above, so much of such payment remaining as shall
be required to pay in full the aggregate amount of the payment or
payments of Original Amount and interest (as well as any interest on
any overdue Original Amount and, to the extent permitted by Law, on
any overdue interest) then due under all Series D Equipment Notes
shall be distributed to the Note Holders of Series D ratably, without
priority of one over the other, in the proportion that the amount of
such payment or payments then due under each Series D Equipment Note
bears to the aggregate amount of the payments then due under all
Series D Equipment Notes.
SECTION 3.02. EVENT OF LOSS; REPLACEMENT; OPTIONAL REDEMPTION
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Mortgagee (i) with respect to the Airframe or the Airframe and
one or more Engines as the result of an Event of Loss or (ii) pursuant to an
optional redemption of the Equipment Notes pursuant to Section 2.11 hereof shall
be applied to redemption of the Equipment Notes and to all other Secured
Obligations by applying such funds in the following order of priority:
First, (a) to reimburse the Mortgagee and the Note Holders for any reasonable
costs or expenses incurred in connection with such redemption for
which they are entitled to reimbursement, or indemnity by Owner, under
the Operative Agreements and then (b) to pay any other amounts then
due (except as provided in clause "Second" below) to the Mortgagee,
the Note Holders and the other Indenture Indemnitees under this Trust
Indenture, the Participation Agreement or the Equipment Notes;
Second, (i) to pay the amounts specified in paragraph (i) of clause "Third"
of Section 3.03 hereof plus Make-Whole Amount, if any, then due
and payable in respect of the Series A Equipment Notes;
(ii) after giving effect to paragraph (i) above, to pay the amounts
specified in paragraph (ii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in
respect of the Series B Equipment Notes;
(iii)after giving effect to paragraph (ii) above, to pay the amounts
specified in paragraph (iii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in
respect of the Series C Equipment Notes; and
(iv) if any Series D Equipment Notes have been issued, after giving
effect to paragraph (iii) above, to pay the amounts specified in
paragraph (iv) of clause "Third" of Section 3.03 hereof plus
Make-Whole Amount, if any, then due and payable in respect of the
Series D Equipment Notes; and
Third, as provided in clause "Fourth" of Section 3.03 hereof;
PROVIDED, HOWEVER, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in Section 4.05 hereof, any insurance, condemnation or similar proceeds which
result from such Event of Loss and are paid over to the Mortgagee shall be held
by the Mortgagee as permitted by Section 7.04 hereof (provided that such moneys
shall be invested as provided in Section 6.06 hereof) as additional security for
the obligations of Owner under Operative Agreements and such proceeds (and such
investment earnings), to the extent not theretofore applied as provided herein,
shall be released to the Owner at the Owner's written request upon the release
of such Airframe or Engine and the replacement thereof as provided herein.
SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Mortgagee (including any amounts
realized by the Mortgagee from the exercise of any remedies pursuant to Article
V hereof) after an Event of Default shall have occurred and be continuing and
after the declaration specified in Section 5.02(b) hereof, as well as all
payments or amounts then held by the Mortgagee as part of the Collateral, shall
be promptly distributed by the Mortgagee in the following order of priority:
First, so much of such payments or amounts as shall be required to (i)
reimburse the Mortgagee or WTC for any tax (except to the extent
resulting from a failure of the Mortgagee to withhold taxes pursuant
to Section 2.04(b) hereof), expense or other loss (including, without
limitation, all amounts to be expended at the expense of, or charged
upon the rents, revenues, issues, products and profits of, the
property included in the Collateral (all such property being herein
called the "Mortgaged Property") pursuant to Section 5.03(b) hereof)
incurred by the Mortgagee or WTC (to the extent not previously
reimbursed), the expenses of any sale, or other proceeding, reasonable
attorneys' fees and expenses, court costs, and any other expenditures
incurred or expenditures or advances made by the Mortgagee, WTC or the
Note Holders in the protection, exercise or enforcement of any right,
power or remedy or any damages sustained by the Mortgagee, WTC or any
Note Holder, liquidated or otherwise, upon such Event of Default shall
be applied by the Mortgagee as between itself, WTC and the Note
Holders in reimbursement of such expenses and any other expenses for
which the Mortgagee, WTC or the Note Holders are entitled to
reimbursement under any Operative Agreement and (ii) pay all amounts
payable to the other Indenture Indemnitees hereunder and under the
Participation Agreement; and in the case the aggregate amount to be so
distributed is insufficient to pay as aforesaid in clauses (i) and
(ii), then ratably, without priority of one over the other, in
proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall be required to
reimburse the then existing or prior Note Holders for payments made
pursuant to Section 6.03 hereof (to the extent not previously
reimbursed) shall be distributed to such then existing or prior Note
Holders ratably, without priority of one over the other, in accordance
with the amount of the payment or payments made by each such then
existing or prior Note Holder pursuant to said Section 6.03 hereof;
Third, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Original Amount of
all Series A Equipment Notes, and the accrued but unpaid interest
and other amounts due thereon (other than Make-Whole Amount which
shall not be due and payable) and all other Secured Obligations
in respect of the Series A Equipment Notes (other than Make-Whole
Amount) to the date of distribution, shall be distributed to the
Note Holders of Series A, and in case the aggregate amount so to
be distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of all
Series A Equipment Notes held by each holder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Amount, if any) to the date of
distribution, bears to the aggregate unpaid Original Amount of
all Series A Equipment Notes held by all such holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Amount) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of such
payments or amounts remaining as shall be required to pay in full
the aggregate unpaid Original Amount of all Series B Equipment
Notes, and the accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Amount which shall not be due and
payable) and all other Secured Obligations in respect of the
Series B Equipment Notes (other than Make-Whole Amount) to the
date of distribution, shall be distributed to the Note Holders of
Series B, and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that
the aggregate unpaid Original Amount of all Series B Equipment
Notes held by each holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder (other than the
Make-Whole Amount, if any) to the date of distribution, bears to
the aggregate unpaid Original Amount of all Series B Equipment
Notes held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than the Make-Whole
Amount) to the date of distribution;
(iii)after giving effect to paragraph (ii) above, so much of such
payments or amounts remaining as shall be required to pay in full
the aggregate unpaid Original Amount of all Series C Equipment
Notes, and the accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Amount which shall not be due and
payable) and all other Secured Obligations in respect of the
Series C Equipment Notes (other than Make-Whole Amount) to the
date of distribution, shall be distributed to the Note Holders of
Series C, and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that
the aggregate unpaid Original Amount of all Series C Equipment
Notes held by each holder plus the accrued but unpaid interest
and other amounts due hereunder or thereunder (other than the
Make-Whole Amount, if any) to the date of distribution, bears to
the aggregate unpaid Original Amount of all Series C Equipment
Notes held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than the Make-Whole
Amount) to the date of distribution; and
(iv) if any Series D Equipment Notes have been issued, after giving
effect to paragraph (iii) above, so much of such payments or
amounts remaining as shall be required to pay in full the
aggregate unpaid Original Amount of all Series D Equipment Notes,
and the accrued but unpaid interest and other amounts due thereon
(other than Make-Whole Amount which shall not be due and payable)
and all other Secured Obligations in respect of the Series D
Equipment Notes (other than Make-Whole Amount) to the date of
distribution, shall be distributed to the Note Holders of Series
D, and in case the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably, without
priority of one over the other, in the proportion that the
aggregate unpaid Original Amount of all Series D Equipment Notes
held by each holder plus the accrued but unpaid interest and
other amounts due hereunder or thereunder (other than the
Make-Whole Amount, if any) to the date of distribution, bears to
the aggregate unpaid Original Amount of all Series D Equipment
Notes held by all such holders plus the accrued but unpaid
interest and other amounts due thereon (other than the Make-Whole
Amount) to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner.
No Make-Whole Amount shall be due and payable on the Equipment Notes as
a consequence of the acceleration of the Equipment Notes as a result of an Event
of Default.
SECTION 3.04. CERTAIN PAYMENTS
(a) Any payments received by the Mortgagee for which no provision
as to the application thereof is made in this Trust Indenture and for which such
provision is made in any other Operative Agreement shall be applied forthwith to
the purpose for which such payment was made in accordance with the terms of such
other Operative Agreement, as the case may be.
(b) Notwithstanding anything to the contrary contained in this
Article III, the Mortgagee will distribute promptly upon receipt any indemnity
payment received by it from the Owner in respect of the Mortgagee in its
individual capacity, any Note Holder or any other Indenture Indemnitee, in each
case whether or not pursuant to Section 8 of the Participation Agreement,
directly to the Person entitled thereto. Any payment received by the Mortgagee
under the third paragraph of Section 2.02 shall be distributed to the
Subordination Agent in its capacity as Note Holder to be distributed in
accordance with the terms of the Intercreditor Agreement.
SECTION 3.05. OTHER PAYMENTS
Any payments received by the Mortgagee for which no provision as to the
application thereof is made elsewhere in this Trust Indenture or in any other
Operative Agreement shall be distributed by the Mortgagee to the extent received
or realized at any time, in the order of priority specified in Section 3.01
hereof, and after payment in full of all amounts then due in accordance with
Section 3.01 in the manner provided in clause "Fourth" of Section 3.03 hereof.
ARTICLE IV
COVENANTS OF THE OWNER
SECTION 4.01. LIENS
The Owner will not directly or indirectly create, incur, assume or
suffer to exist any Lien or with respect to the Airframe or any Engine, title to
any of the foregoing or any interest of Owner therein, except Permitted Liens.
The Owner shall promptly, at its own expense, take such action as may be
necessary to duly discharge (by bonding or otherwise) any Lien other than a
Permitted Lien arising at any time.
SECTION 4.02. POSSESSION, OPERATION AND USE, MAINTENANCE, REGISTRATION
AND MARKINGS
(a) GENERAL. Except as otherwise expressly provided herein, the
Owner shall be entitled to operate, use, locate, employ or otherwise utilize or
not utilize the Airframe, any Engine or any Parts in any lawful manner or place
in accordance with the Owner's business judgment.
(b) POSSESSION. The Owner, without the prior consent of Mortgagee,
shall not lease or otherwise in any manner deliver, transfer or relinquish
possession of the Aircraft, the Airframe or any Engine or install any Engine, or
permit any Engine to be installed, on any airframe other than the Airframe;
except that the Owner may, without such prior written consent of Mortgagee:
(i) Subject or permit any Permitted Lessee to subject any
Engine to normal interchange agreements or pooling agreements or arrangements,
in each case customary in the commercial airline industry and entered into by
Owner or such Permitted Lessee, as the case may be, in the ordinary course of
business; PROVIDED, HOWEVER, that if Owner's title to any such Engine is
divested under any such agreement or arrangement, then such Engine shall be
deemed to have suffered an Event of Loss as of the date of such divestiture, and
Owner shall comply with Section 4.04(e) in respect thereof;
(ii) Deliver or permit any Permitted Lessee to deliver
possession of the Aircraft, Airframe, any Engine or any Part (x) to the
manufacturer thereof or to any third-party maintenance provider for testing,
service, repair, maintenance or overhaul work on the Aircraft, Airframe, any
Engine or any Part, or, to the extent required or permitted by Section 4.04, for
alterations or modifications in or additions to the Aircraft, Airframe or any
Engine or (y) to any Person for the purpose of transport to a Person referred to
in the preceding clause (x);
(iii) Install or permit any Permitted Lessee to install an
Engine on an airframe owned by Owner or such Permitted Lessee, as the case may
be, free and clear of all Liens, except (x) Permitted Liens and those that do
not apply to the Engines, and (y) the rights of third parties under normal
interchange or pooling agreements and arrangements of the type that would be
permitted under Section 4.02(b)(i);
(iv) Install or permit any Permitted Lessee to install an
Engine on an airframe leased to Owner or such Permitted Lessee, or purchased by
Owner or such Permitted Lessee subject to a mortgage, security agreement,
conditional sale or other secured financing arrangement, but only if (x) such
airframe is free and clear of all Liens, except (A) the rights of the parties to
such lease, or any such secured financing arrangement, covering such airframe
and (B) Liens of the type permitted by clause (iii) above and (y) Owner or
Permitted Lessee, as the case may be, shall have received from the lessor,
mortgagee, secured party or conditional seller, in respect of such airframe, a
written agreement (which may be a copy of the lease, mortgage, security
agreement, conditional sale or other agreement covering such airframe), whereby
such Person agrees that it will not acquire or claim any right, title or
interest in, or Lien on, such Engine by reason of such Engine being installed on
such airframe at any time while such Engine is subject to the Lien of this Trust
Indenture;
(v) Install or permit any Permitted Lessee to install an
Engine on an airframe owned by Owner or such Permitted Lessee, leased to Owner
or such Permitted Lessee, or purchased by Owner or such Permitted Lessee subject
to a conditional sale or other security agreement under circumstances where
neither clause (iii) or (iv) above is applicable; PROVIDED, HOWEVER, that any
such installation shall be deemed an Event of Loss with respect to such Engine,
and Owner shall comply with Section 4.04(e) hereof in respect thereof;
(vi) Transfer or permit any Permitted Lessee to transfer
possession of the Aircraft, Airframe or any Engine to the U.S. Government, in
which event Owner shall promptly notify Mortgagee in writing of any such
transfer of possession and, in the case of any transfer pursuant to CRAF, in
such notification shall identify by name, address and telephone numbers the
Contracting Office Representative or Representatives for the Military Airlift
Command of the United States Air Force to whom notices must be given and to whom
requests or claims must be made to the extent applicable under CRAF;
(vii) Enter into a charter or Wet Lease or other similar
arrangement with respect to the Aircraft or any other aircraft on which any
Engine may be installed (which shall not be considered a transfer of possession
hereunder); PROVIDED THAT the Owner's obligations hereunder shall continue in
full force and effect notwithstanding any such charter or Wet Lease or other
similar arrangement;
(viii) So long as no Event of Default shall have occurred and
be continuing, and subject to the provisions of the immediately following
paragraph, enter into a lease with respect to the Aircraft, Airframe or any
Engine to any Permitted Air Carrier that is not then subject to any bankruptcy,
insolvency, liquidation, reorganization, dissolution or similar proceeding and
shall not have substantially all of its property in the possession of any
liquidator, trustee, receiver or similar person; PROVIDED THAT, in the case only
of a lease to a Permitted Foreign Air Carrier, (A) the United States maintains
diplomatic relations with the country of domicile of such Permitted Foreign Air
Carrier (or, in the case of Taiwan, diplomatic relations at least as good as
those in effect on the Closing Date) and (B) Owner shall have furnished
Mortgagee a favorable opinion of counsel, reasonably satisfactory to Mortgagee,
in the country of domicile of such Permitted Foreign Air Carrier, that (v) the
terms of such lease are the legal, valid and binding obligations of the parties
thereto enforceable under the laws of such jurisdiction, (w) it is not necessary
for Mortgagee to register or qualify to do business in such jurisdiction, if not
already so registered or qualified, as a result, in whole or in part, of the
proposed lease, (x) Mortgagee's Lien in respect of, the Aircraft, Airframe and
Engines will be recognized in such jurisdiction, (y) the Laws of such
jurisdiction of domicile require fair compensation by the government of such
jurisdiction, payable in a currency freely convertible into Dollars, for the
loss of title to the Aircraft, Airframe or Engines in the event of the
requisition by such government of such title (unless Owner shall provide
insurance in the amounts required with respect to hull insurance under this
Trust Indenture covering the requisition of title to the Aircraft, Airframe or
Engines by the government of such jurisdiction so long as the Aircraft, Airframe
or Engines are subject to such lease) and (z) the agreement of such Permitted
Air Carrier that its rights under the lease are subject and subordinate to all
the terms of this Trust Indenture is enforceable against such Permitted Air
Carrier under applicable law;
PROVIDED that (1) the rights of any transferee who receives possession by reason
of a transfer permitted by this Section 4.02(b) (other than by a transfer of an
Engine which is deemed an Event of Loss) shall be subject and subordinate to all
the terms of this Trust Indenture, (2) the Owner shall remain primarily liable
for the performance of all of the terms of this Trust Indenture and all the
terms and conditions of this Trust Indenture and the other Operative Agreements
shall remain in effect and (3) no lease or transfer of possession otherwise in
compliance with this Section 4.02(b) shall (x) result in any registration or
re-registration of an Aircraft, except to the extent permitted by Section
4.02(e) or the maintenance, operation or use thereof except in compliance with
Sections 4.02(c) and 4.02(d) or (y) permit any action not permitted to the Owner
hereunder.
In the case of any lease permitted under this Section 4.02(b), the
Owner will include in such lease appropriate provisions which (t) make such
lease expressly subject and subordinate to all of the terms of this Trust
Indenture, including the rights of the Mortgagee to avoid such lease in the
exercise of its rights to repossession of the Airframe and Engines hereunder;
(u) require the Permitted Lessee to comply with the terms of Section 4.06; and
(v) require that the Airframe or any Engine subject thereto be used in
accordance with the limitations applicable to the Owner's possession and use
provided in this Trust Indenture. No lease permitted under this Section 4.02(b)
shall be entered into unless (w) Owner shall provide written notice to Mortgagee
(such notice in the event of a lease to a U.S. Air Carrier to be given promptly
after entering into any such lease or, in the case of a lease to any other
Permitted Air Carrier, 10 days in advance of entering into such lease); (x)
Owner shall furnish to Mortgagee evidence reasonably satisfactory to Mortgagee
that the insurance required by Section 4.06 remains in effect; (y) all necessary
documents shall have been duly filed, registered or recorded in such public
offices as may be required fully to preserve the first priority security
interest (subject to Permitted Liens) of Mortgagee in the Aircraft, Airframe and
Engines; and (z) Owner shall reimburse Mortgagee for all of its reasonable
out-of-pocket fees and expenses, including, without limitation, reasonable fees
and disbursements of counsel, incurred by Mortgagee in connection with any such
lease. For all purposes of this Section, the term "lease" shall be deemed to
include interchange agreements with respect to the Aircraft or Airframe. Except
as otherwise provided herein and without in any way relieving the Owner from its
primary obligation for the performance of its obligations under this Trust
Indenture, the Owner may in its sole discretion permit a lessee to exercise any
or all rights which the Owner would be entitled to exercise under Sections 4.02
and 4.04, and may cause a lessee to perform any or all of the Owner's
obligations under Article IV, and the Mortgagee agrees to accept actual and full
performance thereof by a lessee in lieu of performance by the Owner.
Mortgagee hereby agrees, and each Note Holder by acceptance of an
Equipment Note agrees, for the benefit of each lessor, conditional seller,
indenture trustee or secured party of any engine leased to, or purchased by,
Owner or any Permitted Lessee subject to a lease, conditional sale, trust
indenture or other security agreement that Mortgagee, each Note Holder and their
respective successors and assigns will not acquire or claim, as against such
lessor, conditional seller, indenture trustee or secured party, any right, title
or interest in any engine as the result of such engine being installed on the
Airframe at any time while such engine is subject to such lease, conditional
sale, trust indenture or other security agreement and owned by such lessor or
conditional seller or subject to a trust indenture or security interest in favor
of such indenture trustee or secured party.
(c) OPERATION AND USE. So long as the Aircraft, Airframe or any
Engine is subject to the Lien of this Trust Indenture, the Owner shall not
operate, use or locate the Aircraft, Airframe or any Engine, or allow the
Aircraft, Airframe or any Engine to be operated, used or located, (i) in any
area excluded from coverage by any insurance required by the terms of Section
4.06, except in the case of a requisition by the U.S. Government where the Owner
obtains indemnity in lieu of such insurance from the U.S. Government, or
insurance from the U.S. Government, against substantially the same risks and for
at least the amounts of the insurance required by Section 4.06 covering such
area, or (ii) in any recognized area of hostilities unless covered in accordance
with Section 4.06 by war risk insurance, or in either case unless the Aircraft,
the Airframe or any Engine is only temporarily operated, used or located in such
area as a result of an emergency, equipment malfunction, navigational error,
hijacking, weather condition or other similar unforeseen circumstance, so long
as Owner diligently and in good faith proceeds to remove the Aircraft from such
area. So long as the Aircraft, the Airframe or any Engine is subject to the Lien
of this Trust Indenture, the Owner shall not permit such Aircraft, Airframe or
any Engine, as the case may be, to be used, operated, maintained, serviced,
repaired or overhauled (x) in violation of any Law binding on or applicable to
such Aircraft, Airframe or Engine or (y) in violation of any airworthiness
certificate, license or registration of any Government Entity relating to the
Aircraft, the Airframe or any Engine, except (i) immaterial or non-recurring
violations with respect to which corrective measures are taken promptly by Owner
or Permitted Lessee, as the case may be, upon discovery thereof, or (ii) to the
extent the validity or application of any such Law or requirement relating to
any such certificate, license or registration is being contested in good faith
by Owner or Permitted Lessee in any reasonable manner which does not involve any
material risk of the sale, forfeiture or loss of the Aircraft, Airframe or any
Engine, any material risk of criminal liability or material civil penalty
against Mortgagee or impair the Mortgagee's security interest in the Aircraft,
Airframe or any Engine.
(d) MAINTENANCE AND REPAIR. So long as the Aircraft, Airframe or
any Engine is subject to the Lien of this Trust Indenture, the Owner shall cause
the Aircraft, Airframe and each Engine to be maintained, serviced, repaired and
overhauled in accordance with (i) maintenance standards required by or
substantially equivalent to those required by the FAA or the central aviation
authority of Canada, France, Germany, Japan, the Netherlands or the United
Kingdom for the Aircraft, Airframe and Engines, so as to (A) keep the Aircraft,
the Airframe and each Engine in as good operating condition as on the Closing
Date, ordinary wear and tear excepted, (B) keep the Aircraft in such operating
condition as may be necessary to enable the applicable airworthiness
certification of such Aircraft to be maintained under the regulations of the FAA
or other Aviation Authority then having jurisdiction over the operation of the
Aircraft, except during (x) temporary periods of storage in accordance with
applicable regulations, (y) maintenance and modification permitted hereunder or
(z) periods when the FAA or such other Aviation Authority has revoked or
suspended the airworthiness certificates for Similar Aircraft; and (ii) except
during periods when a Permitted Lease is in effect, the same standards as Owner
uses with respect to similar aircraft of similar size in its fleet operated by
Owner in similar circumstances and, during any period in which a Permitted Lease
is in effect, the same standards used by the Permitted Lessee with respect to
similar aircraft of similar size in its fleet and operated by the Permitted
Lessee in similar circumstances. Owner further agrees that the Aircraft,
Airframe and Engines will be maintained, used, serviced, repaired, overhauled or
inspected in compliance with applicable Laws with respect to the maintenance of
the Aircraft and in compliance with each applicable airworthiness certificate,
license and registration relating to the Aircraft, Airframe or any Engine issued
by the Aviation Authority, other than minor or nonrecurring violations with
respect to which corrective measures are taken upon discovery thereof and except
to the extent Owner or Permitted Lessee is contesting in good faith the validity
or application of any such Law or requirement relating to any such certificate,
license or registration in any reasonable manner which does not create a
material risk of sale, loss or forfeiture of the Aircraft, the Airframe or any
Engine or the interest of Mortgagee therein, or any material risk of criminal
liability or material civil penalty against Mortgagee. The Owner shall maintain
or cause to be maintained the Aircraft Documents in the English language.
(e) REGISTRATION. The Owner on or prior to the date of the Closing
shall cause the Aircraft to be duly registered in its name under the Act and
except as otherwise permitted by this Section 4.02(e) at all times thereafter
shall cause the Aircraft to remain so registered. So long as no Special Default
or Event of Default shall have occurred and be continuing, Owner may, by written
notice to Mortgagee, request to change the country of registration of the
Aircraft. Any such change in registration shall be effected only in compliance
with, and subject to all of the conditions set forth in, Section 6.4.5 of the
Participation Agreement. Unless the Trust Indenture has been discharged, Owner
shall also cause the Trust Indenture to be duly recorded and at all times
maintained of record as a first-priority perfected mortgage (subject to
Permitted Liens) on the Aircraft, the Airframe and each of the Engines (except
to the extent such perfection or priority cannot be maintained solely as a
result of the failure by Mortgagee to execute and deliver any necessary
documents).
(f) MARKINGS. If permitted by applicable Law, on or reasonably
promptly after the Closing Date, Owner will cause to be affixed to, and
maintained in, the cockpit of the Airframe and on each Engine, in each case, in
a clearly visible location, a placard of a reasonable size and shape bearing the
legend: "Subject to a security interest in favor of Wilmington Trust Company,
not in its individual capacity but solely as Mortgagee." Such placards may be
removed temporarily, if necessary, in the course of maintenance of the Airframe
or Engines. If any such placard is damaged or becomes illegible, Owner shall
promptly replace it with a placard complying with the requirements of this
Section.
SECTION 4.03. INSPECTION
(a) At all reasonable times, so long as the Aircraft is subject to
the Lien of this Trust Indenture, Mortgagee and its authorized representatives
(the "Inspecting Parties") may (not more than once every 12 months unless an
Event of Default has occurred and is continuing then such inspection right shall
not be so limited) inspect the Aircraft, Airframe and Engines (including without
limitation, the Aircraft Documents) and any such Inspecting Party may make
copies of such Aircraft Documents not reasonably deemed confidential by Owner or
such Permitted Lessee.
(b) Any inspection of the Aircraft hereunder shall be limited to a
visual, walk-around inspection and shall not include the opening of any panels,
bays or other components of the Aircraft, and no such inspection shall interfere
with Owner's or any Permitted Lessee's maintenance and operation of the
Aircraft, Airframe and Engines.
(c) With respect to such rights of inspection, Mortgagee shall not
have any duty or liability to make, or any duty or liability by reason of not
making, any such visit, inspection or survey.
(d) Each Inspecting Party shall bear its own expenses in
connection with any such inspection (including the cost of any copies made in
accordance with Section 4.03(a)).
SECTION 4.04. REPLACEMENT AND POOLING OF PARTS, ALTERATIONS,
MODIFICATIONS AND ADDITIONS; SUBSTITUTION OF ENGINES
(a) REPLACEMENT OF PARTS. Except as otherwise provided herein, so
long as the Airframe or Engine is subject to the Lien of this Indenture, Owner,
at its own cost and expense, will, or will cause a Permitted Lessee to, at its
own cost and expense, promptly replace (or cause to be replaced) all Parts which
may from time to time be incorporated or installed in or attached to the
Aircraft, Airframe or any Engine and which may from time to time become worn
out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use for any reason whatsoever. In addition, Owner
may, at its own cost and expense, or may permit a Permitted Lessee at its own
cost and expense to, remove (or cause to be removed) in the ordinary course of
maintenance, service, repair, overhaul or testing any Parts, whether or not worn
out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use; PROVIDED, HOWEVER, that Owner, except as
otherwise provided herein, at its own cost and expense, will, or will cause a
Permitted Lessee at its own cost and expense to, replace such Parts as promptly
as practicable. All replacement Parts shall be free and clear of all Liens,
except for Permitted Liens and pooling arrangements to the extent permitted by
Section 4.04(c) below (and except in the case of replacement property
temporarily installed on an emergency basis) and shall be in good operating
condition and have a value and utility not less than the value and utility of
the Parts replaced (assuming such replaced Parts were in the condition required
hereunder).
(b) PARTS. Except as otherwise provided herein, any Part at any
time removed from the Airframe or any Engine shall remain subject to the Lien of
this Trust Indenture, no matter where located, until such time as such Part
shall be replaced by a Part that has been incorporated or installed in or
attached to such Airframe or any Engine and that meets the requirements for
replacement Parts specified above. Immediately upon any replacement Part
becoming incorporated or installed in or attached to such Airframe or any Engine
as provided in Section 4.04(a), without further act, (i) the replaced Part shall
thereupon be free and clear of all rights of the Mortgagee and shall no longer
be deemed a Part hereunder, and (ii) such replacement Part shall become subject
to this Trust Indenture and be deemed part of such Airframe or any Engine, as
the case may be, for all purposes hereof to the same extent as the Parts
originally incorporated or installed in or attached to such Airframe or any
Engine.
(c) POOLING OF PARTS. Any Part removed from the Aircraft, Airframe
or an Engine may be subjected by the Owner or a Permitted Lessee to a normal
pooling arrangement customary in the airline industry and entered into in the
ordinary course of business of Owner or Permitted Lessee, provided that the part
replacing such removed Part shall be incorporated or installed in or attached to
such Airframe or any Engine in accordance with Sections 4.04(a) and 4.04(b) as
promptly as practicable after the removal of such removed Part. In addition, any
replacement part when incorporated or installed in or attached to the Airframe
or any Engine may be owned by any third party, subject to a normal pooling
arrangement, so long as the Owner or a Permitted Lessee, at its own cost and
expense, as promptly thereafter as reasonably possible, either (i) causes such
replacement part to become subject to the Lien of this Trust Indenture, free and
clear of all Liens except Permitted Liens, at which time such replacement part
shall become a Part or (ii) replaces (or causes to be replaced) such replacement
part by incorporating or installing in or attaching to the Aircraft, Airframe or
any Engine a further replacement Part owned by the Owner free and clear of all
Liens except Permitted Liens and which shall become subject to the Lien of this
Trust Indenture in accordance with Section 4.04(b).
(d) ALTERATIONS, MODIFICATIONS AND ADDITIONS. The Owner shall, or
shall cause a Permitted Lessee to, make (or cause to be made) alterations and
modifications in and additions to the Aircraft, Airframe and each Engine as may
be required to be made from time to time to meet the applicable standards of the
FAA or other Aviation Authority having jurisdiction over the operation of the
Aircraft, to the extent made mandatory in respect of the Aircraft (a "Mandatory
Modification"); PROVIDED HOWEVER, that the Owner or a Permitted Lessee may, in
good faith and by appropriate procedure, contest the validity or application of
any law, rule, regulation or order in any reasonable manner which does not
materially adversely affect Mortgagee's interest in the Aircraft and does not
involve any material risk of sale, forfeiture or loss of the Aircraft or the
interest of Mortgagee therein, or any material risk of material civil penalty or
any material risk of criminal liability being imposed on Mortgagee or the holder
of any Equipment Note. In addition, the Owner, at its own expense, may, or may
permit a Permitted Lessee at its own cost and expense to, from time to time make
or cause to be made such alterations and modifications in and additions to the
Airframe or any Engine (each an "Optional Modification") as the Owner or such
Permitted Lessee may deem desirable in the proper conduct of its business
including, without limitation, removal of Parts which Owner deems are obsolete
or no longer suitable or appropriate for use in the Aircraft, Airframe or such
Engine; PROVIDED, HOWEVER, that no such Optional Modification shall (i)
materially diminish the fair market value, utility, or useful life of the
Aircraft or any Engine below its fair market value, utility or useful life
immediately prior to such Optional Modification (assuming the Aircraft or such
Engine was in the condition required by the Trust Indenture immediately prior to
such Optional Modification) or (ii) cause the Aircraft to cease to have the
applicable standard certificate of airworthiness. All Parts incorporated or
installed in or attached to any Airframe or any Engine as the result of any
alteration, modification or addition effected by the Owner shall be free and
clear of any Liens except Permitted Liens and become subject to the Lien of this
Trust Indenture; PROVIDED that the Owner or any Permitted Lessee may, at any
time so long as the Airframe or any Engine is subject to the Lien of this Trust
Indenture, remove any such Part (such Part being referred to herein as a
"REMOVABLE PART") from such Airframe or an Engine if (i) such Part is in
addition to, and not in replacement of or in substitution for, any Part
originally incorporated or installed in or attached to such Airframe or any
Engine at the time of delivery thereof hereunder or any Part in replacement of,
or in substitution for, any such original Part, (ii) such Part is not required
to be incorporated or installed in or attached or added to such Airframe or any
Engine pursuant to the terms of Section 4.02(d) or the first sentence of this
Section 4.04(d) and (iii) such Part can be removed from such Airframe or any
Engine without materially diminishing the fair market value, utility or
remaining useful life which such Airframe or any Engine would have had at the
time of removal had such removal not been effected by the Owner, assuming the
Aircraft was otherwise maintained in the condition required by this Trust
Indenture. Upon the removal by the Owner of any such Part as above provided,
title thereto shall, without further act, be free and clear of all rights of the
Mortgagee and such Part shall no longer be deemed a Part hereunder. Removable
Parts may be leased from or financed by third parties other than Mortgagee.
(e) SUBSTITUTION OF ENGINES. Upon the occurrence of an Event of
Loss with respect to an Engine under circumstances in which an Event of Loss
with respect to the Airframe has not occurred, Owner shall promptly (and in any
event within 15 days after such occurrence) give the Mortgagee written notice of
such Event of Loss. The Owner shall have the right at its option at any time, on
at least 5 Business Days' prior notice to the Mortgagee, to substitute, and if
an Event of Loss shall have occurred with respect to an Engine under
circumstances in which an Event of Loss with respect to the Airframe has not
occurred, shall within 60 days of the occurrence of such Event of Loss
substitute, a Replacement Engine for any Engine. In such event, immediately upon
the effectiveness of such substitution and without further act, (i) the replaced
Engine shall thereupon be free and clear of all rights of the Mortgagee and the
Lien of this Trust Indenture and shall no longer be deemed an Engine hereunder
and (ii) such Replacement Engine shall become subject to this Trust Indenture
and be deemed part of the Aircraft for all purposes hereof to the same extent as
the replaced Engine. Such Replacement Engine shall be an engine manufactured by
Engine Manufacturer that is the same model as the Engine to be replaced thereby,
or an improved model, and that is suitable for installation and use on the
Airframe, and that has a value, utility and remaining useful life (without
regard to hours and cycles remaining until overhaul) at least equal to the
Engine to be replaced thereby (assuming that such Engine had been maintained in
accordance with this Trust Indenture). The Owner's right to make a replacement
hereunder shall be subject to the fulfillment (which may be simultaneous with
such replacement) of the following conditions precedent at the Owner's sole cost
and expense, and the Mortgagee agrees to cooperate with the Owner to the extent
necessary to enable it to timely satisfy such conditions:
(i) an executed counterpart of each of the following
documents shall be delivered to the Mortgagee:
(A) a Trust Indenture Supplement covering the Replacement Engine,
which shall have been duly filed for recordation pursuant to the Act
or such other applicable law of the jurisdiction other than the United
States in which the Aircraft of which such Engine is a part is
registered in accordance with Section 4.02(e), as the case may be;
(B) a full warranty bill of sale (as to title), covering the
Replacement Engine, executed by the former owner thereof in favor of
the Owner (or, at the Owner's option, other evidence of the Owner's
ownership of such Replacement Engine, reasonably satisfactory to the
Mortgagee); and
(C) UCC financing statements covering the security interests
created by this Trust Indenture (or any similar statements or other
documents required to be filed or delivered pursuant to the laws of
the jurisdiction in which such Aircraft may be registered) as are
deemed necessary or desirable by counsel for the Mortgagee to protect
the security interests of the Mortgagee in the Replacement Engine;
(ii) the Owner shall cause to be delivered to the Mortgagee
an opinion of counsel to the effect that the Lien of this Trust Indenture
continues to be in full force and effect with respect to the Replacement Engine
and such evidence of compliance with the insurance provisions of Section 4.06
with respect to such Replacement Engine as Mortgagee shall reasonably request;
(iii) the Owner shall have furnished to Mortgagee an opinion
of Owner's aviation law counsel reasonably satisfactory to Mortgagee and
addressed to Mortgagee as to the due filing for recordation of the Trust
Indenture Supplement with respect to such Replacement Engine under the Act or
such other applicable law of the jurisdiction other than the United States in
which the Aircraft is registered in accordance with Section 4.02(e), as the case
may be; and
(iv) the Owner shall have furnished to Mortgagee a
certificate of a qualified aircraft engineer (who may be an employee of Owner)
certifying that such Replacement Engine has a value and utility and remaining
useful life (without regard to hours and cycles remaining until overhaul) at
least equal to the Engine so replaced (assuming that such Engine had been
maintained in accordance with this Trust Indenture).
Upon satisfaction of all conditions to such substitution, (x) the
Mortgagee shall execute and deliver to the Owner such documents and instruments,
prepared at the Owner's expense, as the Owner shall reasonably request to
evidence the release of such replaced Engine from the Lien of this Trust
Indenture, (y) the Mortgagee shall assign to the Owner all claims it may have
against any other Person relating to any Event of Loss giving rise to such
substitution and (z) the Owner shall receive all insurance proceeds (other than
those reserved to others under Section 4.06(b)) and proceeds in respect of any
Event of Loss giving rise to such replacement to the extent not previously
applied to the purchase price of the Replacement Engine as provided in Section
4.05(d).
SECTION 4.05. LOSS, DESTRUCTION OR REQUISITION
(a) EVENT OF LOSS WITH RESPECT TO THE AIRFRAME.
Upon the occurrence of an Event of Loss with respect to the Airframe,
the Owner shall promptly (and in any event within 15 days after such occurrence)
give the Mortgagee written notice of such Event of Loss. The Owner shall, within
45 days after such occurrence, give the Mortgagee written notice of Owner's
election to either replace the Airframe as provided under Section 4.05(a)(i) or
to make payment in respect of such Event of Loss as provided under Section
4.05(a)(ii) (it being agreed that if Owner shall not have given the Mortgagee
such notice of such election within the above specified time period, the Owner
shall be deemed to have elected to make payment in respect of such Event of Loss
as provided under Section 4.05(a)(ii)):
(i) if Owner elects to replace the Airframe, Owner shall,
subject to the satisfaction of the conditions contained in Section 4.05(c), as
promptly as possible and in any event within 120 days after the occurrence of
such Event of Loss, cause to be subjected to the Lien of this Trust Indenture,
in replacement of the Airframe with respect to which the Event of Loss occurred,
a Replacement Airframe and, if any Engine shall have been installed on the
Airframe when it suffered the Event of Loss, a Replacement Engine therefor, such
Replacement Airframe and Replacement Engines to be free and clear of all Liens
except Permitted Liens and to have a value, utility and remaining useful life
(without regard to hours or cycles remaining until the next regular maintenance
check) at least equal to the Airframe or Engine, as the case may be, to be
replaced thereby (assuming that such Airframe or Engine had been maintained in
accordance with this Trust Indenture); PROVIDED THAT if the Owner shall not
perform its obligation to effect such replacement under this clause (i) during
the 120-day period of time provided herein, it shall pay the amounts required to
be paid pursuant to and within the time frame specified in clause (ii) below; or
(ii) if Owner elects to make a payment in respect of such
Event of Loss of the Airframe, Owner shall make a payment to the Mortgagee for
purposes of redeeming Equipment Notes in accordance with Section 2.10 hereof on
a date on or before the Business Day next following the earlier of (x) the 120th
day following the date of the occurrence of such Event of Loss, and (y) the
fourth Business Day following the receipt of insurance proceeds with respect to
such Event of Loss (but in any event not earlier than the date of Owner's
election under Section 4.05(a) to make payment under this Section 4.05 (a)(ii));
and upon such payment and payment of all other Secured Obligations then due and
payable, the Mortgagee shall, at the cost and expense of the Owner, release from
the Lien of this Trust Indenture the Airframe and the Engines, by executing and
delivering to the Owner all documents and instruments as the Owner may
reasonably request to evidence such release.
(b) EFFECT OF REPLACEMENT. Should the Owner have provided a
Replacement Airframe and Replacement Engines, if any, as provided for in Section
4.05(a)(i), (i) the Lien of this Trust Indenture shall continue with respect to
such Replacement Airframe and Replacement Engines, if any, as though no Event of
Loss had occurred; (ii) the Mortgagee shall, at the cost and expense of the
Owner, release from the Lien of this Trust Indenture the replaced Airframe and
Engines, if any, by executing and delivering to the Owner such documents and
instruments as the Owner may reasonably request to evidence such release; and
(iii) in the case of a replacement upon an Event of Loss, the Mortgagee shall
assign to the Owner all claims the Mortgagee may have against any other Person
arising from the Event of Loss and the Owner shall receive all insurance
proceeds (other than those reserved to others under Section 4.06(b)) and
proceeds from any award in respect of condemnation, confiscation, seizure or
requisition, including any investment interest thereon, to the extent not
previously applied to the purchase price of the Replacement Airframe and
Replacement Engines, if any, as provided in Section 4.05(d).
(c) CONDITIONS TO AIRFRAME AND ENGINE REPLACEMENT. The Owner's
right to substitute a Replacement Airframe and Replacement Engines, if any, as
provided in Section 4.05(a)(i) shall be subject to the fulfillment, at the
Owner's sole cost and expense, in addition to the conditions contained in such
Section 4.05(a)(i), of the following conditions precedent:
(i) on the date when the Replacement Airframe and Replacement
Engines, if any, is subjected to the Lien of this Trust Indenture (such date
being referred to in this Section 4.05 as the "Replacement Closing Date"), an
executed counterpart of each of the following documents (or, in the case of the
FAA Bill of Sale and full warranty bill of sale referred to below, a photocopy
thereof) shall have been delivered to the Mortgagee:
(A) a Trust Indenture Supplement covering the Replacement
Airframe and Replacement Engines, if any, which shall have been duly
filed for recordation pursuant to the Act or such other applicable law
of such jurisdiction other than the United States in which the
Replacement Airframe and Replacement Engines, if any, are to be
registered in accordance with Section 4.02(e), as the case may be;
(B) an FAA Bill of Sale (or a comparable document, if any, of
another Aviation Authority, if applicable) covering the Replacement
Airframe and Replacement Engines, if any, executed by the former owner
thereof in favor of the Owner;
(C) a full warranty (as to title) bill of sale, covering the
Replacement Airframe and Replacement Engines, if any, executed by the
former owner thereof in favor of the Owner (or, at the Owner's option,
other evidence of the Owner's ownership of such Replacement Airframe
and Replacement Engines, if any, reasonably satisfactory to the
Mortgagee); and
(D) UCC financing statements (or any similar statements or other
documents required to be filed or delivered pursuant to the laws of
the jurisdiction in which the Replacement Airframe and Replacement
Engines, if any, may be registered in accordance with Section 4.02(e))
as are deemed necessary or desirable by counsel for the Mortgagee to
protect the security interests of the Mortgagee in the Replacement
Airframe and Replacement Engines, if any;
(ii) the Replacement Airframe and Replacement Engines, if
any, shall be of the same model as the Airframe or Engines, as the case may be,
or an improved model of such aircraft or engines of the manufacturer thereof,
shall have a value and utility (without regard to hours or cycles remaining
until the next regular maintenance check) at least equal to, and be in as good
operating condition and repair as, the Airframe and any Engines replaced
(assuming such Airframe and Engines had been maintained in accordance with this
Trust Indenture);
(iii) the Mortgagee (acting directly or by authorization to
its special counsel) shall have received satisfactory evidence as to the
compliance with Section 4.06 with respect to the Replacement Airframe and
Replacement Engines, if any;
(iv) on the Replacement Closing Date, (A) the Owner shall
cause the Replacement Airframe and Replacement Engines, if any, to be subject to
the Lien of this Trust Indenture free and clear of Liens (other than Permitted
Liens), (B) the Replacement Airframe shall have been duly certified by the FAA
as to type and airworthiness in accordance with the terms of this Trust
Indenture and (C) application for registration of the Replacement Airframe in
accordance with Section 4.02(e) shall have been duly made with the FAA or other
applicable Aviation Authority and the Owner shall have authority to operate the
Replacement Airframe;
(v) the Mortgagee at the expense of the Owner, shall have
received (acting directly or by authorization to its special counsel) (A) an
opinion of counsel, addressed to the Mortgagee, to the effect that the
Replacement Airframe and Replacement Engine, if any, has or have duly been made
subject to the Lien of this Trust Indenture, and Mortgagee will be entitled to
the benefits of Section 1110 with respect to the Replacement Airframe, provided
that such opinion with respect to Section 1110 need not be delivered to the
extent that immediately prior to such replacement the benefits of Section 1110
were not, solely by reason of a change in law or court interpretation thereof,
available to Mortgagee, and (B) an opinion of Owner's aviation law counsel
reasonably satisfactory to and addressed to Mortgagee as to the due registration
of any such Replacement Airframe and the due filing for recordation of each
Trust Indenture Supplement with respect to such Replacement Airframe or
Replacement Engine under the Act or such other applicable law of the
jurisdiction other than the United States in which the Replacement Airframe is
to be registered in accordance with Section 4.02(e), as the case may be; and
(vi) the Owner shall have furnished to the Mortgagee a
certificate of a qualified aircraft engineer (who may be an employee of Owner)
certifying that the Replacement Airframe and Replacement Engines, if any, have a
value and utility and remaining useful life (without regard to hours and cycles
remaining until overhaul) at least equal to the Airframe and any Engines so
replaced (assuming that such Airframe and Engines had been maintained in
accordance with this Trust Indenture).
(d) NON-INSURANCE PAYMENTS RECEIVED ON ACCOUNT OF AN EVENT OF
LOSS. Any amounts, other than insurance proceeds in respect of damage or loss
not constituting an Event of Loss (the application of which is provided for in
Annex B), received at any time by Mortgagee or Owner from any Government Entity
or any other Person in respect of any Event of Loss will be applied as follows:
(i) If such amounts are received with respect to the Airframe,
and any Engine installed thereon at the time of such Event of Loss,
upon compliance by Owner with the applicable terms of Section 4.05(c)
with respect to the Event of Loss for which such amounts are received,
such amounts shall be paid over to, or retained by, Owner;
(ii) If such amounts are received with respect to an Engine
(other than an Engine installed on the Airframe at the time such
Airframe suffers an Event of Loss), upon compliance by Owner with the
applicable terms of Section 4.04(e) with respect to the Event of Loss
for which such amounts are received, such amounts shall be paid over
to, or retained by, Owner;
(iii) If such amounts are received, in whole or in part, with
respect to the Airframe, and Owner makes, has made or is deemed to
have made the election set forth in Section 4.05(a)(ii), such amounts
shall be applied as follows:
FIRST, if the sum described in Section 4.05(a)(ii) has not
then been paid in full by Owner, such amounts shall be paid to
Mortgagee to the extent necessary to pay in full such sum; and
SECOND, the remainder, if any, shall be paid to Owner.
(e) REQUISITION FOR USE. In the event of a requisition for use by
any Government Entity of the Airframe and the Engines, if any, or engines
installed on such Airframe while such Airframe is subject to the Lien of this
Trust Indenture, the Owner shall promptly notify the Mortgagee of such
requisition and all of the Owner's obligations under this Trust Indenture shall
continue to the same extent as if such requisition had not occurred except to
the extent that the performance or observance of any obligation by the Owner
shall have been prevented or delayed by such requisition; PROVIDED THAT the
Owner's obligations under this Section 4.05 with respect to the occurrence of an
Event of Loss for the payment of money and under Section 4.06 (except while an
assumption of liability by the U.S. Government of the scope referred to in
Section 4.02(c) is in effect) shall not be reduced or delayed by such
requisition. Any payments received by the Mortgagee or the Owner or Permitted
Lessee from such Government Entity with respect to such requisition of use shall
be paid over to, or retained by, the Owner. In the event of an Event of Loss of
an Engine resulting from the requisition for use by a Government Entity of such
Engine (but not the Airframe), the Owner will replace such Engine hereunder by
complying with the terms of Section 4.04(e) and any payments received by the
Mortgagee or the Owner from such Government Entity with respect to such
requisition shall be paid over to, or retained by, the Owner.
(f) CERTAIN PAYMENTS TO BE HELD AS SECURITY. Any amount referred
to in this Section 4.05 or Section 4.06 which is payable or creditable to, or
retainable by, the Owner shall not be paid or credited to, or retained by the
Owner if at the time of such payment, credit or retention a Special Default or
an Event of Default shall have occurred and be continuing, but shall be paid to
and held by the Mortgagee as security for the obligations of the Owner under
this Trust Indenture and the Operative Agreements, and at such time as there
shall not be continuing any such Special Default or Event of Default such amount
and any gain realized as a result of investments required to be made pursuant to
Section 6.06 shall to the extent not theretofore applied as provided herein, be
paid over to the Owner.
SECTION 4.06. INSURANCE
(a) OWNER'S OBLIGATION TO INSURE. Owner shall comply with, or
cause to be complied with, each of the provisions of Annex B, which provisions
are hereby incorporated by this reference as if set forth in full herein.
(b) INSURANCE FOR OWN ACCOUNT. Nothing in Section 4.06 shall limit
or prohibit (a) Owner from maintaining the policies of insurance required under
Annex B with higher limits than those specified in Annex B, or (b) Mortgagee
from obtaining insurance for its own account (and any proceeds payable under
such separate insurance shall be payable as provided in the policy relating
thereto); PROVIDED, HOWEVER, that no insurance may be obtained or maintained
that would limit or otherwise adversely affect the coverage of any insurance
required to be obtained or maintained by Owner pursuant to this Section 4.06 and
Annex B.
(c) INDEMNIFICATION BY GOVERNMENT IN LIEU OF INSURANCE. Mortgagee
agrees to accept, in lieu of insurance against any risk with respect to the
Aircraft described in Annex B, indemnification from, or insurance provided by,
the U.S. Government, or upon the written consent of Mortgagee, other Government
Entity, against such risk in an amount that, when added to the amount of
insurance (including permitted self-insurance), if any, against such risk that
Owner (or any Permitted Lessee) may continue to maintain, in accordance with
this Section 4.06, during the period of such requisition or transfer, shall be
at least equal to the amount of insurance against such risk otherwise required
by this Section 4.06.
(d) APPLICATION OF INSURANCE PROCEEDS. As between Owner and
Mortgagee, all insurance proceeds received as a result of the occurrence of an
Event of Loss with respect to the Aircraft or any Engine under policies required
to be maintained by Owner pursuant to this Section 4.06 will be applied in
accordance with Section 4.05(d). All proceeds of insurance required to be
maintained by Owner, in accordance with Section 4.06 and Section B of Annex B,
in respect of any property damage or loss not constituting an Event of Loss with
respect to the Aircraft, Airframe or any Engine will be applied in payment (or
to reimburse Owner) for repairs or for replacement property, and any balance
remaining after such repairs or replacement with respect to such damage or loss
shall be paid over to, or retained by, Owner.
SECTION 4.07. MERGER OF OWNER
(a) IN GENERAL.
Owner shall not consolidate with or merge into any other person under
circumstances in which Owner is not the surviving corporation, or convey,
transfer or lease in one or more transactions all or substantially all of its
assets to any other person, unless:
(i) such person is organized, existing and in good standing
under the Laws of the United States, any State of the United States or the
District of Columbia and, upon consummation of such transaction, such person
will be a U.S. Air Carrier;
(ii) such person executes and delivers to Mortgagee a duly
authorized, legal, valid, binding and enforceable agreement, reasonably
satisfactory in form and substance to Mortgagee, containing an effective
assumption by such person of the due and punctual performance and observance of
each covenant, agreement and condition in the Operative Agreements to be
performed or observed by Owner;
(iii) such person makes such filings and recordings with the
FAA pursuant to the Act as shall be necessary to evidence such consolidation or
merger; and
(iv) immediately after giving effect to such consolidation or
merger no Event of Default shall have occurred and be continuing.
(b) EFFECT OF MERGER.
Upon any such consolidation or merger of Owner with or into, or the
conveyance, transfer or lease by Owner of all or substantially all of its assets
to, any Person in accordance with this Section 4.07, such Person will succeed
to, and be substituted for, and may exercise every right and power of, Owner
under the Operative Agreements with the same effect as if such person had been
named as "Owner" therein. No such consolidation or merger, or conveyance,
transfer or lease, shall have the effect of releasing Owner or such Person from
any of the obligations, liabilities, covenants or undertakings of Owner under
the Trust Indenture.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE
SECTION 5.01. EVENT OF DEFAULT
"Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(i) the failure of the Owner to pay (i) principal of,
interest on or Make-Whole Amount, if any, under any Equipment Note when due, and
such failure shall continue unremedied for a period of 10 Business Days, or (ii)
any other amount payable by it to the Note Holders under this Trust Indenture or
the Participation Agreement when due, and such failure shall continue for a
period in excess of 10 Business Days after Owner has received written notice
from Mortgagee of the failure to make such payment when due;
(ii) Owner shall fail to carry and maintain, or cause to be
carried and maintained, insurance on and in respect of the Aircraft, Airframe
and Engines in accordance with the provisions of Section 4.06;
(iii) Owner shall fail to observe or perform (or caused to be
observed and performed) in any material respect any other covenant, agreement or
obligation set forth herein or in any other Operative Agreement to which Owner
is a party and such failure shall continue unremedied for a period of 30 days
from and after the date of written notice thereof to Owner from Mortgagee,
unless such failure is capable of being corrected and Owner shall be diligently
proceeding to correct such failure, in which case there shall be no Event of
Default unless and until such failure shall continue unremedied for a period of
270 days after receipt of such notice;
(iv) any representation or warranty made by Owner herein, in
the Participation Agreement or in any other Operative Agreement to which Owner
is a party (a) shall prove to have been untrue or inaccurate in any material
respect as of the date made, (b) such untrue or inaccurate representation or
warranty is material at the time in question, (c) and the same shall remain
uncured (to the extent of the adverse impact of such incorrectness on the
interest of the Mortgagee) for a period in excess of 30 days from and after the
date of written notice thereof from Mortgagee to Owner;
(v) the Owner shall consent to the appointment of or taking
possession by a receiver, trustee or liquidator of itself or of a substantial
part of its property, or the Owner shall admit in writing its inability to pay
its debts generally as they come due or shall make a general assignment for the
benefit of its creditors, or the Owner shall file a voluntary petition in
bankruptcy or a voluntary petition or an answer seeking reorganization,
liquidation or other relief under any bankruptcy laws or insolvency laws (as in
effect at such time), or an answer admitting the material allegations of a
petition filed against it in any such case, or the Owner shall seek relief by
voluntary petition, answer or consent, under the provisions of any other
bankruptcy or similar law providing for the reorganization or winding-up of
corporations (as in effect at such time), or the Owner shall seek an agreement,
composition, extension or adjustment with its creditors under such laws or the
Owner's board of directors shall adopt a resolution authorizing corporate action
in furtherance of any of the foregoing;
(vi) an order, judgment or decree shall be entered by any
court of competent jurisdiction appointing, without the consent of the Owner, a
receiver, trustee or liquidator of the Owner or of any substantial part of its
property, or any substantial part of the property of the Owner shall be
sequestered, or granting any other relief in respect of the Owner as a debtor
under any bankruptcy laws or other insolvency laws (as in effect at such time),
and any such order, judgment, decree, or decree of appointment or sequestration
shall remain in force undismissed, unstayed or unvacated for a period of 90 days
after the date of entry thereof; or
(vii) a petition against the Owner in a proceeding under any
bankruptcy laws or other insolvency laws (as in effect at such time) is filed
and not withdrawn or dismissed within 90 days thereafter, or if, under the
provisions of any law providing for reorganization or winding-up of corporations
which may apply to the Owner, any court of competent jurisdiction shall assume
jurisdiction, custody or control of the Owner of any substantial part of its
property and such jurisdiction, custody or control shall remain in force
unrelinquished, unstayed or unterminated for a period of 90 days.
SECTION 5.02. REMEDIES
(a) If an Event of Default shall have occurred and be continuing
and so long as the same shall continue unremedied, then and in every such case
the Mortgagee may exercise any or all of the rights and powers and pursue any
and all of the remedies pursuant to this Article V and shall have and may
exercise all of the rights and remedies of a secured party under the Uniform
Commercial Code and may take possession of all or any part of the properties
covered or intended to be covered by the Lien created hereby or pursuant hereto
and may exclude the Owner and all persons claiming under it wholly or partly
therefrom; PROVIDED, that the Mortgagee shall give the Owner twenty days' prior
written notice of its intention to sell the Aircraft. Without limiting any of
the foregoing, it is understood and agreed that the Mortgagee may exercise any
right of sale of the Aircraft available to it, even though it shall not have
taken possession of the Aircraft and shall not have possession thereof at the
time of such sale.
(b) If an Event of Default shall have occurred and be continuing,
then and in every such case the Mortgagee may (and shall, upon receipt of a
written demand therefor from a Majority in Interest of Note Holders), at any
time, by delivery of written notice or notices to the Owner, declare all the
Equipment Notes to be due and payable, whereupon the unpaid Original Amount of
all Equipment Notes then outstanding, together with accrued but unpaid interest
thereon (without Make-Whole Amount) and other amounts due thereunder or
otherwise payable hereunder, shall immediately become due and payable without
presentment, demand, protest or notice, all of which are hereby waived; provided
that if an Event of Default referred to in clause (v), (vi) or (vii) of Section
5.01 hereof shall have occurred, then and in every such case the unpaid Original
Amount then outstanding, together with accrued but unpaid interest and all other
amounts due hereunder and under the Equipment Notes shall immediately and
without further act become due and payable without presentment, demand, protest
or notice, all of which are hereby waived.
This Section 5.02(b), however, is subject to the condition that, if at
any time after the Original Amount of the Equipment Notes shall have become so
due and payable, and before any judgment or decree for the payment of the money
so due, or any thereof, shall be entered, all overdue payments of interest upon
the Equipment Notes and all other amounts payable hereunder or under the
Equipment Notes (except the Original Amount of the Equipment Notes which by such
declaration shall have become payable) shall have been duly paid, and every
other Default and Event of Default with respect to any covenant or provision of
this Trust Indenture shall have been cured, then and in every such case a
Majority in Interest of Note Holders may (but shall not be obligated to), by
written instrument filed with the Mortgagee, rescind and annul the Mortgagee's
declaration (or such automatic acceleration) and its consequences; but no such
rescission or annulment shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.
(c) The Note Holders shall be entitled, at any sale pursuant to
this Section 5.02, to credit against any purchase price bid at such sale by such
holder all or any part of the unpaid obligations owing to such Note Holder and
secured by the Lien of this Trust Indenture (only to the extent that such
purchase price would have been paid to such Note Holder pursuant to Article III
hereof if such purchase price were paid in cash and the foregoing provisions of
this subsection (c) were not given effect).
(d) In the event of any sale of the Collateral, or any part
thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Trust Indenture, the
unpaid Original Amount of all Equipment Notes then outstanding, together with
accrued interest thereon (without Make-Whole Amount), and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement (or its designee) is a
Note Holder, the Mortgagee will not be authorized or empowered to acquire title
to any Collateral or take any action with respect to any Collateral so acquired
by it if such acquisition or action would cause any Trust to fail to qualify as
a "grantor trust" for federal income tax purposes.
SECTION 5.03. RETURN OF AIRCRAFT, ETC.
(a) If an Event of Default shall have occurred and be continuing
and the Equipment Notes have been accelerated, at the request of the Mortgagee,
the Owner shall promptly execute and deliver to the Mortgagee such instruments
of title and other documents as the Mortgagee may deem necessary or advisable to
enable the Mortgagee or an agent or representative designated by the Mortgagee,
at such time or times and place or places as the Mortgagee may specify, to
obtain possession of all or any part of the Collateral to which the Mortgagee
shall at the time be entitled hereunder. If the Owner shall for any reason fail
to execute and deliver such instruments and documents after such request by the
Mortgagee, the Mortgagee may (i) obtain a judgment conferring on the Mortgagee
the right to immediate possession and requiring the Owner to execute and deliver
such instruments and documents to the Mortgagee, to the entry of which judgment
the Owner hereby specifically consents to the fullest extent permitted by Law,
and (ii) pursue all or part of such Collateral wherever it may be found and may
enter any of the premises of Owner wherever such Collateral may be or be
supposed to be and search for such Collateral and take possession of and remove
such Collateral. All expenses of obtaining such judgment or of pursuing,
searching for and taking such property shall, until paid, be secured by the Lien
of this Trust Indenture.
(b) Upon every such taking of possession, the Mortgagee may, from
time to time, at the expense of the Collateral, make all such expenditures for
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, modifications or alterations to and of the Collateral, as it may
deem proper. In each such case, the Mortgagee shall have the right to maintain,
use, operate, store, insure, lease, control, manage, dispose of, modify or alter
the Collateral and to exercise all rights and powers of the Owner relating to
the Collateral, as the Mortgagee shall deem best, including the right to enter
into any and all such agreements with respect to the maintenance, use,
operation, storage, insurance, leasing, control, management, disposition,
modification or alteration of the Collateral or any part thereof as the
Mortgagee may determine, and the Mortgagee shall be entitled to collect and
receive directly all rents, revenues and other proceeds of the Collateral and
every part thereof, without prejudice, however, to the right of the Mortgagee
under any provision of this Trust Indenture to collect and receive all cash held
by, or required to be deposited with, the Mortgagee hereunder. Such rents,
revenues and other proceeds shall be applied to pay the expenses of the
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, improvement, modification or alteration of the Collateral and of
conducting the business thereof, and to make all payments which the Mortgagee
may be required or may elect to make, if any, for taxes, assessments, insurance
or other proper charges upon the Collateral or any part thereof (including the
employment of engineers and accountants to examine, inspect and make reports
upon the properties and books and records of the Owner), and all other payments
which the Mortgagee may be required or authorized to make under any provision of
this Trust Indenture, as well as just and reasonable compensation for the
services of the Mortgagee, and of all persons properly engaged and employed by
the Mortgagee with respect hereto.
SECTION 5.04. REMEDIES CUMULATIVE
Each and every right, power and remedy given to the Mortgagee
specifically or otherwise in this Trust Indenture shall be cumulative and shall
be in addition to every 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 be exercised from time to time and as often and in such order as may be
deemed expedient by the Mortgagee, 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 the Mortgagee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of the
Owner or to be an acquiescence therein.
SECTION 5.05. DISCONTINUANCE OF PROCEEDINGS
In case the Mortgagee shall have instituted any proceeding to enforce
any right, power or remedy under this Trust Indenture by foreclosure, entry or
otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely to the Mortgagee, then and in
every such case the Owner and the Mortgagee shall, subject to any determination
in such proceedings, be restored to their former positions and rights hereunder
with respect to the Collateral, and all rights, remedies and powers of the Owner
or the Mortgagee shall continue as if no such proceedings had been instituted.
SECTION 5.06. WAIVER OF PAST DEFAULTS
Upon written instruction from a Majority in Interest of Note Holders,
the Mortgagee shall waive any past Default hereunder and its consequences and
upon any such waiver such Default shall cease to exist and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Trust Indenture, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon; provided, that in the absence of
written instructions from all the Note Holders, the Mortgagee shall not waive
any Default (i) in the payment of the Original Amount, Make-Whole Amount, if
any, and interest and other amounts due under any Equipment Note then
outstanding, or (ii) in respect of a covenant or provision hereof which, under
Article X hereof, cannot be modified or amended without the consent of each Note
Holder.
SECTION 5.07. APPOINTMENT OF RECEIVER
The Mortgagee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Mortgagee or any successor or nominee
thereof) for all or any part of the Collateral, whether such receivership be
incidental to a proposed sale of the Collateral or the taking of possession
thereof or otherwise, and the Owner hereby consents to the appointment of such a
receiver and will not oppose any such appointment. Any receiver appointed for
all or any part of the Collateral shall be entitled to exercise all the rights
and powers of the Mortgagee with respect to the Collateral.
SECTION 5.08. MORTGAGEE AUTHORIZED TO EXECUTE BILLS OF SALE, ETC.
The Owner irrevocably appoints, while an Event of Default has occurred
and is continuing, the Mortgagee the true and lawful attorney-in-fact of the
Owner (which appointment is coupled with an interest) in its name and stead and
on its behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement of the Lien of this Trust Indenture, whether
pursuant to foreclosure or power of sale, assignments and other instruments as
may be necessary or appropriate, with full power of substitution, the Owner
hereby ratifying and confirming all that such attorney or any substitute shall
do by virtue hereof in accordance with applicable law. Nevertheless, if so
requested by the Mortgagee or any purchaser, the Owner shall ratify and confirm
any such sale, assignment, transfer or delivery, by executing and delivering to
the Mortgagee or such purchaser all bills of sale, assignments, releases and
other proper instruments to effect such ratification and confirmation as may be
designated in any such request.
SECTION 5.09. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Trust Indenture, the right
of any Note Holder to receive payment of principal of, and premium, if any, and
interest on an Equipment Note on or after the respective due dates expressed in
such Equipment Note, or to bring suit for the enforcement of any such payment on
or after such respective dates in accordance with the terms hereof, shall not be
impaired or affected without the consent of such Note Holder.
ARTICLE VI
DUTIES OF THE MORTGAGEE
SECTION 6.01. NOTICE OF EVENT OF DEFAULT
If the Mortgagee shall have Actual Knowledge of an Event of Default or
of a Default arising from a failure to pay any installment of principal and
interest on any Equipment Note, the Mortgagee shall give prompt written notice
thereof to each Note Holder. Subject to the terms of Sections 5.06, 6.02 and
6.03 hereof, the Mortgagee shall take such action, or refrain from taking such
action, with respect to such Event of Default or Default (including with respect
to the exercise of any rights or remedies hereunder) as the Mortgagee shall be
instructed in writing by a Majority in Interest of Note Holders. Subject to the
provisions of Section 6.03, if the Mortgagee shall not have received
instructions as above provided within 20 days after mailing notice of such Event
of Default to the Note Holders, the Mortgagee may, subject to instructions
thereafter received pursuant to the preceding provisions of this Section 6.01,
take such action, or refrain from taking such action, but shall be under no duty
to take or refrain from taking any action, with respect to such Event of Default
or Default as it shall determine advisable in the best interests of the Note
Holders; PROVIDED, HOWEVER, that the Mortgagee may not sell the Aircraft or any
Engine without the consent of a Majority in Interest of Note Holders. For all
purposes of this Trust Indenture, in the absence of Actual Knowledge on the part
of the Mortgagee, the Mortgagee shall not be deemed to have knowledge of a
Default or an Event of Default (except, the failure of Owner to pay any
installment of principal or interest within one Business Day after the same
shall become due, which failure shall constitute knowledge of a Default) unless
notified in writing by the Owner or one or more Note Holders.
SECTION 6.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND LIMITATIONS
Subject to the terms of Sections 5.02(a), 5.06, 6.01 and 6.03 hereof,
upon the written instructions at any time and from time to time of a Majority in
Interest of Note Holders, the Mortgagee shall, subject to the terms of this
Section 6.02, take such of the following actions as may be specified in such
instructions: (i) give such notice or direction or exercise such right, remedy
or power hereunder as shall be specified in such instructions and (ii) give such
notice or direction or exercise such right, remedy or power hereunder with
respect to any part of the Collateral as shall be specified in such
instructions; it being understood that without the written instructions of a
Majority in Interest of Note Holders, the Mortgagee shall not, except as
provided in Section 6.01, approve any such matter as satisfactory to the
Mortgagee.
The Mortgagee will execute and the Owner will file such continuation
statements with respect to financing statements relating to the security
interest created hereunder in the Collateral as may be specified from time to
time in written instructions of a Majority in Interest of Note Holders (which
instructions shall be accompanied by the form of such continuation statement so
to be filed). The Mortgagee will furnish to each Note Holder, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates and other instruments furnished to the Mortgagee
hereunder.
SECTION 6.03. INDEMNIFICATION
The Mortgagee shall not be required to take any action or refrain from
taking any action under Section 6.01 (other than the first sentence thereof),
6.02 or Article V hereof unless the Mortgagee shall have been indemnified to its
reasonable satisfaction against any liability, cost or expense (including
counsel fees) which may be incurred in connection therewith pursuant to a
written agreement with one or more Note Holders. The Mortgagee agrees that it
shall look solely to the Note Holders for the satisfaction of any indemnity
(except expenses for foreclosure of the type referred to in clause "First" of
Section 3.03 hereof) owed to it pursuant to this Section 6.03. The Mortgagee
shall not be under any obligation to take any action under this Trust Indenture
or any other Operative Agreement and nothing herein or therein shall require the
Mortgagee to expend or risk its own funds or otherwise incur the risk of any
financial liability in the performance 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 written indemnity of any Note Holder who is a QIB, signed by an
authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to the Mortgagee shall be accepted as reasonable assurance of
adequate indemnity). The Mortgagee shall not be required to take any action
under Section 6.01 (other than the first sentence thereof) or 6.02 or Article V
hereof, nor shall any other provision of this Trust Indenture or any other
Operative Agreement be deemed to impose a duty on the Mortgagee to take any
action, if the Mortgagee shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to Law.
SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST INDENTURE OR
INSTRUCTIONS
The Mortgagee shall not have any duty or obligation to use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Collateral, or to otherwise take or refrain
from taking any action under, or in connection with, this Trust Indenture or any
part of the Collateral, except as expressly provided by the terms of this Trust
Indenture or as expressly provided in written instructions from Note Holders as
provided in this Trust Indenture; and no implied duties or obligations shall be
read into this Trust Indenture against the Mortgagee. The Mortgagee 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 8.01
hereof), promptly take such action as may be necessary duly to discharge all
liens and encumbrances on any part of the Collateral which result from claims
against it in its individual capacity not related to the administration of the
Collateral or any other transaction pursuant to this Trust Indenture or any
document included in the Collateral.
SECTION 6.05. NO ACTION EXCEPT UNDER TRUST INDENTURE OR INSTRUCTIONS
The Mortgagee will not use, operate, store, lease, control, manage,
sell, dispose of or otherwise deal with the Aircraft or any other part of the
Collateral except in accordance with the powers granted to, or the authority
conferred upon the Mortgagee pursuant to this Trust Indenture and in accordance
with the express terms hereof.
SECTION 6.06. INVESTMENT OF AMOUNTS HELD BY MORTGAGEE
Any amounts held by the Mortgagee pursuant to the proviso to the first
sentence of Section 3.01, pursuant to Section 3.02, or pursuant to any provision
of any other Operative Agreement providing for amounts to be held by the
Mortgagee which are not distributed pursuant to the other provisions of Article
III hereof shall be invested by the Mortgagee from time to time in Cash
Equivalents as directed by the Owner so long as the Mortgagee may acquire the
same using its best efforts. Unless otherwise expressly provided in this Trust
Indenture, any income realized as a result of any such investment, net of the
Mortgagee's reasonable fees and expenses in making such investment, shall be
held and applied by the Mortgagee in the same manner as the principal amount of
such investment is to be applied and any losses, net of earnings and such
reasonable fees and expenses, shall be charged against the principal amount
invested. The Mortgagee shall not be liable for any loss resulting from any
investment required to be made by it under this Trust Indenture other than by
reason of its willful misconduct or gross negligence, and any such investment
may be sold (without regard to its maturity) by the Mortgagee without
instructions whenever such sale is necessary to make a distribution required by
this Trust Indenture.
ARTICLE VII
THE MORTGAGEE
SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES
The Mortgagee accepts the duties hereby created and applicable to it
and agrees to perform the same but only upon the terms of this Trust Indenture
and agrees to receive and disburse all monies constituting part of the
Collateral in accordance with the terms hereof. The Mortgagee, in its individual
capacity, shall not be answerable or accountable under any circumstances, except
(i) for its own willful misconduct or gross negligence (other than for the
handling of funds, for which the standard of accountability shall be willful
misconduct or negligence), (ii) as provided in the fourth sentence of Section
2.04(a) hereof and the last sentence of Section 6.04 hereof, and (iii) from the
inaccuracy of any representation or warranty of the Mortgagee (in its individual
capacity) in the Participation Agreement or expressly made hereunder.
SECTION 7.02. ABSENCE OF DUTIES
Except in accordance with written instructions furnished pursuant to
Section 6.01 or 6.02 hereof, and except as provided in, and without limiting the
generality of, Sections 6.03, 6.04 and 7.07 hereof the Mortgagee shall have no
duty (i) to see to any registration of the Aircraft or any recording or filing
of this Trust Indenture or any other document, or to see to the maintenance of
any such registration, recording or filing, (ii) to see to any insurance on the
Aircraft or to effect or maintain any such insurance, whether or not Owner shall
be in default with respect thereto, (iii) to see to the payment or discharge of
any lien or encumbrance of any kind against any part of the Collateral, (iv) to
confirm, verify or inquire into the failure to receive any financial statements
from Owner, or (v) to inspect the Aircraft at any time or ascertain or inquire
as to the performance or observance of any of Owner's covenants herein or any
Permitted Lessee's covenants under any assigned Permitted Lease with respect to
the Aircraft.
SECTION 7.03. NO REPRESENTATIONS OR WARRANTIES AS TO AIRCRAFT OR
DOCUMENTS
THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES NOT MAKE AND
SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS,
VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY,
OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE
AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR
NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK
OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT
OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER. The Mortgagee, in its
individual or trust capacities, does not make or shall not be deemed to have
made any representation or warranty as to the validity, legality or
enforceability of this Trust Indenture, the Participation Agreement, the
Equipment Notes, or the Purchase Agreement, or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Owner made in its individual capacity and the representations
and warranties of the Mortgagee in its individual capacity, in each case
expressly made in this Trust Indenture or in the Participation Agreement. The
Note Holders make no representation or warranty hereunder whatsoever.
SECTION 7.04. NO SEGREGATION OF MONIES; NO INTEREST
Any monies paid to or retained by the Mortgagee pursuant to any
provision hereof and not then required to be distributed to the Note Holders, or
the Owner as provided in Article III hereof need not be segregated in any manner
except to the extent required by Law or Section 6.06 hereof, and may be
deposited under such general conditions as may be prescribed by Law, and the
Mortgagee shall not be liable for any interest thereon (except that the
Mortgagee shall invest all monies held as directed by Owner so long as no Event
of Default has occurred and is continuing (or in the absence of such direction,
by the Majority In Interest of Note Holders) in Cash Equivalents; PROVIDED,
HOWEVER, that any payments received, or applied hereunder, by the Mortgagee
shall be accounted for by the Mortgagee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 7.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL
The Mortgagee shall not incur any 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. The
Mortgagee may accept a copy of a resolution of the Board of Directors (or
Executive Committee thereof) of the Owner, certified by the Secretary or an
Assistant Secretary thereof as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the same
is in full force and effect. As to the aggregate unpaid Original Amount of
Equipment Notes outstanding as of any date, the Owner may for all purposes
hereof rely on a certificate signed by any Vice President or other authorized
corporate trust officer of the Mortgagee. As to any fact or matter relating to
the Owner the manner of which is not specifically described herein, the
Mortgagee may for all purposes hereof rely on a certificate, signed by a duly
authorized officer of the Owner, as to such fact or matter, and such certificate
shall constitute full protection to the Mortgagee for any action taken or
omitted to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, the Mortgagee may execute any of the
trusts or powers hereof and perform its powers and duties hereunder directly or
through agents or attorneys and may, at the expense of the Collateral, advise
with counsel, accountants and other skilled persons to be selected and retained
by it, and the Mortgagee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written advice or written
opinion of any such counsel, accountants or other skilled persons.
SECTION 7.06. COMPENSATION
The Mortgagee shall be entitled to reasonable compensation, including
expenses and disbursements (including the reasonable fees and expenses of
counsel), for all services rendered hereunder and shall, on and subsequent to an
Event of Default hereunder, have a priority claim on the Collateral for the
payment of such compensation, to the extent that such compensation shall not be
paid by Owner, and shall have the right, on and subsequent to an Event of
Default hereunder, to use or apply any monies held by it hereunder in the
Collateral toward such payments. The Mortgagee agrees that it shall have no
right against the Note Holders for any fee as compensation for its services as
trustee under this Trust Indenture.
SECTION 7.07. INSTRUCTIONS FROM NOTE HOLDERS
In the administration of the trusts created hereunder, the Mortgagee
shall have the right to seek instructions from a Majority in Interest of Note
Holders should any provision of this Trust Indenture appear to conflict with any
other provision herein or should the Mortgagee's duties or obligations hereunder
be unclear, and the Mortgagee shall incur no liability in refraining from acting
until it receives such instructions. The Mortgagee shall be fully protected for
acting in accordance with any instructions received under this Section 7.07.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. SCOPE OF INDEMNIFICATION
The Mortgagee shall be indemnified by the Owner to the extent and in
the manner provided in Section 8 of the Participation Agreement.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. RESIGNATION OF MORTGAGEE; APPOINTMENT OF SUCCESSOR
(a) The Mortgagee or any successor thereto may resign at any time
without cause by giving at least 30 days' prior written notice to the Owner and
each Note Holder, such resignation to be effective upon the acceptance of the
trusteeship by a successor Mortgagee. In addition, a Majority in Interest of
Note Holders may at any time (but only with the consent of Owner, which consent
shall not be unreasonably withheld, except that such consent shall not be
necessary if an Event of Default is continuing) remove the Mortgagee without
cause by an instrument in writing delivered to the Owner and the Mortgagee, and
the Mortgagee shall promptly notify each Note Holder thereof in writing, such
removal to be effective upon the acceptance of the trusteeship by a successor
Mortgagee. In the case of the resignation or removal of the Mortgagee, a
Majority in Interest of Note Holders may appoint a successor Mortgagee by an
instrument signed by such holders, which successor, so long as no Event of
Default shall have occurred and be continuing, shall be subject to Owner's
reasonable approval. If a successor Mortgagee shall not have been appointed
within 30 days after such notice of resignation or removal, the Mortgagee, the
Owner or any Note Holder may apply to any court of competent jurisdiction to
appoint a successor Mortgagee to act until such time, if any, as a successor
shall have been appointed as above provided. The successor Mortgagee so
appointed by such court shall immediately and without further act be superseded
by any successor Mortgagee appointed as above provided.
(b) Any successor Mortgagee, however appointed, shall execute and
deliver to the Owner and the predecessor Mortgagee an instrument accepting such
appointment and assuming the obligations of the Mortgagee arising from and after
the time of such appointment, and thereupon such successor Mortgagee, without
further act, shall become vested with all the estates, properties, rights,
powers and duties of the predecessor Mortgagee hereunder in the trust hereunder
applicable to it with like effect as if originally named the Mortgagee herein;
but nevertheless upon the written request of such successor Mortgagee, such
predecessor Mortgagee shall execute and deliver an instrument transferring to
such successor Mortgagee, upon the trusts herein expressed applicable to it, all
the estates, properties, rights and powers of such predecessor Mortgagee, and
such predecessor Mortgagee shall duly assign, transfer, deliver and pay over to
such successor Mortgagee all monies or other property then held by such
predecessor Mortgagee hereunder.
(c) Any successor Mortgagee, however appointed, shall be a bank or
trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Chicago, Illinois; Hartford, Connecticut;
Wilmington, Delaware; or Boston, Massachusetts and having (or whose obligations
under the Operative Agreements are guaranteed by an affiliated entity having) a
combined capital and surplus of at least $100,000,000, if there be such an
institution willing, able and legally qualified to perform the duties of the
Mortgagee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Mortgagee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Mortgagee shall be a
party, or any corporation to which substantially all the corporate trust
business of the Mortgagee may be transferred, shall, subject to the terms of
paragraph (c) of this Section 9.01, be a successor Mortgagee and the Mortgagee
under this Trust Indenture without further act.
SECTION 9.02. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES
(a) Whenever (i) the Mortgagee shall deem it necessary or
desirable in order to conform to any Law of any jurisdiction in which all or any
part of the Collateral shall be situated or to make any claim or bring any suit
with respect to or in connection with the Collateral, this Trust Indenture, any
other Indenture Agreement, the Equipment Notes or any of the transactions
contemplated by the Participation Agreement, (ii) the Mortgagee shall be advised
by counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Mortgagee shall so advise the Owner), or
(iii) the Mortgagee shall have been requested to do so by a Majority in Interest
of Note Holders, then in any such case, the Mortgagee and, upon the written
request of the Mortgagee, the Owner, shall execute and deliver an indenture
supplemental hereto and such other instruments as may from time to time be
necessary or advisable either (1) to constitute one or more bank or trust
companies or one or more persons approved by the Mortgagee, either to act
jointly with the Mortgagee as additional trustee or trustees of all or any part
of the Collateral, or to act as separate trustee or trustees of all or any part
of the Collateral, in each case with such rights, powers, duties and obligations
consistent with this Trust Indenture as may be provided in such supplemental
indenture or other instruments as the Mortgagee or a Majority in Interest of
Note Holders may deem necessary or advisable, or (2) to clarify, add to or
subtract from the rights, powers, duties and obligations theretofore granted any
such additional or separate trustee, subject in each case to the remaining
provisions of this Section 9.02. If the Owner shall not have taken any action
requested of it under this Section 9.02(a) that is permitted or required by its
terms within 15 days after the receipt of a written request from the Mortgagee
so to do, or if an Event of Default shall have occurred and be continuing, the
Mortgagee may act under the foregoing provisions of this Section 9.02(a) without
the concurrence of the Owner, and the Owner hereby irrevocably appoints (which
appointment is coupled with an interest) the Mortgagee, its agent and
attorney-in-fact to act for it under the foregoing provisions of this Section
9.02(a) in either of such contingencies. The Mortgagee may, in such capacity,
execute, deliver and perform any such supplemental indenture, or any such
instrument, as may be required for the appointment of any such additional or
separate trustee or for the clarification of, addition to or subtraction from
the rights, powers, duties or obligations theretofore granted to any such
additional or separate trustee. In case any additional or separate trustee
appointed under this Section 9.02(a) shall die, become incapable of acting,
resign or be moved, all the assets, property, rights, powers, trusts, duties and
obligations of such additional or separate trustee shall revert to the Mortgagee
until a successor additional or separate trustee is appointed as provided in
this Section 9.02(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon the
Mortgagee in respect of the custody, investment and payment of monies and all
monies received by any such additional or separate trustee from or constituting
part of the Collateral or otherwise payable under any Operative Agreement to the
Mortgagee shall be promptly paid over by it to the Mortgagee. All other rights,
powers, duties and obligations conferred or imposed upon any additional or
separate trustee shall be exercised or performed by the Mortgagee and such
additional or separate trustee jointly except to the extent that applicable Law
of any jurisdiction in which any particular act is to be performed renders the
Mortgagee incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations (including the holding of title to all or
part of the Collateral in any such jurisdiction) shall be exercised and
performed by such additional or separate trustee. No additional or separate
trustee shall take any discretionary action except on the instructions of the
Mortgagee or a Majority in Interest of Note Holders. No trustee hereunder shall
be personally liable by reason of any act or omission of any other trustee
hereunder, except that the Mortgagee shall be liable for the consequences of its
lack of reasonable care in selecting, and the Mortgagee's own actions in acting
with, any additional or separate trustee. Each additional or separate trustee
appointed pursuant to this Section 9.02 shall be subject to, and shall have the
benefit of Articles V through IX and Article XI hereof insofar as they apply to
the Mortgagee. The powers of any additional or separate trustee appointed
pursuant to this Section 9.02 shall not in any case exceed those of the
Mortgagee hereunder.
(c) If at any time the Mortgagee shall deem it no longer necessary
or in order to conform to any such Law or take any such action or shall be
advised by such counsel that it is no longer so necessary or desirable in the
interest of the Note Holders, or in the event that the Mortgagee shall have been
requested to do so in writing by a Majority in Interest of Note Holders, the
Mortgagee and, upon the written request of the Mortgagee, the Owner, shall
execute and deliver an indenture supplemental hereto and all other instruments
and agreements necessary or proper to remove any additional or separate trustee.
The Mortgagee may act on behalf of the Owner under this Section 9.02(c) when and
to the extent it could so act under Section 9.02(a) hereof.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS
(a) The Mortgagee agrees with the Note Holders that it shall not
enter into any amendment, waiver or modification of, supplement or consent to
this Trust Indenture, or any other Operative Agreement to which it is a party,
unless such supplement, amendment, waiver, modification or consent is consented
to in writing by a Majority in Interest of Note Holders, but upon the written
request of a Majority in Interest of Note Holders, the Mortgagee shall from time
to time enter into any such supplement or amendment, or execute and deliver any
such waiver, modification or consent, as may be specified in such request and as
may be (in the case of any such amendment, supplement or modification), to the
extent such agreement is required, agreed to by the Owner and, as may be
appropriate, the Airframe Manufacturer or the Engine Manufacturer; PROVIDED,
HOWEVER, that, without the consent of each holder of an affected Equipment Note
then outstanding and of each Liquidity Provider, no such amendment, waiver or
modification of the terms of, or consent under, any thereof, shall (i) modify
any of the provisions of this Section 10.01, or of Article II or III or Section
5.01, 5.02(c), 5.02(d), or 6.02 hereof, the definitions of "Event of Default,"
"Default," "Majority in Interest of Note Holders," "Make-Whole Amount" or "Note
Holder," or the percentage of Note Holders required to take or approve any
action hereunder, (ii) reduce the amount, or change the time of payment or
method of calculation of any amount, of Original Amount, Make-Whole Amount, if
any, or interest with respect to any Equipment Note, (iii) reduce, modify or
amend any indemnities in favor of the Mortgagee or the Note Holders (except that
the Mortgagee may consent to any waiver or reduction of an indemnity payable to
it), or (iv) permit the creation of any Lien on the Trust Indenture Estate or
any part thereof other than Permitted Liens or deprive any Note Holder of the
benefit of the Lien of this Trust Indenture on the Collateral, except as
provided in connection with the exercise of remedies under Article V hereof.
Notwithstanding the foregoing, without the consent of the affected Liquidity
Providers, neither the Owner nor the Mortgagee shall enter into any amendment,
waiver or modification of, supplement or consent to this Trust Indenture or the
other Operative Agreements which shall reduce, modify or amend any indemnities
in favor of such Liquidity Providers.
(b) The Owner and the Mortgagee may enter into one or more
agreements supplemental hereto without the consent of any Note Holder for any of
the following purposes: (i) (a) to cure any defect or inconsistency herein or in
the Equipment Notes, or to make any change not inconsistent with the provisions
hereof (PROVIDED that such change does not adversely affect the interests of any
Note Holder in its capacity solely as Note Holder) or (b) to cure any ambiguity
or correct any mistake; (ii) to evidence the succession of another party as the
Owner in accordance with the terms hereof or to evidence the succession of a new
trustee hereunder pursuant hereto, the removal of the trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or additional
trustee or trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Mortgagee or to make any other provisions with respect
to matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Note Holders in its capacity solely as
Note Holder; (iv) to correct or amplify the description of any property at any
time subject to the Lien of this Trust Indenture or better to assure, convey and
confirm unto the Mortgagee any property subject or required to be subject to the
Lien of this Trust Indenture, the Airframe or Engines or any Replacement
Airframe or Replacement Engine; (v) to add to the covenants of the Owner for the
benefit of the Note Holders, or to surrender any rights or power herein
conferred upon the Owner; (vi) to add to the rights of the Note Holders; (vii)
to provide for the issuance of Series D Equipment Notes and Pass Through
Certificates issued by the Class D Pass Through Trust and to make changes
relating thereto, provided that the Series D Equipment Notes are issued in
accordance with the Note Purchase Agreement; and (viii) to include on the
Equipment Notes any legend as may be required by Law.
SECTION 10.02. MORTGAGEE PROTECTED
If, in the opinion of the institution acting as Mortgagee hereunder,
any document required to be executed by it pursuant to the terms of Section
10.01 hereof affects any right, duty, immunity or indemnity with respect to such
institution under this Trust Indenture, such institution may in its discretion
decline to execute such document.
SECTION 10.03. DOCUMENTS MAILED TO NOTE HOLDERS
Promptly after the execution by the Owner or the Mortgagee of any
document entered into pursuant to Section 10.01 hereof, the Mortgagee shall
mail, by first class mail, postage prepaid, a copy thereof to Owner (if not a
party thereto) and to each Note Holder at its address last set forth in the
Equipment Note Register, but the failure of the Mortgagee to mail such copies
shall not impair or affect the validity of such document.
SECTION 10.04. NO REQUEST NECESSARY FOR TRUST INDENTURE SUPPLEMENT
No written request or consent of the Note Holders pursuant to Section
10.01 hereof shall be required to enable the Mortgagee to execute and deliver a
Trust Indenture Supplement specifically required by the terms hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. TERMINATION OF TRUST INDENTURE
Upon (or at any time after) payment in full of the Original Amount of,
Make-Whole Amount, if any, and interest on and all other amounts due under all
Equipment Notes and provided that there shall then be no other Secured
Obligations due to the Indenture Indemnitees, the Note Holders and the Mortgagee
hereunder or under the Participation Agreement or other Operative Agreement, the
Owner shall direct the Mortgagee to execute and deliver to or as directed in
writing by the Owner an appropriate instrument releasing the Aircraft and the
Engines and all other Collateral from the Lien of the Trust Indenture and the
Mortgagee shall execute and deliver such instrument as aforesaid; PROVIDED,
HOWEVER, that this Trust Indenture and the trusts created hereby shall earlier
terminate and this Trust Indenture shall be of no further force or effect upon
any sale or other final disposition by the Mortgagee of all property
constituting part of the Collateral and the final distribution by the Mortgagee
of all monies or other property or proceeds constituting part of the Collateral
in accordance with the terms hereof. Except as aforesaid otherwise provided,
this Trust Indenture and the trusts created hereby shall continue in full force
and effect in accordance with the terms hereof.
SECTION 11.02. NO LEGAL TITLE TO COLLATERAL IN NOTE HOLDERS
No holder of an Equipment Note shall have legal title to any part of
the Collateral. No transfer, by operation of law or otherwise, of any Equipment
Note or other right, title and interest of any Note Holder in and to the
Collateral or hereunder shall operate to terminate this Trust Indenture or
entitle such holder or any successor or transferee of such holder to an
accounting or to the transfer to it of any legal title to any part of the
Collateral.
SECTION 11.03. SALE OF AIRCRAFT BY MORTGAGEE IS BINDING
Any sale or other conveyance of the Collateral, or any part thereof
(including any part thereof or interest therein), by the Mortgagee made pursuant
to the terms of this Trust Indenture shall bind the Note Holders and shall be
effective to transfer or convey all right, title and interest of the Mortgagee,
the Owner and such holders in and to such Collateral or part thereof. No
purchaser or other grantee shall be required to inquire as to the authorization,
necessity, expediency or regularity of such sale or conveyance or as to the
application of any sale or other proceeds with respect thereto by the Mortgagee.
SECTION 11.04. TRUST INDENTURE FOR BENEFIT OF OWNER, MORTGAGEE, NOTE
HOLDERS AND THE OTHER INDENTURE INDEMNITEES
Nothing in this Trust Indenture, whether express or implied, shall be
construed to give any person other than the Owner, the Mortgagee, the Note
Holders and the other Indenture Indemnitees, any legal or equitable right,
remedy or claim under or in respect of this Trust Indenture, except that the
persons referred to in the last paragraph of Section 4.02(b) shall be third
party beneficiaries of such paragraph.
SECTION 11.05. 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 Trust Indenture to be made, given,
furnished or filed shall be in writing, personally delivered or mailed by
certified mail, postage prepaid, or by facsimile or confirmed telex, and (i) if
to the Owner, addressed to it at 2929 Allan Parkway, Houston, Texas 77019,
Attention: Chief Financial Officer, facsimile number (713) 520-6329, (ii) if to
Mortgagee, addressed to it at its office at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration, facsimile number (302) 651-8882, (iii) if to any Note Holder or
any Indenture Indemnitee, addressed to such party at such address as such party
shall have furnished by notice to the Owner and the Mortgagee, or, until an
address is so furnished, addressed to the address of such party (if any) set
forth on Schedule 1 to the Participation Agreement or in the Equipment Note
Register. Whenever any notice in writing is required to be given by the Owner or
the Mortgagee or any Note Holder to any of the other of them, such notice shall
be deemed given and such requirement satisfied when such notice is received, or
if such notice is mailed by certified mail, postage prepaid, three Business Days
after being mailed, addressed as provided above. Any party hereto may change the
address to which notices to such party will be sent by giving notice of such
change to the other parties to this Trust Indenture.
SECTION 11.06. SEVERABILITY
Any provision of this Trust Indenture 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. Any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 11.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS
No term or provision of this Trust Indenture or the Equipment Notes may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the Owner and the Mortgagee, in compliance with Section
10.01 hereof. Any waiver of the terms hereof or of any Equipment Note shall be
effective only in the specific instance and for the specific purpose given.
SECTION 11.08. 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 permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Note Holder
shall bind the successors and assigns of such holder. Each Note Holder by its
acceptance of an Equipment Note agrees to be bound by this Trust Indenture and
all provisions of the Operative Agreements applicable to a Note Holder.
SECTION 11.09. 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 11.10. NORMAL COMMERCIAL RELATIONS
Anything contained in this Trust Indenture to the contrary
notwithstanding. Owner and Mortgagee may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with Owner,
fully to the same extent as if this Trust Indenture were not in effect,
including without limitation the making of loans or other extensions of credit
to Owner for any purpose whatsoever, whether related to any of the transactions
contemplated hereby or otherwise.
SECTION 11.11. GOVERNING LAW; COUNTERPART FORM
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may
be executed by the parties hereto in separate counterparts (or upon separate
signature pages bound together into one or more 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 instrument.
SECTION 11.12. VOTING BY NOTE HOLDERS
All votes of the Note Holders shall be governed by a vote of a Majority
in Interest of Note Holders, except as otherwise provided herein.
SECTION 11.13. BANKRUPTCY
It is the intention of the parties that the Mortgagee shall be entitled
to the benefits of Section 1110 with respect to the right to take possession of
the Aircraft, Airframe, Engines and Parts as provided herein in the event of a
case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor, and in
any instance where more than one construction is possible of the terms and
conditions hereof or any other pertinent Operative Agreement, each such party
agrees that a construction which would preserve such benefits shall control over
any construction which would not preserve such benefits.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Indenture
and Mortgage to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
CONTINENTAL AIRLINES, INC.
By:_______________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Mortgagee
By:_______________________________
Name:
Title:
ANNEX A
DEFINITIONS
GENERAL PROVISIONS
(a) In each Operative Agreement, unless otherwise expressly
provided, a reference to:
(i) each of "Owner," "Mortgagee," "Note Holder" or any other person
includes, without prejudice to the provisions of any Operative
Agreement, any successor in interest to it and any permitted
transferee, permitted purchaser or permitted assignee of it;
(ii) words importing the plural include the singular and words importing
the singular include the plural;
(iii)any agreement, instrument or document, or any annex, schedule or
exhibit thereto, or any other part thereof, includes, without
prejudice to the provisions of any Operative Agreement, that
agreement, instrument or document, or annex, schedule or exhibit, or
part, respectively, as amended, modified or supplemented from time to
time in accordance with its terms and in accordance with the Operative
Agreements, and any agreement, instrument or document entered into in
substitution or replacement therefor (including, without limitation,
in the case of each Pass Through Trust Agreement, the "Related Pass
Through Trust Agreement" as defined therein);
(iv) any provision of any Law includes any such provision as amended,
modified, supplemented, substituted, reissued or reenacted prior to
the Closing Date, and thereafter from time to time;
(v) the words "Agreement," "this Agreement," "hereby," "herein," "hereto,"
"hereof" and "hereunder" and words of similar import when used in any
Operative Agreement refer to such Operative Agreement as a whole and
not to any particular provision of such Operative Agreement;
(vi) the words "including," "including, without limitation," "including,
but not limited to," and terms or phrases of similar import when used
in any Operative Agreement, with respect to any matter or thing, mean
including, without limitation, such matter or thing; and
(vii)a "Section," an "Exhibit," an "Annex" or a "Schedule" in any
Operative Agreement, or in any annex thereto, is a reference to a
section of, or an exhibit, an annex or a schedule to, such Operative
Agreement or such annex, respectively.
(b) Each exhibit, annex and schedule to each Operative Agreement
is incorporated in, and shall be deemed to be a part of, such Operative
Agreement.
(c) Unless otherwise defined or specified in any Operative
Agreement, all accounting terms therein shall be construed and all accounting
determinations thereunder shall be made in accordance with GAAP.
(d) Headings used in any Operative Agreement are for convenience
only and shall not in any way affect the construction of, or be taken into
consideration in interpreting, such Operative Agreement.
(e) For purposes of each Operative Agreement, the occurrence and
continuance of a Default or Event of Default referred to in Section 5.01(v),(vi)
or (vii) shall not be deemed to prohibit the Owner from taking any action or
exercising any right that is conditioned on no Special Default, Default or Event
of Default having occurred and be continuing if such Special Default, Default or
Event of Default consists of the institution of reorganization proceedings with
respect to Owner under Chapter 11 of the Bankruptcy Code and the trustee or
debtor-in-possession in such proceedings shall have agreed to perform its
obligations under the Trust Indenture with the approval of the applicable court
and thereafter shall have continued to perform such obligations in accordance
with Section 1110.
DEFINED TERMS
"ACT" means part A of subtitle VII of title 49, United States Code.
"ACTUAL KNOWLEDGE" means (a) as it applies to Mortgagee, actual
knowledge of a responsible officer in the Corporate Trust Office, and (b) as it
applies to Owner, actual knowledge of a Vice President or more senior officer of
Owner or any other officer of Owner having responsibility for the transactions
contemplated by the Operative Agreements; PROVIDED that each of Owner and
Mortgagee shall be deemed to have "Actual Knowledge" of any matter as to which
it has received notice from Owner, any Note Holder or Mortgagee, such notice
having been given pursuant to Section 11.05 of the Trust Indenture.
"AFFILIATE" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person. For 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 "controlling," "controlled by" and "under common
control with" have correlative meanings.
"AIRCRAFT" means, collectively, the Airframe and Engines.
"AIRCRAFT BILL OF SALE" means the full warranty bill of sale covering
the Aircraft delivered by Airframe Manufacturer to Owner on the Closing Date.
"AIRCRAFT DOCUMENTS" means all technical data, manuals and log books,
and all inspection, modification and overhaul records and other service, repair,
maintenance and technical records that are required by the FAA (or the relevant
Aviation Authority), to be maintained with respect to the Aircraft, Airframe,
Engines or Parts, and such term shall include all additions, renewals, revisions
and replacements of any such materials from time to time made, or required to be
made, by the FAA (or other Aviation Authority) regulations, and in each case in
whatever form and by whatever means or medium (including, without limitation,
microfiche, microfilm, paper or computer disk) such materials may be maintained
or retained by or on behalf of Owner (PROVIDED, that all such materials shall be
maintained in the English language).
"AIRFRAME" means (a) the aircraft (excluding Engines or engines from
time to time installed thereon) manufactured by Airframe Manufacturer and
identified by Airframe Manufacturer's model number, United States registration
number and Airframe Manufacturer's serial number set forth in the initial Trust
Indenture Supplement and any Replacement Airframe and (b) any and all Parts
incorporated or installed in or attached or appurtenant to such airframe, and
any and all Parts removed from such airframe, unless the Lien of the Trust
Indenture shall not be applicable to such Parts in accordance with Section 4.04
of the Trust Indenture. Upon substitution of a Replacement Airframe under and in
accordance with the Trust Indenture, such Replacement Airframe shall become
subject to the Trust Indenture and shall be the "Airframe" for all purposes of
the Trust Indenture and the other Operative Agreements and thereupon the
Airframe for which the substitution is made shall no longer be subject to the
Trust Indenture, and such replaced Airframe shall cease to be the "Airframe."
"AIRFRAME MANUFACTURER" means The Boeing Company, a Delaware
corporation.
"AMORTIZATION AMOUNT" means, with respect to any Equipment Note, as of
any Payment Date, the amount determined by multiplying the percentage set forth
opposite such Payment Date on the Amortization Schedule by the Original Amount
of such Equipment Note.
"AMORTIZATION SCHEDULE" means, with respect to each Equipment Note, the
amortization schedule for such Equipment Note delivered pursuant to Section 2.02
of the Trust Indenture.
"APPRAISER" means a firm of internationally recognized, independent
aircraft appraisers.
"AVERAGE LIFE DATE" for any Equipment Note shall be the date which
follows the time of determination by a period equal to the Remaining Weighted
Average Life of such Equipment Note. "Remaining Weighted Average Life" on a
given date with respect to any Equipment Note shall be the number of days equal
to the quotient obtained by dividing (a) the sum of each of the products
obtained by multiplying (i) the amount of each then remaining scheduled payment
of principal of such Equipment Note by (ii) the number of days from and
including such determination date to but excluding the date on which such
payment of principal is scheduled to be made, by (b) the then outstanding
principal amount of such Equipment Note.
"AVIATION AUTHORITY" means the FAA or, if the Aircraft is permitted to
be, and is, registered with any other Government Entity under and in accordance
with Section 4.02 (e) of the Trust Indenture and Section 6.4.5 of the
Participation Agreement, such other Government Entity.
"BANKRUPTCY CODE" means the United States Bankruptcy Code, 11 U.S.C.
Sections 101 ET SEQ.
"BASIC PASS THROUGH TRUST AGREEMENT" means the Pass Through Trust
Agreement, dated the Issuance Date, between Owner and Pass Through Trustee, but
does not include any Trust Supplement.
"BENEFICIAL OWNER" when used in relation to an Equipment Note means a
Person that, by reason of direct ownership, contract, share ownership or
otherwise, has the right to receive or participate in receiving, directly or
indirectly, payments of principal, interest or Make-Whole Amount in respect of
such Equipment Note; PROVIDED that a Person shall not be deemed to be a
Beneficial Owner of an Equipment Note solely because another Person in which
such a Person owns common stock or other equity securities is a registered
holder or Beneficial Owner of such Equipment Note unless such Person is an
Affiliate of such other Person.
"BILLS OF SALE" means the FAA Bill of Sale and the Aircraft Bill of
Sale.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized or required by law to close in New
York, New York, Houston, Texas, Wilmington, Delaware or Salt Lake City, Utah.
"CASH EQUIVALENTS" means the following securities (which shall mature
within 90 days of the date of purchase thereof): (a) direct obligations of the
U.S. Government; (b) obligations fully guaranteed by the U.S. Government; (c)
certificates of deposit issued by, or bankers' acceptances of, or time deposits
or a deposit account with, Mortgagee or any bank, trust company or national
banking association incorporated or doing business under the laws of the United
States or any state thereof having a combined capital and surplus and retained
earnings of at least $500,000,000 and having a rate of "C" or better from the
Thomson BankWatch Service; or (d) commercial paper of any issuer doing business
under the laws of the United States or one of the states thereof and in each
case having a rating assigned to such commercial paper by Standard & Poor's
Ratings Services or Moody's Investors Service, Inc. equal to A1 or higher.
"CITIZEN OF THE UNITED STATES" is defined in 49 U.S.C. Section
40102(a)(15).
"CLASS D ISSUANCE DATE" means the date of issuance of the Pass Through
Certificates by the Class D Pass Through Trust.
"CLASS D PASS THROUGH TRUST" means the Continental Airlines Pass
Through Trust 1997-4D.
"CLOSING" means the closing of the transactions contemplated by the
Participation Agreement.
"CLOSING DATE" means the date on which the Closing occurs.
"CODE" means the Internal Revenue Code of 1986, as amended; provided
that, when used in relation to a Plan, "Code" shall mean the Internal Revenue
Code of 1986 and any regulations and rulings issued thereunder, all as amended
and in effect from time to time.
"COLLATERAL" is defined in the Granting Clause of the Trust Indenture.
"CONSENT AND AGREEMENT" means the Manufacturer Consent and Agreement
____, dated as of even date with the Participation Agreement, of Airframe
Manufacturer.
"CORPORATE TRUST OFFICE" means the principal office of Mortgagee
located at Mortgagee's address for notices under the Participation Agreement or
such other office at which Mortgagee's corporate trust business shall be
administered which Mortgagee shall have specified by notice in writing to Owner
and each Note Holder.
"CRAF" means the Civil Reserve Air Fleet Program established pursuant
to 10 U.S.C. Section 9511-13 or any similar substitute program.
"DEBT RATE" means, with respect to (i) any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I to the
Trust Indenture and (ii) for any other purpose, with respect to any period, the
weighted average interest rate per annum during such period borne by the
outstanding Equipment Notes, excluding any interest payable at the Payment Due
Rate.
"DEFAULT" means any event or condition that with the giving of notice
or the lapse of time or both would become an Event of Default.
"DEPOSIT AGREEMENT" means each of the three Deposit Agreements between
the Escrow Agent and the Depositary, dated as of the Issuance Date, each of
which relates to one of the Pass Through Trusts, PROVIDED that, for purposes of
any obligation of Owner, no amendment, modification or supplement to, or
substitution or replacement of, any such Deposit Agreement shall be effective
unless consented to by Owner.
"DEPOSITARY" means Credit Suisse First Boston, New York branch, as
Depositary under each Deposit Agreement.
"DOLLARS," "UNITED STATES DOLLARS" or "$" means the lawful currency of
the United States.
"DOT" means the Department of Transportation of the United States or
any Government Entity succeeding to the functions of such Department of
Transportation.
"ENGINE" means (a) each of the engines manufactured by Engine
Manufacturer and identified by Engine Manufacturer's model number and Engine
Manufacturer's serial number set forth in the initial Trust Indenture Supplement
and originally installed on the Airframe on the Closing Date, and any
Replacement Engine, in any case whether or not from time to time installed on
such Airframe or installed on any other airframe or aircraft, and (b) any and
all Parts incorporated or installed in or attached or appurtenant to such
engine, and any and all Parts removed from such engine, unless the Lien of the
Trust Indenture shall not apply to such Parts in accordance with Section 4.04 of
the Trust Indenture. Upon substitution of a Replacement Engine under and in
accordance with the Trust Indenture, such Replacement Engine shall become
subject to the Trust Indenture and shall be an "Engine" for all purposes of the
Trust Indenture and the other Operative Agreements and thereupon the Engine for
which the substitution is made shall no longer be subject to the Trust
Indenture, and such replaced Engine shall cease to be an "Engine."
"ENGINE CONSENT AND AGREEMENT" means the Engine Manufacturer Consent
and Agreement ___ dated as of even date with the Participation Agreement, of
Engine Manufacturer.
"ENGINE MANUFACTURER" means _________________ a corporation organized
under the laws of __________.
"EQUIPMENT NOTE REGISTER" is defined in Section 2.07 of the Trust
Indenture.
"EQUIPMENT NOTES" means and includes any equipment notes issued under
the Trust Indenture in the form specified in Section 2.01 thereof (as such form
may be varied pursuant to the terms of the Trust Indenture) and any Equipment
Note issued under the Trust Indenture in exchange for or replacement of any
Equipment Note.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
any regulations and rulings issued thereunder all as amended and in effect from
time to time.
"ESCROW AGENT" means First Security Bank, National Association, as
Escrow Agent under each of the Escrow Agreements.
"ESCROW AGREEMENT" means each of the three Escrow and Paying Agent
Agreements, among the Escrow Agent, the Paying Agent, certain initial purchasers
of the Pass Through Certificates named therein and one of the Pass Through
Trustees, dated as of the Issuance Date, each of which relates to one of the
Pass Through Trusts, PROVIDED that, for purposes of any obligation of Owner, no
amendment, modification or supplement to, or substitution or replacement of, any
such Escrow Agreement shall be effective unless consented to by Owner.
"EVENT OF DEFAULT" is defined in Section 5.01 of the Trust Indenture.
"EVENT OF LOSS" means, with respect to the Aircraft, Airframe or any
Engine, any of the following circumstances, conditions or events with respect to
such property, for any reason whatsoever:
(a) the destruction of such property, damage to such property
beyond economic repair or rendition of such property permanently unfit for
normal use by Owner;
(b) the actual or constructive total loss of such property or any
damage to such property, or requisition of title or use of such property, which
results in an insurance settlement with respect to such property on the basis of
a total loss or constructive or compromised total loss;
(c) any theft, hijacking or disappearance of such property for a
period of 180 consecutive days or more;
(d) any seizure, condemnation, confiscation, taking or requisition
(including loss of title) of such property by any Government Entity or purported
Government Entity (other than a requisition of use by a Permitted Government
Entity) for a period exceeding 180 consecutive days;
(e) as a result of any law, rule, regulation, order or other
action by the Aviation Authority or by any Government Entity of the government
of registry of the Aircraft or by any Government Entity otherwise having
jurisdiction over the operation or use of the Aircraft, the use of such property
in the normal course of Owner's business of passenger air transportation is
prohibited for a period of 180 consecutive days unless Owner, prior to the
expiration of such 180-day period, shall have undertaken and shall be diligently
carrying forward such steps as may be necessary or desirable to permit the
normal use of such property by Owner, but in any event if such use shall have
been prohibited for a period of two consecutive years, provided that no Event of
Loss shall be deemed to have occurred if such prohibition has been applicable to
Owner's entire U.S. fleet of such property and Owner, prior to the expiration of
such two-year period, shall have conformed at least one unit of such property in
its fleet to the requirements of any such law, rule, regulation, order or other
action and commenced regular commercial use of the same in such jurisdiction and
shall be diligently carrying forward, in a manner which does not discriminate
against such property in so conforming such property, steps which are necessary
or desirable to permit the normal use of the Aircraft by Owner, but in any event
if such use shall have been prohibited for a period of three years.
"EXPENSES" means any and all liabilities, obligations, losses, damages,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and disbursements
of legal counsel, accountants, appraisers, inspectors or other professionals,
and costs of investigation).
"FAA" means the Federal Aviation Administration of the United States or
any Government Entity succeeding to the functions of such Federal Aviation
Administration.
"FAA BILL OF SALE" means a bill of sale for the Aircraft on AC Form
8050-2 (or such other form as may be approved by the FAA) delivered to Owner on
the Closing Date by Airframe Manufacturer.
"FAA FILED DOCUMENTS" means the Trust Indenture, the initial Trust
Indenture Supplement, the FAA Bill of Sale and an application for registration
of the Aircraft with the FAA in the name of Owner.
"FAA REGULATIONS" means the Federal Aviation Regulations issued or
promulgated pursuant to the Act from time to time.
"FINANCING STATEMENTS" means, collectively, UCC-1 (and, where
appropriate, UCC-3) financing statements covering the Collateral, by Owner, as
debtor, showing Mortgagee as secured party, for filing in Texas and each other
jurisdiction that, in the opinion of Mortgagee, is necessary to perfect its Lien
on the Collateral.
"GAAP" means generally accepted accounting principles as set forth in
the statements of financial accounting standards issued by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants, as such principles may at any time or from time to time be varied
by any applicable financial accounting rules or regulations issued by the SEC
and, with respect to any person, shall mean such principles applied on a basis
consistent with prior periods except as may be disclosed in such person's
financial statements.
"GOVERNMENT ENTITY" means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"INDEMNITEE" means (i) WTC and Mortgagee, (ii) each separate or
additional trustee appointed pursuant to the Trust Indenture, (iii) the
Subordination Agent, the Paying Agent and the Escrow Agent, (iv) each Liquidity
Provider, (v) the Pass Through Trustees, (vi) each Affiliate of the persons
described in clauses (i) and (ii), (vii) each Affiliate of the persons described
in clauses (iii), (iv) and (v), (viii) the respective directors, officers,
employees, agents and servants of each of the persons described in clauses (i),
(ii) and (vi), (ix) the respective directors, officers, employees, agents and
servants of each of the persons described in clauses (iii), (iv), (v) and (vii),
(x) the successors and permitted assigns of the persons described in clauses
(i), (ii) and (viii), and (xi) the successors and permitted assigns of the
persons described in clauses (iii), (iv), (v) and (ix); provided that the
persons described in clauses (iii), (iv), (v), (vii), (ix) and (xi) are
Indemnitees only for purposes of Section 8.1 of the Participation Agreement. If
any Indemnitee is Airframe Manufacturer or Engine Manufacturer or any
subcontractor or supplier of either thereof, such Person shall be an Indemnitee
only in its capacity as Note Holder.
"INDENTURE AGREEMENTS" means the Purchase Agreement and the Bills of
Sale, to the extent included in Granting Clause (2) of the Trust Indenture, and
any other contract, agreement or instrument from time to time assigned or
pledged under the Trust Indenture.
"INDENTURE DEFAULT" means any condition, circumstance, act or event
that, with the giving of notice, the lapse of time or both, would constitute an
Indenture Event of Default.
"INDENTURE EVENT OF DEFAULT" means any one or more of the conditions,
circumstances, acts or events set forth in Section 5.01 of the Trust Indenture.
"INDENTURE INDEMNITEE" means (i) WTC and the Mortgagee, (ii) each
separate or additional trustee appointed pursuant to the Trust Indenture, (iii)
the Subordination Agent, (iv) each Liquidity Provider, (v) each Pass Through
Trustee, (vi) the Paying Agent, (vii) the Escrow Agent and (viii) each of the
respective directors, officers, employees, agents and servants of each of the
persons described in clauses (i) through (vii) inclusive above.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement
among the Pass Through Trustees, the Liquidity Providers and the Subordination
Agent, dated as of the Issuance Date, provided that, for purposes of any
obligation of Owner, no amendment, modification or supplement to, or
substitution or replacement of, such Intercreditor Agreement shall be effective
unless consented to by Owner.
"IRS" means the Internal Revenue Service of the United States or any
Government Entity succeeding to the functions of such Internal Revenue Service.
"ISSUANCE DATE" means October 23, 1997.
"LAW" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.
"LIEN" means any mortgage, pledge, lien, charge, claim, encumbrance,
lease or security interest affecting the title to or any interest in property.
"LIQUIDITY FACILITIES" means the six Revolving Credit Agreements
(consisting of a separate Revolving Credit Agreement with each Liquidity
Provider with respect to each Pass Through Trust) between the Subordination
Agent, as borrower, and a Liquidity Provider, each dated as of the Issuance
Date, PROVIDED that, for purposes of any obligation of Owner, no amendment,
modification or supplement to, or substitution or replacement of, any such
Liquidity Facility shall be effective unless consented to by Owner.
"LIQUIDITY PROVIDER" means ABN AMRO Bank, N.V., acting through its
Chicago branch, or Westdeutsche Landesbank Girozentrale, acting through its New
York branch, each as a Class A Liquidity Provider, Class B Liquidity Provider
and Class C Liquidity Provider (as such terms are defined in the Intercreditor
Agreement) under the respective Liquidity Facilities, or any successor thereto.
"MAJORITY IN INTEREST OF NOTE HOLDERS" means as of a particular date of
determination, the holders of a majority in aggregate unpaid Original Amount of
all Equipment Notes outstanding as of such date (excluding any Equipment Notes
held by Owner or any of its Affiliates (unless all Equipment Notes then
outstanding shall be held by Owner or any Affiliate of Owner); PROVIDED that for
the purposes of directing any action or casting any vote or giving any consent,
waiver or instruction hereunder, any Note Holder of an Equipment Note or
Equipment Notes may allocate, in such Note Holder's sole discretion, any
fractional portion of the principal amount of such Equipment Note or Equipment
Notes in favor of or in opposition to any such action, vote, consent, waiver or
instruction.
"MAKE-WHOLE AMOUNT" means, with respect to any Equipment Note, an
amount (as determined by an independent investment banker of national standing)
equal to the excess, if any, of (a) the present value of the remaining scheduled
payments of principal and interest to maturity of such Equipment Note computed
by discounting such payments on a semiannual basis on each Payment Date
(assuming a 360-day year of twelve 30-day months) using a discount rate equal to
the Treasury Yield OVER (b) the outstanding principal amount of such Equipment
Note plus accrued interest to the date of determination. For purposes of
determining the Make-Whole Amount, "Treasury Yield" means, at the date of
determination with respect to any Equipment Note, the interest rate (expressed
as a decimal and, in the case of United States Treasury bills, converted to a
bond equivalent yield) determined to be the per annum rate equal to the
semi-annual yield to maturity for United States Treasury securities maturing on
the Average Life Date of such Equipment Note and trading in the public
securities markets either as determined by interpolation between the most recent
weekly average yield to maturity for two series of United States Treasury
securities, trading in the public securities markets, (A) one maturing as close
as possible to, but earlier than, the Average Life Date of such Equipment Note
and (B) the other maturing as close as possible to, but later than, the Average
Life Date of such Equipment Note, in each case as published in the most recent
H.15(519) or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Equipment Note is reported
on the most recent H.15(519), such weekly average yield to maturity as published
in such H.15(519). "H.15(519)" means the weekly statistical release designated
as such, or any successor publication, published by the Board of Governors of
the Federal Reserve System. The date of determination of a Make-Whole Amount
shall be the third Business Day prior to the applicable payment or redemption
date and the "most recent H.15(519)" means the H.15(519) published prior to the
close of business on the third Business Day prior to the applicable payment or
redemption date.
"MATERIAL ADVERSE CHANGE" means, with respect to any person, any event,
condition or circumstance that materially and adversely affects such person's
business or consolidated financial condition, or its ability to observe or
perform its obligations, liabilities and agreements under the Operative
Agreements.
"MINIMUM LIABILITY INSURANCE AMOUNT" is defined in Schedule 3 to the
Participation Agreement.
"MORTGAGED PROPERTY" is defined in Section 3.03 of the Trust Indenture.
"MORTGAGEE" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as mortgagee under the
Trust Indenture.
"NET WORTH" means, for any person, the excess of its total assets over
its total liabilities.
"NON-U.S. PERSON" means any Person other than a United States person,
as defined in Section 7701(a)(30) of the Code.
"NOTE HOLDER" means at any time each registered holder of one or more
Equipment Notes.
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement, dated as
of the Issuance Date, among Continental Airlines, Inc., the Subordination Agent,
the Escrow Agent, the Paying Agent and the Pass Through Trustee under each Pass
Through Trust Agreement providing for, among other things, the issuance and sale
of certain equipment notes.
"OFFICER'S CERTIFICATE" means, in respect of any party to the
Participation Agreement, a certificate signed by the Chairman, the President,
any Vice President (including those with varying ranks such as Executive,
Senior, Assistant or Staff Vice President), the Treasurer or the Secretary of
such party.
"OPERATIVE AGREEMENTS" means, collectively, the Participation
Agreement, the Trust Indenture, the initial Trust Indenture Supplement, the
Bills of Sale, and the Equipment Notes.
"OPERATIVE INDENTURES" means each of the indentures under which notes
have been issued and purchased by the Pass Through Trustees pursuant to the Note
Purchase Agreement.
"ORIGINAL AMOUNT," with respect to an Equipment Note, means the stated
original principal amount of such Equipment Note and, with respect to all
Equipment Notes, means the aggregate stated original principal amounts of all
Equipment Notes.
"OWNER PERSON" means Owner, any lessee, assignee, successor or other
user or person in possession of the Aircraft, Airframe or an Engine with or
without color of right, or any Affiliate of any of the foregoing (excluding any
Tax Indemnitee or any related Tax Indemnitee with respect thereto, or any person
using or claiming any rights with respect to the Aircraft, Airframe or an Engine
directly by or through any of the persons in this parenthetical).
"PARTICIPATION AGREEMENT" means the Participation Agreement _______
dated as of ________________ among Owner, the Pass Through Trustees, the
Subordination Agent and Mortgagee.
"PARTS" means all appliances, parts, components, instruments,
appurtenances, accessories, furnishings, seats and other equipment of whatever
nature (other than (a) Engines or engines, and (b) any Removable Part leased by
Owner from a third party or subject to a security interest granted to a third
party), that may from time to time be installed or incorporated in or attached
or appurtenant to the Airframe or any Engine.
"PASS THROUGH AGREEMENTS" means the Pass Through Trust Agreements, the
Note Purchase Agreement, the Deposit Agreements, the Escrow Agreements, the
Intercreditor Agreement, the Liquidity Facilities and the Fee Letters referred
to in Section 2.03 of each of the Liquidity Facilities, provided that no
amendment, modification or supplement to, or substitution or replacement of, any
such Fee Letter shall be effective for purposes of any obligation of Owner,
unless consented to by Owner.
"PASS THROUGH CERTIFICATES" means the pass through certificates issued
by the Pass Through Trusts (and any other pass through certificates for which
such pass through certificates may be exchanged).
"PASS THROUGH TRUST" means each of the three separate pass through
trusts created under the Pass Through Trust Agreements.
"PASS THROUGH TRUST AGREEMENT" means each of the three separate Trust
Supplements, together in each case with the Basic Pass Through Trust Agreement,
each dated as of the Issuance Date by and between the Owner and a Pass Through
Trustee.
"PASS THROUGH TRUSTEE" means Wilmington Trust Company, a Delaware
banking corporation, in its capacity as trustee under each Pass Through Trust
Agreement.
"PASS THROUGH TRUSTEE AGREEMENTS" means the Participation Agreement,
the Pass Through Trust Agreements, the Note Purchase Agreement, the Deposit
Agreements, the Escrow Agreements, and the Intercreditor Agreement.
"PAYING AGENT" means Wilmington Trust Company, as paying agent under
each of the Escrow Agreements.
"PAYMENT DATE" means each January 2 and July 2, commencing on
_________.
"PAYMENT DUE RATE" means, with respect to (i) any payment made to a
Note Holder under any Series of Equipment Notes, the lesser of (a) the Debt Rate
applicable to such Series plus 2% and (b) the maximum rate permitted by
applicable law and (ii) any other payment made under any Operative Agreement to
any other Person, 8.88% per annum (computed on the basis of a year of 360 days
comprised of twelve 30-day months).
"PERMITTED AIR CARRIER" means (i) any manufacturer of airframes or
aircraft engines, or any Affiliate of a manufacturer of airframes or aircraft
engines, (ii) any Permitted Foreign Air Carrier, (iii) any person approved in
writing by Lessor or (iv) any U.S. Air Carrier.
"PERMITTED COUNTRY" means any country listed on Schedule 4 to the
Participation Agreement.
"PERMITTED FOREIGN AIR CARRIER" means any air carrier with its
principal executive offices in any Permitted Country and which is authorized to
conduct commercial airline operations and to operate jet aircraft similar to the
Aircraft under the applicable Laws of such Permitted Country.
"PERMITTED GOVERNMENT ENTITY" means (i) the U.S. Government or (ii) any
Government Entity if the Aircraft is then registered under the laws of the
country of such Government Entity.
"PERMITTED LIEN" means (a) the rights of Mortgagee under the Operative
Agreements, or of any Permitted Lessee under any Permitted Lease; (b) Liens
attributable to Mortgagee (both in its capacity as trustee under the Trust
Indenture and in its individual capacity); (c) the rights of others under
agreements or arrangements to the extent expressly permitted by the terms of
Section 4.02(b) or 4.04 of the Trust Indenture; (d) Liens of Taxes of Owner (and
its U.S. federal tax law consolidated group), or Liens for Taxes of any Tax
Indemnitee (and its U.S. federal tax law consolidated group) for which Owner is
obligated to indemnify such Tax Indemnitee under any of the Operative
Agreements, in any such case either not yet due or being contested in good faith
by appropriate proceedings so long as such Liens and such proceedings do not
involve any material risk of the sale, forfeiture or loss of the Aircraft, the
Airframe, or any Engine or the interest of Mortgagee therein or impair the Lien
of the Trust Indenture; (e) materialmen's, mechanics', workers', repairers',
employees' or other like Liens arising in the ordinary course of business for
amounts the payment of which is either not yet delinquent for more than 60 days
or is being contested in good faith by appropriate proceedings, so long as such
Liens and such proceedings do not involve any material risk of the sale,
forfeiture or loss of the Aircraft, the Airframe, or any Engine or the interest
of Mortgagee therein or impair the Lien of the Trust Indenture; (f) Liens
arising out of any judgment or award against Owner (or any Permitted Lessee), so
long as such judgment shall, within 60 days after the entry thereof, have been
discharged or vacated, or execution thereof stayed pending appeal or shall have
been discharged, vacated or reversed within 60 days after the expiration of such
stay, and so long as during any such 60 day period there is not, or any such
judgment or award does not involve, any material risk of the sale, forfeiture or
loss of the Aircraft, the Airframe, or any Engine or the interest of Mortgagee
therein or impair the Lien of the Trust Indenture; (g) any other Lien with
respect to which Owner (or any Permitted Lessee) shall have provided a bond,
cash collateral or other security adequate in the reasonable opinion of
Mortgagee.
"PERMITTED LEASE" means a lease permitted under Section 4.02(b) of the
Trust Indenture.
"PERMITTED LESSEE" means the lessee under a Permitted Lease.
"PERSONS" or "PERSONS" means individuals, firms, partnerships, joint
ventures, trusts, trustees, Government Entities, organizations, associations,
corporations, government agencies, committees, departments, authorities and
other bodies, corporate or incorporate, whether having distinct legal status or
not, or any member of any of the same.
"PLAN" means any employee benefit plan within the meaning of Section
3(3) of ERISA, or any plan within the meaning of Section 4975(e)(1) of the Code.
"PREMIUM TERMINATION DATE" means January 2, 2018 in the case of the
Series A Equipment Notes, January 2, 2017 in the case of the Series B Equipment
Notes and July 2, 2007 in the case of the Series C Equipment Notes.
"PURCHASE AGREEMENT" means the Purchase Agreement No. ____, dated
________________, between Airframe Manufacturer and Owner (including all
exhibits thereto, together with all letter agreements entered into that by their
terms constitute part of such Purchase Agreement), to the extent included in the
Granting Clause (2) of the Trust Indenture.
"QIB" is defined in Section 2.08 of the Trust Indenture.
"REMOVABLE PART" is defined in Section 4.04(d) of the Trust Indenture.
"REPLACEMENT AIRFRAME" means any airframe substituted for the Airframe
pursuant to Article IV of the Trust Indenture.
"REPLACEMENT ENGINE" means an engine substituted for an Engine pursuant
to Article IV of the Trust Indenture.
"SEC" means the Securities and Exchange Commission of the United
States, or any Government Entity succeeding to the functions of such Securities
and Exchange Commission.
"SECTION 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code or
any successor or analogous section of the federal bankruptcy law in effect from
time to time.
"SECURED OBLIGATIONS" is defined in Section 2.06 of the Trust
Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY" means a "security" as defined in Section 2(l) of the
Securities Act.
"SENIOR HOLDER" is defined in Section 2.13(c) of the Trust Indenture.
"SERIES" means any of Series A, Series B, Series C or Series D.
"SERIES A" or "SERIES A EQUIPMENT NOTES" means Equipment Notes issued
under the Trust Indenture and designated as "Series A" thereunder, in the
Original Amount and maturities and bearing interest as specified in Schedule I
to the Trust Indenture under the heading "Series A."
"SERIES B" or "SERIES B EQUIPMENT NOTES" means Equipment Notes issued
under the Trust Indenture and designated as "Series B" thereunder, in the
Original Amount and maturities and bearing interest as specified in Schedule I
to the Trust Indenture under the heading "Series B."
"SERIES C" or "SERIES C EQUIPMENT NOTES" means Equipment Notes issued
under the Trust Indenture and designated as "Series C" thereunder, in the
Original Amount and maturities and bearing interest as specified in Schedule I
to the Trust Indenture under the heading "Series C."
"SERIES D" or "SERIES D EQUIPMENT NOTES" means Equipment Notes issued
under the Trust Indenture and designated as "Series D" thereunder, in the
Original Amount and maturities and bearing interest as specified in Schedule I
to the Trust Indenture under the heading "Series D (or, if the Series D are
issued after the Closing Date, as specified in an amendment to the Trust
Indenture at the time of issuance of the Series D).
"SIMILAR AIRCRAFT" means a Boeing Model _______ aircraft.
"SPECIAL DEFAULT" means (i) the failure by Owner to pay any amount of
principal of or interest on any Equipment Note when due or (ii) the occurrence
of any Default or Event of Default referred to in Section 5.01(v), (vi) or
(vii).
"SUBORDINATION AGENT" means Wilmington Trust Company, as subordination
agent under the Intercreditor Agreement, or any successor thereto.
"TAX INDEMNITEE" means (a) WTC and Mortgagee, (b) each separate or
additional trustee appointed pursuant to the Trust Indenture, (c) each Note
Holder and (d) the respective successors, assigns, agents and servants of the
foregoing.
"TAXES" means all license, recording, documentary, registration and
other similar fees and all taxes, levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever imposed by any Taxing Authority,
together with any penalties, additions to tax, fines or interest thereon or
additions thereto.
"TAXING AUTHORITY" means any federal, state or local government or
other taxing authority in the United States, any foreign government or any
political subdivision or taxing authority thereof, any international taxing
authority or any territory or possession of the United States or any taxing
authority thereof.
"TRANSACTION EXPENSES" means all costs and expenses incurred by
Mortgagee in connection with (a) the preparation, execution and delivery of the
Operative Agreements and the recording or filing of any documents, certificates
or instruments in accordance with any Operative Agreement, including, without
limitation, the FAA Filed Documents and the Financing Statements, (b) the
initial fee of Mortgagee under the Trust Indenture and (c) the reasonable fees
and disbursements of counsel for each Mortgagee and special counsel in Oklahoma
City, Oklahoma, in each case, in connection with the Closing.
"TRANSACTIONS" means the transactions contemplated by the Participation
Agreement.
"TRANSFER" means the transfer, sale, assignment or other conveyance of
all or any interest in any property, right or interest.
"TRANSFEREE" means a person to which any Note Holder purports or
intends to Transfer any or all of its right, title or interest in the Equipment
Note, as described in Section 9 of the Participation Agreement.
"TRUST INDENTURE" means the Trust Indenture and Mortgage __________,
dated as of the date of the Participation Agreement between Owner and Mortgagee.
"TRUST INDENTURE SUPPLEMENT" means a Trust Indenture and Mortgage
Supplement, substantially in the form of Exhibit A to the Trust Indenture, with
appropriate modifications to reflect the purpose for which it is being used.
"TRUST SUPPLEMENT" means an agreement supplemental to the Basic Pass
Through Trust Agreement pursuant to which (i) a separate trust is created for
the benefit of the holders of the Pass Through Certificates of a class, (ii) the
issuance of the Pass Through Certificates of such Class representing fractional
undivided interests in such trust is authorized and (iii) the terms of the Pass
Through Certificates of such class are established.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
"UNITED STATES" or "U.S." means the United States of America; provided
that for geographic purposes, "United States" means, in aggregate, the 50 states
and the District of Columbia of the United States of America.
"U.S. AIR CARRIER" means any United States air carrier that is a
Citizen of the United States holding an air carrier operating certificate issued
by the Secretary of Transportation pursuant to chapter 447 of title 49 of the
United States Code for aircraft capable of carrying 10 or more individuals or
6000 pounds or more of cargo, and as to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the FAA Regulations, or
which may operate as an air carrier by certification or otherwise under any
successor or substitute provisions therefor or in the absence thereof.
"U.S. GOVERNMENT" means the federal government of the United States, or
any instrumentality or agency thereof the obligations of which are guaranteed by
the full faith and credit of the federal government of the United States.
"U.S. PERSON" means any Person described in Section 7701 (a)(30) of the
Code.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, with respect to any
specified Debt, at the time of the determination thereof the number of years
obtained by dividing the then Remaining Dollar-years of such Debt by the then
outstanding principal amount of such Debt. The term "Remaining Dollar-years"
shall mean the amount obtained by (1) multiplying the amount of each
then-remaining principal payment on such Debt by the number of years (calculated
at the nearest one-twelfth) that will elapse between the date of determination
of the Weighted Average Life to Maturity of such Debt and the date of that
required payment and (2) totaling all the products obtained in clause (1) above.
"WET LEASE" means any arrangement whereby Owner or a Permitted Lessee
agrees to furnish the Aircraft, Airframe or any Engine to a third party pursuant
to which the Aircraft, Airframe or Engine shall at all times be in the
operational control of Owner or a Permitted Lessee, provided that Owner's
obligations under the Trust Indenture shall continue in full force and effect
notwithstanding any such arrangement.
"WTC" means Wilmington Trust Company, a Delaware banking corporation,
not in its capacity as Mortgagee under the Trust Indenture, but in its
individual capacity.
------------------------------
ANNEX B - INSURANCE
TRUST INDENTURE ____
------------------------------
ANNEX B
[OMITTED AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
EXHIBIT A
TO
TRUST INDENTURE AND MORTGAGE
TRUST INDENTURE AND MORTGAGE SUPPLEMENT
This TRUST INDENTURE AND MORTGAGE SUPPLEMENT NO. 1, dated
______________ ___, ____ (herein called this "Trust Indenture Supplement") of
CONTINENTAL AIRLINES, INC., as Owner (the "Owner").
W I T N E S S E T H:
WHEREAS, the Trust Indenture and Mortgage, dated as of ______________
__, 199_ (as amended and supplemented to the date hereof, the "Trust Indenture")
between the Owner and Wilmington Trust Company, as Mortgagee (the "Mortgagee"),
provides for the execution and delivery of a supplement thereto substantially in
the form hereof, which shall particularly describe the Aircraft, and shall
specifically mortgage such Aircraft to the Mortgagee; and
WHEREAS, each of the Trust Agreement and Trust Indenture relates to the
Airframe and Engines described below, and a counterpart of the Trust Indenture
is attached hereto and made a part hereof and this Trust Indenture Supplement,
together with such counterpart of the Trust Indenture, is being filed for
recordation on the date hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement WITNESSETH that the
Owner hereby confirms that the Lien of the Trust Indenture on the Collateral
covers all of Owner's right, title and interest in and to the following
described property:
AIRFRAME
One airframe identified as follows:
FAA REGISTRATION MANUFACTURER'S
MANUFACTURER MODEL NUMBER SERIAL NUMBER
- ------------ ----- ---------------- --------------
The Boeing Company
together with all of the Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereinafter acquired and which are from
time to time incorporated or installed in or attached to said airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
MANUFACTURER MANUFACTURER'S MODEL SERIAL NUMBER
- ------------ -------------------- -------------
together with all of Owner's right, title and interest in and to all Parts of
whatever nature, whether now owned or hereafter acquired and which are from time
to time incorporated or installed in or attached to either of such engines.
Together with all of Owner's right, title and interest in and to (a)
all Parts of whatever nature, which from time to time are included within the
definition of "Airframe" or "Engine", whether now owned or hereafter acquired,
including all substitutions, renewals and replacements of and additions,
improvements, accessions and accumulations to the Airframe and Engines (other
than additions, improvements, accessions and accumulations which constitute
appliances, parts, instruments, appurtenances, accessories, furnishings or other
equipment excluded from the definition of Parts) and (b) all Aircraft Documents.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, its successors and assigns, in trust for the equal and proportionate
benefit and security of the Note Holders and the Indenture Indemnitees, except
as provided in Section 2.13 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Equipment Note over any other by
reason of priority of time of issue, sale, negotiation, date of maturity thereof
or otherwise for any reason whatsoever, and for the uses and purposes and
subject to the terms and provisions set forth in the Trust Indenture.
This Trust Indenture Supplement shall be construed as supplemental to
the Trust Indenture and shall form a part thereof. The Trust Indenture is each
hereby incorporated by reference herein and is hereby ratified, approved and
confirmed.
AND, FURTHER, the Owner hereby acknowledges that the Aircraft referred
to in this Trust Indenture Supplement has been delivered to the Owner and is
included in the property of the Owner subject to the pledge and mortgage thereof
under the Trust Indenture.
* * *
IN WITNESS WHEREOF, the Owner has caused this Trust Indenture
Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
CONTINENTAL AIRLINES, INC.
By:_____________________________
Name:
Title:
SCHEDULE I
ORIGINAL AMOUNT INTEREST RATE
--------------- -------------
Series A:
Series B:
Series C:
[Series D:]
Maximum Aggregate
Original Amount:
Trust Indenture and Mortgage
Equipment Note Amortization
PERCENTAGE OF ORIGINAL
PAYMENT DATE AMOUNT TO BE PAID
------------ -----------------------
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch the registered owner hereof, Cede & Co., has an interest
herein.
CONTINENTAL AIRLINES PASS THROUGH TRUST 1997-4A-O
6.90% Continental Airlines Pass Through Certificate, Series 1997-4A-O
Issuance Date: October 23, 1997
Final Expected Distribution Date: January, 2018
Evidencing A Fractional Undivided Interest In The
Continental Airlines Pass Through Trust 1997-4A-O, The
Property Of Which Includes Certain Equipment Notes Each
Secured By An Aircraft Leased To Or Owned By Continental
Airlines, Inc.
Certificate
No. 1 $200,000,000 Fractional Undivided Interest representing
0.0001976% of the Trust per $1,000 face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the registered
owner of a $200,000,000 (Two hundred million dollars) Fractional Undivided
Interest in the Continental Airlines Pass Through Trust 1997-4A-O (the "TRUST")
created by Wilmington Trust Company, as trustee (the "TRUSTEE"), pursuant to a
Pass Through Trust Agreement, dated as of September 25, 1997 (the "BASIC
AGREEMENT"), between the Trustee and Continental Airlines, Inc., a Delaware
corporation (the "Company"), as supplemented by Trust Supplement No. 1997-4A-O
thereto, dated as of October 23, 1997 (the "Trust Supplement" and, together with
the Basic Agreement, the "AGREEMENT"), between the Trustee and the Company, a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement. This Certificate is one of the
duly authorized Certificates designated as "6.90% Continental Airlines Pass
Through Certificates, Series 1997-4A-O" (herein called the "CERTIFICATES"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the Holder of
this Certificate assents to and agrees to be bound by the provisions of the
Agreement and the Intercreditor Agreement. The property of the Trust includes
certain Equipment Notes and all rights of the Trust to receive payments under
the Intercreditor Agreement and any Liquidity Facilities (the "TRUST PROPERTY").
Each issue of the Equipment Notes is secured by, among other things, a security
interest in an Aircraft leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January and July (a "Regular Distribution Date") commencing
January, 1998, to the Person in whose name this Certificate is registered at the
close of business on the 15th day preceding the Regular Distribution Date, an
amount in respect of the Scheduled Payments on the Equipment Notes due on such
Regular Distribution Date, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust evidenced
by this Certificate and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, in the event that Special Payments on the Equipment
Notes are received by the Trustee, from funds then available to the Trustee,
there shall be distributed on the applicable Special Distribution Date, to the
Person in whose name this Certificate is registered at the close of business on
the 15th day preceding the Special Distribution Date, an amount in respect of
such Special Payments on the Equipment Notes, the receipt of which has been
confirmed by the Trustee, equal to the product of the percentage interest in the
Trust evidenced by this Certificate and an amount equal to the sum of such
Special Payments so received. If a Regular Distribution Date or Special
Distribution Date is not a Business Day, distribution shall be made on the
immediately following Business Day with the same force and effect as if made on
such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS THROUGH
TRUST 1997-4A-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:_________________________________
Name:
Title:
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
Dated: October 23, 1997 By:_____________________________________
Name:
Title:
CONTINENTAL AIRLINES 1997-4A ESCROW RECEIPT
No. 1
This Escrow Receipt evidences a fractional undivided interest in
amounts ("ACCOUNT AMOUNTS") from time to time deposited into a certain paying
agent account (the "PAYING AGENT ACCOUNT") described in the Escrow and Paying
Agent Agreement (Class A) dated as of October 23, 1997 (as amended, modified or
supplemented from time to time, the "ESCROW AND PAYING AGENT AGREEMENT") among
First Security Bank, National Association, as Escrow Agent (in such capacity,
together with its successors in such capacity, the "ESCROW AGENT"), Morgan
Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Chase
Securities Inc. and Salomon Brothers Inc, as Underwriters, Wilmington Trust
Company, as Pass Through Trustee (in such capacity, together with its successors
in such capacity, the "PASS THROUGH TRUSTEE") and Wilmington Trust Company, as
paying agent (in such capacity, together with its successors in such capacity,
the "PAYING AGENT"). Capitalized terms not defined herein shall have the
meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the fractional undivided interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Continental, the Pass Through Trustee, the
Paying Agent or the Escrow Agent, except as expressly provided herein or in the
Pass Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to constitute
the Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate to
which this Escrow Receipt is attached as the owner hereof for all purposes, and
the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt to
be duly executed.
Dated: October 23, 1997
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By______________________________________
Name:
Title:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch the registered owner hereof, Cede & Co., has an interest
herein.
CONTINENTAL AIRLINES PASS THROUGH TRUST 1997-4A-O
6.90% Continental Airlines Pass Through Certificate, Series 1997-4A-O
Issuance Date: October 23, 1997
Final Expected Distribution Date: January, 2018
Evidencing A Fractional Undivided Interest In The
Continental Airlines Pass Through Trust 1997-4A-O, The
Property Of Which Includes Certain Equipment Notes Each
Secured By An Aircraft Leased To Or Owned By Continental
Airlines, Inc.
Certificate
No. 2 $200,000,000 Fractional Undivided Interest representing
0.0001976% of the Trust per $1,000 face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the registered
owner of a $200,000,000 (Two hundred million dollars) Fractional Undivided
Interest in the Continental Airlines Pass Through Trust 1997-4A-O (the "TRUST")
created by Wilmington Trust Company, as trustee (the "TRUSTEE"), pursuant to a
Pass Through Trust Agreement, dated as of September 25, 1997 (the "BASIC
AGREEMENT"), between the Trustee and Continental Airlines, Inc., a Delaware
corporation (the "Company"), as supplemented by Trust Supplement No. 1997-4A-O
thereto, dated as of October 23, 1997 (the "Trust Supplement" and, together with
the Basic Agreement, the "AGREEMENT"), between the Trustee and the Company, a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement. This Certificate is one of the
duly authorized Certificates designated as "6.90% Continental Airlines Pass
Through Certificates, Series 1997-4A-O" (herein called the "CERTIFICATES"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the Holder of
this Certificate assents to and agrees to be bound by the provisions of the
Agreement and the Intercreditor Agreement. The property of the Trust includes
certain Equipment Notes and all rights of the Trust to receive payments under
the Intercreditor Agreement and any Liquidity Facilities (the "TRUST PROPERTY").
Each issue of the Equipment Notes is secured by, among other things, a security
interest in an Aircraft leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January and July (a "Regular Distribution Date") commencing
January, 1998, to the Person in whose name this Certificate is registered at the
close of business on the 15th day preceding the Regular Distribution Date, an
amount in respect of the Scheduled Payments on the Equipment Notes due on such
Regular Distribution Date, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust evidenced
by this Certificate and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, in the event that Special Payments on the Equipment
Notes are received by the Trustee, from funds then available to the Trustee,
there shall be distributed on the applicable Special Distribution Date, to the
Person in whose name this Certificate is registered at the close of business on
the 15th day preceding the Special Distribution Date, an amount in respect of
such Special Payments on the Equipment Notes, the receipt of which has been
confirmed by the Trustee, equal to the product of the percentage interest in the
Trust evidenced by this Certificate and an amount equal to the sum of such
Special Payments so received. If a Regular Distribution Date or Special
Distribution Date is not a Business Day, distribution shall be made on the
immediately following Business Day with the same force and effect as if made on
such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS THROUGH TRUST
1997-4A-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:_________________________________
Name:
Title:
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
Dated: October 23, 1997 By:_____________________________________
Name:
Title:
CONTINENTAL AIRLINES 1997-4A ESCROW RECEIPT
No. 2
This Escrow Receipt evidences a fractional undivided interest in
amounts ("ACCOUNT AMOUNTS") from time to time deposited into a certain paying
agent account (the "PAYING AGENT ACCOUNT") described in the Escrow and Paying
Agent Agreement (Class A) dated as of October 23, 1997 (as amended, modified or
supplemented from time to time, the "ESCROW AND PAYING AGENT AGREEMENT") among
First Security Bank, National Association, as Escrow Agent (in such capacity,
together with its successors in such capacity, the "ESCROW AGENT"), Morgan
Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Chase
Securities Inc. and Salomon Brothers Inc, as Underwriters, Wilmington Trust
Company, as Pass Through Trustee (in such capacity, together with its successors
in such capacity, the "PASS THROUGH TRUSTEE") and Wilmington Trust Company, as
paying agent (in such capacity, together with its successors in such capacity,
the "PAYING AGENT"). Capitalized terms not defined herein shall have the
meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the fractional undivided interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Continental, the Pass Through Trustee, the
Paying Agent or the Escrow Agent, except as expressly provided herein or in the
Pass Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to constitute
the Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate to
which this Escrow Receipt is attached as the owner hereof for all purposes, and
the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt to
be duly executed.
Dated: October 23, 1997
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch the registered owner hereof, Cede & Co., has an interest
herein.
CONTINENTAL AIRLINES PASS THROUGH TRUST 1997-4A-O
6.90% Continental Airlines Pass Through Certificate, Series 1997-4A-O
Issuance Date: October 23, 1997
Final Expected Distribution Date: January, 2018
Evidencing A Fractional Undivided Interest In The
Continental Airlines Pass Through Trust 1997-4A-O, The
Property Of Which Includes Certain Equipment Notes Each
Secured By An Aircraft Leased To Or Owned By Continental
Airlines, Inc.
Certificate
No. 3 $105,951,000 Fractional Undivided Interest representing
0.0001976% of the Trust per $1,000 face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the registered
owner of a $105,951,000 (One hundred five million, nine hundred fifty-one
thousand dollars) Fractional Undivided Interest in the Continental Airlines Pass
Through Trust 1997-4A-O (the "TRUST") created by Wilmington Trust Company, as
trustee (the "TRUSTEE"), pursuant to a Pass Through Trust Agreement, dated as of
September 25, 1997 (the "BASIC AGREEMENT"), between the Trustee and Continental
Airlines, Inc., a Delaware corporation (the "Company"), as supplemented by Trust
Supplement No. 1997-4A-O thereto, dated as of October 23, 1997 (the "Trust
Supplement" and, together with the Basic Agreement, the "AGREEMENT"), between
the Trustee and the Company, a summary of certain of the pertinent provisions of
which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is one of the duly authorized Certificates
designated as "6.90% Continental Airlines Pass Through Certificates, Series
1997-4A-O" (herein called the "CERTIFICATES"). This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement. By
virtue of its acceptance hereof, the Holder of this Certificate assents to and
agrees to be bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment Notes and all
rights of the Trust to receive payments under the Intercreditor Agreement and
any Liquidity Facilities (the "TRUST PROPERTY"). Each issue of the Equipment
Notes is secured by, among other things, a security interest in an Aircraft
leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January and July (a "Regular Distribution Date") commencing
January, 1998, to the Person in whose name this Certificate is registered at the
close of business on the 15th day preceding the Regular Distribution Date, an
amount in respect of the Scheduled Payments on the Equipment Notes due on such
Regular Distribution Date, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust evidenced
by this Certificate and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, in the event that Special Payments on the Equipment
Notes are received by the Trustee, from funds then available to the Trustee,
there shall be distributed on the applicable Special Distribution Date, to the
Person in whose name this Certificate is registered at the close of business on
the 15th day preceding the Special Distribution Date, an amount in respect of
such Special Payments on the Equipment Notes, the receipt of which has been
confirmed by the Trustee, equal to the product of the percentage interest in the
Trust evidenced by this Certificate and an amount equal to the sum of such
Special Payments so received. If a Regular Distribution Date or Special
Distribution Date is not a Business Day, distribution shall be made on the
immediately following Business Day with the same force and effect as if made on
such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS THROUGH TRUST
1997-4A-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:_________________________________
Name:
Title:
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
Dated: October 23, 1997 By:_____________________________________
Name:
Title:
CONTINENTAL AIRLINES 1997-4A ESCROW RECEIPT
No. 3
This Escrow Receipt evidences a fractional undivided interest in
amounts ("ACCOUNT AMOUNTS") from time to time deposited into a certain paying
agent account (the "PAYING AGENT ACCOUNT") described in the Escrow and Paying
Agent Agreement (Class A) dated as of October 23, 1997 (as amended, modified or
supplemented from time to time, the "ESCROW AND PAYING AGENT AGREEMENT") among
First Security Bank, National Association, as Escrow Agent (in such capacity,
together with its successors in such capacity, the "ESCROW AGENT"), Morgan
Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Chase
Securities Inc. and Salomon Brothers Inc, as Underwriters, Wilmington Trust
Company, as Pass Through Trustee (in such capacity, together with its successors
in such capacity, the "PASS THROUGH TRUSTEE") and Wilmington Trust Company, as
paying agent (in such capacity, together with its successors in such capacity,
the "PAYING AGENT"). Capitalized terms not defined herein shall have the
meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the fractional undivided interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Continental, the Pass Through Trustee, the
Paying Agent or the Escrow Agent, except as expressly provided herein or in the
Pass Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to constitute
the Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate to
which this Escrow Receipt is attached as the owner hereof for all purposes, and
the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt to
be duly executed.
Dated: October 23, 1997
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch the registered owner hereof, Cede & Co., has an interest
herein.
CONTINENTAL AIRLINES PASS THROUGH TRUST 1997-4B-O
6.90% Continental Airlines Pass Through Certificate, Series 1997-4B-O
Issuance Date: October 23, 1997
Final Expected Distribution Date: January, 2017
Evidencing A Fractional Undivided Interest In The
Continental Airlines Pass Through Trust 1997-4B-O, The
Property Of Which Includes Certain Equipment Notes Each
Secured By An Aircraft Leased To Or Owned By Continental
Airlines, Inc.
Certificate
No. 1 $134,937,000 Fractional Undivided Interest representing
0.0007410% of the Trust per $1,000 face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the registered
owner of a Fractional Undivided Interest in the amount of $134,937,000 (One
hundred thirty-four million, nine hundred thirty-seven thousand dollars) in the
Continental Airlines Pass Through Trust 1997-4B-O (the "TRUST") created by
Wilmington Trust Company, as trustee (the "TRUSTEE"), pursuant to a Pass Through
Trust Agreement, dated as of September 25, 1997 (the "BASIC AGREEMENT"), between
the Trustee and Continental Airlines, Inc., a Delaware corporation (the
"Company"), as supplemented by Trust Supplement No. 1997-4B-O thereto, dated as
of October 23, 1997 (the "Trust Supplement" and, together with the Basic
Agreement, the "AGREEMENT"), between the Trustee and the Company, a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is one of the duly
authorized Certificates designated as "6.90% Continental Airlines Pass Through
Certificates, Series 1997-4B-O" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the Holder of
this Certificate assents to and agrees to be bound by the provisions of the
Agreement and the Intercreditor Agreement. The property of the Trust includes
certain Equipment Notes and all rights of the Trust to receive payments under
the Intercreditor Agreement and any Liquidity Facilities (the "TRUST PROPERTY").
Each issue of the Equipment Notes is secured by, among other things, a security
interest in an Aircraft leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January and July (a "Regular Distribution Date") commencing
January, 1998, to the Person in whose name this Certificate is registered at the
close of business on the 15th day preceding the Regular Distribution Date, an
amount in respect of the Scheduled Payments on the Equipment Notes due on such
Regular Distribution Date, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust evidenced
by this Certificate and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, in the event that Special Payments on the Equipment
Notes are received by the Trustee, from funds then available to the Trustee,
there shall be distributed on the applicable Special Distribution Date, to the
Person in whose name this Certificate is registered at the close of business on
the 15th day preceding the Special Distribution Date, an amount in respect of
such Special Payments on the Equipment Notes, the receipt of which has been
confirmed by the Trustee, equal to the product of the percentage interest in the
Trust evidenced by this Certificate and an amount equal to the sum of such
Special Payments so received. If a Regular Distribution Date or Special
Distribution Date is not a Business Day, distribution shall be made on the
immediately following Business Day with the same force and effect as if made on
such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS THROUGH TRUST
1997-4B-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
Dated: October 23, 1997 By:_____________________________________
Name:
Title:
CONTINENTAL AIRLINES 1997-4B ESCROW RECEIPT
No. 1
This Escrow Receipt evidences a fractional undivided interest in
amounts ("ACCOUNT AMOUNTS") from time to time deposited into a certain paying
agent account (the "PAYING AGENT ACCOUNT") described in the Escrow and Paying
Agent Agreement (Class A) dated as of October 23, 1997 (as amended, modified or
supplemented from time to time, the "ESCROW AND PAYING AGENT AGREEMENT") among
First Security Bank, National Association, as Escrow Agent (in such capacity,
together with its successors in such capacity, the "ESCROW AGENT"), Morgan
Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Chase
Securities Inc. and Salomon Brothers Inc, as Underwriters, Wilmington Trust
Company, as Pass Through Trustee (in such capacity, together with its successors
in such capacity, the "PASS THROUGH TRUSTEE") and Wilmington Trust Company, as
paying agent (in such capacity, together with its successors in such capacity,
the "PAYING AGENT"). Capitalized terms not defined herein shall have the
meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the fractional undivided interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Continental, the Pass Through Trustee, the
Paying Agent or the Escrow Agent, except as expressly provided herein or in the
Pass Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to constitute
the Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate to
which this Escrow Receipt is attached as the owner hereof for all purposes, and
the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt to
be duly executed.
Dated: October 23, 1997
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch the registered owner hereof, Cede & Co., has an interest
herein.
CONTINENTAL AIRLINES PASS THROUGH TRUST 1997-4C-O
6.80% Continental Airlines Pass Through Certificate, Series 1997-4C-O
Issuance Date: October 23, 1997
Final Expected Distribution Date: July, 2007
Evidencing A Fractional Undivided Interest In The
Continental Airlines Pass Through Trust 1997-4C-O, The
Property Of Which Includes Certain Equipment Notes Each
Secured By An Aircraft Leased To Or Owned By Continental
Airlines, Inc.
Certificate
No. 1 $111,112,000 Fractional Undivided Interest representing
0.0008999% of the Trust per $1,000 face amount
THIS CERTIFIES THAT Cede & Co., for value received, is the registered
owner of a $111,112,000 (One hundred eleven million, one hundred twelve thousand
dollars) Fractional Undivided Interest in the Continental Airlines Pass Through
Trust 1997-4C-O (the "TRUST") created by Wilmington Trust Company, as trustee
(the "TRUSTEE"), pursuant to a Pass Through Trust Agreement, dated as of
September 25, 1997 (the "BASIC AGREEMENT"), between the Trustee and Continental
Airlines, Inc., a Delaware corporation (the "Company"), as supplemented by Trust
Supplement No. 1997-4C-O thereto, dated as of October 23, 1997 (the "Trust
Supplement" and, together with the Basic Agreement, the "AGREEMENT"), between
the Trustee and the Company, a summary of certain of the pertinent provisions of
which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is one of the duly authorized Certificates
designated as "6.80% Continental Airlines Pass Through Certificates, Series
1997-4C-O" (herein called the "CERTIFICATES"). This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement. By
virtue of its acceptance hereof, the Holder of this Certificate assents to and
agrees to be bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment Notes and all
rights of the Trust to receive payments under the Intercreditor Agreement and
any Liquidity Facilities (the "TRUST PROPERTY"). Each issue of the Equipment
Notes is secured by, among other things, a security interest in an Aircraft
leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January and July (a "Regular Distribution Date") commencing
January, 1998, to the Person in whose name this Certificate is registered at the
close of business on the 15th day preceding the Regular Distribution Date, an
amount in respect of the Scheduled Payments on the Equipment Notes due on such
Regular Distribution Date, the receipt of which has been confirmed by the
Trustee, equal to the product of the percentage interest in the Trust evidenced
by this Certificate and an amount equal to the sum of such Scheduled Payments.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, in the event that Special Payments on the Equipment
Notes are received by the Trustee, from funds then available to the Trustee,
there shall be distributed on the applicable Special Distribution Date, to the
Person in whose name this Certificate is registered at the close of business on
the 15th day preceding the Special Distribution Date, an amount in respect of
such Special Payments on the Equipment Notes, the receipt of which has been
confirmed by the Trustee, equal to the product of the percentage interest in the
Trust evidenced by this Certificate and an amount equal to the sum of such
Special Payments so received. If a Regular Distribution Date or Special
Distribution Date is not a Business Day, distribution shall be made on the
immediately following Business Day with the same force and effect as if made on
such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS THROUGH TRUST
1997-4C-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:_________________________________
Name:
Title:
THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
Dated: October 23, 1997 By:_____________________________________
Name:
Title:
CONTINENTAL AIRLINES 1997-4C ESCROW RECEIPT
No. 1
This Escrow Receipt evidences a fractional undivided interest in
amounts ("ACCOUNT AMOUNTS") from time to time deposited into a certain paying
agent account (the "PAYING AGENT ACCOUNT") described in the Escrow and Paying
Agent Agreement (Class A) dated as of October 23, 1997 (as amended, modified or
supplemented from time to time, the "ESCROW AND PAYING AGENT AGREEMENT") among
First Security Bank, National Association, as Escrow Agent (in such capacity,
together with its successors in such capacity, the "ESCROW AGENT"), Morgan
Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, Chase
Securities Inc. and Salomon Brothers Inc, as Underwriters, Wilmington Trust
Company, as Pass Through Trustee (in such capacity, together with its successors
in such capacity, the "PASS THROUGH TRUSTEE") and Wilmington Trust Company, as
paying agent (in such capacity, together with its successors in such capacity,
the "PAYING AGENT"). Capitalized terms not defined herein shall have the
meanings assigned to them in the Escrow and Paying Agent Agreement.
This Escrow Receipt is issued under and is subject to the terms,
provisions and conditions of the Escrow and Paying Agent Agreement. By virtue of
its acceptance hereof the holder of this Escrow Receipt assents and agrees to be
bound by the provisions of the Escrow and Paying Agent Agreement and this Escrow
Receipt.
This Escrow Receipt represents a fractional undivided interest in
amounts deposited from time to time in the Paying Agent Account, and grants or
represents no rights, benefits or interests of any kind in respect of any assets
or property other than such amounts. This Escrow Receipt evidences the same
percentage interest in the Account Amounts as the fractional undivided interest
in the Pass Through Trust evidenced by the Certificate to which this Escrow
Receipt is affixed.
All payments and distributions made to Receiptholders in respect of
the Escrow Receipt shall be made only from Account Amounts deposited in the
Paying Agent Account. The holder of this Escrow Receipt, by its acceptance of
this Escrow Receipt, agrees that it will look solely to the Account Amounts for
any payment or distribution due to it pursuant to this Escrow Receipt and that
it will not have any recourse to Continental, the Pass Through Trustee, the
Paying Agent or the Escrow Agent, except as expressly provided herein or in the
Pass Through Trust Agreement. No Receiptholder of this Escrow Receipt shall have
any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account, nor shall anything set forth herein, or
contained in the terms of this Escrow Receipt, be construed so as to constitute
the Receiptholders from time to time as partners or members of an association.
This Escrow Receipt may not be assigned or transferred except in
connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed. After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.
The Paying Agent may treat the person in whose name the Certificate to
which this Escrow Receipt is attached as the owner hereof for all purposes, and
the Paying Agent shall not be affected by any notice to the contrary.
THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow Receipt to
be duly executed.
Dated: October 23, 1997
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By _____________________________________
Name:
Title:
AIRCRAFT INFORMATION SERVICES, INC.
23232 Peralta Drive, Suite 115
Laguna Hills, CA 92653
October 10, 1997
CONTINENTAL AIRLINES, INC.
2929 Allen Parkway, Suite 2010
Houston, TX 77019
Re: PRELIMINARY PROSPECTUS SUPPLEMENT, DATED OCTOBER 10, 1997,
TO THE PROSPECTUS DATED SEPTEMBER 4, 1997, INCLUDED IN REGISTRATION
STATEMENT NO. 333-34545 OF CONTINENTAL AIRLINES, INC.
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Ladies and Gentlemen:
We consent to the use of our report and to the reference to our name in
the text under the headings "Prospectus Supplement Summary--Equipment Notes and
the Aircraft," "Risk Factors--Risk Factors Relating to the Certificates and the
Offering--Appraisals and Realizable Value of Aircraft," "Description of the
Aircraft and the Appraisals--The Appraisals" and "Experts" in the
above-captioned Preliminary Prospectus Supplement and to the summary contained
in the text under such headings of the report prepared by us with respect to the
Aircraft referred to therein. We also consent to such use, reference and summary
in the Final Prospectus Supplement relating to the offering described in such
Preliminary Prospectus Supplement, to the extent such use, references and
summary are unchanged.
Sincerely,
AIRCRAFT INFORMATION SERVICES, INC.
/s/ FRED BEARDEN
------------------------------------
Name: Fred Bearden
Title: President
BK ASSOCIATES, INC.
1295 Northern Boulevard
Manhasset, New York 11030
October 10, 1997
CONTINENTAL AIRLINES, INC.
2929 Allen Parkway, Suite 2010
Houston, TX 77019
Re: PRELIMINARY PROSPECTUS SUPPLEMENT, DATED OCTOBER 10, 1997,
TO THE PROSPECTUS DATED SEPTEMBER 4, 1997, INCLUDED IN REGISTRATION
STATEMENT NO. 333-34545 OF CONTINENTAL AIRLINES, INC.
-------------------------------------------------------------------
Ladies and Gentlemen:
We consent to the use of our report and to the reference to our name in
the text under the headings "Prospectus Supplement Summary--Equipment Notes and
the Aircraft," "Risk Factors--Risk Factors Relating to the Certificates and the
Offering--Appraisals and Realizable Value of Aircraft," "Description of the
Aircraft and the Appraisals--The Appraisals" and "Experts" in the
above-captioned Preliminary Prospectus Supplement and to the summary contained
in the text under such headings of the report prepared by us with respect to the
Aircraft referred to therein. We also consent to such use, reference and summary
in the Final Prospectus Supplement relating to the offering described in such
Preliminary Prospectus Supplement, to the extent such use, references and
summary are unchanged.
Sincerely,
BK ASSOCIATES, INC.
/s/ R.L. BRITTON
------------------------------------
Name: R.L. Britton
Title: Vice President
ISTAT Certified Appraiser
MORTEN BEYER AND AGNEW, INC.
8180 Greensboro Drive, Suite 1000
McLean, VA 22102
October 10, 1997
CONTINENTAL AIRLINES, INC.
2929 Allen Parkway, Suite 2010
Houston, TX 77019
Re: PRELIMINARY PROSPECTUS SUPPLEMENT, DATED OCTOBER 10, 1997,
TO THE PROSPECTUS DATED SEPTEMBER 4, 1997, INCLUDED IN REGISTRATION
STATEMENT NO. 333-34545 OF CONTINENTAL AIRLINES, INC.
-------------------------------------------------------------------
Ladies and Gentlemen:
We consent to the use of our report and to the reference to our name in
the text under the headings "Prospectus Supplement Summary--Equipment Notes and
the Aircraft," "Risk Factors--Risk Factors Relating to the Certificates and the
Offering--Appraisals and Realizable Value of Aircraft," "Description of the
Aircraft and the Appraisals--The Appraisals" and "Experts" in the
above-captioned Preliminary Prospectus Supplement and to the summary contained
in the text under such headings of the report prepared by us with respect to the
Aircraft referred to therein. We also consent to such use, reference and summary
in the Final Prospectus Supplement relating to the offering described in such
Preliminary Prospectus Supplement, to the extent such use, references and
summary are unchanged.
Sincerely,
MORTEN BEYER AND AGNEW, INC.
/s/ CLINTON B. MCCUTCHEON
------------------------------------
Name: Clinton B. McCutcheon
Title: Executive Vice President
