Form 8-K
 
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)
 
                             Delaware
1-10323
74-2099724
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
1600 Smith Street, Dept. HQSEO, Houston, Texas
 
77002
(Address of principal executive offices)
(Zip Code)
 
(713) 324-2950
(Registrant’s telephone number, including area code)

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.

 
 
CONTINENTAL AIRLINES, INC.
     
     
September 28, 2005
By:
 /s/ Jennifer L. Vogel
   
Jennifer L. Vogel
   
Senior Vice President, General Counsel
   
and Secretary
 



EXHIBIT INDEX
 
 
1.1
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.
 
 
4.1
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
 
 
4.2
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
 
 
4.3
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
 
 
4.4
Deposit Agreement, dated as of September 22, 2004, between Wells Fargo Bank Northwest, National Association, as Escrow Agent, and Citibank, N.A., as Depositary
 
 
4.5
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
 
 
4.6
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
 
 
4.7
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)
 
 
4.8
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)
 
 
4.9
Form of Indenture (Trust Indenture and Mortgage between Wells Fargo Bank Northwest, National Association, as Owner Trustee, and

2
 
 
 
Wilmington Trust Company, as Mortgagee) (Exhibit C to Note Purchase Agreement)
 
 
4.10
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)
 
 
4.11
9.798% Continental Airlines Pass Through Certificate, Series 2005-ERJ1, Certificate No. 1
 
 
23.1
Consent of Aviation Specialists Group, Inc., dated September 8, 2005
 
 
23.2
Consent of BACK Aviation Solutions, dated September 8, 2005
 
 
23.3
Consent of BK Associates, Inc., dated September 8, 2005
 
 
23.4
Consent of Aviation Specialists Group, Inc., dated September 13, 2005
 
 
23.5
Consent of BACK Aviation Solutions, dated September 13, 2005
 
 
23.6
Consent of BK Associates, Inc., dated September 13, 2005
 
Exhibit 1.1 - Underwriting Agreement, dated September 14, 2005

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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(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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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.

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(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,

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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.

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(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

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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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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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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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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.

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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

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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,

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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

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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
Exhibit 4.1 - Trust Supplement

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;

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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.

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(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;


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(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.
 

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(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),

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(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

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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.


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(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

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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.


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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.


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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.

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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:



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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.

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supplemented by Trust Supplement No. 2005-ERJ1 thereto, dated as of September 22, 2005 (the “Trust Supplementand, 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.

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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

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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.

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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:



 


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FORM OF THE TRUSTEE’S CERTIFICATE OF AUTHENTICATION


This is one of the Certificates referred to in the within-mentioned Agreement.


                           WILMINGTON TRUST COMPANY,
                                as Trustee


  By:_________________________
  Name:
  Title:







EXHIBIT B


[DTC Letter of Representations]


Exhibit 4.2 - Revolving Credit Agreement

 
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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ANNEX I Interest Advance Notice of Borrowing
 
ANNEX II Early Termination Advance Notice of Borrowing
 
ANNEX III [Reserved]
 
ANNEX IV Downgrade Advance Notice of Borrowing
 
ANNEX V Final Advance Notice of Borrowing
 
ANNEX VI Notice of Termination
 
ANNEX VII Notice of Replacement Subordination Agent
 
ANNEX VIII Special Termination Advance Notice of Borrowing
 
ANNEX IX Notice of Special Termination
 


 
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:
 
 
ARTICLE I
 
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".
 
 
ARTICLE II
 
AMOUNT AND TERMS OF THE COMMITMENT
 
Section 2.01. The Advances. The Liquidity Provider hereby irrevocably agrees, on the terms and conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until 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.
 
 
ARTICLE III
 
OBLIGATIONS OF THE BORROWER
 
Section 3.01. Increased CostsThe 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.
 
 
ARTICLE IV
 
CONDITIONS PRECEDENT
 
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01. Section 2.01 of this Agreement shall become effective on and as of the first date (the "Effective Date") on which the following conditions precedent have been satisfied or waived:
 


 (a)  The Liquidity Provider shall have received each of the following, and in the case of each document delivered pursuant to paragraphs (i), (ii) and (iii), each in form and substance satisfactory to the Liquidity Provider:
 

 
(i)
 
This Agreement duly executed on behalf of the Borrower and the Fee Letter applicable to this Agreement duly executed on behalf of each of the parties thereto (other than the Liquidity Provider);
 
 
(ii)
 
The Intercreditor Agreement duly executed on behalf of each of the parties thereto (other than the Liquidity Provider);
 
 
(iii)
 
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);
 
 
(iv)
 
A copy of the Prospectus Supplement and specimen copies of the Certificates;
 
 
(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);
 
 
(vi)
 
Evidence that there shall have been made and shall be in full force and effect, all filings, recordings and/or registrations, and there shall have been given or taken any notice or other similar action as may be reasonably necessary or, to the extent reasonably requested by the Liquidity Provider, reasonably advisable, in order to establish, perfect, protect and preserve the right, title and interest, remedies, powers, privileges, liens and security interests of, or for the benefit of, the Trustee, the Borrower and the Liquidity Provider created by the Operative Agreements executed and delivered on or prior to the Closing Date;
 
 
(vii)
 
An agreement from Continental, pursuant to which (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
 

 
 
   
Continental's books and records regarding such transactions, and to discuss such transactions with officers and employees of Continental; and
 
 
(viii)
 
Such other documents, instruments, opinions and approvals pertaining to the transactions contemplated hereby or by the other Operative Agreements as the Liquidity Provider shall have reasonably requested.
 
 
(b)  The following statement shall be true on and as of the Effective Date: no event has occurred and is continuing, or would result from the entering into of this Agreement or the making of any Advance, which constitutes a Liquidity Event of Default.
 
(c)  The Liquidity Provider shall have received payment in full of all fees and other sums required to be paid to or for the account of the Liquidity Provider on or prior to the Effective Date.
 
(d)  All conditions precedent to the issuance of the Certificates under the Trust 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.
 
ARTICLE V
 
COVENANTS
 
Section 5.01.  Affirmative Covenants of the Borrower. So long as any Advance shall remain unpaid or the Liquidity Provider shall have any Maximum Commitment hereunder or the Borrower shall have any obligation to pay any amount to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity Provider shall otherwise consent in writing:
 
(a)  Performance of This and Other Agreements. Punctually pay or cause to be paid all amounts payable by it under this Agreement and the other Operative Agreements and observe and perform in all material respects the conditions, covenants and requirements applicable to it contained in this Agreement and the other Operative Agreements.
 
(b)  Reporting Requirements. Furnish to the Liquidity Provider with reasonable promptness, such other information and data with respect to the transactions

contemplated by the Operative Agreements as from time to time may be reasonably requested by the Liquidity Provider; and permit the Liquidity Provider, upon reasonable notice, to inspect the Borrower's books and records with respect to such transactions and to meet with officers and employees of the Borrower to discuss such transactions.
 
(c)  Certain Operative Agreements. Furnish to the Liquidity Provider with reasonable promptness, such Operative Agreements entered into after the date hereof as from time to time may be reasonably requested by the Liquidity Provider.
 
Section 5.02.  Negative Covenants of the Borrower. So long as any Advance shall remain unpaid or the Liquidity Provider shall have any Maximum Commitment hereunder or the Borrower shall have any obligation to pay any amount to the Liquidity Provider hereunder, the Borrower will not appoint or permit or suffer to be appointed any successor Borrower without the prior written consent of the Liquidity Provider, which consent shall not be unreasonably withheld or delayed.
 
 
ARTICLE VI
 
LIQUIDITY EVENTS OF DEFAULT 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.
 
ARTICLE VII
 
MISCELLANEOUS
 
Section 7.01. Amendments, EtcNo 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]




 
VIII-3



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.
 

 
 
IX-1


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
Exhibit 4.3 - Intercreditor Agreement

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:


 
ARTICLE I
 
DEFINITIONS
 
SECTION 1.1 Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
 
(1) the terms used herein that are defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular;
 
(2) all references in this Agreement to designated "Articles", "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this Agreement;
 
(3) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; and
 
(4) the term "including" shall mean "including without limitation".
 
"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).