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):
September
22, 2005
CONTINENTAL
AIRLINES, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-10323
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74-2099724
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1600
Smith Street, Dept. HQSEO, Houston, Texas
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77002
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(Address
of principal executive offices)
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(Zip
Code)
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(713)
324-2950
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(Registrant’s
telephone number, including area
code)
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Check
the
appropriate box below if the Form 8−K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a−12 under the Exchange Act (17 CFR
240.14a−12)
o
Pre−commencement
communications pursuant to Rule 14d−2(b) under the Exchange Act (17 CFR
240.14d−2(b))
o
Pre−commencement
communications pursuant to Rule 13e−4(c) under the Exchange Act (17 CFR
240.13e−4(c))
Item
1.01 Entry
into a Material Definitive Agreement.
On
September 22, 2005, Continental Airlines, Inc. (the “Company”) entered into
Trust Supplement No. 2005-ERJ1, with Wilmington Trust Company, as Pass Through
Trustee, providing for the issuance of $311,010,000 aggregate principal amount
of the Company’s Pass Through Certificates, Series 2005-ERJ1 (the
“Certificates”). The Certificates and other securities of the Company were
registered for offer and sale on a delayed or continuous basis pursuant to
Rule
415 under the Securities Act of 1933, as amended (the “Securities Act”), under
the Company’s registration statement on Form S-3 (File No. 333-67886) (the
“Registration Statement”), which was declared effective by the Commission on
August 23, 2001. For a more detailed description of the agreements and
instruments entered into by the Company in connection with such transactions,
see the disclosure under the captions “Prospectus Supplement Summary”,
“Description of the Certificates”, “Description of the Deposit Agreement”,
“Description of the Escrow Agreement”, “Description of the Liquidity Facility”,
“Description of the Intercreditor Agreement”, “Description of the Equipment
Notes” and “Underwriting” contained in the Company’s final Prospectus
Supplement, dated September 14, 2005, to the Prospectus, dated August 23, 2001,
filed with the Securities and Exchange Commission on September 16, 2005 pursuant
to Rule 424(b) under the Securities Act, which disclosure is hereby incorporated
herein by reference.
This
Current Report is also being filed for the purpose of filing as exhibits to
the
Registration Statement the documents listed in Item 9.01 below, which are hereby
incorporated by reference in the Registration Statement.
Item
9.01. Financial Statements and Exhibits.
(d)Exhibits.
The Exhibit Index attached to this Current Report is hereby incorporated by
reference. The documents listed on the Exhibit Index are filed as Exhibits
with
reference to the Registration Statement. The Registration Statement and the
final Prospectus Supplement, dated September 14, 2005, to the Prospectus, dated
August 23, 2001, relate to the offering of the
Certificates.
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.
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CONTINENTAL
AIRLINES, INC.
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September
28, 2005
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By:
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/s/ Jennifer L. Vogel |
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Jennifer
L. Vogel
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Senior
Vice President, General Counsel
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and
Secretary
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EXHIBIT
INDEX
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1.1
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Underwriting
Agreement, dated September 14, 2005, among Citigroup Global Markets
Inc.,
as Underwriter, Citibank, N.A., as Depositary, Embraer-Empresa Brasileira
de Aeroná;utica S.A. and Continental Airlines,
Inc.
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4.1
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Trust
Supplement No. 2005-ERJ1, dated as of September 22, 2005, between
Wilmington Trust Company, as Trustee, and Continental Airlines, Inc.
to
Pass Through Trust Agreement, dated as of September 25,
1997
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4.2
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Revolving
Credit Agreement (2005-ERJ1), dated as of September 22, 2005, between
Wilmington Trust Company, as Subordination Agent, as Borrower, and
Landesbank Baden-Wü;rttemberg, as Liquidity
Provider
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4.3
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Intercreditor
Agreement, dated as of September 22, 2005, among Wilmington Trust
Company,
as Trustee, Landesbank Baden-Wü;rttemberg, as Liquidity Provider, and
Wilmington Trust Company, as Subordination Agent and
Trustee
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4.4
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Deposit
Agreement, dated as of September 22, 2004, between Wells Fargo Bank
Northwest, National Association, as Escrow Agent, and Citibank, N.A.,
as
Depositary
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4.5
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Escrow
and Paying Agent Agreement, dated as of September 22, 2005, among
Wells
Fargo Bank Northwest, National Association, as Escrow Agent, Citigroup
Global Markets Inc., as Underwriter, Wilmington Trust Company, as
Trustee,
and Wilmington Trust Company, as Paying
Agent
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4.6
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Note
Purchase Agreement, dated as of September 22, 2005, among Continental
Airlines, Inc., Wilmington Trust Company, as Trustee, Subordination
Agent
and Paying Agent, and Wells Fargo Bank Northwest, National Association,
as
Escrow Agent
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4.7
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Form
of Participation Agreement (Participation Agreement among Continental
Airlines, Inc., as Lessee, [ ______ ], as Owner Participant, Wells
Fargo
Bank Northwest, National Association, as Owner Trustee and Lessor,
Wilmington Trust Company, as Mortgagee, Subordination Agent and Trustee,
and Embraer-Empresa Brasileira de Aeroná;utica S.A.) (Exhibit A to Note
Purchase Agreement)
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4.8
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Form
of Lease (Lease between Wells Fargo Bank Northwest, National Association,
as Owner Trustee and Lessor, and Continental Airlines, Inc., as Lessee)
(Exhibit B to Note Purchase
Agreement)
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4.9
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Form
of Indenture (Trust Indenture and Mortgage between Wells Fargo Bank
Northwest, National Association, as Owner Trustee,
and
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2
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Wilmington
Trust Company, as Mortgagee) (Exhibit C to Note Purchase
Agreement)
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4.10
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Form
of Trust Agreement ([Amended and Restated] Trust Agreement between
[
______ ], as Owner Participant, and Wells Fargo Bank Northwest, National
Association, as Owner Trustee) (Exhibit E to Note Purchase
Agreement)
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4.11
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9.798%
Continental Airlines Pass Through Certificate, Series 2005-ERJ1,
Certificate No. 1
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23.1
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Consent
of Aviation Specialists Group, Inc., dated September 8,
2005
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23.2
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Consent
of BACK Aviation Solutions, dated September
8, 2005
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23.3
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Consent
of BK Associates, Inc., dated September 8,
2005
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23.4
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Consent
of Aviation Specialists Group, Inc., dated September 13,
2005
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23.5
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Consent
of BACK Aviation Solutions, dated September 13,
2005
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23.6
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Consent
of BK Associates, Inc., dated September 13,
2005
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EXECUTION
COPY
CONTINENTAL
AIRLINES, INC.
Pass
Through Certificates, Series 2005-ERJ1
UNDERWRITING
AGREEMENT
September
14, 2005
Citigroup
Global Markets Inc.
388
Greenwich Street
New
York,
New York 10013
Ladies
and Gentlemen:
At
the
request of Embraer - Empresa
Brasileira de Aeronáutica S.A., a Brazilian corporation ("Embraer"),
Continental Airlines, Inc., a Delaware corporation (the "Company"),
proposes that Wilmington Trust Company, as trustee under the Class A Trust
(as
defined below) (the "Trustee"),
issue
and sell to Citigroup Global Markets Inc. (the "Underwriter")
its
pass through certificates in the aggregate principal amount and with the
interest rate and final maturity date set forth on Schedule I hereto (the
"Offered
Certificates")
on the
terms and conditions stated herein.
The
Offered Certificates will be issued pursuant to a Pass Through Trust Agreement,
dated as of September 25, 1997 (the "Basic
Agreement"),
between the Company and the Trustee, as supplemented with respect to the
issuance of the Offered Certificates by a Pass Through Trust Supplement to
be
dated as of the Closing Date (as defined below) (the "Trust
Supplement"),
between the Company and the Trustee (the Basic Agreement as supplemented
by such
Trust Supplement being referred to herein as the "Pass
Through Trust Agreement").
The
Trust Supplement is related to the creation and administration of the 2005-ERJ1
Pass Through Trust (the "Class A
Trust").
The
cash
proceeds of the offering of Offered Certificates by the Class A Trust, to
the
extent not used to purchase Equipment Notes (as defined in the Note Purchase
Agreement (as defined below)) on the Closing Date, will be paid to Wells
Fargo
Bank Northwest, National Association, as escrow agent (the "Escrow
Agent"),
under
an Escrow and Paying Agent Agreement among the Escrow Agent, the Underwriter,
the Trustee and Wilmington Trust Company, as paying agent (the "Paying
Agent"),
for
the benefit of the holders of the Offered Certificates (the "Escrow
Agreement").
The
Escrow Agent will deposit such cash proceeds
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of
30
(each,
a
"Deposit")
with
Citibank, N.A. (the "Depositary")
in
accordance with a Deposit Agreement relating to the Class A Trust (the
"Deposit
Agreement"),
and,
subject to the fulfillment of certain conditions, will withdraw Deposits
upon
request to allow the Trustee to purchase Equipment Notes from time to time
pursuant to a Note Purchase Agreement to be dated as of the Closing Date
(the
"Note
Purchase Agreement")
among
the Company, Wilmington Trust Company, as Trustee of the Class A Trust, as
Subordination Agent (as hereinafter defined) and as Paying Agent, and the
Escrow
Agent. The Escrow Agent will issue receipts to be attached to each related
Offered Certificate ("Escrow
Receipts")
representing each holder's fractional undivided interest in amounts deposited
with such Escrow Agent with respect to the Offered Certificates and will
pay to
such holders through the Paying Agent interest accrued on the Deposits and
received by such Paying Agent pursuant to the Deposit Agreement at a rate
per
annum equal to the interest rate applicable to the Offered
Certificates.
Certain
amounts of interest payable on the Offered Certificates will be entitled
to the
benefits of a liquidity facility. Landesbank Baden-Württemberg (the
"Liquidity
Provider")
will
enter into a revolving credit agreement with respect to the Class A Trust
(the
"Liquidity
Facility")
to be
dated as of the Closing Date for the benefit of the holders of the Offered
Certificates issued by such Class A Trust. The Liquidity Provider and the
holders of the Offered Certificates will be entitled to the benefits of an
Intercreditor Agreement to be dated as of the Closing Date (the "Intercreditor
Agreement")
among
the Trustee, Wilmington Trust Company, as subordination agent and trustee
thereunder (the "Subordination
Agent"),
and
the Liquidity Provider.
The
Company has filed with the Securities and Exchange Commission (the "Commission")
a
shelf registration statement on Form S-3 (File No. 333-67886) relating to
pass through certificates (such registration statement (including the respective
exhibits thereto and the respective documents filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended, and
the
rules and regulations of the Commission thereunder (collectively, the
"Exchange
Act"),
that
are incorporated by reference therein), as amended at the date hereof, being
herein referred to as the "Registration
Statement")
and
the offering thereof from time to time in accordance with Rule 415 of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities
Act").
The
Registration Statement has been declared effective by the Commission. A final
prospectus supplement reflecting the terms of the Offered Certificates, the
terms of the offering thereof and other matters relating to the Offered
Certificates, as further specified in Section 4(d) hereof, will be prepared
and filed together with the Basic Prospectus referred to below pursuant to
Rule
424 under the Securities Act (such prospectus supplement, in the form first
filed on or after the date hereof pursuant to Rule 424, being herein referred
to
as the "Prospectus
Supplement"
and any
such prospectus supplement in the form or forms filed prior to the filing
of the
Prospectus Supplement being herein referred to as a "Preliminary
Prospectus Supplement").
The
Basic Prospectus included in the Registration Statement (the "Basic
Prospectus")
and
relating to all offerings of pass through certificates under the Registration
Statement, as supplemented by the Preliminary Prospectus Supplement or the
Prospectus Supplement, as the case may be, and, in either case, including
the
documents incorporated by reference therein, is herein called, the "Preliminary
Prospectus"
or the
"Prospectus",
as
applicable, except that, if the Basic Prospectus is amended or supplemented
on
or prior to the date of the Preliminary Prospectus Supplement
or
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of
30
the
date
on which the Prospectus Supplement is first filed pursuant to Rule 424, the
terms "Preliminary
Prospectus"
and
"Prospectus"
shall
refer to the Basic Prospectus as so amended or supplemented and as supplemented
by the Preliminary Prospectus Supplement or the Prospectus Supplement, as
applicable. Any reference herein to the terms "amendment"
or
"supplement"
with
respect to the Prospectus or any Preliminary Prospectus shall be deemed to
refer
to and include any documents filed with the Commission under the Exchange
Act
after the date the Prospectus is filed with the Commission, or the date of
such
Preliminary Prospectus, as the case may be, and incorporated therein by
reference pursuant to Item 12 of Form S-3 under the Securities Act.
Capitalized
terms not otherwise defined in this Underwriting Agreement (the "Agreement")
shall
have the meanings specified therefor in the Pass Through Trust Agreement,
in the
Note Purchase Agreement or in the Intercreditor Agreement; provided
that, as
used in this Agreement, the term "Operative
Agreements"
shall
mean the Deposit Agreement, the Escrow Agreement, the Intercreditor Agreement,
the Liquidity Facility, the Pass Through Trust Agreement and the Financing
Agreements (as defined in the Note Purchase Agreement).
1. Representations
and Warranties.
(a) The
Company represents and warrants to, and agrees with the Underwriter that:
(i) The
Company meets the requirements for use of Form S-3 under the Securities
Act; the Registration Statement has become effective; and, on the original
effective date of the Registration Statement, the Registration Statement
complied in all material respects with the requirements of the Securities
Act.
On the original effective date of the Registration Statement, the Registration
Statement did not include any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein not misleading, and on the date hereof and on the Closing
Date, the Prospectus, as amended and supplemented, if the Company shall have
furnished any amendment or supplement thereto, does not and will not include
an
untrue statement of a material fact and does not and will not omit to state
a
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading. The preceding
sentence does not apply to (x) statements in or omissions from the
Registration Statement, the Preliminary Prospectus or the Prospectus based
upon
(A) written information furnished to the Company by the Underwriter expressly
for use therein ("Underwriter
Information"),
(B) the Embraer Information (as defined in Annex I) or (C) the Depositary
Information (as hereinafter defined) or (y) statements or omissions in that
part
of each Registration Statement which shall constitute the Statement of
Eligibility of the Trustee under the Trust Indenture Act of 1939, as amended
(the "Trust
Indenture Act"),
on
Form T-1.
(ii) The
documents incorporated by reference in the Prospectus pursuant to Item 12
of
Form S-3 under the Securities Act, at the time they were or hereafter, during
the period mentioned in Section 4(a) hereof, are filed with the Commission,
complied or will comply, as the case may be, in all material respects with
the
requirements of the Exchange Act.
Page 3
of
30
(iii) The
Company has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Delaware, with corporate power and
authority to own, lease and operate its property and to conduct its business
as
described in the Prospectus; and the Company is duly qualified to do business
as
a foreign corporation in good standing in all other jurisdictions in which
its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have
a
material adverse effect on the condition (financial or otherwise), business,
properties or results of operations of the Company and its consolidated
subsidiaries taken as a whole (a "Continental
Material Adverse Effect").
(iv) Each
of
Continental Micronesia, Inc. and Air Micronesia Inc. (together, the
"Subsidiaries")
has
been duly incorporated and is an existing corporation in good standing under
the
laws of the jurisdiction of its incorporation, with corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus; and each Subsidiary is duly qualified to
do
business as a foreign corporation in good standing in all other jurisdictions
in
which its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would not
have a
Continental Material Adverse Effect; all of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly issued and
is
fully paid and nonassessable; and, except as described in the Prospectus,
each
Subsidiary's capital stock owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects.
(v) Except
as
described in the Prospectus, the Company is not in default in the performance
or
observance of any obligation, agreement, covenant or condition contained
in any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which it is a party or by which it may be bound or to which any of its
properties may be subject, except for such defaults that would not have a
Continental Material Adverse Effect. The execution, delivery and performance
of
this Agreement and the Operative Agreements to which the Company is or will
be a
party and the consummation by Continental of the transactions contemplated
herein and therein have been duly authorized by all necessary corporate action
of the Company and will not result in any breach of any of the terms, conditions
or provisions of, or constitute a default under, or result in the creation
or
imposition of any lien, charge or encumbrance (other than any lien, charge
or
encumbrance created under any Operative Agreement) upon any property or assets
of the Company pursuant to any indenture, loan agreement, contract, mortgage,
note, lease or other instrument to which the Company is a party or by which
the
Company may be bound or to which any of the property or assets of the Company
is
subject, which breach, default, lien, charge or encumbrance, individually
or in
the aggregate, would have a Continental Material Adverse Effect, nor will
any
such execution, delivery or performance result in any violation of the
provisions of the charter or by-laws of the Company or any statute, any rule,
regulation or order of any governmental agency or body or any court having
jurisdiction over the Company.
(vi) No
consent, approval, authorization, or order of, or filing with, any governmental
agency or body or any court is required for the valid
authorization,
Page 4
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30
execution
and delivery by the Company of this Agreement and the Operative Agreements
to
which it is or will be a party and for the consummation of the transactions
contemplated herein and therein, except (x) such as may be required under
the
Securities Act, the Trust Indenture Act, the securities or "blue sky" or
similar
laws of the various states and of foreign jurisdictions or rules and regulations
of the National Association of Securities Dealers, Inc., and (y) filings
or
recordings with the Federal Aviation Administration (the "FAA")
and
under the UCC or other laws in effect in any applicable jurisdiction governing
the perfection of security interests, which filings or recordings referred
to in
this clause (y), with respect to any particular set of Financing Agreements,
shall have been made, or duly presented for filing or recordation, or shall
be
in the process of being duly filed or filed for recordation, on or prior
to the
applicable "Closing Date", as defined in such Financing Agreements (the
"Funding
Date").
(vii) This
Agreement has been duly executed and delivered by the Company and the Operative
Agreements to which the Company will be a party will be duly executed and
delivered by the Company on or prior to the Closing Date or the applicable
Funding Date, as the case may be.
(viii) The
Operative Agreements to which the Company is or will be a party, when duly
executed and delivered by the Company, assuming that such Operative Agreements
have been duly authorized, executed and delivered by, and constitute the
legal,
valid and binding obligations of, each other party thereto, will constitute
valid and binding obligations of the Company enforceable in accordance with
their terms, except (w) as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws now or hereafter
in
effect relating to creditors' rights generally, (x) as enforcement thereof
is
subject to general principles of equity (regardless of whether enforcement
is
considered in a proceeding in equity or at law), (y) that the enforceability
of
the Leases may also be limited by applicable laws which may affect the remedies
provided therein but which do not affect the validity of the Leases or make
such
remedies inadequate for the practical realization of the benefits intended
to be
provided thereby and (z) with respect to indemnification and contribution
provisions, as enforcement thereof may be limited by applicable law. The
Basic
Agreement as executed is substantially in the form filed as an exhibit to
the
Company's current report on Form 8-K dated September 25, 1997 and has been
duly
qualified under the Trust Indenture Act.
(ix) The
consolidated financial statements of the Company incorporated by reference
in
the Prospectus, together with the related notes thereto, present fairly in
all
material respects the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the consolidated results of operations
and cash flows of the Company and its consolidated subsidiaries for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as otherwise stated therein and except
that unaudited financial statements do not have all required footnotes. The
financial statement schedules, if any, incorporated by reference in the
Prospectus present the information required to be stated
therein.
Page 5
of
30
(x) The
Company is a "citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended, and holds
an air
carrier operating certificate issued pursuant to Chapter 447 of Title 49
of the
United States Code, as amended, for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo. All of the outstanding shares
of
capital stock of the Company have been duly authorized and validly issued
and
are fully paid and non-assessable.
(xi) Except
as
disclosed in the Prospectus, the Company and the Subsidiaries have good and
marketable title to all real properties and all other properties and assets
owned by them, in each case free from liens, encumbrances and defects except
where the failure to have such title would not have a Continental Material
Adverse Effect; and except as disclosed in the Prospectus, the Company and
the
Subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would have a Continental Material
Adverse Effect.
(xii) Except
as
disclosed in the Prospectus, there is no action, suit or proceeding before
or by
any governmental agency or body or court, domestic or foreign, now pending
or,
to the knowledge of the Company, threatened against the Company or any of
its
subsidiaries or any of their respective properties that individually (or
in the
aggregate in the case of any class of related lawsuits), could reasonably
be
expected to result in a Continental Material Adverse Effect or that could
reasonably be expected to materially and adversely affect the consummation
of
the transactions contemplated by this Agreement or the Operative
Agreements.
(xiii) Except
as
disclosed in the Prospectus, no labor dispute with the employees of the Company
or any subsidiary exists or, to the knowledge of the Company, is imminent
that
could reasonably be expected to have a Continental Material Adverse
Effect.
(xiv) Each
of
the Company and the Subsidiaries has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except to
the
extent that the failure to so obtain, declare or file would not have a
Continental Material Adverse Effect.
(xv) Except
as
disclosed in the Prospectus, (x) neither the Company nor any of the
Subsidiaries is in violation of any statute, rule, regulation, decision or
order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances (collectively,
"environmental
laws"),
owns
or operates any real property contaminated with any substance that is subject
to
any environmental laws, or is subject to any claim relating to any environmental
laws, which violation, contamination, liability or claim individually or
in the
aggregate is reasonably expected to have a Continental Material Adverse Effect,
and (y) the Company is not
Page 6
of
30
aware
of
any pending investigation which might lead to such a claim that is reasonably
expected to have a Continental Material Adverse Effect.
(xvi) The
accountants that examined and issued an auditors' report with respect to
the
consolidated financial statements of the Company and the financial statement
schedules of the Company, if any, included or incorporated by reference in
the
Registration Statement are independent public accountants within the meaning
of
the Securities Act.
(xvii) The
Company is not an "investment company", or an entity "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940,
as amended (the "Investment
Company Act"),
required to register under the Investment Company Act.
(xviii) No
Appraiser is an affiliate of the Company or, to the knowledge of the Company,
has a substantial interest, direct or indirect, in the Company. To the knowledge
of the Company, none of the officers and directors of any of such Appraisers
is
connected with the Company or any of its affiliates as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
(xix) The
Company (A) makes and keeps books, records and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of
the
material assets of the Company and its consolidated subsidiaries and (B)
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (1) transactions are executed in accordance with
management’s general or specific authorization; (2) transactions are recorded as
necessary: (x) to permit preparation of financial statements in conformity
with
generally accepted accounting principles or any other criteria applicable
to
such statements and (y) to maintain accountability for assets; (3) access
to material assets is permitted only in accordance with management’s general or
specific authorization; and (4) the recorded accountability for material
assets
is compared with the existing material assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(b) The
Depositary represents and warrants to, and agrees with, the Underwriter and
the
Company that:
(i) The
information pertaining to the Depositary set forth under the caption
"Description of the Deposit Agreement -- Depositary" (the "Depositary
Information")
in the
Prospectus, as amended and supplemented, if the Company shall have furnished
any
amendment or supplement thereto, does not, and will not as of the Closing
Date,
contain any untrue statement of a material fact.
(ii) The
Depositary is duly organized and validly existing as a national banking
association under the laws of the United States and is duly qualified to
conduct
banking business in the State of New York,
with
corporate power and authority to own, lease and operate its property, to
conduct
its business as described in the Depositary
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Information
and to enter into and perform its obligations under this Agreement and the
Deposit Agreement.
(iii) No
consent, approval, authorization, or order of, or filing with any governmental
agency or body or any court is required for the valid authorization, execution
and delivery by the Depositary of this Agreement and the Deposit Agreement
and
for the consummation by the Depositary of the transactions contemplated herein
and therein, except such as may have been obtained.
(iv) The
execution and delivery by the Depositary of this Agreement and the Deposit
Agreement and the consummation by the Depositary of the transactions
contemplated herein and therein have been duly authorized by the Depositary
and
will not violate any law, governmental rule or regulation or any of its
organizational documents or any order, writ, injunction or decree of any
court
or governmental agency against it or the provisions of any indenture, loan
agreement, contract or other instrument to which it is a party or is
bound.
(v) This
Agreement has been duly executed and delivered by the Depositary, and the
Deposit Agreement will be duly executed and delivered by the Depositary on
or
prior to the Closing Date.
(vi) The
Deposit Agreement, when duly executed and delivered by the Depositary, assuming
that such Deposit Agreement has been duly authorized, executed and delivered
by,
and constitutes the legal, valid and binding obligations of, the Escrow Agent,
will constitute the legal, valid and binding obligations of the Depositary
enforceable in accordance with its terms, except (x) as enforcement thereof
may
be limited by bankruptcy, insolvency (including, without limitation, all
laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws now or hereinafter in effect relating to creditors' rights generally
and
(y) as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at
law).
(c) Embraer
represents and warrants to, and agrees with, the Underwriter and the Company
that:
(i) (x)
As of
the date hereof, the Registration Statement does not include any untrue
statement of a material fact or omit to state any material fact required
to be
stated therein or necessary to make the statements therein not misleading,
(y)
as of its date, the Preliminary Prospectus did not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and (z)
on
the date hereof and on the Closing Date, the Prospectus, as amended and
supplemented, if the Company shall have furnished any amendment or supplement
thereto, does not and will not include an untrue statement of a material
fact
and does not and will not omit to state a material fact necessary in order
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading. The preceding sentence does not apply to statements
in or omissions from
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the
Registration Statement, the Preliminary Prospectus or the Prospectus based
upon
(A) the Continental Information (as defined in Annex I), (B) the
Underwriter Information or (C) the Depositary Information.
(ii) Each
of
Embraer and Refine, Inc. ("Refine")
has
been duly organized and is a corporation validly existing in good standing
under
the laws of its jurisdiction of incorporation or organization, with corporate
power and authority to own, lease and operate its properties, conduct its
business as currently conducted and perform its obligations under this Agreement
and under the Operative Agreements to which it is or will be a
party.
(iii) No
consent, approval, authorization, or order of, or filing with any governmental
agency or body or any court is required for the valid authorization, execution
and delivery by Embraer of this Agreement or by Embraer or Refine of the
Operative Agreements to which either Embraer or Refine is or will be a party
and
for the performance of their respective obligations hereunder and thereunder,
as
applicable, except such as may have been obtained.
(iv) The
execution and delivery by Embraer of this Agreement and by Embraer and Refine
of
the Operative Agreements to which either Embraer or Refine is or will be
a party
and the performance of their respective obligations hereunder and thereunder
have been duly authorized by Embraer and Refine, as applicable, and will
not
violate (w) any law, governmental rule or regulation, (x) any of their
respective organizational documents, (y) any order, writ, injunction or decree
of any court or governmental agency against either Embraer or Refine, as
applicable, or (z) except to the extent that any such violation would not
have a
material adverse effect on the condition (financial or otherwise), business,
properties or results of operations of Embraer and its consolidated subsidiaries
taken as a whole or Refine, as applicable, the provisions of any indenture,
loan
agreement, contract or other instrument to which either Embraer or Refine
is a
party or is bound.
(v) This
Agreement has been duly executed and delivered by Embraer.
(vi) (1)
The
Operative Agreements to which Embraer is or will be a party, when duly executed
and delivered by Embraer, assuming that such Operative Agreements have been
duly
authorized, executed and delivered by, and constitute the legal, valid and
binding obligations of, each other party thereto, will constitute valid and
binding obligations of Embraer enforceable in accordance with their terms
and
(2) the Operative Agreements to which Refine is or will be a party, when
duly
executed and delivered by Refine, assuming that such Operative Agreements
have
been duly authorized, executed and delivered by, and constitute the legal,
valid
and binding obligations of, each other party thereto, will constitute valid
and
binding obligations of Refine enforceable in accordance with their terms,
except, in the case of both (1) and (2), (x) as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally,
(y) as
enforcement thereof is
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subject
to general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law) and (z) with respect to indemnification
and
contribution provisions, as enforcement thereof may be limited by applicable
law.
(vii) On
or
prior to the Closing Date, the issuance of the Offered Certificates will
be duly
authorized by the Trustee. When duly executed, authenticated, issued and
delivered in the manner provided for in the Pass Through Trust Agreement
and
sold and paid for as provided in this Agreement, the Offered Certificates
will
be legally and validly issued and will be entitled to the benefits of the
Pass
Through Trust Agreement; and when executed, authenticated, issued and delivered
in the manner provided for in the Escrow Agreement, the Escrow Receipts will
be
legally and validly issued and will be entitled to the benefits of the Escrow
Agreement.
(viii) The
Class
A Trust is not an "investment company", or an entity "controlled" by an
"investment company", within the meaning of the Investment Company Act, required
to register under the Investment Company Act; and after giving effect to
the
offering and sale of the Offered Certificates and the application of the
proceeds thereof as described in the Prospectus, the Class A Trust will not
be,
nor will the escrow arrangement contemplated by the Escrow Agreement result
in
the creation of, an "investment company", or an entity "controlled" by an
"investment company", as defined in the Investment Company Act, in each case
required to register under the Investment Company Act.
(ix) The
Offered Certificates, this Agreement and the Operative Agreements will conform
in all material respects to the descriptions thereof contained in the Prospectus
(other than, in the case of the Financing Agreements, as described in the
Prospectus).
(x) The
information provided by Embraer to each of Aviation Specialists Group, Inc.
("ASG"),
BACK
Aviation Solutions ("BACK")
and BK
Associates, Inc. ("BK"
and,
together with ASG and BACK, the "Appraisers")
for
use by the Appraisers in preparation of their respective reports relating
to the
Aircraft, dated as of August 18, 2005, August 18, 2005 and August 25, 2005,
respectively, taken as a whole with respect to each such report, did not
contain
an untrue statement of material fact or omit to state a material fact necessary
to make such information not misleading.
(d) The
parties agree that any certificate signed by a duly authorized officer of
the
Company and delivered to the Underwriter, or to counsel for the Underwriter,
on
the Closing Date and in connection with this Agreement or the offering of
the
Offered Certificates, shall be deemed a representation and warranty by (and
only
by) the Company to the Underwriter as to the matters covered
thereby.
2. Purchase,
Sale and Delivery of Offered Certificates.
(a) On
the basis of the representations, warranties and agreements herein contained,
but subject to the terms and the conditions herein set forth, the Company
agrees
to cause the Trustee to sell to the Underwriter, and the Underwriter agrees
to
purchase from the Trustee, at a purchase price of 100% of the
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principal
amount thereof, the aggregate principal amount of Offered Certificates.
Concurrently with the issuance of the Offered Certificates, the Escrow Agent
shall issue and deliver to the Trustee the Escrow Receipts in accordance
with
the terms of the Escrow Agreement, which Escrow Receipts shall be attached
to
the related Offered Certificates.
(b) The
Company is advised by the Underwriter that the Underwriter proposes to make
a
public offering of the Offered Certificates as set forth in the Prospectus
Supplement as soon after this Agreement has been entered into as in the
Underwriter’s judgment is advisable. The Company is further advised by the
Underwriter that the Offered Certificates are to be offered to the public
initially at 100% of their principal amount -- the public offering price
-- plus
accrued interest, if any, and to certain dealers selected by the Underwriter
at
concessions not in excess of the concessions set forth in the Prospectus,
and
that the Underwriter may allow, and such dealers may reallow, concessions
not in
excess of the concessions set forth in the Prospectus to certain other
dealers.
(c) As
underwriting commission and other compensation to the Underwriter for its
commitments and obligations hereunder in respect of the Offered Certificates,
including the undertakings to distribute the Offered Certificates, Embraer
will
pay to the Underwriter the amount set forth in Schedule II hereto. Such payment
will be made on the Closing Date simultaneously with the issuance and sale
of
the Offered Certificates (with attached Escrow Receipts) to the Underwriter.
Payment of such compensation shall be made by Federal funds check or by wire
transfer of immediately available funds.
(d) Delivery
of and payment for the Offered Certificates (with attached Escrow Receipts)
shall be made at the offices of Hughes Hubbard & Reed LLP at One Battery
Park Plaza, New York, New York 10004 at 10:00 A.M. on September 22, 2005
or such
other date, time and place as may be agreed upon by the Company and the
Underwriter (such date and time of delivery and payment for the Offered
Certificates (with attached Escrow Receipts) being herein called the
"Closing
Date").
Delivery of the Offered Certificates (with attached Escrow Receipts) issued
by
the Class A Trust shall be made to Citigroup's account at The Depository
Trust
Company ("DTC")
for
the account of the Underwriter against payment by the Underwriter of the
purchase price thereof. Payment for the Offered Certificates issued by the
Class
A Trust and the related Escrow Receipts attached thereto shall be made by
the
Underwriter by wire transfer of immediately available funds to the accounts
and
in the manner specified in the Escrow Agreement (provided,
that if
the Company notifies the Underwriter that a Funding Date is occurring on
the
Closing Date, a portion of such payment in the amount specified by the Company
shall be paid to the accounts and in the manner specified in the related
Participation Agreement). The Offered Certificates (with attached Escrow
Receipts) issued by the Class A Trust shall be in the form of one or more
fully
registered global Offered Certificates, and shall be deposited with the Trustee
as custodian for DTC and registered in the name of Cede & Co.
(e) The
Company agrees to have the Offered Certificates (with attached Escrow Receipts)
available for inspection and checking by the Underwriter in New York, New
York
not later than 1:00 P.M. on the business day prior to the Closing
Date.
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3. Conditions
of Underwriter's Obligations.
The
obligations of the Underwriter to purchase and pay for the Offered Certificates
pursuant to this Agreement are subject to the following conditions:
(a) On
the
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and no proceedings
therefor shall have been instituted or threatened by the
Commission.
(b) On
the
Closing Date, the Underwriter shall have received an opinion of Hughes Hubbard
& Reed LLP, as counsel for the Company, dated the Closing Date, in form and
substance reasonably satisfactory to the Underwriter and substantially to
the
effect set forth in Exhibit A hereto.
(c) On
the
Closing Date, the Underwriter shall have received an opinion of the General
Counsel of the Company, dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriter and substantially to the effect set forth
in
Exhibit B hereto.
(d) On
the
Closing Date, the Underwriter shall have received an opinion of Richards,
Layton
& Finger, P.A., counsel for Wilmington Trust Company, individually and as
Trustee, Subordination Agent and Paying Agent, dated the Closing Date, in
form
and substance reasonably satisfactory to the Underwriter and substantially
to
the effect set forth in Exhibit C hereto.
(e) On
the
Closing Date, the Underwriter shall have received an opinion of Ray Quinney
& Nebeker P.C., counsel for the Escrow Agent, dated the Closing Date, in
form and substance reasonably satisfactory to the Underwriter and substantially
to the effect set forth in Exhibit D hereto.
(f) On
the
Closing Date, the Underwriter shall have received an opinion of in-house
counsel
for Landesbank
Baden-Württemberg,
as the
Liquidity Provider, dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriter and substantially to the effect set forth
in
Exhibit E hereto.
(g) On
the
Closing Date, the Underwriter shall have received an opinion of Milbank,
Tweed,
Hadley & McCloy LLP, special New York counsel for the Liquidity Provider,
dated the Closing Date, in form and substance reasonably satisfactory to
the
Underwriter and substantially to the effect set forth in Exhibit F
hereto.
(h) On
the
Closing Date, the Underwriter shall have received an opinion of in-house
counsel
for the Depositary, dated the Closing Date, in form and substance reasonably
satisfactory to the Underwriter and substantially to the effect set forth
in
Exhibit G hereto.
(i) On
the
Closing Date, the Underwriter shall have received an opinion of Patterson,
Belknap, Webb & Tyler LLP, special New York counsel for the
Depositary,
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12
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dated
the
Closing Date, in form and substance reasonably satisfactory to the Underwriter
and substantially to the effect set forth in Exhibit H hereto.
(j) On
the
Closing Date, the Underwriter shall have received an opinion of Katten Muchin
Rosenman LLP, special New York counsel for Embraer, dated the Closing Date,
in
form and substance reasonably satisfactory to the Underwriter and substantially
to the effect set forth in Exhibit I hereto.
(k) On
the
Closing Date, the Underwriter shall have received an opinion of Flavio Rimoli,
in-house counsel for Embraer, dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriter and substantially to the effect
set
forth in Exhibit J hereto.
(l) On
the
Closing Date, the Underwriter shall have received an opinion of Milbank,
Tweed,
Hadley & McCloy LLP, counsel for the Underwriter, dated as of the Closing
Date, with respect to the issuance and sale of the Offered Certificates,
the
Registration Statement, the Prospectus and other related matters as the
Underwriter may reasonably require.
(m) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
any change, or any development or event involving a prospective change, in
the
condition (financial or other), business, properties or results of operations
of
the Company and its subsidiaries considered as one enterprise that, in the
Underwriter’s judgment, is material and adverse and that makes it, in the
Underwriter’s judgment, impracticable to proceed with the completion of the
public offering of the Offered Certificates on the terms and in the manner
contemplated by the Prospectus.
(n) The
Underwriter shall have received on the Closing Date a certificate, dated
the
Closing Date and signed by the President or any Vice President of the Company,
to the effect that the representations and warranties of the Company contained
in this Agreement are true and correct as of the Closing Date as if made
on the
Closing Date (except to the extent that they relate solely to an earlier
date,
in which case they shall be true and accurate as of such earlier date), that
the
Company has performed all its obligations to be performed hereunder on or
prior
to the Closing Date and that, subsequent to the execution and delivery of
this
Agreement, there shall not have occurred any material adverse change, or
any
development or event involving a prospective material adverse change, in
the
condition (financial or other), business, properties or results of operations
of
the Company and its subsidiaries considered as one enterprise, except as
set
forth in or contemplated by the Prospectus.
(o) The
Underwriter shall have received from Ernst & Young LLP a letter, dated the
date hereof, in form and substance satisfactory to the Underwriter.
(p) Subsequent
to the execution and delivery of this Agreement and prior to the Closing
Date,
there shall not have been any downgrading in the rating accorded any of the
Company's securities (except for any pass through certificates) by any
"nationally
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recognized
statistical rating organization", as such term is defined for purposes of
Rule
436(g)(2) under the Securities Act, or any public announcement that any such
organization has under surveillance or review, in each case for possible
change,
its ratings of any such securities other than pass through certificates (other
than an announcement with positive implications of a possible upgrading,
and no
implication of a possible downgrading, of such rating).
(q) Each
of
the Appraisers shall have furnished to the Underwriter a letter from such
Appraiser, addressed to the Company and dated the Closing Date, confirming
that
such Appraiser and each of its directors and officers (i) is not an
affiliate of the Company or any of its affiliates, (ii) does not have any
substantial interest, direct or indirect, in the Company or any of its
affiliates and (iii) is not connected with the Company or any of its
affiliates as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
(r) At
the
Closing Date, each of the Operative Agreements (other than the Financing
Agreements) shall have been duly executed and delivered by each of the parties
thereto; and the representations and warranties of the Company contained
in each
of such executed Operative Agreements shall be true and correct as of the
Closing Date (except to the extent that they relate solely to an earlier
date,
in which case they shall be true and correct as of such earlier date) and
the
Underwriter shall have received a certificate of the President or a Vice
President of the Company, dated as of the Closing Date, to such effect.
(s) On
the
Closing Date, the Offered Certificates shall be rated (x) not lower than
"BBB-" by Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., and (y) not lower than "Ba2" by Moody's Investors Service,
Inc.
(t) On
the
Closing Date, the representations and warranties of the Depositary contained
in
this Agreement shall be true and correct as if made on the Closing Date (except
to the extent that they relate solely to an earlier date, in which case they
shall be true and correct as of such earlier date).
(u) The
Underwriter shall have received from Ernst & Young LLP a letter, dated the
Closing Date, which meets the requirements of subsection (o) of this Section,
except that the specified date referred to in such subsection will be a date
not
more than three business days prior to the Closing Date for the purposes
of this
subsection.
(v) The
Underwriter shall have received on the Closing Date a certificate, dated
the
Closing Date and signed by the President or any Vice President of Embraer,
to
the effect that the representations and warranties of Embraer contained in
this
Agreement are true and correct as of the Closing Date as if made on the Closing
Date (except to the extent that they relate solely to an earlier date, in
which
case they shall be true and accurate as of such earlier date) and that Embraer
has performed all its obligations to be performed hereunder on or prior to
the
Closing Date.
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The
Company or Embraer, as applicable, will furnish the Underwriter with such
conformed copies of such opinions, certificates, letters and documents as
the
Underwriter may reasonably request.
4. Certain
Covenants of the Company.
The
Company covenants with the Underwriter as follows:
(a) During
the period described in the following sentence of this Section 4(a), the
Company
shall advise the Underwriter promptly of any proposal to amend or supplement
the
Registration Statement or the Prospectus (except by documents filed under
the
Exchange Act) and will not effect such amendment or supplement (except by
documents filed under the Exchange Act) without the consent of the Underwriter,
which consent will not be unreasonably withheld. If, at any time after the
public offering of the Offered Certificates, the Prospectus is required by
law
to be delivered in connection with sales of the Offered Certificates by the
Underwriter or a dealer, any event shall occur as a result of which it is
necessary to amend the Registration Statement or amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading
in
any material respect, or if it is necessary to amend the Registration Statement
or amend or supplement the Prospectus to comply with law, the Company shall
prepare and furnish, at Embraer's expense, to the Underwriter and to the
dealers
(whose names and addresses the Underwriter will furnish to the Company) to
which
Offered Certificates may have been sold by the Underwriter and to any other
dealers upon request, either amendments or supplements to the Prospectus
so that
the statements in the Prospectus as so amended or supplemented will not,
in the
light of the circumstances when the Prospectus is delivered to a purchaser,
be
misleading in any material respect or amendments or supplements to the
Registration Statement or the Prospectus so that the Registration Statement
or
the Prospectus, as so amended or supplemented, will comply with law and cause
such amendments or supplements to be filed promptly with the
Commission.
(b) During
the period mentioned in paragraph (a) above, the Company shall notify the
Underwriter immediately of (i) the effectiveness of any amendment to the
Registration Statement, (ii) the transmittal to the Commission for filing
of any supplement to the Prospectus or any document that would as a result
thereof be incorporated by reference in the Prospectus, (iii) the receipt
of any comments from the Commission with respect to the Registration Statement,
the Prospectus or the Prospectus Supplement, (iv) any request by the
Commission to the Company for any amendment to the Registration Statement
or any
supplement to the Prospectus or for additional information relating thereto
or
to any document incorporated by reference in the Prospectus and (v) receipt
by the Company of any notice of the issuance by the Commission of any stop
order
suspending the effectiveness of the Registration Statement, the suspension
of
the qualification of the Offered Certificates for offering or sale in any
jurisdiction, or the institution or threatening of any proceeding for any
of
such purposes; and the Company agrees to use every reasonable effort to prevent
the issuance of any such stop order and, if any such order is issued, to
obtain
the lifting thereof at the earliest possible moment and the Company shall
(subject to the proviso to Section 4(e))
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30
endeavor,
in cooperation with the Underwriter, to prevent the issuance of any such
stop
order suspending such qualification and, if any such order is issued, to
obtain
the lifting thereof at the earliest possible moment.
(c) During
the period mentioned in paragraph (a) above, the Company will furnish to
the Underwriter as many conformed copies of the Registration Statement (as
originally filed) and all amendments and supplements to such documents
(excluding all exhibits and documents filed therewith or incorporated by
reference therein) and as many conformed copies of all consents and certificates
of experts, in each case as soon as available and in such quantities as the
Underwriter reasonably requests.
(d) Promptly
following the execution of this Agreement, the Company will prepare a Prospectus
Supplement that complies with the Securities Act and that sets forth the
principal amount of the Offered Certificates and their terms (including,
without
limitation, terms of the Escrow Receipts attached to the Offered Certificates)
not otherwise specified in the Preliminary Prospectus Supplement or the Basic
Prospectus included in the Registration Statement, the name of the Underwriter
and the principal amount of the Offered Certificates, the price at which
the
Offered Certificates are to be purchased by the Underwriter from the Trustee,
any initial public offering price, any selling concession and reallowance
and
any delayed delivery arrangements, and such other information as the Underwriter
and the Company deem appropriate in connection with the offering of the Offered
Certificates. The Company will timely transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424 under the
Securities Act.
(e) The
Company shall, in cooperation with the Underwriter, endeavor to arrange for
the
qualification of the Offered Certificates for offer and sale under the
applicable securities or "blue sky" laws of such jurisdictions in the United
States as the Underwriter reasonably designates and will endeavor to maintain
such qualifications in effect so long as required for the distribution of
the
Offered Certificates; provided
that the
Company shall not be required to (i) qualify as a foreign corporation or as
a dealer in securities, (ii) file a general consent to service of process
or (iii) subject itself to taxation in any such jurisdiction.
(f) During
the period of ten years after the Closing Date, the Company will promptly
furnish to the Underwriter, upon request, copies of all Annual Reports on
Form
10-K and any definitive proxy statement of the Company filed with the
Commission; provided that
providing a website address at which such Annual Reports and any such definitive
proxy statements may be accessed will satisfy this clause (f).
(g) Between
the date of this Agreement and the Closing Date, the Company shall not, without
the prior written consent of the Underwriter, offer, sell, or enter into
any
agreement to sell (as public debt securities registered under the Securities
Act
(other than the Offered Certificates) or as debt securities which may be
resold
in a transaction exempt from the registration requirements of the Securities
Act
in reliance on Rule 144A thereunder and which are marketed through the use
of a
disclosure document containing
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30
substantially
the same information as a prospectus for similar debt securities registered
under the Securities Act), any equipment notes, pass through certificates,
equipment trust certificates or equipment purchase certificates secured by
aircraft owned or leased by the Company (or rights relating
thereto).
5. Indemnification
and Contribution.
(a) The
Company and Embraer agree that the Company (solely to the extent set forth
in
proviso (ii) below) and Embraer, subject to proviso (iii) below, will indemnify
and hold harmless the Underwriter, and each Person, if any, who controls
the
Underwriter within the meaning of either Section 15 of the Securities Act
or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by the Underwriter or any such controlling person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, the Preliminary
Prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and Embraer
will also indemnify and hold harmless the Underwriter, and each Person, if
any,
who controls the Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and
all
any losses, claims, damages or liabilities (including, without limitation,
any
legal or other expenses reasonably incurred by the Underwriter or any such
controlling person in connection with defending or investigating any such
action
or claim) caused by any statement (oral or written) with respect to the offer
and sale of the Offered Certificates made by Embraer, any of its affiliates
or
any of their respective directors, officers, employees or agents, except
to the
extent expressly included in the Continental Information, in each case, except
insofar as any of the aforementioned losses, claims, damages or liabilities
are
caused by any such untrue statement or omission or alleged untrue statement
or
omission based upon the Depositary Information or the Underwriter Information;
provided,
however,
that
(i) the foregoing indemnity agreement with respect to the Preliminary Prospectus
shall not inure to the benefit of the Underwriter, or to the benefit of any
person controlling the Underwriter, if a copy of the Prospectus (as then
amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Underwriter
to
such person, if required by law so to have been delivered, at or prior to
the
written confirmation of the sale of such Offered Certificates to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such losses, claims, damages or liabilities unless
such
failure to deliver the Prospectus was a result of noncompliance by the Company
with its delivery requirements set forth in Section 4(a), (ii) the Company
shall
be obligated under this Section 5 only with respect to the Continental
Information and then only to the extent that a court of competent jurisdiction
makes a Final Determination that such losses, claims, damages or liabilities
arise out of or are caused by an untrue statement of a material fact contained
in or omission of a material fact from the Continental Information (such
Final
Determination, a "Final
Adverse Determination")
and
(iii) Embraer shall be obligated under this Section 5 to the extent that
the
Company is not obligated pursuant to the foregoing clause (ii). "Final
Determination"
shall
mean a determination which has not been stayed or reversed and which has
become
final and non-appealable in accordance with applicable law.
Page
17
of
30
The
provisions of this Section 5 shall not affect any agreements between the
Company, Embraer or any of their respective affiliates for the sharing of,
or
otherwise allocating, costs and expenses.
(b) The
Underwriter agrees to indemnify and hold harmless each of Embraer and the
Company, each of their respective directors, each of the officers of the
Company
who signed the Registration Statement and each person, if any, who controls
the
Company or Embraer, as the case may be, within the meaning of either Section
15
of the Securities Act or Section 20 of the Exchange Act, to the same extent
as
the foregoing indemnity from each of the Company and Embraer to the Underwriter
but only with reference to the Underwriter Information and without giving
effect
to the proviso in Section 5(a).
(c) In
case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant
to
either paragraph (a) or (b) above, such person (the "indemnified
party")
shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying
party"),
and,
if such proceeding involves any Continental Information, the Company, in
writing. The indemnifying party, upon request of the indemnified party, shall,
and the indemnifying party, or, if such proceeding involves any Continental
Information, the Company, may elect (any election by the Company to supersede
any election by Embraer) to, retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party (or the Company as the case may be) may designate in such
proceeding and the indemnifying party (or, if the Company elects to designate
counsel, Embraer) shall pay the fees and disbursements of such counsel related
to such proceeding (provided that if the Company has elected to designate
counsel in such proceeding and there is a Final Adverse Determination in
such
proceeding, then the Company shall reimburse Embraer for such fees and expenses
of such counsel theretofore paid by it in the same proportion as the Company
is
responsible for any judgment in such proceeding pursuant to Section 5(a)).
In
any such proceeding, any indemnified party shall have the right to retain
its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel,
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to
actual or potential differing interests between them, or (iii) the
indemnifying party shall have failed to retain counsel as required by the
prior
sentence to represent the indemnified party within a reasonable amount of
time.
It is understood that the indemnifying party shall not, in connection with
any
proceeding or related proceedings in the same jurisdiction, be liable for
the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by the Underwriter in the case of parties indemnified pursuant to
paragraph (a) above and by the Company after consultation with Embraer in
the
case of parties indemnified pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of
such
Page
18
of
30
settlement
or judgment, including if such settlement is consented to prior to a Final
Adverse Determination. Notwithstanding the foregoing sentence, if at any
time an
indemnified party shall have requested in writing an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more
than 90 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement,
unless such fees and expenses are being disputed in good faith. The indemnifying
party (or, if such proceeding concerns the Continental Information, the Company)
at any time may, subject to the last sentence of this Section 5(c), settle
or
compromise any proceeding described in this paragraph at the expense of the
indemnifying party (provided that the Company may not so effect any such
settlement or compromise unless either (x) Embraer has consented thereto,
which
consent shall not be unreasonably withheld or delayed or (y) the Company
agrees
in its discretion that such settlement or compromise shall be at its expense).
For the avoidance of doubt, the parties acknowledge and agree that, unless
and
until (and then only to the extent that) there is a Final Adverse Determination
with respect to any proceeding described in this paragraph, the "indemnifying
party" with respect to such proceeding shall be Embraer and not the Company,
notwithstanding the Company's rights to designate counsel, and effect a
settlement or compromise, with respect to such proceeding. No indemnifying
party
shall (and, if such proceeding concerns the Continental Information, the
Company
shall not), without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which
any
indemnified party is or could have been a party and indemnity could have
been
sought hereunder by such indemnified party, unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on
claims
that are the subject matter of such proceeding and (ii) does not include
a
statement as to, or an admission of, fault, culpability or a failure to act
by
or on behalf of an indemnified party.
(d) To
the
extent the indemnification provided for in paragraph (a) or (b) of this Section
5 is required to be made but is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then
the
applicable indemnifying party under such paragraph, in lieu of indemnifying
such
indemnified party thereunder, shall contribute to the amount paid or payable
by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the
Company or Embraer, as the case may be,
on the
one hand, and the Underwriter, on the other hand, from the offering of such
Offered Certificates or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate
to
reflect not only the relative benefits referred to in clause (i) above but
also
the relative fault of the Company or Embraer, as the case may be, on the
one
hand and the Underwriter on the other hand in connection with the statements
or
omissions that resulted in such losses, claims, damages or liabilities, as
well
as any other relevant equitable considerations. The relative benefits received
by Embraer on the one hand and the Underwriter on the other hand in connection
with the offering of such Offered Certificates shall be deemed to be in the
same
respective proportions as the proceeds from the offering of such Offered
Certificates received by the Class A Trust (before deducting expenses) less
total underwriting discounts and commissions received by the Underwriter,
and
the total underwriting discounts and commissions received by the
Underwriter,
Page
19
of
30
in
each
case as set forth on the cover of the Prospectus, bear to the aggregate public
offering price of such Offered Certificates (it being acknowledged that the
Company shall be deemed for purposes of this paragraph to have received no
benefits from the offering). The relative fault of the Company or Embraer,
as
the case may be, on the one hand and of the Underwriter on the other hand
shall
be determined by reference to, among other things, whether the untrue or
alleged
untrue statement of a material fact or the omission or alleged omission to
state
a material fact relates to the Continental Information, in the case of the
Company, other information supplied by the Company or Embraer, as the case
may
be, in the case of Embraer, or Underwriter Information, in the case of the
Underwriter, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) The
Company, Embraer and the Underwriter agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by
pro rata
allocation or by any other method of allocation that does not take account
of
the equitable considerations referred to in paragraph (d) above. The amount
paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of
this
Section 5, the Underwriter shall not be required to contribute any amount
in
excess of the amount by which the total price at which the Offered Certificates
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The indemnity and contribution provisions contained in
this
Section 5 and the representations and warranties of the Company and Embraer
contained in this Agreement shall remain operative and in full force and
effect
regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Underwriter or any person controlling
the Underwriter or by or on behalf of either the Company or Embraer, their
respective officers or directors or any person controlling the Company or
Embraer, and (iii) acceptance of and payment for any of the Offered
Certificates. The remedies provided for in this Section 5 are not exclusive
and
shall not limit any rights or remedies which may otherwise be available to
any
indemnified party at law or in equity.
6. Survival
of Certain Representations and Obligations.
The
respective indemnities, agreements, representations, warranties and other
statements of the Company, Embraer or their respective officers and of the
Underwriter set forth in or made pursuant to this Agreement will remain in
full
force and effect, regardless of any termination of this Agreement, any
investigation, or statement as to the results thereof, made by or on behalf
of
the Underwriter, the Company, Embraer or any of their respective
representatives, officers or directors or any controlling person and will
survive delivery of and payment for the Offered Certificates. If for any
reason
the purchase of the Offered Certificates by the Underwriter is not consummated,
Embraer shall remain responsible for the expenses to be paid or reimbursed
by it
pursuant to Section 8 and the respective obligations of the Company, Embraer
and
the Underwriter pursuant to Section 5 shall remain in effect. If the purchase
of
the Offered Certificates by the Underwriter
Page 20
of
30
is
not
consummated for any reason other than solely because of the occurrence of
the
termination of the Agreement pursuant to Section 7, Embraer will reimburse
the Underwriter for all out-of-pocket expenses (including reasonable fees
and
disbursements of counsel) reasonably incurred by them in connection with
the
offering of such Offered Certificates and comply with its obligations under
Section 8.
7. Termination.
This
Agreement shall be subject to termination by notice given by the Underwriter
to
the Company and Embraer, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have
been materially suspended or materially limited on or by, as the case may
be,
any of the New York Stock Exchange, the American Stock Exchange or the National
Association of Securities Dealers, Inc., (ii) trading of any securities of
the Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New
York shall have been declared by either Federal or New York State authorities,
(iv) there shall have occurred any attack on, outbreak or escalation of
hostilities or act of terrorism involving, the United States, or any change
in
financial markets or any calamity or crisis that, in each case, in the
Underwriter’s judgment, is material and adverse or (v) any major disruption of
settlements of securities or clearance services in the United States that
would
materially impair settlement and clearance with respect to the Offered
Certificates and (b) in the case of any of the events specified in clauses
(a)(i) through (v), such event singly or together with any other such event
makes it, in the Underwriter’s judgment, impracticable to market the Offered
Certificates on the terms and in the manner contemplated in the
Prospectus.
8. Payment
of Expenses.
As
among Embraer, the Company and the Underwriter, Embraer shall pay all expenses
incidental to the performance of the Company's and Embraer's obligations
under
this Agreement, including the following:
(i) expenses
incurred in connection with (A) qualifying the Offered Certificates for offer
and sale under the applicable securities or "blue sky" laws of such
jurisdictions in the United States as the Underwriter reasonably designate
(including filing fees and fees and disbursements of counsel for the Underwriter
in connection therewith), (B) endeavoring to maintain such qualifications
in effect so long as required for the distribution of such Offered Certificates,
(C) the review (if any) of the offering of the Offered Certificates by the
National Association of Securities Dealers, Inc., (D) the determination of
the
eligibility of the Offered Certificates for investment under the laws of
such
jurisdictions as the Underwriter may designate and (E) the preparation and
distribution of any blue sky or legal investment memorandum by Underwriter’s
counsel;
(ii) expenses
incurred in connection with the preparation and distribution to the Underwriter
and the dealers (whose names and addresses the Underwriter will furnish to
the
Company) to which Offered Certificates may have been sold by the Underwriter
on
its behalf and to any other dealers upon request, either of (A) amendments
to the Registration Statement or amendments or supplements to the Prospectus
in
order to make the statements therein, in the light of the circumstances when
the
Prospectus is delivered to a purchaser, not materially misleading or
(B) amendments or supplements to the Registration Statement or the
Prospectus so that the Registration Statement or the
Page
21
of
30
Prospectus,
as so amended or supplemented, will comply with law and the expenses incurred
in
connection with causing such amendments or supplements to be filed promptly
with
the Commission, all as set forth in Section 4(a) hereof;
(iii) the
expenses incurred in connection with the preparation, printing and filing
of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, of the Preliminary Prospectus and the
Prospectus and any amendments thereof and supplements thereto, and the cost
of
furnishing copies thereof to the Underwriter;
(iv) expenses
incurred in connection with the preparation, printing and distribution of
this
Agreement, the Offered Certificates and the Operative Agreements;
(v) expenses
incurred in connection with the delivery of the Offered Certificates to the
Underwriter;
(vi) reasonable
fees and disbursements of the counsel and accountants for the
Company;
(vii) to
the
extent Embraer is so required under any Operative Agreement to which it is
a
party, the fees and expenses of the Loan Trustees, the Subordination Agent,
the
Paying Agent, the Trustee, the Escrow Agent, the Depositary, the Liquidity
Provider and the reasonable fees and disbursements of their respective
counsel;
(viii) fees
charged by rating agencies for rating the Offered Certificates (including
annual
surveillance fees related to the Offered Certificates as long as they are
outstanding);
(ix) reasonable
fees and disbursements of counsel for the Underwriter;
(x) all
fees
and expenses relating to appraisals of the Aircraft; and
(xi) all
other
reasonable out-of-pocket expenses incurred by the Underwriter in connection
with
the transactions contemplated by this Agreement; and
(xii) except
as
otherwise provided in the foregoing clauses (i) through (xi), all other expenses
incidental to the performance of the Company's obligations under this Agreement,
other than pursuant to Section 5.
The
provisions of this Section 8 shall not affect any agreements between the
Company, Embraer and any of their respective affiliates for the sharing of,
or
otherwise allocating, costs and expenses.
9. Notices.
All
communications hereunder will be in writing and, if sent to the Underwriter,
will be mailed, delivered or sent by facsimile transmission and confirmed
to it
at
Citigroup Global Markets Inc., 390 Greenwich Street, 4th
Floor,
New York, New York 10013,
Page 22
of
30
Attention:
Greg Lee, facsimile
number (212) 723-8677,
if
sent
to the Company, will be mailed, delivered or sent by facsimile transmission
and
confirmed to it at 1600 Smith Street, HQSEO, Houston, TX 77002, Attention:
Treasurer and General Counsel, facsimile number (713) 324-2447, and if sent
to
Embraer, will be mailed, delivered or sent by facsimile transmission and
confirmed to it at Av.
Brigadeiro Faria Lima, 2170, 12227-901 São José dos Campos, S.P., Brazil,
Attention: Senior Vice President Sales Financing & Asset Management,
facsimile number +55-12-3927-2815, with a copy to Katten Muchin Rosenman
LLP,
1025 Thomas Jefferson Street, N.W., Suite 700, Washington, D.C. 20007,
Attention: Timothy J. Lynes, facsimile number (202) 295-1118;
provided,
however,
that
any notice to the Underwriter pursuant to Section 5 will be sent by facsimile
transmission or delivered and confirmed to the Underwriter.
10. Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the controlling persons referred to in
Section 5, and no other person will have any right or obligation
hereunder.
11. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which will
be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement.
12. APPLICABLE
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF NEW YORK OTHER THAN ANY LAW WHICH WOULD REQUIRE THE APPLICATION
OF A
LAW OF A DIFFERENT JURISDICTION.
13. Submission
to Jurisdiction; Venue; Appointment of Agent.
(a) 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.
Each of the parties to this Agreement agrees that a final action in any such
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other lawful
manner.
(b) Each
party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, and agrees not to assert, by stay 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, or that venue for the action or proceeding is improper.
(c) To
the
fullest extent permitted by applicable law, each party hereto hereby waives
its
respective rights to a jury trial or any claim or cause of action in any
court
in any jurisdiction based upon or arising out of or relating to this
Agreement.
Page 23
of
30
(d) Embraer
hereby irrevocably designates and appoints Corporation Services Company,
1177
Avenue of the Americas, 17th
Floor,
New York, NY 10036 (the "Process
Agent"),
as
the authorized agent of Embraer upon whom process may be served in any such
suit
or proceeding, it being understood that the designation and appointment of
the
Process Agent as such authorized agent shall become effective immediately
without any further action on the part of Embraer. Embraer represents to
the
Underwriter and the Company that it has notified the Process Agent of such
designation and appointment and that the Process Agent has accepted the same
in
writing. Embraer hereby irrevocably authorizes and directs the Process Agent
to
accept such service. Embraer further agrees that service of process upon
the
Process Agent and written notice of said service to Embraer mailed by
first-class mail or delivered to the Process Agent, shall be deemed in every
respect effective service of process upon Embraer in any such suit or
proceeding. Nothing herein shall affect the right of the Underwriter or the
Company, or any person controlling the Underwriter or the Company, to serve
process in any
other
manner permitted by law.
14. Sovereign
Immunity.
Each
party hereto hereby irrevocably agrees that, to the extent that it or any
of its
assets now has or may hereafter acquire any right of immunity as against
any
other party hereto or its respective successors and assigns, whether
characterized as sovereign immunity or otherwise, from any legal proceedings,
whether in the United States or elsewhere, arising out of this Agreement
or the
subject matter hereof or any of the transactions contemplated hereby brought
by
any of the parties hereto or their successors or assigns, including, without
limitation, immunity from service of process, immunity from jurisdiction
or
judgment of any court or tribunal, immunity from execution of a judgment,
and
immunity of any of its assets from attachment in aid of execution upon a
judgment, it hereby expressly and irrevocably waives and agrees not to assert
any such immunity and such waiver shall be irrevocable and not subject to
withdrawal in any jurisdiction, including, without limitation, under the
United
States Foreign Sovereign
Immunities Act of 1976.
15. Currency
Indemnity.
In the
event of a judgment, order or award being rendered by any court or tribunal
for
the payment of any amounts owing to any party hereto (the "Payee")
under
this Agreement or for the payment of damages in respect of a judgment or
order
of another court or tribunal for the payment of such amount or damages, such
judgment, order or award being expressed in a currency (the "Judgment
Currency")
other
than United States dollars (the "Agreed
Currency"),
each
party hereto obligated to pay such amounts owing (each, a "Payor")
agrees, to the fullest extent permitted by applicable law, (a) that its
obligations in respect of any such amounts owing shall be discharged only
to the
extent that on the business day following the Payee's receipt of any sum
adjudged in the Judgment Currency the Payee may in accordance with the normal
banking procedures purchase the Agreed Currency with the Judgment Currency
and
(b) to indemnify and hold harmless the Payee against any deficiency in terms
of
the Agreed Currency in the amounts actually received by the Payee following
any
such purchase (after deduction of any premiums and costs of exchange payable
in
connection with the purchase of, or conversion into, the Agreed Currency).
The
indemnity set forth in the preceding sentence shall (notwithstanding any
judgment referred to in the preceding sentence) constitute an obligation
of each
Payor separate and independent from its other obligations hereunder and shall
apply irrespective of any indulgence granted by the Payee.
Page 24
of
30
16. No
Fiduciary Duty.
Each of
the Company and Embraer hereby acknowledges that (a) the Underwriter is acting
as principal and not as an agent or fiduciary of the Company or Embraer and
(b)
their engagement of the Underwriter in connection with the transactions
contemplated hereby is as an independent contractor and not in any other
capacity. Furthermore, each of the Company and Embraer agrees that it is
solely
responsible for making its own judgments in connection with the transactions
contemplated hereby (irrespective of whether the Underwriter has advised
or is
currently advising the Company or Embraer on related or other
matters).
Page 25
of
30
If
the
foregoing is in accordance with the Underwriter’s understanding of our
agreement, kindly sign and return to the Company one of the counterparts
hereof,
whereupon it will become a binding agreement among the Underwriter, the
Depositary, Embraer and the Company in accordance with its terms.
Very
truly yours,
CONTINENTAL
AIRLINES, INC.
By:_______________________________
Name:
Title:
EMBRAER
-
EMPRESA BRASILEIRA DE AERONÁUTICA S.A.
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
The
foregoing Underwriting Agreement
is
hereby
confirmed and accepted
as
of the
date first above written
By: CITIGROUP
GLOBAL MARKETS INC.
By:_______________________________
Name:
Title:
Page 26
of
30
CITIBANK,
N.A.,
as
Depositary
By:_______________________________
Name:
Title:
Page 27
of
30
SCHEDULE I
(Pass
Through Certificates, Series 2005-ERJ1)
CONTINENTAL
AIRLINES, INC.
|
Pass
Through
Certificate
Designation
|
Aggregate
Principal
Amount
|
Interest
Rate
|
Final
Maturity
Date
|
|
2005-ERJ1
|
$311,010,000
|
9.798%
|
October
1, 2022
|
Page 28
of
30
SCHEDULE II
CONTINENTAL
AIRLINES, INC.
|
Underwriting
commission
and
other compensation:
|
$2,021,565.00
|
|
Closing
date, time and location:
|
September
22, 2005
10:00 A.M.,
New
York time
Hughes
Hubbard & Reed LLP
One
Battery Park Plaza
New
York, New York 10004
|
Page 29
of
30
ANNEX
I
For
purposes of the Underwriting Agreement, "Continental
Information"
shall
consist of the following information:
(i) with
respect to the Basic Prospectus, all information included therein and all
documents deemed to be incorporated by reference therein (and exhibits to
such
documents if so incorporated), but excluding the Basic Agreement and any
documents filed with the Commission subsequent to the Closing Date in connection
with the transactions contemplated by this Agreement;
(ii) with
respect to the Registration Statement, all information included therein and
all
documents deemed to be incorporated by reference therein (and exhibits to
such
documents if so incorporated), but excluding the Basic Agreement and any
documents filed with the Commission subsequent to the Closing Date in connection
with the transactions contemplated by this Agreement; and
(iii) with
respect to the Preliminary Prospectus Supplement and the Prospectus Supplement,
the statements set forth in the following sections:
(a) "Summary
Financial and Operating Data";
(b) "Risk
Factors--Risk Factors Relating to the Company" and "Risk Factors--Risk Factors
Relating to the Airline Industry";
(c) "The
Company"; and
(d) "Incorporation
of Certain Documents by Reference", and all documents deemed to be incorporated
by reference in the Preliminary Prospectus Supplement or Prospectus Supplement,
as the case may be, as specified in "Incorporation of Certain Documents by
Reference" (and exhibits to such documents if so incorporated), but excluding
the Basic Agreement and any documents filed with the Commission subsequent
to
the Closing Date in connection with the transactions contemplated by this
Agreement.
For
purposes of the Underwriting Agreement, "Embraer
Information"
shall
consist of all of the information in the Registration Statement, the Basic
Prospectus, the Preliminary Prospectus Supplement and the Prospectus Supplement
other than the Continental Information.
Page 30 of 30
EXECUTION
COPY
TRUST
SUPPLEMENT No. 2005-ERJ1
Dated
as
of September 22, 2005
between
WILMINGTON
TRUST COMPANY,
as
Trustee,
and
CONTINENTAL
AIRLINES, INC.
to
PASS
THROUGH TRUST AGREEMENT
Dated
as
of September 25, 1997
$311,010,000
Continental
Airlines Pass Through Trust 2005-ERJ1
9.798%
Continental Airlines
Pass
Through Certificates,
Series
2005-ERJ1
This
Trust Supplement No. 2005-ERJ1, dated as of September 22, 2005 (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
60;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 wishes to lease certain Aircraft from the relevant Owner
Trustees;
WHEREAS,
in the case of each Aircraft, the related Owner Trustee, acting on behalf
of the
related Owner Participant, will issue pursuant to an Indenture, on a
non-recourse basis, one series of Equipment Notes in order to finance the
debt
portion of the purchase price of such Aircraft;
WHEREAS,
the Trustee hereby declares the creation of this Continental Airlines Pass
Through Trust 2005-ERJ1 (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 Underwriter have contemporaneously herewith entered
into an Escrow Agreement with the Escrow Paying Agent pursuant to which the
Underwriter has delivered to the Escrow Agent the proceeds from the sale
of the
Applicable Certificates, to the extent not used to purchase Equipment Notes
on
the Issuance Date, 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 financed under the
NPA
(as hereinafter defined) 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;
1
WHEREAS,
pursuant to the terms and conditions of the Basic Agreement as supplemented
by
this Trust Supplement (the “Agreement”)
and
the NPA, upon the financing of an Aircraft, the Trustee on behalf of the
Applicable Trust, using funds withdrawn under the Escrow Agreement (or, if
financed on the Issuance Date, using a portion of the proceeds of the sale
of
the Applicable Certificates), 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;
and
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 “9.798% Continental Airlines Pass Through
Certificates, Series 2005-ERJ1” (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, 3.05 and 3.06
of the Basic Agreement) is $311,010,000.
(b) The
Regular Distribution Dates with respect to any payment of Scheduled Payments
means the 1st
day of
each month, commencing on October 1, 2005 until payment of all of the Scheduled
Payments to be made under the Equipment Notes has been made.
2
(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 or an interest therein
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
“Participation Agreements” as defined in this Trust Supplement are the “Note
Purchase Agreements” referred to in the Basic Agreement.
(g) The
Applicable Certificates are subject to the Intercreditor Agreement, the Deposit
Agreement and the Escrow Agreement.
(h) The
Applicable Certificates are entitled to the benefits of the Liquidity
Facility.
(i) The
Responsible Party is the Company.
(j) The
date
referred to in clause (i) of the definition of the term “PTC Event of Default”
in the Basic Agreement is the Final Maturity Date.
3
(k) The
“particular sections of the Note Purchase Agreement”, for purposes of clause (3)
of Section 7.07 of the Basic Agreement, are Section 9.1 of each Participation
Agreement.
(l) The
Equipment Notes to be acquired and held in the Applicable Trust, and the
related
Aircraft and Note Documents, are described in the NPA.
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 (any term used herein
which is defined in both this Trust Supplement and the Basic Agreement shall
have the meaning assigned thereto in this Trust Supplement for purposes of
the
Basic Agreement as supplemented by this Trust Supplement):
Agreement:
Has the
meaning specified in the recitals hereto.
Aircraft:
Means
each of the Aircraft (as defined in the NPA) or Substitute Aircraft in respect
of which a Participation Agreement is to be or is, as the case may be, entered
into in accordance with the NPA (or any substitute aircraft, including engines
therefor, leased to the Company and securing one or more Equipment
Notes).
Aircraft
Purchase Agreement:
Means
the “Purchase Agreement” as defined in the NPA.
Applicable
Certificate:
Has the
meaning specified in Section 1.01 of this Trust Supplement.
Applicable
Certificateholder:
Means
the Person in whose name an Applicable Certificate is registered on the Register
for the Applicable Certificates.
Applicable
Closing 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.
Applicable
Trust:
Has the
meaning specified in the recitals hereto.
Basic
Agreement:
Has the
meaning specified in the first paragraph of this Trust Supplement.
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
4
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.
Company:
Has the
meaning specified in the first paragraph of this Trust Supplement.
Controlling
Party:
Has the
meaning specified in the Intercreditor Agreement.
Cut-off
Date:
Means
the earlier of (a) the Delivery Period Termination Date and (b) the date
on
which a Triggering Event occurs.
Delivery
Notice:
Has the
meaning specified in the NPA.
Delivery
Period Termination Date:
Means
the earlier of (a) May 31, 2006, or, if the Equipment Notes relating to all
of
the Aircraft (or Substitute Aircraft in lieu thereof) have not been purchased
by
the Trustee 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, August 31, 2006
and (b) the date on which Equipment Notes issued with respect to all of the
Aircraft (or Substitute Aircraft in lieu thereof) have been purchased by
the
Pass Through Trustee in accordance with the NPA.
Deposit
Agreement:
Means
the Deposit Agreement dated as of September 22, 2005 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
Citibank, N.A., a national banking association.
Deposits:
Has the
meaning specified in the Deposit Agreement.
Distribution
Date:
Means
any Regular Distribution Date or Special Distribution Date as the context
requires.
Embraer:
Means
Embraer-Empresa
Brasileira de Aeronáutica S.A.
Escrow
Agent:
Means,
initially, Wells Fargo Bank Northwest, 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 September 22, 2005 relating
to
the Applicable Certificates, among the Escrow Agent, the Escrow Paying Agent,
the Trustee and Underwriter, 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.
5
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
October 1, 2022.
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
NPA 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 (2005-ERJ1) dated as of September 22, 2005 among
the
Trustee, the Liquidity Provider 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 Underwriter together with all subsequent beneficial owners of the Applicable
Certificates.
Liquidity
Facility:
Means,
initially, the Revolving Credit Agreement (2005-ERJ1) dated as of September
22,
2005 relating to the Applicable Certificates, between Landesbank
Baden-Württemberg 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, as amended, supplemented or otherwise modified from time
to
time in accordance with its terms.
Liquidity
Provider:
Means,
initially, Landesbank Baden-Württemberg, a bank established in Germany as a
public law institution with legal capacity (Rechtsfähige
Anstalt des Öffentlichen Rechts),
and
any replacement or successor therefor appointed in accordance with the
Intercreditor Agreement.
Note
Documents:
Means
the Equipment Notes with respect to the Applicable Certificates and, with
respect to any such Equipment Note, the related Indenture, Participation
Agreement and Lease.
Notice
of Purchase Withdrawal:
Has the
meaning specified in the Deposit Agreement.
6
NPA:
Means
the Note Purchase Agreement dated as of September 22, 2005 among the Trustee,
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 Applicable Trust, as the same may be amended,
supplemented or otherwise modified from time to time, in accordance with
its
terms.
Participation
Agreement:
Means
each Participation Agreement entered into or to be entered into, as the case
may
be, by the Trustee pursuant to the NPA, as the same may be amended, supplemented
or otherwise modified from time to time 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
payments with respect to other Trust Property and the distribution thereof
to be
made on that date.
Prospectus
Supplement:
Means
the final Prospectus Supplement dated September 14, 2005 relating to the
offering of the Applicable Certificates.
Ratings
Confirmation:
Has the
meaning specified in the Intercreditor Agreement.
Scheduled
Closing Date:
Has the
meaning specified in the NPA.
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).
Substitute
Aircraft:
Has the
meaning specified in the NPA.
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
7
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 NPA and the Liquidity
Facility, 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 Facility, 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.
Trust
Supplement:
Has the
meaning specified in the first paragraph of this trust supplement.
Underwriter:
Means
Citigroup Global Markets Inc.
Underwriting
Agreement:
Means
the Underwriting Agreement dated September 14, 2005 among the Underwriter,
the
Company, the Depositary and Embraer, 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. 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, 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, 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;
8
(v) the
amount of such distribution under the Escrow Agreement allocable to unused
Deposits, if any; 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 calendar
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
3.01(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 (y) and (z) below from that set forth
in
pages S-32 through S-36 of the Prospectus Supplement, and (ii) the date of
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.
9
(d) This
Section 3.01 supersedes and replaces Section 4.03 of the Basic Agreement,
with
respect to the Applicable Trust.
Section
3.02. Special
Payments Account.
(a) The
Trustee shall establish and maintain on behalf of the Applicable
Certificateholders a Special Payments Account as one or more accounts, which
shall be non-interest bearing except as provided in Section 4.04 of the Basic
Agreement. The Trustee shall hold the Special Payments Account in trust for
the
benefit of the Applicable Certificateholders and shall make or permit
withdrawals therefrom only as provided in the Agreement. On each day when
one or
more Special Payments are made to the Trustee under the Intercreditor Agreement,
the Trustee, upon receipt thereof, shall immediately deposit the aggregate
amount of such Special Payments in the Special Payments Account.
(b)
This
Section 3.02 supersedes and replaces Section 4.01(b) of the Basic Agreement
in
its entirety, with respect to the Applicable Trust.
Section
3.03. Distributions
from Special Payments Account.
(a) On
each Special Distribution Date with respect to any Special Payment or as
soon
thereafter as the Trustee has confirmed receipt of any Special Payments due
on
the Equipment Notes held (subject to the Intercreditor Agreement) in the
Applicable Trust or realized upon the sale of such Equipment Notes, the Trustee
shall distribute out of the Special Payments Account the entire amount of
such
Special Payment deposited therein pursuant to Section 3.02(a) of this Trust
Supplement. There shall be so distributed to each Applicable Certificateholder
of record on the Record Date with respect to such Special Distribution Date
(other than as provided in Section 11.01 of the Basic Agreement concerning
the
final distribution) by check mailed to such Applicable Certificateholder,
at the
address appearing in the Register, such Applicable Certificateholder’s pro rata
share (based on the Fractional Undivided Interest in the Applicable Trust
held
by such Applicable Certificateholder) of the total amount in the Special
Payments Account on account of such Special Payment, except that, with respect
to Applicable Certificates registered on the Record Date in the name of a
Clearing Agency (or its nominee), such distribution shall be made by wire
transfer in immediately available funds to the account designated by such
Clearing Agency (or such nominee).
(b) The
Trustee shall, at the expense of the Company, cause notice of each Special
Payment to be mailed to each Applicable Certificateholder at his address
as it
appears in the Register. In the event of redemption or purchase of Equipment
Notes held in the Applicable Trust, such notice shall be mailed not less
than 15
days prior to the Special Distribution Date for the Special Payment resulting
from such redemption or purchase, which Special Distribution Date shall be
the
date of such redemption or purchase. In the case of any other Special Payments,
such notice shall be mailed as soon as practicable after the Trustee has
confirmed that it has received funds for such Special Payment, stating the
Special Distribution Date for such Special Payment which shall occur not
less
than 15 days after the date of such notice and as soon as practicable
thereafter. Notices mailed by the Trustee shall set forth:
(i) the
Special Distribution Date and the Record Date therefor (except as otherwise
provided in Section 11.01 of the Basic Agreement),
10
(ii) the
amount of the Special Payment for each $1,000 face amount Applicable Certificate
and the amount thereof constituting principal, premium, if any, and
interest,
(iii) the
reason for the Special Payment, and
(iv) if
the
Special Distribution Date is the same date as a Regular Distribution Date,
the
total amount to be received on such date for each $1,000 face amount Applicable
Certificate.
If
the
amount of premium, if any, payable upon the redemption or purchase of an
Equipment Note has not been calculated at the time that the Trustee mails
notice
of a Special Payment, it shall be sufficient if the notice sets forth the
other
amounts to be distributed and states that any premium received will also
be
distributed.
If
any
redemption of the Equipment Notes held in the Trust is canceled, the Trustee,
as
soon as possible after learning thereof, shall cause notice thereof to be
mailed
to each Applicable Certificateholder at its address as it appears on the
Register.
(b)
This
Section 3.03 supersedes and replaces Section 4.02(b) and Section 4.02(c)
of the
Basic Agreement in their entirety, with respect to the Applicable
Trust.
ARTICLE
IV
DEFAULT
Section
4.01. Amendment
of Section 6.05 of the Basic Agreement.
Section
6.05 of the Basic Agreement shall be amended, with respect to the Applicable
Trust, by deleting the phrase “and thereby annul any Direction given by such
Certificateholders or the Trustee to such Loan Trustee with respect thereto,”
set forth in the first sentence thereof.
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 NPA 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
equaling in the aggregate the amount set forth, with respect to the Applicable
Trust, in Schedule I 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 NPA. 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. The provisions of this
11
Section 5.01(a)
supersede and replace the first sentence of Section 3.02(a) of the Basic
Agreement, with respect to the Applicable Trust.
(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
Scheduled Closing Date as to which such Delivery Notice relates (the
“Applicable
Closing 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 Closing 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 issuing such Equipment
Notes, all as shall be described in the Delivery Notice; provided
that, if
the Issuance Date is an Applicable Closing Date, the Trustee shall not so
instruct the Escrow Agent, and the purchase price of such Equipment Notes
shall
be paid from a portion of the proceeds of the sale of the Applicable
Certificates. The Trustee shall (as and when specified in such Delivery Notice),
subject to the conditions set forth in Section 2 of the NPA, 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 Closing Date, the Trustee receives a notice
of
postponement pursuant to Section 1(e) or 1(f) of the NPA, 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 Closing Date. Upon satisfaction of the conditions specified
in
the NPA 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 Closing Date in accordance with the
terms
of the Deposit Agreement and the Escrow Agreement (or, if the Issuance Date
is
the Applicable Closing Date with respect to such Applicable Participation
Agreement, from a portion of the proceeds of the sale of the Applicable
Certificates; provided,
that,
if any portion of such proceeds is not used to purchase Equipment Notes by
3:30
p.m., New York time, on such date, the Trustee (on behalf of the Investors)
shall immediately (but in no event later than 4:00 p.m., New York time, on
such
date) deposit such unused proceeds with the Depositary (in Federal immediately
available funds by wire transfer) in accordance with the Deposit Agreement
and
such deposit or deposits shall constitute a "Deposit" or "Deposits" (as defined
therein) for all purposes thereunder). 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 Closing Date
to
the purchase price of the Equipment Notes, shall be re-deposited by the Trustee
with the Depositary on the Applicable Closing 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 with respect
to
the Applicable 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.
12
(c)
The
Trustee acknowledges its acceptance of all right, title and interest in and
to
the Trust Property to be acquired pursuant to Section 5.01(b) of this Trust
Supplement, the NPA and each Applicable Participation Agreement, and declares
that it holds and will hold such right, title and interest for the benefit
of
all present and future Applicable Certificateholders, upon the trusts set
forth
in the Agreement. By its acceptance of an Applicable Certificate, each initial
Applicable Certificateholder, as a grantor of the Applicable Trust, joins
with
the Trustee in the creation of the Applicable Trust. The provisions of this
Section 5.01(c) supersede and replace the provisions of Section 2.03 of the
Basic Agreement, with respect 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, the Trustee shall give the Escrow Agent notice that the Trustee’s
obligation to purchase Equipment Notes under the NPA 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”).
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, the NPA 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, except
that
the Trustee hereby represents and warrants that each of this Trust Supplement,
the Basic Agreement, each Applicable Certificate, the Intercreditor Agreement,
the NPA and the Escrow Agreement has been executed and delivered by one of
its
officers who is duly authorized to execute and deliver such document on its
behalf.
(b) Except
as
herein otherwise provided and except during the continuation of an Event
of
Default in respect of the Applicable Trust created hereby, 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 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
Agreement, 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 Intercreditor Agreement, the Escrow
Agreement, the NPA and the Note Documents to which it is or is to become
a party
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Supplement, the Intercreditor Agreement,
the
Escrow Agreement, the NPA and the Note Documents to which it is or is to
become
a party;
(b) the
execution, delivery and performance by the Trustee of this Trust Supplement,
the
Intercreditor Agreement, the Escrow Agreement, the NPA and the Note
13
Documents
to which it is or is to become 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
Intercreditor Agreement, the Escrow Agreement, the NPA and the Note Documents
to
which it is or is to become 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 Intercreditor Agreement, the Escrow Agreement, the
NPA and
the Note Documents to which it is or is to become 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
NPA.
14
ARTICLE
VI
ADDITIONAL
AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section
6.01. Amendment
of Section 5.02 of the Basic Agreement.
Section
5.02 of the Basic Agreement shall be amended, with respect to the Applicable
Trust, by (i) replacing the phrase “of the Note Documents and of this Agreement”
set forth in paragraph (b) thereof with the phrase “of the Note Documents, of
the NPA and of this Agreement” and (ii) replacing the phrase “of this Agreement
and any Note Document” set forth in the last paragraph of Section 5.02 with
the phrase “of this Agreement, the NPA and any Note Document”.
Section
6.02. Supplemental
Agreements Without Consent of Applicable Certificateholders.
Without
limitation of Section 9.01 of the Basic Agreement, 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 NPA or the Deposit Agreement, for any of the purposes
set forth in clauses (1) through (9) of such Section 9.01, and (without
limitation of the foregoing or Section 9.01 of the Basic Agreement) (a) clauses
(2) and (3) of such Section 9.01 shall also 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 NPA, and
(b) references in clauses (4), (6) and (7) of such Section 9.01 to “any
Intercreditor Agreement or any Liquidity Facility” shall also be deemed to refer
to “the Intercreditor Agreement, the Liquidity Facility, the Escrow Agreement,
the NPA or the Deposit Agreement”.
Section
6.03. Supplemental
Agreements with Consent of Applicable Certificateholders.
Without
limitation of Section 9.02 of the Basic Agreement, 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 NPA
or
modifying in any manner the rights and obligations of the Applicable
Certificateholders under the Escrow Agreement, the Deposit Agreement or the
NPA;
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
MISCELLANEOUS
PROVISIONS
Section 7.01.
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. All replacements of provisions
of, and
other modifications of the Basic Agreement set forth in this Trust Supplement
are solely with respect to the Applicable Trust.
15
Section
7.02. GOVERNING
LAW.
THE AGREEMENT AND THE APPLICABLE CERTIFICATES HAVE BEEN DELIVERED IN THE
STATE
OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS
OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. THIS SECTION
7.02
SUPERSEDES AND REPLACES SECTION 12.05 OF THE BASIC AGREEMENT, WITH RESPECT
TO
THE APPLICABLE TRUST.
Section
7.03. 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
7.04. 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.
16
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:
Title:
WILMINGTON
TRUST COMPANY,
as
Trustee
By:_________________________
Name:
Title:
17
EXHIBIT
A
FORM
OF
CERTIFICATE
Certificate
No.
[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 2005-ERJ1
9.798%
Continental Airlines Pass Through Certificate, Series 2005-ERJ1
Issuance
Date: September 22, 2005
Final
Maturity Date: October 1, 2022
Evidencing
A Fractional Undivided Interest In The Continental Airlines Pass Through
Trust
2005-ERJ1, The Property Of Which Shall Include Certain Equipment Notes Each
Secured By An Aircraft Leased To Continental Airlines, Inc.
$[_____________]
Fractional Undivided Interest
representing
0.0003215330697% 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
2005-ERJ1 (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
__________________
* This
legend to appear on Book-Entry Certificates to be deposited with the Depository
Trust Company.
A-1
supplemented
by Trust Supplement No. 2005-ERJ1 thereto, dated as of September 22, 2005
(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 “9.798% Continental Airlines Pass Through Certificates, Series
2005-ERJ1”(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 (the “Certificateholder”
and,
together with all other holders of Certificates issued by the Trust, the
“Certificateholders”)
assents to and agrees to be bound by the provisions of the Agreement and
the
Intercreditor Agreement. The property of the Trust includes certain Equipment
Notes and all rights of the Trust to receive payments under the Intercreditor
Agreement and the Liquidity Facility (the “Trust
Property”).
Each
issue of the Equipment Notes is secured by, among other things, a security
interest in an Aircraft leased to 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 the 1st
day of
each month (a “Regular
Distribution Date”)
commencing on October 1, 2005 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.
A-2
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 of 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, privileges, 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.
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
A-3
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 an interest herein are
exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administrative
exemptions.
THE
AGREEMENT AND THIS CERTIFICATE HAVE BEEN DELIVERED IN THE STATE OF NEW YORK
AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF
NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless
the certificate of authentication hereon has been executed by the Trustee,
by
manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
A-4
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL
AIRLINES PASS
THROUGH
TRUST
2005-ERJ1
By: WILMINGTON
TRUST COMPANY,
as
Trustee
By:_________________________
Name:
Title:
A-5
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]
EXECUTION
VERSION
_________________________________________________________________
REVOLVING
CREDIT AGREEMENT
(2005-ERJ1)
Dated
as
of September 22, 2005
between
WILMINGTON
TRUST COMPANY,
as
Subordination Agent,
as
agent
and trustee for the
Continental
Airlines Pass Through Trust 2005-ERJ1,
as
Borrower,
and
LANDESBANK
BADEN-WÜRTTEMBERG,
as
Liquidity Provider
_________________________________________________________________
Continental
Airlines Pass Through Trust 2005-ERJ1
Continental
Airlines 9.798% Pass Through Certificates,
Series
2005-ERJ1
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REVOLVING
CREDIT AGREEMENT (2005-ERJ1)
This
REVOLVING CREDIT AGREEMENT (2005-ERJ1), dated as of September 22, 2005, is
made by and 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 Trust (as
defined below) (the "Borrower"),
and
LANDESBANK BADEN-WÜRTTEMBERG, a bank established in Germany as a public law
institution with legal capacity (Rechtsf’hige
Anstalt des Öffentlichen Rechts)
(the
"Liquidity
Provider").
W
I T
N E S S E T H:
WHEREAS,
pursuant to the 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 Trust is issuing the Certificates; and
WHEREAS,
the Borrower, in order to support the timely payment of a portion of the
interest on the 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 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:
DEFINITIONS
Section
1.01. Certain
Defined Terms.
(a)
As
used
in this Agreement and unless 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
Costs"
has the
meaning assigned to such term in Section 3.01.
"Advance"
means
an Interest Advance, a Final Advance, a Special Termination Advance, a Provider
Advance or an Applied Provider Advance, as the case may be.
"Agreement"
means
this Revolving Credit Agreement (2005-ERJ1), dated as of September 22,
2005, between the Borrower and the Liquidity Provider, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with
its terms.
"Applicable
Liquidity Rate"
has the
meaning assigned to such term in Section 3.07(f).
"Applicable
Margin"
means
(i) with respect to any Unpaid Advance (other than an Unapplied Special
Termination Advance) or Applied Provider Advance, 2.5% per annum, and
(ii) with respect to any Unapplied Provider Advance or any Unapplied
Special Termination Advance, the margin per annum specified in the Fee
Letter.
"Applied
Downgrade Advance"
has the
meaning assigned to such term in Section 2.06(a).
"Applied
Early Termination 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).
"Applied
Special Termination Advance"
has the
meaning assigned to such term in Section 2.05.
"Base
Rate"
means,
on any day, 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, a 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 the 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 LIBOR, on which dealings
are
carried on in the London interbank market.
"Deposit
Agreement"
means
the Deposit Agreement dated as of the date hereof between Wells Fargo Bank
Northwest, National Association, as Escrow Agent, and Citibank, N.A., as
Depositary, pertaining to the Certificates, as the same may be amended, modified
or supplemented from time to time in accordance with the terms
thereof.
"Depositary"
means
Citibank, N.A.
"Deposits"
has the
meaning assigned to such term in the Deposit Agreement.
"Dollars"
or
"$"
means
United States dollars.
"Downgrade
Advance"
means
an Advance made pursuant to Section 2.02(d).
"Downgrade
Event"
means a
downgrading of the Liquidity Provider's short-term unsecured debt rating or
short-term issuer credit rating, as the case may be, issued by either Rating
Agency below the applicable Threshold Rating unless each Rating Agency shall
have confirmed in writing on or prior to the date of such downgrading that
such
downgrading will not result in the downgrading, withdrawal or suspension of
the
ratings of the Certificates.
"Early
Termination Advance"
means
an advance made pursuant to Section 2.02(b).
"Early
Termination Date"
means
the date specified in an Early Termination Notice delivered by the Liquidity
Provider to the Borrower in accordance with Section 2.10, which date shall
not
be earlier than the 25th
day
following the receipt by the Borrower of such Early Termination
Notice.
"Early
Termination Notice"
has the
meaning assigned to such term in Section 2.10.
"Early
Termination Notice Period"
means
the period from the 40th day to and including the 25th day prior to the
anniversary of the Closing Date in each calendar year.
"Effective
Date"
has the
meaning assigned to such term 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, based on or measured by the income of, or franchise Taxes
imposed on, the Liquidity Provider or its Lending Office by the jurisdiction
where such Liquidity Provider's principal office or such Lending Office is
located or any other taxing jurisdiction in which such Tax is imposed as a
result of the Liquidity Provider being, or having been, organized in, or
conducting, or having conducted, any activities unrelated to the transactions
contemplated by the Operative Agreements in, such jurisdiction or (ii)
withholding taxes, whether or not indemnified under Section 3.03.
"Excluded
Withholding Taxes"
means
(i) withholding Taxes imposed by the United States except (a) if such Liquidity
Provider is, on the date hereof (or, in the case of any successor Liquidity
Provider, on the date it acquires its interest herein), a "resident" of an
Applicable Treaty jurisdiction entitled to claim the benefits of an Applicable
Treaty in respect of amounts payable hereunder, any such withholding Tax to
the
extent imposed as a result of a change in applicable law or treaty (other than
any addition of, or change in, any "anti-treaty shopping", "limitation on
benefits", or similar provision in any treaty or other applicable law
restricting the availability of treaty benefits (including, without limitation
any provision similar to the Protocol Amending the Convention Between the United
States of America and the Kingdom of the Netherlands for the Avoidance of Double
Taxation and the Prevention of Fiscal
Evasion
with respect to Taxes on Income, signed at Washington on October 13, 1993))
after the date hereof (or, in the case of any successor Liquidity Provider,
after the date it acquired its interest herein) and (b) any such withholding
Tax
to the extent the amount of such withholding Tax imposed on such successor
Liquidity Provider does not exceed the amount of such withholding Tax that,
in
the absence of the transfer to such successor Liquidity Provider, would have
been an Indemnified Tax imposed on payments to the predecessor Liquidity
Provider pursuant to applicable law in effect on the date such successor
Liquidity Provider acquired its interest herein, (ii) any Tax imposed or to
the
extent increased as a result of the Liquidity Provider failing to deliver to
the
Borrower any certificate or document (the delivery of which certificate or
document in the good faith judgment of the Liquidity Provider will not expose
the Liquidity Provider to any adverse consequence and which the Liquidity
Provider 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, and (iii) any Tax imposed by
a
jurisdiction as a result of the Liquidity Provider being, or having been,
organized in, or maintaining, or having maintained, its principal office or
Lending Office in, or conducting, or having conducted, any activities unrelated
to the transactions contemplated by the Operative Agreements in, such
jurisdiction. For purposes of this definition, "Applicable
Treaty"
means
an income tax treaty between the United States and any of Australia, Austria,
Canada, France, Germany, Ireland, Japan, Luxembourg, The Netherlands, Sweden,
Switzerland or the United Kingdom.
"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 other than sales, use and
V.A.T. taxes imposed on fees and expenses payable pursuant to Section
7.07.
"Expiry
Date"
means
October 16, 2022.
"Final
Advance"
means
an Advance made pursuant to Section 2.02(e).
"Indemnified
Tax"
has the
meaning assigned to such term in Section 3.03.
"Intercreditor
Agreement"
means
the Intercreditor Agreement dated as of the date hereof, among the Trustee,
the
Liquidity Provider 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 (and including) the third London/Stuttgart Business Day following
either (A) the Liquidity Provider's receipt of the Notice of Borrowing for
such
LIBOR Advance or (B) the date on which funds are withdrawn
from
the
Cash Collateral Account for the purpose of paying interest on the Certificates
as contemplated by Section 2.06(a) hereof and, in either case, ending on
(but excluding) the next Regular Distribution Date; and
(i) each
subsequent
period commencing on (and including) the last day of the immediately
preceding
Interest Period and ending on (but excluding) the next Regular Distribution
Date;
provided,
however,
that 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 London/Stuttgart
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); provided further
that if
the last day of any Interest Period shall not be a Business Day, such Interest
Period will end on the next succeeding Business Day.
"Lending
Office"
means
the lending office of the Liquidity Provider presently located at Stuttgart,
Germany, 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 another lending
office outside Germany or the United States of America except in accordance
with
Section 3.11 hereof.
"LIBOR"
means,
with respect to any Interest Period,
(i) the
rate per annum
appearing on display page 3750 (British Bankers Association-LIBOR) of the
Telerate Service (or any successor or substitute therefor) at approximately
11:00 a.m. (London time) two London/Stuttgart Business Days before the first
day
of such Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period; or
(ii)
if
the
rate calculated pursuant to clause (i) above is not available, the average
(rounded upwards, if necessary, to the next 1/16 of 1%) of the rates per annum
at which deposits in dollars are offered for the relevant Interest Period by
three banks of recognized standing selected by the Liquidity Provider in the
London interbank market at approximately 11:00 a.m. (London time) two
London/Stuttgart Business Days before the first day of such Interest Period
in
an amount approximately equal to the principal amount of the LIBOR Advance
to
which such Interest Period is to apply and for a period comparable to such
Interest Period; or
(iii)
if
clause
(ii) above is applicable but fewer than three banks in the London interbank
market provide such rate, the average (rounded upwards, if necessary, to the
next 1/16 of 1%) of the rates per annum quoted by three banks in New York City
of recognized standing selected by the Liquidity Provider at approximately
11:00
a.m. (New York City time) two
Business
Days before the first day of such Interest Period for loans in Dollars to
leading European banks in an amount approximately equal to the principal amount
of the LIBOR Advance to which such Interest Period is to apply and for a period
comparable to such Interest Period.
"LIBOR
Advance"
means
an Advance bearing interest at a rate based upon LIBOR.
"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
$195 million) 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).
"Liquidity
Provider"
has the
meaning assigned to such term in the recital of parties to this
Agreement.
"London/Stuttgart
Business Day"
means
any day on which commercial banks are open for general business in London,
England and Stuttgart, Germany.
"Maximum
Available Commitment"
means,
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, a Special Termination Advance or a Final Advance,
the Maximum Available Commitment shall be zero.
"Maximum
Commitment"
means
initially $45,709,139.70, as the same may be reduced from time to time in
accordance with Section 2.04(a).
"Notice
of Borrowing"
has the
meaning assigned to such term in Section 2.02(g).
"Notice
of Replacement Subordination Agent"
has the
meaning assigned to such term 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 final Prospectus Supplement dated September 14, 2005 relating to the
Certificates, as such Prospectus Supplement may be amended or
supplemented.
"Provider
Advance"
means a
Downgrade Advance or an Early Termination 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).
"Special
Termination Advance"
means
an Advance made pursuant to Section 2.02(f).
"Special
Termination Notice"
means
the Notice of Special Termination substantially in the form of Annex IX 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 Certificates
have been paid in full (or provision has been made for such payment in
accordance with the Intercreditor Agreement and the Trust Agreement) 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 or Special
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 VI to this
Agreement.
"Transferee"
has the
meaning assigned to such term in Section 7.08(b).
"Unapplied
Early Termination Advance"
means
any portion of an Early Termination Advance which is not an Applied Early
Termination Advance.
"Unapplied
Provider Advance"
means
any portion of any Provider Advance that is not an Applied Provider
Advance.
"Unapplied
Special Termination Advance"
means
any portion of a Special Termination Advance that is not an Applied Special
Termination Advance.
"Unpaid
Advance"
has the
meaning assigned to such term in Section 2.05.
(b)
For
the
purposes of this Agreement, the following terms shall have the respective
meanings assigned to such terms in the Intercreditor Agreement:
"Acceleration",
"Cash
Collateral Account",
"Certificate",
"Certificateholder",
"Closing
Date",
"Continental",
"Continental
Bankruptcy Event",
"Controlling
Party",
"Corporate
Trust Office",
"Delivery
Period Expiry Date",
"Distribution
Date",
"Downgraded
Facility",
"Early
Terminated Facility",
"Equipment
Notes",
"Fee
Letter",
"Final
Legal Distribution Date",
"Financing
Agreement",
"Indenture",
"Investment
Earnings",
"Liquidity
Obligations",
"Loan
Trustee",
"Moody's",
"Note
Purchase Agreement",
"Operative
Agreements",
"Participation
Agreement",
"Performing
Equipment Note",
"Person",
"Pool
Balance",
"Rating
Agencies",
"Ratings
Confirmation",
"Regular
Distribution Dates",
"Replacement
Liquidity Facility",
"Required
Amount",
"Responsible
Officer",
"Scheduled
Payment",
"Special
Payment",
"Standard
& Poor's",
"Stated
Interest Rate",
"Subordination
Agent",
"Taxes",
"Threshold
Rating",
"Trust",
"Trust
Agreement",
"Trustee",
"Underwriter",
"Underwriting
Agreement"
and
"Written
Notice".
Section
1.02. Interpretation.
For
purposes of this Agreement, except as expressly provided or unless the context
otherwise requires:
(a)
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;
(b)
all
references in this Agreement to designated "Articles", "Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions
of
this Agreement;
(c)
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
(d)
the
term
"including" shall mean "including without limitation".
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 1:00 p.m. (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
interest with respect to the Certificates at the Stated Interest Rate therefor
in accordance with Sections 3.6(a) and 3.6(b) 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 or in part 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 an
amount equal to the amount of such Interest Advance so repaid but not to exceed
the Maximum Commitment; provided,
however,
that
the Maximum Available Commitment shall not be so reinstated at any time if
(x)
both a Performing Note Deficiency exists and a Liquidity Event of Default shall
have occurred and be continuing, or (y) a Final Advance, a Provider Advance
or a Special Termination Advance has been made or an Advance has been converted
into a Final Advance.
(b)
Subject
to Section 2.10, an Early Termination Advance shall be made in a single
Borrowing if the Liquidity Provider has delivered an Early Termination Notice
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 3.6(d)) 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 Cash Collateral Account in accordance with Sections 3.6(d) and
3.6(f) of the Intercreditor Agreement.
(c)
[reserved]
(d)
A
Downgrade Advance shall be made in a single Borrowing upon the occurrence of
a
Downgrade Event (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 such
Section 3.6(c), 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
Cash Collateral Account in accordance with Sections 3.6(c) and 3.6(f) of the
Intercreditor Agreement.
(e)
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 V 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 Cash Collateral Account
in accordance with Sections 3.6(f) and 3.6(i) of the Intercreditor
Agreement.
(f)
A
Special
Termination Advance shall be made in a single Borrowing upon the receipt by
the
Borrower of a Special Termination Notice from the Liquidity Provider pursuant
to
Section 6.02, by delivery to the Liquidity Provider of a written and completed
Notice of Borrowing in substantially the form of Annex VIII, 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 Cash Collateral Account
in accordance with Sections 3.6(f) and 3.6(k) of the Intercreditor
Agreement.
(g)
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(d), 2.02(e)
or
2.02(f)
as the case may be, given by the Borrower to the Liquidity Provider. Each Notice
of Borrowing shall be effective upon delivery of a copy thereof to the Liquidity
Provider's New York branch (with a copy to the Lending Office) at the address
specified in Section 7.02. If a Notice of Borrowing is delivered by the Borrower
in respect of any Borrowing no later than 1:00 p.m. (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 in immediately available funds,
before 4:00 p.m. (New York City time) on such Business Day 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 on a day that is not
a
Business Day or after 1:00 p.m. (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 in immediately available funds, before 1:00 p.m.
(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 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.
(h)
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. If the Liquidity Provider makes an Advance requested pursuant
to a Notice of Borrowing before 1:00 p.m. (New York City time) on the second
Business Day after the date of payment specified in Section 2.02(g), the
Liquidity Provider shall have fully discharged its obligations hereunder with
respect to such Advance and an event of default shall not have occurred
hereunder. Following the making of any Advance pursuant to Section 2.02(b),
2.02(d), 2.02(e) or 2.02(f) hereof to fund the Cash Collateral Account, the
Liquidity Provider shall have no interest in or rights to the Cash Collateral
Account, the funds constituting such Advance or any other amounts from time
to
time on deposit in the Cash Collateral Account; 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 3.6(f) of the
Intercreditor Agreement and provided further,
that
the foregoing shall not affect or impair the rights of the Liquidity Provider
to
provide written instructions with respect to the investment and reinvestment
of
amounts in the Cash Collateral Account to the extent provided in Section 2.2(b)
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
Fee
Letter applicable to this Agreement.
Section
2.04. Reductions
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 (or deemed reduction) in the Pool Balance of the Certificates
or
otherwise, the Maximum Commitment shall automatically be reduced to an amount
equal to such reduced Required Amount (as calculated by the Borrower);
provided
that on
the first Regular Distribution Date, the Maximum Commitment shall automatically
be reduced to the then Required Amount. 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.
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 upon:
(i) the
making of any Provider Advance;
(ii) the
making of a Special Termination Advance;
(iii) the
making of, or conversion to, a Final Advance; or
(iv) the
occurrence of the Termination Date.
Section
2.05. Repayments
of Interest Advances, the Special Termination Advance 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, the Special Termination 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 an Early Terminated 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 Early Termination 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));
provided,
further,
that
amounts in respect of a Special Termination Advance withdrawn from the Cash
Collateral Account for the purpose of paying interest on the Certificates in
accordance with 3.6(f) of the Intercreditor Agreement (the amount of such
withdrawal being an "Applied
Special Termination Advance")
shall
thereafter be treated as an Interest Advance under this Agreement for the
purposes of determining the Applicable Liquidity Rate for interest payable
thereon; and provided,
further,
that
if,
following the making of a Special Termination Advance, the Liquidity Provider
delivers a Termination Notice to the Borrower pursuant to Section 6.01 hereof,
such Special Termination Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon and the obligation of repayment thereof. The
Borrower and the Liquidity Provider agree that the repayment in full of each
Interest Advance, the Special Termination 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 Cash Collateral Account and invested and withdrawn from the Cash
Collateral Account as set forth in Sections 3.6(c), 3.6(d), 3.6(e) and 3.6(f)
of
the Intercreditor Agreement. Subject to Sections 2.07 and 2.09, 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 hereof; provided,
however,
that
amounts in respect of a Provider Advance withdrawn from the Cash Collateral
Account for the purpose of paying interest on the Certificates in accordance
with Section 3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (x) in the case of a Downgrade Advance, an "Applied
Downgrade Advance"
and (y)
in the case of an Early Termination Advance, an "Applied
Early Termination 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 and the obligation for repayment thereof. Subject to Sections
2.07 and 2.09 hereof, immediately upon the withdrawal of any amounts from the
Cash Collateral Account pursuant to Section 3.6(f) of the Intercreditor
Agreement on account of a reduction (or deemed 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 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 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 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 Cash Collateral Account after giving effect to
any
Applied Provider Advance on the date of such replacement shall be reimbursed
to
the replaced Liquidity Provider, but only to the extent such amounts are
necessary to repay in full to the replaced 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, and not required to be returned
by,
the Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
and shall discharge in full the corresponding obligations of the Borrower
hereunder (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 amounts that constitute Scheduled Payments, Special Payments or payments
under the Fee Letter, Section 9.1 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 and other applicable 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. The Borrower, in its individual
capacity, is not personally liable to the Liquidity Provider 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 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.
Section
2.10. Early
Termination Advance.
At any
time during an Early Termination Notice Period, the Liquidity Provider shall
have the right in its sole discretion to elect to terminate its obligations
to
make Advances under this Agreement upon not less than 25 days' written notice
(the "Early
Termination Notice")
to the
Borrower. If the Liquidity Provider delivers an Early Termination Notice to
the
Borrower during the Early Termination Notice Period (and if the Liquidity
Provider shall not have been replaced in accordance with Section
3.6(e)
of
the Intercreditor Agreement on or before the expiry of the Early Termination
Notice Period), the Borrower shall be entitled at any time prior to the Early
Termination Date to request an Early Termination Advance in accordance with
Section 2.02(b) hereof and Section 3.6(d) of the Intercreditor
Agreement.
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 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 other supervisory
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 or such obligation
(other than with respect to 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 or other
liabilities of, the Liquidity Provider (including any such Advances or such
obligation or any deposits referred to in the definition of LIBOR or related
definitions).
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.
Notwithstanding
the preceding two paragraphs, the Liquidity Provider and the Subordination
Agent
agree that any permitted assignee or participant of the initial Liquidity
Provider which is not a bank shall not be entitled to the benefits of the
preceding two paragraphs (but without limiting the provisions of Section 7.08
hereof).
Section
3.02. Capital
Adequacy.
If (1)
the adoption or change, 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 supervisory 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 supervisory 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 or Advances hereunder and other similar
obligations or advances, the Borrower shall, subject to the provisions of
Section 3.11, 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 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 Liquidity Provider 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.
Notwithstanding
the preceding two paragraphs, the Liquidity Provider and the Subordination
Agent
agree that any permitted assignee or participant of the initial Liquidity
Provider which is not a bank shall not be entitled to the benefits of the
preceding two paragraphs (but without limiting the provisions of Section 7.08
hereof).
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 or withholding for or on account of any present or
future Taxes of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, other than Excluded Withholding Taxes (such
non-excluded Taxes being referred to herein, collectively, as "Indemnified
Taxes"
and,
individually, as an "Indemnified
Tax")
unless
any such reduction or withholding is required by applicable law. If any Taxes
are required to be withheld from any amounts payable to the Liquidity Provider
under this Agreement, (i) the Borrower shall within the time prescribed therefor
by applicable law pay to the appropriate governmental or taxing authority the
full amount of any such Taxes (including any additional Tax required to be
deducted or withheld in respect of the additional amounts payable 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) in the
case of Indemnified Taxes, the amounts payable to the Liquidity Provider shall
be increased to the extent necessary to yield to the Liquidity Provider (after
deduction or withholding for or on account of all Indemnified Taxes and any
additional Taxes required to be deducted or withheld or payable by the Liquidity
Provider by reason of the receipt or accrual of the additional amounts payable
pursuant to this clause (ii)) interest or any other such amounts payable under
this Agreement at the rates or in the
amounts
which would have been due or received by it if no such reduction or withholding
had been required. If the Liquidity Provider (including a successor Liquidity
Provider) is not organized under the laws of the United States or any state
thereof, to the extent it is eligible to do so, the Liquidity Provider agrees
to
provide to the Borrower, prior to the first date any amount is payable to it
hereunder, two executed original copies of Internal Revenue Service Form W-8BEN
or W-8ECI, 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. In addition, the Liquidity Provider will provide,
from time to time upon the reasonable request of the Borrower, such additional
forms or documentation as may be necessary to establish an available exemption
from (or an entitlement to a reduced rate of) withholding Tax on payments
hereunder. Within 30 days after the date of each payment hereunder, the Borrower
shall furnish to the Liquidity Provider an original or certified copy of a
receipt (or other documentary evidence reasonably acceptable to the Liquidity
Provider) evidencing the payment of the Taxes applicable to such
payment.
(b)
If the Liquidity Provider (including a successor Liquidity Provider) is not
organized under the laws of the United States or any state thereof, all 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 that are imposed
by a
jurisdiction in which the Liquidity Provider is organized, has its Lending
Office or maintains its principal place of business unless such reduction or
withholding is required by applicable law. If any such Taxes are required to
be
withheld or deducted from any Advances, 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 additional amounts payable 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) shall be sufficient to yield to the Borrower the full amount
that would have been received by it had no such withholding or deduction been
required. The Borrower shall, for United States federal income tax purposes
and
for all purposes hereunder, treat such payments as Interest Advances, and,
as
such, will treat such payments as loans made by the Liquidity Provider to the
Borrower, unless otherwise required by law (it being understood and agreed
that
the treatment of such additional amounts shall not reduce the Maximum Available
Commitment hereunder). Within 30 days after the date of each payment hereunder,
the Liquidity Provider shall furnish to the Borrower an original or certified
copy of a receipt (or other documentary evidence reasonably acceptable to the
Borrower) evidencing the payment of the Taxes applicable to such
payment.
(c)
If any exemption from, or reduction in the rate of, any Taxes required to be
deducted or withheld from amounts payable by the Liquidity Provider hereunder
is
reasonably available to the Borrower to establish that payments under this
Agreement are exempt from (or entitled to a reduced rate of) Tax, the Borrower
shall deliver to the Liquidity Provider such form or forms and such other
evidence of the eligibility of the Borrower for such exemption or reduction
as
the Liquidity Provider may reasonably identify to the Borrower as being required
as a condition to exemption from, or reduction in the rate of, any such
Taxes.
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 U.S. dollars, to the Liquidity
Provider in immediately available funds, by wire transfer to Deutsche Bank
Trust
Company Americas, New York, ABA No. 021-001-033, Swift Code: BKTRUS33,
Account Holder: Landesbank Baden-Württemberg, Stuttgart, Account
No. 04-095-107, Swift Code: SOLADEST, Reference: Loan Administration,
Continental EETC 2005-ERJ1; or to such other bank account in the United States
as the Liquidity Provider may from time to time direct the Subordination
Agent.
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 LIBOR 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 such extension of time shall be included in the computation
of
interest payable hereunder (and if so made, shall be deemed to have been made
when due).
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 or Applied Special Termination Advance, from and including the date
on
which the amount thereof was withdrawn from the Cash Collateral Account to
pay
interest on the Certificates) to but excluding the date such principal amount
shall be paid in full (or, in the case of an Applied Provider Advance or Applied
Special Termination Advance, the date on which the 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) that 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 the case may be, 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)
Each
Advance (including, without limitation, each outstanding Unapplied Provider
Advance and Unapplied Special Termination Advance) will be either a Base Rate
Advance or a LIBOR Advance as provided in this Section 3.07. Each such Advance
will be a Base Rate Advance for the period from the date of its borrowing to
(but excluding) the third London/Stuttgart 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 (or, if such
Final Advance is deemed to have been made, without delivery of a Notice of
Borrowing pursuant to Section 2.06, by requesting, prior to 11:00 a.m. (New
York
City time) on the first Business Day immediately following the Borrower's
receipt of the applicable Termination Notice, that such Final Advance not be
converted from a Base Rate Advance to a LIBOR Advance).
(c)
Each
LIBOR Advance shall bear interest during each Interest Period at a rate per
annum equal to LIBOR 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
in
effect from time to time 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
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.
(f)
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 VII 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 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:
(a)
Any
repayment of a LIBOR Advance on a date other than the last day of the Interest
Period for such Advance; or
(b)
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 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.
Section
3.11. Mitigation.
If a
condition arises or an event occurs which would, or would upon the giving of
notice, result in the payment of any additional costs or amounts pursuant to
Section 3.01, 3.02 or 3.03 or require the conversion of any Advance pursuant
to
Section 3.10, the Liquidity Provider, promptly upon becoming aware of the same,
shall notify the Borrower and shall use reasonable efforts (consistent with
applicable legal and regulatory restrictions) to mitigate the effects of such
condition or event, including the designation of a different Lending Office
or
furnishing of the proper certificates under any applicable tax laws, tax
treaties and conventions to the extent that such certificates are legally
available to the Liquidity Provider; provided,
that
the Liquidity Provider shall be under no obligation to take any step that,
in
its good-faith opinion would (i) result in its incurring any additional costs
in
performing its obligations hereunder unless the Borrower has agreed to reimburse
it therefor or (ii) be otherwise disadvantageous to the Liquidity Provider
in
the reasonable judgment of the Liquidity Provider.
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 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:
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(i)
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This
Agreement duly executed on behalf of the Borrower and the Fee
Letter
applicable to this Agreement duly executed on behalf of each
of the
parties thereto (other than the Liquidity Provider);
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(ii)
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The
Intercreditor Agreement duly executed on behalf of each of
the parties
thereto (other than the Liquidity Provider);
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(iii)
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Fully
executed copies of each of the Operative Agreements duly executed
and
delivered on or before the Closing Date (other than this Agreement,
the
Fee Letter applicable to this Agreement and the Intercreditor
Agreement);
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(iv)
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A
copy of the Prospectus Supplement and specimen copies of the
Certificates;
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(v)
|
An
executed copy of each document, instrument, certificate and
opinion
delivered on or before the Closing Date pursuant to the 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
Underwriter, 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);
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(vi)
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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 Trustee,
the Borrower
and the Liquidity Provider created by the Operative Agreements
executed
and delivered on or prior to the Closing Date;
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(vii)
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An
agreement from Continental, pursuant to which (A) 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 to the parties thereto
and (B)
Continental agrees to allow the Liquidity Provider to inspect
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Continental's
books and records regarding such transactions, and to discuss such
transactions with officers and employees of Continental; and
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(viii)
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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.
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(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
Agreement shall have been satisfied or waived and all conditions precedent
to
the purchase of the Certificates by the Underwriter under the Underwriting
Agreement shall have been satisfied or waived.
(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, on or 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 Advance
requested.
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.
LIQUIDITY
EVENTS OF DEFAULT
AND
SPECIAL TERMINATION
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) the obligation of the Liquidity Provider to make Advances hereunder
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(e) 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.
Section
6.02. Special
Termination.
If the
aggregate Pool Balance of the Certificates is greater than the aggregate
outstanding principal amount of the Equipment Notes (other than any Equipment
Notes previously sold or with respect to which the collateral securing such
Equipment Notes has been disposed of) at any time during the 18-month period
prior to April 1, 2021, the Liquidity Provider may, in its discretion, deliver
to the Borrower a Special Termination Notice, the effect of which shall be
to
cause (a) the obligation of the Liquidity Provider to make Advances hereunder
to
expire on the fifth Business Day after the date on which such Special
Termination Notice is received by the Borrower, (b) the Borrower to
promptly request, and the Liquidity Provider to promptly make, a Special
Termination Advance in accordance with Section 2.02(f) hereof and
Section 3.6(k) of the Intercreditor Agreement and (c) 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.
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 mailed or delivered or
sent by telecopier):
|
If
to the Borrower, to:
|
Wilmington
Trust Company
Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Attention: Corporate Trust Administration Telephone: (800) 733-8485 Telecopy: (302) 651-8882 |
|
|
If
to the Liquidity Provider, to:
|
Landesbank
Baden-Württemberg
Am Hauptbahnhof 2 D-70173 Stuttgart Germany Attention: Structured Finance Telephone: +49 711 1244 9757 Telecopy: +49 711 1244 9747 |
|
with
a copy of any Notice of Borrowing to:
|
Landesbank
Baden-Württemberg
280 Park Avenue, West Building, 31st Floor New York, New York 10017 Attention: Claudia Rothe/Bette Smolen Telephone: (212) 584-1700 Telecopy: (212) 584-1729 |
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 with receipt confirmed, (ii) if given by
mail,
five Business Days after being deposited in the mails addressed as specified
above (for purposes of notices and communications other than Notices of
Borrowing, the term "Business Day" shall, for purposes of this
Section 7.02, be deemed to exclude any day in which
commercial
banks are required or authorized to close in Stuttgart, Germany), and (iii)
if
given by other means, when delivered at the address specified above, except
that
notices to the Liquidity Provider pursuant to the provisions of Article II
and
Article III hereof shall not be effective until received by the Liquidity
Provider, subject to the provisions of the second sentence of Section 2.02(g).
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 9.1 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 Section 3.01, 3.02 or 7.07 hereof or in the Fee Letter applicable
to this Agreement (regardless of whether indemnified against pursuant to said
Sections or in such Fee Letter)), that may be imposed on, 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 Fee Letter applicable to this Agreement, 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;
(iii) attributable to the failure by the Liquidity Provider to perform or
observe any agreement, covenant or condition on its part to be performed or
observed in this Agreement or the Intercreditor Agreement, or (iv) a Tax. The
indemnities contained in Section 9.1 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 gross 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. In no event, however, shall
the
Liquidity Provider be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including, without limitation,
any
loss of profits, business or anticipated savings).
(b)
Neither
the Liquidity Provider nor any of its officers, employees, directors 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
gross 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 any waiver or consent thereunder (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 Cash Collateral Account. 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 hold 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) and any assignment in violation thereof shall
be
void ab initio. 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 (other than Continental and its Affiliates) as the Liquidity Provider
may in its sole discretion select, subject to the requirements of Section
7.08(b). No such granting of participations 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.
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 and the like
as they pertain to the Liquidity Provider shall be deemed also to include those
of each of its participants that are banks (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 W-8ECI or Form W-8BEN, 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 W-8ECI or Form W-8BEN, as appropriate, or other applicable form, (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 W-8BEN
or Form W-8ECI 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 or becomes invalid, prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, prohibition,
unenforceability or non-authorization without affecting or invalidating the
remaining provisions hereof as to such jurisdiction 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.
(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 (sitting in the City 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 of 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 thereof 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. 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 or representatives 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
Trust, as Borrower
By___________________________________
Name:
Title:
LANDESBANK
BADEN-WÜRTTEMBERG,
as
Liquidity Provider
By___________________________________
Name:
Title:
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 Landesbank Baden-Württemberg (the "Liquidity
Provider"),
with
reference to the Revolving Credit Agreement (2005-ERJ1) dated as of
September 22, 2005, 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 interest on the Certificates which was payable on
____________, ____ (the "Distribution
Date")
in
accordance with the terms and provisions of the Trust Agreement and the
Certificates, which Advance is requested to be made on ____________, ____.
The
Interest Advance should be transferred to [name of bank/wire instructions/ABA
number] in favor of account number [ __ ], reference [ __ ].
(3) The
amount of the Interest Advance requested hereby (i) is $_______________.__,
to
be applied in accordance with Sections 3.6(a) and 3.6(b) of the Intercreditor
Agreement in respect of the payment of the interest which was due and payable
on
the Certificates on the Distribution Date, (ii) does not include any amount
with
respect to the payment of principal of, or premium on, the Certificates, (iii)
was computed in accordance with the provisions of the Certificates, the 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 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 Deposits 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 Notice of
Borrowing
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
EARLY
TERMINATION ADVANCE NOTICE OF BORROWING
The
undersigned, a duly authorized signatory of the undersigned borrower (the
"Borrower"),
hereby certifies to Landesbank Baden-Württemberg (the "Liquidity
Provider"),
with
reference to the Revolving Credit Agreement (2005-ERJ1) dated as of
September 22, 2005, 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 Early
Termination Advance by the Liquidity Provider to be used for the funding of
the
Cash Collateral Account in accordance with Section 3.6(d) of the Intercreditor
Agreement, which Advance is requested to be made on __________, ____. The Early
Termination Advance should be transferred to [name of bank/wire instructions/ABA
number] in favor of account number [ __ ], reference [ __ ].
(3) The
amount of the Early Termination 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 Cash Collateral
Account in accordance with Sections 3.6(d) and 3.6(f) of the Intercreditor
Agreement, (ii) does not include any amount with respect to the payment of
the
principal of, or premium on, the Certificates, (iii) was computed in accordance
with the provisions of the Certificates, the 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 Cash Collateral Account and apply
the
same in accordance with the terms of Sections 3.6(d) and 3.6(f) 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 Early Termination 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 Early Termination 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 EARLY TERMINATION ADVANCE NOTICE OF BORROWING
[Insert
copy of computations in accordance with Early Termination Advance Notice of
Borrowing]
Annex
III to
Revolving
Credit Agreement
[RESERVED]
Annex
IV to
Revolving
Credit Agreement
DOWNGRADE
ADVANCE NOTICE OF BORROWING
The
undersigned, a duly authorized signatory of the undersigned borrower (the
"Borrower"),
hereby certifies to Landesbank Baden-Württemberg (the "Liquidity
Provider"),
with
reference to the Revolving Credit Agreement (2005-ERJ1) dated as of
September 22, 2005, 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 Cash
Collateral Account in accordance with Section 3.6(c) of the Intercreditor
Agreement by reason of the occurrence of a Downgrade Event, which Advance is
requested to be made on __________, ____. The Downgrade Advance should be
transferred to [name of bank/wire instructions/ABA number] in favor of account
number [ __ ], reference [ __ ].
(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 Cash Collateral Account in accordance
with Sections 3.6(c) and 3.6(f) of the Intercreditor Agreement, (ii) does not
include any amount with respect to the payment of the principal of, or premium
on, the Certificates, (iii) was computed in accordance with the provisions
of
the Certificates, the 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 Cash Collateral Account and apply
the
same in accordance with the terms of Sections 3.6(c) and 3.6(f) 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
V to
Revolving
Credit Agreement
FINAL
ADVANCE NOTICE OF BORROWING
The
undersigned, a duly authorized signatory of the undersigned borrower (the
"Borrower"),
hereby certifies to Landesbank Baden-Württemberg (the "Liquidity
Provider"),
with
reference to the Revolving Credit Agreement (2005-ERJ1) dated as of
September 22, 2005, 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 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 ____________, ____. The Final Advance should be
transferred to [name of bank/wire instructions/ABA number] in favor of account
number [ __ ], reference [ __ ].
(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 Cash Collateral Account in accordance with
Sections 3.6(f) and 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
Certificates, (iii) was computed in accordance with the provisions of the
Certificates, the 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 Cash Collateral Account and apply
the
same in accordance with the terms of Sections 3.6(f) and 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 London/Stuttgart Business Day following your receipt of this
notice.]1
___________________
1
Bracketed language may be included at Borrower's option.
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:
SCHEDULE
I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert
copy of computations in accordance with Final Advance Notice of
Borrowing]
Annex
VI to
Revolving
Credit Agreement
NOTICE
OF
TERMINATION
[Date]
Wilmington
Trust Company,
as
Subordination Agent, as Borrower
[Rodney
Square North
1100
North Market Street
Wilmington,
DE 19890-0001
Attention:
Corporate Trust Administration]
Revolving
Credit Agreement dated as of September 22, 2005, between Wilmington Trust
Company, as Subordination Agent, as agent and trustee for the Continental
Airlines Pass Through Trust 2005-ERJ1, as Borrower, and Landesbank
Baden-Württemberg (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,
LANDESBANK
BADEN-WÜRTTEMBERG,
as
Liquidity Provider
By_________________________________
Name:
Title:
cc:
Wilmington Trust Company,
as
Trustee
Annex
VII to
Revolving
Credit Agreement
NOTICE
OF
REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving
Credit Agreement dated as of September 22, 2005, between Wilmington Trust
Company, as Subordination Agent, as agent and trustee for the Continental
Airlines Pass Through Trust, 2005-ERJ1, as Borrower, and Landesbank
Baden-Württemberg (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:
Annex
VIII to
Revolving
Credit Agreement
SPECIAL
TERMINATION ADVANCE NOTICE OF BORROWING
The
undersigned, a duly authorized signatory of the undersigned borrower (the
"Borrower"),
hereby certifies to Landesbank Baden-Württemberg (the "Liquidity
Provider"),
with
reference to the Revolving Credit Agreement (2005-ERJ1) dated as of
September 22, 2005, 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 Special
Termination Advance by the Liquidity Provider to be used for the funding of
the
Cash Collateral Account in accordance with Section 3.6(k) of the Intercreditor
Agreement by reason of the receipt by the Borrower of a Special Termination
Notice from the Liquidity Provider with respect to the Liquidity Agreement,
which Advance is requested to be made on ____________, ____. The Special
Termination Advance should be transferred to [name of bank/wire instructions/ABA
number] in favor of account number [ __ ], reference [ __ ].
(3) The
amount of the Special Termination 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 Cash Collateral
Account in accordance with Sections 3.6(f) and 3.6(k) of the Intercreditor
Agreement, (ii) does not include any amount with respect to the payment of
principal of, or premium on, the Certificates, (iii) was computed in accordance
with the provisions of the Certificates, the 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 Cash Collateral Account and apply
the
same in accordance with the terms of Sections 3.6(f) and 3.6(k) 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 Special Termination 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 Special Termination
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 SPECIAL TERMINATION ADVANCE NOTICE OF BORROWING
[Insert
copy of computations in accordance with Special Termination Advance Notice
of
Borrowing]
Annex
IX to
Revolving
Credit Agreement
NOTICE
OF
SPECIAL TERMINATION
[Date]
Wilmington
Trust Company,
as
Subordination Agent, as Borrower
[Rodney
Square North
1100
North Market Street
Wilmington,
DE 19890-0001
Attention:
Corporate Trust Administration]
Revolving
Credit Agreement dated as of September 22, 2005, between Wilmington Trust
Company, as Subordination Agent, as agent and trustee for the Continental
Airlines Pass Through Trust 2005-ERJ1, as Borrower, and Landesbank
Baden-Wü;rttemberg (the "Liquidity
Agreement")
Ladies
and Gentlemen:
You
are
hereby notified that, pursuant to Section 6.02 of the Liquidity Agreement,
by
reason of the aggregate Pool Balance of the Certificates exceeding the aggregate
outstanding principal amount of the Equipment Notes (other than any Equipment
Notes previously sold or with respect to which the collateral securing such
Equipment Notes has been disposed of) during the 18-month period prior to April
1, 2021, we are giving this notice to you in order to cause (i) our obligations
to make Advances 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 Special Termination Advance under the Liquidity Agreement pursuant
to
Section 3.6(k) of the Intercreditor Agreement as a consequence of your receipt
of this notice.
Terms
used but not defined herein shall have the respective meanings ascribed thereto
in or pursuant to the Liquidity Agreement.
THIS
NOTICE IS THE "NOTICE OF SPECIAL 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,
LANDESBANK
BADEN-WÜRTTEMBERG,
as
Liquidity Provider
By_________________________________
Name:
Title:
By_________________________________
Name:
Title:
cc:
Wilmington Trust Company,
as
Trustee
IX-2
EXECUTION
VERSION
INTERCREDITOR
AGREEMENT
(2005-ERJ1)
Dated
as
of
September 22,
2005
AMONG
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity
but
solely as Trustee under the
Continental
Airlines Pass Through Trust 2005-ERJ1
LANDESBANK
BADEN-WÜRTTEMBERG
as
Liquidity Provider
AND
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity except
as
expressly set forth herein but
solely
as
Subordination Agent and trustee
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INTERCREDITOR
AGREEMENT (2005-ERJ1)
INTERCREDITOR
AGREEMENT (2005-ERJ1) dated as of September 22, 2005 (this "Agreement"),
among
WILMINGTON TRUST COMPANY, a Delaware corporation ("WTC"),
not
in its individual capacity but solely as Trustee of the Trust (as defined
below), LANDESBANK BADEN-WÜRTTEMBERG, a bank established in Germany as a public
law institution with legal capacity (Rechtfähige
Anstalt des
Öffentlichen Rechts)
("LBBW"),
as
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, the related Owner Trustee proposes to issue on
a
non-recourse basis one series of Equipment Notes to finance the debt portion
of
the purchase price of the Aircraft referred to in such Indenture which will
be
leased to Continental pursuant to the related Lease;
WHEREAS,
pursuant to the Financing Agreements, the Trust will acquire the Equipment
Notes;
WHEREAS,
pursuant to the Trust Agreement, the Trust proposes to issue Certificates
bearing the interest rate and having the final distribution date described
in
the Trust Agreement on the terms and subject to the conditions set forth
therein;
WHEREAS,
pursuant to the Underwriting Agreement, the Underwriter proposes to purchase
Certificates issued by the Trust in the aggregate face amount set forth on
Schedule I thereto on the terms and subject to the conditions set forth
therein;
WHEREAS,
the Liquidity Provider proposes to enter into a Liquidity Facility with the
Subordination Agent, as agent for the Trustee, for the benefit of the
Certificateholders;
WHEREAS,
it is a condition precedent to the obligations of the Underwriter under the
Underwriting Agreement that the Subordination Agent, the Trustee and the
Liquidity Provider agree to the terms of subordination set forth in this
Agreement in respect of the Certificates, and the Subordination Agent, the
Trustee and the Liquidity Provider, by entering into this Agreement, hereby
acknowledge and agree to such terms of subordination and the other provisions
of
this Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained, and
of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
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".
"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.
"Advance",
means
any Advances as defined in the 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.
"Agreement"
has the
meaning assigned to such term in the first paragraph of this
Agreement.
"Aircraft"
means,
with respect to each Indenture, the "Aircraft" referred to therein.
"Appraisal"
has the
meaning assigned to such term in Section 4.1(a)(iii).
"Appraisers"
means
Aviation Specialists Group, Inc., BACK Aviation Solutions and BK Associates,
Inc. or any other nationally recognized appraiser reasonably selected by the
Subordination Agent or the Controlling Party.
"Available
Amount"
means,
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 at such
time,
less
(b) the
aggregate amount of each Interest Drawing honored by the Liquidity Provider
under the 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 Special Termination Drawing, an Early
Termination Drawing or a Final Drawing under the Liquidity Facility, the
Available Amount of the Liquidity Facility shall be zero.
"Basic
Agreement"
means
the Pass Through Trust Agreement dated as of September 25, 1997 between
Continental and WTC, not in its individual capacity, except as otherwise
expressly provided therein, but solely as trustee.
"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 the 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
the Liquidity Facility, also is a "Business Day" as defined in the Liquidity
Facility.
"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 Liquidity Facility pursuant
to
Section 3.6(c), 3.6(d), 3.6(i), or 3.6(k) shall be deposited.
"Certificates"
means
the certificates issued by the Trust, substantially in the form of Exhibit
A to
the Trust Agreement, and authenticated by the Trustee, representing fractional
undivided interests in the Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Trust
Agreement.
"Certificateholder"
means,
at any time, any holder of one or more Certificates.
"Closing
Date"
means
September 22, 2005.
"Code"
means
the Internal Revenue Code of 1986, as amended from time to time, and the
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 the 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 Triggering Event Distributions with respect to the
Certificates as of such Distribution Date.
"Delivery
Period Expiry Date"
means
the earlier of (a) May 31, 2006, or, if the
Equipment
Notes relating to all of the Aircraft (or Substitute Aircraft in lieu thereof)
have not been purchased by the Trustee on or prior to such date due to any
reason beyond the control of Continental and not occasioned by Continental's
fault or negligence, August 31, 2006 and (b) the date on which Equipment Notes
with respect to all Aircraft (or Substitute Aircraft in lieu thereof) have
been
purchased by the Trustee in accordance with the Note Purchase
Agreement.
"Deposit
Agreement"
shall
mean the Deposit Agreement dated as of 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
Citibank, N.A.
"Deposits"
has the
meaning set forth in the Deposit Agreement.
"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"
or
"$"
means
United States dollars.
"Downgrade
Drawing"
has the
meaning assigned to such term in Section 3.6(c).
"Downgrade
Event"
has the
meaning assigned to such term in the Liquidity Facility.
"Downgraded
Facility"
has the
meaning assigned to such term in Section 3.6(c).
"Drawing"
means
an Interest Drawing, a Final Drawing, a Special Termination Drawing, an Early
Termination Drawing or a Downgrade Drawing, as the case may be.
"DTC"
means
the Depository Trust Company, a New York corporation.
"Early
Terminated Facility"
has the
meaning assigned to such term in Section 3.6(d).
"Early
Termination Drawing"
has the
meaning assigned to such term in Section 3.6(d).
"Early
Termination Date"
means
the date specified in an Early Termination Notice delivered by the Liquidity
Provider to the Subordination Agent in accordance with Section 3.6(d), which
date shall not be earlier than the 25th
day
following the receipt by the Subordination Agent of such Early Termination
Notice.
"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 of at least A3 from Moody's and an issuer credit
rating of at least A- from Standard & Poor's. An Eligible Deposit Account
may be maintained with the Liquidity Provider so long as the Liquidity Provider
is an Eligible Institution; provided
that the
Liquidity Provider shall have waived all rights of set-off and counterclaim
with
respect to such account.
"Eligible
Institution"
means
(a) the corporate trust department of the Subordination Agent or the 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 of at least A3 from Moody's and an issuer credit rating of at least
A- from Standard & Poor's.
"Eligible
Investments"
means
(a) investments in obligations of, or guaranteed by, the United States
Government having maturities no later than 30 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 Standard &
Poor's of at least P-1 and A-1, respectively, having maturities no later than
30
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 30 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 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; 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) above which is issued or guaranteed by
Continental or any of its Affiliates, and no investment in the obligations
of
any one bank in excess of $10,000,000 shall be an Eligible Investment, 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.
"Embraer"
means
Embraer-Empresa Brasileira de Aeronáutica S.A., a company organized under the
laws of Brazil, and its successors and assigns.
"Equipment
Notes"
means
the 9.798% Equipment Notes issued pursuant to any Indenture by the related
Owner
Trustee 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.
"Escrow
Agent"
means
Wells Fargo Bank Northwest, 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 the Escrow and Paying Agent Agreement dated as of the date hereof among
the
Escrow Agent, the Underwriter, the Trustee 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,
on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on the Certificates (excluding interest, if any, payable with respect
to any Deposits) and (y) the difference between (A) the Pool Balance 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), and (B) the Pool Balance as of the Current Distribution Date
calculated on the basis that (i) the principal of the Equipment Notes has been
paid when due (whether at stated maturity, upon redemption, prepayment,
purchase, Acceleration or otherwise) and such payments have been distributed
to
the Certificateholders and (ii) the principal of any Equipment Notes formerly
held in the Trust that have been sold pursuant to the terms hereof has been
paid
in full and such payments have been distributed to the Certificateholders,
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).
For purposes of calculating Expected Distributions, any premium paid on the
Equipment Notes that has not been distributed to the Certificateholders (other
than such premium or a portion thereof applied to the payment of interest on
the
Certificates or the reduction of the Pool Balance) shall be added to the amount
of such Expected Distributions.
"Expiry
Date"
has the
meaning set forth in the Liquidity Facility.
"Fee
Letters"
means,
collectively, the Fee Letter dated the date hereof among LBBW, Embraer,
Continental and the Subordination Agent with respect to the initial Liquidity
Facility and any fee letter entered into between the Subordination Agent,
Embraer, Continental and any Replacement Liquidity Provider in respect of the
Liquidity Facility.
"Final
Drawing"
has the
meaning assigned to such term in Section 3.6(i).
"Final
Legal Distribution Date"
means
October 1, 2022.
"Financing
Agreements"
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 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
each date on which interest is due and payable under the Liquidity Facility
on a
Downgrade Drawing, a Special Termination Drawing, an Early Termination Drawing
or Final Drawing thereunder, other than any such date on which interest is
due
and payable under the Liquidity Facility only on an Applied Provider Advance
(as
such term is defined in the Liquidity Facility).
"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.
"LBBW"
has the
meaning assigned to such term in the recital of parties to this
Agreement.
"Lease"
means,
with respect to each Indenture, the "Lease" referred to therein.
"Lending
Office"
means,
with respect to the Liquidity Facility of the initial Liquidity Provider, the
lending office of the Liquidity Provider presently located at Stuttgart,
Germany, or such other lending office as such Liquidity Provider from time
to
time shall notify the Trustee as its lending office under such Liquidity
Facility; provided
that
such Liquidity Provider shall not change its Lending Office to a Lending Office
outside Germany or the United States of America except in accordance with 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",
has
the meaning assigned to such term in the Liquidity Facility.
"Liquidity
Expenses"
means
all Liquidity Obligations other than (i) the principal amount of any Drawings
under the Liquidity Facility and (ii) any interest accrued on any Liquidity
Obligations.
"Liquidity
Facility"
means,
initially, the Revolving Credit Agreement, dated as of the date hereof, between
the Subordination Agent, as agent and trustee for the Trust, and the initial
Liquidity Provider, and, from and after the replacement of such Revolving Credit
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.
"Liquidity
Obligations"
means
all principal, interest, fees and other amounts owing to the Liquidity Provider
under the Liquidity Facility, Section 9.1 of the Participation Agreements or
the
Fee Letter.
"Liquidity
Provider"
means
LBBW, together with any Replacement Liquidity Provider which has issued a
Replacement Liquidity Facility to replace the Liquidity Facility pursuant to
Section 3.6(e).
"Loan
Trustee"
means,
with respect to any Indenture, the mortgagee thereunder.
"LP
Incumbency Certificate"
has the
meaning assigned to such term in Section 2.5(c).
"LP
Representatives"
has the
meaning assigned to such term in Section 2.5(c).
"Moody's"
means
Moody's Investors Service, Inc.
"Non-Controlling
Party"
means,
at any time, the Trustee or the Liquidity Provider, if such person is not the
Controlling Party at such time.
"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,
the
Trustee, the Escrow Agent, the Subordination Agent and the Paying Agent, as
amended, supplemented or otherwise modified from time to time in accordance
with
its terms.
"Officer's
Certificate"
of any
Person means a certification signed by a Responsible Officer of such
Person.
"Operative
Agreements"
means
this Agreement, the Liquidity Facility, the Underwriting Agreement, the
Indentures, the Trust Agreement, the Leases, the Financing Agreements, 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 the Certificates, as of the date of determination,
all
Certificates theretofore authenticated and delivered under the Trust Agreement,
except:
(i)
Certificates theretofore canceled by the Registrar (as defined in the Trust
Agreement) or delivered to the Trustee or such Registrar for
cancellation;
(ii) Certificates
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 Trustee in trust for the holders of
the
Certificates as provided in Section 4.01 of the Trust Agreement pending
distribution of such money to the Certificateholders pursuant to such final
distribution payment; and
(iii) Certificates
in exchange for or in lieu of which other Certificates have been authenticated
and delivered pursuant to the Trust Agreement;
provided,
however,
that in
determining whether the holders of the requisite Outstanding amount of the
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 the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Certificates that the 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 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.
"Owner
Participant"
means,
with respect to any Participation Agreement, the owner participant
thereunder.
"Owner
Trustee"
means,
with respect to any Indenture, 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 the Escrow and Paying Agent
Agreement, together with its successors in such capacity.
"Performing
Equipment Note"
means
an Equipment Note 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 under Title 11 of the United States Code
(the "Bankruptcy
Code")
in
which Continental is a debtor any payment default existing during the 60-day
period under Section 1110(a)(2)(A) of the Bankruptcy Code (or such longer period
as may apply under Section 1110(b) of the Bankruptcy Code or as may apply for
the cure of such payment default under Section 1110(a)(2)(B) of the Bankruptcy
Code) shall not be taken into consideration until the expiration of the
applicable 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,
as of any date, (i) the original aggregate face amount of the Certificates
less
(ii) the
aggregate amount of all payments made in respect of the Certificates or in
respect of Deposits other than payments made in respect of interest or premium
thereon or reimbursement of any costs and expenses 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.
"Proceeding"
means
any suit in equity, action at law or other judicial or administrative
proceeding.
"PTC
Event of Default"
means
the failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the Certificates on the Final Legal Distribution
Date or (ii) interest due on the 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).
"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 the Certificates below the then current rating for the
Certificates or (ii) a withdrawal or suspension of the rating of the
Certificates.
"Regular
Distribution Dates"
means
the 1st
day of
each month, commencing on October 1, 2005; 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.
"Replacement
Liquidity Facility"
means
an irrevocable revolving credit agreement (or agreements) in substantially
the
form of the replaced Liquidity Facility, including reinstatement provisions,
or
in such other form or forms (which may include a letter of credit, surety bond,
financial insurance policy or guaranty) 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 Liquidity Provider), in a face amount (or in an aggregate face amount)
equal
to the amount of interest payable on the Certificates (at the Stated Interest
Rate and without regard to expected future principal payments) on the 18 Regular
Distribution Dates following the date of replacement of the Liquidity Facility
and issued by a Person (or Persons) having an unsecured short-term debt rating
and a short-term issuer credit rating, as the case may be, issued by both Rating
Agencies which are equal to or higher than the Threshold Rating or such other
ratings and qualifications as shall permit the Rating
Agencies
to confirm in writing their respective ratings then in effect for the
Certificates (before the downgrading of such ratings, if any, as a result of
the
downgrading of the replaced Liquidity Provider).
"Replacement
Liquidity Provider"
means a
Person (or Persons) who issues a Replacement Liquidity Facility.
"Required
Amount"
means
with respect to the Liquidity Facility or the Cash Collateral Account, for
any
day, the sum of the aggregate amount of interest, calculated at the rate per
annum equal to the Stated Interest Rate, that would be payable on the
Certificates on each of the eighteen successive Regular Distribution Dates
immediately following such day or, if such day is a Regular Distribution Date,
on such day and the succeeding seventeen Regular Distribution Dates, in each
case calculated on the basis of the Pool Balance on such date and without regard
to expected future payments of principal on the Certificates; provided
that,
for any date, the Pool Balance for determining the Required Amount shall, in
the
event of (A) the disposition of any Aircraft pursuant to the exercise of
remedies under an Indenture on or prior to such date, be deemed to be reduced
by
an amount equal to the outstanding principal amount of the Equipment Note
secured by such Aircraft that remains unpaid after giving effect to the
application under such Indenture of proceeds from the disposition of such
Aircraft and any amounts otherwise received from Continental in connection
with
such disposition at or prior to the time of such disposition or (B) the sale
of
any Equipment Note pursuant to the Intercreditor Agreement on or prior to such
date, be deemed to be reduced by an amount equal to the excess of (x) the
outstanding amount of principal as of the date of sale of such Equipment Note
over (y) the excess of (A) the net purchase price received with respect to
the
sale of such Equipment Note over (B) the outstanding amount of interest accrued
and payable under such Equipment Note as of the date of sale of such Equipment
Note.
"Reserve
Account"
means
the Eligible Deposit Account established by the Subordination Agent pursuant
to
Section 2.2(a)(iii) from which the Subordination Agent shall make withdrawals
to
fund the Appraisals in accordance with Section 4.1 hereof.
"Reserve
Amount"
means
$75,000.
"Responsible
Officer"
means
(i) with respect to the Subordination Agent and the Trustee, any officer in
the
corporate trust administration department of the Subordination Agent or the
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 the
Liquidity Provider, two authorized signatories 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, 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, or (ii) any payment of interest on the
Certificates with funds drawn under the Liquidity
Facility
or the Cash Collateral Account; 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.
"Section
2.4(b) Fraction"
has the
meaning assigned to such term in Section 2.4(b).
"Special
Distribution Date"
has the
meaning assigned to such term in Section 2.4(a).
"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.
"Special
Termination Drawing"
has the
meaning assigned to such term in Section 3.6(k).
"Special
Termination Notice"
has the
meaning assigned to such term in the Liquidity Facility.
"Standard
& Poor's"
means
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc.
"Stated
Amount"
means
the Maximum Commitment (as defined in the Liquidity Facility) of the Liquidity
Provider.
"Stated
Interest Rate"
means
9.798% per annum.
"Subordination
Agent"
has the
meaning assigned to it in the preliminary statements to this
Agreement.
"Subordination
Agent Incumbency Certificate"
has the
meaning assigned to such term in Section 2.5(a).
"Subordination
Agent Representatives"
has the
meaning assigned to such term in Section 2.5(a).
"Substitute
Aircraft"
has the
meaning set forth in the Note Purchase Agreement.
"Tax"
and
"Taxes"
mean
any and all taxes, fees, levies, duties, tariffs, imposts, and other charges
of
any kind (together with any and all interest, penalties, loss, damage,
liability, expense, additions to tax and additional amounts or costs incurred
or
imposed with respect thereto) imposed or otherwise assessed by the United States
of America or by any state, local or
foreign
government (or any subdivision or agency thereof) or other taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth and similar charges; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value
added, taxes on goods and services, gains taxes, license, registration and
documentation fees, customs duties, tariffs and similar charges.
"Termination
Notice"
has the
meaning assigned to such term in the Liquidity Facility.
"Threshold
Rating"
means
the short-term unsecured debt rating of P-1 by Moody's and short-term issuer
credit rating of A-1 by Standard & Poor's.
"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, (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 such Equipment Notes is in excess of $195
million) or (z) the occurrence of a Continental Bankruptcy Event.
"Triggering
Event Distributions"
means,
on any Current Distribution Date, the sum of (x) the aggregate amount of all
accrued and unpaid interest on the Certificates (excluding interest, if any,
payable with respect to the Deposits) and (y) the Pool Balance 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) (less the amount of the Deposits as of such preceding Distribution
Date (or, if the Current Distribution Date is the first Distribution Date,
the
Closing Date) other than any portion of such Deposits thereafter used to acquire
Equipment Notes pursuant to the Note Purchase Agreement). For purposes of
calculating the Triggering Event Distributions, any premium paid on the
Equipment Notes that has not been distributed to the Certificateholders (other
than such premium or a portion thereof applied to the payment of interest on
the
Certificates or the reduction of the Pool Balance) shall be added to the amount
of the Triggering Event Distributions.
"Trust"
means
the Continental Airlines Pass Through Trust 2005-ERJ1 created and administered
pursuant to the Trust Agreement.
"Trust
Accounts"
has the
meaning assigned to such term in Section 2.2(a).
"Trust
Agreement"
means
the Basic Agreement, as supplemented by the Trust Supplement No. 2005-ERJ1
thereto, dated the date hereof, governing the creation and administration of
the
Pass Through Trust 2005-ERJ1 and the issuance of the Certificates, as the
same
may
be amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Trustee"
means
WTC, not in its individual capacity except as expressly set forth in the Trust
Agreement, but solely as trustee under the Trust Agreement, together with any
successor trustee appointed pursuant thereto.
"Trustee
Incumbency Certificate"
has the
meaning assigned to such term in Section 2.5(b).
"Trustee
Representatives"
has the
meaning assigned to such term in Section 2.5(b).
"Trust
Indenture Estate"
with
respect to any Indenture, has the meaning assigned to such term in such
Indenture.
"Trust
Property"
has the
meaning set forth in the Trust Agreement.
"Unapplied
Provider Advance"
has the
meaning specified in the Liquidity Facility.
"Underwriter"
means
Citigroup Global Markets Inc.
"Underwriting
Agreement"
means
the Underwriting Agreement dated September 14, 2005 among the Underwriter,
the Depositary, Embraer and Continental, relating to the purchase of the
Certificates by the Underwriter, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Written
Notice"
means,
from the Subordination Agent, the Trustee or the Liquidity Provider, a written
instrument executed by the Designated Representative of such Person. An invoice
delivered by the 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.
TRUST
ACCOUNTS; CONTROLLING PARTY
SECTION
2.1 Agreement
to Terms of Subordination; Payments from Monies Received Only.
(a) The
Trustee hereby acknowledges and agrees to the terms of subordination and
distribution set forth in this Agreement in respect of the Certificates and
agrees to enforce such provisions and cause all payments in respect of the
Equipment Notes and the Liquidity Facility to be applied in accordance with
the
terms of this Agreement. In addition, the Trustee hereby agrees to cause the
Equipment Notes purchased by the Trust to be registered in the name of the
Subordination Agent or its nominee, as agent and trustee for the 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(b), 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 or payments under Section 9.1 of the Participation Agreements
or payments under Section 6 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. The Trustee and the Subordination Agent hereby agree and, as
provided in the Trust Agreement, each Certificateholder, by its acceptance
of a
Certificate, and the Liquidity Provider, by entering into the Liquidity Facility
to which it is a party, have 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 Owner Trustees, Loan Trustees, Owner
Participants nor the Trustee or the Subordination Agent is personally liable
to
any of them for any amounts payable or any liability under this Agreement,
the
Trust Agreement, the Liquidity Facility or such Certificate, except (in the
case
of the Subordination Agent) as expressly provided herein or (in the case of
the
Trustee) as expressly provided in the 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 Trustee, the Certificateholders
and the Liquidity Provider, (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 Trustee, the Certificateholders and the Liquidity Provider and
(iii) the Reserve 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 Trustee, the Liquidity Provider and the Certificateholders.
The
Subordination Agent shall establish and maintain the Cash Collateral Account
and
shall operate such Cash Collateral Account in accordance with
Section 3.6(f) hereof. Upon such establishment and maintenance, the Cash
Collateral Account 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) 30 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; provided,
however,
that
following the making of a Downgrade Drawing, a Special Termination Drawing
or an
Early Termination Drawing under the Liquidity Facility, the Subordination Agent
shall invest and reinvest such amounts in Eligible Investments at the direction
of Continental; 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 amounts
on deposit in the Cash Collateral Account, 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 in Section
3.4(b) 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 Trustee, the Certificateholders
and
the Liquidity Provider, as the case may be. If, at any time, any of the Trust
Accounts or the Reserve Account 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, for which a Ratings Confirmation shall have been
obtained) establish a new Collection Account, Special Payments Account, Reserve
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, Reserve Account or Cash Collateral
Account, as the case may be. So long as WTC is an Eligible Institution, the
Trust Accounts and the Reserve Account shall be maintained with it as Eligible
Deposit Accounts.
(d) The
Subordination Agent shall possess all right, title and interest in all funds
on
deposit from time to time in the Reserve Account. The Reserve Account shall
be
used by the Subordination Agent solely to fund the Appraisals when required
to
be obtained pursuant to Section 4.1 hereof.
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 the Trustee and the Liquidity Provider. 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 the Trustee a Written Notice of such amount. 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 Distribution 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
Distribution Date and the denominator of which is the aggregate outstanding
principal amount of all Equipment Notes (the "Section
2.4(b) Fraction"),
shall
be distributed to the Liquidity Provider;
second,
such
amount as shall be required to pay (i) (A) all accrued and unpaid interest
then in arrears on all Liquidity Obligations 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 Distribution Date (at
the
rate provided in the Liquidity Facility) multiplied by
(y) the
Section 2.4(b) Fraction and (ii) if a Special Termination Drawing has been
made
under the Liquidity Facility and has not been converted into a Final Drawing,
the outstanding amount of such Special Termination Drawing, shall be distributed
to the Liquidity Provider, pro rata on the basis of all amounts described in
clauses (i) and (ii) above;
third,
such
amount as shall be required (A) if the Cash Collateral Account had been
previously funded as provided in Section 3.6(f), to fund the Cash Collateral
Account up to its Required Amount shall be deposited in the Cash Collateral
Account, (B) if the Liquidity Facility shall become a Downgraded Facility or
an
Early Terminated Facility at
a
time
when unreimbursed Interest Drawings under the Liquidity Facility have reduced
the Available Amount thereunder to zero, to fund the Cash Collateral Account
up
to an amount equal to the Required Amount shall be deposited in the Cash
Collateral Account, and (C) if neither subclause (A) nor subclause (B) of this
clause "third" are applicable, to pay or reimburse the Liquidity Provider an
amount equal to the amount of any unreimbursed Interest Drawings under the
Liquidity Facility shall be distributed to the Liquidity Provider;
fourth,
if any
amounts are to be distributed pursuant to either subclause (A) or (B) of clause
"third" above, then the Liquidity Provider shall be paid the excess of (x)
the
aggregate outstanding amount of unreimbursed Advances (whether or not then
due)
under the Liquidity Facility over (y) the Required Amount;
fifth,
such
amount as shall be required to pay in full Expected Distributions to the holders
of the Certificates on such Special Distribution Date shall be distributed
to
the Trustee; and
sixth,
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)(i), clause (x) of the definition of "Expected
Distributions" shall be deemed to read as follows: "(x) accrued, due and unpaid
interest on the Certificates together with (without duplication) accrued and
unpaid interest on a portion of the Certificates equal to the outstanding
principal amount of the Equipment Notes held in the Trust and being redeemed,
purchased or prepaid (immediately prior to such redemption, purchase or
prepayment), in each case excluding interest, if any, payable with respect
to
the Deposits".
(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 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.
Except
for amounts constituting Liquidity Obligations which shall be distributed as
provided in Section 2.4(b), 3.2 or 3.3 (as the case may be), 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
the Trustee, the Liquidity Provider, the Paying Agent, the Depositary or the
Escrow Agent (collectively, the "Payees")
and
(ii) any compensation 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
the Liquidity Provider and the Trustee, and from time to time thereafter may
furnish to the Liquidity Provider and the Trustee, at the Subordination Agent's
discretion, or upon the 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 of the Liquidity Provider and the Trustee receive 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, the Trustee shall furnish to the Subordination
Agent, and from time to time thereafter may furnish to the Subordination Agent,
at the 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 the Trustee certifying as to the incumbency and specimen
signatures of the officers of the Trustee and the attorney-in-fact and agents
of
the Trustee (the "Trustee
Representatives")
authorized to give Written Notices on behalf of the 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, the Liquidity Provider shall furnish to the
Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at the 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 the Liquidity Provider certifying as to the incumbency
and specimen signatures of any officer, attorney-in-fact, agent or other
designated representative of the 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 the 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
Trustee and the Liquidity Provider 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 Trustee (with respect to the Equipment
Notes issued under such Indenture and held as Trust Property of the Trust)
constituting, in the aggregate, directions with respect to at least a majority
of outstanding principal amount of Equipment Notes), and (ii) after the
occurrence and during the continuance of an Indenture Default thereunder (which
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 upon the occurrence of an Indenture Default thereunder
shall be the Trustee. For purposes of giving effect to the rights of the
Controlling Party, the Trustee shall irrevocably agree, and the
Certificateholders will 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 Trustee 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 the Liquidity Facility shall
have been drawn (for any reason other than a Downgrade Drawing, an Early
Termination Drawing or a Special Termination Drawing unless such Downgrade
Drawing, Early Termination Drawing or Special Termination Drawing shall have
been converted to a Final Drawing under such Liquidity Facility) and remain
unreimbursed, (ii) the date on which the entire amount of any Downgrade Drawing,
Early Termination Drawing or Special Termination Drawing shall have become
and
remain "Applied Downgrade Advances", "Applied Early Termination Advances" or
"Applied Special Termination Advances", as the case may be, under and as defined
in the Liquidity Facility and (iii) the date on which all Equipment Notes shall
have been Accelerated (provided
that,
with respect to the period prior to the Delivery Period Expiry Date, such
Equipment Notes have an aggregate outstanding principal balance of in excess
of
$195 million), the Liquidity Provider shall have the right to elect, by Written
Notice to the Subordination Agent and the Trustee, 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
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.
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 Certificates, the Trustee shall separately set forth the amounts
to be paid in accordance with clause "fifth"
of
Section 3.2 or 2.4(b)(i), as the case may be, hereof;
(ii) With
respect to the Liquidity Facility, the Liquidity Provider 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)(i), as the case may be, hereof; and
(iii) The
Trustee shall set forth the amounts to be paid in accordance with clause
"sixth"
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 Certificates, the Trustee shall separately set forth the amounts
to be paid in accordance with clause "first"
(to
reimburse payments made by such Trustee or the Certificateholders, as the case
may be, pursuant to subclause (ii) or (iii) of clause "first"
of
Section 3.3 hereof), clause "sixth"
(to
reimburse payments made by the Certificateholders pursuant to subclause (iii)
of
clause "sixth"
of
Section 3.3 hereof) and clause "seventh"
of
Section 3.3 hereof;
(ii)
With
respect to the Liquidity Facility, the Liquidity Provider 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
(iii) The
Trustee shall set forth the amounts to be paid in accordance with clause
"sixth"
of
Section 3.3 hereof.
(c) At
such
time as the Trustee or the Liquidity Provider shall have received all amounts
owing to it (and, in the case of the 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 the Liquidity Provider, its commitment under the 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
the Trustee or the 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 the Trustee or the 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) on any Business Day shall be effective on
the
date delivered (or if delivered later on a Business Day or if delivered on
a day
which is not a Business Day 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
2.4(b)(i), 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
"sixth"
of
Section 2.4(b)(i), clauses "first"
through
"seventh"
of
Section 3.2 and clauses "first"
through
"eighth"
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 the Liquidity Provider or the
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 the Liquidity Provider shall be distributed to the Liquidity
Provider;
second,
(i) such amount as shall be required to pay in full the aggregate amount of
accrued and unpaid interest on all Liquidity Obligations (at the rate, or in
the
amount, provided in the Liquidity Facility) and (ii) if a Special Termination
Drawing has been made under the Liquidity Facility and has not been converted
into a Final Drawing, the outstanding amount of such Special Termination
Drawing, shall be distributed to the Liquidity Provider, pro rata on the basis
of all amounts described in clauses (i) and (ii) above;
third,
such
amount as shall be required (A) if the Cash Collateral Account had been
previously funded as provided in Section 3.6(f), to fund the Cash Collateral
Account up to its Required Amount shall be deposited in the Cash Collateral
Account, (B) if the Liquidity Facility shall become a Downgraded Facility or
an
Early Terminated Facility at a time when unreimbursed Interest Drawings under
the Liquidity Facility have reduced the Available Amount thereunder to zero,
to
fund the Cash Collateral Account up to an amount equal to the Required Amount
shall be deposited in the Cash Collateral Account, and (C) if neither subclause
(A) nor subclause (B) of this clause "third" is applicable, to pay or reimburse
the Liquidity Provider an amount equal to the amount of all Liquidity
Obligations then due under the Liquidity Facility (other than amounts payable
pursuant to clause "first" or "second" of this Section 3.2) shall be distributed
to the Liquidity Provider;
fourth,
if any
amounts are to be distributed pursuant to either subclause (A) or (B) of clause
"third" above, then the Liquidity Provider shall be paid the excess of (x)
the
aggregate outstanding amount of unreimbursed Advances (whether or not then
due)
under the Liquidity Facility over (y) the Required Amount;
fifth,
such
amount as shall be required to pay in full Expected Distributions to the holders
of the Certificates on such Distribution Date shall be distributed to the
Trustee;
sixth,
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
the Trustee pursuant to the terms of this Agreement and the Trust Agreement,
as
the case may be, shall be distributed to the Subordination Agent and the
Trustee; and
seventh,
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.
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 (A) 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 Trust Indenture Estate, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses, (ii) the
Trustee for any amounts of the nature described in clause (i) above actually
incurred by it under the Trust Agreement (to the extent not previously
reimbursed), shall be distributed to the Trustee, and (iii) any Liquidity
Provider or any Certificateholder for payments, if any, made by it to the
Subordination Agent or the Trustee in respect of amounts described in clause
(i)
above, shall be distributed to such Liquidity Provider or to the Trustee for
the
account of such Certificateholder and (B) if the Subordination Agent shall
have
requested the initial Appraisals and only so long as a Triggering Event shall
be
continuing, to fund or replenish the Reserve Account up to the Reserve Amount,
but in no event (other than the initial funding of the Reserve Account) more
than $25,000 in the aggregate during any calendar year, shall be distributed
to
the Subordination Agent for deposit in the Reserve Account, in each such case,
pro rata on the basis of all amounts described in clauses (A)(i), (A)(ii),
(A)(iii) and (B) above;
second,
such
amount remaining as shall be required to pay all accrued and unpaid Liquidity
Expenses shall be distributed to the Liquidity Provider;
third,
(i)
such amount remaining as shall be required to pay accrued and unpaid interest
on
the Liquidity Obligations as provided in the Liquidity Facility and (ii) if
a
Special Termination Drawing has been made under the Liquidity Facility and
has
not been converted into a Final Drawing, the outstanding amount of such Special
Termination Drawing, shall be distributed to the Liquidity Provider, pro rata
on
the basis of all amounts described in clauses (i) and (ii) above;
fourth,
such
amount remaining as shall be required (A) if the 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 or (ii) a Final Drawing shall have occurred, to fund the Cash
Collateral Account up to its Required Amount (less the amount of any repayments
of Interest Drawings under the Liquidity Facility while subclause (A)(i) above
is applicable) shall be deposited in the Cash Collateral Account, (B) if any
Liquidity Facility shall become a Downgraded Facility or an Early Terminated
Facility at a time when unreimbursed Interest
Drawings under the 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 or (ii) a Final Drawing shall
have
occurred, to fund the Cash Collateral Account up to an amount equal to the
Required Amount (less the amount of any repayments of Interest Drawings under
the Liquidity Facility while subclause (B)(i) above is applicable) shall be
deposited in the Cash Collateral Account, and (C) if 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 the Liquidity
Facility (other than amounts payable pursuant to clause "second"
or
"third"
of this
Section 3.3) shall be distributed to the Liquidity Provider;
fifth,
if any
amounts are to be distributed pursuant to either subclause (A) or (B) of clause
"fourth"
above,
then the Liquidity Provider shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due) under
the
Liquidity Facility over (y) the Required Amount (less the amount of any
repayments of Interest Drawings under the Liquidity Facility while subclause
(A)(i) or (B)(i), as the case may be, of clause "fourth"
above
is applicable);
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) the Trustee for any Tax (other
than
Taxes imposed on compensation paid under the Trust Agreement), expense, fee,
charge, loss or any other amount payable to the Trustee under the Trust
Agreement (to the extent not previously reimbursed), shall be distributed to
the
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 Trustee for the account of such
Certificateholder, in each such case, pro rata 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 Triggering Event
Distributions on the Certificates shall be distributed to the Trustee;
and
eighth,
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
3.4 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 Triggering
Event Distributions have been made in full, in the manner provided in clause
"first"
of
Section 3.3 hereof.
(b) Notwithstanding
the priority of payments specified in Sections 2.4(b)(i), 3.2 and 3.3, in the
event any Investment Earnings on amounts on deposit in the Cash Collateral
Account resulting from an Unapplied Provider Advance are deposited in the
Collection Account
or
the
Special Payments Account, such Investment Earnings shall be used to pay interest
payable in respect of such Unapplied Provider Advance to the extent of such
Investment Earnings.
(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
"sixth"
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"
of
Section 3.2 to "Distribution Date" shall be deemed to refer to such Scheduled
Payment Date.
(d) If
the
scheduled date for the distribution of any Expected Distributions under this
Agreement is extended due to the proviso in the definition of "Regular
Distribution Dates", no additional interest will accrue in respect of such
Expected Distributions during such extension.
SECTION
3.5 Payments
to the Trustee and the Liquidity Provider.
Any
amounts distributed hereunder to the Liquidity Provider shall be paid to the
Liquidity Provider by wire transfer of funds to the address the Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent
shall
provide a Written Notice of any such transfer to the Liquidity Provider at
the
time of such transfer. Any amounts distributed hereunder by the Subordination
Agent to the Trustee, if the Trustee shall not be the same institution as the
Subordination Agent, shall be paid to the Trustee by wire transfer of funds
at
the address the Trustee shall provide to the Subordination Agent.
SECTION
3.6 Liquidity
Facility.
(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
Certificates (at the Stated Interest Rate), then, prior to 1:00 p.m. (New York
City time) on such Distribution Date, the Subordination Agent shall request
a
drawing (each such drawing, an "Interest
Drawing")
under
the Liquidity Facility in an amount equal to the lesser of (i) an amount
sufficient to pay the amount of such accrued interest (at the Stated Interest
Rate) and (ii) the Available Amount under the Liquidity Facility, and shall
pay
such amount to the Trustee in payment of such accrued interest.
(b) Application
of Interest Drawings.
Notwithstanding anything to the contrary contained in this Agreement, all
payments received by the Subordination Agent in respect of an Interest Drawing
under the Liquidity Facility and all amounts withdrawn by the Subordination
Agent from the Cash Collateral Account, and payable in each case to the
Certificateholders or the Trustee, shall be promptly distributed to the
Trustee.
(c) Downgrade
Drawings.
(i)
With respect to the Liquidity Facility, a Downgrade Drawing shall be requested
by the Subordination Agent thereunder as provided in Section 3.6(c)(iii), if
at
any time, a Downgrade Event shall have occurred with respect to such
Liquidity
Facility (a "Downgraded
Facility"),
unless an event described in Section 3.6(c)(ii) occurs with respect to the
Liquidity Facility.
(ii) If
at any
time the Liquidity Facility becomes a Downgraded Facility, the Subordination
Agent shall request a Downgrade Drawing thereunder in accordance with Section
3.6(c)(iii), unless the Liquidity Provider or Continental arranges for a
Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility to the Subordination Agent within 10 days after receiving notice of
a
Downgrade Event (but not later than the expiration date of such Downgraded
Facility).
(iii) Upon
the
occurrence of any Downgrade Event with respect to the Liquidity Facility, unless
any event described in Section 3.6(c)(ii) occurs with respect thereto, the
Subordination Agent shall, on the 10th day referred to in Section 3.6(c)(ii)
(or
if such 10th day is not a Business Day, on the next succeeding Business Day)
(or, if earlier, the expiration date of the Downgraded Facility), request a
drawing in accordance with and to the extent permitted by the Downgraded
Facility (such drawing, a "Downgrade
Drawing")
of the
Available Amount 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) Early
Termination Drawings.
LBBW
shall
have the right in its sole discretion to elect to terminate the Liquidity
Facility at any time during the period from the 40th
day to
and including the 25th
day
prior to each anniversary of the Closing Date (the "Early
Termination Notice Period")
upon
not less than 25 days' written notice (the "Early
Termination Notice")
to the
Subordination Agent. If
LBBW
delivers
an Early Termination Notice to the Subordination Agent during the Early
Termination Notice Period (and,
if
LBBW shall not have been replaced in accordance with Section 3.6(e) on or before
the last day of the Early Termination Notice Period), the Subordination Agent
shall,
as
soon
as possible after the last
day
of the
Early Termination Notice Period but prior to the Early
Termination Date,
in
accordance with and to the extent permitted by the terms of the terminating
Liquidity Facility (an "Early
Terminated Facility"),
request a drawing under the Early Terminated Facility of all available and
undrawn amounts thereunder (such drawing, an "Early
Termination Drawing").
Amounts drawn pursuant to an Early Termination Drawing shall be maintained
and
invested in accordance with Section 3.6(f).
(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 the Liquidity Facility
(including any Replacement Liquidity Facility provided pursuant to Section
3.6(e)(ii) hereof). If such Replacement Liquidity Facility is provided at any
time after a Downgrade Drawing, Early Termination Drawing or Special Termination
Drawing has been made, all funds on deposit in the Cash Collateral Account
will
be returned to the Liquidity Provider being replaced.
(ii) If
LBBW
shall elect to terminate
its Liquidity Facility early in accordance with Section 3.6(d), then LBBW
may, at its option, arrange for a Replacement Liquidity Facility to replace
such
Liquidity Facility on or prior to the last day of the Early Termination
Period.
(iii) No
Replacement Liquidity Facility arranged by Continental or the Liquidity Provider
in accordance with clause (i) or (ii) above or pursuant to Section 3.6(c),
respectively, shall become effective and no such Replacement Liquidity Facility
shall be deemed a "Liquidity Facility" under the Operative Agreements, unless
and until (A) each of the conditions referred to in sub clauses (iv)(x) and
(z)
below shall have been satisfied, (B) if such Replacement Liquidity Facility
shall materially adversely affect the rights, remedies, interests or obligations
of the 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 the Liquidity Provider under Section 3.6(e)(ii) or pursuant
to Section 3.6(c), 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 the 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 (iii) 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) with respect to a Replacement Liquidity Facility, (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 Liquidity Provider with
the Replacement Liquidity Provider and (2) the replacement of the Liquidity
Facility with the applicable Replacement Liquidity Facility and (z) such
Replacement Liquidity Provider shall be deemed to be the Liquidity Provider
with
the rights and obligations of the Liquidity Provider hereunder and under the
other Operative Agreements and such Replacement Liquidity Facility shall be
deemed to be the Liquidity Facility hereunder and under the other Operative
Agreements.
(f) Cash
Collateral Account; Withdrawals; Investments.
In the
event the Subordination Agent shall draw all available amounts under the
Liquidity Facility pursuant to Section 3.6(c), 3.6(d), 3.6(i) or 3.6(k) hereof,
or in the event amounts are to be deposited in the Cash Collateral Account
pursuant to subclause (A) or (B) of clause "third"
of
Section 2.4(b)(i), subclause (A) or (B) of clause "third"
of
Section 3.2 or subclause (A) or (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 Cash Collateral Account. All amounts
on deposit in the Cash Collateral Account shall be invested and reinvested
in
Eligible Investments in accordance with Section 2.2(b) hereof. On each Interest
Payment Date (or, in the case of any Special Distribution Date with respect
to a
distribution pursuant to Section 2.4(b) hereof occurring prior to the occurrence
of a Triggering Event, on such Special Distribution Date), Investment Earnings
on amounts on deposit in the Cash Collateral Account (or, in the case of any
Special Distribution Date with respect to a distribution pursuant to Section
2.4(b) hereof occurring prior to the occurrence of a Triggering Event, a
fraction of such Investment Earnings equal to the Section 2.4(b) Fraction)
shall
be deposited in the Collection Account (or, in the case of any Special
Distribution Date with respect to a distribution pursuant to Section 2.4(b)
hereof occurring prior to the occurrence of a Triggering Event, the Special
Payments Account) and applied on such Interest Payment Date (or Special
Distribution Date, as the case may be) in accordance with Section 2.4, 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 and Special Distribution Date setting forth the aggregate
amount of Investment Earnings held in the Cash Collateral Account 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
Certificates (at the Stated Interest Rate) from any other source, withdraw
from
the Cash Collateral Account, and pay to the Trustee, an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at the
Stated Interest Rate) on the Certificates and (y) the amount on deposit in
the
Cash Collateral Account;
(ii) on
each
date on which the Pool Balance of the Trust shall have been reduced by payments
made to the 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 or deemed
reduced pursuant to the proviso in the definition of "Required Amount", the
Subordination Agent shall withdraw from the Cash Collateral Account such amount
as is necessary so that, after giving effect to the reduction or deemed
reduction of the Pool Balance on such date (and any reduction in the amounts
on
deposit in the Cash Collateral Account resulting from a prior withdrawal of
amounts on deposit in the Cash Collateral Account on such date) and any transfer
of Investment Earnings from the Cash Collateral Account to the Collection
Account or the Special Payments Account on such date, an amount equal to the
sum
of the Required Amount (with respect to the Liquidity Facility) plus Investment
Earnings on deposit in the Cash Collateral Account (after giving effect to
any
such transfer of Investment Earnings) will be on deposit in the Cash Collateral
Account and shall first,
pay
such withdrawn amount to the Liquidity Provider until the
Liquidity
Obligations owing to the Liquidity Provider shall have been paid in full, and
second,
deposit
any remaining withdrawn amount in the Collection Account;
(iii) if
a
Replacement Liquidity Facility for the Certificates shall be delivered to the
Subordination Agent following the date on which funds have been deposited into
the Cash Collateral Account, the Subordination Agent shall withdraw all amounts
on deposit in the 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
(iv) following
the payment of Triggering Event Distributions in full, on the date on which
the
Subordination Agent shall have been notified by the Liquidity Provider that
the
Liquidity Obligations owed to the Liquidity Provider have been paid in full,
the
Subordination Agent shall withdraw all amounts on deposit in the Cash Collateral
Account and shall deposit such amount in the Collection Account.
(g) Reinstatement.
With
respect to any Interest Drawing under the Liquidity Facility, upon the
reimbursement of the Liquidity Provider in full or in part of the amount of
such
Interest Drawing, together with any accrued interest thereon, the Available
Amount of the Liquidity Facility shall be reinstated by an amount equal to
the
amount of such Interest Drawing so reimbursed to the Liquidity Provider but
not
to exceed the Stated Amount for the Liquidity Facility; provided,
however,
that
the 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 or (y) a Final Drawing, Downgrade Drawing,
Early Termination Drawing or Special Termination Drawing shall have occurred
or
a Drawing has been converted into a Final Drawing. In the event that (i) funds
are withdrawn from the Cash Collateral Account pursuant to clause (i), (ii)
or
(iii) of Section 3.6(f) hereof or (ii) the Liquidity Facility shall become
a Downgraded Facility or an Early Terminated Facility at a time when
unreimbursed Interest Drawings under the 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 and a Performing Note Deficiency exists
or
(y) any time after a Final Drawing shall have occurred shall be deposited
in the Cash Collateral Account as and to the extent provided in clause
"third"
of
Section 2.4(b)(i), 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 Facility shall be due and payable,
together with interest thereon, on the dates and at the rates, respectively,
provided in the Liquidity Facility.
(i) Final
Drawing.
Upon
receipt from the Liquidity Provider of a Termination Notice, the Subordination
Agent shall, not later than the date specified in such Termination Notice,
in
accordance with the terms of the Liquidity Facility, request a drawing under
the
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.
On the
first Regular Distribution Date, the Stated Amount under each Liquidity Facility
shall automatically be reduced to the Required Amount then in effect with
respect to such Liquidity Facility. On each date on which the Pool Balance
of
the Trust shall have been reduced by payments made to the 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 or deemed reduced pursuant to the proviso
in
the definition of "Required Amount", the Stated Amount under the Liquidity
Facility shall automatically be reduced to an amount equal to the Required
Amount for the Liquidity Facility (as calculated by the Subordination Agent
after giving effect to such payment).
(k) Special
Termination Drawing.
Upon
receipt from the Liquidity Provider of a Special Termination Notice with respect
to the Liquidity Facility, the Subordination Agent shall, not later than the
date specified in such Special Termination Notice, in accordance with the terms
of the Liquidity Facility, request a drawing under the Liquidity Facility of
all
available and undrawn amounts thereunder (a "Special
Termination Drawing").
Amounts drawn pursuant to a Special Termination Drawing shall be maintained
and
invested in accordance with Section 3.6(f) hereof.
(l) Relation
to Subordination Provisions.
Interest Drawings under the Liquidity Facility and withdrawals from the Cash
Collateral Account, in each case, in respect of interest on the Certificates,
will be distributed to the Trustee, notwithstanding Sections 2.4, 3.2 and 3.3
hereof.
(m) Assignment
of Liquidity Facility.
The
Subordination Agent agrees not to consent to the assignment by the Liquidity
Provider of any of its rights or obligations under the Liquidity Facility or
any
interest therein, unless (i) Continental shall have consented to such assignment
and (ii) each Rating Agency shall have provided a Ratings Confirmation in
respect of such assignment; provided,
that
the Subordination Agent shall consent to such assignment if the conditions
in
the foregoing clauses (i) and (ii) are satisfied, and the foregoing is not
intended to and shall not be construed to limit the rights of the Liquidity
Provider under Section 3.6(e)(ii).
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 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 direct
the
Subordination Agent to sell, assign, contract to sell or otherwise dispose
of
and deliver
all
(but
not less than all) of such Equipment Notes, or sell the Aircraft subject to
the
Lien of such Indenture, in either case, 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) 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 Appraisals with respect to the Aircraft subject
to
such Indenture.
(iii) After
a
Triggering Event occurs and any Equipment Note becomes a Non-Performing
Equipment Note, the Subordination Agent shall obtain a desktop appraisal from
each of three Appraisers setting forth the current market value, current lease
rate and immediate or distress sale value (in each case, as defined by the
International Society of Transport Aircraft Trading) with respect to all of
the
Aircraft (the "Appraisals")
as
soon as practicable and thereafter during the continuance of such Triggering
Event additional Appraisals on or prior to each six-month anniversary of the
date of such initial Appraisals; provided,
that,
the Controlling Party shall have the right to obtain or cause to be obtained
additional Appraisals (including any Appraisals based upon physical inspection
of the Aircraft) at any time.
(iv) After
the
Subordination Agent has requested the Appraisers to deliver the initial
Appraisals, the Reserve Account will be funded initially up to the Reserve
Amount from amounts distributed under clause "first"
of
Section 3.3 hereof. The Subordination Agent shall have the right to withdraw
funds from the Reserve Account to pay for the initial and any subsequent
Appraisals. The Reserve Account will subsequently be replenished up to the
Reserve Amount pursuant to clause "first"
of
Section 3.3 hereof; provided, that, except for the initial funding of the
Reserve Account up to the Reserve Amount, no more than $25,000 will be deposited
in the Reserve Account in any calendar year and no more than $100,000 shall
be
on deposit in the Reserve Account at any time. On the first Business Day
following the earliest of (w) the first day after the initial funding of the
Reserve Account on which no Triggering Event exists, (x) the Final Legal
Distribution Date, (y) the date of the disposition of the last Aircraft or
the
related Equipment Note hereunder, and (z) the date on which payment of the
Triggering Event Distributions is made in full, the Subordination Agent shall
withdraw all amounts (if any) on deposit in the Reserve Account and deposit
such
amounts in the Collection Account.
(b) Following
the occurrence and during the continuance of an Indenture Default under any
Indenture, the Controlling Party shall take such actions as it may reasonably
deem most effectual to complete the sale or other disposition of the relevant
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 Articles II and 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 Trustee, the Liquidity Provider,
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 the Trustee, the 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 the Trustee, the
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
to Receive Payments Not to Be Impaired.
Anything in this Agreement to the contrary notwithstanding but subject to the
Trust Agreement, the right of any Certificateholder or the 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 the 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, the Liquidity Provider or the Trustee or a suit by
Certificateholders holding more than 10% of the original principal amount of
the
Certificates.
DUTIES
OF
THE SUBORDINATION AGENT;
AGREEMENTS
OF TRUSTEE, ETC.
SECTION
5.1 Notice
of Indenture Default or Triggering Event; Other Notices; Reports.
(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
Provider and the Trustee 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 the Trustee, one or more Liquidity Provider or one or
more Certificateholders.
(b) The
Subordination Agent will furnish to the Liquidity Provider and the 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 the Liquidity Provider or
Trustee, as applicable, pursuant to the express provision of any other Operative
Agreement.
(c) Upon
the
occurrence of an Indenture Default, the Subordination Agent shall instruct
the
Trustee to, and the Trustee shall, request that DTC post on its internet
bulletin board a securities position listing setting forth the names of all
the
parties reflected on DTC's books as holding interests in the
certificates.
(d) Promptly
after the occurrence of a Triggering Event or an Indenture Default resulting
from the failure of Continental to make payments on any Equipment Note and
on
every sixth Regular Distribution Date while the Triggering Event or such
Indenture Default shall be continuing, the Subordination Agent will provide
to
the Trustee, Liquidity Provider, Rating Agencies and Continental a statement
setting forth the following information:
(i)
after
a bankruptcy of Continental, with respect to each Aircraft, whether such
Aircraft is (A) subject to the 60-day period of Section 1110 of the
Bankruptcy Code, (B) subject to an election by Continental under
Section 1110(a) of the Bankruptcy Code, (C) covered by an agreement
contemplated by Section 1110(b) of the Bankruptcy Code or (D) not
subject to any of (A), (B) or (C);
(ii)
to
the best of the Subordination Agent's knowledge, after requesting such
information from Continental, (A) whether the Aircraft are currently in
service or parked in storage, (B) the maintenance status of the Aircraft
and (C) the location of the Engines (as defined in the
Indentures);
(iii)
the
current Pool Balance of the Certificates and outstanding principal
amount
of all Equipment Notes;
(iv)
the
expected amount of interest which will have accrued on the Equipment Notes
and
on the Certificates as of the next Regular Distribution Date;
(v)
the
amounts paid to each person on such Distribution Date pursuant to this
Agreement;
(vi)
details of the amounts paid on such Distribution Date identified by reference
to
the relevant provision of this Agreement and the source of payment (by Aircraft
and party);
(vii)
if
the Subordination Agent has made a Final Drawing under the Liquidity
Facility;
(viii)
the amounts currently owed to the Liquidity Provider;
(ix)
the
amounts drawn under the Liquidity Facility; and
(x)
after
a bankruptcy of Continental, any operational reports filed by Continental with
the bankruptcy court which are available to the Subordination Agent on a
non-confidential basis.
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 5.2 or 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 Provider and Trustee.
If the
Liquidity Provider or the Trustee has received notice of an Indenture Default
or
a Triggering Event, such Person shall promptly give notice thereof to the
Trustee or Liquidity Provider, as the case may be, 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.
THE
SUBORDINATION AGENT
SECTION
6.1 Authorization;
Acceptance of Trusts and Duties.
The
Trustee hereby designates and appoints the Subordination Agent as the agent
and
trustee of the Trustee under the Liquidity Facility and authorizes the
Subordination Agent to enter into the Liquidity Facility as agent and trustee
for such Trustee. Each of the Liquidity Provider and the Trustee 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 Sections 2.2 or 5.3 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 Trustee and the Liquidity Provider 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 the Trustee or the 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 as of any date, the Subordination Agent may for all purposes hereof
rely
on a certificate signed by any Responsible Officer of the 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 Provider or the Trustee 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 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 the Liquidity Provider
and the Trustee 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 the Liquidity Provider or the Trustee 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 selected 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 the Trustee or the 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.
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
6 of the Note Purchase Agreement. The indemnities contained in such Sections
of
such agreements shall survive the termination of this Agreement.
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 Trustee and
the
Liquidity Provider. 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 the
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 Provider and the Trustee.
The retiring Subordination Agent shall promptly transfer its rights under the
Liquidity Facility 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 the Trustee 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), the Trustee or the Liquidity Provider 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.
SUPPLEMENTS
AND AMENDMENTS
SECTION
9.1 Amendments,
Waivers, etc.
(a)
This Agreement may not be supplemented, amended or modified without the consent
of the Trustee (acting, except in the case of any amendment pursuant to
Section 3.6(e)(v)(y) hereof with respect to any Replacement Liquidity
Facility or any amendment contemplated by the last sentence of this Section
9.1(a), with the consent of holders of the Certificates evidencing interests
in
the Trust aggregating not less than a majority in interest in the Trust or
as
otherwise authorized pursuant to the Trust Agreement), the Subordination Agent
and the Liquidity Provider; provided,
however,
that
this Agreement may be supplemented, amended or modified without the consent
of
the Trustee if such supplement, amendment or modification cures an ambiguity
or
inconsistency or does not materially adversely affect the Trustee, the Liquidity
Provider or the holders of the Certificates; 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), Section 3.6(n), the last sentence of this Section 9.1(a),
the
second sentence of Section 10.6 or this proviso (collectively, 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
Operative Agreement or (B) is made pursuant to the last sentence of this Section
9.1(a), 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 the Liquidity
Provider, no supplement, amendment or modification of this Agreement may
(i) reduce the percentage of the interest in the Trust evidenced by the
Certificates issued by the Trust necessary to consent to modify or amend any
provision of this Agreement or to waive compliance therewith or (ii) except
as provided in the last sentence of this Section 9.1(a), 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 the Trustee at any time following the payment of
Triggering Event Distributions in full. If any Replacement Liquidity Facility
in
accordance with Section 3.6(e) hereof is to be comprised of more than one
instrument or an instrument other than a revolving credit agreement, in each
case, as contemplated by the definition of the term "Replacement Liquidity
Facility", then each of the parties hereto agrees to amend this Agreement to
incorporate appropriate mechanics for multiple Liquidity Facilities or for
such
instrument, as the case may be.
(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 such Equipment Notes from the Trustee and
shall vote or consent in accordance with the directions of the Trustee and
(ii) if any Indenture Default (which 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 the
Liquidity Provider, reduce the amount of rent, supplemental rent or stipulated
loss values payable by Continental under any Lease.
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 the 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.
Upon
the
reasonable request of any Rating Agency in writing, the Subordination Agent
and
Trustee shall provide to such Rating Agency such information available to the
Subordination Agent and the Trustee as may be relevant to maintaining such
Rating Agency's rating on the Certificates. During the continuance of a
Triggering Event or an Indenture Default resulting from a payment default under
any Equipment Note, the Subordination Agent and Trustee
shall permit each Rating Agency, upon reasonable notice and on a
periodic basis, to be provided copies of documents in the possession of the
Subordination Agent and Trustee in their respective capacities as such
reasonably related to the transactions contemplated by the Operative Agreements
and, on a reasonable periodic basis, to meet or confer with officers and
employees of the Subordination Agent and Trustee in their respective capacities
as such to discuss such transactions, so long as such actions are reasonably
related to maintaining such Rating Agency's rating on the Certificates.
MISCELLANEOUS
SECTION
10.1 Termination
of Intercreditor Agreement.
Following payment in full of Triggering Event Distributions and the payment
in
full of all Liquidity Obligations to the Liquidity Provider and provided
that
there shall then be no other amounts due to the Certificateholders, the Trustee,
the Liquidity Provider and the Subordination Agent hereunder or under the Trust
Agreement, and that the commitment of the Liquidity Provider under the Liquidity
Facility 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 the Trustee, the Liquidity Provider and the
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 Trustee, the Liquidity
Provider 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 Administration
Telecopy:
(302) 651-8882
(ii) if
to the
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 Administration
Telecopy:
(302) 651-8882
(iii) if
to the
Liquidity Provider, addressed to it at its office at:
Landesbank
Baden-Wü;rttemberg
Am
Hauptbahnhof 2
D-70173
Stuttgart
Germany
Attention:
Structured Finance
Telephone:
+49 711 1244 9757
Telecopy:
+49 711 1244 9747
with
a
copy to:
Landesbank
Baden-Württemberg
280
Park
Avenue, West Building, 31st Floor
New
York,
New York 10017
Attention:
Claudia Rothe/Bette Smolen
Telephone:
(212) 584-1700
Telecopy:
(212) 584-1729
Whenever
any notice in writing is required to be given by the Trustee, the 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 or becomes invalid, prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such invalidity,
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.
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 Provider, on the one hand, and the Trustee and the
Certificateholders, on the other hand, and as among the Trustee and the
Certificateholders, 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 Provider 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
the
Trustee, the Liquidity Provider or the Subordination Agent receives any payment
in respect of any obligations owing hereunder (or, in the case of the Liquidity
Provider, 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 Provider, 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
Trustee (on behalf of itself and the holders of Certificates), the Liquidity
Provider 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 Trustee and the
holders of Certificates are secured by certain assets and the Liquidity
Obligations may not be so secured. The Trustee expressly agrees (on behalf
of
itself 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 Trustee (on behalf of itself and the holders of the Certificates), the
Liquidity Provider 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 Provider, 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 Provider,
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 Provider, 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 the Trustee, the Liquidity Provider 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 (sitting in the City 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 of 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 (and any successor Liquidity Provider not organized under
the
laws of the United States or any political subdivision thereof) 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.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers or representatives 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
By
___________________________
Name:
Title:
LANDESBANK
BADEN-WÜRTTEMBERG, as 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:
Title:
48
EXECUTION
VERSION
DEPOSIT
AGREEMENT
Dated
as
of September 22, 2005
between
WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
as
Escrow
Agent
and
CITIBANK,
N.A.
as
Depositary
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DEPOSIT
AGREEMENT dated as of September 22, 2005 (as amended, modified or supplemented
from time to time, this "Agreement")
between WELLS FARGO BANK NORTHWEST, 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
CITIBANK, N.A., a national banking association, 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 as of September 22, 2005, 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 2005-ERJ1 pursuant to
which
the Continental Airlines Pass Through Trust, Series 2005-ERJ1 Certificates
referred to therein (the "Certificates")
are
being issued (the date of such issuance, the "Issuance
Date");
WHEREAS,
Continental, Embraer-Empresa Brasileira de Aeronáutica S.A., Citigroup Global
Markets Inc. (the "Underwriter"
and,
together with its transferees and assigns as registered owners of the
Certificates, the "Investors")
and
the Depositary have entered into an Underwriting Agreement dated as of September
14, 2005, pursuant to which the Pass Through Trustee will issue and sell
the
Certificates to the Underwriter;
WHEREAS,
Continental, the Pass Through Trustee, 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, utilizing
a
portion of the proceeds from the sale of the Certificates (the "Net
Proceeds");
WHEREAS,
the Escrow Agent, the Underwriter, 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 Underwriter and the Pass Through Trustee intend that the Net Proceeds
(excluding any amount used to purchase Equipment Notes on the Issuance Date)
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 are
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, solely
upon the written instruction of an Authorized Person (as defined in Section
8
hereof) of the Escrow Agent, 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 Underwriter to deposit with the Depositary
on the
date of this Agreement (the "Deposit
Date")
in
Federal (same day) funds by wire transfer to: Citibank, N.A., ABA No. 021000089,
Account No. 36855852, further credit to Account No. 795733, and the Depositary
shall accept from the Underwriter, on behalf of the Escrow Agent, the sum
of
US$311,010,000 (or such lesser amount equal to the Net Proceeds less amounts,
if
any, used to purchase Equipment Notes on the Issuance Date). Upon acceptance
of
such sum, the Depositary shall (i) accept each of the deposits specified
in
Schedule I hereto maturing on September 28, 2006 (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. The Depositary
shall have no duty to solicit the delivery of any Deposit.
SECTION
2.2 Interest.
The
Depository shall pay interest on each Deposit from and including the date
of
deposit to but excluding the date of withdrawal at the rate of 9.798% per
annum
(computed on the basis of a year of twelve 30 day months) payable to the
Paying
Agent, in accordance with the instructions set forth in Section 4 hereof,
on
behalf of the Escrow Agent monthly in arrears on the 1st day of each month,
commencing on October 1, 2005 (each, an "Interest
Payment Date"),
and
on the date of the Final Withdrawal (as defined below), 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 receipt and acceptance of any Deposit,
the Escrow Agent may, by providing at least one Business Day's prior notice
of
withdrawal to the Depositary (with a copy to the Pass Through Trustee) in
the
form of Exhibit A hereto (a "Notice
of Purchase Withdrawal"),
signed by an Authorized Person of the Escrow Agent, withdraw not less than
the
entire balance of such Deposit on a Business Day, except that at any time
prior
to the actual withdrawal of such Deposit, the Escrow Agent or the Pass Through
Trustee may, by written notice, signed by an Authorized Person of the Escrow
Agent or the Pass Through Trustee, to the Depositary (provided such notice
is
received by the Depositary prior to the distribution of such withdrawal),
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 of such Deposit
in
the related Account shall be zero and, upon payment of interest accrued on
such
Deposit, 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
or Wilmington, Delaware. The Depositary may waive the foregoing requirement
that
any Deposit can only be withdrawn on or after seven days after the establishment
thereof, and may instead reserve the right, upon at least 14 days' prior
written
notice to Continental, the Escrow Agent and the Pass Through Trustee, to
require
seven days' notice for any withdrawal.
(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
up
to but excluding the specified date of withdrawal (a "Final
Withdrawal"),
on
such Business Day as shall be specified in such Notice of Final Withdrawal.
If a
Notice of Final Withdrawal has not been received by the Depositary on or
before
September 10, 2006, and there are unwithdrawn Deposits in any of the Accounts
on
such date, the Depositary shall pay, via wire transfer in accordance with
the
instructions set forth in Section 4 hereof, the amount of the Final Withdrawal
to the Paying Agent on September 28, 2006.
(c) If
the
Depositary timely receives a duly completed Notice of Purchase Withdrawal
or
Notice of Final Withdrawal (each, a "Withdrawal
Notice")
complying with the provisions of this Agreement, and provided a notice of
cancellation has not been timely received by the Depositary in the case of
a
Notice of Purchase Withdrawal, 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 (other than the date of the Final Withdrawal),
the Escrow Agent, or the Pass Through Trustee on behalf of the Escrow Agent,
shall re-deposit with the Depositary any portion thereof not used to acquire
Equipment Notes and the Depositary shall accept the same for deposit hereunder
into the account from which it was withdrawn. On the date the Certificates
are
issued, the Escrow Agent, or the Underwriter, on behalf of the Escrow Agent,
shall be entitled to deposit with the Depositary any portion of the Net Proceeds
not theretofore deposited hereunder and not used to purchase Equipment Notes
on
the Issuance Date (the "Unused
Proceeds")
and
the Depositary shall accept the Unused Proceeds for deposit hereunder. Any
sums
so received for deposit shall be received
as
a new
Deposit, credited to a new Account, and Schedule I hereto shall be amended
to
include such Deposit, 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 receipt and acceptance thereof by the Depositary and
(ii)
such Deposit shall mature on September 28, 2006 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.
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# 031100092, Account No.
070157-000,
Attention: Monica Henry, Telephone No.: (302) 636-6296, Reference: Continental
Airlines PTT, Series 2005-ERJ1, 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 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 and (ii) pay the full amount deducted
or
withheld (including in respect of such additional amounts) to the competent
taxation authority. The Depositary shall not have any withholding or tax
reporting obligations with respect to the Deposits, except as may be required
by
law. 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
national banking association duly organized and validly existing under the
laws
of the United States;
(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 this Agreement 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
(x) as enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereinafter in effect relating to
creditors' rights generally and (y) as enforcement thereof is subject to
general
principles of equity (regardless of whether enforcement is considered in
a
proceeding in equity or at law).
(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 of 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.
SECTION
7. Amendment,
Etc.
This
Agreement may not be amended, waived or otherwise modified except by an
instrument in writing signed by each of the parties hereto.
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, Citibank, N.A., 388 Greenwich Street, 14th
Floor,
New York, NY, 10013, Attention: Barbara E. Bennett, (Telephone: (212)
816-5621, Telecopier: (212) 657-2762) or (y) in the case of the
Escrow Agent, Wells Fargo Bank Northwest, National Association, 299 South
Main
Street, MAC: U1228-120, Salt Lake City, UT 84111, Attention: Corporate Trust
Services (Telephone: (801) 246-5630, Telecopier: (801) 246-5053), in each
case,
with a copy to the Pass Through Trustee, Wilmington Trust Company, 1100 North
Market Street, Rodney Square North, Wilmington, DE 19890-1605, Attention:
Corporate Capital Market Services (Telephone: (800) 733-8485,
Telecopier: (302) 636-4140) and to Continental, Continental Airlines, Inc.,
1600
Smith Street, Dept. HQS-FN, Houston, TX 77002, Attention: Treasurer (Telephone:
(713) 324-2544, Telecopier: (713) 324-2447) (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 and the Pass Through Trustee who are
authorized to give notices and instructions with respect to this Agreement,
attached hereto as Schedule IIA and IIB, respectively ("Authorized
Person").
The
Depositary may conclusively rely on such certificate until the Depositary
receives written notice from the Escrow Agent to the contrary.
In
addition, the Depositary may conclusively rely on and shall be protected
in
acting in reliance upon any certificate, instrument, opinion, notice, letter
or
other document or security delivered to the Depositary and believed by the
Depositary in good faith to be genuine and to have been signed and presented
by
the proper person or persons and may act upon any tender, statements, request,
documents, certificate, agreement or other instrument not only as to its
due
execution and validity and effectiveness of its provisions, but also as to
the
truth and accuracy of any information contained therein, which the Depositary
shall in good faith believe to be genuine or to have been signed or presented
by
the proper person or persons. The Depositary shall have no duties or obligations
other than those specifically set forth herein or as may be subsequently
agreed
to in writing between the parties hereto and by the Pass Through Trustee.
The
Depositary may consult with counsel of its selection with respect to any
questions relating to its duties and responsibilities and the advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by the Depositary
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
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.
[Signature
Page Follows]
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.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION,
as
Escrow
Agent
By
___________________________
Name:
Title:
CITIBANK,
N.A.,
as
Depositary
By
___________________________
Name:
Title:
Schedule
I
Schedule
of Deposits
|
Registration
No.
|
Serial
No.
|
Deposit
Amount
|
Account
No.
|
|
N11192
|
14500936
|
11,007,469.39
|
795746
|
|
N11193
|
14500938
|
11,007,469.39
|
795747
|
|
N11194
|
14500940
|
11,007,469.37
|
795748
|
|
N12195
|
14500943
|
11,007,469.37
|
795749
|
|
N17196
|
14500945
|
11,007,469.37
|
795750
|
|
N21197
|
14500947
|
11,007,469.37
|
795751
|
|
N14198
|
14500951
|
11,007,469.37
|
795752
|
|
N11199
|
14500953
|
11,007,469.37
|
795753
|
Schedule
II A & B
INCUMBENCY
CERTIFICATES
EXHIBIT
A
NOTICE
OF
PURCHASE WITHDRAWAL
Citibank,
N.A.
388
Greenwich Street, 14th Floor
New
York,
NY, 10013
Attention:
Barbara E. Bennett
Telecopier:
(212) 657-2762
Gentlemen:
Reference
is made to the Deposit Agreement dated as of September 22, 2005 (the
"Deposit
Agreement")
between Wells Fargo Bank Northwest, National Association, as Escrow Agent,
and
Citibank, N.A., 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 _________ __,
200__, upon the telephonic request of a representative of the Pass Through
Trustee.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION,
as
Escrow Agent
By__________________________
Name:
Title:
Dated:
_______ __, 200_
EXHIBIT
B
NOTICE
OF
FINAL WITHDRAWAL
Citibank,
N.A.
388
Greenwich Street, 14th Floor
New
York,
NY, 10013
Attention:
Barbara E. Bennett
Telecopier:
(212) 657-2762
Gentlemen:
Reference
is made to the Deposit Agreement dated as of September 22, 2005 (the
"Deposit
Agreement")
between Wells Fargo Bank Northwest, National Association, as Escrow Agent,
and
Citibank, N.A., 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 and all accrued
interest to date on such 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# 031100092, Account No. _____________, Reference: Continental
2005-ERJ1].
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION,
as
Escrow Agent
By__________________________
Name:
Title:
EXECUTION
VERSION
ESCROW
AND PAYING AGENT AGREEMENT
Dated
as
of September 22, 2005
among
WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
as
Escrow
Agent
CITIGROUP
GLOBAL MARKETS INC.
as
Underwriter
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity,
but
solely as Pass Through Trustee
for
and
on behalf of
Continental
Airlines Pass Through Trust 2005-ERJ1
as
Pass
Through Trustee
and
WILMINGTON
TRUST COMPANY
as
Paying
Agent
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ESCROW
AND PAYING AGENT AGREEMENT dated as of September 22, 2005 (as amended, modified
or supplemented from time to time, this "Agreement")
among
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking
association, as Escrow Agent (in such capacity, together with its successors
in
such capacity, the "Escrow
Agent");
CITIGROUP GLOBAL MARKETS INC., as Underwriter of the Certificates referred
to
below (the "Underwriter"
and
together with its 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
September 22, 2005 (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 2005-ERJ1 (the "Pass
Through Trust")
pursuant to which the Continental Airlines Pass Through Trust, Series 2005-ERJ1
Certificates referred to therein (the "Certificates")
are
being issued (the date of such issuance, the "Issuance
Date");
WHEREAS,
Continental, Embraer-Empresa Brasileira de Aeronáutica S.A., the Depositary and
the Underwriter have entered into an Underwriting Agreement dated as of
September 14, 2005 (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 Underwriter;
WHEREAS,
Continental, the Pass Through Trustee, 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, utilizing
a
portion of the proceeds from the sale of the Certificates (the "Net
Proceeds");
WHEREAS,
the Underwriter and the Pass Through Trustee intend that the Net Proceeds
(excluding any amount used to purchase Equipment Notes on the Issuance Date)
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 Citibank, N.A., 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,
supplemented
or replaced 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.
The
Underwriter, 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
Underwriter, for and on behalf of each of the Investors, hereby irrevocably
instructs 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) August 31, 2006 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 25th
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 September 10, 2006, and there are
unwithdrawn Deposits on such date, the Final Withdrawal Date shall be deemed
to
be September 28, 2006.
Section
1.03. Initial
Escrow Amount; Issuance of Escrow Receipts.
The
Escrow Agent hereby directs the Underwriter to, and the Underwriter hereby
acknowledges that on the date hereof it 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 $311,010,000 (or such lesser amount equal
to the Net Proceeds less amounts, if any, used to purchase Equipment Notes
on
the Issuance Date) for deposit on behalf of the Escrow Agent with the Depositary
in accordance with Section 2.1 of the Deposit Agreement. The Underwriter hereby
instructs the Escrow Agent, upon receipt of such sum from the Underwriter,
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 Ratings Services, a
division of The McGraw-Hill Companies, 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 The Depository Trust Company ("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 banking or Utah 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, Wells Fargo Bank Northwest,
National Association, 299 South Main Street, MAC: U1228-120, 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, Rodney Square North, Wilmington, DE
19890-1605, Attention: Corporate Capital Market Services (Telecopier: (302)
636-4140) or (d) in the case of the Paying Agent, Wilmington Trust Company,
1100
North Market Street, Rodney Square North, Wilmington, DE 19890-1605, Attention:
Corporate Capital Market Services (Telecopier: (302) 636-4140) in each case
with
a copy to Continental, Continental Airlines, Inc., 1600 Smith Street, Dept.
HQS-FN, Houston, TX 77002, Attention: Treasurer (Telecopier: (713) 324-2447)
(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 1.07 hereof or (in the case of the Paying Agent)
to a
successor paying agent under Section 2.05 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.
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 Underwriter 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.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the Underwriter and the
Pass Through Trustee have caused this Escrow and Paying Agent Agreement to
be
duly executed as of the day and year first above written.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION,
as
Escrow
Agent
By __________________________
Name:
Title:
CITIGROUP
GLOBAL MARKETS INC.,
as
Underwriter
By __________________________
Name:
Title:
WILMINGTON
TRUST COMPANY, not in its
individual
capacity, but solely as Pass Through
Trustee
By __________________________
Name:
Title:
WILMINGTON
TRUST COMPANY,
as
Paying Agent
By __________________________
Name:
Title:
CONTINENTAL
AIRLINES 2005-ERJ1 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 dated as of September
22,
2005 (as amended, modified or supplemented from time to time, the "Escrow
and Paying Agent Agreement")
among
Wells Fargo Bank Northwest, National Association, as Escrow Agent (in such
capacity, together with its successors in such capacity, the "Escrow
Agent"),
Citigroup Global Markets Inc., as Underwriter, 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:
September 22, 2005
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION,
as Escrow Agent
By __________________________
Name:
Title:
WITHDRAWAL
CERTIFICATE
Wells
Fargo Bank Northwest, National Association
as
Escrow
Agent
Ladies
and Gentlemen:
Reference
is made to the Escrow and Paying Agent Agreement, dated as of September 22,
2005
(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 Purchase Withdrawal and
immediately transmit by facsimile to the Depositary, at (212) 657-2762
(Attention: Barbara Bennett). 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, but solely as Pass Through
Trustee
By __________________________
Name:
Title:
Dated:
____________, 200_
EXECUTION
COPY
________________________________________________________________
NOTE
PURCHASE AGREEMENT
Dated
as
of September 22, 2005
Among
CONTINENTAL
AIRLINES, INC.,
WILMINGTON
TRUST COMPANY,
as
Pass
Through Trustee under the
Pass
Through Trust Agreement
WILMINGTON
TRUST COMPANY,
as
Subordination Agent
WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
as
Escrow
Agent
and
WILMINGTON
TRUST COMPANY,
as
Paying
Agent
________________________________________________________________
INDEX
TO NOTE PURCHASE AGREEMENT
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Schedules
Annex
Exhibits
NOTE
PURCHASE AGREEMENT
This
NOTE
PURCHASE AGREEMENT, dated as of September 22, 2005, 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
the Pass Through Trust Agreement (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) WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, a national banking association, as Escrow Agent (in
such
capacity together with its successors in such capacity, the "Escrow
Agent"),
under
the Escrow and Paying Agent Agreement (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
the Escrow and Paying Agent Agreement.
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 (i) previously taken delivery of the 21 Embraer EMB-145 XR
aircraft listed in Part A of Schedule I hereto (the "Existing
Aircraft"),
each
of which has been leased to the Company pursuant to a separate lease agreement
(collectively, the "Existing
Leases")
and
(ii) obtained commitments from the Manufacturer pursuant to the Purchase
Agreement for the delivery of the eight Embraer EMB-145 XR aircraft listed
in
Part B of Schedule I hereto (together with any aircraft substituted therefor
in
accordance with the Purchase Agreement, the "New
Aircraft"
and,
together with the Existing Aircraft, the "Aircraft");
WHEREAS,
the Manufacturer, which is obligated to arrange lease financing of the Aircraft
for the Company, wishes to arrange debt financing with respect to a portion
of
the purchase price of the Aircraft and, at the request of the Manufacturer,
the
Company has entered into this Agreement;
WHEREAS,
pursuant to the Basic Pass Through Trust Agreement and the Trust Supplement
set
forth in Schedule II hereto, and concurrently with the execution and delivery
of
this Agreement, a grantor trust (the "Pass
Through Trust")
has
been created to facilitate certain of the transactions contemplated hereby,
including, without limitation, the issuance and sale of pass through
certificates pursuant thereto (the "Certificates")
to
provide for a portion of the financing of the Aircraft;
WHEREAS,
the Company has entered into the Underwriting Agreement dated as of September
14, 2005 (the "Underwriting
Agreement")
with
the underwriter (the "Underwriter")
named
therein, which provides that the Company will cause the Pass Through Trustee
to
issue and sell the Certificates to the Underwriter on the Issuance
Date;
WHEREAS,
concurrently with the execution and delivery of this Agreement, (i) the Escrow
Agent and the Depositary have entered into a Deposit Agreement, dated as
of the
Issuance Date, relating to the Pass Through Trust (the "Deposit
Agreement")
whereby the Escrow Agent agreed to direct the Underwriter to make certain
deposits referred to therein on the Issuance Date (the "Initial
Deposits")
and to
permit the 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 Trustee, the Underwriter, the Paying Agent and the
Escrow
Agent have entered into the Escrow and Paying Agent Agreement, dated as of
the
Issuance Date, relating to the Pass Through Trust (the "Escrow
and Paying Agent Agreement")
whereby, among other things, (a) the Underwriter agreed to deliver an amount
equal to the amount of the Initial Deposits to the Depositary on behalf of
the
Escrow Agent and (b) the Escrow Agent, upon the Depositary receiving such
amount, agreed to deliver escrow receipts to be affixed to each
Certificate;
WHEREAS,
upon receipt of a Delivery Notice with respect to an Aircraft, subject to
the
terms and conditions of this Agreement, the Pass Through Trustee will enter
into
the applicable Financing Agreements relating to such Aircraft;
WHEREAS,
upon the financing of each Aircraft, the Pass Through Trustee will fund its
purchase of Equipment Notes with the proceeds of one or more Deposits withdrawn
by the Escrow Agent under the Deposit Agreement (or, if financed on the Issuance
Date, with a portion of the proceeds from the offering of the Certificates);
and
WHEREAS,
concurrently with the execution and delivery of this Agreement, (i) Landesbank
Baden-Württemberg (the "Liquidity
Provider")
has
entered into a revolving credit agreement for the benefit of the
Certificateholders with the Subordination Agent, as agent for the Pass Through
Trustee (the "Liquidity
Facility"),
and
(ii) the Pass Through Trustee, the Liquidity Provider 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 Aircraft.
(a) The
Company confirms that (i) it has previously taken delivery of the Existing
Aircraft under the Purchase Agreement and, as of the Issuance Date, leases
as
lessee the Existing Aircraft pursuant to the Existing Leases and (ii) ExpressJet
Airlines, Inc. has entered into the Purchase Agreement with the Manufacturer
pursuant to which ExpressJet Airlines, Inc. has agreed to acquire, 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
Purchase Agreement. The Company agrees to finance the 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 substantially in the form of Exhibit F hereto (a "Delivery
Notice")
of the
scheduled closing date (the "Scheduled
Closing 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 the financing of each Aircraft
under this Agreement, which notice shall:
(i)
specify the Scheduled Closing Date of such Aircraft (which shall be a Business
Day before the Cut-off Date) on which the financing therefor in the manner
provided herein shall be consummated;
(ii)
instruct the Pass Through Trustee to instruct the 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 Aircraft (except in the case of any
such
financing on the Issuance Date);
(iii)
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 Scheduled Closing Date specified in such
Delivery Notice and to perform its obligations thereunder; and
(iv)
specify the principal amount of the Equipment Notes to be issued, and purchased
by the Pass Through Trustee, in connection with the financing of such Aircraft
scheduled to be financed on such Scheduled Closing Date (which shall in all
respects comply with the Mandatory Economic Terms).
Notwithstanding
the foregoing, in the case of any Aircraft to be financed hereunder on the
Issuance Date, the Delivery Notice therefor may be delivered to the parties
hereto on the Issuance Date.
(c) Upon
receipt of a Delivery Notice, the Pass Through Trustee 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 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 agreed upon by the related Owner Participant and 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 Pass Through Trustee on or before the relevant Closing
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.
The
Company shall pay the reasonable costs and expenses of the Rating Agencies
in
connection with obtaining any such Rating Agency Confirmation. With respect
to
each Aircraft, the Company shall cause WTC (or such other person that meets
the
eligibility requirements to act as loan trustee under the Trust 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 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 the
New
Aircraft referred to therein, or if on the Scheduled Closing Date of an 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 the financing of such Aircraft shall
have
been re-scheduled (which shall be a Business Day before the Cut-off Date
on
which the Escrow Agent shall be entitled to withdraw one or more Deposits
under
the Deposit Agreement to enable the Pass Through Trustee to fund its purchase
of
the related Equipment Notes). Upon receipt of any such notice of postponement,
the Pass Through Trustee shall comply with its obligations under Section
5.01 of
the Trust Supplement and thereafter the financing of such Aircraft, as specified
in such substitute Delivery Notice, shall take place on the re-scheduled
closing
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 to accept delivery of a New Aircraft under the 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
Scheduled Closing Date not later than 90 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 closing date therefor except (i) the re-scheduled closing 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 Month" in Schedule I hereto or (b) beyond
May 31, 2006, the Company may identify for delivery a substitute aircraft
therefor meeting the following conditions (a "Substitute
Aircraft"):
(i) a
Substitute Aircraft must be an Embraer EMB-145 XR aircraft manufactured after
the date of this Agreement and (ii) 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 Trustee
to
purchase Equipment Notes with respect to any Aircraft or Substitute
Aircraft.
(i) The
parties agree that if, in connection with the financing of a New Aircraft
or
Substitute Aircraft, any Owner Participant who is to be a party to any Financing
Agreement shall be a "Citizen of the United States" within the meaning of
Section 40102(a)(15) of the Act, then the applicable Financing Agreements
may be
modified, consistent with the Mandatory Document Terms, to eliminate the
restrictions on the Owner Participant's right to control the Owner Trustee
and
to make other customary changes to reflect that the Owner Participant is
a
"Citizen of the United States".
(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 to the 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 Deposit
Agreement.
SECTION
2. Conditions
Precedent.
The
obligation of the Pass Through Trustee 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 thereunder 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 such Pass Through Trustee and
the
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 of Financing Agreements 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 the 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 Section 40102(a)(15) of the Act, 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
Section 40102(a)(15) of the Act, 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 the 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
the Liquidity Facility), 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 the Liquidity Facility); 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,
the
Deposit Agreement and the 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)
[Intentionally omitted.]
(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 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;
(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.
(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 Section 40102(a)(15) of the Act 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 Trust Indenture then entered into,
resign
as Loan Trustee in respect of such Trust 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 or to such
other
address or facsimile number as such party may hereafter specify by notice
to the
other parties.
SECTION
6. Expenses.
(a) The
Company agrees to pay to the Subordination Agent when due, to the extent
not
paid when due by the Manufacturer, an amount or amounts equal to the fees
payable to the Liquidity Provider under Section 2.03 of the 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 Agreement and the denominator
of which shall be the sum of (x) the then outstanding aggregate principal
amount
of the Equipment Notes issued under all of the Trust Indentures and (y) the
then
outstanding aggregate amount of the Deposits under the Deposit
Agreement.
(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, to the extent not
paid
when due by the Manufacturer, (A) the amount equal to interest on any Downgrade
Advance (other than any Applied Downgrade Advance) payable under Section
3.07 of
the Liquidity Facility minus Investment Earnings while such Downgrade Advance
shall be outstanding, (B) the amount equal to interest on any Special
Termination Advance (other than any Applied Special Termination Advance)
payable
under Section 3.07 of the Liquidity Facility minus Investment Earnings from
such
Special Termination Advance, (C) the
amount equal to interest on any Early Termination Advance (other than any
Applied Early Termination Advance) payable under Section 3.07 of the Liquidity
Facility minus Investment Earnings from such Early Termination Advance; and
(D) any
other amounts owed to the Liquidity Provider by the Subordination Agent as
borrower under the Liquidity Facilities (other than amounts due as repayment
of
advances thereunder or as interest on such advances, except to the extent
payable pursuant to clause (A), (B) or (C), (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 Early Termination Advance”, “Applied
Special Termination Advance”, “Downgrade Advance”, “Early Termination Advance”,
“Investment Earnings”
and
“Special Termination Advance” shall have the meanings specified in the
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 Agreement, 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 Underwriter 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 Underwriter 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: 1600
Smith Street, HQSFN
Houston, TX 77002
Attention: Treasurer
Facsimile: (713) 324-2447
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
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION,
as
Escrow
Agent
By______________________________________
Name:
Title:
Address: MAC:
U1228-120
299 South Main Street
12th Floor
Salt
Lake City, Utah 84111
Attention: Corporate
Trust Services
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
AIRCRAFT
Part
A
- Existing Aircraft
|
Registration
Number
|
Manufacturer's
Serial Number
|
Scheduled
Delivery
Month
|
|
N14171
|
14500859
|
Previously
Delivered
|
|
N12172
|
14500864
|
Previously
Delivered
|
|
N14173
|
14500872
|
Previously
Delivered
|
|
N14174
|
14500876
|
Previously
Delivered
|
|
N12175
|
14500878
|
Previously
Delivered
|
|
N11176
|
14500881
|
Previously
Delivered
|
|
N14177
|
14500888
|
Previously
Delivered
|
|
N16178
|
14500889
|
Previously
Delivered
|
|
N14179
|
14500896
|
Previously
Delivered
|
|
N14180
|
14500900
|
Previously
Delivered
|
|
N11181
|
14500904
|
Previously
Delivered
|
|
N33182
|
14500909
|
Previously
Delivered
|
|
N16183
|
14500914
|
Previously
Delivered
|
|
N11184
|
14500917
|
Previously
Delivered
|
|
N17185
|
14500922
|
Previously
Delivered
|
|
N14186
|
14500924
|
Previously
Delivered
|
|
N11187
|
14500927
|
Previously
Delivered
|
|
N14188
|
14500929
|
Previously
Delivered
|
|
N11189
|
14500931
|
Previously
Delivered
|
|
N27190
|
14500934
|
Previously
Delivered
|
|
N11191
|
14500935
|
Previously
Delivered
|
Part
B
- New Aircraft
|
N11192
|
14500936
|
October
2005
|
|
N11193
|
14500938
|
October
2005
|
|
N11194
|
14500940
|
November
2005
|
|
N12195
|
14500943
|
December
2005
|
|
N17196
|
14500945
|
December
2005
|
|
N21197
|
14500947
|
January
2006
|
|
N14198
|
14500951
|
February
2006
|
|
N11199
|
14500953
|
February
2006
|
SCHEDULE
II to
Note
Purchase Agreement
TRUST
SUPPLEMENT
Trust
Supplement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of the Continental Airlines Class A Pass Through
Trust, Series 2005-ERJ1.
SCHEDULE
III to
Note
Purchase Agreement
MANDATORY
ECONOMIC TERMS
•
The
aggregate principal amount of the Equipment Notes issued with respect to
an
Aircraft shall not exceed the amounts set forth in the following
table:
|
Aircraft
|
||
|
Registration
|
Manufacturer’s
|
Principal
Amount
|
|
Number
|
Serial
Number
|
of
Equipment Notes
|
|
N14171
|
14500859
|
$10,037,481
|
|
N12172
|
14500864
|
9,994,443
|
|
N14173
|
14500872
|
10,164,449
|
|
N14174
|
14500876
|
10,271,406
|
|
N12175
|
14500878
|
10,225,962
|
|
N11176
|
14500881
|
10,532,173
|
|
N14177
|
14500888
|
10,485,908
|
|
N16178
|
14500889
|
10,485,908
|
|
N14179
|
14500896
|
10,775,405
|
|
N14180
|
14500900
|
10,925,153
|
|
N11181
|
14500904
|
10,880,450
|
|
N33182
|
14500909
|
10,750,417
|
|
N16183
|
14500914
|
10,725,962
|
|
N11184
|
14500917
|
10,692,171
|
|
N17185
|
14500922
|
10,795,225
|
|
N14186
|
14500924
|
10,670,184
|
|
N11187
|
14500927
|
10,771,685
|
|
N14188
|
14500929
|
10,855,667
|
|
N11189
|
14500931
|
11,060,953
|
|
N27190
|
14500934
|
10,896,010
|
|
N11191
|
14500935
|
10,953,234
|
|
N11192
|
14500936
|
11,172,581
|
|
N11193
|
14500938
|
11,172,581
|
|
N11194
|
14500940
|
11,172,581
|
|
N12195
|
14500943
|
11,172,581
|
|
N17196
|
14500945
|
11,172,581
|
|
N21197
|
14500947
|
11,172,581
|
|
N14198
|
14500951
|
11,172,581
|
|
N11199
|
14500953
|
11,172,581
|
•
The
Loan
to Aircraft Value for the Equipment Notes issued for each Aircraft computed
on
the date of issuance thereof (with value for such Aircraft for these purposes
initially equal to its value set forth under “Description of the Aircraft and
the Appraisals—The Appraisals” in the column “Appraised Value” in the Prospectus
Supplement
and thereafter based on such value after giving effect to the Depreciation
Assumption (as defined in the Prospectus Supplement)) as of the issuance
date of
such Equipment Notes and any Regular Distribution Date thereafter (assuming
no
default in the payment of the Equipment Notes and after giving effect to
scheduled payments) will not exceed 55%.
•
The
initial average life of the Equipment Notes for any Aircraft shall not extend
beyond 10 years from the Issuance Date.
•
As
of the
Delivery Period Termination Date, the average life of the Certificates shall
not
be more than 9.5 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).
•
The
final
expected distribution date of the Certificates shall be as set forth on the
cover page of the Prospectus Supplement.
•
The
original aggregate principal amount of all of the Equipment Notes shall not
exceed the original aggregate face amount of the Certificates.
•
The
interest rate applicable to the Equipment Notes must be equal to the rate
applicable to the Certificates.
•
The
payment dates for the Equipment Notes must be on the first day of each month,
and basic rent under the Leases must be payable on such dates.
•
Basic
rent, stipulated loss values and termination values under the Leases must
be
sufficient to pay amounts due with respect to the related Equipment Notes.
•
The
amounts payable under the all-risk aircraft hull insurance maintained with
respect to each Aircraft must be sufficient to pay the applicable stipulated
loss value, subject to certain rights of self-insurance.
•
(a)
The
past due rate in the Trust Indentures and the Leases, (b) the “Make-Whole
Amount” payable under the Trust Indentures, (c) the provisions relating to the
redemption and purchase of Equipment Notes in the Trust Indentures, (d) the
minimum liability insurance amount on Aircraft in the Leases, and (e) the
indemnification of the Loan Trustees, Subordination Agent, Liquidity Providers,
Pass Through Trustee, Escrow Agent and registered holders of the Equipment
Notes
with respect to certain taxes and expenses, in each case shall be provided
as
set forth in the forms of Participation Agreements, Lease and Trust Indentures
attached as exhibits to the Note Purchase Agreement.
SCHEDULE
IV TO
Note
Purchase Agreement
MANDATORY
DOCUMENT TERMS
The
terms
"Form of Participation Agreement" "Form of Lease" and "Form of Trust Indenture"
correspond to Exhibits A, B and C of the Note Purchase Agreement.
| 1. |
May
not modify in any material adverse respect the Granting Clause
of the Form
of Trust Indenture 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 Form of Trust
Indenture.
|
| 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(b), 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 Form of
Lease or otherwise modify the terms of the Form of Lease 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 Form of Participation Agreement or
of the
provisions of Section 5.1.2(xxv) or 10.1.1(a)(iv) of the Form
of
Participation Agreement 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 Form of Participation Agreement
as regards
the rights of the Mortgagee thereunder or otherwise modify the
terms of
the Form of Participation Agreement to deprive the Note Holders,
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.
|
ANNEX
A to
Note
Purchase Agreement
DEFINITIONS
"Act"
means
part A of subtitle VII of title 49, United States Code.
"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"
has the
meaning set forth in the second recital to the Note Purchase
Agreement.
"Assumed
Amortization Schedule"
means
the amortization schedule set forth on pages S-32 through S-36 of the Prospectus
Supplement.
"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. §§ 101 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 the 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.
"Certificates"
has the
meaning set forth in the fourth recital to the Note Purchase
Agreement.
"Certificateholder"
means
the Person in whose name a Certificate is registered in the
Register.
"Company"
means
Continental Airlines, Inc., a Delaware corporation.
"Corporate
Trust Office"
with
respect to the 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) May 31, 2006, or, if the Equipment Notes
relating to all of the Aircraft (or Substitute Aircraft in lieu thereof)
have
not been purchased by the Pass Through Trustee 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, August 31, 2006 and (b) the date on which
Equipment Notes issued with respect to all of the Aircraft (or Substitute
Aircraft in lieu thereof) have been purchased by the Pass Through Trustee
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.
"Delivery
Notice"
means a
Delivery Notice substantially in the form of Exhibit F to the Note Purchase
Agreement.
"Deposit"
has the
meaning set forth in the sixth recital to the Note Purchase
Agreement.
"Deposit
Agreement"
has the
meaning set forth in the sixth recital to the Note Purchase
Agreement.
"Depositary"
means
Citibank, N.A.
"Equipment
Notes"
means
and includes any equipment notes issued under any Trust Indenture in the
form
specified in Section 2.01 thereof (as such form may be varied pursuant to
the
terms of such Trust Indenture) and any Equipment Note issued under any Trust
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
Agent Agreements"
has the
meaning set forth in Section 3(e)(i) of the Note Purchase
Agreement.
"Escrow
and Paying Agent Agreement"
has the
meaning set forth in the fifth recital to the Note Purchase
Agreement.
"Existing
Aircraft"
has the
meaning set forth in the second recital to the Note Purchase
Agreement.
"Existing
Leases"
has the
meaning set forth in the second recital to the Note Purchase
Agreement.
"FAA"
means
the Federal Aviation Administration of the United States.
"Final
Withdrawal"
with
respect to the Escrow and Paying Agent Agreement, has the meaning set forth
in
Section 1.02 thereof.
"Financing
Agreements"
means,
collectively, the Purchase Agreement Assignment, the Initial Purchase Agreement
Assignment (if a New Aircraft), the Participation Agreement, the Lease, the
Trust Indenture, the Equipment Notes issued thereunder, and the Trust Agreement
relating to the financing of an Aircraft.
"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.
"Initial
Deposits"
has the
meaning set forth in the sixth recital to the Note Purchase
Agreement.
"Initial
Purchase Agreement Assignment"
means a
Purchase Agreement Assignment substantially in the form of Exhibit D-2 to
the Note Purchase Agreement.
"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 B 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
the "Mortgagee" as defined in the Financing Agreements.
"Mandatory
Document Terms"
means
the terms set forth on Schedule IV to the Note Purchase Agreement.
"Mandatory
Economic Terms"
means
the terms set forth on Schedule III to the Note Purchase Agreement.
"Manufacturer"
means
Embraer-Empresa Brasileira de Aeronáutica S.A., a Brazilian corporation, solely
in its capacity as manufacturer or seller of the 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 the Deposit Agreement, has the meaning set forth in Section 2.3
thereof.
"Operative
Agreements"
means,
collectively, the Pass Through Trust Agreement, the Escrow and Paying Agent
Agreement, the Deposit Agreement, the Liquidity Facility, the Intercreditor
Agreement, the Certificates and the Financing Agreements.
"Owner
Participant"
means,
with respect to any Aircraft, the Person named as the Owner Participant in
the
Participation Agreement with respect to such Aircraft.
"Owner
Trust"
means,
with respect to any Aircraft, the trust created by the Trust Agreement related
thereto.
"Owner
Trustee"
means,
with respect to any Aircraft, the "Owner Trustee" party to the Trust Agreement
related thereto.
"Participation
Agreement"
means a
Participation Agreement substantially in the form of Exhibit A to the Note
Purchase Agreement.
"Pass
Through Trust"
has the
meaning set forth in the fourth recital to the Note Purchase
Agreement.
"Pass
Through Trust Agreement"
means
the Trust Supplement, together with the Basic Pass Through Trust Agreement,
dated as of the Issuance Date, by and between the Company 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.
"Paying
Agent Agreements"
has the
meaning set forth in Section 3(f)(i) of the Note Purchase
Agreement.
"Person"
means
any individual, firm, partnership, joint venture, trust, trustee, Government
Entity, organization, association, corporation, limited liability company,
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.
"Prospectus
Supplement"
means
the final Prospectus Supplement, dated September 14, 2005, to the Prospectus,
dated August 23, 2001, of the Company relating to the offering of the
Certificates.
"Purchase
Agreement"
means
the Purchase Agreement GPJ-003/96 between Manufacturer and ExpressJet Airlines,
Inc. (formerly Continental Express, Inc.) (including all exhibits thereto,
together with all letter agreements entered into that by their terms constitute
part of such Purchase Agreement), as amended.
"Purchase
Agreement Assignment"
means a
Purchase Agreement Assignment substantially in the form of Exhibit D-1 to
the Note Purchase Agreement (for an Existing Aircraft) or Exhibit D-3 to
the Note Purchase Agreement (for a New Aircraft).
"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 The McGraw-Hill
Companies, Inc.
"Rating
Agency Confirmation"
means,
with respect to (1) any Financing Agreement that has been modified in any
material respect from the forms thereof attached to the Note Purchase Agreement
or (2) a Substitute Aircraft, a written confirmation from each of the
Rating Agencies that (a) the use of such Financing Agreement with such
modifications or (b) the substituting of such Substitute Aircraft for a New
Aircraft, respectively, would not result in (i) a reduction of the rating
for
the Certificates below the then current rating for the Certificates or (ii)
a
withdrawal or suspension of the rating of the Certificates.
"Register"
means
the register maintained pursuant to Sections 3.04 and 7.12 of the Basic Pass
Through Trust Agreement with respect to the Pass Through Trust.
"Regular
Distribution Date"
shall
mean the first day of each month, commencing October 1, 2005.
"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.
"Scheduled
Closing Date"
has the
meaning set forth in Section 1(b) of the Note Purchase
Agreement.
"Section
1110"
means
11 U.S.C. § 1110 of the Bankruptcy Code or any successor or analogous Section of
the federal bankruptcy Law in effect from time to time.
"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 monthly 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). The "most recent H.15(519)" means the H.15(519) most recently
published prior to the close of business on the date of determination of
the
Deposit Make-Whole Premium.
"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
Indenture"
means a
Trust Indenture and Mortgage substantially in the form of Exhibit C to the
Note
Purchase Agreement.
"Trust
Supplement"
means
an agreement supplemental to the Basic Pass Through Trust Agreement pursuant
to
which (i) a trust is created for the benefit of the holders of the
Certificates, (ii) the issuance of the Certificates representing fractional
undivided interests in such trust is authorized and (iii) the terms of the
Certificates are established.
"Underwriter"
has the
meaning set forth in the fifth recital to the Note Purchase
Agreement.
"Underwriting
Agreement"
has the
meaning set forth in the fifth recital to the Note Purchase
Agreement.
"WTC"
has the
meaning set forth in the first paragraph of the Note Purchase
Agreement.
EXHIBIT
A to
Note
Purchase Agreement
FORM
OF
PARTICIPATION AGREEMENT
(Filed
Separately)
EXHIBIT
B to
Note
Purchase Agreement
FORM
OF
LEASE
(Filed
Separately)
EXHIBIT
C to
Note
Purchase Agreement
FORM
OF
TRUST INDENTURE
(Filed
Separately)
EXHIBIT
D-1 to
Note
Purchase Agreement
FORM
OF
PURCHASE AGREEMENT ASSIGNMENT
(EXISTING
AIRCRAFT)
AMENDED
AND RESTATED
PURCHASE
AGREEMENT ASSIGNMENT NO. 2 - _____
AMENDED
AND RESTATED PURCHASE AGREEMENT ASSIGNMENT NO. 2 - _____, dated as of September
22, 2005(this “Restated Assignment”), between PM Limited, a Cayman Islands
company (the “Assignor” or “PM Limited”), WELLS FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, not in its individual capacity but solely as Owner Trustee (the
“Assignee”), and EXPRESSJET AIRLINES, INC., a Delaware corporation (“Express”),
which amends and restates in its entirety the Original PAA No. 2 (as hereinafter
defined).
Recitals
WHEREAS,
Express and EMBRAER-Empresa Brasileira de Aeronautica S.A., a corporation
organized under the laws of Brazil (“Embraer”), have entered into the Purchase
Agreement, pursuant to which, among other things, Embraer has agreed to
manufacture and sell to Express, and Express has agreed to purchase from
Embraer, certain aircraft, including the Aircraft (as defined in the Purchase
Agreement Assignment No. 1 described below);
WHEREAS,
pursuant to a Purchase Agreement Assignment No. 1 - _____, dated as of
_______________ (“PAA No. 1”), between Express and PM Limited, Express has,
among other things, heretofore assigned to PM Limited, with the consent of
the
Manufacturer, certain of its right, title and interest in, to and under the
Purchase Agreement including, without limitation, the right to purchase the
Aircraft from Embraer upon and subject to the terms and conditions set forth
in
the Purchase Agreement and PAA No. 1;
WHEREAS,
PM Limited has heretofore purchased the Aircraft from Embraer and, concurrently
therewith, has heretofore sold the Aircraft to Wells Fargo Bank Northwest,
National Association, acting not in its individual capacity but solely as
Owner
Trustee under the Trust Agreement _____, dated as of _______________(the
“Original Trust Agreement”), between Refine, Inc., as Owner Participant (the
“Owner Participant”), and Wells Fargo Bank Northwest, National Association
(“Wells Fargo”), as amended and restated in its entirety by that certain Amended
and Restated Trust Agreement _____, dated as of the date hereof, between
the
Owner Participant and Wells Fargo (the Original Trust Agreement, as so amended
and restated, the “Amended and Restated Trust Agreement”);
WHEREAS,
in connection with the sale of the Aircraft by PM Limited to the Owner Trustee
and with the consent of the Manufacturer, PM Limited has, pursuant to the
Purchase Agreement Assignment No. 2-_____, dated as of _________________(the
“PAA No. 2”), between PM Limited and the Owner Trustee, heretofore transferred
to the Owner Trustee all of PM Limited’s present and future rights, title,
obligations and interests in, to and under the Purchase Agreement as assigned
by
PAA No. 1, except for
PM
Limited’s right to purchase the Aircraft from the Manufacturer pursuant to
Section 2(a) of PAA No. 1;
WHEREAS,
the Owner Trustee desires to (i) issue Equipment Notes (as defined in Annex
A to
the Lease Agreement referred to herein) for the purpose of enabling the Owner
Participant to repay, in part, the indebtedness relating to the acquisition
of
the Aircraft by the Owner Trustee, (ii) terminate the Lease Agreement _____,
dated as of the date of PAA No. 1 (the “Existing Lease”), between the Owner
Trustee and Continental Airlines, Inc. (“Continental”), in connection therewith
and (iii) re-lease the Aircraft to Continental pursuant to the Lease Agreement
(as hereinafter defined); and
WHEREAS,
to facilitate the transactions described in the immediately preceding Whereas
clause, PM Limited and the Assignee desire to amend and restate in its entirety
PAA No. 2 on the terms and conditions hereof, Express desires to agree to
the
terms and provisions hereof and to certain changes to PAA No. 1, as provided
herein, and the Manufacturer is willing to execute and deliver to the Assignee
a
Consent and Agreement to the provisions hereof in substantially the form
attached hereto as Annex 1;
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
and agreements of the parties contained herein, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
the
Assignor and the Assignee hereby agree to amend and restate PAA No. 2 in
its
entirety upon the terms set forth herein, and the parties hereto further
agree
as follows:
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 PAA No. 1.
Section
2. Transfer
and Assumption.
The
Assignor does hereby sell, assign and transfer to the Assignee all of the
Assignor’s present and future rights, title, obligations and interest in, to and
under the Purchase Agreement as assigned by PAA No. 1, excluding the right
to
purchase the Aircraft from the Manufacturer (the “Assignor’s Interest”) and the
Assignee hereby accepts the Assignor’s Interest from the Assignor. The Assignee
agrees that it shall be bound by all the terms of, and shall assume and
undertake to perform all the obligations of, the Assignor with respect to
the
Assignor’s Interest. For all purposes of PAA No. 1 and this Restated Assignment,
Express, the Assignor and the Assignee hereby agree that:
(i) the
“Lease” or “Lease Agreement” referred to in PAA No. 1 shall be deemed to refer
to the Lease Agreement _____, dated as of the date hereof (as the same may
be
amended, modified or supplemented, the “Lease Agreement”), between the Owner
Trustee and Continental, providing for the lease of the Aircraft;
(ii) the
Participation Agreement referred to in Paragraph 4 of PAA No. 1 shall be
deemed
to refer to the Participation Agreement defined in Annex A to the Existing
Lease;
(iii) Continental,
in lieu of Express, shall have the rights referred to in clause (iii)(B)
of the
first paragraph of Section 2 of PAA No. 1 after notice by Continental to
the
Manufacturer that Continental is entitled to possession of the Aircraft;
(iv) Continental,
in lieu of Express, shall be entitled to exercise the rights of Express under
the second paragraph of Section 2 of PAA No. 1 after notice by Continental
to
the Manufacturer that Continental is entitled to possession of the Aircraft;
and
(v) the
Manufacturer shall not be deemed to have knowledge of, and need not recognize
nor take any action with respect to, the termination of Express’s rights under
PAA No. 1 by Continental to the extent permitted hereunder or thereunder
unless
and until the Manufacturer shall have received from Continental, as required
by
the terms of this Restated Assignment, written notice (including notice by
fax)
thereof and, in acting in accordance with the terms and conditions of the
Purchase Agreement and this Restated Assignment and PAA No. 1, the Manufacturer
may act in accordance with and conclusively rely upon any such
notice.
Section
3. Confidential
Treatment.
The
Assignee and the Assignor agree that the provisions of Paragraph 8 of PAA
No. 1
are hereby terminated and superseded by the provisions of this Section 3
and, in
furtherance thereof, agree that they will not disclose to any third party
(other
than their direct and indirect parent companies) the terms of the Purchase
Agreement (whether or not related to the Aircraft) or PAA No. 1 or this Restated
Assignment, except (a) as required by applicable law, judicial proceeding
or
governmental regulation, (b) in the case of the Assignee, as required for
the
assignment of its rights under this Restated Assignment in accordance with
the
provisions of Article 16 of the Purchase Agreement, (c) with the prior written
consent of Express, the Assignor and the Manufacturer, which consent shall
not
be unreasonably withheld with respect to a prospective bona fide purchaser
of
the Aircraft, (d) to prospective and permitted transferees of Owner
Participant’s interest or their or Owner Participant’s respective counsel or
special counsel, independent insurance brokers, auditors, or other agents,
(e)
as otherwise permitted by the Operative Agreements (as defined in Annex A
to the
Lease), or (f) to such other Persons as are reasonably deemed necessary by
the
disclosing party for the purposes of enforcing such documents by such party;
provided
that any
such disclosure under this sentence shall be made only to the extent necessary
to meet the specific requirements or needs of the Assignee or PM Limited,
as the
case may be. Any disclosure as contemplated in (b), (c) or (d) above shall
include a requirement that the entity to which the information is disclosed
shall be subject to obligations of nondisclosure with respect to such
information substantially the same as those contained herein.
Section
4. Assignment
to Mortgagee.
The
right, title and interest of the Assignee in and to this Restated Assignment
has, contemporaneously with the execution and delivery hereof, been assigned
to
and is subject to a security interest in favor of the Mortgagee (as such
terms
and the other capitalized terms used hereinafter in this sentence are defined
in
Appendix A to the Lease) under the Trust Indenture, for the benefit of the
Loan
Participants and the Note Holders referred to the Trust Indenture, all to
the
extent provided in such Trust Indenture. The Assignor hereby consents to
such
assignment and to the creation of such security interest in and to this Restated
Assignment.
Section
5. Notices.
Any
notices provided for in PAA No. 1 shall be delivered to the Assignee at the
following address or such other place as the Assignee may designate in
accordance with PAA No. 1:
Wells
Fargo Bank Northwest,
National
Association
MAC:
U1228-120
Attn:
Corporate Trust Dept.
299
S.
Main Street, 12th Floor
Salt
Lake
City, UT 84111
Facsimile:
801-246-5053
Section
6. Headings.
The
headings of the Sections herein are for convenience of reference only and
shall
not define or limit any of the terms or provisions hereof.
Section
7. GOVERNING
LAW.
THIS
RESTATED ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE
LAW OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REGARD TO
CONFLICT OF LAWS RULES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
Section
8. 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.
Section
9. Purchase
Agreement.
The
rights and obligations of the parties hereto are subject to the terms and
conditions of the Purchase Agreement.
IN
WITNESS WHEREOF, the parties hereto have caused this Restated Assignment
to be
duly executed as of the day and year first written above.
PM
LIMITED, as Assignor
By:______________________
Name:
Title:
WELLS
FARGO BANK
NORTHWEST,
NATIONAL
ASSOCIATION,
not in its
individual
capacity but solely as
Owner
Trustee, as Assignee
By:
________________________
Name:
Title:
EXPRESSJET
AIRLINES, INC.
By:
________________________
Name:
Title:
Annex 1 to Amended
and
Restated Purchase
Agreement
Assignment No. 2 - _____
CONSENT
AND AGREEMENT No. 2 - _____
The
undersigned, EMBRAER-EMPRESA BRASILEIRA DE AERONAUTICA S.A., a corporation
organized and existing under the laws of Brazil, hereby acknowledges notice
of
and consents to all of the terms of the foregoing Amended and Restated Purchase
Agreement Assignment No. 2 - _____, dated as of September 22, 2005, by and
among
PM Limited, WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee, and EXPRESSJET AIRLINES,
INC.,
to the extent they relate to the Manufacturer (herein called the “Assignment No.
2”, the defined terms therein being hereinafter used with the same meaning)
and
hereby confirms to the Assignee that: (i) all representations, warranties,
indemnities and agreements of the Manufacturer under the Purchase Agreement
with
respect to the Aircraft shall inure to the benefit of the Assignee to the
same
extent as if originally named the “Buyer” therein, subject to the terms and
conditions of the Assignment No. 2, the Purchase Agreement and PAA No. 1;
(ii)
the Assignee shall not be liable for any of the obligations or duties of
Express
under the Purchase Agreement, nor shall the Assignment No. 2 give rise to
any
duties or obligations whatsoever on the part of the Assignee owing to the
Manufacturer except for the Assignee’s agreement to the effect that in
exercising any rights under the Purchase Agreement, or in making any claim
with
respect to the Aircraft or other things (including without limitation data,
documents and services) delivered or to be delivered pursuant to the Purchase
Agreement, the terms and conditions of the Purchase Agreement shall apply
to and
be binding upon the Assignee to the same extent as if the Assignee had been
the
original “Buyer” thereunder, and with respect to such agreement the Manufacturer
agrees that, anything contained in the Purchase Agreement or the Assignment
No.
2 to the contrary notwithstanding, so long as the Manufacturer shall not
have
received notice that a Lease Event of Default has occurred and is continuing,
the Assignee shall not have any responsibility to the Manufacturer for failure
to comply with any of the terms of the Purchase Agreement with respect to
the
Aircraft while under lease to Continental so long as the Assignee acts upon
the
written instructions of Express (or, if Continental shall have specified
in a
written notice to the Assignee and the Manufacturer that Continental is entitled
to possession of the Aircraft, Continental) (to which instructions the
Manufacturer understands it shall have access on request); provided
that no
person other than the Manufacturer shall have any rights against the Assignee
with respect to the undertaking and agreement set forth in this clause (ii);
(iii) the Manufacturer will continue to pay to Express (or, if Continental
shall
have specified in a written notice to the Assignee and the Manufacturer that
Continental is entitled to possession of the Aircraft, Continental) all payments
which the Manufacturer may be required to make in respect of the Aircraft
under
the Purchase Agreement unless and until the Manufacturer shall have received
written notice addressed to its Contracts Administrator, by mail to
EMBRAER-Empresa Brasileira de Aeronautica S.A., Av. Brigadeiro Faria Lima,
2170,
12.227-901 Sao Jose dos Campos-SP, Brazil, or by fax to fax no: 55 12-3927-1257,
that a
Lease
Event of Default has occurred and is continuing (which such notice from the
Assignee shall be conclusive proof thereof to the Manufacturer and as to
which
the Manufacturer shall have no obligation to inquire), whereupon the
Manufacturer will, until the Manufacturer shall have received notice in writing
sent or addressed as aforesaid that no Lease Event of Default exists, make
any
and all payments and take any and all actions which it may be required
thereafter to make or take in respect of the Aircraft under the Purchase
Agreement and the right to receive which has been assigned under the Assignment
No. 2 directly to the Assignee at its address at MAC: U1228-120, 299 S. Main
Street, 12th Floor, Salt Lake City, Utah 84111 , telecopy no. 801-246-5053;
(iv)
from and after the delivery of the Aircraft on the Delivery Date, the
Manufacturer will not assert any lien or claim against the Aircraft or any
part
thereof arising with respect to or in connection with any work or other services
performed before the delivery and acceptance of the Aircraft; and (v) the
Manufacturer consents to the grant of a security interest in the Purchase
Agreement pursuant to the Trust Indenture (as defined in Appendix A to the
Lease).
The
Manufacturer hereby represents and warrants that (A) the Manufacturer is
a
corporation duly organized and existing in good standing under the laws of
Brazil, (B) the making and performance of the Purchase Agreement have been
duly
authorized by all necessary corporate action on the part of the Manufacturer,
do
not require any stockholder approval, do not contravene the Manufacturer’s
By-Laws or any indenture, credit agreement or other contractual agreement
to
which the Manufacturer is a party or by which it is bound, and the making
of the
Purchase Agreement does not contravene any law binding on the Manufacturer,
(C)
the making and performance of this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of the Manufacturer,
do
not require any stockholder approval and do not contravene any law binding
on
the Manufacturer or contravene the Manufacturer’s By-laws or any indenture,
credit agreement or other contractual agreement to which the Manufacturer
is a
party or by which it is bound, (D) the Purchase Agreement constituted as
of the
date thereof and at all times thereafter to and including the date of this
Consent and Agreement constitutes a binding obligation of the Manufacturer
enforceable against the Manufacturer in accordance with its terms subject
to:
(i) the limitations of applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally) and
(ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and (E) this Consent and
Agreement is a binding obligation of the Manufacturer enforceable against
the
Manufacturer in accordance with its 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). It is understood that the execution by the Manufacturer
of
this Consent and Agreement is subject to the condition that concurrently
with
execution and delivery hereof the Aircraft will be leased to Continental
under
the Lease Agreement.
This
Consent and Agreement shall be governed by the laws of the State of New York,
including all matters of construction, validity and performance, as applicable
to contracts between citizens of the state to be performed wholly within
that
state, and without regard to conflicts of law rules other than Section 5-1401
of
the New York General Obligations Law.
Dated
as
of September 22, 2005.
EMBRAER-EMPRESA
BRASILEIRA
DE
AERONAUTICA S.A.
By____________________________
Title:
By____________________________
Title:
Note
Purchase Agreement
FORM
OF
INITIAL PURCHASE AGREEMENT ASSIGNMENT
(NEW
AIRCRAFT)
PURCHASE
AGREEMENT ASSIGNMENT NO. 1 - ___
This
PURCHASE AGREEMENT ASSIGNMENT NO. 1- ___ (the “Assignment”), dated as of
_____________________, 200__, is between EXPRESSJET AIRLINES, INC., a Delaware
corporation (the “Assignor”), and PM Limited, a Cayman Islands company (the
“Assignee”).
WHEREAS,
the Assignor and the Manufacturer (as hereinafter defined) are parties to
the
Purchase Agreement (as hereinafter defined) providing, among other things,
for
the manufacture and sale by the Manufacturer to the Assignor of certain
aircraft, engines and related equipment, including the Aircraft (as hereinafter
defined), and the Aircraft is covered by the Lease Agreement (as hereinafter
defined).
WHEREAS,
the Assignee wishes to acquire the Aircraft from the Manufacturer, and the
Assignor, on the terms and conditions hereinafter set forth, is willing to
assign to the Assignee certain of the Assignor’s rights and interests under the
Purchase Agreement, and the Assignee is willing to accept such assignment,
as
hereinafter set forth.
WHEREAS,
the Manufacturer is willing to execute and deliver to Assignee a Consent
and
Agreement to the provisions hereof in substantially the form attached hereto
as
Annex 1.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. 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:
Aircraft. The
Embraer Model EMB-145 XR aircraft to be delivered under the Purchase Agreement
bearing Manufacturer’s Serial No. ____________ and U.S. Registration Mark
N_______ (as hereinafter defined), with two Allison AE3007A1E engines installed
on such aircraft on the date of delivery therefor, together with the equipment,
components and accessories installed thereon pursuant to the Purchase
Agreement.
Lease
or Lease Agreement. The
Lease
Agreement dated as of the date hereof as the same may be amended, modified
or
supplemented, between Wells Fargo Bank Northwest, National Association, not
in
its individual capacity but solely as Owner Trustee, as lessor, and Continental
Airlines, Inc. (“CAL”), as lessee, providing for the lease of the
Aircraft.
Manufacturer. EMBRAER-Empresa
Brasileira de Aeronautica S.A., a corporation organized and existing under
the
laws of Brazil, and its successors and assigns.
Purchase
Agreement. Purchase
Agreement No. GPJ-003/96, dated August 5, 1996 as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms, between the Manufacturer and the Assignor (formerly known as
Continental
Express, Inc.) solely with respect to Articles 1, 2(a), 3(a), 4(a), 5(a),
6,
7(a) and (c), 12(a), 15, 17, 19, 20, 21, 24, 25, 26, 27, 28, 29 and 30 thereof,
and Attachment C thereto providing, among other things, for the manufacture
and
sale by the Manufacturer to the Assignor (or its designee) of the airframe,
Allison AE3007A1E engines and parts installed thereon.
All
terms
used herein in capitalized form which are defined in the Lease and not otherwise
defined herein shall, when used herein, have the meanings specified in Annex
A
to the Lease.
2. Subject
to the terms and conditions of this Assignment, Assignor does hereby sell,
assign, transfer and set over unto the Assignee all the Assignor’s rights and
interest in and to the Purchase Agreement as and to the extent that the same
relate to the Aircraft and the purchase and operation thereof, except to
the
extent reserved below, including, without limitation, (a) the right upon
valid
tender by the Manufacturer to purchase the Aircraft pursuant to the Purchase
Agreement (including the right to accept delivery of such Aircraft, such
right
of acceptance to be exercised by a representative of the Assignor authorized
by
the Assignee and designated by the Assignor pursuant to Section 2.2(b) of
the
Lease), and the right to take title to the Aircraft and to be named the buyer
in
the bill of sale to be delivered by the Manufacturer for the Aircraft pursuant
to Article 7(c) of the Purchase Agreement, (b) all claims for damages in
respect
of the Aircraft arising as a result of any default by the Manufacturer under
the
Purchase Agreement or any supplier of parts or equipment installed on or
in the
Aircraft, including, without limitation, all warranty and indemnity provisions
contained in the Purchase Agreement, and all claims arising thereunder, in
respect of the Aircraft, and (c) any and all rights of the Assignor to compel
performance of the terms of the Purchase Agreement in respect of the Aircraft;
reserving to the Assignor however, (i) all the Assignor’s rights and interests
in and to the Purchase Agreement to the extent the same relates to aircraft
other than the Aircraft and the purchase and operation of such aircraft and
to
the extent it pertains to any other matters not directly pertaining to the
Aircraft, and (ii) all the Assignor’s rights and obligations with respect to any
post-delivery adjustment of the purchase price of the Aircraft (and any other
payments made or to be made by the Assignor in respect of such Aircraft under
the Purchase Agreement or amounts credited or to be credited by the Manufacturer
to the Assignor, provided that Assignor shall obtain no additional rights
in or
to the Aircraft or any part thereof by reason of making any such payment),
and
(iii) with respect to the Aircraft so long as the Aircraft is subject to
the
Lease (A) the rights to demand, accept and retain all rights in and to all
property (other than the Aircraft), data and service related to the Aircraft
which the Manufacturer is obligated to provide or does provide pursuant to
the
Purchase Agreement, and (B) the right to obtain services, training, data
and
demonstration and test flights related to the Aircraft pursuant to the Purchase
Agreement (provided that after reasonable prior notice by CAL to Manufacturer,
CAL shall be entitled to the rights referred to in this clause (iii) in lieu
of
the Assignor), and (iv) the right to maintain plant representatives at the
Manufacturer’s plant pursuant to the Purchase Agreement. The Assignee hereby
accepts such assignment subject to the terms hereof.
Notwithstanding
the foregoing, so long as no Lease Event of Default as defined in Section
14 of
the Lease has occurred and is continuing, the Assignee shall and it does
hereby
authorize the Assignor during the term of the Lease, as sublessee under the
Express Sublease, to the exclusion of the Assignee, to exercise in Assignor’s
own name all rights and powers of the “Buyer” under the Purchase Agreement
including the right to retain any recovery or benefit resulting from the
enforcement of any warranty or indemnity under the Purchase Agreement in
respect
of the Aircraft except that the Assignor may not enter into any amendment,
modification or supplement to the Purchase Agreement without the written
consent
or countersignature of the Assignee if such amendment, modification or
supplement would result in any rescission,
cancellation
or termination of the Purchase Agreement with respect to the Aircraft, except
as
permitted by Article 9 or 22 of the Purchase Agreement provided that after
reasonable prior notice by CAL to Manufacturer, CAL shall be entitled to
exercise the rights of the Assignor referred to in this paragraph.
Until
such time as written notice of a Lease Event of Default or termination of
the
Lease shall have been given by the Lessor to the Manufacturer, to its Director
of Contracts, by mail to EMBRAER-Empresa Brasileira de Aeronautica S.A.,
Av.
Brigadeiro Faria Lima, 2170, 12.227-901 Sao Jose dos Campos-SP, Brazil, or
by
fax to fax no.: 55 12-3927-1257, the Manufacturer shall deal solely and
exclusively with the Assignor. After such notice has been given to the
Manufacturer, and until the Lessor shall have notified the Manufacturer that
a
Lease Event of Default is no longer continuing, the Manufacturer shall deal
solely and exclusively with the Lessor. Assignee shall cause Lessor to promptly
after all Lease Events of Default have been remedied to the satisfaction
of
Lessor, give written notice that such remedy has occurred to the Manufacturer
with a copy to the Assignor, and upon the Manufacturer’s receipt of such notice,
the Assignor and the Manufacturer shall have all of the respective rights
which
they have hereunder and under the Consent and Agreement annexed hereto in
the
absence of notice from the Lessor of a Lease Event of Default.
For
all
purposes of this Assignment, the Manufacturer shall not be deemed to have
knowledge of, and need not recognize nor take any action with respect to,
the
occurrence of a Lease Event of Default, or the discontinuance of a Lease
Event
of Default, or the Aircraft’s becoming no longer subject to the Lease, or the
termination of the Assignor’s rights hereunder by CAL to the extent permitted
herewith, unless and until the Manufacturer shall have received from the
Lessor
or CAL, as required by the terms of this Assignment, written notice (including
notice by fax) thereof and, in acting in accordance with the terms and
conditions of the Purchase Agreement and this Assignment, the Manufacturer
may
act in accordance with and conclusively rely upon any such notice.
3. It
is
expressly agreed that, anything herein contained to the contrary
notwithstanding: (a) the Assignor shall at all times remain liable to the
Manufacturer under the Purchase Agreement to perform all duties and obligations
of the “Buyer” thereunder to the same extent as if this Assignment had not been
executed; (b) the exercise by the Assignee of any of the rights assigned
hereunder shall not release the Assignor from any of its duties or obligations
to the Manufacturer under the Purchase Agreement except to the extent that
such
exercise by the Assignee shall constitute performance of such duties and
obligations; (c) subject to the provisions of the penultimate paragraph of
this
Section 3, the Assignee shall not have any obligation or liability under
the
Purchase Agreement (including in particular, but without limitation, any
liability for the payment of any taxes and customs duties under the Purchase
Agreement, the obligation for payment of which shall remain with the Assignor
as
provided in clause (d) below) by reason of, or arising out of, this Assignment
or be obligated to perform any of the obligations or duties of the Assignor
under the Purchase Agreement or to make any payment (other than to pay the
purchase price for the Aircraft as invoiced on the delivery date for such
Aircraft to the extent and upon the terms and conditions set forth in the
Purchase Agreement and the Lease Agreement) or to make any inquiry as to
the
sufficiency of any payment received by it or to present or file any claim
or to
take any other action to collect or enforce any claim for any payment assigned
hereunder; (d) after the delivery date for the Aircraft
under
the
Purchase Agreement, the Assignor will exercise its rights and perform its
obligations under the Purchase Agreement to the extent that such rights and
obligations have not been assigned hereunder or performed by the Assignee.
Nothing contained in this Section 3 shall impose upon the Assignee any liability
for post-delivery adjustments in price, which adjustments it is understood
and
agreed will be the sole right and responsibility of the Assignor.
Nothing
contained herein shall subject the Manufacturer to any liability to which
it
would not otherwise be subject under the Purchase Agreement or modify in
any
respect the Manufacturer’s contract rights thereunder or require the
Manufacturer to divest itself of title to or possession of the Aircraft therefor
until delivery thereof and payment therefor on the delivery date as provided
therein.
Without
in any way releasing the Assignor from any of its duties or obligations under
the Purchase Agreement, the Assignee hereby agrees, expressly for the benefit
of
the Manufacturer, that notwithstanding anything contained herein to the
contrary, insofar as the provisions of the Purchase Agreement relate to the
Aircraft accepted by Assignee under the Purchase Agreement, in exercising
any
rights under the Purchase Agreement, or in making any claim with respect
to the
Aircraft or other things (including without limitation data, documents and
services) delivered or to be delivered pursuant to the Purchase Agreement,
the
terms and conditions of the Purchase Agreement, shall apply to and be binding
upon Assignee to the same extent as if Assignee had been the original “Buyer”
thereunder. Assignee further agrees, expressly for the benefit of the
Manufacturer, that at any time and from time to time upon the written request
of
the Manufacturer, Assignee shall promptly and duly execute and deliver any
and
all such further assurances, instruments and documents and take all such
further
action as the Manufacturer may reasonably request in order to obtain the
full
benefits of Assignee’s agreements set forth in this paragraph.
The
Assignee hereby confirms that it shall be deemed for all purposes to have
read
and be familiar with the Purchase Agreement and to thoroughly understand
the
terms and conditions thereof.
4. On
the
delivery date for the Aircraft, the Assignee agrees, subject to satisfaction
or
waiver of the conditions set forth in Section 4 of the Participation Agreement
to purchase the Aircraft from the Manufacturer and, subject to the provisions
of
clause (c) of the first paragraph of Section 3 hereof, to pay (or agree to
pay)
the Manufacturer an amount equal to the unpaid balance of the purchase price
payable to the Manufacturer on such Delivery Date for such Aircraft pursuant
to
the Purchase Agreement, as such unpaid balance may be adjusted in accordance
with the terms of the Purchase Agreement and invoiced by the Manufacturer
to the
Assignee on or before the delivery date for such Aircraft.
5. The
Assignor agrees that at any time and from time to time upon the written request
of the Assignee, the Assignor will 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 in order to obtain the full benefits of this
Assignment and of the rights and powers herein granted.
6.
The
Assignor does hereby represent and warrant (a) that the Purchase Agreement
is in
full force and effect and is a legal, valid and binding obligation of Assignor,
enforceable in accordance with its terms and that Assignor is not in default
thereunder; and (b) that Assignor has not assigned, mortgaged, charged or
pledged, and hereby covenants that it will not assign, mortgage, charge 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 not assigned hereby, to anyone other than the
Assignee.
7. The
Assignee agrees that, so long as the Lease has not been terminated and the
Assignor remains in possession, it will not enter into any agreement with
the
Manufacturer that would amend, modify, rescind, cancel or terminate the Purchase
Agreement in respect of the Aircraft without the prior written consent of
the
Assignor.
8.
The
Assignee agrees that it will not disclose to any third party (other than
their
direct and indirect parent companies) the terms of the Purchase Agreement
(whether or not related to the Aircraft) or this Assignment, except (a) as
required by applicable law, judicial proceeding or governmental regulation,
or
(b) as required for the assignment of its rights under this Assignment in
accordance with the provisions of Article 16 of the Purchase Agreement, or
(c)
with the prior written consent of the Assignor and the Manufacturer, which
consent shall not be unreasonably withheld with respect to a prospective
bona
fide purchaser of the Aircraft. Any disclosure as contemplated in (b) above
shall include a requirement that the entity to which the information is
disclosed shall be subject to obligations of nondisclosure with respect to
such
information substantially the same as those contained herein.
9.
This
Assignment is executed by the Assignor and the Assignee concurrently with
the
execution and delivery of the Lease.
10. This
Assignment 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.
11.
THIS
PURCHASE AGREEMENT ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT
REGARD
TO CONFLICT OF LAWS RULES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
[The
remainder of this page has been left blank intentionally.]
IN
WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly
executed as of the day and year first above written.
EXPRESSJET
AIRLINES, INC.
By_________________________
PM
LIMITED
By_________________________
[Partial
Assignment]
Annex
1
to Purchase Agreement
Assignment
No. 1- ___
CONSENT
AND AGREEMENT No. 1- ___
The
undersigned, EMBRAER-EMPRESA BRASILEIRA DE AERONAUTICA S.A., a corporation
organized and existing under the laws of Brazil, hereby acknowledges notice
of
and consents to all of the terms of the foregoing Purchase Agreement Assignment
- No. 1- ___, dated as of _____________________, 200__, between EXPRESSJET
AIRLINES, INC. and PM LIMITED, to the extent they relate to the Manufacturer
(herein called the “Assignment”, the defined terms therein being hereinafter
used with the same meaning) and hereby confirms to the Assignee that: (i)
all
representations, warranties, indemnities and agreements of the Manufacturer
under the Purchase Agreement with respect to the Aircraft shall inure to
the
benefit of the Assignee to the same extent as if originally named the “Buyer”
therein, subject to the terms and conditions of the Assignment and the Purchase
Agreement, except as provided in paragraph 2 of the Assignment, (ii) the
Assignee shall not be liable for any of the obligations or duties of the
Assignor under the Purchase Agreement, nor shall the Assignment give rise
to any
duties or obligations whatsoever on the part of the Assignee owing to the
Manufacturer except for the Assignee’s agreement in the Assignment to the effect
that in exercising any rights under the Purchase Agreement, or in making
any
claim with respect to the Aircraft or other things (including without limitation
data, documents and services) delivered or to be delivered pursuant to the
Purchase Agreement, the terms and conditions of the Purchase Agreement, shall
apply to and be binding upon Assignee to the same extent as if Assignee had
been
the original “Buyer” thereunder, and with respect to such agreement the
Manufacturer agrees that, anything contained in the Purchase Agreement or
the
Assignment to the contrary notwithstanding, so long as the Manufacturer shall
not have received notice from Lessor that a Lease Event of Default has occurred
and is continuing, the Assignee shall not have any responsibility to the
Manufacturer for failure to comply with any of the terms of the Purchase
Agreement with respect to the Aircraft while under lease to CAL so long as
the
Assignee acts upon the written instructions of the Assignor (or if CAL shall
have specified in a written notice to Assignee and Manufacturer, CAL) (to
which
instructions the Manufacturer understands it shall have access on request);
provided
that no
person other than the Manufacturer shall have any rights against the Assignee
with respect to the undertaking and agreement set forth in this clause (ii);
(iii) the Manufacturer will continue to pay to the Assignor (or if CAL shall
have specified in a written notice to Assignee and Manufacturer, CAL) all
payments which the Manufacturer may be required to make in respect of the
Aircraft under the Purchase Agreement unless and until the Manufacturer shall
have received written notice addressed to its Director of Contracts, by mail
to
EMBRAER-Empresa Brasileira de Aeronautica S.A., Av. Brigadeiro Faria Lima,
2170,
12.227-901 Sao Jose dos Campos-SP, Brazil, or by fax to fax no: 55 12-3927-1257,
that a Lease Event of Default has occurred and is continuing (which such
notice
from the Assignee shall be conclusive proof thereof to the Manufacturer and
as
to which the Manufacturer shall have no obligation to inquire), whereupon
the
Manufacturer will, until the Manufacturer shall have received notice in writing
sent or addressed as aforesaid that no Lease Event of Default exists, make
any
and all payments and take any and all actions which it may be required
thereafter to make or take in respect of the Aircraft under the Purchase
Agreement and the right to receive which has been assigned under the Assignment
to the Assignee (which has its registered office at the offices of
Caledonian
Bank & Trust Limited, Caledonian House, P.O. Box 1043, Dr Roy's Drive,
George Town, Grand Cayman, Cayman Islands); and (iv) from and
after
the delivery of the Aircraft and payment in full therefor pursuant to Article
4
of the Purchase Agreement as invoiced on the Delivery Date the Manufacturer
will
not assert any lien or claim against the Aircraft or any part thereof arising
with respect to or in connection with any work or other services performed
before the delivery and acceptance of the Aircraft.
The
Manufacturer hereby represents and warrants that (A) the Manufacturer is
a
corporation duly organized and existing in good standing under the laws of
Brazil, (B) the making and performance of the Purchase Agreement have been
duly
authorized by all necessary corporate action on the part of the Manufacturer,
do
not require any stockholder approval, do not contravene the Manufacturer’s
By-Laws or any indenture, credit agreement or other contractual agreement
to
which the Manufacturer is a party or by which it is bound, and the making
of the
Purchase Agreement does not contravene any law binding on the Manufacturer,
(C)
the making and performance of this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of the Manufacturer,
do
not require any stockholder approval and do not contravene any law binding
on
the Manufacturer or contravene the Manufacturer’s By-laws or any indenture,
credit agreement or other contractual agreement to which the Manufacturer
is a
party or by which it is bound and (D) the Purchase Agreement constituted
as of
the date thereof and at all times thereafter to and including the date of
this
Consent and Agreement constitutes a binding obligation of the Manufacturer
enforceable against the Manufacturer in accordance with its terms subject
to:
(i) the limitations of applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally; and
(ii)
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 inadequate for the practical realization of the benefits intended
to
be provided thereby and this Consent and Agreement is a binding obligation
of
the Manufacturer enforceable against the Manufacturer in accordance with
its
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 which respect
to this Consent and Agreement inadequate for the practical realization of
the
benefits intended to be provided thereby. It is understood that the execution
by
the Manufacturer of this Consent and Agreement is subject to the condition
that
concurrently with the delivery of the Aircraft the Aircraft will be leased
to
Lessee under the Lease Agreement.
[The
remainder of this page has been left blank intentionally.]
This
Consent and Agreement shall be governed by the laws of the State of New York,
including all matters of construction, validity and performance, as applicable
to contracts between citizens of the state to be performed wholly within
that
state, and without regard to conflicts of law rules other than Section 5-1401
of
the New York General Obligations Law.
Dated
as
of
_____________________,
200__
EMBRAER-EMPRESA
BRASILEIRA
DE
AERONAUTICA S.A.
By_____________________________
Title:
By____________________________
Title:
[Consent
and Agreement]
EXHIBIT
D-3 to
Note
Purchase Agreement
FORM
OF
PURCHASE AGREEMENT ASSIGNMENT
(NEW
AIRCRAFT)
PURCHASE
AGREEMENT ASSIGNMENT NO. 2 - _____
PURCHASE AGREEMENT ASSIGNMENT NO. 2 - _____ , dated as of _______________
___,
200___ (this “Assignment”), between PM LIMITED,
a
Cayman Islands company (the “Assignor” or “PM Limited”), and WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely
as
Owner Trustee (the “Assignee”).
Recitals
WHEREAS,
EXPRESSJET AIRLINES, INC., a Delaware corporation (“Express”) and
EMBRAER-Empresa Brasileira de Aeronautica S.A., a corporation organized under
the laws of Brazil (“Embraer”), have entered into the Purchase Agreement,
pursuant to which, among other things, Embraer has agreed to manufacture
and
sell to Express, and Express has agreed to purchase from Embraer, certain
aircraft, including the Aircraft (as defined in the Purchase Agreement
Assignment No. 1 described below);
WHEREAS,
pursuant to a Purchase Agreement Assignment No. 1 - _____, dated as of the
date
hereof (“PAA No. 1”), between Express and PM Limited, Express has, among other
things, assigned to PM Limited, with the consent of the Manufacturer, certain
of
its right, title and interest in, to and under the Purchase Agreement including,
without limitation, the right to purchase the Aircraft from Embraer upon
and
subject to the terms and conditions set forth in the Purchase Agreement and
PAA
No. 1;
WHEREAS,
PM Limited has purchased the Aircraft from Embraer and, concurrently therewith,
has sold the Aircraft to Wells Fargo Bank Northwest, National Association,
acting not in its individual capacity but solely as Owner Trustee under the
Trust Agreement _____ dated as of the date hereof (the “Original Trust
Agreement”), between Refine, Inc., as Owner Participant (the “Owner
Participant”), and Wells Fargo Bank Northwest, National Association (“Wells
Fargo”);
WHEREAS,
in connection with the sale of the Aircraft by PM Limited to the Owner Trustee
and with the consent of the Manufacturer, PM Limited shall, pursuant to this
Assignment, transfer to the Owner Trustee all of PM Limited’s present and future
rights, title, obligations and interests in, to and under the Purchase Agreement
as assigned by PAA No. 1, except for PM Limited’s right to purchase the Aircraft
from the Manufacturer pursuant to Section 2(a) of PAA No. 1;
WHEREAS,
the Owner Trustee desires to (i) issue Equipment Notes (as defined in Annex
A to
the Lease Agreement referred to herein) for the purpose of enabling the Owner
Participant to repay, in part, the indebtedness relating to the acquisition
of
the Aircraft by the Owner Trustee, and (ii) lease the Aircraft to Continental
Airlines, Inc. (“Continental”) pursuant to the Lease Agreement (as hereinafter
defined); and
WHEREAS,
to facilitate the transactions described in the immediately preceding Whereas
clause, the Manufacturer is willing to execute and deliver to the Assignee
a
Consent and Agreement to the provisions hereof in substantially the form
attached hereto as Annex 1;
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
and agreements of the parties contained herein, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged the
parties hereto agree as follows:
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 PAA No. 1.
Section
2. Transfer
and Assumption.
The
Assignor does hereby sell, assign and transfer to the Assignee all of the
Assignor’s present and future rights, title, obligations and interest in, to and
under the Purchase Agreement as assigned by PAA No. 1, excluding the right
to
purchase the Aircraft from the Manufacturer (the “Assignor’s Interest”) and the
Assignee hereby accepts the Assignor’s Interest from the Assignor. The Assignee
agrees that it shall be bound by all the terms of, and shall assume and
undertake to perform all the obligations of, the Assignor with respect to
the
Assignor’s Interest.
Section
3. Confidential
Treatment.
The
Assignee and the Assignor agree that the provisions of Paragraph 8 of PAA
No. 1
are hereby terminated and superseded by the provisions of this Section 3
and, in
furtherance thereof, agree that they will not disclose to any third party
(other
than their direct and indirect parent companies) the terms of the Purchase
Agreement (whether or not related to the Aircraft) or PAA No. 1 or this
Assignment, except (a) as required by applicable law, judicial proceeding
or
governmental regulation, (b) in the case of the Assignee, as required for
the
assignment of its rights under this Assignment in accordance with the provisions
of Article 16 of the Purchase Agreement, (c) with the prior written consent
of
Express, the Assignor and the Manufacturer, which consent shall not be
unreasonably withheld with respect to a prospective bona fide purchaser of
the
Aircraft, (d) to prospective and permitted transferees of Owner Participant’s
interest or their or Owner Participant’s respective counsel or special counsel,
independent insurance brokers, auditors, or other agents, (e) as otherwise
permitted by the Operative Agreements (as defined in Annex A to the Lease),
or
(f) to such other Persons as are reasonably deemed necessary by the disclosing
party for the purposes of enforcing such documents by such party; provided
that any
such disclosure under this sentence shall be made only to the extent necessary
to meet the specific requirements or needs of the Assignee or PM Limited,
as the
case may be. Any disclosure as contemplated in (b), (c) or (d) above shall
include a requirement that the entity to which the information is disclosed
shall be subject to obligations of nondisclosure with respect to such
information substantially the same as those contained herein.
Section
4. Assignment
to Mortgagee.
The
right, title and interest of the Assignee in and to this Assignment has,
contemporaneously with the execution and delivery hereof, been assigned to
and
is subject to a security interest in favor of the Mortgagee (as such terms
and
the other capitalized terms used hereinafter in this sentence are defined
in
Appendix A to the Lease) under the Trust Indenture, for the benefit of the
Loan
Participants and the Note Holders referred to the Trust Indenture, all to
the
extent provided in such Trust Indenture. The Assignor hereby consents to
such
assignment and to the creation of such security interest in and to this
Assignment.
Section
5. Notices.
Any
notices provided for in PAA No. 1 shall be delivered to the Assignee at the
following address or such other place as the Assignee may designate in
accordance with PAA No. 1:
Wells
Fargo Bank Northwest,
National
Association
MAC:
U1228-120
Attn:
Corporate Trust Dept.
299
S.
Main Street, 12th Floor
Salt
Lake
City, UT 84111
Facsimile:
801-246-5053
Section
6. Headings.
The
headings of the Sections herein are for convenience of reference only and
shall
not define or limit any of the terms or provisions hereof.
Section
7. GOVERNING
LAW.
THIS
ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REGARD TO CONFLICT
OF
LAWS RULES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
Section
8. 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.
Section
9. Purchase
Agreement.
The
rights and obligations of the parties hereto are subject to the terms and
conditions of the Purchase Agreement.
[Remainder
of the Page is Intentionally Left Blank.]
IN
WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly
executed as of the day and year first written above.
PM
LIMITED, as Assignor
By:______________________
Name:
Title:
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, not in its individual
capacity
but solely as Owner Trustee, as Assignee
By:
________________________
Name:
Title:
Annex
1
to Purchase
Agreement
Assignment No. 2 - _____
CONSENT
AND AGREEMENT No. 2 - _____
The
undersigned, EMBRAER-EMPRESA BRASILEIRA DE AERONAUTICA S.A., a corporation
organized and existing under the laws of Brazil, hereby acknowledges notice
of
and consents to all of the terms of the foregoing Purchase Agreement Assignment
No. 2 - _____, dated as of _________________ ___, 200__, by and among PM
LIMITED
and
WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity
but solely as Owner Trustee, to the extent they relate to the Manufacturer
(herein called the “Assignment No. 2”, the defined terms therein being
hereinafter used with the same meaning) and hereby confirms to the Assignee
that: (i) all representations, warranties, indemnities and agreements of
the
Manufacturer under the Purchase Agreement with respect to the Aircraft shall
inure to the benefit of the Assignee to the same extent as if originally
named
the “Buyer” therein, subject to the terms and conditions of the Assignment No.
2, the Purchase Agreement and PAA No. 1; (ii) the Assignee shall not be liable
for any of the obligations or duties of Express under the Purchase Agreement,
nor shall the Assignment No. 2 give rise to any duties or obligations whatsoever
on the part of the Assignee owing to the Manufacturer except for the Assignee’s
agreement to the effect that in exercising any rights under the Purchase
Agreement, or in making any claim with respect to the Aircraft or other things
(including without limitation data, documents and services) delivered or
to be
delivered pursuant to the Purchase Agreement, the terms and conditions of
the
Purchase Agreement shall apply to and be binding upon the Assignee to the
same
extent as if the Assignee had been the original “Buyer” thereunder, and with
respect to such agreement the Manufacturer agrees that, anything contained
in
the Purchase Agreement or the Assignment No. 2 to the contrary notwithstanding,
so long as the Manufacturer shall not have received notice that a Lease Event
of
Default has occurred and is continuing, the Assignee shall not have any
responsibility to the Manufacturer for failure to comply with any of the
terms
of the Purchase Agreement with respect to the Aircraft while under lease
to
Continental so long as the Assignee acts upon the written instructions of
Express (or, if Continental shall have specified in a written notice to the
Assignee and the Manufacturer that Continental is entitled to possession
of the
Aircraft, Continental) (to which instructions the Manufacturer understands
it
shall have access on request); provided
that no
person other than the Manufacturer shall have any rights against the Assignee
with respect to the undertaking and agreement set forth in this clause (ii);
(iii) the Manufacturer will continue to pay to Express (or, if Continental
shall
have specified in a written notice to the Assignee and the Manufacturer that
Continental is entitled to possession of the Aircraft, Continental) all payments
which the Manufacturer may be required to make in respect of the Aircraft
under
the Purchase Agreement unless and until the Manufacturer shall have received
written notice addressed to its Contracts Administrator, by mail to
EMBRAER-Empresa Brasileira de Aeronautica S.A., Av. Brigadeiro Faria Lima,
2170,
12.227-901 Sao Jose dos Campos-SP, Brazil, or by fax to fax no: 55 12-3927-1257,
that a Lease Event of Default has occurred and is continuing (which such
notice
from the Assignee shall be conclusive proof thereof to the
Manufacturer
and as to which the Manufacturer shall have no obligation to inquire), whereupon
the Manufacturer will, until the Manufacturer shall have received notice
in
writing sent or addressed as aforesaid that no Lease Event of Default exists,
make any and all payments and take any and all actions which it may be required
thereafter to make or take in respect of the Aircraft under the Purchase
Agreement and the right to receive which has been assigned under the Assignment
No. 2 directly to the Assignee at its address at MAC: U1228-120, 299 S. Main
Street, 12th Floor, Salt Lake City, Utah 84111, telecopy no. 801-246-5053;
(iv)
from and after the delivery of the Aircraft on the Delivery Date, the
Manufacturer will not assert any lien or claim against the Aircraft or any
part
thereof arising with respect to or in connection with any work or other services
performed before the delivery and acceptance of the Aircraft; and (v) the
Manufacturer consents to the grant of a security interest in the Purchase
Agreement pursuant to the Trust Indenture (as defined in Appendix A to the
Lease).
The
Manufacturer hereby represents and warrants that (A) the Manufacturer is
a
corporation duly organized and existing in good standing under the laws of
Brazil, (B) the making and performance of the Purchase Agreement have been
duly
authorized by all necessary corporate action on the part of the Manufacturer,
do
not require any stockholder approval, do not contravene the Manufacturer’s
By-Laws or any indenture, credit agreement or other contractual agreement
to
which the Manufacturer is a party or by which it is bound, and the making
of the
Purchase Agreement does not contravene any law binding on the Manufacturer,
(C)
the making and performance of this Consent and Agreement have been duly
authorized by all necessary corporate action on the part of the Manufacturer,
do
not require any stockholder approval and do not contravene any law binding
on
the Manufacturer or contravene the Manufacturer’s By-laws or any indenture,
credit agreement or other contractual agreement to which the Manufacturer
is a
party or by which it is bound, (D) the Purchase Agreement constituted as
of the
date thereof and at all times thereafter to and including the date of this
Consent and Agreement constitutes a binding obligation of the Manufacturer
enforceable against the Manufacturer in accordance with its terms subject
to:
(i) the limitations of applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally) and
(ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and (E) this Consent and
Agreement is a binding obligation of the Manufacturer enforceable against
the
Manufacturer in accordance with its 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). It is understood that the execution by the Manufacturer
of
this Consent and Agreement is subject to the condition that concurrently
with
execution and delivery hereof the Aircraft will be leased to Continental
under
the Lease Agreement.
[The
remainder of this page has been left blank intentionally.]
This
Consent and Agreement shall be governed by the laws of the State of New York,
including all matters of construction, validity and performance, as applicable
to contracts between citizens of the state to be performed wholly within
that
state, and without regard to conflicts of law rules other than Section 5-1401
of
the New York General Obligations Law.
Dated
as
of ___________ ____, 200__.
EMBRAER-EMPRESA
BRASILEIRA
DE
AERONAUTICA S.A.
By____________________________
Title:
By____________________________
Title:
EXHIBIT
E to
Note
Purchase Agreement
FORM
OF
TRUST AGREEMENT
(Filed
Separately)
FINAL
TO
NOTE
PURCHASE AGREEMENT
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
|
Ladies
and Gentlemen:
Reference is made to the Note Purchase Agreement, dated as of September 22,
2005, among Continental Airlines, Inc. (the “Company”),
Wilmington Trust Company, as Pass Through Trustee under the Pass Through
Trust
Agreement (as defined therein) (the “Pass
Through Trustee”),
Wilmington Trust Company, as Subordination Agent (the “Subordination
Agent”),
Wells
Fargo Bank Northwest, 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 Section 1(b) of the Note Purchase Agreement, the undersigned
hereby
notifies you, in respect of the Embraer Model EMB-145 XR aircraft with
manufacturer’s serial number [MSN] (the “Aircraft”),
of
the following:
| (1) |
The
Scheduled Closing Date of the Aircraft is [_________];
and
|
| (2) |
The
principal amount of the Equipment Notes to be issued, and purchased
by the
Pass Through Trustee on such Scheduled Closing
Date, in connection with the financing of such Aircraft is
$[_______].
|
|
|
The
Company hereby instructs the Pass Through 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 Escrow Agent.1
The
Company hereby instructs the Pass Through Trustee to (i) purchase Equipment
Notes in an amount set forth in clause (2) above with a portion of the proceeds
[of the withdrawals of Deposits referred to in the Notice of Purchase Withdrawal
referred to above]2
[received on the Scheduled Closing Date from the Underwriter]3
and (ii)
re-deposit with the Depositary any amount not used on the Scheduled Closing
Date
to purchase Equipment Notes.
The
Company hereby instructs the Pass Through Trustee to (a) enter into the
Participation Agreement [TN] dated as of [__________] among the Company,
as
Lessee, Wilmington Trust Company, as Mortgagee and Loan Participant, Wells
Fargo
Bank Northwest, National Association, as Owner Trustee and Lessor, [_______],
as
Owner Participant, and Embraer-Empresa Brasileira de Aeroná;utica, (b) perform
its obligations thereunder and (c) deliver such certificates, documents and
legal opinions relating to the Pass Through Trustee as required thereby.
Yours
faithfully,
Continental
Airlines, Inc.
By:______________________
Name:
Title:
_________________________
1. Eliminate
if the Scheduled Closing Date is the Issuance Date.
2. Eliminate
if the Scheduled Closing Date is the Issuance Date.
3. Insert
if
the Scheduled Closing Date is the Issuance Date.
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
Wells
Fargo Bank Northwest, National Association,
MAC:U1228-120
as Escrow Agent
299
South
Main Street, 12th Floor
Salt
Lake
City, Utah 84111
Attention:
Corporate Trust Services
Facsimile:
(801) 246-5053
Citibank,
N.A.
388
Greenwich Street, 14th
Floor
New
York,
New York 10013
Attention:
Barbara Bennett
Facsimile:
(212) 657-2762
Standard
& Poor’s Ratings Services
55
Water
Street, 35th Floor
New
York,
New York 10004
Attention:
Michael K. Vernier
Facsimile:
(212) 438-6632
Moody’s
Investors Service, Inc.
99
Church
Street
New
York,
New York 10007
Attention:
Gregory Clifton
Facsimile:
(212) 298-7499
Annex
A
WITHDRAWAL
CERTIFICATE
Wells
Fargo Bank Northwest, National Association
as
Escrow
Agent
Ladies
and Gentlemen:
Reference
is made to the Escrow and Paying Agent Agreement, dated as of August [__],
2005 (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 Purchase Withdrawal
and
immediately transmit by facsimile to the Depositary, at (212) 657-2762
(Attention: Barbara Bennett). Capitalized terms used herein but not defined
herein shall have the meanings set forth in the Agreement.
| Very
truly yours,
|
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|
WILMINGTON
TRUST COMPANY,
not
in its individual capacity but
solely
as Pass Through Trustee
|
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| By: | ___________________________________________________ | ||
|
|
Name: | ||
| Title: |
Dated:
As
of ____________, 200_
Exhibit
A
NOTICE
OF
PURCHASE WITHDRAWAL
Citibank,
N.A.
388
Greenwich Street, 14th
Floor
New
York,
New York 10013
Attention:
Barbara Bennett
Telecopier:
(212) 657-2762
Ladies
and Gentlemen:
Reference
is made to the Deposit Agreement dated as of August [__], 2005 (the
“Deposit
Agreement”)
between Wells Fargo Bank Northwest, National Association, as Escrow Agent,
and
Citibank, N.A., 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 [_________
__, 200__], upon the telephonic request of a representative of the Pass Through
Trustee.
WELLS
FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION,
as
Escrow Agent
By__________________________
Name:
Title:
Dated:
As
of _______ __, 200_
FINAL
|
CONFIDENTIAL:
Subject to Restrictions on Dissemination
Set
Forth in Section 8 of this
Agreement
|
PARTICIPATION
AGREEMENT
[TN]
Dated
as
of [DD]
Among
CONTINENTAL
AIRLINES, INC.,
Lessee,
[OP],
Owner
Participant,
WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
Not
in
its individual capacity
except
as
expressly provided herein,
but
solely as owner trustee,
Owner
Trustee and Lessor
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 the Pass Through Trust Agreement,
Mortgagee
and Loan Participant,
and
EMBRAER-EMPRESA
BRASILEIRA DE AERONÁUTICA S.A.
Airframe
Manufacturer
One
Embraer Model EMB-145 XR Aircraft
Bearing
Manufacturer’s Serial No. [MSN]
and
U.S.
Registration No. N[REG]
with
Two
Allison Model AE3007A1E Engines
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ANNEX,
SCHEDULES AND EXHIBITS
EXHIBIT
A - Opinion
of special counsel to Lessee
EXHIBIT
B - Opinion
of corporate counsel to Lessee
EXHIBIT
C-1 - Opinion
of corporate counsel to Airframe Manufacturer
EXHIBIT
C-2 - Opinion
of special counsel to Airframe Manufacturer
EXHIBIT
D - Opinion
of special counsel to Owner Trustee
EXHIBIT
E - Opinion
of special counsel to Mortgagee
EXHIBIT
F - Opinion
of special counsel to Owner Participant
EXHIBIT
G - Opinion
of special counsel in Oklahoma City, Oklahoma
EXHIBIT
H - Opinion
of special counsel to Seller
PARTICIPATION
AGREEMENT [TN]
PARTICIPATION
AGREEMENT [TN], dated as of [DD] (this “Agreement”), among (a) CONTINENTAL
AIRLINES, INC., a Delaware corporation (“Lessee”), (b) [OP], a corporation
organized under the laws of the OP Jurisdiction (“Owner Participant”),
(c) WELLS FARGO BANK NORTHWEST, 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, “Wells Fargo”), (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 the Pass
Through Trust Agreement (“Pass Through Trustee”), (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”), and (g) EMBRAER-EMPRESA BRASILEIRA DE AERONÁUTICA S.A., a company
organized under the laws of Brazil (“Airframe Manufacturer”).
RECITALS
A.
Express
and Airframe Manufacturer have entered into the Purchase Agreement, pursuant
to
which, among other things, Airframe Manufacturer has agreed to manufacture
and
sell to Express and Express has agreed to purchase from Airframe Manufacturer
certain aircraft, including the Aircraft.
[B.
Prior
to
the date hereof, in connection with the interim financing of the Aircraft,
(i) certain of Express’ rights under the Purchase Agreement with respect to
the Aircraft were assigned to Lessor and (ii) the Aircraft was purchased by
Lessor, leased to Lessee pursuant to the Existing Lease and subleased to
Express
pursuant to the Existing Sublease.]1
[B.
On
the
Delivery Date, Express and Seller will enter into the Initial Purchase Agreement
Assignment and Seller and Owner Trustee will enter into the Purchase Agreement
Assignment, pursuant to which, among other things, Express’ right to purchase
the Aircraft from Airframe Manufacturer will be assigned to Seller and
reassigned to the Owner Trustee upon and subject to the terms and conditions
set
forth in the Purchase Agreement, the Initial Purchase Agreement Assignment
and
the Purchase Agreement Assignment.]2
C.
In
order
to effectuate the long-term financing of the Aircraft, the parties hereto
intend
that (i) the Owner Trustee issue, on a non-recourse basis, pursuant to the
Trust Indenture the Equipment Notes to the Pass Through Trustee, [(ii) the
Existing Lease be terminated and
1.
Delete for New Aircraft.
2.
Insert for New Aircraft.
replaced
with the Lease, and the Aircraft continue to be leased to Lessee and subleased
to Express]3 [(ii)
the
Owner Trustee will purchase the Aircraft from the Airframe Manufacturer
utilizing the Commitments and lease it to Lessee pursuant to the Lease and
the
Lessee will sublease the Aircraft to Express]4 and
(iii)
Owner Trustee grant a security interest to Mortgagee in the Aircraft and
the
Lease for the benefit of the Note Holders.
D.
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. ISSUANCE
OF EQUIPMENT NOTES; TERMINATION OF OBLIGATION TO
PARTICIPATE
2.1 Issuance
of Equipment Notes
Subject
to the terms and conditions of this Agreement, on the Closing Date, the 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 the Pass Through Trustee’s PTT Percentage multiplied by
Lessor’s Cost, such loan to be evidenced by one or more Equipment Notes, dated
the Closing Date, issued to the Subordination Agent as the registered holder
on
behalf of the Pass Through Trustee for the 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 the Pass Through
Trustee.
2.2
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 the Loan 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 the Loan Participant that has defaulted in the payment of
its
Commitment shall not be released.]5
3.
Delete for New Aircraft.
4.
Insert for New Aircraft.
5.
Delete for New Aircraft.
[SECTION
3. TERMINATION
OF EXISTING FINANCING AGREEMENTS; COMMITMENT TO LEASE
AIRCRAFT
3.1
Termination
of Existing Financing Agreements
(a) The
Existing Lease and Existing Sublease for the Aircraft shall be terminated
in
order to be replaced by the Lease and the Express Sublease, and each of Lessor
and Lessee shall take such action to evidence such termination as Owner Trustee
or Mortgagee shall reasonably request, including execution and delivery of
a
termination agreement for the Existing Lease and Existing Sublease in form
and
substance reasonably acceptable to Owner Trustee and satisfactory for filing
with the FAA, and UCC-3 termination statements with respect to the termination
of the Existing Lease and Existing Sublease.
(b) The
Existing Participation Agreement shall be terminated, effective as of the
Closing, and the parties thereto shall have no further obligation thereunder
except for Sections 7, 10 and 11 thereof and for any breach of such Agreement
arising prior to the Closing.
(c) Lessor
shall refund to Lessee “Basic Rent” (as defined in the Existing Lease) paid in
advance by Lessee attributable to periods on and after the Closing Date
determined by multiplying such Basic Rent by a fraction, the numerator of
which
shall be the number of days remaining in the month in which the Closing Date
occurs (from and including the Closing Date) and the denominator of which
shall
be the total number of days in such month.
(d) Airframe
Manufacturer shall pay and discharge all applicable sales, use or similar
Taxes,
duties or fees assessed or levied by any federal, state, provincial or local
taxing authority as a result of the replacement of the existing financing
agreements with the Operative Agreements and the Express Sublease or issuance
of
the Equipment Notes contemplated by this Agreement. Owner Trustee and Lessee
will cooperate in order to minimize Taxes applicable to the termination of
the
existing financing agreements or issuance of the Equipment Notes contemplated
by
this Agreement.
3.2
Commitment
to Lease
Subject
to the terms and conditions of this Agreement, concurrently with the issuance
of
the Equipment Notes, Owner Trustee shall continue the lease of the Aircraft
to
Lessee, and Lessee shall continue the lease of the Aircraft from Owner Trustee,
under the Lease.]6
[SECTION
4. CLOSING;
PROCEDURE FOR PAYMENT; POSTPONEMENT OF SCHEDULED CLOSING
DATE
4.1
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, at the time specified pursuant to notice given in accordance
with
Section 1 of the Note Purchase Agreement.
6.
Delete for New Aircraft.
4.2
Payment
of Proceeds
(a) The
Loan
Participant agrees, subject to the terms and conditions of this Agreement,
to
make the Dollar amount of its Commitment available, by wire transfer of
immediately available funds to the account of WTC, ABA No. 031100092, Account
No. [ ],
reference Continental Lease [TN], at or before 12:00 Noon, New York City
time,
on the Scheduled Closing Date. All such funds made available by the Loan
Participant to WTC shall, until payment thereof to Owner Trustee as provided
in
Section 4.2(c) or return thereof to the Loan Participant as provided in
Section 4.3, be held by WTC in trust for the benefit of the Loan
Participant, as the sole and exclusive property of the Loan 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 Closing Date
pursuant to this Section 4.2, Owner Trustee shall:
(i) 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);
(ii) lease
the
Aircraft to Lessee pursuant to the Lease; and
(iii) take
such
other action as may be required to be taken by the Owner Trustee on the Closing
Date by the terms of any Operative Agreement.
(c) Subject
to the satisfaction or waiver by the applicable party of the conditions
precedent set forth in Section 5, WTC shall pay to the Owner Trustee the
amounts
received from the Loan Participants pursuant to Section 4.2(a).
4.3
Postponement
of Scheduled Closing Date
If
for
any reason whatsoever the Closing is not consummated on the Scheduled Closing
Date, Airframe Manufacturer may 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 Closing Date to Lessee,
the
Loan Participant, Owner Trustee and Mortgagee, designate a Delayed Closing
Date,
in which case any funds made available by the Loan Participant shall be returned
on such Scheduled Closing Date and the Loan Participant shall comply with
its
obligations under Section 2.02(b) of the Trust Supplement.]7
7.
Delete for New Aircraft.
[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 Closing Date, Owner
Participant and the 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) The
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 the Pass Through Trustee’s PTT Percentage multiplied by
Lessor’s Cost, such loan to be evidenced by one or more Equipment Notes, dated
the Closing Date, issued to the Subordination Agent as the registered holder
on
behalf of each Pass Through Trustee for the 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 the 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.]8
[SECTION
3. COMMITMENT
TO LEASE AIRCRAFT
Subject
to the terms and conditions of this Agreement, concurrently with the issuance
of
the Equipment Notes, Owner Trustee shall purchase and accept delivery of
the
Aircraft under and pursuant to the Purchase Agreement and the Purchase Agreement
Assignment, and
8.
Insert for New Aircraft.
thereupon
Owner Trustee shall lease the Aircraft to Lessee, and Lessee shall lease
the
Aircraft from Owner Trustee, under the Lease.]9
[SECTION
4. PROCEDURE
FOR PARTICIPATION IN PAYMENT OF LESSOR’S COST; POSTPONEMENT OF SCHEDULED
DELIVERY DATE
4.1
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 at the time specified pursuant to notice given in accordance with Section
1 of the Note Purchase Agreement.
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 the account of WTC, ABA No. 031100092,
Account
No. [ ],
reference Continental Lease [TN], at or before 12:00 Noon, New York City
time,
on the Scheduled Closing Date. All such funds made available by each Participant
to WTC shall, until payment thereof to Airframe Manufacturer 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 Closing 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 Lessor’s Cost, from the funds made available to WTC hereunder by the
Participants, to Airframe Manufacturer, by wire transfer of immediately
available funds to Airframe Manufacturer’s account set forth in Schedule
1;
(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
9.
Insert for New Aircraft.
(vi) take
such
other action as may be required to be taken by the Owner Trustee on the Closing
Date by the terms of any Operative Agreement.
4.3
Postponement
of Scheduled Closing Date
4.3.1
Postponement
If
for
any reason whatsoever the Closing is not consummated on the Scheduled Closing
Date, Airframe Manufacturer may, 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 Closing Date to Lessee,
each
Participant, Owner Trustee and Mortgagee, designate a Delayed Closing Date,
in
which case the Owner Participant will make its funds available to WTC on
the
Delayed Closing Date in accordance with Section 4.2(a), and the Loan
Participant shall comply with its obligations under Section [2.02(b)] of
the
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, if the Closing fails to occur
on the
Scheduled Delivery Date.]10
SECTION
5. CONDITIONS
PRECEDENT
5.1
Conditions
Precedent to Obligations of Participants
The
obligation of [each]11
[the
Loan]12 Participant
to make the Dollar amount of its Commitment available for payment as directed
by
the Owner Trustee on the Closing Date and of each Participant to take the
other
actions required by this Agreement to be taken by it at the Closing is subject
to satisfaction or waiver by each such Participant, at or prior to the Closing,
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
Section 5.1.2(iii) [and (xv)]13
shall
not be conditions precedent to the obligation of Loan Participant, and
Section 5.1.5 shall not be a condition precedent to the obligation of Owner
Participant.
10.
Insert for New Aircraft.
11.
Insert for New Aircraft.
12.
Delete for New Aircraft.
13.
Delete for New Aircraft.
5.1.1
Notice
Such
Participant shall have received the notice described in Section 4.1 or, in
the case of a Delayed Closing 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 each
of
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
Initial Purchase Agreement Assignment and]14 the
Purchase Agreement Assignment;
(viii) the
Consent and Agreement;
(ix) the
Equipment Notes dated the Closing 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 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 Closing Date, but after the Closing 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);
14.
Insert for New Aircraft.
[(xi) the
OP
Guaranty;]15
(xii) the
Express Sublease;
(xiii) the
broker’s report and insurance certificates required by Section 11 of the
Lease;
[(xiv) termination
agreements with respect to the Existing Lease and the Existing Sublease and,
in
the case of Owner Participant and Lessee, the Existing Participation Agreement
and the “Tax Indemnity Agreement” as defined in the Existing Lease;]16
[(xv) the
Satisfaction and Discharge Agreement, dated as of the date of the Participation
Agreement, among the Airframe Manufacturer, Seller, Owner Participant and
Owner
Trustee;]17
[(xiv) the
Bills
of Sale;]18
[(xv) an
invoice from Seller to Owner Trustee in respect of the Aircraft;]19
(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 Closing 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 Closing Date in accordance with the provisions
hereof and thereof; (B) an incumbency certificate of Lessee, Airframe
Manufacturer, Owner Participant, Wells Fargo 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 Airframe Manufacturer, Owner Participant, Wells Fargo and
WTC,
certified as of the Closing Date by the Secretary or an Assistant or Attesting
Secretary of Airframe Manufacturer, Owner Participant, Wells Fargo and WTC,
respectively, which authorize the execution, delivery and performance by
Airframe Manufacturer, Owner Participant, Wells Fargo 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
15.
Include if the OP is an Affiliate of Airframe Manufacturer.
16.
Delete for New Aircraft.
17.
Delete for New Aircraft.
18.
Insert for New Aircraft.
19.
Insert for New Aircraft.
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 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);
(xviii) an
Officer’s Certificate of Wells Fargo, dated as of the Closing 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 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);
(xix) an
Officer’s Certificate of Owner Participant, 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);
(xx) 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,
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);
(xxi) an
Officer’s Certificate of Airframe Manufacturer, 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);
[(xxii) an
appointment of authorized representatives by Owner Trustee, and an acceptance
thereof by such representatives;]20
(xxiii) a
copy of
the application for registration of the Aircraft with the FAA in the name
of
Owner Trustee;
(xxiv) the
Financing Statements;
(xxv) the
following opinions of counsel, in each case dated the Closing 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;
20.
Insert for New Lease.
(C) an
opinion of (x) corporate counsel to Airframe Manufacturer, substantially
in the
form of Exhibit C-1, and (y) Katten Muchin Rosenman, special counsel
to Airframe Manufacturer, substantially in the form of
Exhibit C-2;
(D) an
opinion of Ray, Quinney & Nebeker, special counsel to Owner Trustee,
substantially in the form of Exhibit D;
(E) an
opinion of Richards, Layton & Finger, special counsel to Mortgagee and
Loan Participant, 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 Soulé; & Curlee, special counsel in Oklahoma City,
Oklahoma, substantially in the form of Exhibit G;
(H) an
opinion of Walkers, special counsel to Seller, substantially in the form
of
Exhibit H;
(xxvi) a
copy of
a current, valid Standard Certificate of Airworthiness for the Aircraft duly
issued by the FAA;
(xxvii) 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]21
[The
Loan]22 Participant
shall have made available the Dollar amount of its Commitment 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]23
[the
Loan]24 Participant
to make the Dollar amount of its
21.
Insert for New Aircraft.
22.
Delete for New Aircraft.
23.
Insert for New Aircraft.
Commitment
available or to acquire an Equipment Note or to realize the benefits of the
security afforded by the Trust Indenture.
5.1.5
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 Trustee’s right, title and interest
in the Aircraft and the Lease, subject only to Permitted Liens.
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 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.
5.1.7
No
Event of Default
On
the
Closing Date, no event shall have occurred and be continuing, or would result
from the 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
On
the
Closing Date, 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 to the Aircraft [(subject to filing and
recordation of the FAA Bill of Sale with the FAA)]25,
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 and (c) other Permitted
Liens.
24.
Delete for New Aircraft.
25.
Insert for New Aircraft.
5.1.10
Certification
The
Aircraft shall have been duly certificated by the FAA as to type, and an
export
certificate of airworthiness shall have been issued by the Brazilian aviation
authority.
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 and to enforce any of its other rights
or
remedies 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
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.
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 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.
5.2
Conditions
Precedent to Obligations of Owner Trustee
The
obligation of Owner Trustee to execute and deliver the Equipment Notes on
the
Closing Date is subject to satisfaction or waiver by Owner Trustee, at or
prior
to the Closing, 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 Closing 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 Closing
Date
is subject to the satisfaction or waiver by Mortgagee, at or prior to the
Closing, 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 Closing 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 Closing Date and to take
the
other actions required by this Agreement to be taken by it at the Closing
is
subject to the satisfaction or waiver by Lessee, at or prior to the Closing,
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 transactions to
occur
at the Closing pursuant to this Agreement 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, 5.1.4, 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.
5.5
Post-Registration
Opinion
Promptly
upon the registration of the Aircraft and the recordation of the FAA Filed
Documents pursuant to the Act, Airframe Manufacturer will cause Lytle Soulé;
& 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, Airframe Manufacturer,
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 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 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 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 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 Closing Date, or in any
Quarterly Report on Form 10-Q or Current Report on Form 8-K (or any
amendment thereof) filed by Lessee with the SEC subsequent to such Form 10-K
and
on or prior to the Closing 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 (or
any
amendment thereof) 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 nameplates 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 jurisdiction
in the
United States.
6.1.9
Location
Lessee’s
location (as such term is used in Section 9-307 of the UCC) is
Delaware.
6.1.10
No
Default
No
event
which, if the Aircraft were subject to the Lease, constitutes a 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.
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
and to
enforce any of its other rights or remedies 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, Airframe
Manufacturer, 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 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 Owner Participant Agreements.
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 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 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 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 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
Closing Date, Owner Participant is not a Citizen of the United States, but
holds
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 or any other provision that could restrict Lessee’s use or operation
of the Aircraft).
6.2.7
No
Liens
On
the
Closing 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 has been 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 used by Owner Participant to acquire or hold its interests in
the
Trust Estate 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, or affect the validity
or
enforceability of, 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 registration provisions 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
Wells
Fargo’s Representations and Warranties
Wells
Fargo represents and warrants (in the case of Section 6.3.13, solely in its
capacity as Owner Trustee) to Lessee, Owner Participant, Airframe Manufacturer,
Loan Participants, Subordination Agent and Mortgagee that:
6.3.1
Organization,
Etc.
Wells
Fargo 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
Wells
Fargo 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 Wells Fargo, 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 Wells Fargo, in its individual capacity and as
Owner
Trustee, of the Owner Trustee Agreements, the performance by Wells Fargo,
in its
individual capacity and as Owner Trustee, of its obligations thereunder and
the
consummation by Wells Fargo in its individual capacity and as Owner Trustee
on
the Closing Date of the transactions contemplated thereby, do not and will
not
(a) violate any provision of the Articles of Association or By-Laws of
Wells Fargo, (b) violate any Law of the State of Utah or federal banking
Law applicable to or binding on Owner Trustee or Wells Fargo or (c) violate
or constitute any default under (other than any violation or default that
would
not result in a Material Adverse Change to Wells Fargo, 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 Wells Fargo, 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 Wells Fargo, in its individual capacity or as Owner Trustee, is a party
or
by which Wells Fargo, in its individual capacity or as Owner Trustee, or
any of
its properties is or may be bound or affected.
6.3.4
Approvals
The
execution and delivery by Wells Fargo, in its individual capacity and as
Owner
Trustee, of the Owner Trustee Agreements, the performance by Wells Fargo,
in its
individual capacity and as Owner Trustee, of its obligations thereunder and
the
consummation by Wells Fargo, in its individual capacity and as Owner Trustee,
on
the Closing 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 Wells Fargo or (b) any Government Entity governing
banking and trust powers, 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 Wells
Fargo, in its individual capacity or as Owner Trustee, as the case may be,
and
constitute the legal, valid and binding obligations of Wells Fargo, 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 Wells Fargo, 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
Closing Date, Wells Fargo is a Citizen of the United States.
6.3.7
Location
The
Owner
Trustee’s location (as such term is used in Section 9-307 of the UCC) is
Utah.
6.3.8
Title
On
the
Delivery Date, Owner Trustee received whatever title to the Aircraft as was
conveyed to it by Seller.
6.3.9
No
Liens; Financing Statements
On
the
Closing Date, there are no Lessor Liens attributable to Wells Fargo 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 and the one or more
UCC-1
financing statements covering the Aircraft and filed for precautionary purposes
by the Owner Trustee in connection with the delivery of the Aircraft to Lessee
under the Existing Lease on the Delivery Date, 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 Wells Fargo, threatened actions
or
proceedings against Wells Fargo or Owner Trustee before any court, governmental
body, arbitration board, administrative agency or tribunal which, if determined
adversely to Wells Fargo or Owner Trustee, would materially adversely affect
the
ability of Wells Fargo or Owner Trustee to perform its obligations under,
or
affect the validity or enforceability of, the Owner Trustee
Agreements.
6.3.11
Securities
Laws
Neither
Wells Fargo, 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,
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.
[6.3.13
Prior
Activities
Owner
Trustee has not engaged in any activities except holding title to the Aircraft
and leasing the Aircraft pursuant to the terms of the “Trust Agreement” (as
defined in the Existing Lease) and the Existing Lease, respectively, and
Owner
Trustee has not incurred any debt or other financial obligation, except as
expressly provided in the “Trust Agreement” (as defined in the Existing Lease)
and the Existing Lease or such other debt that shall have been satisfied
or
discharged in full contemporaneously with the Closing.]26
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, Airframe
Manufacturer, 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,
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,
Pass
Through Trustee or Subordination Agent, as the case may be, of the Mortgagee
Agreements, the
26.
Delete for New Aircraft.
Pass
Through Trustee Agreements and the Subordination Agent Agreements, the
performance by WTC, in its individual capacity or as Mortgagee, 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, 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 as Mortgagee, 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, 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, Pass Through
Trustee or Subordination Agent, is a party or by which WTC, in its individual
capacity or as Mortgagee, 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,
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,
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, 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, Pass Through Trustee or Subordination
Agent, as the case may be, and are enforceable against WTC, in its individual
capacity or as Mortgagee, 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
Closing 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, 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,
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,
Pass Through Trustee or Subordination Agent, as the case may be, to perform
its
obligations under, or affect the validity or enforceability of, 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 Trustee, 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 the 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 the
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 the Pass Through Trustee
or
WTC, as the case may be, for services rendered in connection with the
transactions contemplated by the Pass Through Trust Agreement), and there
are no
Taxes payable by the 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 the 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 the Pass Through Trustee or WTC, as
the
case may be, for services rendered in connection with the transactions
contemplated by the Pass Through Trust Agreement), and, assuming that the
trust
created by the
Pass
Through Trust Agreement will not be taxable as a corporation, but, rather,
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 trust 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, 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.
6.5
Airframe
Manufacturer’s Representations and Warranties
Airframe
Manufacturer represents and warrants to Lessee, each Participant, Subordination
Agent, Owner Trustee and Mortgagee that:
6.5.1
Organization,
Etc.
Airframe
Manufacturer is a corporation duly incorporated, validly existing and in
good
standing under the Laws of Brazil, 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
Airframe Manufacturer Agreements. [OP Guarantor has a tangible net worth
(exclusive of goodwill) greater than $25,000,000.]27
6.5.2
Corporate
Authorization
Airframe
Manufacturer 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 constitutional documents) to authorize the
execution and delivery of each of the Airframe Manufacturer Agreements, and
the
performance of its obligations thereunder.
6.5.3
No
Violation
The
execution and delivery by Airframe Manufacturer of the Airframe Manufacturer
Agreements, the performance by Airframe Manufacturer of its obligations
thereunder and the consummation by Airframe Manufacturer on the Closing Date
of
the transactions contemplated thereby, do not and will not (a) violate any
provision of the constitutional documents of Airframe Manufacturer,
(b) violate any Law applicable to or binding on Airframe Manufacturer or
(c) violate or constitute any default under (other than any violation or
default that would not result in a Material Adverse Change to Airframe
Manufacturer), or result in the creation of any Lien (other than as provided
for
or otherwise permitted in the Operative Agreements) upon the
27.
Insert if OP is an Affiliate of Airframe Manufacturer.
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 Airframe Manufacturer is a party or by which Airframe
Manufacturer or any of its properties is bound.
6.5.4
Approvals
The
execution and delivery by Airframe Manufacturer of the Airframe Manufacturer
Agreements, the performance by Airframe Manufacturer of its obligations
thereunder and the consummation by Airframe Manufacturer 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 Airframe
Manufacturer and (b) any Government Entity, other than the filing of the
FAA Filed Documents and the Financing Statements.
6.5.5
Valid
and Binding Agreements
The
Airframe Manufacturer Agreements have been duly authorized, executed and
delivered by Airframe Manufacturer and, assuming the due authorization,
execution and delivery by the other party or parties thereto, constitute
the
legal, valid and binding obligations of Airframe Manufacturer and are
enforceable against Airframe Manufacturer 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.
6.5.6
Title
On
the
Closing Date, Lessor shall have good and marketable title to the Aircraft,
free
and clear of all claims, Liens and encumbrances of any nature, except Permitted
Liens.
6.5.7
Taxes
Lessor
has filed or will cause to be filed all Federal and all material state, local
and foreign tax returns which are required to be filed by it and have paid
or
will cause to be paid all Taxes which are due and payable in connection with
the
Aircraft.
6.5.8
Litigation
There
are
no pending or, to the Actual Knowledge of Airframe Manufacturer, threatened
actions or proceedings against Airframe Manufacturer before any court,
governmental body, arbitration board, administrative agency or tribunal which,
if determined adversely to Airframe Manufacturer, would materially adversely
affect the ability of Airframe Manufacturer to perform its obligations under,
or
affect the validity or enforceability of, the Airframe Manufacturer
Agreements.
6.5.9
Securities
Laws
Neither
Airframe Manufacturer nor any person Airframe Manufacturer 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.
6.5.10
Broker’s
Fees
No
Person
acting on behalf of Airframe Manufacturer is or will be entitled to any broker’s
fee, commission or finder’s fee in connection with the Transactions, except for
the placement agent’s fees and commissions payable with respect to the offering
of the Pass Through Certificates and the fees and expenses of Equity Advisor,
which are the sole responsibility of Airframe Manufacturer.
SECTION
7. COVENANTS,
UNDERTAKINGS AND AGREEMENTS
7.1
Covenants
of Lessee
Lessee
covenants and agrees 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 change
of
its location (as such term is used in Section 9-307 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 re-filing 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, and Lessee shall pay
all
out-of-pocket costs and expenses thereof to the extent not paid by another
party
as Transaction Expenses. 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).
(c) Lessee
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
change of its location (as such term is used in Section 9-307 of the UCC))
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). Lessee hereby authorizes Owner Trustee and/or Mortgagee to prepare
and file any UCC financing statements (including any amendments thereto)
and
continuation statements referred to in this Section 7.1.3(c).
(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, re-recording and re-filing 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, 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. Owner Participant
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, in each case 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 Trustee 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 (it being agreed that if a Lease
Event of Default shall have occurred and is then continuing, it shall not
be
unreasonable for Owner Participant to withhold its consent to moving the
situs
of the Trust, notwithstanding the provision by Lessee of such additional
tax
indemnification,
unless a Section 1110 Event shall have occurred and is then continuing),
(b) the rights and obligations under the Operative Agreements of Owner
Participant, the Note Holders, Pass Through Trustee 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 be necessary or as may reasonably be requested by
Mortgagee to protect and maintain the perfection and priority of such Lien,
(d) Owner Participant, Pass Through Trustee and Mortgagee shall have
received an opinion or opinions of counsel (which counsel is reasonably
satisfactory to Owner Participant, Pass Through Trustee and Mortgagee) in
scope,
form and substance reasonably satisfactory to Owner Participant, Pass Through
Trustee 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
Trustee or Mortgagee may reasonably request, (e) if such removal involves
the replacement of Owner Trustee, then Owner Participant, Pass Through Trustee
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 Trustee and Mortgagee covering the matters described in the opinion
delivered pursuant to Section 5.1.2(xxv)(D) and (f) Lessee shall
indemnify and hold harmless Owner Participant, Note Holders, Pass Through
Trustee and Wells Fargo, 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 Trustee 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, except that if a Lease Event
of
Default shall have occurred and is then continuing, except during a Section
1110
Period, such consent shall not be required.
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 registration provisions 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 instruct Owner Trustee to perform its obligations under
each
Owner Trustee Agreement.
7.3
Covenants
of Wells Fargo and Owner Trustee
Wells
Fargo, 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
Wells
Fargo (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, take such action as may be necessary to
discharge any Lessor Lien attributable to Wells Fargo or Owner Trustee on
all or
any part of the Trust Estate, the Trust Indenture Estate or the Aircraft.
Wells
Fargo will in its individual capacity 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, in each case 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 Location
Wells
Fargo, in its individual capacity and as Owner Trustee, will give Lessee,
each
Participant and Mortgagee 30 days’ prior written notice of any change of its
location (as such term is used in Section 9-307 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
Wells
Fargo, 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 registration
provisions of the Securities Act or applicable state or foreign securities
Laws,
provided that the foregoing shall not be deemed to impose on Wells Fargo
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 and Mortgagee 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
Closing 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 change of its location (as such term is used
in
Section 9-307 of the UCC)), 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. Owner
Trustee hereby authorizes the Mortgagee to prepare and file any UCC financing
statements (including any amendments thereto) and continuation statements
referred to in this Section 7.3.8.
7.3.9
Trust
Agreement
Each
of
Wells Fargo 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 Wells Fargo 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, 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 in its individual capacity
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, in each case 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, 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, Pass Through Trustee or Subordination
Agent, as the case may be, shall perform its obligations under the Mortgagee
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
as
otherwise required by the terms of Section 2.13 of the Trust Indenture, 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, 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) and the other covenants of the Note Holders contained in the
Operative Agreements.
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, Wells Fargo, 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,
Wells Fargo, Owner Trustee, WTC or Mortgagee from filing any claim against
the
Trust Estate in any case commenced against the Trust Estate or preclude the
exercise of remedies pursuant to, or limit the rights of Mortgagee under,
the
Trust Indenture.
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, Wells Fargo
or Owner Participant is required, by reason of Wells Fargo or Owner Participant
being held to have recourse liability to any Note Holder or Mortgagee directly
or indirectly (other than the recourse liability of Wells Fargo 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 Wells Fargo or Owner Participant
on
account of (b) above, then such Note Holder or Mortgagee, as the case may
be,
shall promptly refund to Wells Fargo 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 Wells Fargo or Owner Participant had not become subject to the
recourse liability referred to in clause (b) above, and such Note Holder
or
Mortgagee receives written notice that such amount is an Excess Amount prior
to
its distribution thereof. 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 Wells Fargo 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, 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
Trust
Indenture, 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 Wells Fargo
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 Wells Fargo 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 Wells Fargo 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 Wells Fargo, in its individual
capacity).
7.6.7
Other
Documents; Amendment
(a) Each
of
the Owner Participant and the Owner Trustee hereby 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 materially adversely
affect such party without the prior written consent of such party (including
without limitation in the case of such agreement with Lessee, Section 4.2.5
of
the Trust Agreement). 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 Sections 2.02 (third
paragraph), 2.05 or 3.06 (second sentence) 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
materially adversely affect Lessee. Mortgagee and Owner Trustee agree promptly
to 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 the 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
Owner
Participant, Pass Through Trustee, Subordination Agent, Owner Trustee and
Mortgagee each 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 Trustee, 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 materially 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 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.
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 calculated pursuant to Section 5(f) of the
Tax
Indemnity Agreement 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, provided, that notwithstanding the foregoing, such
registration may be made during the taxable year in which the seventh
anniversary of the Delivery Date occurs so long as the Aircraft is not
“used
predominantly outside the United States” within the meaning of
Section 168(g) of the Code during such taxable year;
(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; and
(D) such
country is a Permitted Country with which the United States then maintains
normal diplomatic relations.
(ii) the
Owner
Trustee, Owner Participant and Mortgagee shall have received an opinion,
in form
and substance reasonably satisfactory to the Owner Participant (subject
to
customary exceptions), of counsel reasonably satisfactory to the Owner
Participant and Mortgagee addressed to each such party to the effect
that:
(A)
such country would recognize the Owner Trustee’s title to, ownership interest in
and right to possession of, 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 country (or
the
laws of the country to which the laws of such country 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) 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
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 Owner Trustee, the Owner
Participant or the Mortgagee (or any Affiliate thereof), as the case may
be, for
Owner Trustee, the Owner Participant or the Mortgagee to qualify to do business
in such country as a result of such reregistration;
(E) there
is
no tort liability of the owner or lessor or mortgagee of an aircraft not
in
possession thereof under the laws of such country (it being agreed that,
in the
event such latter opinion cannot be given in a form satisfactory to the Owner
Participant and Mortgagee, such opinion shall be waived if insurance reasonably
satisfactory to the Owner Participant and Mortgagee is provided to cover
such
risk); and
(F)
unless Lessee shall have agreed to provide insurance reasonably satisfactory
to
Owner Participant and Mortgagee 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; and
(ii) of
the
payment by Lessee of all reasonable out-of-pocket expenses at no after-tax
cost
to any Participant 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, (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 (4) costs in connection with the calculation of the lump
sum
payment described in clause (i)(A) of this Section 7.6.11.
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) The
Airframe Manufacturer, by its execution and delivery of the Consent and
Agreement, shall not be deemed to have waived any rights, remedies or claims
which Airframe Manufacturer (or any subcontractor or supplier of Airframe
Manufacturer) 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 any subcontractor or supplier of Airframe
Manufacturer).
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, Mortgagee and Airframe
Manufacturer shall keep Annexes B, C and D and Schedules 1, 2, 3 and 4
to the Lease, the Purchase Agreement Assignment and the Tax Indemnity Agreement
confidential and shall not disclose, or cause to be disclosed, the same to
any
other 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, 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 and state and local income tax 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 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 the Pass Through Certificates 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
If
the
Closing occurs, 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;
provided,
however,
this
Section 9.1.1(a) shall not apply to any taxes taken into account in making
any
payment on a net after tax basis;
(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 or failure to
perform by Lessee of its obligations pursuant to the terms of the Lessee
Operative Agreements) that occur after the earlier 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 or Mortgagee 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;
(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 costs and expenses incurred as a result of such Transfer, if such Transfer
arises directly from a Lease Event of Default that 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 Wells Fargo, 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 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 offer or sale 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 Trustee),
to the extent attributable to the failure of the Pass Through Trustee to
distribute funds received and distributable by it in accordance with the
Pass
Through Trust Agreement, (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 Trustee, to the extent attributable to the negligence or willful
misconduct of the Pass Through Trustee in the distribution of funds
received
and distributable by it in accordance with the Pass Through Trust Agreement,
(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 it is a Transaction Expense;
(r) 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
(s) 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; or
(t) To
the
extent not included in the definition of Supplemental Rent as a result of
the
provisions of clause (e) of such definition.
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 in writing 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,
or
proceeding or compromise any such Expense (i) during the continuance of any
Lease Event of Default arising under Section 14.1 of the Lease, (ii) if
such proceedings would entail a material risk of the sale, forfeiture or
loss of
the Aircraft or (iii) if such proceedings would entail a risk of criminal
liability or greater than de minimis risk of material civil penalties being
imposed on such Indemnitee. 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
7.01 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
Transaction
Expenses
Owner
Participant shall pay all Transaction Expenses (which shall exclude the ongoing
fees, disbursements and expenses of Mortgagee and the Owner Trustee), up
to an
aggregate amount equal to the Expense Limit. Airframe Manufacturer shall
pay all
Transaction Expenses in excess of the Expense Limit and the ongoing fees,
disbursements and expenses of Mortgagee and the Owner Trustee, provided that
if
Airframe Manufacturer shall fail to make any payment when due of the ongoing
fees, disbursements and expenses of Mortgagee or Owner Trustee, Lessee shall
make such payment if so requested by Mortgagee or Owner Trustee, as applicable,
in which case Airframe Manufacturer shall be obligated to immediately reimburse
Lessee for any payment made by Lessee pursuant to this sentence. Lessee shall
have no liability or obligation with respect to Transaction Expenses, except
as
provided in the preceding sentence.
9.2.2
Payment
of Other Expenses
Lessee
will be responsible for the fees and charges of its counsel incurred in
connection with the preparation, execution and delivery of the Operative
Agreements. All out-of-pocket costs and expenses of Lessee (including, without
limitation, reasonable attorney’s fees and charges) incurred in performance of
Sections 7.1.3(a), (b) and (c) (other than with respect to the first
parenthetical of Section 7.1.3(c)) to the extent constituting Transaction
Expenses, shall be paid pursuant to Section 9.2.1 and, otherwise, shall be
paid
by Airframe Manufacturer. Airframe Manufacturer shall pay all costs and expenses
incurred by it in connection with the Operative Agreements.
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 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 (at no after-Tax cost to the Tax Indemnitee) 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,
Termination Value, Stipulated Loss Value (and amounts determined by reference
thereto), or 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 of any jurisdiction within the United States in which such Tax
Indemnitee is incorporated or maintains its principal place of business or
is
otherwise subject to Taxes of such type as a result of transactions or
activities by such Tax Indemnitee or its Affiliates that are independent
of the
transactions and activities contemplated by the Operative Agreements (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, Taxes
in
the nature of sales or use taxes, value added taxes imposed in lieu of any
of
the foregoing, airport excise taxes or any excise taxes imposed in the nature
of
or in lieu of any of the foregoing and other than, in the case of clause
(ii),
any doing business taxes imposed by a taxing authority in any jurisdiction
(other than the jurisdiction within which such Tax Indemnitee is incorporated
or
maintains its principal place of business) if such doing business taxes
attributable to the transactions contemplated by the Operative Agreements
were
subject to indemnity pursuant to the provisions of this clause 9.3.2(a) (without
regard to this parenthetical) solely as a result of the usage or location
of the
Aircraft in such jurisdiction by a Lessee Person when such Tax Indemnitee
was
not incorporated or doing business or otherwise subject to Taxes of such
type in
such jurisdiction, if in a subsequent taxable period such Indemnitee becomes
subject to Taxes of such type as a result of activities or transactions other
than those contemplated by the Operative Agreements, to the extent that such
taxes (and in an amount no more than the amount of such Taxes that) would
have
continued to be imposed solely as a result of the usage or location of the
Aircraft by a Lessee Person in such jurisdiction in the absence of any
additional nexus between such Tax Indemnitee and such
jurisdiction);
(b) imposed
as a result of the replacement of the existing financing agreements with
the
Operative Agreements and the Express Sublease or the issuance of the Equipment
Notes;
(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, for so long as such
contest
is continuing;
(f) imposed
on any Tax Indemnitee to the extent that such Taxes result from the gross
negligence or willful misconduct of such Tax Indemnitee, a related 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 (unless requested
by the
Lessee), 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 Mortgagee 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) except
with respect to gross-ups, imposed subsequent to (and not in respect of)
a
transfer or other disposition described in paragraph (g) above and not described
in the last parenthetical of such paragraph (g) and 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 events
occurring prior to such expiration or earlier termination);
(k) consisting
of any interest, penalties or additions to tax imposed on a Tax Indemnitee
resulting from a 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, provided
that if
any such return is required to be filed in a jurisdiction outside the United
States, which return would not have been required to be filed in the absence
of
the transactions contemplated under the Operative Agreements or Lessee’s
transactions or activities in such jurisdiction, this exclusion shall not
apply
if (A) Lessee has not informed the Tax Indemnitee in writing of the need
to file
such return at least 30 days prior to the due date thereof (or such shorter
period as would reasonably allow the Tax Indemnitee to file such return if,
under the circumstances, the Lessee could not have reasonably informed the
Tax
Indemnitee of the need to file at least 30 days prior to the due date thereof),
or (B) the Tax Indemnitee had determined in good faith that such filing would
subject it or any Affiliate to adverse consequences in such jurisdiction
for
which it had not been (and would not have been) indemnified;
(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
are
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 within which such Tax Indemnitee is incorporated or maintains its
principal place of business or 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. The loss, disallowance or recapture
of
such tax benefits taken into account by such Tax Indemnitee shall be treated
as
a Tax subject to indemnity under this Section 9.3.1 without regard to the
provisions of Section 9.3.2 (other than Section 9.3.2(f)).
(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 (computed using a discount rate equal to the Debt Rate,
compounded monthly) 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 two Business Days 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 (by law or by Lessee hereunder), (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
(within 30 days after the realization of such tax savings) 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
(other than in respect of contest costs) 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.
(f) For
purposes of this Section 9.3, items of foreign Tax of any Tax Indemnitee
shall
be deemed to be utilized by such Tax Indemnitee as credits or deductions
for any
taxable year in accordance with the following priorities:
(x) First,
all utilizable foreign Taxes (taking into account the limitations of Section
904(d) of the Code) other than those described in clause (y) below;
(y) Second,
all utilizable foreign Taxes (taking into account the limitations of Section
904(d) of the Code) arising out of the transactions contemplated by the
Operative Agreements and other equipment leasing transactions to the extent
such
Tax Indemnitee is indemnified or held harmless for such Taxes by the Lessee
or a
lessee on a pari passu basis.
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 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 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, in its good
faith opinion, 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 to be contested by the
Lessee
in its own name, 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 contest such matter in its own name, if permitted by applicable
law, and shall provide to Lessee (at Lessee’s cost and expense) such information
or data that is in such Tax Indemnitee’s control or possession that is
reasonably necessary to conduct such contest (other than such Tax Indemnitee’s
federal income tax returns), and Lessee shall keep such Tax Indemnitee
reasonably informed concerning the progress of such contest and shall provide
such
Tax
Indemnitee with copies of all submissions and judicial and administrative
proceedings. 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 and 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
and the
Owner Participant in a manner reasonably satisfactory to such Tax Indemnitee
and
the Owner Participant) (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 adequate 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 (other then contest costs),
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
(other
than contest costs) 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.
If
any such refund or credit or any interest thereon for which a Tax Indemnitee
shall have paid Lessee is later recaptured, denied, disallowed or reduced,
such
recapture, denial, disallowance or reduction 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)).
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 which a 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, or if the same is required by law to be filed
in
the Tax Indemnitee’s own name, it shall notify such Tax Indemnitee in writing 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 Mortgagee or
to such
other person as Lessee or Mortgagee may designate, at Lessee’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, (y) Lessee has provided such Tax Indemnitee
with any information necessary to complete such form not otherwise reasonably
available to such Tax Indemnitee, and (z) if such return is required to be
filed
in a jurisdiction outside the United States, the Tax Indemnitee has not made
a
good faith determination that such filing would subject it or any Affiliate
to
any adverse consequences in such jurisdiction for which it has not been (and
would not have been) indemnified.
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 (other than any activities of the Owner Participant
resulting from its participation in the transactions contemplated by the
Operative Agreements or resulting from any activities of Lessee in such
jurisdiction) 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 Pass Through Trustee, Pass Through
Trust, or any Note Holder, then Owner Participant shall reimburse Lessee
for any
payments Lessee is required to make to or on behalf of Pass Through Trustee,
Pass Through Trust, or any 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, Pass
Through Trust or Note Holder.
9.4
Payments
Any
payments made pursuant to Section 9.1 and Section 9.3 shall be due on the
60th day after demand is made to the indemnifying party therefor (other than
any
payments for which a different time is provided under Section 9.3.3 hereof)
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) 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 this
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 the Lease and the other Lessee Operative
Agreements insofar as they relate to the rights and obligations of Lessee
or the
Loan Participants 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 (which, if the Transferee
is an
Affiliate of the Owner Participant, may be in-house counsel to such Owner
Participant) 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 applicable securities laws, the Act or any other applicable
Law
and is in accordance with this Section 10.1.1;
(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 would 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 or any
other provision that would restrict Lessee’s use or operation of the
Aircraft);
(vi) The
Transferee shall be one 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; and
(vii) The
Transferee shall be a “U.S. Person” as defined in Section 7701(a)(30) of the
Code (or any successor provision thereto).
(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 the 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 neither Lessee, Lessor,
nor Owner Participant shall 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. [RESERVED]
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.
Lessee shall at all times be certificated and registered to the extent necessary
to entitle
Owner
Trustee to the rights afforded to lessors of aircraft equipment under
Section 1110 of the Bankruptcy Code.
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, Wells Fargo and WTC 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
Wells Fargo 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 Wells Fargo (a) to Owner Participant as expressly set
forth in the Trust Agreement, (b) in respect of the representations, warranties
and agreements of Wells Fargo 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
PAGE
63
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) TO
THE EXTENT THAT ANY PARTY HERETO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM
JURISDICTION OF ANY OF THE ABOVE-NAMED COURTS OR FROM ANY LEGAL PROCESS THEREIN,
SUCH PARTY HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED
BY
APPLICABLE
LAW, SUCH IMMUNITY, AND 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, (i) THE DEFENSE OF SOVEREIGN IMMUNITY,
(ii) THAT IT OR ANY OF ITS PROPERTY IS IMMUNE FROM THE ABOVE DESCRIBED
LEGAL PROCESS AND (iii) 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 each Indemnitee, which is an intended third party beneficiary
with respect to the provisions of Section 9.1 as provided in Section 9.1.3,
and the other persons referred to in Section 7.6.13, who are intended third
party beneficiaries of such Section) with any rights of any nature whatsoever
against any of the parties hereto and no person not a party hereto (other
than
each Indemnitee, with respect to the provisions of Section 9.1 as provided
in Section 9.1.3, and the other persons referred to in Section 7.6.13, with
respect to 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.
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
(except
that the Indemnity Agreement shall not be superseded).
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
Lessee
By
__________________________________
Name:
Title:
[OP],
Owner
Participant
By
__________________________________
Name:
Title:
WELLS
FARGO BANK NORTHWEST,
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,
2005-ERJ1
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,
2005-ERJ1
By
__________________________________
Name:
Title:
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity, except as expressly
provided
herein, but solely as Subordination
Agent
By
__________________________________
Name:
Title:
EMBRAER-EMPRESA
BRASILEIRA DE
AERONÁ;UTICA
S.A.,
Airframe
Manufacturer
By
__________________________________
Name:
Title:
FINAL
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;
(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 Lease
Default or Lease Event of Default referred to in Section 14.5 of
the Lease 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, Bankruptcy
Default or
Lease Default having occurred and be continuing if a Section 1110
Event shall
have occurred and is then continuing.
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
(in the
case of Owner Trustee) or the Corporate Trust Office (in the case
of Mortgagee)
and (b) as it applies to Owner Participant, Airframe Manufacturer
or Lessee,
actual knowledge of a Vice President or more senior officer of Owner
Participant, Airframe Manufacturer or Lessee, respectively, or any
other officer
of Owner Participant, Airframe Manufacturer or Lessee, respectively,
having
responsibility for the transactions contemplated by the Operative
Agreements;
provided
that
each of Lessee, Owner Participant, Owner Trustee, Mortgagee and Airframe
Manufacturer 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.
“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
Seller 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
Embraer-Empresa Brasileira de Aeronáutica S.A., a Brazilian
corporation.
“Airframe
Manufacturer Agreements”
means,
collectively, the Participation Agreement, [the OP Guaranty,]1
the
Purchase Agreement and the Consent and Agreement.
“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 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
________________________
1. Delete
if
OP is not an Affiliate of Airframe Manufacturer.
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. § 101 et seq.
“Bankruptcy
Default”
means
a
Lease Event of Default under Section 14.5 of the Lease.
“Base
Lease Term”
means
the period beginning on and including the Closing 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 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.
“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, 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 Rating Services or Moody’s Investors Service,
Inc. equal to A1 or higher.
“Change
in Tax Law”
means
any change or proposed change in the Code or the regulations promulgated
thereunder or any change in the interpretation of the Code or such
regulations
in a decision by the United States Supreme Court, the United States
Tax Court,
the United States Claims Court or any of the United States Courts of
Appeal or
District Courts, or any issuance of an Internal Revenue Ruling, Revenue
Procedure or administrative pronouncement by the Internal Revenue Service
or the
Department of the Treasury.
“Citizen
of the United States”
is
defined in Section 40102(a)(15) of the Act and in the FAA
Regulations.
“Closing”
means
the occurrence of the following concurrent events: (i) execution, authentication
and delivery of the Equipment Notes in accordance with the Participation
Agreement; (ii) [payment of the Commitments of the Loan Participants
to Owner
Trustee]2
[purchase of the Aircraft by the Owner Trustee]3;
(iii) lease of the Aircraft by Owner Trustee to Lessee pursuant to the
Lease; and (iv) completion of the other events contemplated by the
Participation
Agreement to occur at the Closing.
“Closing
Date”
means
the Business Day specified in Lease Supplement No. 1 as the Closing Date,
which shall be 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.
“Commitment”
means,
for any [Loan]4
Participant, the amount of its commitment set forth in Schedule 2 to
the
Participation Agreement.
“Commitment
Termination Date”
is
defined in Schedule 3 to the Participation Agreement.
“Consent
and Agreement”
means
the Manufacturer Consent and Agreement [TN], 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
________________________
2. Delete
for New Aircraft.
3. Insert
for New Aircraft.
4. Delete
for New Aircraft.
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.
§ 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
the rate per annum specified under the heading “Interest Rate” in
Schedule I to the Trust Indenture.
“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
Closing Date”
means
a
delayed Closing Date notified to Lessee, each Participant, Owner Trustee
and
Mortgagee by Airframe Manufacturer pursuant to Section 4.3 of the
Participation Agreement, which delayed Closing Date shall be a Business
Day not
later than the Commitment Termination Date.
“Delivery
Date”
means
the date on which the Aircraft was leased to Lessee by Lessor, as lessor,
under
the [Existing]5
Lease.
“Deposit
Agreement”
means
the Deposit Agreement between the Depositary and the Escrow Agent,
dated as of
the Issuance Date, which relates to the Pass Through Trust, provided
that,
for purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, such Deposit Agreement
shall
be effective unless consented to by Lessee.
“Depositary”
means
Citibank, N.A., as Depositary under the 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.
________________________
5. Delete
for New Aircraft.
“Eligible
Account”
means
an account established by and with an Eligible Institution at the request
of the
Mortgagee, which institution agrees, for all purposes of the UCC including
Article 8 thereof, that (a) such account shall be a “securities account” (as
defined in Section 8-501 of the UCC), (b) all property (other than
cash)
credited to such account shall be treated as a “financial asset” (as defined in
Section 8-102(9) of the UCC), (c) the Mortgagee shall be the “entitlement
holder” (as defined in Section 8-102(7) of the UCC) in respect of such account,
(d) it will comply with all entitlement orders issued by the Mortgagee
to the
exclusion of the Lessee and the Owner Trustee, and (e) the “securities
intermediary jurisdiction” (under Section 8-110(e) of the UCC) shall be the
State of New York.
“Eligible
Institution”
means
the corporate trust department of (a) Wilmington Trust Company, acting
solely in
its capacity as a “securities intermediary” (as defined in Section 8-102(14) of
the UCC), 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 Moody’s and Standard & Poor’s of at least A-3 or its
equivalent.
“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 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
Manufacturer”
means
Rolls-Royce Company, formerly known as Allison Engine Company, Inc.,
a Delaware
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.
“Equity
Advisor”
has
the
meaning provided in Schedule 3 to the Participation Agreement.
“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
Wells Fargo Bank Northwest, National Association, as Escrow Agent under
the
Escrow Agreement.
“Escrow
Agreement”
means
the Escrow and Paying Agent Agreement, among the Escrow Agent, the
Paying Agent,
certain initial purchasers of the Pass Through Certificates named therein
and
the Pass Through Trustee, dated as of the Issuance Date, which relates
to the
Pass Through Trust, provided
that,
for purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, 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 or, if earlier, the end of the
Term;
|
|
(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 the
U.S. Government)
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 the U.S. Government that continues until 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 720 days, provided that no Event of Loss shall
be deemed to have
occurred if such prohibition has been applicable to Lessee’s (or a
Permitted Sublessee’s) entire
|
U.S.
fleet of such property and Lessee (or a Permitted Sublessee), prior
to the
expiration of such 720-day 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
such property 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
amount payable to the Owner Participant by any transferee as the purchase
price
of the Owner Participant’s interest in the Trust Estate, (vi) 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 (v) above, (vii)
proceeds of any right to enforce the payment of any amount described
in clauses
(i) through (vi) above (provided, that
the
rights referred to in this clause (vii) 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 (viii) 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.
[“Existing
Lease”
has
the
meaning provided in Schedule 3 to the Participation Agreement.]6
[“Existing
Participation Agreement”
has
the
meaning provided in Schedule 3 to the Participation Agreement.]7
________________________
6. Delete
for New Aircraft.
7. Delete
for New Aircraft.
[“Existing
Sublease”
means
the Aircraft Sublease Agreement, dated the date of the Existing Participation
Agreement, between Lessee and Express relating to the Aircraft.]8
“Expense
Limit”
has
the
meaning provided in Schedule 3 to the Participation Agreement.
“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).
“Express”
means
ExpressJet Airlines, Inc., a Delaware corporation.
“Express
Sublease”
means
the Permitted Sublease, dated as of the date of the Participation Agreement,
between Lessee and Express relating to the Aircraft.
“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
Seller.
“FAA
Filed Documents”
means
the Lease, Lease Supplement No. 1, the Express Sublease, the Trust
Indenture, the Trust Agreement, the initial Trust Indenture Supplement,
the FAA
Bill of Sale, [the Termination Agreements]9
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 monthly,
and (c) the
Aircraft would be leased during any such Renewal Term on the same terms
and
conditions as are set forth in the Lease with respect to the Base Lease
Term.
________________________
8. Delete
for New Aircraft.
9. Delete
for New Aircraft.
“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 (except as otherwise provided in Section
15.4 of
the Lease) 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, [(a)]10 UCC-1
financing statements (i) 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 (ii) 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
Delaware and each other jurisdiction that, in the opinion of Owner
Trustee and
Mortgagee, is reasonably desirable [and (b) UCC-3 financing statements
evidencing the termination of the Existing Lease and the Existing Sublease,
for
filing in Delaware and each other jurisdiction that, in the opinion
of Owner
Trustee and Mortgagee, is reasonably desirable].11
“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) Wells Fargo 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)
________________________
10. Delete
for New Aircraft.
11. Delete
for New Aircraft.
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.
“Indemnity
Agreement”
means
the agreement, dated as of September 14, 2005, between Lessee and Airframe
Manufacturer, which states that it is the Indemnity Agreement for purposes
of
the Pass Through Certificates.
“Indenture
Agreements”
means
the Participation Agreement, the Lease, the Purchase Agreement, the
Purchase
Agreement Assignment, the 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)
the Liquidity Provider, (v) the 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.
[“Initial
Purchase Agreement Assignment”
means
the Purchase Agreement Assignment [TN], dated as of even date with
the
Participation Agreement, between Express and Seller.]12
“Intercreditor
Agreement”
means
that certain Intercreditor Agreement among the Pass Through Trustee,
the
Liquidity Provider 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.
“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
September 22, 2005.
________________________
12. Insert
for New Aircraft.
“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 [TN], 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 Closing Date.
“Lessee”
means
Continental Airlines, Inc., a Delaware corporation.
“Lessee
Operative Agreements”
means
the Participation Agreement, the Lease, Lease Supplement No. 1, the
Express
Sublease[, the Termination Agreement with respect to the Existing
Sublease]13
and the
Tax Indemnity Agreement.
“Lessee
Person”
means
Lessee, any sublessee, assignee, successor or other user or person
in possession
of the Aircraft, Airframe or an Engine during the Term 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).
“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
________________________
13. Delete
for New Aircraft.
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 amount paid by Owner Trustee to Airframe Manufacturer to purchase
the
Aircraft pursuant to the Purchase 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
Facility”
means
the Revolving Credit Agreement between the Subordination Agent, as
borrower, and
the Liquidity Provider, dated as of the Issuance Date, provided
that,
for the purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, such Liquidity Facility
shall
be effective unless consented to by Lessee.
“Liquidity
Provider”
means
Landesbank Baden-Württemburg, as Liquidity Provider under the Liquidity
Facility, or any successor thereto.
“Loan
Participant”
means,
until the Closing shall have been consummated, the Pass Through Trustee,
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
monthly 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 sum of (i) 50 basis
points and (ii) 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 monthly 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, or affect the validity or enforceability of the Operative
Agreements.
“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
any Trust
Indenture Supplement.
“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)(2)(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 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 Stipulated Loss Value percentages
and
Termination Value percentages, as of the Closing Date.
“Net
Worth”
means,
for any person, the excess of its total assets over its total liabilities
in
accordance with GAAP.
“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 the Pass Through Trust Agreement providing
for,
among other things, the issuance and sale of certain equipment notes,
provided
that,
for purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, such Agreement shall
be
effective unless consented to by Lessee.
“Obsolete
Part”
is
defined in Section D of Annex C to the Lease.
“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 Lease, Lease Supplement
No. 1, the Trust Indenture, the initial Trust Indenture Supplement, the
Bills of Sale, the Tax Indemnity Agreement[, the Termination
Agreements]14
and the
Equipment Notes.
“Operative
Indentures”
means
each of the indentures under which notes have been issued and purchased
by the
Pass Through Trustee.
[“OP
Guarantor”
means
the Airframe Manufacturer.]15
________________________
14. Delete
for New Aircraft.
15. Insert
if
OP is an Affiliate of Airframe Manufacturer.
[“OP
Guaranty”
means
the Guaranty, dated as of the date of the Participation Agreement,
providing,
among other things, for the guaranty by the OP Guarantor of Owner Participant’s
obligations under the Operative Agreements.]16
“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
and the
Trust Agreement.
“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
Wells Fargo Bank Northwest, 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 and the Purchase Agreement
Assignment.
“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 [TN] dated as of [DD] among Lessee, Owner
Participant, Owner Trustee, the Pass Through Trustee, Subordination
Agent,
Mortgagee and Airframe Manufacturer.
“Parts”
means
all appliances, parts, components, avionics, landing gear, 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.
________________________
16. Insert
if
OP is an Affiliate of Airframe Manufacturer.
“Pass
Through Agreements”
means
the Pass Through Trust Agreement, the Note Purchase Agreement, the
Deposit
Agreement, the Escrow Agreement, the Intercreditor Agreement, the Liquidity
Facility and the Fee Letter (as defined in the Intercreditor Agreement),
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 Trust (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
Provider and the Pass Through Trustee, (ii) each Affiliate of a person
described
in the preceding clause (i), (iii) the respective directors, trustees,
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
the pass through trust created under the Pass Through Trust
Agreement.
“Pass
Through Trust Agreement”
means
the Trust Supplement, dated as of the Issuance Date, by and between
the Lessee
and Pass Through Trustee, together with the Basic Pass Through Trust
Agreement.
“Pass
Through Trustee”
means
Wilmington Trust Company, a Delaware banking corporation, in its capacity
as
trustee under the Pass Through Trust Agreement.
“Pass
Through Trustee Agreements”
means
the Participation Agreement, the Pass Through Trust Agreement, the
Note Purchase
Agreement, the Deposit Agreement, the Escrow Agreement and the Intercreditor
Agreement.
“Paying
Agent”
means
Wilmington Trust Company, as Paying Agent under the Escrow
Agreement.
“Payment
Date”
means
the first day of each month during the Term, commencing with
[____________________].
“Payment
Default”
means
the failure by Lessee to pay any amount of Basic Rent, Renewal Rent,
Stipulated
Loss Value or Termination Value when due.
“Payment
Due Rate”
is
defined in Schedule 1 to the Lease.
“Payment
Period”
means
each of the consecutive monthly periods during the Term ending on a
Payment
Date, the first such period commencing on and including the Closing
Date and
being other than monthly.
“Permitted
Air Carrier”
means
(i) any Permitted Foreign Air Carrier, (ii) any person approved in
writing by
Lessor or (iii) 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
any bank, trust company, insurance company, financial institution,
partnership,
limited liability company 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 $25,000,000.
“Permitted
Lien”
means
any Lien described in clauses (a) through (f), inclusive, of Section 6
of the Lease.
“Permitted
Sublease”
means
a
sublease or sub-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, limited liability
companies, 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
October 22, 2014.
“PTT
Percentage”
means,
with respect to the 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 GPJ-003/96 between Airframe Manufacturer and
Express
(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 [Amended and Restated]17
Purchase
Agreement Assignment [TN], dated as of even date with the Participation
Agreement, among Seller [, Express]18
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.
“Removable
Parts”
is
defined in Section D of Annex C to the Lease.
“Renewal
Lease Term”
means
each two year term for which the Lease is extended by Lessee, if any,
pursuant
to the first or second such extensions in accordance with Section 17
of the
Lease.
“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, 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
Closing Date”
means
the expected Closing Date notified to Lessee, each Participant, Owner
Trustee
and Mortgagee by Airframe Manufacturer pursuant to Section 4.1 of the
Participation Agreement, which expected Closing Date shall be a Business
Day not
later than the Commitment Termination Date.
“Scheduled
Expiration Date”
is
defined in Schedule 1 to the Lease.
________________________
17. Delete
for New Aircraft.
18. Delete
for New Aircraft.
“Scheduled
Renewal Term Expiration Date”
means,
in the case of the first Renewal Lease Term, the second anniversary
of the
Scheduled Expiration Date, and in the case of the second Renewal Lease
Term, the
fourth anniversary of the Scheduled Expiration Date.
“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. § 1110 of the Bankruptcy Code or any successor or analogous
section of the federal bankruptcy Law in effect from time to time.
“Section
1110 Event”
means
the institution of reorganization proceedings with respect to Lessee
under
Chapter 11 of the Bankruptcy Code and thereafter so long as the Section
1110
Period continues.
“Section
1110 Period”
means
the continuous period of 60 days specified in Section 1110(a)(2)(A)
of the
Bankruptcy Code (or such longer period, if any, agreed to under Section
1110(b)
of the Bankruptcy Code), plus an additional period, if any, commencing
with the
trustee or debtor-in-possession in such proceeding agreeing to perform
its
obligations under the Lease with the approval of the applicable court
and
continuing until such time as such trustee or debtor-in-possession
ceases to
fully perform its obligations thereunder with the result that the period
during
which the Owner Trustee is prohibited from repossessing the Aircraft
under the
Lease comes to an end.
“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.
“Seller”
is
defined in Schedule 3 to the Participation Agreement.
“Similar
Aircraft”
is
defined in Schedule 1 to the Lease.
“SLV
Rate”
is
defined in Schedule 1 to the Lease.
“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 3.2.3 of the Lease) opposite the Stipulated Loss Value Date by
(ii) Lessor’s Cost, (b) during any Renewal Lease Term, the amount
determined pursuant to Section 17.2.3 of the Lease and (c) during any
extension of the Term pursuant to the proviso to the definition of
“Term”, the
Stipulated Loss Value immediately prior to the commencement of such
extension.
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 Facility and the Intercreditor
Agreement.
“Supplemental
Rent”
means,
without duplication (a) all amounts, liabilities, indemnities and obligations
(other than 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
Liquidity Provider under Section 2.03 of the 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 Equipment Notes and the denominator of which shall be the then
outstanding aggregate principal amount of all “Equipment Notes” (as defined in
the Intercreditor Agreement); (ii) (x) the amount equal to interest on any
Downgrade Advance (other than any Applied Downgrade Advance) payable
under
Section 3.07 of the 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 Special Termination
Advance (other than any Applied Special Termination Advance) payable
under
Section 3.07 of the Liquidity Facility minus Investment Earnings from
such
Special Termination Advance multiplied by (y) the fraction specified in the
forgoing clause (i); (iv) (x) the amount equal to interest on any Early
Termination Advance (other than any Applied Early Termination Advance)
payable
under Section 3.07 of the Liquidity Facility minus Investment Earnings
from such
Early Termination Advance multiplied by (y) the fraction specified
in the
foregoing clause (i); (v) if any payment default shall have occurred
and be
continuing with respect to interest on any Equipment Notes, (x) the excess,
if any, of (1) an amount equal to interest on any Unpaid Advance, Applied
Downgrade Advance, Applied Special Termination Advance or Applied Early
Termination Advance payable under Section 3.07 of the 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 Trustee on the overdue scheduled interest on the Equipment
Notes
in respect of which such Unpaid Advance, Applied Downgrade Advance,
Applied
Special Termination Advance or Applied Early Termination Advance was
made
multiplied by (y) a fraction the numerator of which shall be the then
aggregate
overdue amounts of interest on the 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 “Equipment Notes” (as defined in the Intercreditor Agreement)
(other than interest becoming due and payable solely as a result of
acceleration
of any such “Equipment Notes”); and
(vi) Lessee’s
pro rata share of any other amounts owed to the Liquidity Provider
by the
Subordination Agent as borrower under the 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 (i), (ii), (iii), (iv) or
(v) above),
in each case, to the extent not paid when due by the Airframe Manufacturer
pursuant to the Fee Letter (as defined in the Intercreditor Agreement),
(c) Lessee’s pro rata share of all compensation and reimbursement of
expenses, disbursements and advances payable by Lessee under the Pass
Through
Trust Agreement, (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 of 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 Trustee under the Escrow Agreement. 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, (i) the terms “Applied Downgrade Advance”, “Applied
Early Termination Advance”, “Applied Special Termination Advance”, “Downgrade
Advance”, “Early Termination Advance”, “Final Advance”, “Investment Earnings”,
“Special Termination Advance” and “Unpaid Advance” shall have the meanings
specified in the Liquidity Facility.
“Tax
Attribute Period”
is
defined in Section 1(e) of the Tax Indemnity Agreement.
“Tax
Indemnitee”
means
(a) Wells Fargo 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 [TN], 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 Closing Date, for which the Aircraft is
leased
pursuant to Section 3 of the Lease, and shall include 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 rate equal to 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
Agreements”
means,
collectively, the termination agreement with respect to the Existing
Lease and
the termination agreement with respect to the Existing Sublease, in
each case
delivered pursuant to Section 5.1.2(xiv) of the Participation
Agreement.]19
“Termination
Date”
means
any Payment 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 3.2.3 of the Lease) opposite the applicable
Payment 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.
“Threshold
Amount”
is
defined in Schedule 1 to the Lease.
“Transactions”
means
the transactions contemplated by the Participation Agreement and the
other
Operative Agreements to occur on the Closing Date.
________________________
19. Delete
for New Aircraft.
“Transaction
Expenses” means
(a) all costs and expenses incurred by Owner Participant, the Pass Through
Trustee, the Subordination Agent, Owner Trustee and Mortgagee in connection
with
the preparation, execution and delivery of the Operative Agreements
(including,
without limitation, the reasonable fees and expenses of counsel for
such
parties), (b) all costs and expenses for 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, (c) the OP Pro Rata Share of (i) the placement
fees and expenses attributable to the offering and sale of the Pass
Through
Certificates and (ii) all costs and expenses incurred by the Pass Through
Trustee, the Subordination Agent, Owner Trustee and Mortgagee in connection
with
the preparation, execution and delivery of the Pass Through Agreements
(including, without limitation, the reasonable fees and expenses of
counsel for
such parties), (d) the reasonable fees and disbursements of special
counsel in
Oklahoma City, Oklahoma, in connection with the Closing, and (e) all
initial and ongoing fees, disbursements and expenses of Owner Trustee
and
Mortgagee. For purposes of the foregoing, “OP
Pro
Rata Share”
shall
mean a fraction, the numerator of which shall be one and the denominator
of
which shall be the number of aircraft financed under the Note Purchase
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 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 [Amended and Restated]20
Trust
Agreement [TN], 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 (other than insurance proceeds payable
to or for
the benefit of Owner Participant, Note Holders or WTC) and requisition,
indemnity or other payments of any kind for or with respect to the
Aircraft
(except amounts owing to Owner Participant, Note Holders or WTC, or
to any of
their respective directors, officers, employees, servants and agents,
pursuant
to Section 9 of the Participation Agreement). Notwithstanding the
foregoing, “Trust Estate” shall not include any Excluded Payment.
________________________
20. Delete
for New Aircraft.
“Trust
Indenture”
means
the Trust Indenture and Mortgage [TN], 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 [TN] 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, (ii) the issuance of the Pass Through Certificates
representing fractional undivided interests in such trust is authorized
and
(iii) the terms of the Pass Through Certificates 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 Person 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.
“Wells
Fargo”
means
Wells Fargo Bank Northwest, National Association, a national banking
association, not in its capacity as Owner Trustee under the Trust Agreement,
but
in its individual capacity.
“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.
|
TO
Participation
Agreement [TN]
|
ACCOUNTS;
ADDRESSES
|
Account
for Payments
|
Address
for Notices
|
||||
|
Continental
Airlines, Inc.
|
JPMorgan
Chase
New
York, New York 10081
Account
No.: 910-2-499291
ABA#:
021-000021
Attention:
Darlene Cafferata
Voice:
312-807-4084
Facsimile:
312-807-4501
Reference:
Continental
Lease [TN]
|
Continental
Airlines, Inc.
1600
Smith Street
Dept.
HQS-FN
Houston,
Texas 77002
Attention: Treasurer
Facsimile:
(713) 324-2447
|
|||
|
Owner
Participant
|
[Banco
do Brasil S.A.
New
York Branch
ABA#
026003557
Account
No.: 75592-011
Reference:
Continental Lease [TN]]
|
[Refine,
Inc.
c/o
CT Corporation
1209
Orange St.
Wilmington,
DE 19801
Facsimile:
202-298-7570]
|
|||
|
Wells
Fargo Bank Northwest, National Association
|
Wells
Fargo Bank Northwest,
National
Association
ABA:
121000248
Cr:
Corporate Trust Services
A/C:
051-09221-15
Ref:
Continental Lease [TN]
|
Wells
Fargo Bank Northwest,
National
Association
MAC:
U1228-120
299
South Main Street, 12th Floor
Salt
Lake City, Utah 84111
Attention:
Corporate Trust Services
Facsimi le:
(801)
246-5053
|
|||
|
Wilmington
Trust Company, as Mortgagee
|
Wilmington
Trust Company
Wilmington,
Delaware 19890
Account
No.: [AC]
ABA
#: 031-100092
Attention:
Corporate Capital Market
Services/Monica M. Henry
Reference:
Continental
Lease [TN]
|
Wilmington
Trust Company
Rodney
Square North
1100
North Market Street
Wilmington,
Delaware 19890
Attention:
Corporate Trust
Administration
Facsimile:
(302) 636-4141
|
|||
|
Wilmington
Trust Company, as Subordination Agent
|
Wilmington
Trust Company
Wilmington,
Delaware 19890
Account
No.: 64060-0
ABA
#: 031-100092
Attention:
Corporate Capital Market
Services/Monica M. Henry
Reference:
Continental
Lease [TN]
|
Wilmington
Trust Company
Rodney
Square North
1100
North Market Street
Wilmington,
Delaware 19890
Attention:
Corporate Trust
Administration
Facsimile:
(302) 636-4141
|
|||
PAGE
1
|
Wilmington
Trust
Company,
as Pass
Through
Trustee
for
the 2005-ERJ1
Pass
Through
Trust
|
Wilmington
Trust Company
Wilmington,
Delaware 19890
Account
No.: 64021-0
ABA
#: 031-100092
Attention:
Corporate Capital Market
Services/Monica M. Henry
Reference:
Continental
Lease [TN]
|
Wilmington
Trust Company
Rodney
Square North
1100
North Market Street
Wilmington,
Delaware 19890
Attention:
Corporate Trust
Administration
Facsimile:
(302) 636-4141
|
||
|
EMBRAER-
Empresa
Brasileira
de
Aeroná;utica S.A.
|
Banco
do Brasil S.A.
Av.
Nelson D’Avila, 149
12245-030,
São José dos
Campos-SP
Brazil
Swift
Code: BRASBRRJSJC
Account
No.: 9405-6
Reference:
COEX Lease [TN]
|
EMBRAER-Empresa
Brasileira de Aeronáutica S.A.
Av.
Brigadeiro Faria Lima, 2170
12227-901
São José dos Campos-SP
Brazil
Attention:
General Counsel
Facsimile:
(55-123) 927-1257
|
||
|
TO
Participation
Agreement [TN]
|
|
Participant
|
Percentage
of Lessor’s
Cost
|
Dollar
Amount
|
|
Pass
Through Trustee
|
Loan
Participant’s
PTT
Percentage
|
|
|
2005-ERJ1
|
[PTT]%
|
$[DA]
|
|
Owner
Participant
|
Owner
Participant’s Percentage
|
|
|
[OPP]%
|
$[OPDA]
|
|
|
Total
|
$[TDA]
|
|
TO
Participation
Agreement [TN]
|
|
Defined
Term
|
Definition
|
|
Commitment
Termination Date
|
[__________,
200_]
|
|
[Existing
Lease
|
Lease
Agreement-[TN], dated as of
[ELD],
between Lessor and Lessee]28
|
|
[Existing
Participation Agreement
|
Participation
Agreement-[TN], dated
as
of [EPD], among Lessee, Refine,
Inc.,
Owner Trustee, Express and
Airframe
Manufacturer]29
|
|
Equity
Advisor
|
[________]
|
|
Expense
Limit
|
$[___]
|
|
Lessor’s
Cost
|
$[LC]
|
|
OP
Jurisdiction
|
[Delaware]
|
|
Seller
|
PM
Limited, a Cayman Islands
company
|
|
Special
Counsel to the Owner Participant
|
[________]
|
28.
Delete for New Aircraft.
29.
Delete for New Aircraft.
PAGE
1
|
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 [TN]
Dated
as
of [DD]
Between
WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
Not
in
its Individual Capacity,
except
as
expressly provided herein,
but
solely as Owner Trustee,
Lessor
and
CONTINENTAL
AIRLINES, INC.,
Lessee
_______________________________________________________
One
Embraer Model EMB-145 XR Aircraft
Bearing
United States Registration No. N[REG] and
Bearing
Manufacturer’s Serial No. [MSN] with two
Allison
AE3007A1E Engines
Bearing
Engine Manufacturer’s Serial Nos. CAE[E1] and CAE[E2]
_____________________________________________________________
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 [TN], dated as of [DD], 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.
|
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1
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2
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16
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PAGE
i
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16
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31
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31
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31
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34
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34
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34
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35
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PAGE
ii
ANNEXES, EXHIBITS AND SCHEDULES
PAGE
iii
LEASE
AGREEMENT [TN]
LEASE
AGREEMENT [TN], dated as of [DD] (this “Agreement” or “Lease”), between (a)
WELLS FARGO BANK NORTHWEST, 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
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 Participation Agreement.
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.
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.
3.2.1 Basic
Rent
(a) During
the Base 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, Basic Rent in
the
amount specified in the column with the heading “Total Basic Rent” in
Schedule 2 for such Payment Date, which shall be rent paid in advance for
the Payment Period ending on the next Payment Date (except that the first
payment shall include rent in arrears since the Closing Date).
(b) 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
attributable to Lessor or Owner Participant, (ii) any modification of the
payment terms of the Equipment Notes, 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 whomever 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 whomever 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.
3.2.3 Adjustments
to Stipulated Loss Values and Termination Values
(a) In
the
event that Lessee is required to indemnify the Owner Participant under the
Tax
Indemnity Agreement, 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 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 Loss or Foreign
Tax Credit Loss) used to calculate the Stipulated Loss Value percentages and
the
Termination Value percentages on the Closing Date, in order to maintain the
Owner Participant’s Net Economic Return.
(b) All
adjustments pursuant to Section 3.2.3(a) 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 Stipulated Loss Value and
Termination Value shall be prepared by Owner Participant, subject to
verification at the request of Lessee in accordance with Section 3.2.3(c),
on
the basis of the same methodology and assumptions used by Owner Participant
in
determining the percentages of Stipulated Loss Value and Termination Value
as of
the Closing 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 required pursuant to Section 3.2.3(a) 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.
(c) If
Lessee
believes that any calculations by Owner Participant pursuant to
Section 3.2.3(b) 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 3.2.3(b) 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 absent manifest
error. Lessee will pay the reasonable costs and expenses of such further
verification by such accountants, provided that if it results in a decrease
in
the present value (discounted at the Debt Rate) of any Stipulated Loss Value
or
Termination Value by ten or more basis points from such Stipulated Loss Value
or
Termination Value as recalculated by the Owner Participant, then the Owner
Participant will pay such costs and expenses.
(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 Trust
Indenture has been discharged, and notwithstanding Section 3.3(a), Lessor
hereby irrevocably 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.
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.
|
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
any
of its subcontractors or suppliers, as the case may be, pursuant to and in
accordance with the terms of the Purchase Agreement Assignment.
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. The
foregoing, however, shall not be construed or deemed to modify or condition
in
any respect the obligations of the Lessee pursuant to Section 16, which
obligations are absolute and unconditional.
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.
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 but otherwise
on
an “as-is”, “where is” basis, (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 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.
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.
(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 and to enforce any of its other rights or remedies as provided
in this Lease.
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.
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 120 day period commencing upon expiration of such initial period,
at
such storage facility in the 48 contiguous states of the United States on
Lessee’s route system for Similar Aircraft as Lessor may select as the site for
such return of the Aircraft. 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.
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.
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 with respect to any Participant, Lessor or Mortgagee; (c) the
rights of others under agreements or arrangements to the extent permitted by
the
terms of Sections 7.2 and 7.3 or Annex C; (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 danger of the sale, forfeiture or loss of the Aircraft,
the
Airframe, any Engine or any Part thereof; (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 35 days or is being contested in good faith by appropriate
proceedings, so long as such Liens and such proceedings do not involve any
material danger of the sale, forfeiture or loss of the Aircraft, the Airframe,
any Engine or any Part thereof; and (f) Liens arising out of any judgment or
award against Lessee (or against any Permitted Sublessee), so long as such
judgment shall, within 30 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 30 days after the expiration of such
stay, and so long as during any such 30-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. Lessee shall promptly (and
in
any case, by the end of the Term), at its own expense, take (or cause to be
taken) such action as may be necessary to duly 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.
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 any and 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 that such perfection or priority cannot be
maintained 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 Closing, 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 Closing, 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 Lessee
or 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 that does not involve a material danger of the sale, forfeiture or loss
of the Aircraft, the Airframe, or any Engine, any risk of criminal liability
or
a greater than de minimis risk of material civil penalties being imposed against
Lessor, Mortgagee or any Participant or impair the Lien of the Trust
Indenture.
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.
Lessee
will not, without the prior written consent of Lessor and Owner Participant
(which consent shall not be unreasonably withheld), 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
So
long
as no Payment Default, Bankruptcy Default or Lease Event of Default shall
have
occurred and be continuing, 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 Payment Default,
Bankruptcy Default or Lease Event of Default has occurred and is continuing,
enter into a sublease with any Permitted Air Carrier, but only if:
(a) Lessee
shall provide written notice to Lessor of Lessee’s intent to enter into a
Permitted Sublease (except if the Permitted Sublessee is Express) and of
any
permitted sub-sublease, 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, 20 days in advance
of
entering into such sublease;
(b) At
the
time that Lessee enters into such Permitted Sublease or a sublessee enters
into
a permitted sub-sublease, such Permitted Sublessee shall not be subject to
any
bankruptcy, insolvency, liquidation, reorganization, dissolution or similar
proceeding, shall not be seeking any reorganization or any readjustment of
its
debts and shall not be, or shall not have substantially all of its property,
in
the possession of any liquidator, trustee, receiver or similar person and,
if
such Permitted Sublessee is a Permitted Foreign Air Carrier, the United States
then maintains normal diplomatic relations with the country in which such
Permitted Sublessee has its principal executive offices;
(c) Any
such
Permitted Sublease (including any permitted sub-sublease) (i) 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, (ii) shall provide that, except if Express
or any subsidiary of Lessee is the Permitted Sublessee, such Permitted Sublessee
may not further sublease or transfer its interests (except transfers of the
type
permitted in Sections 7.2.1 through 7.2.6, inclusive) in the Aircraft, Airframe
or Engines, (iii) shall not extend beyond the end of the Term and (iv) shall
be
expressly subject and subordinate to all the terms of this Agreement and to
the
rights, powers and remedies of Lessor hereunder;
(d) In
connection with a sublease (including any permitted sub-sublease) to a Permitted
Foreign Air Carrier, Lessee shall have furnished Lessor and Mortgagee an opinion
of counsel, reasonably satisfactory to Lessor and Mortgagee, 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), (v) the agreement of such Permitted Foreign Air
Carrier that its rights under the sublease are subject and subordinate to all
the terms of this Lease is enforceable against such Permitted Foreign Air
Carrier under applicable Law, and (vi) there is no tort liability of the owner
or Lessor of an aircraft not in possession thereof under the Laws of such
country (it being agreed that, in the event such latter opinion cannot be given
in a form satisfactory to the Owner Participant and Mortgagee, such opinion
shall be waived if insurance reasonably satisfactory to the Owner Participant
and Mortgagee is provided to cover such risk);
(e) No
such
sublease shall be made to a “tax exempt entity” as defined in
Section 168(h)(2) of the Code (including any 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, provided,
that
notwithstanding
the foregoing, such sublease may be made without requiring such prepayment
during the taxable year in which the seventh anniversary of the Closing Date
occurs so long as the Aircraft is not “used predominantly outside the United
States” within the meaning of Section 168(g) of the Code during such taxable
year;
(f) Lessee
shall furnish to Lessor and Mortgagee evidence reasonably satisfactory to Lessor
and Mortgagee that the insurance required by Section 11 remains in effect at
the
time such sublease (including any permitted sub-sublease) is entered
into;
(g) 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 perfected security interest (subject to Permitted Liens) of
Mortgagee, in the Aircraft, Airframe and Engines;
(h) Except
for the initial sublease to Express, Lessee shall reimburse Lessor and Mortgagee
for all of its reasonable out-of-pocket fees and expenses, including, without
limitation, reasonable fees and disbursements of counsel, incurred by Lessor
and
Mortgagee in connection with any such sublease; and
(i) 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.
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.
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.
8.2.1 Financial
Information
Lessee
will furnish to Lessor and Mortgagee:
(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) or an e-mail notice that such report has been filed
with
the SEC and providing a website address at which such report may be accessed
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) or an e-mail notice that such report has been filed
with
the SEC and providing a website address at which such report may be accessed
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 (which, in lieu of
delivery pursuant to Section 18.6, may be delivered by e-mail and, in such
case, need not include a manual signature of a required officer but instead
shall set forth a typed signature of such officer) 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 or if there is knowledge of a Lease Event of Default, the steps
that
are being taken with respect thereto.
8.2.3 Information
for Filings
Lessee
shall promptly furnish to Owner Participant, Mortgagee 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, to enable Mortgagee timely to file any reports
required to be filed by it as Mortgagee under the Trust Indenture or to enable
Owner Participant to timely file any reports required to be filed by it, as
the
beneficiary of the Trust Estate, in any such case, with any Government Entity
because of, or in connection with, the interest of Owner Participant, Mortgagee
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, Mortgagee 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, Mortgagee 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, Mortgagee or Lessor, and if
any
such waiver or consent is evidenced to the reasonable satisfaction of Owner
Participant, Mortgagee or Lessor, as the case may be, then Lessee shall not
be
required to furnish such information to Owner Participant, Mortgagee or
Lessor.
(a) Unless
a
Lease Event of Default, Payment Default or Bankruptcy Default shall have
occurred and be continuing, Lessee shall have the right at its option to
terminate this Lease during the Base Lease Term, effective only on a Termination
Date occurring after the end of the Tax Attribute Period, 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 later than 45 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.
9.2.1 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 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, but excluding
Basic Rent due on such Termination Date; 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 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,
(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,
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 20 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 three 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.
(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, but
excluding Basic Rent due on such Termination
date;
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 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, (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 reasonable out-of-pocket
fees and
expenses incurred by Lessor 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 ompliance 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 returned 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.
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 10 Business 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 Payment Default, a Bankruptcy Default or a Lease Event of
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
the
Stipulated Loss Value Date next following the earlier of (x) the 120th day
following the date of the occurrence of such Event of Loss, and (y) the
twentieth 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 Basic Rent or Renewal Rent, as the case may be, due at any
time
prior to such Stipulated Loss Value Date;
plus
|
|
(2)
|
the
Stipulated Loss Value of the Aircraft computed as of such Stipulated
Loss
Value Date; plus
|
|
(3)
|
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;
|
provided,
that if
such Stipulated Loss Value Date is a Payment Date, Lessee shall not be obligated
to pay the Basic Rent or Renewal Rent otherwise required to be paid on such
date; 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 Participants all
other
amounts due and payable by Lessee to Lessor, Mortgagee and the 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 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
Engine 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).
10.2.1 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 10 Business 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 90 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
Unless
a
Payment Default, Bankruptcy Default or Lease Event of Default shall have
occurred and be continuing, 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.
10.3.1 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 Mortgagee 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 Mortgagee and addressed to Lessor and Mortgagee as to the due registration
of any such Replacement Airframe, the ownership of title to such Replacement
Airframe by Owner Trustee and the absence of Liens of record with respect
to
such Replacement Airframe (other than Permitted Liens) 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 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 Lessee’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);
and
(g) furnish
a
certificate of a qualified aircraft engineer (who may be an employee of Lessee)
certifying that such Replacement Engine complies with the value, utility
and
remaining useful life requirements set forth in Section 10.2.2.
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.
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.
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.
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, unless Lessor shall have elected, upon notice
given not less than 30 days nor more than 120 days before the end of the Term,
not to treat such event as constituting an Event of Loss with respect to the
Aircraft, 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. If Lessor shall have elected not 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.
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.
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, 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 Trust Indenture has been duly discharged), and held as provided in Section
10.5.
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
Lease
Event of Default, Payment Default or Bankruptcy 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 Lease Event of Default,
Payment Default or Bankruptcy Default, such amount shall be paid to Lessee
to
the extent not previously applied in accordance with this
Section 10.9.
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.
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.
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 and 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 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.
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.
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 Lease
Event of 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 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 Lease Event of Default, such
amount shall be paid to Lessee to the extent not previously applied in
accordance with this Section 11.5.
(a) Lessor,
Mortgagee or their respective authorized representatives (the “Inspecting
Parties”) may, upon reasonable notice to Lessee, inspect the Aircraft, Airframe
and Engines (including, without limitation, the Aircraft Documents) and Lessee
shall cooperate, and shall cause any Permitted Sublessee to cooperate, with
the
Inspecting Parties in connection with any such inspection (including, without
limitation, permitting any such Inspecting Party to make copies of such Aircraft
Documents not reasonably deemed confidential by Lessee or such Permitted
Sublessee).
(b) Except
during the continuance of any Lease Event of Default while the Section 1110
Period shall not be in effect, 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, Airframe or Engines.
Any
inspection permitted hereunder, including any inspection conducted during the
continuance of a Lease Event of Default, shall be conducted in a manner which
does not interfere with Lessee’s or a Permitted Sublessee’s operation, use and
maintenance of such Aircraft, which determination of interference shall be
made
by Lessee in its reasonable sole discretion.
(c) With
respect to such rights of inspection, neither Lessor nor Mortgagee shall 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)); provided,
that if
a Lease Event of Default shall have occurred and be continuing, Lessee shall
bear all such reasonable expenses, except, in the case of a Chapter 11
reorganization, during the Section 1110 Period.
(e) If
requested by Lessor or Mortgagee, Lessee shall promptly advise, or shall cause
any Permitted Sublessee to advise, Lessor of the date upon which the Aircraft,
Airframe or any Engine undergoes its next scheduled maintenance visit or next
major check, and with respect to any Engine, the next off-the-wing maintenance,
and shall advise Lessor of the name and location of the relevant maintenance
performer. An Inspecting Party shall have the opportunity to attend such
scheduled maintenance visit or major check, subject to the other provisions
of
this Section 12.
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) or in the Trust Indenture, 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.
13.2.1 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 and Mortgagee, 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.
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 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.
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.
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:
Lessee
shall fail to pay any amount of Basic Rent, Renewal Rent, Stipulated Loss Value
or Termination Value within five (5) 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, Mortgagee or Owner Participant
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.
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.
Lessee
shall fail to observe or perform (or cause 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, Owner Participant 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 90 days after receipt of such notice.
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, Owner Participant or Mortgagee to Lessee (except
that this clause (c) shall be inapplicable in the case of Section 6.1.7 of
the
Participation Agreement).
(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.
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, and
Lessee expressly waives any right it may have to a hearing prior to repossession
of the Aircraft.
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
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 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, but excluding Basic
Rent or Renewal Rent due on such Stipulated Loss Value Date; plus
(b) 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) 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
Aircraft, Lessor, in lieu of exercising its rights under Section 15.1.3
with respect to the Aircraft, 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 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 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, but excluding Basic Rent or Renewal Rent due on such Stipulated Loss
Value
Date; 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 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 or to recover damages
for
the breach hereof, including without limitation Lessee’s agreement to lease the
Aircraft for the Term and to pay Rent.
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, 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 of Lessor 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.
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.
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, Mortgagee or Owner Participant to Lessee, Lessor 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.
For
the
purpose of this Section 15, the “Fair Market Sales Value” of the Aircraft
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 sale of the Aircraft. 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 Sales Value for purposes of
this Section 15 shall be zero.
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.
(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). Without limiting
the foregoing, nothing in this Section 16 shall be construed as a waiver by
Lessee, or otherwise limit Lessee in pursuing any claim by Lessee, of any breach
by
Lessor, Owner Participant or any other Person of any covenant or obligation
contained in any Operative Agreement.
(a) At
least
225 days but not more than 375 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.
17.2.1 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 on two occasions, in
each
case 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 180 days but not more than 375 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
Payment Default, Bankruptcy Default or 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
advance.
(b) The
Renewal Rent payable by Lessee on each Payment Date during any 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
10 Business Days after Lessee gives a Preliminary Notice 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,
but
shall be adjusted to credit Lessee for any Renewal Rent paid in advance
attributable to any subsequent period.
(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.
17.3.1 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 (i) the Purchase Price Cap (as defined in
Schedule 1 to the Lease) and (ii) 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 180 and not more than 375 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) No
Preliminary Notice or Purchase Notice shall be binding on Lessor or oblige
Lessor to sell the Aircraft hereunder if any Payment Default, Bankruptcy
Default
or Lease Event of Default shall have occurred and be continuing on and as
of
such Purchase Date.
(iii) Lessee
shall not be entitled to give any Purchase Notice in respect of any Purchase
Date if it has (x) not delivered a Preliminary Notice or (y) 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 10 Business
Days after Lessee gives a Preliminary Notice 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.
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 190 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.
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 with the written consent of the
Mortgagee if required by the Trust Indenture. 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.
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.
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 respect to matters expressly
for their benefit in this Lease) 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, with respect to matters expressly for their
benefit in this Lease) shall have any right, power or privilege in respect
of,
or have any benefit or interest arising out of, this Agreement.
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.
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.
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.
(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.
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
further action in any circumstances without notice or demand.
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.
WELLS
FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its
individual capacity, except as expressly provided
herein, but solely as Owner Trustee under the
Trust Agreement, as Lessor
NATIONAL ASSOCIATION, not in its
individual capacity, except as expressly provided
herein, but solely as Owner Trustee under the
Trust Agreement, as Lessor
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.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, not in its
individual
capacity, except as expressly provided
herein,
but solely as Owner Trustee under the
Trust
Agreement, as Lessor
By
Name:
Title:
CONTINENTAL
AIRLINES, INC.,
as
Lessee
By
Name:
Title:
DEFINITIONS
[SEE
PARTICIPATION AGREEMENT ANNEX A]
ANNEX
B
RETURN
CONDITIONS
[OMITTED
AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
ANNEX
C
MAINTENANCE
[OMITTED
AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
ANNEX
D
INSURANCE
[OMITTED
AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
PAGE
1
EXHIBIT
A - LEASE SUPPLEMENT
LEASE
AGREEMENT [TN]
LEASE
SUPPLEMENT NO.__
LEASE
SUPPLEMENT No. __, dated ________, 200_, between WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, but solely as Owner Trustee under the [Amended and
Restated]1
Trust
Agreement [TN], dated as of [DD], 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 [TN],
dated
as of [DD], relating to one Embraer Model EMB-145 XR 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 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 Embraer EMB-145
XR 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) Allison AE3007A1E 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
Closing Date for the Aircraft is the date of this Lease Supplement set forth
in
the opening paragraph hereof.
___________________________
1. Delete
for New Aircraft.
PAGE
1
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.]
PAGE
2
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.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, not in its
individual
capacity, except as
expressly
provided
herein, but
solely as Owner
Trustee
under
the
Trust Agreement, as
Lessor
By
Name:
Title:
CONTINENTAL
AIRLINES, INC.,
as
Lessee
By
Name:
Title:
PAGE
3
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.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, not in its
individual
capacity, except as expressly
provided
herein, but solely as Owner
Trustee
under
the
Trust Agreement, as
Lessor
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:
RETURN
ACCEPTANCE SUPPLEMENT
RETURN
ACCEPTANCE SUPPLEMENT dated ________, between WELLS FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, but solely as Owner Trustee under the [Amended and
Restated]2
Trust
Agreement [TN], dated as of [DD], 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 [TN],
dated
as of [DD], relating to one Embraer Model EMB-145 XR 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
Lessee to Lessor:
(i) Airframe:
U.S. Registration No. ______________; manufacturer’s serial no.
__________________; and
(ii) Engines:
two (2) Allison AE3007A1E 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.
__________________________________
2 . Delete
for New Aircraft.
PAGE
1
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.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, not in its
individual
capacity, except as expressly
provided
herein, but solely as Owner
Trustee
under
the
Trust Agreement, as
Lessor
By
Name:
Title:
CONTINENTAL
AIRLINES, INC.,
as
Lessee
By
Name:
Title:
CERTAIN
TERMS
[OMITTED
AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
BASIC
RENT
[OMITTED
AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
STIPULATED
LOSS VALUE
[OMITTED
AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
TERMINATION
VALUE
[OMITTED AS CONTAINING CONFIDENTIAL FINANCIAL INFORMATION]
PERMITTED
COUNTRIES
|
Argentina
Australia
Austria
Bahamas
Belgium
Brazil
Canada
Chile
Denmark
Ecuador
Egypt
Finland
France
Germany
Greece
Hungary
Iceland
India
Indonesia
Ireland
Italy
Japan
|
Luxembourg
Malaysia
Malta
Mexico
Netherlands
New
Zealand
Norway
Philippines
Portugal
Republic
of China (Taiwain)
Singapore
South
Africa
South
Korea
Spain
Sweden
Switzerland
Thailand
Tobago
Trinidad
United
Kingdom
Venezuela
|
PLACARDS
Leased
from
Wells
Fargo Bank Northwest, 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
FINAL
TRUST
INDENTURE AND MORTGAGE [TN]
Dated
as of [DD]
Between
WELLS
FARGO BANK NORTHWEST, 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
EMBRAER EMB-145 XR AIRCRAFT
BEARING
U.S. REGISTRATION MARK N[REG]
LEASED
BY CONTINENTAL AIRLINES, INC.
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TRUST
INDENTURE AND MORTGAGE [TN]
TRUST
INDENTURE AND MORTGAGE [TN], dated as of [DD] (“Trust
Indenture”), between WELLS FARGO BANK NORTHWEST, 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 Trust
Indenture;
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 Note Holders 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;
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
Participant 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 Participant, 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 Participant, 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 EMBRAER EMB-145 XR aircraft with
the FAA Registration number of N[REG] and the manufacturer’s serial number of
[MSN] and two Engines, with the manufacturer's serial numbers of CAE[E1]
and
CAE[E2], each of which is an Allison engine 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 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) All
right, title, interest, claims and demands of the Owner
Trustee in, to and under:
(a) the
Purchase Agreement;
(b) the
Purchase Agreement Assignment, with the 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;
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), 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) 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) 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) 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) 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) All
proceeds of the foregoing;
excluding,
however, in all events from each of foregoing clauses (1)
through (8) 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 and the
Purchase Agreement (to the extent assigned by the Purchase Agreement
Assignment), the Purchase Agreement Assignment, with the 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 Participant, 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 Participant, 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 Participant, 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 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.
Notwithstanding
the Granting Clause or any of the preceding
paragraphs, all Excluded Payments are hereby excluded from the foregoing
sale,
transfer, assignment, grant, pledge and security interest. 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:
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.
THE
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.
WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
AS
OWNER TRUSTEE UNDER [AMENDED AND RESTATED]1 TRUST
AGREEMENT [TN]
DATED
AS OF [DDC].
LIMITED
RECOURSE EQUIPMENT NOTE DUE [____] ISSUED IN CONNECTION
WITH THE EMBRAER MODEL EMB-145 XR AIRCRAFT BEARING UNITED STATES REGISTRATION
NUMBER N[REG].
|
No.
____
|
Date:
[__________, ____]
|
|
|
$_______________________
|
||
|
INTEREST
RATE
|
MATURITY
DATE
|
|
|
[___________]
|
[____________]
|
WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee (herein in such capacity
called
the “Owner
___________________________
1. Delete
for New Aircraft.
Trustee”)
under that certain [Amended and Restated]2 Trust
Agreement [TN], dated as of [DD], between the Owner Participant named therein
and Wells Fargo Bank Northwest, 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 WILMINGTON TRUST COMPANY, 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 monthly installments commencing on [__________, 200_],
and
thereafter on the first day of each month, 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 [TN], dated as of [DD], 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
___________________________
2. Delete
for New Aircraft.
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 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.
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.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, not in its individual
capacity
but solely as Owner Trustee
By:_____________________________________
Name:
Title:
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]
*
* *
The
Equipment Notes shall be dated the date of issuance thereof and
shall have the maturity date and shall bear interest as specified in Schedule
I
hereto. On the date of the consummation of the Transactions, the initial
Equipment Note shall be issued in the initial Original Amount set forth in
Schedule I hereto to the Subordination Agent on behalf of the Pass Through
Trustee under the Pass Through Trust Agreement. 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 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 [_________, 200_], and on the first day of each month 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 or amounts equal to the fees payable to the Liquidity Provider
under
Section 2.03 of the 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 Equipment
Notes
and the denominator of which shall be the then outstanding aggregate principal
amount of all “Equipment Notes” (as defined in the Intercreditor Agreement);
(ii) (x) the amount equal to interest on any Downgrade Advance (other than
any Applied Downgrade Advance) payable under Section 3.07 of the 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 Special Termination Advance (other than any Applied Special
Termination Advance) payable under Section 3.07 of the Liquidity Facility
minus
Investment Earnings from such Special Termination Advance multiplied by
(y) the fraction specified in the foregoing clause (i); (iv) (x) the amount
equal to interest on any Early Termination Advance (other than any Applied
Early
Termination Advance) payable under Section 3.07 of the Liquidity Facility
minus
Investment Earnings from such Early Termination Advance multiplied by (y)
the
fraction specified in the foregoing clause (i); and (v) if any payment default
shall have occurred and be continuing with respect to interest on any Equipment
Notes, (x) the excess, if any, of (1) an amount equal to interest on
any Unpaid Advance, Applied Downgrade Advance, Applied Special Termination
Advance or Applied Early Termination Advance payable under Section 3.07 of
the
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 Trustee on the overdue scheduled interest
on the Equipment Notes in respect of which such Unpaid Advance, Applied
Downgrade Advance, Applied Special Termination Advance or Applied Early
Termination Advance was made multiplied by (y) a fraction the numerator of
which
shall be the then aggregate overdue amounts of interest on the 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 “Equipment Notes” (as defined in
the Intercreditor Agreement) (other than interest becoming due and payable
solely as a result of acceleration of any such “Equipment Notes”). For purposes
of this paragraph, (i) the terms “Applied Downgrade Advance”, “Applied
Early Termination Advance”, “Applied Special Termination Advance”, “Downgrade
Advance”, “Early Termination Advance”, “Final Advance”, “Investment Earnings”,
“Special Termination Advance” and “Unpaid Advance” shall have the meanings
specified in the Liquidity Facility.
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 shall be conclusive evidence, and the only evidence, that
such
Equipment Note has been duly authenticated and delivered hereunder.
(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 Original
Amount,
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 Mortgagee 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.
(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 W-8BEN (or such successor form or forms as may be required
by the United States Treasury Department) for each calendar year in which
a
payment is made 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
W-8ECI 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 hereunder or under any Equipment
Note
(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 or reduced withholding 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 hereunder
or 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.
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 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.
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.
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. 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.
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”) or the Subordination Agent is the
holder of any such destroyed, lost or stolen Equipment Note, then the written
indemnity of such QIB or the Subordination Agent, 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 with 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.
(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.
(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.
(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 with respect to the Equipment Notes
shall be given by the Mortgagee by first-class mail, postage prepaid, mailed
not
less than 15 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,
however, that, in the case of a redemption to be made pursuant to
Section
2.10(b), 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. 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 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.
(d) Notice
of redemption 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 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.
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, however, that if such option is
exercised prior to the Premium Termination Date pursuant to clause (y) at a
time 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 at least 15 days but not more than 20 days from 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.
The
Owner Trustee and, by acceptance of its Equipment Notes, each
Note Holder, hereby agree that no payment or distribution shall be made on
or in
respect of the Secured Obligations owed to such Note Holder, 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.
RECEIPT,
DISTRIBUTION AND APPLICATION OF
INCOME
FROM THE TRUST INDENTURE ESTATE
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:
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First,
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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 Equipment Notes shall be distributed
to the
Note Holders ratably, without priority of one over the other, in
the
proportion that the amount of such payment or payments then due
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under each Equipment Note bears to the aggregate
amount of
the payments then due under all Equipment
Notes;
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Second,
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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”.
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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
a
voluntary termination of the Lease pursuant to Section 9 thereof 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:
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First,
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(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 Secured Obligations then
due to
the Mortgagee, the Note Holders and the other Indenture Indemnitees
under
this Trust Indenture, the Participation Agreement or the Equipment
Notes
(other than amounts specified in clause Second below);
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Second,
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to pay the amounts specified in clause “Third” of Section
3.03 hereof plus Make-Whole Amount, if any, then due and payable
in
respect of the Equipment Notes;
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Third,
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as
provided in clause “Fourth” of Section 3.03
hereof;
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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.
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 or other acceleration
of
the Equipment Notes 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:
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First,
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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) pay all Secured Obligations payable
to the
other Indenture Indemnitees hereunder and under the Participation
Agreement and the Lease (other than amounts specified in clauses
Second
and Third below); 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;
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Second,
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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;
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Third,
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so much of such payments or amounts remaining
as shall be
required to pay in full the aggregate unpaid Original Amount
of all
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 Equipment
Notes (other
than Make-Whole Amount) to the date of distribution, shall be
distributed
to the Note Holders, and in case the aggregate amount so to be
distributed
shall be insufficient to pay in full as
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aforesaid, then ratably, without priority
of one over the
other, in the proportion that the aggregate unpaid Original
Amount of all
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 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; and
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Fourth,
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the balance, if any, of such payments or amounts
remaining
thereafter shall be distributed to the Owner
Trustee.
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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.
(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
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.
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:
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First,
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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
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Second,
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in the manner provided in clause “Fourth” of Section 3.03
hereof.
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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.
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 Mortgagee shall not pay an amount due to
Owner
Trustee hereunder to any Person other than Owner Trustee, unless the Lessee
shall have given its written consent thereto.
COVENANTS
OF OWNER TRUSTEE; EVENTS OF
DEFAULT;
REMEDIES OF MORTGAGEE
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, subject to the proviso in Section 7.3.1
of
the Participation Agreement, 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 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
Section 2 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.
“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 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).
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. 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 18 immediately preceding Basic Rent payment dates,
or
the Owner Trustee has cured 36 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, however, 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.
(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 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, however, that the
Mortgagee shall give the Owner Trustee and the Owner Participant twenty days’
prior written notice of its intention to sell the Aircraft. 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, involuntarily
stayed or prohibited by applicable law or court order for a continuous period
(a
“Continuous Stay Period”) in excess of 60 days subsequent to an entry of an
order for relief pursuant to Chapter 11 of the Bankruptcy Code (such
60 day period, the “Section 1110 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
Section 1110 Period to the extent that the continuation of such Continuous
Stay
Period subsequent to the expiration of the Section 1110 Period (A) results
from
an agreement by the trustee or the debtor-in-possession in such proceeding
during the Section 1110 Period with the approval of the relevant court to
perform the Lease in accordance with Section 1110(a)(2)(A) of the Bankruptcy
Code and continues to perform as required by Section 1110(a)(2) of the
Bankruptcy Code and cures any default (other than a default of the kind
specified in Section 365(b)(2) of the Bankruptcy Code) within the applicable
time period specified in Section 1110(a)(2)(B) of the Bankruptcy Code or
(B) is
an extension of
the
Section 1110 Period with the consent of the Mortgagee pursuant to
Section 1110(b) of the Bankruptcy Code or (C) is the consequence of the
Mortgagee’s own failure to give any requisite notice or demand 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, however, 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, however, 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 the 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.
(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.
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.
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.
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, however,
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.
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.
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.
Notwithstanding
any other provision of this Trust Indenture, the
right of any Note Holder to receive payment of principal of, and premium
(including, without limitation, Make-Whole Amount), 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.
DUTIES
OF THE MORTGAGEE
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.
(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, however, 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; provided, however, 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;
(2) (A)
so long as the Mortgagee has not foreclosed the Lien of
the Trust Indenture, 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, 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 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) 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 Stipulated Loss Values and Termination Values as provided
in Section 3.2 of the Lease or to adjust 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;
(5) 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, (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 (iv) obtain insurance for its own account in
accordance with Section 11.2 of the Lease; and
(6) so
long as no Mortgagee Event shall have occurred and be
continuing, all other rights of the “Lessor” under the Lease 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,
however, 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 Trust 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 2.13 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(b) 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, under the
Participation Agreement or hereunder, including, without limitation, 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.
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.
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.
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.
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.
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.
In
the event of the substitution of a Replacement 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.
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 in Clause
"Second" of 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. All Cash Equivalents
held
by the Mortgagee pursuant to Section 4.4 of the Lease or this Section 5.09
shall
either be (a) registered in the name of, payable to the order of, or
specially endorsed to, the Mortgagee, or (b) held in an Eligible Account.
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.
THE
OWNER TRUSTEE AND THE MORTGAGEE
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 third 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.
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 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, however, 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.
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 Participation Agreement, the
Equipment Notes, the Lease, the Purchase Agreement or the Purchase Agreement
Assignment with the 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 Participant, the Note Holders and the
Owner Participant make no representation or warranty hereunder whatsoever.
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.
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 ascertainment 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.
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.
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 Participant, the Note Holders, the Owner Trustee
or the Owner Participant for any fee as compensation for its services as
trustee
under this Trust Indenture.
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.
INDEMNIFICATION
OF MORTGAGEE BY OWNER
TRUSTEE
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.
SUCCESSOR
AND SEPARATE TRUSTEES
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.
(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 this Trust Indenture and 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.
(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 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
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.
SUPPLEMENTS
AND AMENDMENTS TO
TRUST
INDENTURE AND OTHER DOCUMENTS
(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 or the 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 or the 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, (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
and (iii) the Owner Trustee may enter into a Lease Supplement (x) to evidence
the succession of another party as the Owner Trustee in accordance with the
terms of the Trust Agreement or (y) to provide for subjecting any Replacement
Airframe or Replacement Engine to the Lease in accordance with the terms
of the
Lease.
(b) Without
limiting the provisions of Section 9.01 hereof, the
Mortgagee agrees with the Note Holders that it shall not consent to or enter
into any amendment, waiver or modification of or supplement or consent to
this
Trust Indenture, the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the 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 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 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 the 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 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) or the other Indenture Indemnitees, (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 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.
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.
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.
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.
MISCELLANEOUS
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 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 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.
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.
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.
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.
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 MAC: U1228-120, 299 South Main
Street, 12th Floor, 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.
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.
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.
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.
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.
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,
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.
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.
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.
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 and to enforce
any
of its other rights or remedies 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.
[This
space intentionally left blank.]
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.
WELLS
FARGO BANK NORTHWEST,
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:
TO
TRUST INDENTURE AND MORTGAGE [TN]
TRUST
INDENTURE AND MORTGAGE [TN] SUPPLEMENT
This
TRUST INDENTURE AND MORTGAGE [TN] SUPPLEMENT NO. 1, dated
__________ (herein called this “Trust Indenture Supplement”) of WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, but solely
as
Owner Trustee (herein called the “Owner Trustee”) under that certain [Amended
and Restated]3 Trust Agreement [TN] dated as of [DD] (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 [TN], dated as of [DD] (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:
|
Manufacturer
|
Model
|
FAA
Registration
Number
|
Manufacturer’s
Serial
Number
|
|
Embraer-Empresa
Brasileira de Aeronáutica S.A.
|
EMB-145
XR
|
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.
___________________________
3. Delete
for New Aircraft.
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 Participant, 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 Participant, 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.
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, not in its individual
capacity,
but solely as Owner Trustee, Owner
Trustee
By:____________________________________
Name:
Title:
TRUST
INDENTURE AND MORTGAGE
|
Original
Amount
|
Interest
Rate
|
TRUST
INDENTURE AND MORTGAGE
EQUIPMENT
NOTE AMORTIZATION
|
Payment
Date
|
Percentage
of
Original
Amount
to
Be
Paid
|
|
[AMENDED
AND RESTATED]1
TRUST
AGREEMENT [TN]
Dated
as
of [DD]
Between
[OP]
and
WELLS
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION
One
Embraer Model EMB-145 XR Aircraft
Bearing
Manufacturer’s Serial No. [MSN]
and
U.S.
Registration No. N[REG]
with
Two
Allison Model AE3007A1E Engines
Bearing
Engine Manufacturer’s Serial Nos. CAE[E1] and CAE[E2]
_____________________
1. Delete
for New Aircraft.
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OF
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(Continued)
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TABLE
OF
CONTENTS
(Continued)
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[AMENDED
AND RESTATED]2
TRUST
AGREEMENT [TN]
This
[AMENDED AND RESTATED]3 TRUST
AGREEMENT [TN], dated as of [DD], between [OP], a corporation organized under
the laws of the OP Jurisdiction (“Owner Participant”), and WELLS FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, a national banking association (in its
individual capacity, “Wells Fargo” and otherwise not in its individual capacity
but solely as trustee hereunder, “Owner Trustee”)[, which amends and restates in
its entirety the Trust Agreement [TN], dated as of [EPD], between the Owner
Participant and Wells Fargo (the “Original Trust Agreement”).]4
In
connection with the issuance of the Equipment Notes on a non-recourse basis
by
the Owner Trustee in accordance with the Participation Agreement [TN], dated
as
of the date hereof, among Continental Airlines, Inc., Owner Participant, Owner
Trustee, Wilmington Trust Company and Embraer-Empresa Brasileira de Aeronáutica
S.A., Owner Participant and Wells Fargo wish to [amend and restate the Original
Trust Agreement in its entirety as]5 [enter
into this agreement on the terms]6 set
forth
below.
Accordingly,
the parties hereto agree as follows:
W
I T
N E S S E T H:
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 Agreement [TN], dated as of the date
hereof, between Owner Trustee and Continental Airlines, Inc, as
Lessee.
SECTION
2. DECLARATION
OF TRUST
Wells
Fargo 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.
_____________________
2. Delete
for New Aircraft.
3. Delete
for New Aircraft.
4. Delete
for New Aircraft.
5. Delete
for New Aircraft.
6. Insert
for New Aircraft.
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 Closing 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;]7
[(e) accept
from Seller the delivery of the Aircraft Bill of Sale, the FAA Bill of Sale
and
the invoice with respect to such Aircraft;]8
[(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;]9
(g) execute
and deliver all agreements, documents and instruments referred to in Section
5
of the Participation Agreement to which Owner Trustee is to be a
party;
(h) execute
and deliver Lease Supplement No. 1 covering the Aircraft;
(i) execute
and deliver a Trust Indenture Supplement covering the Aircraft;
_____________________
7. Insert
for New Aircraft.
8. Insert
for New Aircraft.
9. Insert
for New Aircraft.
(j) [make
payment to the Owner Participant of the proceeds from the sale of the Equipment
Notes received by it;]10 [make
payment of Lessor’s Cost for the Aircraft from the aggregate amount of the
Commitments for the Aircraft of Owner Participant and Loan Participant, to
the
extent available to Owner Trustee, in the manner provided in the Participation
Agreement;]11 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]12
(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
for filing with the FAA the FAA Filed Documents 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
_____________________
10. Delete
for New Aircraft.
11. Insert
for New Aircraft.
12. Insert
for New Aircraft.
payments,]13
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 to the income
from and proceeds of the Trust Estate (except as otherwise provided in Section
14 of the Participation Agreement) 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 Wells Fargo 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) Airframe Manufacturer 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,
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.
_____________________
13. Insert
for New Aircraft.
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
Payments to the Lessee
Notwithstanding
any other provision of any Operative Agreement to the contrary, if Lessee shall
have given to Owner Trustee written notice that an amount is due to Lessee
and
unpaid under the Indemnity Agreement, all amounts that would otherwise be paid
to Owner Participant under this Agreement shall instead be paid to Lessee until
such amount owed to Lessee shall have been paid in full, provided
that
Lessee shall not be entitled to payment of a Primary Amount (as defined in
the
Indemnity Agreement) under this Section 4.2.5 if at the time Lessee gives such
notice to Owner Trustee the Owner Participant is not the Airframe Manufacturer
or an Affiliate of Airframe Manufacturer.
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.
Wells
Fargo 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
Wells
Fargo 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. Wells Fargo 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 Wells Fargo 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) 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) 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. Wells Fargo 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 Wells Fargo 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 Wells Fargo to comply with the FAA reporting
requirements set forth in 14 C.F.R. § 47.45 and 14 C.F.R. § 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
WELLS FARGO 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 Wells Fargo 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 Closing Date and during the Term, be
free
of Lessor Liens attributable to Wells Fargo or (b) any representation or
warranty as to the validity, legality or enforceability of this Trust Agreement
or any other Operative Agreement to which Wells Fargo, 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 Wells Fargo, in its individual capacity or as Owner
Trustee, as the case may be, and except that Wells Fargo 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 Wells Fargo or Owner Trustee, as
the
case may be, enforceable against Wells Fargo 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, Wells Fargo 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
Airframe
Manufacturer shall pay the Transaction Expenses and ongoing fees of Owner
Trustee throughout the Term 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 Airframe Manufacturer 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 expense of Airframe Manufacturer, 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 WELLS FARGO 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, Wells Fargo 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 Wells Fargo on or measured by
any
compensation received by Wells Fargo 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 Wells Fargo (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 Wells Fargo, 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 Wells Fargo (or from the failure of Wells Fargo
to
perform any of its covenants) in Section 6.3 of this Trust Agreement, in Section
6.03 of the Trust Indenture, in Section 4 of the Lease, in Section 6.3 and
Section 7.3 of the Participation Agreement or elsewhere in any of the other
Operative Agreements or (c) as may result from a breach by Wells Fargo 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 Wells Fargo, 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 Wells Fargo pursuant to Section 9.1 or 9.3 of the Participation
Agreement (disregarding for purposes of this paragraph Sections 9.1.2(b) and
9.3.2(j)); provided,
that
before asserting its right to indemnification, if any, pursuant to this Section
7, Wells Fargo 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 Wells Fargo 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 Wells Fargo 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,
Wells Fargo 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 Wells Fargo 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.
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,
[subject to Section 12.1(b), Owner Participant may at any time remove Owner
Trustee, but only with]14[Owner
Participant may at any time remove Owner Trustee with or without]15
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)]16.
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, 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
_____________________
14. Include
if OP not a Citizen of the U.S.
15. Delete
if
OP not a Citizen of the U.S.
16. Delete
if
OP not a Citizen of the U.S.
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 Wells Fargo may be merged or converted or with which
it
may be consolidated, or any corporation resulting from any merger, conversion
or
consolidation to which Wells Fargo shall be a party, or any corporation to
which
substantially all the corporate trust business of Wells Fargo 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 Note 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
Owner
Participant shall not 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 4.2.5, 5.1, 6.7, 9,
10.1,
11.1 and 11.2, 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
Name
of
the Trust
The
name
of the trust created hereby shall be “XJT Owner Trust [TN]” and such name may
(but need not) be used in any correspondence and filings made with respect
to
the security interest granted under the Trust Indenture or otherwise by the
Owner Trustee in connection with the trust created hereby.
11.14
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.
[SECTION
12. CERTAIN LIMITATIONS
12.1
Limitations
on Control; Exceptions
(a) Notwithstanding
any other provision of this Agreement, at any time that the Owner Participant
is
not a citizen of the United States as defined in 49 U.S.C. Section 40102(a)(15)
(a “Citizen”), the Owner Participant shall have no rights or powers to direct,
influence, or control the Owner Trustee in the performance of the Owner
Trustee’s duties under this Agreement in connection with matters involving the
ownership and operation of the Aircraft by the Owner Trustee. In all matters
involving the ownership and operation of the Aircraft by the Owner Trustee,
the
Owner Trustee shall have absolute and complete discretion in connection
therewith and shall be free of any kind of influence or control whatsoever
by
the Owner Participant at any time that the Owner Participant is not a Citizen,
and the Owner Trustee shall exercise its duties under this Agreement in
connection with all matters involving the ownership and operation of the
Aircraft by the Owner Trustee as it, in its discretion, shall deem necessary
to
protect the interests of the United States, notwithstanding any countervailing
interest of any foreign power that, or whose citizens, may have a direct or
indirect interest in the Owner Participant and any such action by the Owner
Trustee shall not be considered malfeasance or in breach of any obligation
that
the Owner Trustee might otherwise have to the Owner Participant; provided,
however,
that
subject to the foregoing limitations, the Owner Trustee shall exercise its
discretion in all matters involving the ownership and operation of the Aircraft
by the Owner Trustee with due regard for the interests of the Owner Participant.
In exercising any of its rights and duties under this Agreement in connection
with matters that may arise not relating to the ownership and operation of
the
Aircraft, the Owner Trustee shall be permitted to seek the advice
of
the
Owner Participant before taking, or refraining from taking, any action with
respect thereto. The Owner Trustee shall notify the Owner Participant of its
exercise of rights and duties under the Trust Agreement in connection with
matters involving the ownership and operation of the Aircraft by the Owner
Trustee.
(b) At
any
time the Owner Participant is not a Citizen of the United States, the Owner
Participant shall have no rights or powers to remove the Owner Trustee except
with cause, including without limitation for gross negligence, willful
misconduct, misfeasance, malfeasance, or nonfeasance in, or material breach
of,
its duties under the Trust Agreement or applicable law.
(c) Subject
to the requirements of subsection (a) above, the Owner Trustee will not, without
the prior written consent of the Owner Participant, (a) sell, mortgage, pledge,
or otherwise dispose of the Aircraft or other assets held in the trust estate
relating thereto, except as otherwise provided for in this Agreement, or (b)
amend the Lease or other Operative Documents or give any consents thereunder.
(d) Notwithstanding
any other provision of this Section 12.1, the Owner Participant shall be
entitled to receive from the Owner Trustee, or otherwise, and the Owner Trustee
shall not be entitled to retain, all rent, payment, and insurance proceeds,
and
other payments of any kind or nature whatsoever payable to the Owner Participant
pursuant to the Trust Agreement or any other Operative Agreements in the same
manner as if the power of management and control had not been transferred to
the
Owner Trustee as provided in this Section 12.1.
(e) The
purpose of this Section 12.1 is to give the Owner Trustee the power to manage
and control the Aircraft with respect to matters involving the ownership and
operation of the Aircraft by the Owner Trustee so as to assure that (a) the
Aircraft shall be controlled with respect to such matters by a Citizen of the
United States, (b) if the Owner Participant is not a Citizen of the United
States, the Owner Participant shall have no power to influence or control the
exercise of the Owner Trustee’s authority with respect to such matters, and (c)
the Owner Trustee shall be able to give the affidavit required by Section
47.7(c)(2)(iii) of the Federal Aviation Regulations, 14 C.F.R. 47.7(c)(2)(iii).
The restrictions and requirements of this Section 12.1 shall be construed in
furtherance of such purpose.
(f) If
persons who are not “citizens of the United States” as defined in 49 U.S.C.
section 40102(a)(15) or resident aliens have the power to direct or remove
the
Owner Trustee, either directly or indirectly through the control of another
person, those persons together may not have more than 25% of the aggregate
power
to direct or remove the Owner Trustee. Nothing in this paragraph prevents those
Persons from having more than 25% of the beneficial interest in the Trust
Estate.]17
[This
space intentionally left blank.]
_____________________
17. Include
Section 12 if OP not a Citizen of the U.S.
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.
[OP]
By
_______________________________
Name:
Title:
WELLS
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION
By
_______________________________
Name:
Title:
Certificate
No.
1
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 2005-ERJ1
9.798%
Continental Airlines Pass Through Certificate, Series 2005-ERJ1
Issuance
Date: September 22, 2005
Final
Maturity Date: October 1, 2022
Evidencing
A Fractional Undivided Interest In The Continental Airlines Pass Through Trust
2005-ERJ1, The Property Of Which Shall Include Certain Equipment Notes Each
Secured By An Aircraft Leased To Continental Airlines, Inc.
$311,010,000
Fractional Undivided Interest
representing
0.0003215330697% of the Trust per $1,000 face amount
THIS
CERTIFIES THAT CEDE & CO., for value received, is the registered owner of a
$311,010,000 (THREE HUNDRED ELEVEN MILLION, TEN THOUSAND DOLLARS) Fractional
Undivided Interest in the Continental Airlines Pass Through Trust 2005-ERJ1
(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. 2005-ERJ1 thereto, dated as of September
22, 2005 (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 “9.798% Continental Airlines Pass Through Certificates, Series
2005-ERJ1”(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 (the “Certificateholder”
and,
together with all other holders of Certificates issued by the Trust, the
“Certificateholders”)
assents to and agrees to be bound by the provisions
A-2
of
the
Agreement and the Intercreditor Agreement. The property of the Trust includes
certain Equipment Notes and all rights of the Trust to receive payments under
the Intercreditor Agreement and the Liquidity Facility (the “Trust
Property”).
Each
issue of the Equipment Notes is secured by, among other things, a security
interest in an Aircraft leased to 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 the 1st
day of
each month (a “Regular
Distribution Date”)
commencing on October 1, 2005 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 of 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
A-3
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, privileges, 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.
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.
A-4
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 an interest herein are
exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administrative
exemptions.
THE
AGREEMENT AND THIS CERTIFICATE HAVE BEEN DELIVERED IN THE STATE OF NEW YORK
AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF
NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Unless
the certificate of authentication hereon has been executed by the Trustee,
by
manual signature, this Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose.
A-5
IN
WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL
AIRLINES PASS THROUGH
TRUST
2005-ERJ1
By: WILMINGTON
TRUST COMPANY,
as
Trustee
By:_________________________
Name:
Title:
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
23.1
September
8, 2005
CONTINENTAL
AIRLINES, INC.
1600
Smith Street
Houston,
TX 77002
|
Re:
|
Preliminary
Prospectus Supplement, dated September 12, 2005, to the
Prospectus
dated August 23, 2001, included in Registration Statement
No. 333-67886
of Continental Airlines, Inc.
|
Ladies
and Gentlemen:
We
consent to the use of the report prepared by us with respect to the aircraft
referred to therein, to the summary of such report 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 references to our name under the headings
“Description of the Aircraft and the Appraisals—The Appraisals” and “Experts” in
such Preliminary Prospectus Supplement. We also consent to such use, summary
and
references in the Final Prospectus Supplement relating to the offering described
in such Preliminary Prospectus Supplement, to the extent such use, summary
and
references are unchanged.
Sincerely,
For
Aviation Specialists Group, Inc.
/s/
Fred
J. Klein
--------------------------------------------------
Fred
J.
Klein
President
Aviation
Specialists Group, Inc. w
1037
Sterling Road w
Herndon,
Virginia w
USA
Telephone:
703 736-9700 w Fax:
703 736-0505
w
avspecgroup@aol.com w www.aviation
specialistsgroup.com
Exhibit
23.2
September
8, 2005
CONTINENTAL
AIRLINES, INC.
1600
Smith Street
Houston,
TX 77002
|
Re:
|
Preliminary
Prospectus Supplement, dated September 12, 2005, to the
Prospectus
dated August 23, 2001, included in Registration Statement
No. 333-67886
of Continental Airlines, Inc.
|
Ladies
and Gentlemen:
We
consent to the use of the report prepared by us with respect to the aircraft
referred to therein, to the summary of such report 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 references to our name under the headings
“Description of the Aircraft and the Appraisals—The Appraisals” and “Experts” in
such Preliminary Prospectus Supplement. We also consent to such use,
summary and
references in the Final Prospectus Supplement relating to the offering
described
in such Preliminary Prospectus Supplement, to the extent such use, summary
and
references are unchanged.
Sincerely,
BACK
Aviation Solutions
/s/
Scott
E. Daniels
-----------------------------------------------
Name:
Scott E. Daniels
Title:
VP
- Asset Management
Exhibit
23.3
BK
Associates, Inc.
1295
Northern Boulevard
Manhasset,
New York 11030
(516)
365-6275 - Fax (516) 365-6287
September
8, 2005
CONTINENTAL
AIRLINES, INC.
1600
Smith Street
Houston,
TX 77002
|
Re:
|
Preliminary
Prospectus Supplement, dated September 12, 2005, to the
Prospectus
dated August 23, 2001, included in Registration
Statement
No. 333-67886 of Continental Airlines, Inc. |
Ladies
and Gentlemen:
We
consent to the use of the report prepared by us with respect to the aircraft
referred to therein, to the summary of such report 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 references
to
our name under the headings “Description of the Aircraft and the Appraisals—The
Appraisals” and “Experts” in such Preliminary Prospectus Supplement. We also
consent to such use, summary and references in the Final Prospectus Supplement
relating to the offering described in such Preliminary Prospectus Supplement,
to
the extent such use, summary and references are unchanged.
Sincerely,
BK
Associates, Inc.
/s/
R. L.
Britton
-----------------------------------------------
R.L.
Britton
Vice
President
ISTAT
Senior Certified Appraiser
RLB/kf
Exhibit
23.4
September
13, 2005
CONTINENTAL
AIRLINES, INC.
1600
Smith Street
Houston,
TX 77002
|
Re:
|
Final
Prospectus Supplement, dated September 14, 2005, to the
Prospectus
dated
August 23, 2001, included in Registration Statement
No. 333-67886
of
Continental Airlines, Inc.
|
Ladies
and Gentlemen:
We
consent to the use of the report prepared by us with respect to the aircraft
referred to therein, to the summary of such report 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 Final Prospectus
Supplement and to the references to our name under the headings “Description of
the Aircraft and the Appraisals—The Appraisals” and “Experts” in such Final
Prospectus Supplement.
Sincerely,
Aviation
Specialists Group, Inc.
/s/
Fred
J. Klein
------------------------------------------------------------
Fred
J.
Klein
President
Aviation
Specialists Group, Inc. w
1037
Sterling Road w
Herndon,
Virginia w
USA
Telephone:
703 736-9700 w
Fax: 703 736-0505
w
avspecgroup@aol.com w
www.aviation
specialistsgroup.com
Exhibit
23.5
September
13, 2005
CONTINENTAL
AIRLINES, INC.
1600
Smith Street
Houston,
TX 77002
|
Re:
|
Final
Prospectus Supplement, dated September 14, 2005, to the
Prospectus
dated
August 23, 2001, included in Registration Statement
No. 333-67886
of
Continental Airlines, Inc.
|
Ladies
and Gentlemen:
We
consent to the use of the report prepared by us with respect to the aircraft
referred to therein, to the summary of such report 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 Final Prospectus
Supplement and to the references to our name under the headings “Description of
the Aircraft and the Appraisals—The Appraisals” and “Experts” in such Final
Prospectus Supplement.
Sincerely,
BACK
Aviation Solutions
/s/
Scott
E. Daniels
-----------------------------------------------
Name:
Scott E. Daniels
Title:
VP
- Asset Management
Exhibit
23.6
BK
Associates, Inc.
1295
Northern Boulevard
Manhasset,
New York 11030
(516)
365-6272 - Fax (516) 365-6287
September
13, 2005
CONTINENTAL
AIRLINES, INC.
1600
Smith Street
Houston,
TX 77002
|
Re:
|
Final
Prospectus Supplement, dated September 14, 2005, to the
Prospectus
dated
August 23, 2001, included in Registration Statement
No. 333-67886
of
Continental Airlines, Inc.
|
Ladies
and Gentlemen:
We
consent to the use of the report prepared by us with respect to the aircraft
referred to therein, to the summary of such report 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 Final Prospectus Supplement and to the references to our
name under the headings “Description of the Aircraft and the Appraisals—The
Appraisals” and “Experts” in such Final Prospectus Supplement.
Sincerely,
BK
Associates, Inc.
/s/
R. L.
Britton
-----------------------------------------------
R.L.
Britton
Vice
President
ISTAT
Senior Certified Appraiser
RLB/kf