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 25, 1997
CONTINENTAL AIRLINES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-09781 74-2099724
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2929 Allen Parkway, Suite 2010, Houston, Texas 77019
(Address of principal executive offices) (Zip Code)
(713) 834-2950
(Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The documents listed below are filed as Exhibits with
reference to the Registration Statement on Form S-3 (Registration No. 333-31285)
of Continental Airlines, Inc. The Registration Statement and the Prospectus
Supplement, dated September 12, 1997, to the Prospectus, dated July 23, 1997,
relate to the offering of Continental Airlines, Inc.'s Pass Through
Certificates, Series 1997-3.
4.1 Revolving Credit Agreement 1997-3A between Wilmington Trust
Company, Subordination Agent and Borrower, and ABN AMRO
Bank, N.V., Chicago Branch, as Liquidity Provider
4.2 Revolving Credit Agreement 1997-3B between Wilmington Trust
Company, Subordination Agent and Borrower, and ABN AMRO
Bank, N.V., Chicago Branch, as Liquidity Provider
4.3 Revolving Credit Agreement 1997-3C between Wilmington Trust
Company, Subordination Agent and Borrower, and ABN AMRO
Bank, N.V., Chicago Branch, as Liquidity Provider
4.4 Pass Through Trust Agreement between Continental Airlines,
Inc. and Wilmington Trust Company, as Trustee
4.5 Trust Supplement No. 1997-3A Dated September 25, 1997
between Wilmington Trust Company, as Trustee, and
Continental Airlines, Inc. to Pass Through Trust Agreement
Dated as of September 25, 1997
4.6 Trust Supplement No. 1997-3B Dated September 25, 1997
between Wilmington Trust Company, as Trustee, and
Continental Airlines, Inc. to Pass Through Trust Agreement
Dated as of September 25, 1997
4.8 Trust Supplement No. 1997-3C Dated September 25, 1997
between Wilmington Trust Company, as Trustee, and
Continental Airlines, Inc. to Pass Through Trust Agreement
Dated as of September 25, 1997
4.9 Intercreditor Agreement among Wilmington Trust Company,
Trustee, ABN AMRO Bank, N.V., Chicago Branch, Liquidity
Provider, and Wilmington Trust Company, Subordination Agent
and Trustee
4.10 Form of Trust Agreement between ICX Corporation, Owner
Participant, and First Security Bank, National Association,
Owner Trustee
4.11 Form of Trust Agreement between MetLife Capital Credit L.P.,
Owner Participant, and First Security Bank, National
Association, Owner Trustee
4.12 Form of Trust Agreement between Pacific Century Leasing,
Inc., Owner Participant, and First Security Bank, National
Association, Owner Trustee
4.13 Form of Participation Agreement among Continental Airlines,
Inc., Lessee, Pacific Century Leasing, Inc., Owner
Participant, First Security Bank National Association,
Owner Trustee, Wilmington Trust Company, Mortgagee and Loan
Participant, Corcim, Inc., Existing Lessor, Rolls-Royce plc,
Existing Mortgagee and Equity Guarantor and Embraer-Empresa
Brasileira de Aeronautica S.A., Airframe Manufacturer
4.14 Form of Participation Agreement among Continental Airlines,
Inc., Lessee, ICX Corporation, Owner Participant, First
Security Bank National Association, Owner Trustee,
Wilmington Trust Company, Mortgagee and Loan Participant,
Corcim, Inc., Existing Lessor, Rolls-Royce plc, Existing
Mortgagee and Equity Guarantor and Embraer-Empresa
Brasileira de Aeronautica S.A., Airframe Manufacturer
4.15 Form of Participation Agreement among Continental Airlines,
Inc., Lessee, MetLife Capital Credit L.P., Owner
Participant, First Security Bank National Association,
Owner Trustee, Wilmington Trust Company, Mortgagee and Loan
Participant, Corcim, Inc., Existing Lessor, Rolls-Royce plc,
Existing Mortgagee and Equity Guarantor and Embraer-Empresa
Brasileira de Aeronautica S.A., Airframe Manufacturer
4.16 Form of Lease Agreement between First Security Bank National
Association, Lessor and Continental Airlines, Inc., Lessee
[Pacific Century Leasing, Inc., Owner Participant]
4.17 Form of Lease Agreement between First Security Bank National
Association, Lessor and Continental Airlines, Inc., Lessee
[ICX Corporation, Owner Participant]
4.18 Form of Lease Agreement between First Security Bank National
Association, Lessor and Continental Airlines, Inc., Lessee
[MetLife Capital Credit L.P., Owner Participant]
4.19 Form of Trust Indenture and Mortgage between First Security
Bank, National Association, Owner Trustee, and Wilmington
Trust Company, Mortgagee
23.1 Consent of Avmark, Inc.
23.2 Consent of Simat, Helliesen & Eichner, Inc.
23.3 Consent of Morten Beyer and Agnew
23.4 Consent of Avmark, Inc.
23.5 Consent of Morten Beyer and Agnew
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Continental
Airlines, Inc. has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONTINENTAL AIRLINES, INC.
By /S/ JEFFERY A. SMISEK
--------------------------------
Jeffery A. Smisek
Executive Vice President
and General Counsel
October 13, 1997
EXHIBIT INDEX
4.1 Revolving Credit Agreement 1997-3A between Wilmington Trust
Company, Subordination Agent and Borrower, and ABN AMRO
Bank, N.V., Chicago Branch, as Liquidity Provider
4.2 Revolving Credit Agreement 1997-3B between Wilmington Trust
Company, Subordination Agent and Borrower, and ABN AMRO
Bank, N.V., Chicago Branch, as Liquidity Provider
4.3 Revolving Credit Agreement 1997-3C between Wilmington Trust
Company, Subordination Agent and Borrower, and ABN AMRO
Bank, N.V., Chicago Branch, as Liquidity Provider
4.4 Pass Through Trust Agreement between Continental Airlines,
Inc. and Wilmington Trust Company, as Trustee
4.5 Trust Supplement No. 1997-3A Dated September 25, 1997
between Wilmington Trust Company, as Trustee, and
Continental Airlines, Inc. to Pass Through Trust Agreement
Dated as of September 25, 1997
4.6 Trust Supplement No. 1997-3B Dated September 25, 1997
between Wilmington Trust Company, as Trustee, and
Continental Airlines, Inc. to Pass Through Trust Agreement
Dated as of September 25, 1997
4.8 Trust Supplement No. 1997-3C Dated September 25, 1997
between Wilmington Trust Company, as Trustee, and
Continental Airlines, Inc. to Pass Through Trust Agreement
Dated as of September 25, 1997
4.9 Intercreditor Agreement among Wilmington Trust Company,
Trustee, ABN AMRO Bank, N.V., Chicago Branch, Liquidity
Provider, and Wilmington Trust Company, Subordination Agent
and Trustee
4.10 Form of Trust Agreement between ICX Corporation, Owner
Participant, and First Security Bank, National Association,
Owner Trustee
4.11 Form of Trust Agreement between MetLife Capital Credit L.P.,
Owner Participant, and First Security Bank, National
Association, Owner Trustee
4.12 Form of Trust Agreement between Pacific Century Leasing,
Inc., Owner Participant, and First Security Bank, National
Association, Owner Trustee
4.13 Form of Participation Agreement among Continental Airlines,
Inc., Lessee, Pacific Century Leasing, Inc., Owner
Participant, First Security Bank National Association,
Owner Trustee, Wilmington Trust Company, Mortgagee and Loan
Participant, Corcim, Inc., Existing Lessor, Rolls-Royce plc,
Existing Mortgagee and Equity Guarantor and Embraer-Empresa
Brasileira de Aeronautica S.A., Airframe Manufacturer
4.14 Form of Participation Agreement among Continental Airlines,
Inc., Lessee, ICX Corporation, Owner Participant, First
Security Bank National Association, Owner Trustee,
Wilmington Trust Company, Mortgagee and Loan Participant,
Corcim, Inc., Existing Lessor, Rolls-Royce plc, Existing
Mortgagee and Equity Guarantor and Embraer-Empresa
Brasileira de Aeronautica S.A., Airframe Manufacturer
4.15 Form of Participation Agreement among Continental Airlines,
Inc., Lessee, MetLife Capital Credit L.P., Owner
Participant, First Security Bank National Association,
Owner Trustee, Wilmington Trust Company, Mortgagee and Loan
Participant, Corcim, Inc., Existing Lessor, Rolls-Royce plc,
Existing Mortgagee and Equity Guarantor and Embraer-Empresa
Brasileira de Aeronautica S.A., Airframe Manufacturer
4.16 Form of Lease Agreement between First Security Bank National
Association, Lessor and Continental Airlines, Inc., Lessee
[Pacific Century Leasing, Inc., Owner Participant]
4.17 Form of Lease Agreement between First Security Bank National
Association, Lessor and Continental Airlines, Inc., Lessee
[ICX Corporation, Owner Participant]
4.18 Form of Lease Agreement between First Security Bank National
Association, Lessor and Continental Airlines, Inc., Lessee
[MetLife Capital Credit L.P., Owner Participant]
4.19 Form of Trust Indenture and Mortgage between First Security
Bank, National Association, Owner Trustee, and Wilmington
Trust Company, Mortgagee
23.1 Consent of Avmark, Inc.
23.2 Consent of Simat, Helliesen & Eichner, Inc.
23.3 Consent of Morten Beyer and Agnew
23.4 Consent of Avmark, Inc.
23.5 Consent of Morten Beyer and Agnew
================================================================================
REVOLVING CREDIT AGREEMENT
(1997-3A)
Dated as of September 25, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-3A
as Borrower
and
ABN AMRO BANK N.V., CHICAGO BRANCH
as Liquidity Provider
Relating to
Continental Airlines Pass Through Trust 1997-3A
7.160% Continental Airlines Pass Through Certificates,
Series 1997-3A
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I.
DEFINITIONS
Section 1.1 Certain Defined Terms......................................... 1
ARTICLE II.
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.1 The Advances...................................................6
Section 2.2 Making the Advances............................................7
Section 2.3. Fees...........................................................9
Section 2.4. Adjustments or Termination of the Maximum Commitment...........9
Section 2.5. Repayments of Interest Advances or the Final Advance...........9
Section 2.6. Repayments of Provider Advances...............................10
Section 2.7. Payments to the Liquidity Provider Under the Intercreditor
Agreement.....................................................11
Section 2.8. Book Entries..................................................11
Section 2.9. Payments from Available Funds Only............................11
ARTICLE III.
OBLIGATIONS OF THE BORROWER
Section 3.1. Increased Costs...............................................12
Section 3.2. Capital Adequacy..............................................13
Section 3.3. Payments Free of Deductions...................................13
Section 3.4. Payments......................................................14
Section 3.5. Computations..................................................14
Section 3.6. Payment on Non-Business Days..................................14
Section 3.7. Interest......................................................14
Section 3.8. Replacement of Borrower.......................................16
Section 3.9. Funding Loss Indemnification..................................16
Section 3.10. Illegality....................................................17
TABLE OF CONTENTS
(Continued)
PAGE
----
ARTICLE IV.
CONDITIONS PRECEDENT
Section 4.1. Conditions Precedent to Effectiveness of Section 2.1..........17
Section 4.2. Conditions Precedent to Borrowing.............................19
ARTICLE V.
COVENANTS
Section 5.1. Affirmative Covenants of the Borrower.........................19
Section 5.2. Negative Covenants of the Borrower............................19
ARTICLE VI.
LIQUIDITY EVENTS OF DEFAULT
Section 6.1. Liquidity Events of Default...................................20
ARTICLE VII.
MISCELLANEOUS
Section 7.1. Amendments, Etc...............................................20
Section 7.2. Notices, Etc..................................................20
Section 7.3. No Waiver; Remedies...........................................21
Section 7.4. Further Assurances............................................21
Section 7.5. Indemnification; Survival of Certain Provisions...............21
Section 7.6. Liability of the Liquidity Provider...........................22
Section 7.7. Costs, Expenses and Taxes.....................................22
Section 7.8. Binding Effect; Participations................................23
Section 7.9. Severability..................................................24
Section 7.10. Governing Law.................................................25
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Immunity......................................................25
Section 7.12. Execution in Counterparts.....................................26
Section 7.13. Entirety......................................................26
Section 7.14. Headings......................................................26
Section 7.15. Liquidity Provider's Obligation To Make Advances..............26
TABLE OF CONTENTS
(Continued)
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of September 25, 1997,
between WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual
capacity but solely as Subordination Agent under the Intercreditor Agreement
(each as defined below), as agent and trustee for the Class A Trust (as defined
below) (the "BORROWER"), and ABN AMRO BANK N.V., a bank organized under the laws
of The Netherlands, acting through its Chicago Branch ("ABN AMRO" or the
"LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class A Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.1), the Class A Trust is issuing the Class A
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS
-----------
Section 1.1. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.1.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.7(g).
"APPLICABLE MARGIN" means (w) with respect to any Unpaid Advance or
Applied Provider Advance, 2.00% or (x) with respect to any Unapplied
Provider Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.6(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.6(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.6(a).
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one-quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Chicago, Illinois or, so long as any Class A
Certificate is outstanding, the city and state in which the Class A
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.2(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.1. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.1(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law after the
date hereof (excluding from change in applicable law for this purpose a
change in an applicable treaty or other change in law affecting the
applicability of a treaty), or in the case of a successor Liquidity
Provider (including a transferee of an Advance) or Lending Office, after
the date on which such successor Liquidity Provider obtains its interest or
on which the Lending Office is changed, and (ii) any withholding Taxes
imposed by the United States which are imposed or increased as a result of
the Liquidity Provider failing to deliver to the Borrower any certificate
or document (which certificate or document in the good faith judgment of
the Liquidity Provider it is legally entitled to provide) which is
reasonably requested by the Borrower to establish that payments under this
Agreement are exempt from (or entitled to a reduced rate of) withholding
Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means September 24, 1998, initially, or any date to
which the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.2(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.2(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following
either (x) the Liquidity Provider's receipt of the Notice of Borrowing for
such LIBOR Advance or (y) the withdrawal of funds from the Class A Cash
Collateral Account for the purpose of paying interest on the Class A
Certificates as contemplated by Section 2.6(a) hereof and, in either case,
ending on the next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
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 Business Day following the Liquidity Provider's
receipt of the Notice of Borrowing for such Final Advance (in the case of
clause (x) above) or the Regular Distribution Date following such
conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; provided that the Liquidity Provider shall not
change its Lending Office to a Lending Office outside the United States of
America except in accordance with Section 3.1, 3.2 or 3.3 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes or (b) a Continental Bankruptcy
Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.2(a), at any time of
determination, (a) the Maximum Commitment at such time less (b) the
aggregate amount of each Interest Advance outstanding at such time;
provided that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x) $5,846,856
and (y) the Required Amount on such day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.2(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.2(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.8.
"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" means the Prospectus dated July 23, 1997, as modified and
supplemented by the Prospectus Supplement dated September 12, 1997,
relating to the Certificates; and as such Prospectus may be further amended
or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.1.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.6(b).
"REQUIRED AMOUNT" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest
Rate for the Class A Certificates, that would be payable on the Class A
Certificates on each of the six successive quarterly Regular Distribution
Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding five quarterly Regular
Distribution Dates, in each case calculated on the basis of the Pool
Balance of the Class A Certificates on such day and without regard to
expected future payments of principal on the Class A Certificates.
"ROLLS ROYCE" means Rolls-Royce plc, a corporation organized under the
laws of England.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Rolls Royce pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class A Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.1 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.8(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section 2.5.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"ACCELERATION", "CERTIFICATES", "CLASS A CASH COLLATERAL ACCOUNT",
"CLASS A CERTIFICATES", "CLASS A CERTIFICATEHOLDERS", "CLASS A TRUST",
"CLASS A TRUST AGREEMENT", "CLASS A TRUSTEE", "CLASS B CASH COLLATERAL
ACCOUNT", "CLASS B CERTIFICATES", "CLASS B CERTIFICATEHOLDERS", "CLASS
B TRUST", "CLASS B TRUST AGREEMENT", "CLASS B TRUSTEE", "CLASS C CASH
COLLATERAL ACCOUNT", "CLASS C CERTIFICATES", "CLASS C
CERTIFICATEHOLDERS", "CLASS C TRUST", "CLASS C TRUST AGREEMENT",
"CLASS C TRUSTEE", "CLOSING DATE", "CONTINENTAL", "CONTINENTAL
BANKRUPTCY EVENT", "CONTROLLING PARTY", "CORPORATE TRUST OFFICE",
"DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION DATE", "DOWNGRADED
FACILITY", "EQUIPMENT NOTES", "FEE LETTER", "FINANCING AGREEMENT",
"INDENTURE", "INVESTMENT EARNINGS", "LIQUIDITY FACILITY", "LOAN
TRUSTEE", "MOODY'S", "NON-EXTENDED FACILITY", "OPERATIVE AGREEMENTS",
"PERFORMING EQUIPMENT NOTE", "PERSON", "POOL BALANCE", "PURCHASE
AGREEMENT", "RATING AGENCY", "REGULAR DISTRIBUTION DATE", "REPLACEMENT
LIQUIDITY FACILITY", "RESPONSIBLE OFFICER", "SCHEDULED PAYMENT",
"SPECIAL PAYMENT", "STANDARD & POOR'S", "STATED INTEREST RATE",
"SUBORDINATION AGENT", "TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST
AGREEMENTS", "TRUSTEE", "UNDERWRITERS", "UNDERWRITING AGREEMENT" AND
"WRITTEN NOTICE".
ARTICLE II.
AMOUNT AND TERMS OF THE COMMITMENT
----------------------------------
Section 2.1. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.4(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.2. MAKING THE ADVANCES.
2.2.1. Interest Advances shall be made in one or more
Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form
of Annex I attached hereto, signed by a Responsible Officer of the
Borrower, in an amount not exceeding the Maximum Available Commitment
at such time and shall be used solely for the payment when due of the
interest on the Class A Certificates at the Stated Interest Rate
therefor in accordance with Section 3.6(a) of the Intercreditor
Agreement. Each Interest Advance made hereunder shall automatically
reduce the Maximum Available Commitment and the amount available to be
borrowed hereunder by subsequent Advances by the amount of such
Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full of the
amount of any Interest Advance made pursuant to this Section 2.2(a),
together with accrued interest thereon (as provided herein), the
Maximum Available Commitment shall be reinstated by the amount of such
repaid Interest Advance, but not to exceed the Maximum Commitment;
PROVIDED, HOWEVER, that the Maximum Available Commitment shall not be
so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note
Deficiency.
2.2.2. A Non-Extension Advance shall be made in a single
Borrowing if this Agreement is not extended in accordance with Section
3.6(d) of the Intercreditor Agreement (unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously
delivered to the Borrower in accordance with said 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 Class A Cash Collateral Account in accordance with said
Section 3.6(d).
2.2.3. A Downgrade Advance shall be made in a single
Borrowing upon a downgrading of the Liquidity Provider's short-term
unsecured debt rating issued by either Rating Agency below the
Threshold Rating (as provided for in Section 3.6(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility to
replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the
Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex III attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class
A Cash Collateral Account in accordance with said Section 3.6(c).
2.2.4. 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 6.1 hereof by delivery to the
Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex IV attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class
A Cash Collateral Account (in accordance with Section 3.6(i) of the
Intercreditor Agreement).
2.2.5. Each Borrowing shall be made on notice in writing
(a "NOTICE OF BORROWING") in substantially the form required by
Section 2.2(a), 2.2(b), 2.2(c) or 2.2(d), as the case may be, given by
the Borrower to the Liquidity Provider. If a Notice of Borrowing is
delivered by the Borrower in respect of any Borrowing no later than
12:00 Noon (New York City time) on a Business Day, the Liquidity
Provider shall, upon satisfaction of the conditions precedent set
forth in Section 4.2 with respect to a requested Borrowing, before
12:00 Noon (New York City time) on the first Business Day next
following the day of receipt of such Notice of Borrowing or on such
later Business Day specified in such Notice of Borrowing, make
available to the Borrower, in accordance with its payment
instructions, in U.S. dollars and immediately available funds, the
amount of such Borrowing. If a Notice of Borrowing is delivered by the
Borrower in respect of any Borrowing after 12:00 Noon (New York City
time) on a Business Day, the Liquidity Provider shall, upon
satisfaction of the conditions precedent set forth in Section 4.2 with
respect to a requested Borrowing, before 12:00 Noon (New York City
time) on the second Business Day next following the day of receipt of
such Notice of Borrowing or on such later Business Day specified by
the Borrower in such Notice of Borrowing, make available to the
Borrower, in accordance with its payment instructions, in U.S. dollars
and in immediately available funds, the amount of such 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.
2.2.6. Upon the making of any Advance requested pursuant
to a Notice of Borrowing, in accordance with the Borrower's payment
instructions, the Liquidity Provider shall be fully discharged of its
obligation hereunder with respect to such Notice of Borrowing, and the
Liquidity Provider shall not thereafter be obligated to make any
further Advances hereunder in respect of such Notice of Borrowing to
the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.2(b), (c) or (d) hereof to fund the
Class A Cash Collateral Account, the Liquidity Provider shall have no
interest in or rights to the Class A Cash Collateral Account, such
Advance or any other amounts from time to time on deposit in the Class
A 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 (f) of the
Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions
of this Agreement, the Liquidity Provider makes no representation as
to, and assumes no responsibility for, the correctness or sufficiency
for any purpose of the amount of the Advances so made and requested.
Section 2.3. FEES. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.4. ADJUSTMENTS OR TERMINATION OF THE MAXIMUM COMMITMENT.
2.4.1. AUTOMATIC ADJUSTMENTS. Promptly following each date
on which the Required Amount is reduced as a result of a reduction in
the Pool Balance of the Class A Certificates or otherwise, clause (y)
of the definition of Maximum Commitment shall automatically be reduced
to an amount equal to the Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic
reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any
such notice shall not affect such automatic reduction of the Maximum
Commitment.
2.4.2 TERMINATION. Upon the making of any Provider Advance
or Final Advance hereunder or the occurrence of the Termination Date,
the obligation of the Liquidity Provider to make further Advances
hereunder shall automatically and irrevocably terminate, and the
Borrower shall not be entitled to request any further Borrowing
hereunder.
Section 2.5. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.6, 2.7 and 2.9 hereof, the Borrower hereby agrees, without
notice of an Advance or demand for repayment from the Liquidity Provider (which
notice and demand are hereby waived by the Borrower), to pay, or to cause to be
paid, to the Liquidity Provider on each date on which the Liquidity Provider
shall make an Interest Advance or the Final Advance, an amount equal to (a) the
amount of such Advance (any such Advance, until repaid, is referred to herein as
an "UNPAID ADVANCE"), plus (b) interest on the amount of each such Unpaid
Advance as provided in Section 3.7 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 2.5 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.6
and for the purposes of Section 2.6(b)). The Borrower and the Liquidity Provider
agree that the repayment in full of each Interest Advance and Final Advance on
the date such Advance is made is intended to be a contemporaneous exchange for
new value given to the Borrower by the Liquidity Provider.
Section 2.6. REPAYMENTS OF PROVIDER ADVANCES.
2.6.1 Amounts advanced hereunder in respect of a Provider
Advance shall be deposited in the Class A Cash Collateral Account,
invested and withdrawn from the Class A Cash Collateral Account as set
forth in Sections 3.6(c), (d) and (f) of the Intercreditor Agreement.
The Borrower agrees to pay to the Liquidity Provider, on each Regular
Distribution Date, commencing on the first Regular Distribution Date
after the making of a Provider Advance, interest on the principal
amount of any such Provider Advance as provided in Section 3.7;
PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the Class A Cash Collateral Account for the purpose of
paying interest on the Class A Certificates in accordance with Section
3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED
DOWNGRADE ADVANCE" and (z) in the case of a Non-Extension Advance, an
"APPLIED NON-EXTENSION ADVANCE" and, together with an Applied
Downgrade Advance, an "APPLIED PROVIDER ADVANCE") shall thereafter
(subject to Section 2.6(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 6.1
hereof, such Provider Advance shall thereafter be treated as a Final
Advance under this Agreement for purposes of determining the
Applicable Liquidity Rate for interest payable thereon. Subject to
Sections 2.7 and 2.9 hereof, immediately upon the withdrawal of any
amounts from the Class A Cash Collateral Account on account of a
reduction in the Required Amount, the Borrower shall repay to the
Liquidity Provider a portion of the Provider Advances in a principal
amount equal to the amount of such reduction, plus interest on the
principal amount prepaid as provided in Section 3.7 hereof.
2.6.2. At any time when an Applied Provider Advance (or
any portion thereof) is outstanding, upon the deposit in the Class A
Cash Collateral Account of any amount pursuant to clause "THIRD" of
Section 2.4(b) of the Intercreditor Agreement, clause "THIRD" of
Section 3.2 of the Intercreditor Agreement or clause "FOURTH" of
Section 3.3 of the Intercreditor Agreement (any such amount being a
"REPLENISHMENT AMOUNT") for the purpose of replenishing or increasing
the balance thereof up to the 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.
2.6.3. 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 Class A Cash Collateral Account after giving effect to any Applied
Provider Advance on the date of such replacement shall be reimbursed
to the Liquidity Provider, but only to the extent such amounts are
necessary to repay in full to the Liquidity Provider all amounts owing
to it hereunder.
Section 2.7. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.8. 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 2.9. 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 Section
9.1 of the Participation Agreements and only to the extent that the Borrower
shall have sufficient income or proceeds therefrom to enable the Borrower to
make payments in accordance with the terms hereof after giving effect to the
priority of payments provisions set forth in the Intercreditor Agreement. The
Liquidity Provider agrees that it will look solely to such amounts to the extent
available for distribution to it as provided in the Intercreditor Agreement and
this Agreement and that the Borrower, in its individual capacity, is not
personally liable to it for any amounts payable or liability under this
Agreement except as expressly provided in this Agreement, the Intercreditor
Agreement or any Participation Agreement. Amounts on deposit in the Class A Cash
Collateral Account shall be available to the Borrower to make payments under
this Agreement only to the extent and for the purposes expressly contemplated in
Section 3.6(f) of the Intercreditor Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class A Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.2(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III.
OBLIGATIONS OF THE BORROWER
---------------------------
Section 3.1. INCREASED COSTS. Subject to the Fee Letter, the Borrower
shall pay to the Liquidity Provider from time to time such amounts as may be
necessary to compensate the Liquidity Provider for any increased costs incurred
by the Liquidity Provider which are attributable to its making or maintaining
any LIBOR Advances hereunder or its obligation to make any such Advances
hereunder, or any reduction in any amount receivable by the Liquidity Provider
under this Agreement or the Intercreditor Agreement in respect of any such
Advances or such obligation (such increases in costs and reductions in amounts
receivable being herein called "ADDITIONAL COSTS"), resulting from any change
after the date of this Agreement in U.S. federal, state, municipal, or foreign
laws or regulations (including Regulation D), or the adoption or making after
the date of this Agreement of any interpretations, directives, or requirements
applying to a class of banks including the Liquidity Provider under any U.S.
federal, state, municipal, or any foreign laws or regulations (whether or not
having the force of law) by any court, central bank or monetary authority
charged with the interpretation or administration thereof (a "REGULATORY
CHANGE"), which: (1) changes the basis of taxation of any amounts payable to the
Liquidity Provider under this Agreement in respect of any such Advances (other
than Excluded Taxes); or (2) imposes or modifies any reserve, special deposit,
compulsory loan or similar requirements relating to any extensions of credit or
other assets of, or any deposits with other liabilities of, the Liquidity
Provider (including any such Advances or any deposits referred to in the
definition of LIBOR Rate or related definitions). The Liquidity Provider agrees
to use reasonable efforts (consistent with applicable legal and regulatory
restrictions) to change the jurisdiction of its Lending Office if making such
change would avoid the need for, or reduce the amount of, any amount payable
under this Section 3.1 that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.1 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 3.1 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.2. CAPITAL ADEQUACY. Subject to the Fee Letter, if (1) the
adoption, after the date hereof, of any applicable governmental law, rule or
regulation regarding capital adequacy, (2) any change, after the date hereof, in
the interpretation or administration of any such law, rule or regulation by any
central bank or other governmental authority charged with the interpretation or
administration thereof or (3) compliance by the Liquidity Provider or any
corporation controlling the Liquidity Provider with any applicable guideline or
request of general applicability, issued after the date hereof, by any central
bank or other governmental authority (whether or not having the force of law)
that constitutes a change of the nature described in clause (2), has the effect
of requiring an increase in the amount of capital required to be maintained by
the Liquidity Provider or any corporation controlling the Liquidity Provider,
and such increase is based upon the Liquidity Provider's obligations hereunder
and other similar obligations, the Borrower shall pay to the Liquidity Provider
from time to time such additional amount or amounts as are necessary to
compensate the Liquidity Provider for such portion of such increase as shall be
reasonably allocable to the Liquidity Provider's obligations to the Borrower
hereunder. The Liquidity Provider agrees to use reasonable efforts (consistent
with applicable legal and regulatory restrictions) to change the jurisdiction of
its Lending Office if making such change would avoid the need for, or reduce the
amount of, any amount payable under this Section that may thereafter accrue and
would not, in the reasonable judgment of the Liquidity Provider, be otherwise
materially disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.2 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 3.2 of the effect of any increase in the amount of capital required
to be maintained by the bank and of the amount allocable to the Liquidity
Provider's obligations to the Borrower hereunder shall be prima facie evidence
of the amounts owed under this Section.
Section 3.3. PAYMENTS FREE OF DEDUCTIONS. All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "Non-Excluded Tax"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
Section 3.4. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to ABN AMRO Bank N.V., New York,
NY, ABA # 026009580, Account Name: ABN AMRO Bank, N.V. - Chicago Branch, Account
# 650-001-1789-41, Reference: Continental Airlines, Inc. Pass Through Trust
1997-3A .
Section 3.5. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.6. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance or reduce the number
of days for which interest will be payable on such Advance on the next interest
payment date for such Advance.
Section 3.7. INTEREST.
3.7.1. Subject to Section 2.9, the Borrower shall pay, or
shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and
including the date on which the amount thereof was withdrawn from the
Class A Cash Collateral Account to pay interest on the Class A
Certificates) to but excluding the date such principal amount shall be
paid in full (or, in the case of an Applied Provider Advance, the date
on which the Class A Cash Collateral Account is fully replenished in
respect of such Advance) and (ii) any other amount due hereunder
(whether fees, commissions, expenses or other amounts or, to the
extent permitted by law, installments of interest on Advances or any
such other amount) which is not paid when due (whether at stated
maturity, by acceleration or otherwise) from and including the due
date thereof to but excluding the date such amount is paid in full, in
each such case, at a fluctuating interest rate per annum for each day
equal to the Applicable Liquidity Rate (as defined below) for such
Advance or such other amount as in effect for such day, but in no
event at a rate per annum greater than the maximum rate permitted by
applicable law; PROVIDED, HOWEVER, that, if at any time the otherwise
applicable interest rate as set forth in this Section 3.7 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 3.7 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 3.7 had at all
times been in effect.
3.7.2. Except as provided in clause (e) below, each
Advance will be either a Base Rate Advance or a LIBOR Advance as
provided in this Section. Each Advance will be a Base Rate Advance for
the period from the date of its borrowing to (but excluding) the third
Business Day following the Liquidity Provider's receipt of the Notice
of Borrowing for such Advance. Thereafter, such Advance shall be a
LIBOR Advance; provided that the Borrower (at the direction of the
Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate
Advance on the last day of an Interest Period for such Advance by
giving the Liquidity Provider no less than four Business Days' prior
written notice of such election or (y) elect to maintain the Final
Advance as 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.
3.7.3. Each LIBOR Advance shall bear interest during each
Interest Period at a rate per annum equal to the LIBOR Rate for such
Interest Period plus the Applicable Margin for such LIBOR Advance,
payable in arrears on the last day of such Interest Period and, in the
event of the payment of principal of such LIBOR Advance on a day other
than such last day, on the date of such payment (to the extent of
interest accrued on the amount of principal repaid).
3.7.4. Each Base Rate Advance shall bear interest at a
rate per annum equal to the Base Rate plus the Applicable Margin for
such Base Rate Advance, payable in arrears on each Regular
Distribution Date and, in the event of the payment of principal of
such Base Rate Advance on a day other than a Regular Distribution
Date, on the date of such payment (to the extent of interest accrued
on the amount of principal repaid).
3.7.5. Each Unapplied Provider Advance (i) during the
period from and including the date of the making of such Unapplied
Provider Advance through but excluding the date of repayment thereof
or of conversion thereof into a Final Advance or Applied Provider
Advance (and for any additional periods of time during which such
Advance no longer constitutes an Applied Provider Advance but again
constitutes an Unapplied Provider Advance pursuant to Sections 2.6(a)
and (b) hereof), shall bear interest in an amount equal to the
Investment Earnings on amounts on deposit in the Class A Cash
Collateral Account for such period plus the Applicable Margin on the
amount of such Unapplied Provider Advance from time to time during
such period, payable in arrears on each Regular Distribution Date and
(ii) after conversion thereof into a Final Advance or Applied Provider
Advance (but only for such period of time during which such Advance
constitutes an Applied Provider Advance pursuant to Sections 2.6(a)
and (b) hereof), as the case may be, shall be a LIBOR Advance and
shall bear interest in accordance with clause (c) above.
3.7.6. 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.
3.7.7. Each change in the Base Rate shall become effective
immediately. The rates of interest specified in this Section 3.7 with
respect to any Advance or other amount shall be referred to as the
"APPLICABLE LIQUIDITY RATE".
Section 3.8. REPLACEMENT OF BORROWER. From time to time and subject to
the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination Agent
upon the effective date and time specified in a written and completed Notice of
Replacement Subordination Agent in substantially the form of Annex VI attached
hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.9. 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 2.2.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV.
CONDITIONS PRECEDENT
--------------------
Section 4.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.1.
Section 2.1 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:
4.1.1. The Liquidity Provider shall have received on or
before the Closing Date each of the following, and in the case of each
document delivered pursuant to paragraphs (i), (ii) and (iii), each in
form and substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the
Borrower;
(ii) The Intercreditor Agreement duly executed on
behalf of each of the parties thereto;
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing
Date (other than this Agreement and the Intercreditor
Agreement);
(iv) A copy of the Prospectus and specimen copies of
the Class A Certificates;
(v) An executed copy of each document, instrument,
certificate and opinion delivered on or before the Closing
Date pursuant to the Class A Trust Agreement, the
Intercreditor Agreement and the other Operative Agreements
(together with, in the case of each such opinion, other than
the opinion of counsel for the Underwriters, a letter from
the counsel rendering such opinion to the effect that the
Liquidity Provider is entitled to rely on such opinion as of
its date as if it were addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and
shall be in full force and effect, all filings, recordings
and/or registrations, and there shall have been given or
taken any notice or other similar action as may be
reasonably necessary or, to the extent reasonably requested
by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title
and interest, remedies, powers, privileges, liens and
security interests of, or for the benefit of, the Trustees,
the Borrower and the Liquidity Provider created by the
Operative Agreements executed and delivered on or prior to
the Closing Date;
(vii) An agreement from Continental, pursuant to
which (i) Continental agrees to provide copies of quarterly
financial statements and audited annual financial statements
to the Liquidity Provider, and such other information as the
Liquidity Provider shall reasonably request with respect to
the transactions contemplated by the Operative Agreements,
in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section
8.2.1 of the Leases to the parties thereto and (ii)
Continental agrees to allow the Liquidity Provider to
inspect Continental's books and records regarding such
transactions, and to discuss such transactions with officers
and employees of Continental; and
(viii) Such other documents, instruments, opinions
and approvals as the Liquidity Provider shall have
reasonably requested.
4.1.2. 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.
4.1.3. 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.
4.1.4. All conditions precedent to the issuance of the
Certificates under the Trust Agreements shall have been satisfied, all
conditions precedent to the effectiveness of the other Liquidity
Facilities shall have been satisfied, and all conditions precedent to
the purchase of the Certificates by the Underwriters under the
Underwriting Agreement shall have been satisfied (unless any of such
conditions precedent shall have been waived by the Underwriters).
4.1.5. 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 2.1 have been satisfied or waived.
Section 4.2. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V.
COVENANTS
---------
Section 5.1. 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:
5.1.1. 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.
5.1.2. 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.
5.1.3. 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 5.2. 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 written consent of the
Liquidity Provider, which consent shall not be unreasonably withheld or delayed.
ARTICLE VI.
LIQUIDITY EVENTS OF DEFAULT
---------------------------
Section 6.1. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.2(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.7 and 2.9 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 7.1. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.2. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #820
Chicago, IL 60674-9135
Attention: Claudia Heldring, V.P.
Telephone: (312) 904-5031
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle St., #625
Chicago, IL 60674-9135
Attention: Loan Operations
Telephone: (312) 904-2961
Telecopy: (312) 606-6893
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.3. 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 7.4. 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 7.5. 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 Sections 3.1, 3.2 or 7.7 hereof or in the Fee Letter (regardless of
whether indemnified against pursuant to said Sections or in such Fee Letter)),
that may be imposed, incurred by or asserted against any Liquidity Indemnitee,
in any way relating to, resulting from, or arising out of or in connection with
any action, suit or proceeding by any third party against such Liquidity
Indemnitee and relating to this Agreement, the Fee Letter, the Intercreditor
Agreement or any Financing Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to indemnify, protect, defend and hold harmless any Liquidity
Indemnitee in respect of any Expense of such Liquidity Indemnitee to the extent
such Expense is (i) attributable to the gross negligence or willful misconduct
of such Liquidity Indemnitee or any other Liquidity Indemnitee, (ii) ordinary
and usual operating overhead expense, or (iii) attributable to the failure by
such Liquidity Indemnitee or any other Liquidity Indemnitee to perform or
observe any agreement, covenant or condition on its part to be performed or
observed in this Agreement, the Intercreditor Agreement, the Fee Letter, the Tax
Letter or any other Operative Agreement to which it is a party. The indemnities
contained in such Section 9.1, and the provisions of Sections 3.1, 3.2, 3.3,
3.9, 7.5 and 7.7 hereof, shall survive the termination of this Agreement.
Section 7.6. LIABILITY OF THE LIQUIDITY PROVIDER.
7.6.1. Neither the Liquidity Provider nor any of its
officers, employees, directors or affiliates shall be liable or
responsible for: (i) the use which may be made of the Advances or any
acts or omissions of the Borrower or any beneficiary or transferee in
connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; or (iii) the making of Advances by the Liquidity
Provider against delivery of a Notice of Borrowing and other documents
which do not comply with the terms hereof; PROVIDED, HOWEVER, that the
Borrower shall have a claim against the Liquidity Provider, and the
Liquidity Provider shall be liable to the Borrower, to the extent of
any damages suffered by the Borrower which were the result of (A) the
Liquidity Provider's willful misconduct or negligence in determining
whether documents presented hereunder comply with the terms hereof, or
(B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's
failure to make lawful payment hereunder after the delivery to it by
the Borrower of a Notice of Borrowing strictly complying with the
terms and conditions hereof.
7.6.2. Neither the Liquidity Provider nor any of its
officers, employees, director or affiliates shall be liable or
responsible in any respect for (i) any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with this Agreement or any
Notice of Borrowing delivered hereunder, or (ii) any action, inaction
or omission which may be taken by it in good faith, absent willful
misconduct or negligence (in which event the extent of the Liquidity
Provider's potential liability to the Borrower shall be limited as set
forth in the immediately preceding paragraph), in connection with this
Agreement or any Notice of Borrowing.
Section 7.7. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay, or
cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Cash Collateral
Accounts. In addition, the Borrower shall pay any and all recording, stamp and
other similar taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this Agreement, any other
Operative Agreement and such other documents, and agrees to save the Liquidity
Provider harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees.
Section 7.8. BINDING EFFECT; PARTICIPATIONS.
7.8.1. 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 7.8) nor
(except as contemplated by Section 3.8) 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 7.8(b). The Liquidity Provider may
grant participations herein or in any of its rights hereunder
(including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and
under the other Operative Agreements to such Persons as the Liquidity
Provider may in its sole discretion select, subject to the
requirements of Section 7.8(b). No such participation by the Liquidity
Provider, however, will relieve the Liquidity Provider of its
obligations hereunder. In connection with any participation or any
proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the
Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and
agrees that the Liquidity Provider's source of funds may derive in
part from its participants (other than Continental). Accordingly,
references in this Agreement and the other Operative Agreements to
determinations, reserve and capital adequacy requirements, increased
costs, reduced receipts, additional amounts due pursuant to Section
3.3(a) and the like as they pertain to the Liquidity Provider shall be
deemed also to include those of each of its participants (subject, in
each case, to the maximum amount that would have been incurred by or
attributable to the Liquidity Provider directly if the Liquidity
Provider, rather than the participant, had held the interest
participated).
7.8.2. If, pursuant to subsection (a) above, the Liquidity
Provider sells any participation in this Agreement to any bank or
other entity (each, a "TRANSFEREE"), then, concurrently with the
effectiveness of such participation, the Transferee shall (i)
represent to the Liquidity Provider (for the benefit of the Liquidity
Provider and the Borrower) either (A) that it is incorporated under
the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld
with respect to any payments to be made to such Transferee in respect
of this Agreement, (ii) furnish to the Liquidity Provider and the
Borrower either (x) a statement that it is incorporated under the laws
of the United States or a state thereof or (y) if it is not so
incorporated, two copies of a properly completed United States
Internal Revenue Service Form 4224 or Form 1001, as appropriate, or
other applicable form, certificate or document prescribed by the
Internal Revenue Service certifying, in each case, such Transferee's
entitlement to a complete exemption from United States federal
withholding tax in respect to any and all payments to be made
hereunder, and (iii) agree (for the benefit of the Liquidity Provider
and the Borrower) to provide the Liquidity Provider and the Borrower a
new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the
occurrence of any event requiring a change in the most recent form
previously delivered by it and prior to the immediately following due
date of any payment by the Borrower hereunder, certifying in the case
of a Form 1001 or Form 4224 that such Transferee is entitled to a
complete exemption from United States federal withholding tax on
payments under this Agreement. Unless the Borrower has received forms
or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to
United States federal withholding tax, the Borrower will withhold
taxes as required by law from such payments at the applicable
statutory rate.
7.8.3. Notwithstanding the other provisions of this
Section 7.8, 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 7.9. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF IMMUNITY.
7.11.1. Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any other
Operative Agreement, or for recognition and enforcement of
any judgment in respect hereof or thereof, to the
nonexclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for
the Southern District of New York, and the appellate courts
from any thereof;
(ii) consents that any such action or proceeding may
be brought in such courts, and waives any objection that it
may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such
action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to
each party hereto at its address set forth in Section 7.2
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.
7.11.2. 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.
7.11.3. The Liquidity Provider hereby waives any immunity
it may have from the jurisdiction of the courts of the United States
or of any State and waives any immunity any of its properties located
in the United States may have from attachment or execution upon a
judgement 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 duty
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as agent and
trustee for the Class A Trust, as
Borrower
By:_______________________________________
Name:
Title:
ABN AMRO BANK N.V., acting through its
Chicago Branch, 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 ABN AMRO N.V., Chicago Branch
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-3A) dated as of September 25, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(a) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(b) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used for the payment of
the interest on the Class A Certificates which was payable on
_____________________ (the "DISTRIBUTION DATE") in accordance with the terms and
provisions of the Class A Trust Agreement and the Class A Certificates, which
Advance is requested to be made on __________.
(c) The amount of the Interest Advance requested hereby (i) is
$_________________, to be applied in respect of the payment of the interest
which was due and payable on the Class A Certificates on the Distribution Date,
(ii) does not include any amount with respect to the payment of principal of, or
premium on, the Class A Certificates, the Class B Certificates or the Class C
Certificates, or interest on the Class B Certificates or the Class C
Certificates, (iii) was computed in accordance with the provisions of the Class
A Certificates, the Class A Trust Agreement and the Intercreditor Agreement (a
copy of which computation is attached hereto as Schedule I), (iv) does not
exceed the Maximum Available Commitment on the date hereof and (v) has not been
and is not the subject of a prior or contemporaneous Notice of Borrowing.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.6(b) of the Intercreditor Agreement (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the day of _________ 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
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.,
Chicago Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving
Credit Agreement (1997-3A) dated as of September 25, 1997, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(a) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(b) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class A Cash Collateral Account in accordance with Section 3.6(d)
of the Intercreditor Agreement, which Advance is requested to be made on
__________________.
(c) The amount of the Non-Extension Advance requested hereby (i) is
$__________, which equals the Maximum Available Commitment on the date hereof
and is to be applied in respect of the funding of the Class A Cash Collateral
Account in accordance with Section 3.6(d) of the Intercreditor Agreement, (ii)
does not include any amount with respect to the payment of the principal of, or
premium on, the Class A Certificates, or principal of, or interest or premium
on, the Class B Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class A Certificates, the Class A Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A Cash
Collateral Account and apply the same in accordance with the terms of Section
3.6(d) of the Intercreditor Agreement, (b) no portion of such amount shall be
applied by the Borrower for any other purpose and (c) no portion of such amount
until so applied shall be commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the day of _______ day of ___________________, ______.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.,
Chicago Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving
Credit Agreement (1997-3A) dated as of September 25, 1997, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(a) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(b) 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 Class A Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement by reason of the downgrading of the short-term unsecured
debt rating of the Liquidity Provider issued by either Rating Agency below the
Threshold Rating, which Advance is requested to be made on ____________, _____.
(c) 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 Class A Cash Collateral
Account in accordance with Section 3.6(c) of the Intercreditor Agreement, (ii)
does not include any amount with respect to the payment of the principal of, or
premium on, the Class A Certificates, or principal of, or interest or premium
on, the Class B Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class A Certificates, the Class A Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A Cash
Collateral Account and apply the same in accordance with the terms of Section
3.6(c) of the Intercreditor Agreement, (b) no portion of such amount shall be
applied by the Borrower for any other purpose and (c) no portion of such amount
until so applied shall be commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ___ day of ____________, ____.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:_______________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V., Chicago
Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-3A) dated as of September 25, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(a) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(b) 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
Class A Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ______________, ___.
(c) The amount of the Final Advance requested hereby (i) is
$__________, which equals the Maximum Available Commitment on the date hereof
and is to be applied in respect of the funding of the Class A Cash Collateral
Account in accordance with Section 3.6(i) of the Intercreditor Agreement, (ii)
does not include any amount with respect to the payment of principal of, or
premium on, the Class A Certificates, or principal of, or interest or premium
on, the Class B Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class A Certificates, the Class A Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A Cash
Collateral Account and apply the same in accordance with the terms of Section
3.6(i) of the Intercreditor Agreement, (b) no portion of such amount shall be
applied by the Borrower for any other purpose and (c) no portion of such amount
until so applied shall be commingled with other funds held by the Borrower.
(e) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice].
___________________
Bracketed language is optional.
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 V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of September 25, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-3A, as Borrower, and ABN AMRO BANK
N.V., Chicago Branch (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.1 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
ABN AMRO BANK N.V., Chicago Branch, as
Liquidity Provider
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class A Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of September 25, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-3A, as Borrower, and ABN AMRO BANK
N.V., Chicago Branch (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
(Name of Transferee)
(Name 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:
================================================================================
REVOLVING CREDIT AGREEMENT
(1997-3B)
Dated as of September 25, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-3B
as Borrower
and
ABN AMRO BANK N.V., CHICAGO BRANCH
as Liquidity Provider
Relating to
Continental Airlines Pass Through Trust 1997-3B
7.140% Continental Airlines Pass Through Certificates,
Series 1997-3B
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I.
DEFINITIONS
Section 1.1 Certain Defined Terms..........................................1
ARTICLE II.
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.1 The Advances....................................................6
Section 2.2 Making the Advances.............................................7
Section 2.3. Fees............................................................9
Section 2.4. Adjustments or Termination of the Maximum Commitment............9
Section 2.5. Repayments of Interest Advances or the Final Advance............9
Section 2.6. Repayments of Provider Advances................................10
Section 2.7. Payments to the Liquidity Provider Under the Intercreditor
Agreement......................................................11
Section 2.8. Book Entries...................................................11
Section 2.9. Payments from Available Funds Only.............................11
Section 2.10. Extension of the Expiry Date; Non-Extension Advance............11
ARTICLE III.
OBLIGATIONS OF THE BORROWER
Section 3.1. Increased Costs................................................12
Section 3.2. Capital Adequacy...............................................13
Section 3.3. Payments Free of Deductions....................................13
Section 3.4. Payments.......................................................14
Section 3.5. Computations...................................................14
Section 3.6. Payment on Non-Business Days...................................14
Section 3.7. Interest.......................................................14
Section 3.8. Replacement of Borrower........................................16
Section 3.9. Funding Loss Indemnification...................................16
Section 3.10. Illegality.....................................................17
TABLE OF CONTENTS
(Continued)
PAGE
----
ARTICLE IV.
CONDITIONS PRECEDENT
Section 4.1. Conditions Precedent to Effectiveness of Section 2.1...........17
Section 4.2. Conditions Precedent to Borrowing..............................19
ARTICLE V.
COVENANTS
Section 5.1. Affirmative Covenants of the Borrower..........................19
Section 5.2. Negative Covenants of the Borrower.............................19
ARTICLE VI.
LIQUIDITY EVENTS OF DEFAULT
Section 6.1. Liquidity Events of Default....................................20
ARTICLE VII.
MISCELLANEOUS
Section 7.1. Amendments, Etc................................................20
Section 7.2. Notices, Etc...................................................20
Section 7.3. No Waiver; Remedies............................................21
Section 7.4. Further Assurances.............................................21
Section 7.5. Indemnification; Survival of Certain Provisions................21
Section 7.6. Liability of the Liquidity Provider............................22
Section 7.7. Costs, Expenses and Taxes......................................22
Section 7.8. Binding Effect; Participations.................................23
Section 7.9. Severability...................................................24
Section 7.10. Governing Law..................................................25
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Immunity.......................................................25
Section 7.12. Execution in Counterparts......................................26
Section 7.13. Entirety.......................................................26
Section 7.14. Headings.......................................................26
Section 7.15. Liquidity Provider's Obligation To Make Advances...............26
TABLE OF CONTENTS
(Continued)
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of September 25, 1997,
between WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual
capacity but solely as Subordination Agent under the Intercreditor Agreement
(each as defined below), as agent and trustee for the Class B Trust (as defined
below) (the "BORROWER"), and ABN AMRO BANK N.V., a bank organized under the laws
of The Netherlands, acting through its Chicago Branch ("ABN AMRO" or the
"LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class B Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.1), the Class B Trust is issuing the Class B
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class B Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I.
DEFINITIONS
-----------
Section 1.1. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.1.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.7(g).
"APPLICABLE MARGIN" means (w) with respect to any Unpaid Advance or
Applied Provider Advance, 2.00% or (x) with respect to any Unapplied
Provider Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.6(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.6(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.6(a).
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one-quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Chicago, Illinois or, so long as any Class B
Certificate is outstanding, the city and state in which the Class B
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.2(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.1. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.1(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law after the
date hereof (excluding from change in applicable law for this purpose a
change in an applicable treaty or other change in law affecting the
applicability of a treaty), or in the case of a successor Liquidity
Provider (including a transferee of an Advance) or Lending Office, after
the date on which such successor Liquidity Provider obtains its interest or
on which the Lending Office is changed, and (ii) any withholding Taxes
imposed by the United States which are imposed or increased as a result of
the Liquidity Provider failing to deliver to the Borrower any certificate
or document (which certificate or document in the good faith judgment of
the Liquidity Provider it is legally entitled to provide) which is
reasonably requested by the Borrower to establish that payments under this
Agreement are exempt from (or entitled to a reduced rate of) withholding
Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means September 24, 1998, initially, or any date to
which the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.2(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.2(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following
either (x) the Liquidity Provider's receipt of the Notice of Borrowing for
such LIBOR Advance or (y) the withdrawal of funds from the Class B Cash
Collateral Account for the purpose of paying interest on the Class B
Certificates as contemplated by Section 2.6(a) hereof and, in either case,
ending on the next Regular Distribution Date; and
(ii) each subsequent period co mmencing on the last day of the
immediately preceding Interest Period and ending on 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 Business Day following the Liquidity Provider's
receipt of the Notice of Borrowing for such Final Advance (in the case of
clause (x) above) or the Regular Distribution Date following such
conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; provided that the Liquidity Provider shall not
change its Lending Office to a Lending Office outside the United States of
America except in accordance with Section 3.1, 3.2 or 3.3 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes or (b) a Continental Bankruptcy
Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.2(a), at any time of
determination, (a) the Maximum Commitment at such time less (b) the
aggregate amount of each Interest Advance outstanding at such time;
provided that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x) $2,113,190
and (y) the Required Amount on such day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.2(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.2(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.8.
"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" means the Prospectus dated July 23, 1997, as modified and
supplemented by the Prospectus Supplement dated September 12, 1997,
relating to the Certificates; and as such Prospectus may be further amended
or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.1.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.6(b).
"REQUIRED AMOUNT" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest
Rate for the Class B Certificates, that would be payable on the Class B
Certificates on each of the six successive quarterly Regular Distribution
Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding five quarterly Regular
Distribution Dates, in each case calculated on the basis of the Pool
Balance of the Class B Certificates on such day and without regard to
expected future payments of principal on the Class B Certificates.
"ROLLS ROYCE" means Rolls-Royce plc, a corporation organized under the
laws of England.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Rolls Royce pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class B Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.1 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.8(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section 2.5.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"Acceleration," "Certificates", "Class A Cash Collateral Account",
"Class A Certificates", "Class A Certificateholders", "Class A Trust",
"Class A Trust "ACCELERATION," "CERTIFICATES", "CLASS A CASH
COLLATERAL ACCOUNT", "CLASS A CERTIFICATES", "CLASS A
CERTIFICATEHOLDERS", "CLASS A TRUST", "CLASS A TRUST AGREEMENT",
"CLASS A TRUSTEE", "CLASS B CASH COLLATERAL ACCOUNT", "CLASS B
CERTIFICATES", "CLASS B CERTIFICATEHOLDERS", "CLASS B TRUST", "CLASS B
TRUST AGREEMENT", "CLASS B TRUSTEE", "CLASS C CASH COLLATERAL
ACCOUNT", "CLASS C CERTIFICATES", "CLASS C CERTIFICATEHOLDERS", "CLASS
C TRUST", "CLASS C TRUST AGREEMENT", "CLASS C TRUSTEE", "CLOSING
DATE", "CONTINENTAL", "CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING
PARTY", "CORPORATE TRUST OFFICE", "DELIVERY PERIOD EXPIRY DATE",
"DISTRIBUTION DATE", "DOWNGRADED FACILITY", "EQUIPMENT NOTES", "FEE
LETTER", "FINANCING AGREEMENT", "INDENTURE", "INVESTMENT EARNINGS",
"LIQUIDITY FACILITY", "LOAN TRUSTEE", "MOODY'S", "NON-EXTENDED
FACILITY", "OPERATIVE AGREEMENTS", "PERFORMING EQUIPMENT NOTE",
"PERSON", "POOL BALANCE", "PURCHASE AGREEMENT", "RATING AGENCY",
"REGULAR DISTRIBUTION DATE", "REPLACEMENT LIQUIDITY FACILITY",
"RESPONSIBLE OFFICER", "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
"STANDARD & POOR'S", "STATED INTEREST RATE", "SUBORDINATION AGENT",
"TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST AGREEMENTS",
"TRUSTEE", "UNDERWRITERS", "UNDERWRITING AGREEMENT" and "WRITTEN
NOTICE".
ARTICLE II.
AMOUNT AND TERMS OF THE COMMITMENT
----------------------------------
Section 2.1. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.4(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.2. MAKING THE ADVANCES.
2.2.1. Interest Advances shall be made in one or more
Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form
of Annex I attached hereto, signed by a Responsible Officer of the
Borrower, in an amount not exceeding the Maximum Available Commitment
at such time and shall be used solely for the payment when due of the
interest on the Class B Certificates at the Stated Interest Rate
therefor in accordance with Section 3.6(a) of the Intercreditor
Agreement. Each Interest Advance made hereunder shall automatically
reduce the Maximum Available Commitment and the amount available to be
borrowed hereunder by subsequent Advances by the amount of such
Interest Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full of the
amount of any Interest Advance made pursuant to this Section 2.2(a),
together with accrued interest thereon (as provided herein), the
Maximum Available Commitment shall be reinstated by the amount of such
repaid Interest Advance, but not to exceed the Maximum Commitment;
PROVIDED, HOWEVER, that the Maximum Available Commitment shall not be
so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note
Deficiency.
2.2.2. A Non-Extension Advance shall be made in a single
Borrowing if this Agreement is not extended in accordance with Section
3.6(d) of the Intercreditor Agreement (unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously
delivered to the Borrower in accordance with said 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 Class B Cash Collateral Account in accordance with said
Section 3.6(d).
2.2.3. A Downgrade Advance shall be made in a single
Borrowing upon a downgrading of the Liquidity Provider's short-term
unsecured debt rating issued by either Rating Agency below the
Threshold Rating (as provided for in Section 3.6(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility to
replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the
Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex III attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class
B Cash Collateral Account in accordance with said Section 3.6(c).
2.2.4. 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 6.1 hereof by delivery to the
Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex IV attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class
B Cash Collateral Account (in accordance with Section 3.6(i) of the
Intercreditor Agreement).
2.2.5. Each Borrowing shall be made on notice in writing
(a "NOTICE OF BORROWING") in substantially the form required by
Section 2.2(a), 2.2(b), 2.2(c) or 2.2(d), as the case may be, given by
the Borrower to the Liquidity Provider. If a Notice of Borrowing is
delivered by the Borrower in respect of any Borrowing no later than
12:00 Noon (New York City time) on a Business Day, the Liquidity
Provider shall, upon satisfaction of the conditions precedent set
forth in Section 4.2 with respect to a requested Borrowing, before
12:00 Noon (New York City time) on the first Business Day next
following the day of receipt of such Notice of Borrowing or on such
later Business Day specified in such Notice of Borrowing, make
available to the Borrower, in accordance with its payment
instructions, in U.S. dollars and immediately available funds, the
amount of such Borrowing. If a Notice of Borrowing is delivered by the
Borrower in respect of any Borrowing after 12:00 Noon (New York City
time) on a Business Day, the Liquidity Provider shall, upon
satisfaction of the conditions precedent set forth in Section 4.2 with
respect to a requested Borrowing, before 12:00 Noon (New York City
time) on the second Business Day next following the day of receipt of
such Notice of Borrowing or on such later Business Day specified by
the Borrower in such Notice of Borrowing, make available to the
Borrower, in accordance with its payment instructions, in U.S. dollars
and in immediately available funds, the amount of such 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.
2.2.6. Upon the making of any Advance requested pursuant
to a Notice of Borrowing, in accordance with the Borrower's payment
instructions, the Liquidity Provider shall be fully discharged of its
obligation hereunder with respect to such Notice of Borrowing, and the
Liquidity Provider shall not thereafter be obligated to make any
further Advances hereunder in respect of such Notice of Borrowing to
the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.2(b), (c) or (d) hereof to fund the
Class B Cash Collateral Account, the Liquidity Provider shall have no
interest in or rights to the Class B Cash Collateral Account, such
Advance or any other amounts from time to time on deposit in the Class
B 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 (f) of the
Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions
of this Agreement, the Liquidity Provider makes no representation as
to, and assumes no responsibility for, the correctness or sufficiency
for any purpose of the amount of the Advances so made and requested.
Section 2.3. FEES. Borrower agrees to pay to the Liquidity Provider
the fees set forth in the Fee Letter.
Section 2.4. ADJUSTMENTS OR TERMINATION OF THE MAXIMUM COMMITMENT.
2.4.1. AUTOMATIC ADJUSTMENTS. Promptly following each date
on which the Required Amount is reduced as a result of a reduction in
the Pool Balance of the Class B Certificates or otherwise, clause (y)
of the definition of Maximum Commitment shall automatically be reduced
to an amount equal to the Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic
reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any
such notice shall not affect such automatic reduction of the Maximum
Commitment.
2.4.2. TERMINATION. Upon the making of any Provider
Advance or Final Advance hereunder or the occurrence of the
Termination Date, the obligation of the Liquidity Provider to make
further Advances hereunder shall automatically and irrevocably
terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.5. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.6, 2.7 and 2.9 hereof, the Borrower hereby agrees, without
notice of an Advance or demand for repayment from the Liquidity Provider (which
notice and demand are hereby waived by the Borrower), to pay, or to cause to be
paid, to the Liquidity Provider on each date on which the Liquidity Provider
shall make an Interest Advance or the Final Advance, an amount equal to (a) the
amount of such Advance (any such Advance, until repaid, is referred to herein as
an "UNPAID ADVANCE"), plus (b) interest on the amount of each such Unpaid
Advance as provided in Section 3.7 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 2.5 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.6
and for the purposes of Section 2.6(b)). The Borrower and the Liquidity Provider
agree that the repayment in full of each Interest Advance and Final Advance on
the date such Advance is made is intended to be a contemporaneous exchange for
new value given to the Borrower by the Liquidity Provider.
Section 2.6. REPAYMENTS OF PROVIDER ADVANCES.
2.6.1. Amounts advanced hereunder in respect of a Provider
Advance shall be deposited in the Class B Cash Collateral Account,
invested and withdrawn from the Class B Cash Collateral Account as set
forth in Sections 3.6(c), (d) and (f) of the Intercreditor Agreement.
The Borrower agrees to pay to the Liquidity Provider, on each Regular
Distribution Date, commencing on the first Regular Distribution Date
after the making of a Provider Advance, interest on the principal
amount of any such Provider Advance as provided in Section 3.7;
PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the Class B Cash Collateral Account for the purpose of
paying interest on the Class B Certificates in accordance with Section
3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED
DOWNGRADE ADVANCE" and (z) in the case of a Non-Extension Advance, an
"APPLIED NON-EXTENSION ADVANCE" and, together with an Applied
Downgrade Advance, an "APPLIED PROVIDER ADVANCE") shall thereafter
(subject to Section 2.6(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 6.1
hereof, such Provider Advance shall thereafter be treated as a Final
Advance under this Agreement for purposes of determining the
Applicable Liquidity Rate for interest payable thereon. Subject to
Sections 2.7 and 2.9 hereof, immediately upon the withdrawal of any
amounts from the Class B Cash Collateral Account on account of a
reduction in the Required Amount, the Borrower shall repay to the
Liquidity Provider a portion of the Provider Advances in a principal
amount equal to the amount of such reduction, plus interest on the
principal amount prepaid as provided in Section 3.7 hereof.
2.6.2. At any time when an Applied Provider Advance (or
any portion thereof) is outstanding, upon the deposit in the Class B
Cash Collateral Account of any amount pursuant to clause "THIRD" of
Section 2.4(b) of the Intercreditor Agreement, clause "THIRD" of
Section 3.2 of the Intercreditor Agreement or clause "FOURTH" of
Section 3.3 of the Intercreditor Agreement (any such amount being a
"REPLENISHMENT AMOUNT") for the purpose of replenishing or increasing
the balance thereof up to the 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.
2.6.3. 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 Class B Cash Collateral Account after giving effect to any Applied
Provider Advance on the date of such replacement shall be reimbursed
to the Liquidity Provider, but only to the extent such amounts are
necessary to repay in full to the Liquidity Provider all amounts owing
to it hereunder.
Section 2.7. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.8. 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 2.9. 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 Section
9.1 of the Participation Agreements and only to the extent that the Borrower
shall have sufficient income or proceeds therefrom to enable the Borrower to
make payments in accordance with the terms hereof after giving effect to the
priority of payments provisions set forth in the Intercreditor Agreement. The
Liquidity Provider agrees that it will look solely to such amounts to the extent
available for distribution to it as provided in the Intercreditor Agreement and
this Agreement and that the Borrower, in its individual capacity, is not
personally liable to it for any amounts payable or liability under this
Agreement except as expressly provided in this Agreement, the Intercreditor
Agreement or any Participation Agreement. Amounts on deposit in the Class B Cash
Collateral Account shall be available to the Borrower to make payments under
this Agreement only to the extent and for the purposes expressly contemplated in
Section 3.6(f) of the Intercreditor Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class B Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.2(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III.
OBLIGATIONS OF THE BORROWER
---------------------------
Section 3.1. INCREASED COSTS. Subject to the Fee Letter, the Borrower
shall pay to the Liquidity Provider from time to time such amounts as may be
necessary to compensate the Liquidity Provider for any increased costs incurred
by the Liquidity Provider which are attributable to its making or maintaining
any LIBOR Advances hereunder or its obligation to make any such Advances
hereunder, or any reduction in any amount receivable by the Liquidity Provider
under this Agreement or the Intercreditor Agreement in respect of any such
Advances or such obligation (such increases in costs and reductions in amounts
receivable being herein called "ADDITIONAL COSTS"), resulting from any change
after the date of this Agreement in U.S. federal, state, municipal, or foreign
laws or regulations (including Regulation D), or the adoption or making after
the date of this Agreement of any interpretations, directives, or requirements
applying to a class of banks including the Liquidity Provider under any U.S.
federal, state, municipal, or any foreign laws or regulations (whether or not
having the force of law) by any court, central bank or monetary authority
charged with the interpretation or administration thereof (a "REGULATORY
CHANGE"), which: (1) changes the basis of taxation of any amounts payable to the
Liquidity Provider under this Agreement in respect of any such Advances (other
than Excluded Taxes); or (2) imposes or modifies any reserve, special deposit,
compulsory loan or similar requirements relating to any extensions of credit or
other assets of, or any deposits with other liabilities of, the Liquidity
Provider (including any such Advances or any deposits referred to in the
definition of LIBOR Rate or related definitions). The Liquidity Provider agrees
to use reasonable efforts (consistent with applicable legal and regulatory
restrictions) to change the jurisdiction of its Lending Office if making such
change would avoid the need for, or reduce the amount of, any amount payable
under this Section 3.1 that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.1 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 3.1 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.2. CAPITAL ADEQUACY. Subject to the Fee Letter, if (1) the
adoption, after the date hereof, of any applicable governmental law, rule or
regulation regarding capital adequacy, (2) any change, after the date hereof, in
the interpretation or administration of any such law, rule or regulation by any
central bank or other governmental authority charged with the interpretation or
administration thereof or (3) compliance by the Liquidity Provider or any
corporation controlling the Liquidity Provider with any applicable guideline or
request of general applicability, issued after the date hereof, by any central
bank or other governmental authority (whether or not having the force of law)
that constitutes a change of the nature described in clause (2), has the effect
of requiring an increase in the amount of capital required to be maintained by
the Liquidity Provider or any corporation controlling the Liquidity Provider,
and such increase is based upon the Liquidity Provider's obligations hereunder
and other similar obligations, the Borrower shall pay to the Liquidity Provider
from time to time such additional amount or amounts as are necessary to
compensate the Liquidity Provider for such portion of such increase as shall be
reasonably allocable to the Liquidity Provider's obligations to the Borrower
hereunder. The Liquidity Provider agrees to use reasonable efforts (consistent
with applicable legal and regulatory restrictions) to change the jurisdiction of
its Lending Office if making such change would avoid the need for, or reduce the
amount of, any amount payable under this Section that may thereafter accrue and
would not, in the reasonable judgment of the Liquidity Provider, be otherwise
materially disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.2 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 3.2 of the effect of any increase in the amount of capital required
to be maintained by the bank and of the amount allocable to the Liquidity
Provider's obligations to the Borrower hereunder shall be prima facie evidence
of the amounts owed under this Section.
Section 3.3. PAYMENTS FREE OF DEDUCTIONS. All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "Non-Excluded Tax"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
Section 3.4. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to ABN AMRO Bank N.V., New York,
NY, ABA # 026009580, Account Name: ABN AMRO Bank, N.V. - Chicago Branch, Account
# 650-001-1789-41, Reference: Continental Airlines, Inc. Pass Through Trust
1997-3B .
Section 3.5. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.6. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance or reduce the number
of days for which interest will be payable on such Advance on the next interest
payment date for such Advance.
Section 3.7. INTEREST.
3.7.1. Subject to Section 2.9, the Borrower shall pay, or
shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of
such Advance (or, in the case of an Applied Provider Advance, from and
including the date on which the amount thereof was withdrawn from the
Class B Cash Collateral Account to pay interest on the Class B
Certificates) to but excluding the date such principal amount shall be
paid in full (or, in the case of an Applied Provider Advance, the date
on which the Class B Cash Collateral Account is fully replenished in
respect of such Advance) and (ii) any other amount due hereunder
(whether fees, commissions, expenses or other amounts or, to the
extent permitted by law, installments of interest on Advances or any
such other amount) which is not paid when due (whether at stated
maturity, by acceleration or otherwise) from and including the due
date thereof to but excluding the date such amount is paid in full, in
each such case, at a fluctuating interest rate per annum for each day
equal to the Applicable Liquidity Rate (as defined below) for such
Advance or such other amount as in effect for such day, but in no
event at a rate per annum greater than the maximum rate permitted by
applicable law; PROVIDED, HOWEVER, that, if at any time the otherwise
applicable interest rate as set forth in this Section 3.7 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 3.7 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 3.7 had at all
times been in effect.
3.7.2. Except as provided in clause (e) below, each
Advance will be either a Base Rate Advance or a LIBOR Advance as
provided in this Section. Each Advance will be a Base Rate Advance for
the period from the date of its borrowing to (but excluding) the third
Business Day following the Liquidity Provider's receipt of the Notice
of Borrowing for such Advance. Thereafter, such Advance shall be a
LIBOR Advance; provided that the Borrower (at the direction of the
Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate
Advance on the last day of an Interest Period for such Advance by
giving the Liquidity Provider no less than four Business Days' prior
written notice of such election or (y) elect to maintain the Final
Advance as 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.
3.7.3. Each LIBOR Advance shall bear interest during each
Interest Period at a rate per annum equal to the LIBOR Rate for such
Interest Period plus the Applicable Margin for such LIBOR Advance,
payable in arrears on the last day of such Interest Period and, in the
event of the payment of principal of such LIBOR Advance on a day other
than such last day, on the date of such payment (to the extent of
interest accrued on the amount of principal repaid).
3.7.4. Each Base Rate Advance shall bear interest at a
rate per annum equal to the Base Rate plus the Applicable Margin for
such Base Rate Advance, payable in arrears on each Regular
Distribution Date and, in the event of the payment of principal of
such Base Rate Advance on a day other than a Regular Distribution
Date, on the date of such payment (to the extent of interest accrued
on the amount of principal repaid).
3.7.5. Each Unapplied Provider Advance (i) during the
period from and including the date of the making of such Unapplied
Provider Advance through but excluding the date of repayment thereof
or of conversion thereof into a Final Advance or Applied Provider
Advance (and for any additional periods of time during which such
Advance no longer constitutes an Applied Provider Advance but again
constitutes an Unapplied Provider Advance pursuant to Sections 2.6(a)
and (b) hereof), shall bear interest in an amount equal to the
Investment Earnings on amounts on deposit in the Class B Cash
Collateral Account for such period plus the Applicable Margin on the
amount of such Unapplied Provider Advance from time to time during
such period, payable in arrears on each Regular Distribution Date and
(ii) after conversion thereof into a Final Advance or Applied Provider
Advance (but only for such period of time during which such Advance
constitutes an Applied Provider Advance pursuant to Sections 2.6(a)
and (b) hereof), as the case may be, shall be a LIBOR Advance and
shall bear interest in accordance with clause (c) above.
3.7.6. 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.
3.7.7. Each change in the Base Rate shall become effective
immediately. The rates of interest specified in this Section 3.7 with
respect to any Advance or other amount shall be referred to as the
"APPLICABLE LIQUIDITY RATE".
Section 3.8. REPLACEMENT OF BORROWER. From time to time and subject to
the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination Agent
upon the effective date and time specified in a written and completed Notice of
Replacement Subordination Agent in substantially the form of Annex VI attached
hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.9. 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 2.2.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV.
CONDITIONS PRECEDENT
--------------------
Section 4.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.1..
Section 2.1 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:
4.1.1. The Liquidity Provider shall have received on or
before the Closing Date each of the following, and in the case of each
document delivered pursuant to paragraphs (i), (ii) and (iii), each in
form and substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the
Borrower;
(ii) The Intercreditor Agreement duly executed on
behalf of each of the parties thereto;
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing
Date (other than this Agreement and the Intercreditor
Agreement);
(iv) A copy of the Prospectus and specimen copies of
the Class B Certificates;
(v) An executed copy of each document, instrument,
certificate and opinion delivered on or before the Closing
Date pursuant to the Class B Trust Agreement, the
Intercreditor Agreement and the other Operative Agreements
(together with, in the case of each such opinion, other than
the opinion of counsel for the Underwriters, a letter from
the counsel rendering such opinion to the effect that the
Liquidity Provider is entitled to rely on such opinion as of
its date as if it were addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and
shall be in full force and effect, all filings, recordings
and/or registrations, and there shall have been given or
taken any notice or other similar action as may be
reasonably necessary or, to the extent reasonably requested
by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title
and interest, remedies, powers, privileges, liens and
security interests of, or for the benefit of, the Trustees,
the Borrower and the Liquidity Provider created by the
Operative Agreements executed and delivered on or prior to
the Closing Date;
(vii) An agreement from Continental, pursuant to
which (i) Continental agrees to provide copies of quarterly
financial statements and audited annual financial statements
to the Liquidity Provider, and such other information as the
Liquidity Provider shall reasonably request with respect to
the transactions contemplated by the Operative Agreements,
in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section
8.2.1 of the Leases to the parties thereto and (ii)
Continental agrees to allow the Liquidity Provider to
inspect Continental's books and records regarding such
transactions, and to discuss such transactions with officers
and employees of Continental; and
(viii) Such other documents, instruments, opinions
and approvals as the Liquidity Provider shall have
reasonably requested.
4.1.2. 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.
4.1.3. 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.
4.1.4. All conditions precedent to the issuance of the
Certificates under the Trust Agreements shall have been satisfied, all
conditions precedent to the effectiveness of the other Liquidity
Facilities shall have been satisfied, and all conditions precedent to
the purchase of the Certificates by the Underwriters under the
Underwriting Agreement shall have been satisfied (unless any of such
conditions precedent shall have been waived by the Underwriters).
4.1.5. 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 2.1 have been satisfied or waived.
Section 4.2. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V.
COVENANTS
---------
Section 5.1. 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:
5.1.1. 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.
5.1.2. 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.
5.1.3. 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 5.2. 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 written consent of the
Liquidity Provider, which consent shall not be unreasonably withheld or delayed.
ARTICLE VI.
LIQUIDITY EVENTS OF DEFAULT
---------------------------
Section 6.1. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.2(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.7 and 2.9 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 7.1. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.2. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #820
Chicago, IL 60674-9135
Attention: Claudia Heldring, V.P.
Telephone: (312) 904-5031
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle St., #625
Chicago, IL 60674-9135
Attention: Loan Operations
Telephone: (312) 904-2961
Telecopy: (312) 606-6893
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.3. 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 7.4. 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 7.5. 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 Sections 3.1, 3.2 or 7.7 hereof or in the Fee Letter (regardless of
whether indemnified against pursuant to said Sections or in such Fee Letter)),
that may be imposed, incurred by or asserted against any Liquidity Indemnitee,
in any way relating to, resulting from, or arising out of or in connection with
any action, suit or proceeding by any third party against such Liquidity
Indemnitee and relating to this Agreement, the Fee Letter, the Intercreditor
Agreement or any Financing Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to indemnify, protect, defend and hold harmless any Liquidity
Indemnitee in respect of any Expense of such Liquidity Indemnitee to the extent
such Expense is (i) attributable to the gross negligence or willful misconduct
of such Liquidity Indemnitee or any other Liquidity Indemnitee, (ii) ordinary
and usual operating overhead expense, or (iii) attributable to the failure by
such Liquidity Indemnitee or any other Liquidity Indemnitee to perform or
observe any agreement, covenant or condition on its part to be performed or
observed in this Agreement, the Intercreditor Agreement, the Fee Letter, the Tax
Letter or any other Operative Agreement to which it is a party. The indemnities
contained in such Section 9.1, and the provisions of Sections 3.1, 3.2, 3.3,
3.9, 7.5 and 7.7 hereof, shall survive the termination of this Agreement.
Section 7.6. LIABILITY OF THE LIQUIDITY PROVIDER.
7.6.1. Neither the Liquidity Provider nor any of its
officers, employees, directors or affiliates shall be liable or
responsible for: (i) the use which may be made of the Advances or any
acts or omissions of the Borrower or any beneficiary or transferee in
connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; or (iii) the making of Advances by the Liquidity
Provider against delivery of a Notice of Borrowing and other documents
which do not comply with the terms hereof; PROVIDED, HOWEVER, that the
Borrower shall have a claim against the Liquidity Provider, and the
Liquidity Provider shall be liable to the Borrower, to the extent of
any damages suffered by the Borrower which were the result of (A) the
Liquidity Provider's willful misconduct or negligence in determining
whether documents presented hereunder comply with the terms hereof, or
(B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's
failure to make lawful payment hereunder after the delivery to it by
the Borrower of a Notice of Borrowing strictly complying with the
terms and conditions hereof.
7.6.2. Neither the Liquidity Provider nor any of its
officers, employees, director or affiliates shall be liable or
responsible in any respect for (i) any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with this Agreement or any
Notice of Borrowing delivered hereunder, or (ii) any action, inaction
or omission which may be taken by it in good faith, absent willful
misconduct or negligence (in which event the extent of the Liquidity
Provider's potential liability to the Borrower shall be limited as set
forth in the immediately preceding paragraph), in connection with this
Agreement or any Notice of Borrowing.
Section 7.7. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay, or
cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Cash Collateral
Accounts. In addition, the Borrower shall pay any and all recording, stamp and
other similar taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this Agreement, any other
Operative Agreement and such other documents, and agrees to save the Liquidity
Provider harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees.
Section 7.8. BINDING EFFECT; PARTICIPATIONS.
7.8.1. 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 7.8) nor
(except as contemplated by Section 3.8) 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 7.8(b). The Liquidity Provider may
grant participations herein or in any of its rights hereunder
(including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and
under the other Operative Agreements to such Persons as the Liquidity
Provider may in its sole discretion select, subject to the
requirements of Section 7.8(b). No such participation by the Liquidity
Provider, however, will relieve the Liquidity Provider of its
obligations hereunder. In connection with any participation or any
proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the
Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and
agrees that the Liquidity Provider's source of funds may derive in
part from its participants (other than Continental). Accordingly,
references in this Agreement and the other Operative Agreements to
determinations, reserve and capital adequacy requirements, increased
costs, reduced receipts, additional amounts due pursuant to Section
3.3(a) and the like as they pertain to the Liquidity Provider shall be
deemed also to include those of each of its participants (subject, in
each case, to the maximum amount that would have been incurred by or
attributable to the Liquidity Provider directly if the Liquidity
Provider, rather than the participant, had held the interest
participated).
7.8.2. If, pursuant to subsection (a) above, the Liquidity
Provider sells any participation in this Agreement to any bank or
other entity (each, a "TRANSFEREE"), then, concurrently with the
effectiveness of such participation, the Transferee shall (i)
represent to the Liquidity Provider (for the benefit of the Liquidity
Provider and the Borrower) either (A) that it is incorporated under
the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld
with respect to any payments to be made to such Transferee in respect
of this Agreement, (ii) furnish to the Liquidity Provider and the
Borrower either (x) a statement that it is incorporated under the laws
of the United States or a state thereof or (y) if it is not so
incorporated, two copies of a properly completed United States
Internal Revenue Service Form 4224 or Form 1001, as appropriate, or
other applicable form, certificate or document prescribed by the
Internal Revenue Service certifying, in each case, such Transferee's
entitlement to a complete exemption from United States federal
withholding tax in respect to any and all payments to be made
hereunder, and (iii) agree (for the benefit of the Liquidity Provider
and the Borrower) to provide the Liquidity Provider and the Borrower a
new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the
occurrence of any event requiring a change in the most recent form
previously delivered by it and prior to the immediately following due
date of any payment by the Borrower hereunder, certifying in the case
of a Form 1001 or Form 4224 that such Transferee is entitled to a
complete exemption from United States federal withholding tax on
payments under this Agreement. Unless the Borrower has received forms
or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to
United States federal withholding tax, the Borrower will withhold
taxes as required by law from such payments at the applicable
statutory rate.
7.8.3. Notwithstanding the other provisions of this
Section 7.8, 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 7.9. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF IMMUNITY.
7.11.1. Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any other
Operative Agreement, or for recognition and enforcement of
any judgment in respect hereof or thereof, to the
nonexclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for
the Southern District of New York, and the appellate courts
from any thereof;
(ii) consents that any such action or proceeding may
be brought in such courts, and waives any objection that it
may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such
action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to
each party hereto at its address set forth in Section 7.2
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.
7.11.2. 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.
7.11.3. The Liquidity Provider hereby waives any immunity
it may have from the jurisdiction of the courts of the United States
or of any State and waives any immunity any of its properties located
in the United States may have from attachment or execution upon a
judgement 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 duty
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as agent and
trustee for the Class B Trust, as
Borrower
By:_______________________________________
Name:
Title:
ABN AMRO BANK N.V., acting through its
Chicago Branch, 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 ABN AMRO N.V., Chicago Branch
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-3B) dated as of September 25, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(a) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(b) The Borrower is delivering this Notice of Borrowing for the
making of an Interest Advance by the Liquidity Provider to be used for
the payment of the interest on the Class B Certificates which was
payable on __________ (the "DISTRIBUTION DATE") in accordance with the
terms and provisions of the Class B Trust Agreement and the Class B
Certificates, which Advance is requested to be made on
__________________.
(c) The amount of the Interest Advance requested hereby (i) is
$__________, to be applied in respect of the payment of the interest
which was due and payable on the Class B Certificates on the
Distribution Date, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class B Certificates,
the Class A Certificates or the Class C Certificates, or interest on
the Class A Certificates or the Class C Certificates, (iii) was
computed in accordance with the provisions of the Class B
Certificates, the Class B Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule
I), (iv) does not exceed the Maximum Available Commitment on the date
hereof and (v) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance
with the terms of Section 3.6(b) of the Intercreditor Agreement (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the day of _________ 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
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.,
Chicago Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving
Credit Agreement (1997-3B) dated as of September 25, 1997, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(a) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(b) The Borrower is delivering this Notice of Borrowing for the
making of the Non-Extension Advance by the Liquidity Provider to be
used for the funding of the Class B Cash Collateral Account in
accordance with Section 3.6(d) of the Intercreditor Agreement, which
Advance is requested to be made on _____________.
(c) The amount of the Non-Extension Advance requested hereby (i)
is $__________, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the
Class B Cash Collateral Account in accordance with Section 3.6(d) of
the Intercreditor Agreement, (ii) does not include any amount with
respect to the payment of the principal of, or premium on, the Class B
Certificates, or principal of, or interest or premium on, the Class A
Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class B Certificates, the Class
B Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been
and is not the subject of a prior or contemporaneous Notice of
Borrowing under the Liquidity Agreement.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class B Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(d) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the day of _______ day of ___________________, ______.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:_______________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.,
Chicago Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving
Credit Agreement (1997-3B) dated as of September 25, 1997, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(a) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(b) 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 Class B Cash Collateral Account in accordance
with Section 3.6(c) of the Intercreditor Agreement by reason of the
downgrading of the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold Rating,
which Advance is requested to be made on ____________, _____.
(c) 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 Class B
Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement, (ii) does not include any amount with respect
to the payment of the principal of, or premium on, the Class B
Certificates, or principal of, or interest or premium on, the Class A
Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class B Certificates, the Class
B Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been
and is not the subject of a prior or contemporaneous Notice of
Borrowing under the Liquidity Agreement.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class B Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(c) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the day of _______ day of ___________________, ______.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:_______________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V., Chicago
Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-3B) dated as of September 25, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(a) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(b) 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 Class A Cash Collateral Account in accordance with
Section 3.6(i) of the Intercreditor Agreement by reason of the receipt
by the Borrower of a Termination Notice from the Liquidity Provider
with respect to the Liquidity Agreement, which Advance is requested to
be made on _________________, ____.
(c) The amount of the Final Advance requested hereby (i) is
$__________, which equals the Maximum Available Commitment on the date
hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect
to the payment of principal of, or premium on, the Class B
Certificates, or principal of, or interest or premium on, the Class A
Certificates or the Class C Certificates, (iii) was computed in
accordance with the provisions of the Class B Certificates, the Class
B Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been
and is not the subject of a prior or contemporaneous Notice of
Borrowing.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class B Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(i) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(e) The Borrower hereby requests that the Advance requested
hereby be a Base Rate Advance [and that such Base Rate Advance be
converted into a LIBOR Advance on the third Business Day following
your receipt of this notice].
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ___ day of ________________, ____.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:_______________________________________
Name:
Title:
___________________
Bracketed language is optional.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Final Advance Notice of Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of September 25, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-3B, as Borrower, and ABN AMRO BANK
N.V., Chicago Branch (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.1 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.
ABN AMRO BANK N.V., Chicago Branch, as
Liquidity Provider
By:_______________________________________
Name:
Title:
By:_______________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class A Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of September 25, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-3B, as Borrower, and ABN AMRO BANK
N.V., Chicago Branch (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
(Name of Transferee)
(Name 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:
================================================================================
REVOLVING CREDIT AGREEMENT
(1997-3C)
Dated as of September 25, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-3C
as Borrower
and
ABN AMRO BANK N.V., CHICAGO BRANCH
as Liquidity Provider
Relating to
Continental Airlines Pass Through Trust 1997-3C
7.121% Continental Airlines Pass Through Certificates,
Series 1997-3C
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
Section 1.1. Certain Defined Terms................................... 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.1. The Advances............................................ 6
Section 2.2. Making the Advances..................................... 7
Section 2.3. Fees.................................................... 9
Section 2.4. Adjustments or Termination of the Maximum
Commitment.............................................. 9
Section 2.5. Repayments of Interest Advances or the Final
Advance................................................. 9
Section 2.6. Repayments of Provider Advances......................... 10
Section 2.7. Payments to the Liquidity Provider Under the
Intercreditor Agreement................................. 11
Section 2.8. Book Entries............................................ 11
Section 2.9. Payments from Available Funds Only...................... 11
Section 2.10. Extension of the Expiry Date; Non-Extension
Advance................................................. 11
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.1. Increased Costs......................................... 12
Section 3.2. Capital Adequacy........................................ 13
Section 3.3. Payments Free of Deductions............................. 13
Section 3.4. Payments................................................ 14
Section 3.5. Computations............................................ 14
Section 3.6. Payment on Non-Business Days............................ 14
Section 3.7. Interest................................................ 14
Section 3.8. Replacement of Borrower................................. 16
Section 3.9. Funding Loss Indemnification............................ 16
Section 3.10. Illegality.............................................. 16
TABLE OF CONTENTS
(Continued)
PAGE
----
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1. Conditions Precedent to Effectiveness of Section
2.1..................................................... 17
Section 4.2. Conditions Precedent to Borrowing....................... 19
ARTICLE V
COVENANTS
Section 5.1. Affirmative Covenants of the Borrower................... 19
Section 5.2. Negative Covenants of the Borrower...................... 19
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.1. Liquidity Events of Default............................. 20
ARTICLE VII
MISCELLANEOUS
Section 7.1. Amendments, Etc......................................... 20
Section 7.2. Notices, Etc............................................ 20
Section 7.3. No Waiver; Remedies..................................... 21
Section 7.4. Further Assurances...................................... 21
Section 7.5. Indemnification; Survival of Certain Provisions......... 21
Section 7.6. Liability of the Liquidity Provider..................... 22
Section 7.7. Costs, Expenses and Taxes............................... 23
Section 7.8. Binding Effect; Participations.......................... 23
Section 7.9. Severability............................................ 25
Section 7.10. GOVERNING LAW........................................... 25
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity...................................... 25
Section 7.12. Execution in Counterparts............................... 26
Section 7.13. Entirety................................................ 26
Section 7.14. Headings................................................ 26
Section 7.15. LIQUIDITY PROVIDER'S OBLIGATION
TO MAKE ADVANCES........................................ 26
TABLE OF CONTENTS
(Continued)
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of September 25, 1997,
between WILMINGTON TRUST COMPANY, a Delaware corporation, not in its individual
capacity but solely as Subordination Agent under the Intercreditor Agreement
(each as defined below), as agent and trustee for the Class C Trust (as defined
below) (the "BORROWER"), and ABN AMRO BANK N.V., a bank organized under the laws
of The Netherlands, acting through its Chicago Branch ("ABN AMRO" or the
"LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class C Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.1), the Class C Trust is issuing the Class C
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class C Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
-----------
Section 1.1. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.1.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.7(g).
"APPLICABLE MARGIN" means (w) with respect to any Unpaid Advance or
Applied Provider Advance, 2.00% or (x) with respect to any Unapplied
Provider Advance, .40%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.6(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.6(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.6(a).
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one-quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Chicago, Illinois or, so long as any Class C
Certificate is outstanding, the city and state in which the Class C
Trustee, the Borrower or any Loan Trustee maintains its Corporate Trust
Office or receives or disburses funds, and, if the applicable Business Day
relates to any Advance or other amount bearing interest based on the LIBOR
Rate, on which dealings are carried on in the London interbank market.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.2(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.1. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.1(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office by the jurisdiction where
such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law after the
date hereof (excluding from change in applicable law for this purpose a
change in an applicable treaty or other change in law affecting the
applicability of a treaty), or in the case of a successor Liquidity
Provider (including a transferee of an Advance) or Lending Office, after
the date on which such successor Liquidity Provider obtains its interest or
on which the Lending Office is changed, and (ii) any withholding Taxes
imposed by the United States which are imposed or increased as a result of
the Liquidity Provider failing to deliver to the Borrower any certificate
or document (which certificate or document in the good faith judgment of
the Liquidity Provider it is legally entitled to provide) which is
reasonably requested by the Borrower to establish that payments under this
Agreement are exempt from (or entitled to a reduced rate of) withholding
Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means September 24, 1998, initially, or any date to
which the Expiry Date is extended pursuant to Section 2.10.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.2(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.2(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following
either (x) the Liquidity Provider's receipt of the Notice of Borrowing for
such LIBOR Advance or (y) the withdrawal of funds from the Class C Cash
Collateral Account for the purpose of paying interest on the Class C
Certificates as contemplated by Section 2.6(a) hereof and, in either case,
ending on the next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
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 Business Day following the Liquidity Provider's
receipt of the Notice of Borrowing for such Final Advance (in the case of
clause (x) above) or the Regular Distribution Date following such
conversion (in the case of clause (y) above).
"LENDING OFFICE" means the lending office of the Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as the
Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder; provided that the Liquidity Provider shall not
change its Lending Office to a Lending Office outside the United States of
America except in accordance with Section 3.1, 3.2 or 3.3 hereof.
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period, the average
(rounded upward, if necessary, to the next higher 1/16 of 1%) of the rates
per annum at which deposits in dollars are offered to major banks in the
London interbank market at approximately 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period in an amount
approximately equal to the principal amount of the Advance to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes or (b) a Continental Bankruptcy
Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.2(a), at any time of
determination, (a) the Maximum Commitment at such time less (b) the
aggregate amount of each Interest Advance outstanding at such time;
provided that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means, for any day, the lesser of (x) $1,540,059
and (y) the Required Amount on such day.
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.2(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.2(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.8.
"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" means the Prospectus dated July 23, 1997, as modified and
supplemented by the Prospectus Supplement dated September 12, 1997,
relating to the Certificates; and as such Prospectus may be further amended
or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.1.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.6(b).
"REQUIRED AMOUNT" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest
Rate for the Class C Certificates, that would be payable on the Class C
Certificates on each of the six successive quarterly Regular Distribution
Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding five quarterly Regular
Distribution Dates, in each case calculated on the basis of the Pool
Balance of the Class C Certificates on such day and without regard to
expected future payments of principal on the Class C Certificates.
"ROLLS ROYCE" means Rolls-Royce plc, a corporation organized under the
laws of England.
"TAX LETTER" means the letter dated the date hereof between the
Liquidity Provider and Rolls Royce pertaining to this Agreement.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class C Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.1 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.8(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section 2.5.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"ACCELERATION," "CERTIFICATES", "CLASS A CASH COLLATERAL ACCOUNT",
"CLASS A CERTIFICATES", "CLASS A CERTIFICATEHOLDERS", "CLASS A TRUST",
"CLASS A TRUST AGREEMENT", "CLASS A TRUSTEE", "CLASS B CASH COLLATERAL
ACCOUNT", "CLASS B CERTIFICATES", "CLASS B CERTIFICATEHOLDERS", "CLASS
B TRUST", "CLASS B TRUST AGREEMENT", "CLASS B TRUSTEE", "CLASS C CASH
COLLATERAL ACCOUNT", "CLASS C CERTIFICATES", "CLASS C
CERTIFICATEHOLDERS", "CLASS C TRUST", "CLASS C TRUST AGREEMENT",
"CLASS C TRUSTEE", "CLOSING DATE", "CONTINENTAL", "CONTINENTAL
BANKRUPTCY EVENT", "CONTROLLING PARTY", "CORPORATE TRUST OFFICE",
"DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION DATE", "DOWNGRADED
FACILITY", "EQUIPMENT NOTES", "FEE LETTER", "FINANCING AGREEMENT",
"INDENTURE", "INVESTMENT EARNINGS", "LIQUIDITY FACILITY", "LOAN
TRUSTEE", "MOODY'S", "NON-EXTENDED FACILITY", "OPERATIVE AGREEMENTS",
"PERFORMING EQUIPMENT NOTE", "PERSON", "POOL BALANCE", "PURCHASE
AGREEMENT", "RATING AGENCY", "REGULAR DISTRIBUTION DATE", "REPLACEMENT
LIQUIDITY FACILITY", "RESPONSIBLE OFFICER", "SCHEDULED PAYMENT",
"SPECIAL PAYMENT", "STANDARD & POOR'S", "STATED INTEREST RATE",
"SUBORDINATION AGENT", "TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST
AGREEMENTS", "TRUSTEE", "UNDERWRITERS", "UNDERWRITING AGREEMENT" and
"WRITTEN NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
----------------------------------
Section 2.1. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.4(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.2. MAKING THE ADVANCES. Interest Advances shall be made in
one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of the interest on the Class C Certificates at
the Stated Interest Rate therefor in accordance with Section 3.6(a) of the
Intercreditor Agreement. Each Interest Advance made hereunder shall
automatically reduce the Maximum Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.2(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
2.2.1. A Non-Extension Advance shall be made in a single
Borrowing if this Agreement is not extended in accordance with Section
3.6(d) of the Intercreditor Agreement (unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously
delivered to the Borrower in accordance with said 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 Class C Cash Collateral Account in accordance with said
Section 3.6(d).
2.2.2. A Downgrade Advance shall be made in a single
Borrowing upon a downgrading of the Liquidity Provider's short-term
unsecured debt rating issued by either Rating Agency below the
Threshold Rating (as provided for in Section 3.6(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility to
replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the
Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex III attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class
C Cash Collateral Account in accordance with said Section 3.6(c).
2.2.3. 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 6.1 hereof by delivery to the
Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex IV attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum
Available Commitment at such time, and shall be used to fund the Class
C Cash Collateral Account (in accordance with Section 3.6(i) of the
Intercreditor Agreement).
2.2.4. Each Borrowing shall be made on notice in writing (a
"NOTICE OF BORROWING") in substantially the form required by Section
2.2(a), 2.2(b), 2.2(c) or 2.2(d), as the case may be, given by the
Borrower to the Liquidity Provider. If a Notice of Borrowing is
delivered by the Borrower in respect of any Borrowing no later than
12:00 Noon (New York City time) on a Business Day, the Liquidity
Provider shall, upon satisfaction of the conditions precedent set
forth in Section 4.2 with respect to a requested Borrowing, before
12:00 Noon (New York City time) on the first Business Day next
following the day of receipt of such Notice of Borrowing or on such
later Business Day specified in such Notice of Borrowing, make
available to the Borrower, in accordance with its payment
instructions, in U.S. dollars and immediately available funds, the
amount of such Borrowing. If a Notice of Borrowing is delivered by the
Borrower in respect of any Borrowing after 12:00 Noon (New York City
time) on a Business Day, the Liquidity Provider shall, upon
satisfaction of the conditions precedent set forth in Section 4.2 with
respect to a requested Borrowing, before 12:00 Noon (New York City
time) on the second Business Day next following the day of receipt of
such Notice of Borrowing or on such later Business Day specified by
the Borrower in such Notice of Borrowing, make available to the
Borrower, in accordance with its payment instructions, in U.S. dollars
and in immediately available funds, the amount of such 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.
2.2.5. Upon the making of any Advance requested pursuant to
a Notice of Borrowing, in accordance with the Borrower's payment
instructions, the Liquidity Provider shall be fully discharged of its
obligation hereunder with respect to such Notice of Borrowing, and the
Liquidity Provider shall not thereafter be obligated to make any
further Advances hereunder in respect of such Notice of Borrowing to
the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.2(b), (c) or (d) hereof to fund the
Class C Cash Collateral Account, the Liquidity Provider shall have no
interest in or rights to the Class C Cash Collateral Account, such
Advance or any other amounts from time to time on deposit in the Class
C 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 (f) of the
Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions
of this Agreement, the Liquidity Provider makes no representation as
to, and assumes no responsibility for, the correctness or sufficiency
for any purpose of the amount of the Advances so made and requested.
Section 2.3. FEES. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.4. ADJUSTMENTS OR TERMINATION OF THE MAXIMUM COMMITMENT.
2.4.1. AUTOMATIC ADJUSTMENTS. Promptly following each date
on which the Required Amount is reduced as a result of a reduction in
the Pool Balance of the Class C Certificates or otherwise, clause (y)
of the definition of Maximum Commitment shall automatically be reduced
to an amount equal to the Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic
reduction of the Maximum Commitment to the Liquidity Provider within
two Business Days thereof. The failure by the Borrower to furnish any
such notice shall not affect such automatic reduction of the Maximum
Commitment.
2.4.2. TERMINATION. Upon the making of any Provider Advance
or Final Advance hereunder or the occurrence of the Termination Date,
the obligation of the Liquidity Provider to make further Advances
hereunder shall automatically and irrevocably terminate, and the
Borrower shall not be entitled to request any further Borrowing
hereunder.
Section 2.5. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.6, 2.7 and 2.9 hereof, the Borrower hereby agrees, without
notice of an Advance or demand for repayment from the Liquidity Provider (which
notice and demand are hereby waived by the Borrower), to pay, or to cause to be
paid, to the Liquidity Provider on each date on which the Liquidity Provider
shall make an Interest Advance or the Final Advance, an amount equal to (a) the
amount of such Advance (any such Advance, until repaid, is referred to herein as
an "UNPAID ADVANCE"), plus (b) interest on the amount of each such Unpaid
Advance as provided in Section 3.7 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 2.5 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.6
and for the purposes of Section 2.6(b)). The Borrower and the Liquidity Provider
agree that the repayment in full of each Interest Advance and Final Advance on
the date such Advance is made is intended to be a contemporaneous exchange for
new value given to the Borrower by the Liquidity Provider.
Section 2.6. REPAYMENTS OF PROVIDER ADVANCES.
2.6.1. Amounts advanced hereunder in respect of a Provider
Advance shall be deposited in the Class C Cash Collateral Account,
invested and withdrawn from the Class C Cash Collateral Account as set
forth in Sections 3.6(c), (d) and (f) of the Intercreditor Agreement.
The Borrower agrees to pay to the Liquidity Provider, on each Regular
Distribution Date, commencing on the first Regular Distribution Date
after the making of a Provider Advance, interest on the principal
amount of any such Provider Advance as provided in Section 3.7;
PROVIDED, HOWEVER, that amounts in respect of a Provider Advance
withdrawn from the Class C Cash Collateral Account for the purpose of
paying interest on the Class C Certificates in accordance with Section
3.6(f) of the Intercreditor Agreement (the amount of any such
withdrawal being (y) in the case of a Downgrade Advance, an "APPLIED
DOWNGRADE ADVANCE" and (z) in the case of a Non-Extension Advance, an
"APPLIED NON-EXTENSION ADVANCE" and, together with an Applied
Downgrade Advance, an "APPLIED PROVIDER ADVANCE") shall thereafter
(subject to Section 2.6(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 6.1
hereof, such Provider Advance shall thereafter be treated as a Final
Advance under this Agreement for purposes of determining the
Applicable Liquidity Rate for interest payable thereon. Subject to
Sections 2.7 and 2.9 hereof, immediately upon the withdrawal of any
amounts from the Class C Cash Collateral Account on account of a
reduction in the Required Amount, the Borrower shall repay to the
Liquidity Provider a portion of the Provider Advances in a principal
amount equal to the amount of such reduction, plus interest on the
principal amount prepaid as provided in Section 3.7 hereof.
2.6.2. At any time when an Applied Provider Advance (or any
portion thereof) is outstanding, upon the deposit in the Class C Cash
Collateral Account of any amount pursuant to clause "THIRD" of Section
2.4(b) of the Intercreditor Agreement, clause "THIRD" of Section 3.2
of the Intercreditor Agreement or clause "FOURTH" of Section 3.3 of
the Intercreditor Agreement (any such amount being a "REPLENISHMENT
AMOUNT") for the purpose of replenishing or increasing the balance
thereof up to the 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.
2.6.3. 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 Class C Cash Collateral Account after giving effect to any Applied
Provider Advance on the date of such replacement shall be reimbursed
to the Liquidity Provider, but only to the extent such amounts are
necessary to repay in full to the Liquidity Provider all amounts owing
to it hereunder.
Section 2.7. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.8. 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 2.9. 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 Section
9.1 of the Participation Agreements and only to the extent that the Borrower
shall have sufficient income or proceeds therefrom to enable the Borrower to
make payments in accordance with the terms hereof after giving effect to the
priority of payments provisions set forth in the Intercreditor Agreement. The
Liquidity Provider agrees that it will look solely to such amounts to the extent
available for distribution to it as provided in the Intercreditor Agreement and
this Agreement and that the Borrower, in its individual capacity, is not
personally liable to it for any amounts payable or liability under this
Agreement except as expressly provided in this Agreement, the Intercreditor
Agreement or any Participation Agreement. Amounts on deposit in the Class C Cash
Collateral Account shall be available to the Borrower to make payments under
this Agreement only to the extent and for the purposes expressly contemplated in
Section 3.6(f) of the Intercreditor Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. No
earlier than the 60th day and no later than the 40th day prior to the then
effective Expiry Date (unless such Expiry Date is on or after the date that is
15 days after the Final Maturity Date for the Class C Certificates), the
Borrower shall request that the Liquidity Provider extend the Expiry Date for a
period of 364 days after the then effective Expiry Date (unless the obligations
of the Liquidity Provider are earlier terminated in accordance with the terms
hereof). The Liquidity Provider shall advise the Borrower, no earlier than 40
days and no later than 25 days prior to the then effective Expiry Date, whether,
in its sole discretion, it agrees to so extend the Expiry Date. If the Liquidity
Provider advises the Borrower on or before the 25th day prior to the Expiry Date
then in effect that such Expiry Date shall not be so extended, or fails to
irrevocably and unconditionally advise the Borrower on or before the 25th day
prior to the Expiry Date then in effect that such Expiry Date shall be so
extended (and, in each case, if the Liquidity Provider shall not have been
replaced in accordance with Section 3.6(e) of the Intercreditor Agreement), the
Borrower shall be entitled on and after such 25th day (but prior to the then
effective Expiry Date) to request a Non-Extension Advance in accordance with
Section 2.2(b) hereof and Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
---------------------------
Section 3.1. INCREASED COSTS. Subject to the Fee Letter, the Borrower
shall pay to the Liquidity Provider from time to time such amounts as may be
necessary to compensate the Liquidity Provider for any increased costs incurred
by the Liquidity Provider which are attributable to its making or maintaining
any LIBOR Advances hereunder or its obligation to make any such Advances
hereunder, or any reduction in any amount receivable by the Liquidity Provider
under this Agreement or the Intercreditor Agreement in respect of any such
Advances or such obligation (such increases in costs and reductions in amounts
receivable being herein called "ADDITIONAL COSTS"), resulting from any change
after the date of this Agreement in U.S. federal, state, municipal, or foreign
laws or regulations (including Regulation D), or the adoption or making after
the date of this Agreement of any interpretations, directives, or requirements
applying to a class of banks including the Liquidity Provider under any U.S.
federal, state, municipal, or any foreign laws or regulations (whether or not
having the force of law) by any court, central bank or monetary authority
charged with the interpretation or administration thereof (a "REGULATORY
CHANGE"), which: (1) changes the basis of taxation of any amounts payable to the
Liquidity Provider under this Agreement in respect of any such Advances (other
than Excluded Taxes); or (2) imposes or modifies any reserve, special deposit,
compulsory loan or similar requirements relating to any extensions of credit or
other assets of, or any deposits with other liabilities of, the Liquidity
Provider (including any such Advances or any deposits referred to in the
definition of LIBOR Rate or related definitions). The Liquidity Provider agrees
to use reasonable efforts (consistent with applicable legal and regulatory
restrictions) to change the jurisdiction of its Lending Office if making such
change would avoid the need for, or reduce the amount of, any amount payable
under this Section 3.1 that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.1 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 3.1 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Section 3.2. CAPITAL ADEQUACY. Subject to the Fee Letter, if (1) the
adoption, after the date hereof, of any applicable governmental law, rule or
regulation regarding capital adequacy, (2) any change, after the date hereof, in
the interpretation or administration of any such law, rule or regulation by any
central bank or other governmental authority charged with the interpretation or
administration thereof or (3) compliance by the Liquidity Provider or any
corporation controlling the Liquidity Provider with any applicable guideline or
request of general applicability, issued after the date hereof, by any central
bank or other governmental authority (whether or not having the force of law)
that constitutes a change of the nature described in clause (2), has the effect
of requiring an increase in the amount of capital required to be maintained by
the Liquidity Provider or any corporation controlling the Liquidity Provider,
and such increase is based upon the Liquidity Provider's obligations hereunder
and other similar obligations, the Borrower shall pay to the Liquidity Provider
from time to time such additional amount or amounts as are necessary to
compensate the Liquidity Provider for such portion of such increase as shall be
reasonably allocable to the Liquidity Provider's obligations to the Borrower
hereunder. The Liquidity Provider agrees to use reasonable efforts (consistent
with applicable legal and regulatory restrictions) to change the jurisdiction of
its Lending Office if making such change would avoid the need for, or reduce the
amount of, any amount payable under this Section that may thereafter accrue and
would not, in the reasonable judgment of the Liquidity Provider, be otherwise
materially disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.2 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 3.2 of the effect of any increase in the amount of capital required
to be maintained by the bank and of the amount allocable to the Liquidity
Provider's obligations to the Borrower hereunder shall be prima facie evidence
of the amounts owed under this Section.
Section 3.3. PAYMENTS FREE OF DEDUCTIONS. All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding Excluded Taxes (such non-excluded
taxes being referred to herein, collectively, as "Non-Excluded Taxes" and,
individually, as a "Non-Excluded Tax"). If any Non-Excluded Taxes are required
to be withheld from any amounts payable to the Liquidity Provider under this
Agreement, the amounts so payable to the Liquidity Provider shall be increased
to the extent necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes) interest or any other such amounts payable under this
Agreement at the rates or in the amounts specified in this Agreement. The
Liquidity Provider agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of the Liquidity Provider, be
otherwise disadvantageous to the Liquidity Provider. From time to time upon the
reasonable request of the Borrower, the Liquidity Provider agrees to provide to
the Borrower two original Internal Revenue Service Forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that the Liquidity Provider is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement.
Section 3.4. PAYMENTS. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to ABN AMRO Bank N.V., New York,
NY, ABA # 026009580, Account Name: ABN AMRO Bank, N.V. - Chicago Branch, Account
# 650-001-1789-41, Reference: Continental Airlines, Inc. Pass Through Trust
1997-3C.
Section 3.5. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.6. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance or reduce the number
of days for which interest will be payable on such Advance on the next interest
payment date for such Advance.
Section 3.7. INTEREST. Subject to Section 2.9, the Borrower shall pay,
or shall cause to be paid, without duplication, interest on (i) the unpaid
principal amount of each Advance from and including the date of such Advance
(or, in the case of an Applied Provider Advance, from and including the date on
which the amount thereof was withdrawn from the Class C Cash Collateral Account
to pay interest on the Class C Certificates) to but excluding the date such
principal amount shall be paid in full (or, in the case of an Applied Provider
Advance, the date on which the Class C Cash Collateral Account is fully
replenished in respect of such Advance) and (ii) any other amount due hereunder
(whether fees, commissions, expenses or other amounts or, to the extent
permitted by law, installments of interest on Advances or any such other amount)
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) from and including the due date thereof to but excluding the date
such amount is paid in full, in each such case, at a fluctuating interest rate
per annum for each day equal to the Applicable Liquidity Rate (as defined below)
for such Advance or such other amount as in effect for such day, but in no event
at a rate per annum greater than the maximum rate permitted by applicable law;
PROVIDED, HOWEVER, that, if at any time the otherwise applicable interest rate
as set forth in this Section 3.7 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 3.7 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 3.7 had at all times been
in effect.
Except as provided in clause (e) below, each Advance will be either a
Base Rate Advance or a LIBOR Advance as provided in this Section. Each Advance
will be a Base Rate Advance for the period from the date of its borrowing to
(but excluding) the third Business Day following the Liquidity Provider's
receipt of the Notice of Borrowing for such Advance. Thereafter, such Advance
shall be a LIBOR Advance; provided that the Borrower (at the direction of the
Controlling Party, so long as the Liquidity Provider is not the Controlling
Party) may (x) convert the Final Advance into a Base Rate Advance on the last
day of an Interest Period for such Advance by giving the Liquidity Provider no
less than four Business Days' prior written notice of such election or (y) elect
to maintain the Final Advance as 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.
Each LIBOR Advance shall bear interest during each Interest Period at
a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
Each Base Rate Advance shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin for such Base Rate Advance, payable
in arrears on each Regular Distribution Date and, in the event of the payment of
principal of such Base Rate Advance on a day other than a Regular Distribution
Date, on the date of such payment (to the extent of interest accrued on the
amount of principal repaid).
Each Unapplied Provider Advance (i) during the period from and
including the date of the making of such Unapplied Provider Advance through but
excluding the date of repayment thereof or of conversion thereof into a Final
Advance or Applied Provider Advance (and for any additional periods of time
during which such Advance no longer constitutes an Applied Provider Advance but
again constitutes an Unapplied Provider Advance pursuant to Sections 2.6(a) and
(b) hereof), shall bear interest in an amount equal to the Investment Earnings
on amounts on deposit in the Class C Cash Collateral Account for such period
plus the Applicable Margin on the amount of such Unapplied Provider Advance from
time to time during such period, payable in arrears on each Regular Distribution
Date and (ii) after conversion thereof into a Final Advance or Applied Provider
Advance (but only for such period of time during which such Advance constitutes
an Applied Provider Advance pursuant to Sections 2.6(a) and (b) hereof), as the
case may be, shall be a LIBOR Advance and shall bear interest in accordance with
clause (c) above.
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.
Each change in the Base Rate shall become effective immediately. The
rates of interest specified in this Section 3.7 with respect to any Advance or
other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.8. REPLACEMENT OF BORROWER. From time to time and subject to
the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination Agent
upon the effective date and time specified in a written and completed Notice of
Replacement Subordination Agent in substantially the form of Annex VI attached
hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.9. 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 2.2.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
Section 4.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.1.
Section 2.1 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:
4.1.1. The Liquidity Provider shall have received on or
before the Closing Date each of the following, and in the case of each
document delivered pursuant to paragraphs (i), (ii) and (iii), each in
form and substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the
Borrower;
(ii) The Intercreditor Agreement duly executed on
behalf of each of the parties thereto;
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing Date
(other than this Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus and specimen copies of
the Class C Certificates;
(v) An executed copy of each document, instrument,
certificate and opinion delivered on or before the Closing Date
pursuant to the Class C Trust Agreement, the Intercreditor
Agreement and the other Operative Agreements (together with, in
the case of each such opinion, other than the opinion of counsel
for the Underwriters, 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);
(v) Evidence that there shall have been made and shall
be in full force and effect, all filings, recordings and/or
registrations, and there shall have been given or taken any
notice or other similar action as may be reasonably necessary or,
to the extent reasonably requested by the Liquidity Provider,
reasonably advisable, in order to establish, perfect, protect and
preserve the right, title and interest, remedies, powers,
privileges, liens and security interests of, or for the benefit
of, the Trustees, the Borrower and the Liquidity Provider created
by the Operative Agreements executed and delivered on or prior to
the Closing Date;
(vi) An agreement from Continental, pursuant to which
(i) Continental agrees to provide copies of quarterly financial
statements and audited annual financial statements to the
Liquidity Provider, and such other information as the Liquidity
Provider shall reasonably request with respect to the
transactions contemplated by the Operative Agreements, in each
case, only to the extent that Continental is obligated to provide
such information pursuant to Section 8.2.1 of the Leases to the
parties thereto and (ii) Continental agrees to allow the
Liquidity Provider to inspect Continental's books and records
regarding such transactions, and to discuss such transactions
with officers and employees of Continental; and
(vii) Such other documents, instruments, opinions and
approvals as the Liquidity Provider shall have reasonably
requested.
4.1.2. 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.
4.1.3. 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.
4.1.4. All conditions precedent to the issuance of the
Certificates under the Trust Agreements shall have been satisfied, all
conditions precedent to the effectiveness of the other Liquidity
Facilities shall have been satisfied, and all conditions precedent to
the purchase of the Certificates by the Underwriters under the
Underwriting Agreement shall have been satisfied (unless any of such
conditions precedent shall have been waived by the Underwriters).
4.1.5. 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 2.1 have been satisfied or waived.
Section 4.2. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
---------
Section 5.1. 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:
5.1.1. 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.
5.1.2. 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.
5.1.3 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 5.2. 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 written consent of the
Liquidity Provider, which consent shall not be unreasonably withheld or delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
---------------------------
Section 6.1. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) this
Agreement to expire on the fifth Business Day after the date on which such
Termination Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final Advance in
accordance with Section 2.2(d) hereof and Section 3.6(i) of the Intercreditor
Agreement, (iii) all other outstanding Advances to be automatically converted
into Final Advances for purposes of determining the Applicable Liquidity Rate
for interest payable thereon, and (iv) subject to Sections 2.7 and 2.9 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 7.1. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.2. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: ABN AMRO BANK N.V.
Aerospace Department
135 South LaSalle Street, #820
Chicago, IL 60674-9135
Attention: Claudia Heldring, V.P.
Telephone: (312) 904-5031
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle St., #625
Chicago, IL 60674-9135
Attention: Loan Operations
Telephone: (312) 904-2961
Telecopy: (312) 606-6893
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.3. 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 7.4. 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 7.5. 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 Sections 3.1, 3.2 or 7.7 hereof or in the Fee Letter (regardless of
whether indemnified against pursuant to said Sections or in such Fee Letter)),
that may be imposed, incurred by or asserted against any Liquidity Indemnitee,
in any way relating to, resulting from, or arising out of or in connection with
any action, suit or proceeding by any third party against such Liquidity
Indemnitee and relating to this Agreement, the Fee Letter, the Intercreditor
Agreement or any Financing Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to indemnify, protect, defend and hold harmless any Liquidity
Indemnitee in respect of any Expense of such Liquidity Indemnitee to the extent
such Expense is (i) attributable to the gross negligence or willful misconduct
of such Liquidity Indemnitee or any other Liquidity Indemnitee, (ii) ordinary
and usual operating overhead expense, or (iii) attributable to the failure by
such Liquidity Indemnitee or any other Liquidity Indemnitee to perform or
observe any agreement, covenant or condition on its part to be performed or
observed in this Agreement, the Intercreditor Agreement, the Fee Letter, the Tax
Letter or any other Operative Agreement to which it is a party. The indemnities
contained in such Section 9.1, and the provisions of Sections 3.1, 3.2, 3.3,
3.9, 7.5 and 7.7 hereof, shall survive the termination of this Agreement.
Section 7.6. LIABILITY OF THE LIQUIDITY PROVIDER.OVIDER
7.6.1. Neither the Liquidity Provider nor any of its
officers, employees, directors or affiliates shall be liable or
responsible for: (i) the use which may be made of the Advances or any
acts or omissions of the Borrower or any beneficiary or transferee in
connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; or (iii) the making of Advances by the Liquidity
Provider against delivery of a Notice of Borrowing and other documents
which do not comply with the terms hereof; PROVIDED, HOWEVER, that the
Borrower shall have a claim against the Liquidity Provider, and the
Liquidity Provider shall be liable to the Borrower, to the extent of
any damages suffered by the Borrower which were the result of (A) the
Liquidity Provider's willful misconduct or negligence in determining
whether documents presented hereunder comply with the terms hereof, or
(B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's
failure to make lawful payment hereunder after the delivery to it by
the Borrower of a Notice of Borrowing strictly complying with the
terms and conditions hereof.
7.6.2. Neither the Liquidity Provider nor any of its
officers, employees, director or affiliates shall be liable or
responsible in any respect for (i) any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with this Agreement or any
Notice of Borrowing delivered hereunder, or (ii) any action, inaction
or omission which may be taken by it in good faith, absent willful
misconduct or negligence (in which event the extent of the Liquidity
Provider's potential liability to the Borrower shall be limited as set
forth in the immediately preceding paragraph), in connection with this
Agreement or any Notice of Borrowing.
Section 7.7. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay, or
cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Cash Collateral
Accounts. In addition, the Borrower shall pay any and all recording, stamp and
other similar taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this Agreement, any other
Operative Agreement and such other documents, and agrees to save the Liquidity
Provider harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees.
Section 7.8. BINDING EFFECT; PARTICIPATIONS.
7.8.1. 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 7.8) nor
(except as contemplated by Section 3.8) 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 7.8(b). The Liquidity Provider may
grant participations herein or in any of its rights hereunder
(including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and
under the other Operative Agreements to such Persons as the Liquidity
Provider may in its sole discretion select, subject to the
requirements of Section 7.8(b). No such participation by the Liquidity
Provider, however, will relieve the Liquidity Provider of its
obligations hereunder. In connection with any participation or any
proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the
Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and
agrees that the Liquidity Provider's source of funds may derive in
part from its participants (other than Continental). Accordingly,
references in this Agreement and the other Operative Agreements to
determinations, reserve and capital adequacy requirements, increased
costs, reduced receipts, additional amounts due pursuant to Section
3.3(a) and the like as they pertain to the Liquidity Provider shall be
deemed also to include those of each of its participants (subject, in
each case, to the maximum amount that would have been incurred by or
attributable to the Liquidity Provider directly if the Liquidity
Provider, rather than the participant, had held the interest
participated).
7.8.2. If, pursuant to subsection (a) above, the Liquidity
Provider sells any participation in this Agreement to any bank or
other entity (each, a "TRANSFEREE"), then, concurrently with the
effectiveness of such participation, the Transferee shall (i)
represent to the Liquidity Provider (for the benefit of the Liquidity
Provider and the Borrower) either (A) that it is incorporated under
the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld
with respect to any payments to be made to such Transferee in respect
of this Agreement, (ii) furnish to the Liquidity Provider and the
Borrower either (x) a statement that it is incorporated under the laws
of the United States or a state thereof or (y) if it is not so
incorporated, two copies of a properly completed United States
Internal Revenue Service Form 4224 or Form 1001, as appropriate, or
other applicable form, certificate or document prescribed by the
Internal Revenue Service certifying, in each case, such Transferee's
entitlement to a complete exemption from United States federal
withholding tax in respect to any and all payments to be made
hereunder, and (iii) agree (for the benefit of the Liquidity Provider
and the Borrower) to provide the Liquidity Provider and the Borrower a
new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the
occurrence of any event requiring a change in the most recent form
previously delivered by it and prior to the immediately following due
date of any payment by the Borrower hereunder, certifying in the case
of a Form 1001 or Form 4224 that such Transferee is entitled to a
complete exemption from United States federal withholding tax on
payments under this Agreement. Unless the Borrower has received forms
or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to
United States federal withholding tax, the Borrower will withhold
taxes as required by law from such payments at the applicable
statutory rate.
7.8.3. Notwithstanding the other provisions of this Section
7.8, 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 7.9. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF IMMUNITY.
7.11.1. Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any other
Operative Agreement, or for recognition and enforcement of any
judgment in respect hereof or thereof, to the nonexclusive
general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District
of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to each party hereto at its address
set forth in Section 7.2 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.
7.11.2. 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.
7.11.3. The Liquidity Provider hereby waives any immunity it
may have from the jurisdiction of the courts of the United States or
of any State and waives any immunity any of its properties located in
the United States may have from attachment or execution upon a
judgement 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 thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as agent and
trustee for the Class C Trust, as
Borrower
By:_______________________________________
Name:
Title:
ABN AMRO BANK N.V., acting through its
Chicago Branch, 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 ABN AMRO N.V., Chicago Branch
(the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1997-3C) dated as of September 25, 1997, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(a) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(b) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used for the payment of
the interest on the Class C Certificates which was payable on _______________
(the "DISTRIBUTION DATE") in accordance with the terms and provisions of the
Class C Trust Agreement and the Class C Certificates, which Advance is requested
to be made on _________________.
(c) The amount of the Interest Advance requested hereby (i) is
$_____________ , to be applied in respect of the payment of the interest which
was due and payable on the Class C Certificates on the Distribution Date, (ii)
does not include any amount with respect to the payment of principal of, or
premium on, the Class C Certificates, the Class B Certificates or the Class A
Certificates, or interest on the Class B Certificates or the Class A
Certificates, (iii) was computed in accordance with the provisions of the Class
C Certificates, the Class C Trust Agreement and the Intercreditor Agreement (a
copy of which computation is attached hereto as Schedule I), (iv) does not
exceed the Maximum Available Commitment on the date hereof and (v) has not been
and is not the subject of a prior or contemporaneous Notice of Borrowing.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with the
terms of Section 3.6(b) of the Intercreditor Agreement (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no portion
of such amount until so applied shall be commingled with other funds held by the
Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ______ day of____________, _____.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:______________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.,
Chicago Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving
Credit Agreement (1997-3C) dated as of September 25, 1997, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(a) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(b) The Borrower is delivering this Notice of Borrowing for the making
of the Non-Extension Advance by the Liquidity Provider to be used for the
funding of the Class C Cash Collateral Account in accordance with Section 3.6(d)
of the Intercreditor Agreement, which Advance is requested to be made on .
(c) The amount of the Non-Extension Advance requested hereby (i) is
$__________, which equals the Maximum Available Commitment on the date hereof
and is to be applied in respect of the funding of the Class C Cash Collateral
Account in accordance with Section 3.6(d) of the Intercreditor Agreement, (ii)
does not include any amount with respect to the payment of the principal of, or
premium on, the Class C Certificates, or principal of, or interest or premium
on, the Class B Certificates or the Class A Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class C Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C Cash
Collateral Account and apply the same in accordance with the terms of Section
3.6(d) of the Intercreditor Agreement, (b) no portion of such amount shall be
applied by the Borrower for any other purpose and (c) no portion of such amount
until so applied shall be commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
* * *
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the day of ______ day of _____________, _____.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:______________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V.,
Chicago Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving
Credit Agreement (1997-3C) dated as of September 25, 1997, between the Borrower
and the Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein
and not otherwise defined herein being used herein as therein defined or
referenced), that:
(a) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(b) 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 Class C Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement by reason of the downgrading of the short-term unsecured
debt rating of the Liquidity Provider issued by either Rating Agency below the
Threshold Rating, which Advance is requested to be made on ____________, _____.
(c) 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 Class C Cash Collateral
Account in accordance with Section 3.6(c) of the Intercreditor Agreement, (ii)
does not include any amount with respect to the payment of the principal of, or
premium on, the Class C Certificates, or principal of, or interest or premium
on, the Class B Certificates or the Class A Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class C Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing under the Liquidity Agreement.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C Cash
Collateral Account and apply the same in accordance with the terms of Section
3.6(c) of the Intercreditor Agreement, (b) no portion of such amount shall be
applied by the Borrower for any other purpose and (c) no portion of such amount
until so applied shall be commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ___ day of _____________, _____.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Subordination Agent, as Borrower
By:_______________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to ABN AMRO BANK N.V., Chicago
Branch (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1997-3C) dated as of September 25, 1997, between the Borrower and the
Liquidity Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or referenced),
that:
(a) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(b) 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
Class A Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement by reason of the receipt by the Borrower of a
Termination Notice from the Liquidity Provider with respect to the Liquidity
Agreement, which Advance is requested to be made on ______________, ___.
(c) The amount of the Final Advance requested hereby (i) is
$__________, which equals the Maximum Available Commitment on the date hereof
and is to be applied in respect of the funding of the Class C Cash Collateral
Account in accordance with Section 3.6(i) of the Intercreditor Agreement, (ii)
does not include any amount with respect to the payment of principal of, or
premium on, the Class C Certificates, or principal of, or interest or premium
on, the Class B Certificates or the Class A Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class C Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is not the subject of
a prior or contemporaneous Notice of Borrowing.
(d) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C Cash
Collateral Account and apply the same in accordance with the terms of Section
3.6(i) of the Intercreditor Agreement, (b) no portion of such amount shall be
applied by the Borrower for any other purpose and (c) no portion of such amount
until so applied shall be commingled with other funds held by the Borrower.
(e) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a LIBOR
Advance on the third Business Day following your receipt of this notice].
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
___________________
Bracketed language is optional.
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 V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of September 25, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-3C, as Borrower, and ABN AMRO BANK
N.V., Chicago Branch (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.1 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
ABN AMRO BANK N.V., Chicago Branch, as
Liquidity Provider
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of September 25, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-3C, as Borrower, and ABN AMRO BANK
N.V., Chicago Branch (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
(Name of Transferee)
(Name 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:
EXHIBIT 4.4
FORM OF PASS THROUGH TRUST AGREEMENT
- --------------------------------------------------------------------------------
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
between
CONTINENTAL AIRLINES, INC.
and
WILMINGTON TRUST COMPANY,
as Trustee
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I - DEFINITIONS
Section 1.01. Definitions............................................ 2
Section 1.02. Compliance Certificates and Opinions................... 11
Section 1.03. Form of Documents Delivered to Trustee................. 12
Section 1.04. Directions of Certificateholders....................... 12
ARTICLE II - ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01. Amount Unlimited; Issuable in Series................... 13
Section 2.02. Acquisition of Equipment Notes......................... 15
Section 2.03. Acceptance by Trustee.................................. 17
Section 2.04. Limitation of Powers................................... 17
ARTICLE III - THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates....... 18
Section 3.02. Authentication of Certificates......................... 18
Section 3.03. Temporary Certificates................................. 19
Section 3.04. Transfer and Exchange.................................. 19
Section 3.05. Book-Entry and Definitive Certificates................. 20
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates...... 22
Section 3.07. Persons Deemed Owners.................................. 22
Section 3.08. Cancellation........................................... 22
Section 3.09. Limitation of Liability for Payments................... 23
ARTICLE IV - DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account....... 23
Section 4.02. Distributions from Certificate Account and Special
Payments Account....................................... 24
Section 4.03. Statements to Certificateholders....................... 25
Section 4.04. Investment of Special Payment Moneys................... 26
ARTICLE V - THE COMPANY
Section 5.01. Maintenance of Corporate Existence..................... 27
Section 5.02. Consolidation, Merger, Etc............................. 27
ARTICLE VI - DEFAULT
Section 6.01. Events of Default...................................... 28
TABLE OF CONTENTS
(Continued)
Page
----
Section 6.02. Incidents of Sale of Equipment Notes................... 29
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee May
Bring Suit............................................. 30
Section 6.04. Control by Certificateholders.......................... 30
Section 6.05. Waiver of Past Defaults................................ 30
Section 6.06. Right of Certificateholders to Receive Payments Not to
Be Impaired............................................ 31
Section 6.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions..................................... 31
Section 6.08. Remedies Cumulative.................................... 32
Section 6.09. Undertaking for Costs.................................. 32
ARTICLE VII - THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities.................... 32
Section 7.02. Notice of Defaults..................................... 33
Section 7.03. Certain Rights of Trustee.............................. 33
Section 7.04. Not Responsible for Recitals or Issuance of
Certificates........................................... 35
Section 7.05. May Hold Certificates.................................. 35
Section 7.06. Money Held in Trust.................................... 35
Section 7.07. Compensation and Reimbursement......................... 35
Section 7.08. Corporate Trustee Required; Eligibility................ 36
Section 7.09. Resignation and Removal; Appointment of Successor...... 36
Section 7.10. Acceptance of Appointment by Successor................. 38
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business............................................... 39
Section 7.12. Maintenance of Agencies................................ 39
Section 7.13. Money for Certificate Payments to Be Held in Trust..... 40
Section 7.14. Registration of Equipment Notes in Trustee's Name...... 40
Section 7.15. Representations and Warranties of Trustee.............. 41
Section 7.16. Withholding Taxes; Information Reporting............... 42
Section 7.17. Trustee's Liens........................................ 42
Section 7.18. Preferential Collection of Claims...................... 42
ARTICLE VIII - CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders....................... 42
Section 8.02. Preservation of Information; Communications to
Certificateholders..................................... 43
Section 8.03. Reports by Trustee..................................... 43
Section 8.04. Reports by the Company................................. 43
TABLE OF CONTENTS
(Continued)
Page
----
ARTICLE IX - SUPPLEMENTAL AGREEMENTS
Section 9.01. Supplemental Agreements Without Consent of
Certificateholders..................................... 44
Section 9.02. Supplemental Agreements with Consent of
Certificateholders..................................... 45
Section 9.03. Documents Affecting Immunity or Indemnity.............. 46
Section 9.04. Execution of Supplemental Agreements................... 47
Section 9.05. Effect of Supplemental Agreements...................... 47
Section 9.06. Conformity with Trust Indenture Act.................... 47
Section 9.07. Reference in Certificates to Supplemental Agreements... 47
ARTICLE X - AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indenture and Other
Note Documents......................................... 47
ARTICLE XI - TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts.............................. 48
ARTICLE XII - MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders............. 49
Section 12.02. Liabilities of Certificateholders...................... 50
Section 12.03. Registration of Equipment Notes in Name of
Subordination Agent.................................... 50
Section 12.04. Notices................................................ 50
Section 12.05. Governing Law.......................................... 51
Section 12.06. Severability of Provisions............................. 51
Section 12.07. Trust Indenture Act Controls........................... 51
Section 12.08. Effect of Headings and Table of Contents............... 51
Section 12.09. Successors and Assigns................................. 52
Section 12.10. Benefits of Agreement.................................. 52
Section 12.11. Legal Holidays......................................... 52
Section 12.12. Counterparts........................................... 52
Section 12.13. Communication by Certificateholders with Other
Certificateholders..................................... 52
Section 12.14. Intention of Parties................................... 52
EXHIBITS
Exhibit A Form of Certificate
Reconciliation and tie between Continental Airlines Pass Through Trust
Agreement, dated as of September 25, 1997 and the Trust Indenture Act of 1939.
This reconciliation does not constitute part of the Pass Through Trust
Agreement.
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
--------------- -----------------
310(a)(1) 7.07
(a)(2) 7.07
312(a) 3.05; 8.01; 8.02
313(a) 7.07
314(a) 8.04(a) - (c)
(a)(4) 8.04(d)
(c)(1) 1.02
(c)(2) 1.02
(d)(1) 7.13; 11.01
(d)(2) 7.13; 11.01
(d)(3) 2.01
(e) 1.02
315(b) 7.02
316(a)(last sentence) 1.01(c)
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.13
318(a) 12.05
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of September 25, 1997 (the
"BASIC AGREEMENT"), between CONTINENTAL AIRLINES, INC., a Delaware corporation
(the "COMPANY"), and WILMINGTON TRUST COMPANY, a Delaware trust company, as
Trustee, is made with respect to the formation from time to time of separate
Continental Airlines Pass Through Trusts, and the issuance from time to time of
separate series of Pass Through Certificates representing fractional undivided
interests in the respective Trusts.
WITNESSETH:
WHEREAS, from time to time, the Company and the Trustee may enter into
a Trust Supplement (this and certain other defined terms used herein are defined
in Section 1.01) pursuant to which the Trustee shall declare the creation of a
separate Trust for the benefit of the Holders of the series of Certificates to
be issued in respect of such Trust, and the initial Holders of the Certificates
of such series, as the grantors of such Trust, by their respective acceptances
of the Certificates of such series, shall join in the creation of such Trust
with the Trustee;
WHEREAS, all Certificates to be issued in respect of each separate
Trust will be issued as a separate series pursuant to this Agreement, will
evidence fractional undivided interests in such Trust and will have no rights,
benefits or interests in respect of any other separate Trust or the property
held therein, subject, however, to the provisions of any Intercreditor Agreement
to which one or more Trusts may be a party;
WHEREAS, from time to time, pursuant to the terms and conditions of
this Agreement with respect to each separate Trust formed hereunder, the Trustee
on behalf of such Trust shall purchase one or more issues of Equipment Notes
having the same interest rate as, and final maturity dates not later than the
final Regular Distribution Date of, the series of Certificates issued in respect
of such Trust and, subject to the terms of any related Intercreditor Agreement,
shall hold such Equipment Notes in trust for the benefit of the
Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to, and the
purchase of Equipment Notes by, the Trustee on behalf of each Trust created from
time to time pursuant to this Agreement, the Company as the "ISSUER", as such
term is defined in and solely for purposes of the Securities Act of 1933, as
amended, of the Certificates to be issued in respect of each Trust and as the
"OBLIGOR", as such term is defined in and solely for purposes of the Trust
Indenture Act of 1939, as amended, has duly authorized the execution and
delivery of this Basic Agreement and each Trust Supplement with respect to all
such Certificates and is undertaking to perform certain administrative and
ministerial duties hereunder and is also undertaking to pay the fees and
expenses of the Trustee; and
WHEREAS, this Basic Agreement, as supplemented from time to time, 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 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. DEFINITIONS. For all purposes of this Basic Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article I have the
meanings assigned to them in this Article I, and include the plural as well
as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, or by the rules
promulgated under the Trust Indenture Act, have the meanings assigned to
them therein;
(3) all references in this Basic Agreement to designated "ARTICLES",
"SECTIONS", "SUBSECTIONS" and other subdivisions are to the designated
Articles, Sections, Subsections and other subdivisions of this Basic
Agreement;
(4) the words "HEREIN", "HEREOF" and "HEREUNDER" and other words of
similar import refer to this Basic Agreement as a whole and not to any
particular Article, Section, Subsection or other subdivision;
(5) unless the context otherwise requires, whenever the words
"INCLUDING", "INCLUDE" or "INCLUDES" are used herein, it shall be deemed to
be followed by the phrase "WITHOUT LIMITATION"; and
(6) the term "THIS AGREEMENT" (as distinguished from "THIS BASIC
AGREEMENT") refers, unless the context otherwise requires, to this Basic
Agreement as supplemented by the Trust Supplement creating a particular
Trust and establishing the series of Certificates issued or to be issued in
respect thereof, with reference to such Trust and such series of
Certificates, as this Basic Agreement as so supplemented may be further
supplemented with respect to such Trust and such series of Certificates.
ACT: Has the meaning, with respect to any Certificateholder, specified
in Section 1.04(a).
AFFILIATE: Means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person; PROVIDED, HOWEVER, that
neither America West Airlines, Inc. nor any of its subsidiaries shall be
deemed to be an "AFFILIATE" of the Company for purposes of this Agreement.
For the purposes of this definition, "CONTROL", when used with respect to
any specified Person, means the power, directly or indirectly, to direct
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.
AIRCRAFT: Means one or more aircraft, including engines therefor,
owned by or leased to the Company and securing one or more Equipment Notes.
AUTHORIZED AGENT: Means, with respect to the Certificates of any
series, any Paying Agent or Registrar for the Certificates of such series.
BASIC AGREEMENT: Means this Pass Through Trust Agreement, as the same
may from time to time be supplemented, amended or modified, but does not
include any Trust Supplement.
BOOK-ENTRY CERTIFICATES: Means, with respect to the Certificates of
any series, a beneficial interest in the Certificates of such series,
ownership and transfers of which shall be made through book entries as
described in Section 3.05.
BUSINESS DAY: Means, with respect to the Certificates of any series,
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 of such series is outstanding, the city and
state in which the Trustee or any related Loan Trustee maintains its
Corporate Trust Office or receives and disburses funds.
CERTIFICATE: Means any one of the certificates executed and
authenticated by the Trustee, substantially in the form of Exhibit A
hereto.
CERTIFICATE ACCOUNT: Means, with respect to the Certificates of any
series, the account or accounts created and maintained for such series
pursuant to Section 4.01(a) and the related Trust Supplement.
CERTIFICATEHOLDER OR HOLDER: Means, with respect to the Certificates
of any series, the Person in whose name a Certificate of such series is
registered in the Register for Certificates of such series.
CERTIFICATE OWNER: Means, with respect to the Certificates of any
series, for purposes of Section 3.05, the Person who owns a Book-Entry
Certificate of such series.
CLEARING AGENCY: Means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
CLEARING AGENCY PARTICIPANT: Means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects, directly or indirectly, book-entry transfers and pledges of
securities deposited with the Clearing Agency.
COMPANY: Means Continental Airlines, Inc., a Delaware corporation, or
its successor in interest pursuant to Section 5.02, or (only in the context
of provisions hereof, if any, when such reference is required for purposes
of compliance with the Trust Indenture Act) any other "obligor" (within the
meaning of the Trust Indenture Act) with respect to the Certificates of any
series.
CONTROLLING PARTY: Means the Person entitled to act as such pursuant
to the terms of any Intercreditor Agreement.
CORPORATE TRUST OFFICE: Means, with respect to the Trustee or any Loan
Trustee, the office of such trustee in the city at which at any particular
time its corporate trust business shall be principally administered.
CUT-OFF DATE: Means, with respect to the Certificates of any series,
the date designated as such in the Trust Supplement establishing such
series.
DEFINITIVE CERTIFICATES: Has the meaning, with respect to the
Certificates of any series, specified in Section 3.05.
DIRECTION: Has the meaning specified in Section 1.04(a).
EQUIPMENT NOTES: Means, with respect to the Certificates of any
series, all of the equipment notes issued under the Indentures related to
such series of Certificates.
ERISA: Means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor federal statute.
ESCROW ACCOUNT: Has the meaning, with respect to the Certificates of
any series, specified in Section 2.02(b).
ESCROWED FUNDS: Has the meaning, with respect to any Trust, specified
in Section 2.02(b).
EVENT OF DEFAULT: Means, in respect of any Trust, an Indenture Event
of Default under any Indenture pursuant to which Equipment Notes held by
such Trust were issued.
FRACTIONAL UNDIVIDED INTEREST: Means the fractional undivided interest
in a Trust that is evidenced by a Certificate relating to such Trust.
INDENTURE: Means, with respect to any Trust, each of the one or more
separate trust indenture and security agreements or trust indenture and
mortgages or similar documents described in, or on a schedule attached to,
the Trust Supplement and an indenture having substantially the same terms
and conditions which relates to a Substitute Aircraft, as each such
indenture may be amended or supplemented in accordance with its respective
terms; and "INDENTURES" means all of such agreements.
INDENTURE EVENT OF DEFAULT: Means, with respect to any Indenture, any
Indenture Event of Default (as such term is defined in such Indenture).
INITIAL REGULAR DISTRIBUTION DATE: Means, with respect to the
Certificates of any series, the first Regular Distribution Date on which a
Scheduled Payment is to be made.
INTERCREDITOR AGREEMENT: Means any agreement by and among the Trustee,
as trustee hereunder with respect to one or more Trusts, one or more
Liquidity Providers and a Subordination Agent providing, among other
things, for the distribution of payments made in respect of Equipment Notes
held by such Trusts.
ISSUANCE DATE: Means, with respect to the Certificates of any series,
the date of the issuance of such Certificates.
LEASE: Means any lease between an Owner Trustee, as the lessor, and
the Company, as the lessee, referred to in the related Indenture, as such
lease may be amended, supplemented or otherwise modified in accordance with
its terms; and "LEASES" means all such Leases.
LETTER OF REPRESENTATIONS: Means, with respect to the Certificates of
any series, an agreement among the Company, the Trustee and the initial
Clearing Agency.
LIQUIDITY FACILITY: Means, with respect to the Certificates of any
series, any revolving credit agreement, letter of credit or similar
facility relating to the Certificates of such series between a bank or
other financial institution and a Subordination Agent, as amended,
replaced, supplemented or otherwise modified from time to time in
accordance with its terms and the terms of any Intercreditor Agreement.
LIQUIDITY PROVIDER: Means, with respect to the Certificates of any
series, a bank or other financial institution that agrees to provide a
Liquidity Facility for the benefit of the holders of Certificates of such
series.
LOAN TRUSTEE: Means, with respect to any Equipment Note or the
Indenture applicable thereto, the bank or trust company designated as loan
or indenture trustee under such Indenture, and any successor to such Loan
Trustee as such trustee; and "LOAN TRUSTEES" means all of the Loan Trustees
under the Indentures.
NOTE DOCUMENTS: Means, with respect to the Certificates of any series,
the Equipment Notes with respect to such Certificates and, with respect to
such Equipment Notes, the related Indenture, Note Purchase Agreement and,
if the related Aircraft is leased to the Company, the related Lease and the
related Owner Trustee's Purchase Agreement.
NOTE PURCHASE AGREEMENT: Means, with respect to the Certificates of
any series, any note purchase, refunding, participation or similar
agreement providing for, among other things, the purchase of Equipment
Notes by the Trustee on behalf of the relevant Trust; and "NOTE PURCHASE
AGREEMENTS" means all such agreements.
OFFICER'S CERTIFICATE: Means a certificate signed, (a) in the case of
the Company, by the Chairman or Vice Chairman of the Board of Directors,
the President, any Vice President or the Treasurer of the Company, signing
alone, or (b) in the case of the Trustee or an Owner Trustee or a Loan
Trustee, a Responsible Officer of the Trustee or such Owner Trustee or such
Loan Trustee, as the case may be.
OPINION OF COUNSEL: Means a written opinion of legal counsel who (a)
in the case of counsel for the Company may be (i)a senior attorney of the
Company one of whose principal duties is furnishing advice as to legal
matters, (ii) Hughes Hubbard & Reed LLP or (iii) such other counsel
designated by the Company and reasonably acceptable to the Trustee and (b)
in the case of any Owner Trustee or any Loan Trustee, may be such counsel
as may be designated by any of them whether or not such counsel is an
employee of any of them, and who shall be reasonably acceptable to the
Trustee.
OTHER AGREEMENTS: Has the meaning specified in Section 6.01(b).
OUTSTANDING: When used with respect to Certificates of any series,
means, as of the date of determination, all Certificates of such series
theretofore authenticated and delivered under this Agreement, except:
(i) Certificates of such series theretofore cancelled by the
Registrar or delivered to the Trustee or the Registrar for
cancellation;
(ii) All of the Certificates of such series if money in the full
amount required to make the final distribution with respect to such
series pursuant to Section 11.01 hereof has been theretofore deposited
with the Trustee in trust for the Holders of the Certificates of such
series as provided in Section 4.01 pending distribution of such money
to such Certificateholders pursuant to payment of such final
distribution payment; and
(iii) Certificates of such series in exchange for or in lieu of
which other Certificates of such series have been authenticated and
delivered pursuant to this Agreement.
OWNER PARTICIPANT: Means, with respect to any Equipment Note, the
"Owner Participant", if any, as referred to in the Indenture pursuant to
which such Equipment Note is issued and any permitted successor or assign
of such Owner Participant; and "OWNER PARTICIPANTS" at any time of
determination means all of the Owner Participants thus referred to in the
Indentures.
OWNER TRUSTEE: Means, with respect to any Equipment Note, the "Owner
Trustee", if any, as referred to in the Indenture pursuant to which such
Equipment Note is issued, not in its individual capacity but solely as
trustee; and "OWNER TRUSTEES" means all of the Owner Trustees party to any
of the related Indentures.
OWNER TRUSTEE'S PURCHASE AGREEMENT: Has the meaning, with respect to
the Certificates of any series if the related Aircraft is leased to the
Company, specified therefor in the related Lease.
PAYING AGENT: Means, with respect to the Certificates of any series,
the paying agent maintained and appointed for the Certificates of such
series pursuant to Section 7.12.
PERMITTED INVESTMENTS: Means obligations of the United States of
America or agencies or instrumentalities thereof for the payment of which
the full faith and credit of the United States of America is pledged,
maturing in not more than 60 days after the date of acquisition thereof or
such lesser time as is required for the distribution of any Special
Payments on a Special Distribution Date.
PERSON: Means any person, including any individual, corporation,
limited liability company, partnership, joint venture, association,
joint-stock company, trust, trustee, unincorporated organization, or
government or any agency or political subdivision thereof.
POOL BALANCE: Means, with respect to the Certificates of any series as
of any date, (i) the original aggregate face amount of the Certificates of
any series less (ii) the aggregate amount of all payments made in respect
of such Certificates 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 the payment of principal, if any, on the
Equipment Notes or other Trust Property held in the Trust and the
distribution thereof to be made on such Distribution Date.
POOL FACTOR: Means, with respect to any series of Certificates as of
any date, the quotient (rounded to the seventh decimal place) computed by
dividing (i) the Pool Balance of such series as at such date by (ii) the
original aggregate face amount of the Certificates of such series. The Pool
Factor as of any Distribution Date shall be computed after giving effect to
the payment of principal, if any, on the Equipment Notes or other Trust
Property held in the Trust and the distribution thereof to be made on such
Distribution Date.
POSTPONED NOTES: Means, with respect to any Trust or the related
series of Certificates, the Equipment Notes to be held in such Trust as to
which a Postponement Notice shall have been delivered pursuant to Section
2.02(b).
POSTPONEMENT NOTICE: Means, with respect to any Trust or the related
series of Certificates, an Officer's Certificate of the Company signed by
an officer of the Company (1) requesting that the Trustee temporarily
postpone purchase of the related Equipment Notes to a date later than the
Issuance Date of such series of Certificates, (2) identifying the amount of
the purchase price of each such Equipment Note and the aggregate purchase
price for all such Equipment Notes, (3) setting forth the reasons for such
postponement and (4) with respect to each such Equipment Note, either (a)
setting or resetting a new Transfer Date (which shall be on or prior to the
applicable Cut-off Date) for payment by the Trustee of such purchase price
and issuance of the related Equipment Note (subject to subsequent change
from time to time in accordance with the relevant Note Purchase Agreement),
or (b) indicating that such new Transfer Date (which shall be on or prior
to the applicable Cut-off Date) will be set by subsequent written notice
not less than one Business Day prior to such new Transfer Date (subject to
subsequent change from time to time in accordance with the relevant Note
Purchase Agreement).
POTENTIAL PURCHASER: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(b).
PTC EVENT OF DEFAULT: Means, with respect to the Certificates of any
series, any failure to pay within ten Business Days of the due date
thereof: (i) the outstanding Pool Balance of such series of Certificates on
the date specified in any Trust Supplement for such payment or (ii)
interest due on the Certificates of such series on any Distribution Date
(unless the related Subordination Agent shall have made an Interest Drawing
or Drawings (as defined in the related Intercreditor Agreement), or a
withdrawal or withdrawals pursuant to a cash collateral account under such
Intercreditor Agreement, with respect thereto in an aggregate amount
sufficient to pay such interest and shall have distributed such amount to
the Trustee).
PURCHASING CERTIFICATEHOLDER: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(b).
RECORD DATE: Means, with respect to any Trust or the related series of
Certificates, (i) for Scheduled Payments to be distributed on any Regular
Distribution Date, other than the final distribution with respect to such
series, the 15th day (whether or not a Business Day) preceding such Regular
Distribution Date, and (ii) for Special Payments to be distributed on any
Special Distribution Date, other than the final distribution with respect
to such series, the 15th day (whether or not a Business Day) preceding such
Special Distribution Date.
REGISTER and REGISTRAR: Means, each with respect to the Certificates
of any series, the register maintained and the registrar appointed pursuant
to Sections 3.04 and 7.12.
REGULAR DISTRIBUTION DATE: Means, with respect to distributions of
Scheduled Payments in respect of any series of Certificates, each date
designated as such in this Agreement, until payment of all the Scheduled
Payments to be made under the Equipment Notes held in the Trust have been
made.
REQUEST: Means a request by the Company setting forth the subject
matter of the request accompanied by an Officer's Certificate and an
Opinion of Counsel as provided in Section 1.02 of this Basic Agreement.
RESPONSIBLE OFFICER: Means, with respect to any Trustee, any Loan
Trustee and any Owner Trustee, any officer in the Corporate Trust
Department of the Trustee, Loan Trustee or Owner Trustee or any other
officer customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject.
RESPONSIBLE PARTY: Means, with respect to the Certificates of any
series, the person designated as such in the related Trust Supplement.
SCHEDULED PAYMENT: Means, with respect to any Equipment Note, (i) any
payment of principal or interest on such Equipment Note (other than any
such payment which is not in fact received by the Trustee or any
Subordination Agent within five days of the date on which such payment is
scheduled to be made) or (ii) any payment of interest on the Certificates
of any series with funds drawn under the Liquidity Facility for such
series, which payment represents the installment of principal on such
Equipment Note at the stated maturity of such installment, the payment of
regularly scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both; PROVIDED, HOWEVER, that any payment of principal,
premium, if any, or interest resulting from the redemption or purchase of
any Equipment Note shall not constitute a Scheduled Payment.
SEC: Means the Securities and Exchange Commission, as from time to
time constituted or created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties on such
date.
SELLING CERTIFICATEHOLDER: Has the meaning, with respect to any
Certificateholder, specified in Section 6.01(b).
SPECIAL DISTRIBUTION DATE: Means, with respect to the Certificates of
any series, each date on which a Special Payment is to be distributed as
specified in this Agreement.
SPECIAL PAYMENT: Means (i) 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), (ii) the amounts required
to be distributed pursuant to the last paragraph of Section 2.02(b) or
(iii) the amounts required to be distributed pursuant to the penultimate
paragraph of Section 2.02(b).
SPECIAL PAYMENTS ACCOUNT: Means, with respect to the Certificates of
any series, the account or accounts created and maintained for such series
pursuant to Section 4.01(b) and the related Trust Supplement.
SPECIFIED INVESTMENTS: Means, with respect to any Trust, unless
otherwise specified in the related Trust Supplement, (i) obligations of, or
guaranteed by, the United States Government or agencies thereof, (ii) open
market commercial paper of any corporation incorporated under the laws of
the United States of America or any state thereof rated at least P-2 or its
equivalent by Moody's Investors Service, Inc. or at least A-2 or its
equivalent by Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., (iii) certificates of deposit issued by
commercial banks organized under the laws of the United States or of any
political subdivision thereof having a combined capital and surplus in
excess of $100,000,000 which banks or their holding companies have a rating
of A or its equivalent by Moody's Investors Service, Inc. or Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.;
PROVIDED, HOWEVER, that the aggregate amount at any one time so invested in
certificates of deposit issued by any one bank shall not exceed 5% of such
bank's capital and surplus, (iv) U.S. dollar-denominated offshore
certificates of deposit issued by, or offshore time deposits with, any
commercial bank described in clause (iii) above or any subsidiary thereof
and (v) repurchase agreements with any financial institution having
combined capital and surplus of at least $100,000,000 with any of the
obligations described in clauses (i) through (iv) above as collateral;
PROVIDED FURTHER that if all of the above investments are unavailable, the
entire amounts to be invested may be used to purchase federal funds from an
entity described in clause (iii) above.
SUBORDINATION AGENT: Has the meaning specified therefor in any
Intercreditor Agreement.
SUBSTITUTE AIRCRAFT: Means, with respect to any Trust, any Aircraft of
a type specified in this Agreement and, at the election of the Company,
substituted prior to the applicable Cut-off Date, if any, pursuant to the
terms of this Agreement.
TRANSFER DATE: Has the meaning assigned to that term or any of the
terms "Delivery Date", "Funding Date" or "Closing Date" in a Note Purchase
Agreement, and in any event refers to any such date as it may be changed
from time to time in accordance with the terms of such Note Purchase
Agreement.
TRIGGERING EVENT: Has the meaning specified therefor in any
Intercreditor Agreement.
TRUST: Means, with respect to the Certificates of any series, the
trust under this Agreement.
TRUSTEE: Means Wilmington Trust Company, or its successor in interest,
and any successor or other trustee appointed as provided herein.
TRUST INDENTURE ACT: Except as otherwise provided in Section 9.06,
means, with respect to any particular Trust, the United States Trust
Indenture Act of 1939, as in force at the date as of which the related
Trust Supplement was executed.
TRUST PROPERTY: Means, with respect to any Trust, (i) subject to any
related Intercreditor Agreement, the Equipment Notes held as the property
of such Trust, all monies at any time paid thereon and all monies due and
to become due thereunder, (ii) funds from time to time deposited in the
related Escrow Account, the related Certificate Account and the related
Special Payments Account and, subject to the related Intercreditor
Agreement, any proceeds from the sale by the Trustee pursuant to Article VI
hereof of any such Equipment Note, (iii) all rights of such Trust and the
Trustee, on behalf of the Trust, under any Intercreditor Agreement,
including, without limitation, all monies receivable in respect of such
rights, and (iv) all monies receivable under any Liquidity Facility for
such Trust.
TRUST SUPPLEMENT: Means an agreement supplemental hereto pursuant to
which (i) a separate Trust is created for the benefit of the Holders of the
Certificates of a series, (ii) the issuance of the Certificates of such
series representing fractional undivided interests in such Trust is
authorized and (iii) the terms of the Certificates of such series are
established.
Section 1.02. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company, any Owner Trustee or any Loan Trustee to
the Trustee to take any action under any provision of this Basic Agreement or,
in respect of the Certificates of any series, this Agreement, the Company, such
Owner Trustee or such Loan Trustee, as the case may be, shall furnish to the
Trustee (i) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Basic Agreement
or this Agreement relating to the proposed action have been complied with and
(ii) an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Basic Agreement or this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Basic Agreement or, in respect of the
Certificates of any series, this Agreement (other than a certificate provided
pursuant to Section 8.04(d)) or any Trust Supplement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions in this
Basic Agreement or this Agreement relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters and any such Person may certify or give an opinion as to
such matters in one or several documents.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Basic Agreement or, in respect of the Certificates of any
series, this Agreement, they may, but need not, be consolidated and form one
instrument.
Section 1.04. DIRECTIONS OF CERTIFICATEHOLDERS. (a) Any direction,
consent, request, demand, authorization, notice, waiver or other action provided
by this Agreement in respect of the Certificates of any series to be given or
taken by Certificateholders (a "DIRECTION") may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Certificateholders in person or by an agent or proxy duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
when it is hereby expressly required pursuant to this Agreement, to the Company
or any Loan Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "ACT" of
the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy shall be sufficient for any purpose of this Trust Agreement and conclusive
in favor of the Trustee, the Company and the related Loan Trustee, if made in
the manner provided in this Section 1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or such other officer, and where such execution is by
an officer of a corporation or association or a member of a partnership, on
behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable manner
which the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates of any series Outstanding have
given any Direction under this Agreement, Certificates owned by the Company or
any Affiliate thereof shall be disregarded and deemed not to be Outstanding for
purposes of any such determination. In determining whether the Trustee shall be
protected in relying upon any such Direction, only Certificates which the
Trustee knows to be so owned shall be so disregarded. Notwithstanding the
foregoing, (i) if any such Person owns 100% of the Certificates of any series
Outstanding, such Certificates shall not be so disregarded, and (ii) if any
amount of Certificates of any series so owned by any such Person have been
pledged in good faith, such Certificates shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Certificates and that the pledgee is not the Company or any
Affiliate thereof.
(d) The Company may, at its option, by delivery of an Officer's
Certificate to the Trustee, set a record date to determine the
Certificateholders in respect of the Certificates of any series, entitled to
give any Direction. Notwithstanding Section 316(c) of the Trust Indenture Act,
such record date shall be the record date specified in such Officer's
Certificate, which shall be a date not more than 30 days prior to the first
solicitation of Certificateholders of the applicable series in connection
therewith. If such a record date is fixed, such Direction may be given before or
after such record date, but only the Certificateholders of record of the
applicable series at the close of business on such record date shall be deemed
to be Certificateholders for the purposes of determining whether
Certificateholders of the requisite proportion of Outstanding Certificates of
such series have authorized or agreed or consented to such Direction, and for
that purpose the Outstanding Certificates shall be computed as of such record
date; provided, however, that no such Direction by the Certificateholders on
such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Agreement not later than one year after such
record date.
(e) Any Direction by the Holder of any Certificate shall bind the
Holder of every Certificate issued upon the transfer thereof or in exchange
therefor or in lieu thereof, whether or not notation of such Direction is made
upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c), Certificates of
any series owned by or pledged to any Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Certificates of such
series.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES:
ACQUISITION OF TRUST PROPERTY
Section 2.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES. (a) The aggregate
principal amount of Certificates which may be authenticated and delivered under
this Basic Agreement is unlimited. The Certificates may be issued from time to
time in one or more series and shall be designated generally as the "PASS
THROUGH CERTIFICATES", with such further designations added or incorporated in
such title for the Certificates of each series as specified in the related Trust
Supplement. Each Certificate shall bear upon its face the designation so
selected for the series to which it belongs. All Certificates of the same series
shall be substantially identical except that the Certificates of a series may
differ as to denomination and as may otherwise be provided in the Trust
Supplement establishing the Certificates of such series. Each series of
Certificates issued pursuant to this Agreement will evidence fractional
undivided interests in the related Trust and, except as may be contained in any
Intercreditor Agreement, will have no rights, benefits or interests in respect
of any other Trust or the Trust Property held therein. All Certificates of the
same series shall be in all respects equally and ratably entitled to the
benefits of this Agreement without preference, priority or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Agreement.
(b) The following matters shall be established with respect to the
Certificates of each series issued hereunder by a Trust Supplement executed and
delivered by and among the Company and the Trustee:
(1) the formation of the Trust as to which the Certificates of such
series represent fractional undivided interests and its designation (which
designation shall distinguish such Trust from each other Trust created
under this Basic Agreement and a Trust Supplement);
(2) the specific title of the Certificates of such series (which title
shall distinguish the Certificates of such series from each other series of
Certificates created under this Basic Agreement and a Trust Supplement);
(3) any limit upon the aggregate principal amount of the Certificates
of such series which may be authenticated and delivered (which limit shall
not pertain to Certificates authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates of
the series pursuant to Sections 3.03, 3.04 and 3.06);
(4) the Cut-off Date with respect to the Certificates of such series;
(5) the Regular Distribution Dates applicable to the Certificates of
such series;
(6) the Special Distribution Dates applicable to the Certificates of
such series;
(7) if other than as provided in Section 7.12(b), the Registrar or the
Paying Agent for the Certificates of such series, including any
Co-Registrar or additional Paying Agent;
(8) if other than as provided in Section 3.02, the denominations in
which the Certificates of such series shall be issuable;
(9) if other than United States dollars, the currency or currencies
(including currency units) in which the Certificates of such series shall
be denominated;
(10) the specific form of the Certificates of such series (including
the interest rate applicable thereto) and whether or not Certificates of
such series are to be issued as Book-Entry Certificates and, if such
Certificates are to be Book-Entry Certificates, the form of Letter of
Representations, if any (or, in the case of any Certificates denominated in
a currency other than United States dollars and if other than as provided
in Section 3.05, whether and the circumstances under which beneficial
owners of interests in such Certificates in permanent global form may
exchange such interests for Certificates of such series and of like tenor
of any authorized form and denomination);
(11) a description of the Equipment Notes to be acquired and held in
the related Trust and of the related Aircraft and Note Documents;
(12) provisions with respect to the terms for which the definitions
set forth in Article I hereof or the terms of Section 11.01 hereof require
further specification in the related Trust Supplement;
(13) any restrictions (including legends) in respect of ERISA;
(14) whether such series will be subject to an Intercreditor Agreement
and, if so, the specific designation of such Intercreditor Agreement;
(15) whether such series will have the benefit of a Liquidity Facility
and, if so, the specific designation of such Liquidity Facility;
(16) whether there will be a deposit agreement or other comparable
arrangement prior to the delivery of one or more Aircraft and, if so, any
terms appropriate thereto; and
(17) any other terms of the Certificates of such series (which terms
shall not be inconsistent with the provisions of the Trust Indenture Act),
including any terms of the Certificates of such series which may be
required or advisable under United States laws or regulations or advisable
in connection with the marketing of Certificates of the series.
(c) At any time and from time to time after the execution and delivery
of this Basic Agreement and a Trust Supplement forming a Trust and establishing
the terms of Certificates of a series, Certificates of such series shall be
executed, authenticated and delivered by the Trustee to the Person or Persons
specified by the Company upon request of the Company and upon satisfaction or
waiver of any conditions precedent set forth in such Trust Supplement.
Section 2.02. ACQUISITION OF EQUIPMENT NOTES. (a) Unless otherwise
specified in the related Trust Supplement, on or prior to the Issuance Date of
the Certificates of a series, the Trustee shall execute and deliver the related
Note Purchase Agreements in the form delivered to the Trustee by the Company and
shall, subject to the respective terms thereof, perform its obligations under
such Note Purchase Agreements. The Trustee shall issue and sell such
Certificates, in authorized denominations and in such Fractional Undivided
Interests, so as to result in the receipt of consideration in an amount equal to
the aggregate purchase price of the Equipment Notes contemplated to be purchased
by the Trustee under the related Note Purchase Agreements and, concurrently
therewith, the Trustee shall purchase, pursuant to the terms and conditions of
the Note Purchase Agreements, such Equipment Notes at a purchase price equal to
the amount of such consideration so received. Except as provided in Sections
3.03, 3.04 and 3.06 hereof, the Trustee shall not execute, authenticate or
deliver Certificates of such series in excess of the aggregate amount specified
in this paragraph. The provisions of this Subsection (a) are subject to the
provisions of Subsection (b) below.
(b) If on or prior to the Issuance Date with respect to a series of
Certificates the Company shall deliver to the Trustee a Postponement Notice
relating to one or more Postponed Notes, the Trustee shall postpone the purchase
of such Postponed Notes and shall deposit into an escrow account (as to such
Trust, the "ESCROW ACCOUNT") to be maintained as part of the related Trust an
amount equal to the purchase price of such Postponed Notes (the "ESCROWED
FUNDS"). The portion of the Escrowed Funds so deposited with respect to any
particular Postponed Notes shall be invested by the Trustee at the written
direction and risk of, and for the benefit of, the Responsible Party in
Specified Investments (i) maturing no later than any scheduled Transfer Date
relating to such Postponed Notes or (ii) if no such Transfer Date has been
scheduled, maturing on the next Business Day, or (iii) if the Company has given
notice to the Trustee that such Postponed Notes will not be issued, maturing on
the next applicable Special Distribution Date, if such investments are
reasonably available for purchase. The Trustee shall make withdrawals from the
Escrow Account only as provided in this Agreement. Upon request of the Company
on one or more occasions and the satisfaction or waiver of the closing
conditions specified in the applicable Note Purchase Agreements on or prior to
the related Cut-off Date, the Trustee shall purchase the applicable Postponed
Notes with the Escrowed Funds withdrawn from the Escrow Account. The purchase
price shall equal the principal amount of such Postponed Notes.
The Trustee shall hold all Specified Investments until the maturity
thereof and will not sell or otherwise transfer Specified Investments. If
Specified Investments held in an Escrow Account mature prior to any applicable
Transfer Date, any proceeds received on the maturity of such Specified
Investments (other than any earnings thereon) shall be reinvested by the Trustee
at the written direction and risk of, and for the benefit of, the Responsible
Party in Specified Investments maturing as provided in the preceding paragraph.
Any earnings on Specified Investments received from time to time by
the Trustee shall be promptly distributed to the Responsible Party. The
Responsible Party shall pay to the Trustee for deposit to the relevant Escrow
Account an amount equal to any losses on such Specified Investments as incurred.
On the Initial Regular Distribution Date in respect of the Certificates of any
series, the Responsible Party will pay (in immediately available funds) to the
Trustee an amount equal to the interest that would have accrued on any Postponed
Notes with respect to such Certificates, if any, purchased after the Issuance
Date if such Postponed Notes had been purchased on the Issuance Date, from the
Issuance Date to, but not including, the date of the purchase of such Postponed
Notes by the Trustee.
If, in respect of the Certificates of any series, the Company notifies
the Trustee prior to the Cut-off Date that any Postponed Notes will not be
issued on or prior to the Cut-off Date for any reason, on the next Special
Distribution Date for such Certificates occurring not less than 15 days
following the date of such notice, (i) the Responsible Party shall pay to the
Trustee for deposit in the related Special Payments Account, in immediately
available funds, an amount equal to the interest that would have accrued on the
Postponed Notes designated in such notice at a rate equal to the interest rate
applicable to such Certificates from the Issuance Date to, but not including,
such Special Distribution Date and (ii) the Trustee shall transfer an amount
equal to that amount of Escrowed Funds that would have been used to purchase the
Postponed Notes designated in such notice and the amount paid by the Responsible
Party pursuant to the immediately preceding clause (i) to the related Special
Payments Account for distribution as a Special Payment in accordance with the
provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next such
Special Distribution Date occurring not less than 15 days following such Cut-off
Date (i) the Responsible Party shall pay to the Trustee for deposit in such
Special Payments Account, in immediately available funds, an amount equal to the
interest that would have accrued on such Postponed Notes contemplated to be
purchased with such unused Escrowed Funds (other than Escrowed Funds referred to
in the immediately preceding paragraph) but not so purchased at a rate equal to
the interest rate applicable to such Certificates from the Issuance Date to, but
not including, such Special Distribution Date and (ii) the Trustee shall
transfer such unused Escrowed Funds and the amount paid by the Responsible Party
pursuant to the immediately preceding clause (i) to such Special Payments
Account for distribution as a Special Payment in accordance with the provisions
hereof.
Section 2.03. ACCEPTANCE BY TRUSTEE. The Trustee, upon the execution
and delivery of a Trust Supplement creating a Trust and establishing a series of
Certificates, shall acknowledge its acceptance of all right, title and interest
in and to the Trust Property to be acquired pursuant to Section 2.02 hereof and
the related Note Purchase Agreements and shall declare that the Trustee holds
and will hold such right, title and interest for the benefit of all then present
and future Certificateholders of such series, upon the trusts herein and in such
Trust Supplement set forth. By the acceptance of each Certificate of such series
issued to it under this Agreement, each initial Holder of such series as grantor
of such Trust shall thereby join in the creation and declaration of such Trust.
Section 2.04. LIMITATION OF POWERS. Each Trust shall be constituted
solely for the purpose of making the investment in the Equipment Notes provided
for in the related Trust Supplement, and, except as set forth herein, the
Trustee shall not be authorized or empowered to acquire any other investments or
engage in any other activities and, in particular, the Trustee shall not be
authorized or empowered to do anything that would cause such Trust to fail to
qualify as a "grantor trust" for federal income tax purposes (including, as
subject to this restriction, acquiring any Aircraft (as defined in the
respective Indentures) by bidding such Equipment Notes or otherwise, or taking
any action with respect to any such Aircraft once acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01. FORM, DENOMINATION AND EXECUTION OF CERTIFICATES. The
Certificates of each series shall be issued in fully registered form without
coupons and shall be substantially in the form attached hereto as Exhibit A,
with such omissions, variations and insertions as are permitted by this
Agreement, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange on which such Certificates may be
listed or to conform to any usage in respect thereof, or as may, consistently
herewith, be determined by the Trustee or the officers executing such
Certificates, as evidenced by the Trustee's or respective officers' execution of
the Certificates.
Except as provided in Section 3.05, the definitive Certificates of
such series shall be typed, printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner permitted by
the rules of any securities exchange on which the Certificates may be listed,
all as determined by the officers executing such Certificates, as evidenced by
their execution of such Certificates.
Except as otherwise provided in the related Trust Supplement, the
Certificates of each series shall be issued in minimum denominations of $1,000
or integral multiples thereof except that one Certificate of such series may be
issued in a different denomination.
The Certificates of such series shall be executed on behalf of the
Trustee by manual or facsimile signature of a Responsible Officer of the
Trustee. Certificates of any series bearing the manual or facsimile signature of
an individual who was, at the time when such signature was affixed, authorized
to sign on behalf of the Trustee shall be valid and binding obligations of the
Trustee, notwithstanding that such individual has ceased to be so authorized
prior to the authentication and delivery of such Certificates or did not hold
such office at the date of such Certificates.
Section 3.02. AUTHENTICATION OF CERTIFICATES. (a) On the Issuance
Date, the Trustee shall duly execute, authenticate and deliver Certificates of
each series in authorized denominations equalling in the aggregate the aggregate
principal amount of the Equipment Notes that may be purchased by the Trustee
pursuant to the related Note Purchase Agreements, and evidencing the entire
ownership of the related Trust. Thereafter, the Trustee shall duly execute,
authenticate and deliver the Certificates of such series as herein provided.
(b) No Certificate of any series shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A hereto executed by the Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates of any series shall be dated the date of
their authentication.
Section 3.03. TEMPORARY CERTIFICATES. Until definitive Certificates
are ready for delivery, the Trustee shall execute, authenticate and deliver
temporary Certificates of each series. Temporary Certificates of each series
shall be substantially in the form of definitive Certificates of such series but
may have insertions, substitutions, omissions and other variations determined to
be appropriate by the officers executing the temporary Certificates of such
series, as evidenced by their execution of such temporary Certificates. If
temporary Certificates of any series are issued, the Trustee will cause
definitive Certificates of such series to be prepared without unreasonable
delay. After the preparation of definitive Certificates of such series, the
temporary Certificates shall be exchangeable for definitive Certificates upon
surrender of such temporary Certificates at the office or agency of the Trustee
designated for such purpose pursuant to Section 7.12, without charge to the
Certificateholder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute, authenticate and deliver in exchange
therefor a like face amount of definitive Certificates of like series, in
authorized denominations and of a like Fractional Undivided Interest. Until so
exchanged, such temporary Certificates shall be entitled to the same benefits
under this Agreement as definitive Certificates.
Section 3.04. TRANSFER AND EXCHANGE. The Trustee shall cause to be
kept at the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 a register (the "REGISTER") for each series of
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates of
such series and of transfers and exchanges of such Certificates as herein
provided. The Trustee shall initially be the registrar (the "REGISTRAR") for the
purpose of registering such Certificates of each series and transfers and
exchanges of such Certificates as herein provided.
All Certificates issued upon any registration of transfer or exchange
of Certificates of any series shall be valid obligations of the applicable
Trust, evidencing the same interest therein, and entitled to the same benefits
under this Agreement, as the Certificates of such series surrendered upon such
registration of transfer or exchange.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or such other office or agency, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of like series, in authorized
denominations of a like aggregate Fractional Undivided Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of like series, in authorized denominations and of a like
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute, authenticate and deliver
the Certificates that the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder thereof or its attorney duly authorized in writing.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates. All
Certificates surrendered for registration of transfer or exchange shall be
cancelled and subsequently destroyed by the Trustee.
Section 3.05. BOOK-ENTRY AND DEFINITIVE CERTIFICATES. (a) The
Certificates of any series may be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates of such series, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Company. In such case, the Certificates of such series
delivered to The Depository Trust Company shall initially be registered on the
Register in the name of CEDE & Co., the nominee of the initial Clearing Agency,
and no Certificate Owner will receive a definitive certificate representing such
Certificate Owner's interest in the Certificates of such series, except as
provided above and in Subsection (d) below. As to the Certificates of any
series, unless and until definitive, fully registered Certificates (the
"DEFINITIVE CERTIFICATES") have been issued pursuant to Subsection (d) below:
(i) the provisions of this Section 3.05 shall be in full force and
effect;
(ii) the Company, the Paying Agent, the Registrar and the Trustee may
deal with the Clearing Agency Participants for all purposes (including the
making of distributions on the Certificates) as the authorized
representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 3.05 conflict
with any other provisions of this Agreement (other than the provisions of
any Trust Supplement expressly amending this Section 3.05 as permitted by
this Basic Agreement), the provisions of this Section 3.05 shall control;
(iv) the rights of Certificate Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency
Participants; and until Definitive Certificates are issued pursuant to
Subsection (d) below, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal, interest and premium, if any, on the
Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Certificateholders of such series
holding Certificates of such series evidencing a specified percentage of
the Fractional Undivided Interests in the related Trust, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Clearing Agency
Participants owning or representing, respectively, such required percentage
of the beneficial interest in Certificates of such series and has delivered
such instructions to the Trustee. The Trustee shall have no obligation to
determine whether the Clearing Agency has in fact received any such
instructions.
(b) Whenever notice or other communication to the Certificateholders
of such series is required under this Agreement, unless and until Definitive
Certificates shall have been issued pursuant to Subsection (d) below, the
Trustee shall give all such notices and communications specified herein to be
given to Certificateholders of such series to the Clearing Agency.
(c) Unless and until Definitive Certificates of a series are issued
pursuant to Subsection (d) below, on the Record Date prior to each applicable
Regular Distribution Date and Special Distribution Date, the Trustee will
request from the Clearing Agency a securities position listing setting forth the
names of all Clearing Agency Participants reflected on the Clearing Agency's
books as holding interests in the Certificates on such Record Date.
(d) If with respect to the Certificates of any series (i) the Company
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to discharge properly its responsibilities and the Trustee or the Company
is unable to locate a qualified successor, (ii) the Company, at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or (iii) after the occurrence of an Event of
Default, Certificate Owners of Book-Entry Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the related Trust, by Act of such Certificate Owners delivered to the Company
and the Trustee, advise the Company, the Trustee and the Clearing Agency through
the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency Participants is no longer in the
best interests of the Certificate Owners of such series, then the Trustee shall
notify all Certificate Owners of such series, through the Clearing Agency, of
the occurrence of any such event and of the availability of Definitive
Certificates. Upon surrender to the Trustee of all the Certificates of such
series held by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency Participants for registration of Definitive
Certificates in the names of Certificate Owners of such series, the Trustee
shall issue and deliver the Definitive Certificates of such series in accordance
with the instructions of the Clearing Agency. Neither the Company, the
Registrar, the Paying Agent nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such registration instructions. Upon the issuance of
Definitive Certificates of such series, the Trustee shall recognize the Person
in whose name the Definitive Certificates are registered in the Register as
Certificateholders hereunder. Neither the Company nor the Trustee shall be
liable if the Trustee or the Company is unable to locate a qualified successor
Clearing Agency.
(e) Except as otherwise provided in the related Trust Supplement, the
Trustee shall enter into the applicable Letter of Representations with respect
to such series of Certificates and fulfill its responsibilities thereunder.
(f) The provisions of this Section 3.05 may be made inapplicable to
any series or may be amended with respect to any series in the related Trust
Supplement.
Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate is surrendered to the Registrar, or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Registrar and the Trustee such
security, indemnity or bond, as may be required by them to save each of them
harmless, then, in the absence of notice to the Registrar or the Trustee that
such destroyed, lost or stolen Certificate has been acquired by a BONA FIDE
purchaser, and PROVIDED, HOWEVER, that the requirements of Section 8-405 of the
Uniform Commercial Code in effect in any applicable jurisdiction are met, the
Trustee shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate or
Certificates of like series, in authorized denominations and of like Fractional
Undivided Interest and bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this
Section 3.06, the Trustee shall require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee and the
Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this Section 3.06 shall
constitute conclusive evidence of the appropriate Fractional Undivided Interest
in the related Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
The provisions of this Section 3.06 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.07. PERSONS DEEMED OWNERS. Prior to due presentment of a
Certificate for registration of transfer, the Trustee, the Registrar and any
Paying Agent may treat the Person in whose name any Certificate is registered
(as of the day of determination) as the owner of such Certificate for the
purpose of receiving distributions pursuant to Article IV and for all other
purposes whatsoever, and none of the Trustee, the Registrar or any Paying Agent
shall be affected by any notice to the contrary.
Section 3.08. CANCELLATION. All Certificates surrendered for payment
or transfer or exchange shall, if surrendered to the Trustee or any agent of the
Trustee other than the Registrar, be delivered to the Registrar for cancellation
and shall promptly be cancelled by it. No Certificates shall be authenticated in
lieu of or in exchange for any Certificates cancelled as provided in this
Section 3.08, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Registrar shall be destroyed and a certification of
their destruction delivered to the Trustee.
Section 3.09. LIMITATION OF LIABILITY FOR PAYMENTS. All payments and
distributions made to Certificateholders of any series in respect of the
Certificates of such series shall be made only from the Trust Property of the
related Trust and only to the extent that the Trustee shall have sufficient
income or proceeds from such Trust Property to make such payments in accordance
with the terms of Article IV of this Agreement. Each Certificateholder, by its
acceptance of a Certificate, agrees that it will look solely to the income and
proceeds from the Trust Property of the related Trust for any payment or
distribution due to such Certificateholder pursuant to the terms of this
Agreement and that it will not have any recourse to the Company, the Trustee,
the Loan Trustees, the Owner Trustees or the Owner Participants, except as
otherwise expressly provided herein or in the related Intercreditor Agreement.
The Company is a party to this Agreement solely for purposes of
meeting the requirements of the Trust Indenture Act, and therefore shall not
have any right, obligation or liability hereunder (except as otherwise expressly
provided herein).
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. CERTIFICATE ACCOUNT AND SPECIAL PAYMENTS ACCOUNT. (a)
The Trustee shall establish and maintain on behalf of the Certificateholders of
each series a Certificate Account as one or more non-interest-bearing accounts.
The Trustee shall hold such Certificate Account in trust for the benefit of the
Certificateholders of such series, and shall make or permit withdrawals
therefrom only as provided in this Agreement. On each day when a Scheduled
Payment is made to the Trustee (under an Intercreditor Agreement, if applicable)
with respect to the Certificates of such series, the Trustee, upon receipt
thereof, shall immediately deposit the aggregate amount of such Scheduled
Payment in such Certificate Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
4.04. The Trustee shall hold the Special Payments Account in trust for the
benefit of the Certificateholders of such series and shall make or permit
withdrawals therefrom only as provided in this Agreement. On each day when one
or more Special Payments are made to the Trustee (under an Intercreditor
Agreement, if applicable) with respect to the Certificates of such series, the
Trustee, upon receipt thereof, shall immediately deposit the aggregate amount of
such Special Payments in such Special Payments Account.
(c) The Trustee shall present (or, if applicable, cause the
Subordination Agent to present) to the related Loan Trustee of each Equipment
Note such Equipment Note on the date of its stated final maturity or, in the
case of any Equipment Note which is to be redeemed in whole pursuant to the
related Indenture, on the applicable redemption date under such Indenture.
Section 4.02. DISTRIBUTIONS FROM CERTIFICATE ACCOUNT AND SPECIAL
PAYMENTS ACCOUNT. (a) On each Regular Distribution Date with respect to a series
of Certificates or as soon thereafter as the Trustee has confirmed receipt of
the payment of all or any part of the Scheduled Payments due on the Equipment
Notes held (subject to the Intercreditor Agreement) in the related Trust on such
date, the Trustee shall distribute out of the applicable Certificate Account the
entire amount deposited therein pursuant to Section 4.01(a). There shall be so
distributed to each Certificateholder of record of such series on the Record
Date with respect to such Regular Distribution Date (other than as provided in
Section 11.01 concerning the final distribution) by check mailed to such
Certificateholder, at the address appearing in the Register, such
Certificateholder's pro rata share (based on the Fractional Undivided Interest
in the Trust held by such Certificateholder) of the total amount in the
applicable Certificate Account, 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 in immediately available funds
to the account designated by such Clearing Agency (or such nominee).
(b) On each Special Distribution Date with respect to any Special
Payment with respect to a series of Certificates 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 related Trust or realized
upon the sale of such Equipment Notes, the Trustee shall distribute out of the
applicable Special Payments Account the entire amount of such applicable Special
Payment deposited therein pursuant to Section 4.01(b). There shall be so
distributed to each Certificateholder of record of such series on the Record
Date with respect to such Special Distribution Date (other than as provided in
Section 11.01 concerning the final distribution) by check mailed to such
Certificateholder, at the address appearing in the Register, such
Certificateholder's pro rata share (based on the Fractional Undivided Interest
in the related Trust held by such Certificateholder) of the total amount in the
applicable Special Payments Account on account of such Special Payment, 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 in immediately available funds to the account designated by such
Clearing Agency (or such nominee).
(c) The Trustee shall, at the expense of the Company, cause notice of
each Special Payment with respect to a series of Certificates to be mailed to
each Certificateholder of such series at his address as it appears in the
Register. In the event of redemption or purchase of Equipment Notes held in the
related 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 event that the Trustee receives a notice from the
Company that Postponed Notes will not be purchased by the Trustee pursuant to
Section 2.02, such notice of Special Payment shall be mailed as soon as
practicable after receipt of such notice from the Company and shall state the
Special Distribution Date for such Special Payment, which shall occur 15 days
after the date of such notice of Special Payment or (if such 15th day is not
practicable) as soon as practicable thereafter. In the event that any Special
Payment is to be made pursuant to the last paragraph of Section 2.02(b) hereof,
there shall be mailed on the Cut-off Date (or, if such mailing on the Cut-off
Date is not practicable, as soon as practicable after the Cut-off Date), notice
of such Special Payment stating the Special Distribution Date for such Special
Payment, which shall occur 15 days after the date of such notice of such Special
Payment (or, if such 15th day is not practicable, as soon as practicable
thereafter). 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),
(ii) the amount of the Special Payment (taking into account any
payment to be made by the Company pursuant to Section 2.02(b)) for each
$1,000 face amount 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 for the Certificates of such series, the total amount to
be received on such date for each $1,000 face amount 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 any Trust is
cancelled, the Trustee, as soon as possible after learning thereof, shall cause
notice thereof to be mailed to each Certificateholder of the related series at
its address as it appears on the Register.
Section 4.03. STATEMENTS TO CERTIFICATEHOLDERS. (a) On each Regular
Distribution Date and Special Distribution Date, the Trustee will include with
each distribution of a Scheduled Payment or Special Payment, as the case may be,
to Certificateholders of the related series a statement setting forth the
information provided below. Such statement shall set forth (per $1,000 aggregate
principal amount of Certificate as to (i) and (ii) below) the following
information:
(i) the amount of such distribution hereunder allocable to principal
and the amount allocable to premium, if any;
(ii) the amount of such distribution hereunder allocable to interest;
and
(iii) the Pool Balance and the Pool Factor of the related Trust.
With respect to the Certificates registered in the name of a Clearing
Agency or its nominee, on the Record Date prior to each Distribution Date, the
Trustee will request from the Clearing Agency a securities position listing
setting forth the names of all the Clearing Agency Participants reflected on the
Clearing Agency's books as holding interests in the Certificates on such Record
Date. On each Distribution Date, the applicable 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 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 a
Certificateholder of record a statement containing the sum of the amounts
determined pursuant to clauses (a)(i) and (a)(ii) above with respect to the
related Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar year, for the
applicable portion of such year, and such other items as are readily available
to the Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its federal
income tax returns. With respect to Certificates registered in the name of a
Clearing Agency or its nominee, 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 Certificates in the manner
described in Section 4.03(a).
Section 4.04. INVESTMENT OF SPECIAL PAYMENT MONEYS. Any money received
by the Trustee pursuant to Section 4.01(b) representing a Special Payment which
is not distributed on the date received shall, to the extent practicable, be
invested in Permitted Investments by the Trustee pending distribution of such
Special Payment pursuant to Section 4.02. Any investment made pursuant to this
Section 4.04 shall be in such Permitted Investments having maturities not later
than the date that such moneys are required to be used to make the payment
required under Section 4.02 on the applicable Special Distribution Date and the
Trustee shall hold any such Permitted Investments until maturity. The Trustee
shall have no liability with respect to any investment made pursuant to this
Section 4.04, other than by reason of the willful misconduct or negligence of
the Trustee. All income and earnings from such investments shall be distributed
on such Special Distribution Date as part of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01. MAINTENANCE OF CORPORATE EXISTENCE. The Company, at its
own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises, except as otherwise specifically permitted in Section 5.02;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any right
or franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
Section 5.02. CONSOLIDATION, MERGER, ETC. The Company shall not
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person that acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
be (i) organized and validly existing under the laws of the United States
of America or any state thereof or the District of Columbia, (ii) a
"citizen of the United States" as defined in 49 U.S.C. ss. 40102(a)(15), as
amended, and (iii) a United States certificated air carrier, if and so long
as such status is a condition of entitlement to the benefits of Section
1110 of the Bankruptcy Reform Act of 1978, as amended (11 U.S.C. ss. 1110),
with respect to the Leases or the Aircraft owned by the Company;
(b) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
execute and deliver to the Trustee applicable to the Certificates of each
series a duly authorized, valid, binding and enforceable agreement in form
and substance reasonably satisfactory to the Trustee containing an
assumption by such successor corporation or Person of the due and punctual
performance and observance of each covenant and condition of the Note
Documents and of this Agreement applicable to the Certificates of each
series to be performed or observed by the Company; and
(c) the Company shall have delivered to the Trustee an Officer's
Certificate of the Company and an Opinion of Counsel of the Company
reasonably satisfactory to the Trustee, each stating that such
consolidation, merger, conveyance, transfer or lease and the assumption
agreement mentioned in clause (b) above comply with this Section 5.02 and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease
of substantially all of the assets of the Company as an entirety in accordance
with this Section 5.02, the successor corporation or Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement applicable
to the Certificates of each series with the same effect as if such successor
corporation or Person had been named as the Company herein. No such conveyance,
transfer or lease of substantially all of the assets of the Company as an
entirety shall have the effect of releasing any successor corporation or Person
which shall have become such in the manner prescribed in this Section 5.02 from
its liability in respect of this Agreement and any Note Document applicable to
the Certificates of such series to which it is a party.
ARTICLE VI
DEFAULT
Section 6.01. EVENTS OF DEFAULT. (a) EXERCISE OF REMEDIES. Upon the
occurrence and during the continuation of any Indenture Event of Default under
any Indenture, the Trustee may (i) to the extent it is the Controlling Party at
such time (as determined pursuant to the related Intercreditor Agreement),
direct the exercise of remedies as provided in such related Intercreditor
Agreement and (ii) if there is no related Intercreditor Agreement, direct the
exercise of remedies or take other action as provided in the relevant Indenture
to the extent that it may do so as the holder of the Equipment Notes issued
under such Indenture and held in the related Trust.
(b) PURCHASE RIGHTS OF CERTIFICATEHOLDERS. At any time after the
occurrence and during the continuation of a Triggering Event, each
Certificateholder of Certificates of certain series (each, a "POTENTIAL
PURCHASER" and, collectively, the "POTENTIAL PURCHASERS") will have certain
rights to purchase the Certificates of one or more other series, all as set
forth in the Trust Supplement applicable to the Certificates held by such
Potential Purchaser. The purchase price with respect to the Certificates of any
series shall be equal to the Pool Balance of the Certificates of such series,
together with accrued and unpaid interest thereon to the date of such purchase,
without premium, but including any other amounts then due and payable to the
Certificateholders of such series under this Agreement, any related
Intercreditor Agreement or any other Note Document or on or in respect of the
Certificates of such series; PROVIDED, HOWEVER, that if such purchase occurs
after a Record Date, such purchase price shall be reduced by the amount to be
distributed hereunder on the related Distribution Date (which deducted amounts
shall remain distributable to, and may be retained by, the Certificateholder as
of such Record Date); PROVIDED, FURTHER, that no such purchase of Certificates
of such series shall be effective unless the purchasing Certificateholder (each,
a "PURCHASING CERTIFICATEHOLDER" and, collectively, the "PURCHASING
CERTIFICATEHOLDERS") shall certify to the Trustee that contemporaneously with
such purchase, one or more Purchasing Certificateholders are purchasing,
pursuant to the terms of this Agreement and the other Agreements, if any,
relating to the Certificates of a series that are subject to the same
Intercreditor Agreement (such other Agreements, the "OTHER AGREEMENTS"), the
Certificates of each such series that the Trust Supplement applicable to the
Certificates held by the Purchasing Certificateholder specifies may be purchased
by such Purchasing Certificateholder. Each payment of the purchase price of the
Certificates of any series shall be made to an account or accounts designated by
the Trustee and each such purchase shall be subject to the terms of this Section
6.01. By acceptance of its Certificate, each Certificateholder (each, a "SELLING
CERTIFICATEHOLDER" and, collectively, the "SELLING CERTIFICATEHOLDERS") of a
series that is subject to purchase by Potential Purchasers, all as set forth in
the Trust Supplement applicable to the Certificates held by the Selling
Certificateholders, agrees that, at any time after the occurrence and during the
continuance of a Triggering Event, it will, upon payment of the purchase price
specified herein by one or more Purchasing Certificateholders, forthwith sell,
assign, transfer and convey to such Purchasing Certificateholder (without
recourse, representation or warranty of any kind except for its own acts), all
of the right, title, interest and obligation of such Selling Certificateholder
in this Agreement, any related Intercreditor Agreement, the related Liquidity
Facility, the related Note Documents and all Certificates of such series held by
such Selling Certificateholder (excluding all right, title and interest under
any of the foregoing to the extent such right, title or interest is with respect
to an obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the Purchasing
Certificateholder shall assume all of such Selling Certificateholder's
obligations under this Agreement, any related Intercreditor Agreement, the
related Liquidity Facility and the related Note Documents. The Certificates of
such series will be deemed to be purchased on the date payment of the purchase
price is made notwithstanding the failure of any Selling Certificateholder to
deliver any Certificates of such series and, upon such a purchase, (i) the only
rights of the Selling Certificateholders will be to deliver the Certificates to
the Purchasing Certificateholder and receive the purchase price for such
Certificates of such series and (ii) if the Purchasing Certificateholder shall
so request, such Selling Certificateholder will comply with all of the
provisions of Section 3.04 hereof to enable new Certificates of such series to
be issued to the Purchasing Certificateholder in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the Purchasing Certificateholder.
Section 6.02. INCIDENTS OF SALE OF EQUIPMENT NOTES. Upon any sale of
all or any part of the Equipment Notes held in the Trust made either under the
power of sale given under this Agreement or otherwise for the enforcement of
this Agreement, the following shall be applicable:
(1) CERTIFICATEHOLDERS AND TRUSTEE MAY PURCHASE EQUIPMENT NOTES. Any
Certificateholder, the Trustee in its individual or any other capacity or
any other Person may bid for and purchase any of the Equipment Notes held
in the Trust, and upon compliance with the terms of sale, may hold, retain,
possess and dispose of such Equipment Notes in their own absolute right
without further accountability.
(2) RECEIPT OF TRUSTEE SHALL DISCHARGE PURCHASER. The receipt of the
Trustee making such sale shall be a sufficient discharge to any purchaser
for his purchase money, and, after paying such purchase money and receiving
such receipt, such purchaser or its personal representative or assigns
shall not be obliged to see to the application of such purchase money, or
be in any way answerable for any loss, misapplication or non-application
thereof.
(3) APPLICATION OF MONEYS RECEIVED UPON SALE. Any moneys collected by
the Trustee upon any sale made either under the power of sale given by this
Agreement or otherwise for the enforcement of this Agreement shall be
applied as provided in Section 4.02.
Section 6.03. JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE; TRUSTEE MAY
BRING SUIT. If there shall be a failure to make payment of the principal of,
premium, if any, or interest on any Equipment Note held in the related Trust, or
if there shall be any failure to pay Rent (as defined in the relevant Lease)
under any Lease when due and payable, then the Trustee, in its own name and as
trustee of an express trust, as holder of such Equipment Notes, to the extent
permitted by and in accordance with the terms of any related Intercreditor
Agreement and any related Note Documents (subject to rights of the applicable
Owner Trustee or Owner Participant to cure any such failure to pay principal of,
premium, if any, or interest on any Equipment Note or to pay Rent under any
Lease in accordance with the applicable Indenture), shall be entitled and
empowered to institute any suits, actions or proceedings at law, in equity or
otherwise, for the collection of the sums so due and unpaid on such Equipment
Notes or under such Lease and may prosecute any such claim or proceeding to
judgment or final decree with respect to the whole amount of any such sums so
due and unpaid.
Section 6.04. CONTROL BY CERTIFICATEHOLDERS. Subject to Section 6.03
and any related Intercreditor Agreement, the Certificateholders holding
Certificates of a series evidencing Fractional Undivided Interests aggregating
not less than a majority in interest in the related Trust shall have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee with respect to such Trust or pursuant to the terms of
such Intercreditor Agreement, or exercising any trust or power conferred on the
Trustee under this Agreement or such Intercreditor Agreement, including any
right of the Trustee as Controlling Party under such Intercreditor Agreement or
as holder of the Equipment Notes held in the related Trust; PROVIDED, HOWEVER,
that
(1) such Direction shall not in the opinion of the Trustee be in
conflict with any rule of law or with this Agreement and would not involve
the Trustee in personal liability or expense,
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Certificateholders of such series not taking
part in such Direction, and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such Direction.
Section 6.05. WAIVER OF PAST DEFAULTS. Subject to any related
Intercreditor Agreement, the Certificateholders holding Certificates of a series
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the Trust (i) may on behalf of all of the Certificateholders
waive any past Event of Default hereunder and its consequences or (ii) if the
Trustee is the Controlling Party, may direct the Trustee to instruct the
applicable Loan Trustee to waive any past Indenture Event of Default under any
related Indenture and its consequences, and thereby annul any Direction given by
such Certificateholders or the Trustee to such Loan Trustee with respect
thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special Payment under
Section 4.01 or in the distribution of any payment under Section 4.02 on
the Certificates of a series, or
(2) in the payment of the principal of (premium, if any) or interest
on the Equipment Notes held in the related Trust, or
(3) in respect of a covenant or provision hereof which under Article
IX hereof cannot be modified or amended without the consent of each
Certificateholder holding an Outstanding Certificate of a series affected
thereby.
Upon any such waiver, such default shall cease to exist with respect to the
Certificates of such series and any Event of Default arising therefrom shall be
deemed to have been cured for every purpose and any direction given by the
Trustee on behalf of the Certificateholders of such series to the relevant Loan
Trustee shall be annulled with respect thereto; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon. Upon any such waiver, the Trustee shall vote the Equipment
Notes issued under the relevant Indenture to waive the corresponding Indenture
Event of Default.
Section 6.06. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT TO
BE IMPAIRED. Anything in this Agreement to the contrary notwithstanding,
including, without limitation, Section 6.07 hereof, but subject to any related
Intercreditor Agreement, the right of any Certificateholder to receive
distributions of payments required pursuant to Section 4.02 hereof on the
applicable Certificates when due, or to institute suit for the enforcement of
any such payment on or after the applicable Regular Distribution Date or Special
Distribution Date, shall not be impaired or affected without the consent of such
Certificateholder.
Section 6.07. CERTIFICATEHOLDERS MAY NOT BRING SUIT EXCEPT UNDER
CERTAIN CONDITIONS. A Certificateholder of any series shall not have the right
to institute any suit, action or proceeding at law or in equity or otherwise
with respect to this Agreement, for the appointment of a receiver or for the
enforcement of any other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given written notice
to the Trustee of a continuing Event of Default;
(2) Certificateholders holding Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than 25% of the related
Trust shall have requested the Trustee in writing to institute such action,
suit or proceeding and shall have offered to the Trustee indemnity as
provided in Section 7.03(e);
(3) the Trustee shall have refused or neglected to institute any such
action, suit or proceeding for 60 days after receipt of such notice,
request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by Certificateholders
holding Certificates of such series evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the related
Trust.
It is understood and intended that no one or more of the
Certificateholders of any series shall have any right in any manner whatsoever
hereunder or under the related Trust Supplement or under the Certificates of
such series to (i) surrender, impair, waive, affect, disturb or prejudice any
property in the Trust Property of the related Trust, or the lien of any related
Indenture on any property subject thereto, or the rights of the
Certificateholders of such series or the holders of the related Equipment Notes,
(ii) obtain or seek to obtain priority over or preference with respect to any
other such Certificateholder of such series or (iii) enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all the Certificateholders of such series subject to the
provisions of this Agreement.
Section 6.08. REMEDIES CUMULATIVE. Every remedy given hereunder to the
Trustee or to any of the Certificateholders of any series shall not be exclusive
of any other remedy or remedies, and every such remedy shall be cumulative and
in addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.
Section 6.09. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Agreement, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; PROVIDED, HOWEVER, that neither
this Section 6.09 nor the Trust Indenture Act shall be deemed to authorize any
court to require such an undertaking or to make such an assessment in any suit
instituted by the Company.
ARTICLE VII
THE TRUSTEE
Section 7.01. CERTAIN DUTIES AND RESPONSIBILITIES. (a) Except during
the continuance of an Event of Default in respect of a Trust, the Trustee
undertakes to perform such duties in respect of such Trust as are specifically
set forth in this Agreement, and no implied covenants or obligations shall be
read into this Agreement against the Trustee.
(b) In case an Event of Default in respect of a Trust has occurred and
is continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Agreement in respect of such Trust, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a)of this Section 7.01; and
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts.
(d) Whether or not herein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
Section 7.02. NOTICE OF DEFAULTS. As promptly as practicable after,
and in any event within 90 days after, the occurrence of any default (as such
term is defined below) hereunder known to the Trustee, the Trustee shall
transmit by mail to the Company, any related Owner Trustees, any related Owner
Participants, the related Loan Trustees and the Certificateholders holding
Certificates of the related series in accordance with Section 313(c) of the
Trust Indenture Act, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; PROVIDED, HOWEVER, that,
except in the case of a default in the payment of the principal, premium, if
any, or interest on any Equipment Note, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith shall determine that the withholding of such notice is in
the interests of the Certificateholders of the related series. For the purpose
of this Section 7.02 in respect of any Trust, the term "DEFAULT" means any event
that is, or after notice or lapse of time or both would become, an Event of
Default in respect of that Trust.
Section 7.03. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of
Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Request;
(c) whenever in the administration of this Agreement or any
Intercreditor Agreement, the Trustee shall deem it desirable that a matter
be proved or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officer's Certificate of the Company, any related Owner Trustee or any
related Loan Trustee;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Intercreditor
Agreement at the Direction of any of the Certificateholders pursuant to
this Agreement or any Intercreditor Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the cost, expenses and liabilities which might be
incurred by it in compliance with such Direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document;
(g) the Trustee may execute any of the trusts or powers under this
Agreement or any Intercreditor Agreement or perform any duties under this
Agreement or any Intercreditor Agreement either directly or by or through
agents or attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it under this Agreement or any Intercreditor Agreement;
(h) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the Direction
of the Certificateholders holding Certificates of any series evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in the related Trust relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement or any Intercreditor Agreement; and
(i) the Trustee shall not be required to expend or risk its own funds
in the performance of any of its duties under this Agreement, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk is not reasonably assured to it.
Section 7.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
CERTIFICATES. The recitals contained herein and in the Certificates of each
series, except the certificates of authentication, shall not be taken as the
statements of the Trustee, and the Trustee assumes no responsibility for their
correctness. Subject to Section 7.15, the Trustee makes no representations as to
the validity or sufficiency of this Basic Agreement, any Equipment Notes, any
Intercreditor Agreement, the Certificates of any series, any Trust Supplement or
any Note Documents, except that the Trustee hereby represents and warrants that
this Basic Agreement has been, and each Trust Supplement, each Certificate, each
Note Purchase Agreement and each Intercreditor Agreement of, or relating to,
each series will be executed and delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.
Section 7.05. MAY HOLD CERTIFICATES. The Trustee, any Paying Agent,
Registrar or any of their Affiliates or any other agent, in their respective
individual or any other capacity, may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
if applicable, may otherwise deal with the Company, any Owner Trustees or the
Loan Trustees with the same rights it would have if it were not Trustee, Paying
Agent, Registrar or such other agent.
Section 7.06. MONEY HELD IN TRUST. Money held by the Trustee or the
Paying Agent in trust under this Agreement need not be segregated from other
funds except to the extent required herein or by law and neither the Trustee nor
the Paying Agent shall have any liability for interest upon any such moneys
except as provided for herein.
Section 7.07. COMPENSATION AND REIMBURSEMENT. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and
(2) except as otherwise expressly provided herein or in any Trust
Supplement, to reimburse, or cause to be reimbursed, the Trustee upon its
request for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Basic Agreement, any Trust Supplement or any Intercreditor
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, willful
misconduct or bad faith or as may be incurred due to the Trustee's breach
of its representations and warranties set forth in Section 7.15; and
(3) to indemnify, or cause to be indemnified, the Trustee with respect
to the Certificates of any series, pursuant to the particular sections of
the Note Purchase Agreements specified in the related Trust Supplement.
The Trustee shall be entitled to reimbursement from, and shall have a
lien prior to the Certificates of each series upon, all property and funds held
or collected by the Trustee in its capacity as Trustee with respect to such
series or the related Trust for any tax incurred without negligence, bad faith
or willful misconduct, on its part, arising out of or in connection with the
acceptance or administration of such Trust (other than any tax attributable to
the Trustee's compensation for serving as such), including any costs and
expenses incurred in contesting the imposition of any such tax. The Trustee
shall notify the Company of any claim for any tax for which it may seek
reimbursement. If the Trustee reimburses itself from the Trust Property of such
Trust for any such tax, it will mail a brief report within 30 days setting forth
the amount of such tax and the circumstances thereof to all Certificateholders
of such series as their names and addresses appear in the Register.
Section 7.08. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. Each Trust
shall at all times have a Trustee which shall be eligible to act as a trustee
under Section 310(a) of the Trust Indenture Act and shall have a combined
capital and surplus of at least $75,000,000 (or a combined capital and surplus
in excess of $5,000,000 and the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States, any state or
territory thereof or of the District of Columbia and having a combined capital
and surplus of at least $75,000,000). If such corporation publishes reports of
conditions at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 7.08 the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of conditions so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.08 to act as Trustee of any
Trust, the Trustee shall resign immediately as Trustee of such Trust in the
manner and with the effect specified in Section 7.09.
Section 7.09. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee of any Trust pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 7.10.
(b) The Trustee may resign at any time as Trustee of any or all Trusts
by giving prior written notice thereof to the Company, the Authorized Agents,
the related Owner Trustees and the related Loan Trustees. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Company,
the related Owner Trustees and the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Direction of the
Certificateholders of the related series holding Certificates evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in such Trust delivered to the Trustee and to the Company, the related Owner
Trustees and the related Loan Trustees.
(d) If at any time in respect of any Trust:
(1) the Trustee shall fail to comply with Section 310 of the Trust
Indenture Act, if applicable, after written request therefor by the Company
or by any Certificateholder who has been a BONA FIDE Certificateholder for
at least six months; or
(2) the Trustee shall cease to be eligible under Section 7.08 and
shall fail to resign after written request therefor by the Company or by
any such Certificateholder; or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder of the related series who has been a BONA FIDE
Certificateholder for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee of such Trust.
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax (as defined below) in respect of any Trust which
has been or is likely to be asserted, the Trustee shall promptly notify the
Company and shall, within 30 days of such notification, resign as Trustee of
such Trust hereunder unless within such 30-day period the Trustee shall have
received notice that the Company has agreed to pay such tax. The Company shall
promptly appoint a successor Trustee of such Trust in a jurisdiction where there
are no Avoidable Taxes. As used herein, an "AVOIDABLE TAX" in respect of such
Trust means a state or local tax: (i) upon (w) such Trust, (x) such Trust
Property, (y) Certificateholders of such Trust or (z) the Trustee for which the
Trustee is entitled to seek reimbursement from the Trust Property of such Trust,
and (ii) which would be avoided if the Trustee were located in another state, or
jurisdiction within a state, within the United States of America. A tax shall
not be an Avoidable Tax in respect of any Trust if the Company or any Owner
Trustee shall agree to pay, and shall pay, such tax.
(f) If the Trustee shall resign, be removed or become incapable of
acting as Trustee of any Trust or if a vacancy shall occur in the office of the
Trustee of any Trust for any cause, the Company shall promptly appoint a
successor Trustee of such Trust. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a successor
Trustee of such Trust shall be appointed by Direction of the Certificateholders
of the related series holding Certificates of such series evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in such
Trust delivered to the Company, the related Owner Trustees, the related Loan
Trustee and the retiring Trustee, then the successor Trustee of such Trust so
appointed shall, with the approval of the Company of such appointment, which
approval shall not be unreasonably withheld, forthwith upon its acceptance of
such appointment, become the successor Trustee of such Trust and supersede the
successor Trustee of such Trust appointed as provided above. If no successor
Trustee shall have been so appointed as provided above and accepted appointment
in the manner hereinafter provided, the resigning Trustee or any
Certificateholder who has been a BONA FIDE Certificateholder of the related
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee of such Trust.
(g) The successor Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
the Certificateholders of the related series as their names and addresses appear
in the Register. Each notice shall include the name of such successor Trustee
and the address of its Corporate Trust Office.
Section 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Trustee appointed hereunder shall execute and deliver to the Company and to the
retiring Trustee with respect to any or all Trusts an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
with respect to such Trusts shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Company or the successor Trustee, such retiring Trustee shall execute and
deliver an instrument transferring to such successor Trustee all such rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all Trust Property held by such retiring
Trustee in respect of such Trusts hereunder, subject nevertheless to its lien,
if any, provided for in Section 7.07. Upon request of any such successor
Trustee, the Company, the retiring Trustee and such successor Trustee shall
execute and deliver any and all instruments containing such provisions as shall
be necessary or desirable to transfer and confirm to, and for more fully and
certainly vesting in, such successor Trustee all such rights, powers and trusts.
If a successor Trustee is appointed with respect to one or more (but
not all) Trusts, the Company, the predecessor Trustee and each successor Trustee
with respect to any Trust shall execute and deliver a supplemental agreement
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Trusts as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee,
and shall add to or change any of the provisions of this Basic Agreement and the
applicable Trust Supplements as shall be necessary to provide for or facilitate
the administration of the Trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental agreement shall
constitute such Trustees as co-Trustees of the same Trust and that each such
Trustee shall be Trustee of separate Trusts.
No institution shall accept its appointment as a Trustee hereunder
unless at the time of such acceptance such institution shall be qualified and
eligible under this Article VII.
Section 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
PROVIDED, HOWEVER, that such corporation shall be otherwise qualified and
eligible under this Article VII, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any
Certificates shall have been executed or authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such execution or authentication and
deliver the Certificates so executed or authenticated with the same effect as if
such successor Trustee had itself executed or authenticated such Certificates.
Section 7.12. MAINTENANCE OF AGENCIES. (a) With respect to each series
of Certificates, there shall at all times be maintained an office or agency in
the location set forth in Section 12.04 where Certificates of such series may be
presented or surrendered for registration of transfer or for exchange, and for
payment thereof, and where notices and demands, to or upon the Trustee in
respect of such Certificates or this Agreement may be served; PROVIDED, HOWEVER,
that, if it shall be necessary that the Trustee maintain an office or agency in
another location with respect to the Certificates of any series (E.G., the
Certificates of such series shall be represented by Definitive Certificates and
shall be listed on a national securities exchange), the Trustee will make all
reasonable efforts to establish such an office or agency. Written notice of the
location of each such other office or agency and of any change of location
thereof shall be given by the Trustee to the Company, any Owner Trustees, the
Loan Trustees (in the case of any Owner Trustee or Loan Trustee, at its address
specified in the Note Documents or such other address as may be notified to the
Trustee) and the Certificateholders of such series. In the event that no such
office or agency shall be maintained or no such notice of location or of change
of location shall be given, presentations and demands may be made and notices
may be served at the Corporate Trust Office of the Trustee.
(b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates of each series. Each such Authorized
Agent shall be a bank or trust company, shall be a corporation organized and
doing business under the laws of the United States or any state, with a combined
capital and surplus of at least $75,000,000, or a corporation having a combined
capital and surplus in excess of $5,000,000, the obligations of which are
guaranteed by a corporation organized and doing business under the laws of the
United States or any state, with a combined capital and surplus of at least
$75,000,000, and shall be authorized under such laws to exercise corporate trust
powers, subject to supervision by federal or state authorities. The Trustee
shall initially be the Paying Agent and, as provided in Section 3.04, Registrar
hereunder with respect to the Certificates of each series. Each Registrar shall
furnish to the Trustee, at stated intervals of not more than six months, and at
such other times as the Trustee may request in writing, a copy of the Register
maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent shall
be a party, or any corporation succeeding to the corporate trust business of any
Authorized Agent, shall be the successor of such Authorized Agent, if such
successor corporation is otherwise eligible under this Section 7.12, without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authorized Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving written
notice of resignation to the Trustee, the Company, any related Owner Trustees
and the related Loan Trustees. The Company may, and at the request of the
Trustee shall, at any time terminate the agency of any Authorized Agent by
giving written notice of termination to such Authorized Agent and to the
Trustee. Upon the resignation or termination of an Authorized Agent or in case
at any time any such Authorized Agent shall cease to be eligible under this
Section 7.12 (when, in either case, no other Authorized Agent performing the
functions of such Authorized Agent shall have been appointed), the Company shall
promptly appoint one or more qualified successor Authorized Agents, reasonably
satisfactory to the Trustee, to perform the functions of the Authorized Agent
which has resigned or whose agency has been terminated or who shall have ceased
to be eligible under this Section 7.12. The Company shall give written notice of
any such appointment made by it to the Trustee, any related Owner Trustees and
the related Loan Trustees; and in each case the Trustee shall mail notice of
such appointment to all Certificateholders of the related series as their names
and addresses appear on the Register for such series.
(e) The Company agrees to pay, or cause to be paid, from time to time
to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses.
Section 7.13. MONEY FOR CERTIFICATE PAYMENTS TO BE HELD IN TRUST. All
moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section 7.13. Moneys so deposited and held in trust shall constitute a separate
trust fund for the benefit of the Certificateholders with respect to which such
money was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Section 7.14. REGISTRATION OF EQUIPMENT NOTES IN TRUSTEE'S NAME.
Subject to the provisions of any Intercreditor Agreement, the Trustee agrees
that all Equipment Notes to be purchased by any Trust and Permitted Investments,
if any, shall be issued in the name of the Trustee as trustee for the applicable
Trust or its nominee and held by the Trustee in trust for the benefit of the
Certificateholders of such series, or, if not so held, the Trustee or its
nominee shall be reflected as the owner of such Equipment Notes or Permitted
Investments, as the case may be, in the register of the issuer of such Equipment
Notes or Permitted Investments, as the case may be.
Section 7.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE67. The Trustee
hereby represents and warrants that:
(a) the Trustee is a Delaware banking corporation organized and
validly existing in good standing under the laws of the State of Delaware;
(b) the Trustee has full power, authority and legal right to execute,
deliver and perform this Agreement, any Intercreditor Agreement and the
Note Purchase Agreements and has taken all necessary action to authorize
the execution, delivery and performance by it of this Agreement, any
Intercreditor Agreement and the Note Purchase Agreements;
(c) the execution, delivery and performance by the Trustee of this
Agreement, any Intercreditor Agreement and the Note Purchase Agreements (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;
(d) the execution, delivery and performance by the Trustee of this
Agreement, any Intercreditor Agreement and the Note Purchase Agreements
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
(e) this Agreement, any Intercreditor Agreement and the Note Purchase
Agreements have been duly executed and delivered by the Trustee and constitute
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 7.16. WITHHOLDING TAXES; INFORMATION REPORTING. As to the
Certificates of any series, the Trustee, as trustee of the related grantor trust
created by this Agreement, shall exclude and withhold from each distribution of
principal, premium, if any, and interest and other amounts due under this
Agreement or under the Certificates of such series any and all withholding taxes
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Certificates of such series, to withhold such amounts
and timely pay the same to the appropriate authority in the name of and on
behalf of the Certificateholders of such series, that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each such
Certificateholder of such series appropriate documentation showing the payment
thereof, together with such additional documentary evidence as such
Certificateholders may reasonably request from time to time. The Trustee agrees
to file any other information reports as it may be required to file under United
States law.
Section 7.17. TRUSTEE'S LIENS. The Trustee in its individual capacity
agrees that it will, in respect of each Trust created by this Agreement, at its
own cost and expense promptly take any action as may be necessary to duly
discharge and satisfy in full any mortgage, pledge, lien, charge, encumbrance,
security interest or claim ("TRUSTEE'S LIENS") on or with respect to the Trust
Property of such Trust which is attributable to the Trustee either (i) in its
individual capacity and which is unrelated to the transactions contemplated by
this Agreement or the related Note Documents or (ii) as Trustee hereunder or in
its individual capacity and which arises out of acts or omissions which are not
contemplated by this Agreement.
Section 7.18. PREFERENTIAL COLLECTION OF CLAIMS. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act. If the Trustee
shall resign or be removed as Trustee, it shall be subject to Section 311(a) of
the Trust Indenture Act to the extent provided therein.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. THE COMPANY TO FURNISH TRUSTEE WITH NAMES AND ADDRESSES
OF CERTIFICATEHOLDERS. The Company will furnish to the Trustee within 15 days
after each Record Date with respect to a Scheduled Payment, and at such other
times as the Trustee may request in writing within 30 days after receipt by the
Company of any such request, a list, in such form as the Trustee may reasonably
require, of all information in the possession or control of the Company as to
the names and addresses of the Certificateholders of each series, in each case
as of a date not more than 15 days prior to the time such list is furnished;
provided, HOWEVER, that so long as the Trustee is the sole Registrar for such
series, no such list need be furnished; and PROVIDED FURTHER, HOWEVER, that no
such list need be furnished for so long as a copy of the Register is being
furnished to the Trustee pursuant to Section 7.12.
Section 8.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
CERTIFICATEHOLDERS. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders of each
series contained in the most recent list furnished to the Trustee as provided in
Section 7.12 or Section 8.01, as the case may be, and the names and addresses of
Certificateholders of each series received by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.12 or Section 8.01, as the case may be, upon receipt of a
new list so furnished.
Section 8.03. REPORTS BY TRUSTEE. Within 60 days after May 15 of each
year commencing with the first full year following the issuance of any series of
Certificates, the Trustee shall transmit to the Certificateholders of such
series, as provided in Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15, if required by Section 313(a) of the Trust Indenture
Act.
Section 8.04. REPORTS BY THE COMPANY. The Company shall:
(a) file with the Trustee, within 30 days after the Company is
required to file the same with the SEC, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may from time to time by rules and
regulations prescribe) which the Company is required to file with the SEC
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934, as amended; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with
the Trustee and the SEC, in accordance with rules and regulations
prescribed by the SEC, such of the supplementary and periodic information,
documents and reports which may be required pursuant to section 13 of the
Securities Exchange Act of 1934, as amended, in respect of a security
listed and registered on a national securities exchange as may be
prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with the rules
and regulations prescribed by the SEC, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants of the Company provided for in this Agreement, as
may be required by such rules and regulations, including, in the case of
annual reports, if required by such rules and regulations, certificates or
opinions of independent public accountants, conforming to the requirements
of Section 1.02;
(c) transmit to all Certificateholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act such summaries
of any information, documents and reports required to be filed by the
Company pursuant to subsections (a) and (b) of this Section 8.04 as may be
required by rules and regulations prescribed by the SEC; and
(d) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his knowledge of the
Company's compliance with all conditions and covenants under this Agreement
(it being understood that for purposes of this paragraph (d), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF
CERTIFICATEHOLDERS. Without the consent of the Certificateholders, the Company
may (but will not be required to), and the Trustee (subject to Section 9.03)
shall, at the Company's request, at any time and from time to time, enter into
one or more agreements supplemental hereto or, if applicable, to an
Intercreditor Agreement or a Liquidity Facility, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to provide for the formation of a Trust, the issuance of a series
of Certificates and other matters contemplated by Section 2.01(b); or
(2) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein contained or of the Company's obligations under any Intercreditor
Agreement or any Liquidity Facility; or
(3) to add to the covenants of the Company for the benefit of the
Certificateholders of any series, or to surrender any right or power
conferred upon the Company in this Agreement, any Intercreditor Agreement
or any Liquidity Facility; or
(4) to correct or supplement any provision in this Agreement, any
Intercreditor Agreement or any Liquidity Facility which may be defective or
inconsistent with any other provision herein or therein or to cure any
ambiguity or to modify any other provision with respect to matters or
questions arising under this Agreement, any Intercreditor Agreement or any
Liquidity Facility, PROVIDED, HOWEVER, that any such action shall not
materially adversely affect the interests of the Certificateholders of any
series; to correct any mistake in this Agreement, any Intercreditor
Agreement or any Liquidity Facility; or, as provided in any Intercreditor
Agreement, to give effect to or provide for a Replacement Liquidity
Facility (as defined in such Intercreditor Agreement); or
(5) to comply with any requirement of the SEC, any applicable law,
rules or regulations of any exchange or quotation system on which the
Certificates of any series are listed or of any regulatory body; or
(6) to modify, eliminate or add to the provisions of this Agreement,
any Intercreditor Agreement or any Liquidity Facility to such extent as
shall be necessary to continue the qualification of this Agreement, any
Intercreditor Agreement or any Liquidity Facility (including any
supplemental agreement) under the Trust Indenture Act or under any similar
Federal statute hereafter enacted, and to add to this Agreement, any
Intercreditor Agreement or any Liquidity Facility such other provisions as
may be expressly permitted by the Trust Indenture Act, excluding, however,
the provisions referred to in Section 316(a)(2) of the Trust Indenture Act
as in effect at the date as of which this Basic Agreement was executed or
any corresponding provision in any similar Federal statute hereafter
enacted; or
(7) to evidence and provide for the acceptance of appointment under
this Agreement, any Intercreditor Agreement or any Liquidity Facility by a
successor Trustee with respect to one or more Trusts and to add to or
change any of the provisions of this Agreement, any Intercreditor Agreement
or any Liquidity Facility as shall be necessary to provide for or
facilitate the administration of the Trust, pursuant to the requirements of
Section 7.10; or
(8) to provide the information required under Section 7.12 and Section
12.04 as to the Trustee; or
(9) to make any other amendments or modifications hereto, PROVIDED,
HOWEVER, that such amendments or modifications shall apply to Certificates
of any series to be thereafter issued;
PROVIDED, HOWEVER, that no such supplemental agreement shall adversely affect
the status of any Trust as a grantor trust under Subpart E, Part I of Subchapter
J of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, as amended,
for U.S. federal income tax purposes.
Section 9.02. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF
CERTIFICATEHOLDERS. With respect to each separate Trust and the series of
Certificates relating thereto, with the consent of the Certificateholders
holding Certificates of such series (including consents obtained in connection
with a tender offer or exchange offer for the Certificates) evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in such Trust, by Direction of said Certificateholders delivered to the Company
and the Trustee, the Company may (with the consent of the Owner Trustees, if
any, relating to such Certificates, which consent shall not be unreasonably
withheld), but shall not be obligated to, and the Trustee (subject to Section
9.03) shall, enter into an agreement or agreements supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, any Intercreditor Agreement or any
Liquidity Facility to the extent applicable to such Certificateholders or of
modifying in any manner the rights and obligations of such Certificateholders
under this Agreement, any Intercreditor Agreement or any Liquidity Facility;
PROVIDED, HOWEVER, that no such agreement shall, without the consent of the
Certificateholder of each Outstanding Certificate affected thereby:
(1) reduce in any manner the amount of, or delay the timing of, any
receipt by the Trustee of payments on the Equipment Notes held in such
Trust or distributions that are required to be made herein on any
Certificate of such series, or change any date of payment on any
Certificate of such series, or change the place of payment where, or the
coin or currency in which, any Certificate of such series is payable, or
impair the right to institute suit for the enforcement of any such payment
or distribution on or after the Regular Distribution Date or Special
Distribution Date applicable thereto; or
(2) permit the disposition of any Equipment Note included in the Trust
Property of such Trust except as permitted by this Agreement, or otherwise
deprive such Certificateholder of the benefit of the ownership of the
Equipment Notes in such Trust; or
(3) alter the priority of distributions specified in the Intercreditor
Agreement in a manner materially adverse to the interests of the
Certificateholders of any series; or
(4) reduce the specified percentage of the aggregate Fractional
Undivided Interests of such Trust that is required for any such
supplemental agreement, or reduce such specified percentage required for
any waiver (of compliance with certain provisions of this Agreement or
certain defaults hereunder and their consequences) provided for in this
Agreement; or
(5) modify any of the provisions of this Section 9.02 or Section 6.05,
except to increase any such percentage or to provide that certain other
provisions of this Agreement cannot be modified or waived without the
consent of the Certificateholder of each Certificate of such series
affected thereby; or
(6) adversely affect the status of any Trust as a grantor trust under
Subpart E, Part I of Subchapter J of Chapter 1 of Subtitle A of the
Internal Revenue Code of 1986, as amended, for U.S. federal income tax
purposes.
It shall not be necessary for any Direction of such Certificateholders
under this Section 9.02 to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Direction shall
approve the substance thereof.
Section 9.03. DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY. If in the
opinion of the Trustee any document required to be executed by it pursuant to
the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity or
indemnity in favor of the Trustee under this Basic Agreement or any Trust
Supplement, the Trustee may in its discretion decline to execute such document.
Section 9.04. EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing, or
accepting the additional trusts created by, any supplemental agreement permitted
by this Article or the modifications thereby of the trusts created by this
Agreement, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.
Section 9.05. EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of
any agreement supplemental to this Agreement under this Article, this Basic
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Basic Agreement for all purposes; and every
Certificateholder of each series theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby to the extent applicable to such
series.
Section 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
agreement executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 9.07. REFERENCE IN CERTIFICATES TO SUPPLEMENTAL AGREEMENTS.
Certificates of each series authenticated and delivered after the execution of
any supplemental agreement applicable to such series pursuant to this Article
may bear a notation in form approved by the Trustee as to any matter provided
for in such supplemental agreement; and, in such case, suitable notation may be
made upon Outstanding Certificates of such series after proper presentation and
demand.
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. AMENDMENTS AND SUPPLEMENTS TO INDENTURE AND OTHER NOTE
DOCUMENTS. In the event that the Trustee, as holder (or beneficial owner through
the Subordination Agent) of any Equipment Notes (or as a prospective purchaser
of any Postponed Notes) in trust for the benefit of the Certificateholders of
any series or as Controlling Party under an Intercreditor Agreement, receives
(directly or indirectly through the Subordination Agent) a request for a consent
to any amendment, modification, waiver or supplement under any Indenture, other
Note Document or any other related document, the Trustee shall forthwith send a
notice of such proposed amendment, modification, waiver or supplement to each
Certificateholder of such series registered on the Register as of the date of
such notice. The Trustee shall request from the Certificateholders of such
series a Direction as to (a) whether or not to take or refrain from taking (or
direct the Subordination Agent to take or refrain from taking) any action which
a holder of (or, with respect to Postponed Notes, a prospective purchaser of)
such Equipment Note or a Controlling Party has the option to direct, (b) whether
or not to give or execute (or direct the Subordination Agent to give or execute)
any waivers, consents, amendments, modifications or supplements as a holder of
(or, with respect to Postponed Notes, a prospective purchaser of) such Equipment
Note or as Controlling Party and (c) how to vote (or direct the Subordination
Agent to vote) any Equipment Note (or, with respect to a Postponed Note, its
commitment to acquire such Postponed Note) if a vote has been called for with
respect thereto. Provided such a request for Certificateholder Direction shall
have been made, in directing any action or casting any vote or giving any
consent as the holder of any Equipment Note (or in directing the Subordination
Agent in any of the foregoing), (i) other than as Controlling Party, the Trustee
shall vote for or give consent to any such action with respect to such Equipment
Note (or Postponed Note) in the same proportion as that of (A) the aggregate
face amounts of all Certificates actually voted in favor of or for giving
consent to such action by such Direction of Certificateholders to (B) the
aggregate face amount of all Outstanding Certificates and (ii) as Controlling
Party, the Trustee shall vote as directed in such Certificateholder Direction by
the Certificateholders of such series evidencing a Fractional Undivided Interest
aggregating not less than a majority in interest in the Trust. For purposes of
the immediately preceding sentence, a Certificate shall have been "actually
voted" if the Holder of such Certificate has delivered to the Trustee an
instrument evidencing such Holder's consent to such Direction prior to one
Business Day before the Trustee directs such action or casts such vote or gives
such consent. Notwithstanding the foregoing, but subject to Section 6.04 and any
Intercreditor Agreement, the Trustee may, with respect to the Certificates of
any series, in its own discretion and at its own direction, consent and notify
the relevant Loan Trustee of such consent (or direct the Subordination Agent to
consent and notify the Loan Trustee of such consent) to any amendment,
modification, waiver or supplement under any related Indenture or any other
related Note Document if an Event of Default hereunder shall have occurred and
be continuing or if such amendment, modification, waiver or supplement will not
materially adversely affect the interests of the Certificateholders of such
series.
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. TERMINATION OF THE TRUSTS. In respect of each Trust
created by the Basic Agreement as supplemented by a related Trust Supplement,
the respective obligations and responsibilities of the Company and the Trustee
with respect to such Trust shall terminate upon the distribution to all Holders
of Certificates of the series of such Trust and the Trustee of all amounts
required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property of such Trust;
PROVIDED, HOWEVER, that in no event shall such Trust continue beyond one hundred
ten (110) years following the date of the execution of the Trust Supplement with
respect to such Trust (or such other final expiration date as may be specified
in such Trust Supplement).
Notice of any termination of a Trust, specifying the applicable
Regular Distribution Date (or applicable Special Distribution Date, as the case
may be) upon which the Certificateholders of any series may surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Certificateholders of
such series not earlier than the minimum number of days and not later than the
maximum number of days specified therefor in the related Trust Supplement
preceding such final distribution specifying (A) the Regular Distribution Date
(or Special Distribution Date, as the case may be) upon which the proposed final
payment of the Certificates of such series will be made upon presentation and
surrender of Certificates of such series at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Regular Distribution Date (or
Special Distribution Date, as the case may be) is not applicable, payments being
made only upon presentation and surrender of the Certificates of such series at
the office or agency of the Trustee therein specified. The Trustee shall give
such notice to the Registrar at the time such notice is given to
Certificateholders of such series. Upon presentation and surrender of the
Certificates of such series in accordance with such notice, the Trustee shall
cause to be distributed to Certificateholders of such series amounts
distributable on such Regular Distribution Date (or Special Distribution Date,
as the case may be) pursuant to Section 4.02.
In the event that all of the Certificateholders of such series shall
not surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders of such series to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. No additional interest shall accrue on the Certificates of
such series after any Regular Distribution Date (or Special Distribution Date,
as the case may be) of such series, as specified in the first written notice. In
the event that any money held by the Trustee for the payment of distributions on
the Certificates of such series shall remain unclaimed for two years (or such
lesser time as the Trustee shall be satisfied, after 60 days' notice from the
Company, is one month prior to the escheat period provided under applicable law)
after the final distribution date with respect thereto, the Trustee shall pay to
each Loan Trustee the appropriate amount of money relating to such Loan Trustee
and shall give written notice thereof to the related Owner Trustees and the
Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death
or incapacity of any Certificateholder of any series shall not operate to
terminate this Agreement or the related Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding up of the Trust, nor otherwise affect the rights, obligations, and
liabilities of the parties hereto or any of them.
Section 12.02. LIABILITIES OF CERTIFICATEHOLDERS. Neither the
existence of the Trust nor any provision in this Agreement is intended to or
shall limit the liability the Certificateholders would otherwise incur if the
Certificateholders owned Trust Property as co-owners, or incurred any
obligations of the Trust, directly rather than through the Trust.
Section 12.03. REGISTRATION OF EQUIPMENT NOTES IN NAME OF
SUBORDINATION AGENT. If a Trust is party to an Intercreditor Agreement, the
Trustee agrees that all Equipment Notes to be purchased by such Trust shall be
issued in the name of the Subordination Agent under such Intercreditor Agreement
or its nominee and held by such Subordination Agent in trust for the benefit of
the Certificateholders, or, if not so held, such Subordination Agent or its
nominee shall be reflected as the owner of such Equipment Notes in the register
of the issuer of such Equipment Notes.
Section 12.04. NOTICES. (a) Unless otherwise specifically provided
herein or in the applicable Trust Supplement with respect to any Trust, all
notices required under the terms and provisions of this Basic Agreement or such
Trust Supplement with respect to such Trust shall be in English and in writing,
and any such notice may be given by United States mail, courier service or
telecopy, and any such notice shall be effective when delivered or received or,
if mailed, three days after deposit in the United States mail with proper
postage for ordinary mail prepaid,
if to the Company:
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Attention: Chief Financial Officer
and General Counsel
Facsimile: (713) 523-2831
if to the Trustee:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Department
Facsimile: (302) 651-8882
Telephone: (302) 651-8584
(b) The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
(c) Any notice or communication to Certificateholders of any series
shall be mailed by first-class mail to the addresses for Certificateholders of
such series shown on the Register kept by the Registrar and to addresses filed
with the Trustee for Certificate Owners of such series. Failure so to mail a
notice or communication or any defect in such notice or communication shall not
affect its sufficiency with respect to other Certificateholders or Certificate
Owners of such series.
(d) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and to
each Paying Agent for such series at the same time.
(f) Notwithstanding the foregoing, all communications or notices to
the Trustee shall be deemed to be given only when received by a Responsible
Officer of the Trustee.
(g) The Trustee shall promptly furnish the Company with a copy of any
demand, notice or written communication received by the Trustee hereunder from
any Certificateholder, Owner Trustee or Loan Trustee.
Section 12.05. GOVERNING LAW. THIS BASIC AGREEMENT HAS BEEN DELIVERED
IN THE STATE OF NEW YORK AND, TOGETHER WITH ALL TRUST SUPPLEMENTS AND
CERTIFICATES, SHALL BE 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.
Section 12.06. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or the related Trust,
or of the Certificates of such series or the rights of the Certificateholders
thereof.
Section 12.07. TRUST INDENTURE ACT CONTROLS. This Agreement is subject
to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions. If any provision of this Agreement
limits, qualifies or conflicts with another provision which is required to be
included in this Agreement by the Trust Indenture Act, the required provision
shall control.
Section 12.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 12.09. SUCCESSORS AND ASSIGNS. All covenants, agreements,
representations and warranties in this Agreement by the Trustee and the Company
shall bind and, to the extent permitted hereby, shall inure to the benefit of
and be enforceable by their respective successors and assigns, whether so
expressed or not.
Section 12.10. BENEFITS OF AGREEMENT. Nothing in this Agreement or in
the Certificates of any series, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, and the
Certificateholders of each series, any benefit or any legal or equitable right,
remedy or claim under this Agreement.
Section 12.11. LEGAL HOLIDAYS. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate of
any series shall not be a Business Day with respect to such series, then
(notwithstanding any other provision of this Agreement) payment need not be made
on such date, but may be made on the next succeeding 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.
Section 12.12. COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
Section 12.13. COMMUNICATION BY CERTIFICATEHOLDERS WITH OTHER
CERTIFICATEHOLDERS. Certificateholders of any series may communicate with other
Certificateholders of such series with respect to their rights under this Basic
Agreement, the related Trust Supplement or the Certificates of such series
pursuant to Section 312(b) of the Trust Indenture Act. The Company, the Trustee
and any and all other persons benefitted by this Agreement shall have the
protection afforded by Section 312(c) of the Trust Indenture Act.
Section 12.14. INTENTION OF PARTIES. The parties hereto intend that
each 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. The powers granted and obligations undertaken pursuant to this
Agreement shall be so construed so as to further such intent.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto 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:
EXHIBIT A
FORM OF CERTIFICATE
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
CONTINENTAL AIRLINES ____________ PASS THROUGH TRUST
Pass Through
Certificate, Series __________
Final Regular Distribution Date: _____, ____
evidencing a fractional undivided interest in a
trust, the property of which includes certain
equipment notes each secured by Aircraft owned by
or leased to Continental Airlines, Inc.
Certificate
No.____________ $_________ Fractional Undivided Interest representing
._____% 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, Series [___] (the
"TRUST") created by Wilmington Trust Company, as trustee (the "TRUSTEE"),
pursuant to a Pass Through Trust Agreement dated as of [ ], 1997 (the "BASIC
AGREEMENT"), as supplemented by Trust Supplement No. _______ thereto dated
__________, 199_ (collectively, the "Agreement"), between the Trustee and
Continental Airlines, Inc., a corporation incorporated under Delaware law (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 "___%
Continental Airlines Pass Through Certificate, Series ____" (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,
___________________
This legend to appear on Book-Entry Certificates to be deposited with The
Depository Trust Company.
the Certificateholder of this Certificate assents to and agrees to be bound by
the provisions of the Agreement and any related Intercreditor Agreement. The
property of the Trust includes certain Equipment Notes and all rights of the
Trust to receive any payments under any Intercreditor Agreement or Liquidity
Facility (the "TRUST PROPERTY"). Each issue of the Equipment Notes is or will be
secured by, among other things, a security interest in aircraft leased to or
owned by the Company.
The Certificates represent fractional undivided interests in the Trust
and the Trust Property, and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and any
related Intercreditor Agreement, from funds then available to the Trustee, there
will be distributed on each __________ and ___________ (a "REGULAR DISTRIBUTION
DATE"), commencing on _________, 199_, 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 any related 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 the presentation or surrender of
this Certificate or the making of any notation hereon. 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, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
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.
THIS CERTIFICATE AND THE AGREEMENT HAVE EACH BEEN DELIVERED IN THE
STATE OF NEW YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES AND
CERTIFICATEHOLDERS HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES, INC.
By: WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Title:__________________________________
Dated: ______________________
[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:_____________________________________
Authorized Officer
TRUST SUPPLEMENT NO. 1997-3A
Dated September 25, 1997
between
WILMINGTON TRUST COMPANY,
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$54,440,000
Continental Airlines, Inc.
Pass Through Trust, 1997-3A
Continental Airlines, Inc.
1997-3 Pass Through Certificates,
Class A
TABLE OF CONTENTS
PAGE
----
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates ..............................................2
ARTICLE II
DEFINITIONS AND AMENDMENTS
Section 2.01. Definitions ...................................................4
Section 2.02. Amendments ....................................................5
ARTICLE III
DEFAULT
Section 3.01. Purchase Rights of Certificateholders .........................6
ARTICLE IV
THE TRUSTEE
Section 4.01. The Trustee ...................................................7
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Basic Agreement Modified and Ratified .........................8
Section 5.02. GOVERNING LAW .................................................8
Section 5.03. Execution in Counterparts .....................................8
This Trust Supplement No. 1997-3A, dated as of September 25, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified
heretofore in the Basic Agreement) which may be issued thereunder, has
heretofore been executed and delivered;
WHEREAS, each Owner Trustee, acting on behalf of its respective Owner
Participant, will issue, on a non-recourse basis, Equipment Notes, among other
things, to refinance the outstanding debt portion of the purchase price of the
aircraft purchased by such Owner Trustee and leased to the Company pursuant to
the related Lease;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "AGREEMENT"), the Trustee shall
purchase such Equipment Notes issued by each Owner Trustee having the same
interest rate as, and final maturity dates not later than the final expected
Regular Distribution Date of, the Certificates issued hereunder and shall hold
such Equipment Notes in trust for the benefit of the Class A Certificateholders;
WHEREAS, the Trustee hereby declares the creation of this Continental
Airlines Pass Through Trust, Series 1997-3A (the "1997-3A TRUST"), for the
benefit of the Class A Certificateholders, and the initial Class A
Certificateholders as the grantors of the 1997-3A Trust, by their respective
acceptances of the Certificates issued hereunder, join in the creation of this
1997-3A Trust with the Trustee;
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
"Continental Airlines Pass Through Certificates, Series 1997-3A" (hereinafter
defined as the "SERIES 1997-3A CERTIFICATES"). Each Series 1997-3A Certificate
represents a fractional undivided interest in the 1997-3A Trust created hereby.
The Series 1997-3A Certificates shall be the only instruments evidencing a
fractional undivided interest in the 1997-3A Trust.
The terms and conditions applicable to the Series 1997-3A Certificates
are as follows:
(a) The aggregate principal amount of the Series 1997-3A Certificates
that shall be authenticated under the Agreement (except for Series 1997-3A
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04 and
3.06 of the Basic Agreement) is $54,440,000.
(b) The Cut-off Date is October 31, 1997.
(c) The Regular Distribution Date with respect to any payment of
Scheduled Payments means March 24, June 24, September 24 and December 24,
commencing on December 24, 1997 until payment of all of the Scheduled Payments
to be made under the Equipment Notes has been made.
(d) The Special Distribution Date with respect to the Series 1997-3A
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(e)(i) The Series 1997-3A Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting a Series 1997-3A
Certificate or an interest therein 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
Series 1997-3A Certificates or an interest therein or (ii) the purchase and
holding of Series 1997-3A Certificates or interest therein are exempt from the
prohibited transaction restrictions of ERISA and the Code pursuant to one or
more prohibited transaction statutory or administrative exemptions.
(ii) The Series 1997-3A Certificates shall be Book-Entry Certificates
and shall be subject to the conditions set forth in the Letter of
Representations between the Company, the Trustee and the Clearing Agency
attached hereto as Exhibit B.
(f) The Scheduled Payments of principal shall be as set forth in
Exhibit C hereto.
(g)All or a portion of the proceeds of the Series 1997-3A Certificates
shall be used to purchase the Equipment Notes in the principal amounts specified
below and the unused portion of such proceeds, if any, shall be deposited in the
Escrow Account to be applied as set forth in the Agreement:
REGISTRATION NUMBER PRINCIPAL AMOUNT
------------------- ----------------
N14925............................................$6,276,000
N15926............................................ 6,276,000
N16927............................................ 6,276,000
N17928............................................ 5,540,000
N13929............................................ 5,540,000
N14930............................................ 6,133,000
N14931............................................ 6,133,000
N15932............................................ 6,133,000
N14933............................................ 6,133,000
(h) Each Owner Trustee, acting on behalf of its respective Owner
Participant, will issue, on a non-recourse basis, the Equipment Notes, the
proceeds of which shall be used, among other things, to refinance the
outstanding debt portion of the purchase price to such Owner Trustee of the
following Aircraft:
REGISTRATION NUMBER AIRCRAFT TYPE ENGINE TYPE
- ------------------- ------------- -----------
N14925 Embraer EMB-145 AE3007A
N15926 Embraer EMB-145 AE3007A
N16927 Embraer EMB-145 AE3007A
N17928 Embraer EMB-145 AE3007A
N13929 Embraer EMB-145 AE3007A
N14930 Embraer EMB-145 AE3007A
N14931 Embraer EMB-145 AE3007A
N15932 Embraer EMB-145 AE3007A
N14933 Embraer EMB-145 AE3007A
(i) The related Note Documents are listed on Exhibit D.
(j) Notice of any termination of the 1997-3A Trust shall be mailed
promptly by the Trustee to the Class A Certificateholders not earlier than the
60th day and not later than the 15th day next preceding the final distribution
pursuant to the Agreement.
(k) Except as contemplated by Section 2.02(b) of the Basic Agreement,
there will be no deposit agreement or other arrangement prior to the delivery of
any Aircraft.
(l) The Series 1997-3A Certificates are subject to the Intercreditor
Agreement.
(m) The Series 1997-3A Certificates will have the benefit of the
Liquidity Facility.
(n) The Responsible Party is the Company.
(o) The Final Legal Distribution Date is September 24, 2014.
(p) 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 Note Purchase Agreement.
ARTICLE II
DEFINITIONS AND AMENDMENTS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms shall
have the following meanings:
CLASS A CERTIFICATEHOLDER: Means the Person in whose name a Series
1997-3A Certificate is registered on the Register for the Series 1997-3A
Certificates.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
the date hereof among the Trustee, the Other Trustees, the Liquidity
Provider named therein and Wilmington Trust Company, as Subordination Agent
and as trustee, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
LIQUIDITY FACILITY: Means the Revolving Credit Agreement dated as of
the date hereof among Wilmington Trust Company, as Subordination Agent and
trustee for the 1997-3A Trust, and ABN AMRO Bank, N.V., acting through its
Chicago Branch, as amended, replaced, supplemented or otherwise modified
from time to time in accordance with its terms and the terms of the
Intercreditor Agreement..
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement 1997-3B dated as of the date hereof relating to the
Continental Airlines Pass Through Trust created thereunder and (ii) the
Basic Agreement as supplemented by Trust Supplement No. 1997-3C dated the
date hereof relating to the Continental Airlines Pass Through Trust created
thereunder.
OTHER TRUSTEES: Means each of the trustees under the Other Agreements,
and any successor thereunder or other trustee appointed as provided
therein.
PTC EVENT OF DEFAULT: Means the failure to pay within ten Business
Days of the due date thereof: (i) the outstanding Pool Balance of the
Series 1997-3A Certificates on the Final Legal Distribution Date for such
Series 1997-3A Certificates or (ii) interest due on such Series 1997-3A
Certificates on any Distribution Date (unless the Subordination Agent shall
have made an Interest Drawing or Drawings (as defined in the Intercreditor
Agreement), or a withdrawal or withdrawals pursuant to a cash collateral
account under the Intercreditor Agreement, with respect thereto in an
aggregate amount sufficient to pay such interest and shall have distributed
such amount to the Trustee).
Section 2.02. AMENDMENTS. Solely for purposes of this Trust
Supplement, Section 2.02(b) of the Basic Agreement shall be amended to read as
follows:
(b) If on or prior to the Issuance Date with respect to a series of
Certificates the Company shall deliver to the Trustee a Postponement Notice
relating to one or more Postponed Notes, the Trustee shall postpone the purchase
of such Postponed Notes and shall deposit into an escrow account (as to such
Trust, the "ESCROW ACCOUNT") to be maintained as part of the related Trust an
amount equal to the purchase price of such Postponed Notes (the "ESCROWED
FUNDS"). The portion of the Escrowed Funds so deposited with respect to any
particular Postponed Notes shall be invested by the Trustee at the written
direction of the Responsible Party in Specified Investments (i) maturing no
later than any scheduled Transfer Date relating to such Postponed Notes or (ii)
if no such Transfer Date has been scheduled, maturing on the next Business Day,
or (iii) if the Company has given notice to the Trustee that such Postponed
Notes will not be issued, maturing on the next applicable Special Distribution
Date, if such investments are reasonably available for purchase. The Trustee
shall make withdrawals from the Escrow Account only as provided in this
Agreement. Upon request of the Company on one or more occasions and the
satisfaction or waiver of the closing conditions specified in the applicable
Note Purchase Agreements on or prior to the related Cut-off Date, the Trustee
shall purchase the applicable Postponed Notes with the Escrowed Funds withdrawn
from the Escrow Account. The purchase price shall equal the principal amount of
such Postponed Notes.
The Trustee shall hold all Specified Investments until the maturity
thereof and will not sell or otherwise transfer Specified Investments. If
Specified Investments held in an Escrow Account mature prior to any applicable
Transfer Date, any proceeds received on the maturity of such Specified
Investments (including any earnings thereon) shall be reinvested by the Trustee
at the written direction of the Responsible Party in Specified Investments
maturing as provided in the preceding paragraph. The Responsible Party shall pay
to the Trustee for deposit to the relevant Escrow Account an amount equal to any
losses on such Specified Investments as incurred.
On the Initial Regular Distribution Date in respect of the
Certificates of any series, the Responsible Party will pay (in immediately
available funds) to the Trustee an amount equal to (i) the interest that would
have accrued on any Postponed Notes with respect to such Certificates, if any,
purchased after the Issuance Date if such Postponed Notes had been purchased on
the Issuance Date, from the Issuance Date to, but not including, the date of the
purchase of such Postponed Notes by the Trustee minus (ii) the earnings on
Specified Investments (disregarding any losses thereon) received (with respect
to the portion of the Escrow Funds deposited with respect to the Postponed Notes
described in clause (i) of this paragraph) by the Trustee from and including the
Issuance Date to, but not including, the Initial Regular Distribution Date.
If, in respect of the Certificates of any series, the Company notifies
the Trustee prior to the Cut-off Date that any Postponed Notes will not be
issued on or prior to the Cut-off Date for any reason, on the next Special
Distribution Date for such Certificates occurring not less than 15 days
following the date of such notice, (i) the Responsible Party shall pay to the
Trustee for deposit in the related Special Payments Account, in immediately
available funds, an amount equal to (A) the interest that would have accrued on
the Postponed Notes designated in such notice at a rate equal to the interest
rate applicable to such Certificates from the Issuance Date to, but not
including, such Special Distribution Date minus (B) the earnings on Specified
Investments (disregarding any losses thereon) received (with respect to the
portion of the Escrowed Funds deposited with respect to the Postponed Notes
designated in such notice) by the Trustee from and including the Issuance Date
to, but not including, such Special Distribution Date and (ii) the Trustee shall
transfer an amount equal to that amount of Escrowed Funds that would have been
used to purchase the Postponed Notes designated in such notice and the amount
paid by the Responsible Party pursuant to the immediately preceding clause (i)
to the related Special Payments Account for distribution as a Special Payment in
accordance with the provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next such
Special Distribution Date occurring not less than 15 days following such Cut-off
Date, (i) the Responsible Party shall pay to the Trustee for deposit in such
Special Payments Account, in immediately available funds, an amount equal to (A)
the interest that would have accrued on such Postponed Notes contemplated to be
purchased with such unused Escrowed Funds (other than Escrowed Funds referred to
in the immediately preceding paragraph) but not so purchased at a rate equal to
the interest rate applicable to such Certificates from the Issuance Date to, but
not including, such Special Distribution Date minus (B) the earnings on
Specified Investments (disregarding any losses thereon) received (with respect
to the portion of the Escrowed Funds deposited with respect to the Postponed
Notes contemplated to be purchased with such unused Escrowed Funds (other than
Escrowed Funds referred to in the immediately preceding paragraph) but not so
purchased) by the Trustee from and including the Issuance Date to, but not
including, such Special Distribution Date and (ii) the Trustee shall transfer
such unused Escrowed Funds and the amount paid by the Responsible Party pursuant
to the immediately preceding clause (i) to such Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
ARTICLE III
DEFAULT
Section 3.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) By acceptance
of its Series 1997-3A Certificate, each Class A Certificateholder agrees that at
any time after the occurrence and during the continuation of a Triggering Event,
(i) Each Class B Certificateholder shall have the right to purchase
all, but not less than all, of the Series 1997-3A Certificates upon ten
days' written notice to the Trustee and each other Class B
Certificateholder, provided that (A) if prior to the end of such ten-day
period any other Class B Certificateholder notifies such purchasing Class B
Certificateholder that such other Class B Certificateholder wants to
participate in such purchase, then such other Class B Certificateholder may
join with the purchasing Class B Certificateholder to purchase, for the
purchase price and otherwise in accordance with and subject to the
provisions set forth in Section 6.01(b) of the Basic Agreement, all, but
not less than all, of the Series 1997-3A Certificates pro rata based on the
Fractional Undivided Interest in the Class B Trust held by each such Class
B Certificateholder and (B) if prior to the end of such ten-day period any
other Class B Certificateholder fails to notify the purchasing Class B
Certificateholder of such other Class B Certificateholder's desire to
participate in such a purchase, then such other Class B Certificateholder
shall lose its right to purchase the Series 1997-3A Certificates pursuant
to this Section and Section 6.01(b) of the Basic Agreement; and
(ii) Each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Series 1997-3A Certificates pursuant to
clause (i) above) to purchase, for the purchase price and otherwise in
accordance with and subject to the provisions set forth in Section 6.01(b)
of the Basic Agreement, all, but not less than all, of the Series 1997-3A
Certificates and the Class B Certificates upon ten days' written notice to
the Trustee, the Class B Trustee and each other Class C Certificateholder,
provided that (A) if prior to the end of such ten-day period any other
Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may
join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Series 1997-3A Certificates and the Class B
Certificates pro rata based on the Fractional Undivided Interest in the
Class C Trust held by each such Class C Certificateholder and (b) if prior
to the end of such ten-day period any other Class C Certificateholder fails
to notify the purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the Series
1997-3A Certificates and the Class B Certificates pursuant to this Section
and Section 6.01(b) of the Basic Agreement.
(b) As used in this Article III, the terms "Class B Certificate",
"Class B Certificateholder", "Class B Trust", "Class B Trustee", "Class C
Certificateholder" and "Class C Trust" shall have the respective meanings
assigned to such terms in the Intercreditor Agreement.
ARTICLE IV
THE TRUSTEE
Section 4.01. THE TRUSTEE. The Trustee is hereby directed to execute
and deliver the Intercreditor Agreement on or prior to the Issuance Date in the
form delivered to the Trustee by the Company. The Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement or the due execution hereof by the Company,
or for or in respect of the recitals and statements contained herein, all of
which recitals and statements are made solely by the Company.
The Trustee, upon the execution and delivery of this Trust Supplement,
acknowledges its acceptance of all right, title and interest in and to the Trust
Property with respect to the 1997-3A Trust and declares that the Trustee holds
and will hold such right, title and interest for the benefit of all then present
and future Class A Certificateholders, upon the trusts set forth in the Basic
Agreement and this Trust Supplement. By its acceptance of each Series 1997-3A
Certificate issued to it under the Agreement, each initial Class A
Certificateholder as grantor of the 1997-3A Trust thereby joins in the creation
and declaration of the 1997-3A Trust.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Trust Supplement other than as set forth in the Basic Agreement,
and this Trust Supplement is executed and accepted on behalf of the Trustee,
subject to all the terms and conditions set forth in the Basic Agreement, upon
the effectiveness thereof, as if the same were herein set forth at length.
The Trustee represents and warrants that the Intercreditor Agreement
will be duly executed and delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. BASIC AGREEMENT MODIFIED AND RATIFIED. The Basic
Agreement is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Trust Supplement as if set forth in full herein, and
is in all respects ratified and confirmed, as supplemented and modified by this
Trust Supplement.
Section 5.02. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE CLASS A
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
Section 5.03. 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.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereunto 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:
EXHIBIT A
---------
Form of Certificate
[Include on each Certificate that is a Global Certificate: Unless this
certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to Issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
CONTINENTAL AIRLINES 1997-3A PASS THROUGH TRUST
Pass Through
Certificate, Series 1997-3A
Issuance Date: September 25, 1997
Final Expected Distribution Date: March 24, 2013
evidencing a fractional undivided interest in a 1997-3A Trust,
the property of which includes certain equipment notes each
secured by aircraft leased to Continental Airlines, Inc.
Certificate
No. _______ $ ________Fractional Undivided Interest representing 0.0018369%
of the Trust per $1,000 of 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, Series 1997-3A (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"), as
supplemented by Trust Supplement No. 1997-3A thereto, dated as of September 25,
1997 (collectively, the "AGREEMENT") between the Trustee and Continental
Airlines, Inc., a Delaware corporation (the "COMPANY" or the "ISSUER"), 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 "Continental Airlines Pass Through
Certificates, Series 1997-3A" (herein called the "CERTIFICATES"). This
Certificate is issued under and is subject to the terms, provisions and
___________________
This legend to appear on Book-Entry Certificates to be deposited with The
Depository Trust Company.
conditions of the Agreement. By virtue of its acceptance hereof, the
Certificateholder of this Certificate assents to and agrees to be bound by the
provisions of the Agreement and the Intercreditor Agreement. The property of the
Trust includes certain Equipment Notes and all rights of the Trust to receive
payments under the Intercreditor Agreement and the Liquidity Facility (the
"TRUST PROPERTY"). Each issue of the Equipment Notes is secured by, among other
things, a security interest in 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 each March 24, June 24, September 24 and December 24 (a "REGULAR
DISTRIBUTION DATE"), commencing on December 24, 1997, 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 the presentation or surrender of
this Certificate or the making of any notation hereon. 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, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THIS CERTIFICATE AND THE AGREEMENT HAVE EACH BEEN DELIVERED IN THE
STATE OF NEW YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
CERTIFICATEHOLDERS HEREUNDER AND THE PARTIES THEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES 1997-3A PASS
THROUGH TRUST
By: WILMINGTON TRUST COMPANY, as Trustee
By:_____________________________________
Title:_______________________________
Dated:____________________________
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY, as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT B
---------
DTC Letter of Representations
EXHIBIT C
---------
Regular Distribution Dates
and
Scheduled Payments
DATE SCHEDULED PAYMENTS OF PRINCIPAL
- ---- -------------------------------
December 24, 1997............................... $ 515,402
March 24, 1998.................................. 423,390
June 24, 1998................................... 45,761
September 24, 1998.............................. 149,601
December 24, 1998............................... 566,859
March 24, 1999.................................. 172,652
June 24, 1999................................... 299,241
September 24, 1999.............................. 173,049
December 24, 1999............................... 831,531
March 24, 2000.................................. 348,512
June 24, 2000................................... 374,988
September 24, 2000.............................. 257,094
December 24, 2000............................... 905,558
March 24, 2001.................................. 128,608
June 24, 2001................................... 252,000
September 24, 2001.............................. 167,136
December 24, 2001............................... 775,924
March 24, 2002.................................. 128,608
June 24, 2002................................... 252,000
September 24, 2002.............................. 137,589
December 24, 2002............................... 805,471
March 24, 2003.................................. 128,608
June 24, 2003................................... 252,000
September 24, 2003.............................. 105,870
December 24, 2003............................... 837,190
March 24, 2004.................................. 128,608
June 24, 2004................................... 252,000
September 24, 2004.............................. 71,814
December 24, 2004............................... 999,616
March 24, 2005.................................. 141,238
June 24, 2005................................... 111,002
September 24, 2005.............................. 269,589
December 24, 2005............................... 1,059,437
March 24, 2006.................................. 0
June 24, 2006................................... 213,854
September 24, 2006.............................. 61,588
DATE SCHEDULED PAYMENTS OF PRINCIPAL
- ---- -------------------------------
December 24, 2006............................... 1,305,826
March 24, 2007.................................. 0
June 24, 2007................................... 213,854
September 24, 2007.............................. 453,429
December 24, 2007............................... 1,855,972
March 24, 2008.................................. 743,622
June 24, 2008................................... 707,548
September 24, 2008.............................. 1,493,224
December 24, 2008............................... 1,689,375
March 24, 2009.................................. 1,975,143
June 24, 2009................................... 2,010,656
September 24, 2009.............................. 2,046,811
December 24, 2009............................... 2,083,614
March 24, 2010.................................. 2,121,079
June 24, 2010................................... 2,159,219
September 24, 2010.............................. 2,198,046
December 24, 2010............................... 2,237,568
March 24, 2011.................................. 2,277,805
June 24, 2011................................... 2,318,762
September 24, 2011.............................. 2,183,728
December 24, 2011............................... 1,819,586
March 24, 2012.................................. 2,104,210
June 24, 2012................................... 1,885,708
September 24, 2012.............................. 1,919,666
December 24, 2012............................... 1,746,152
March 24, 2013.................................. 546,009
EXHIBIT D
---------
Related Note Documents
[Information to be inserted post-closing]
TRUST SUPPLEMENT NO. 1997-3B
Dated September 25, 1997
between
WILMINGTON TRUST COMPANY,
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$19,731,000
Continental Airlines, Inc.
Pass Through Trust, 1997-3B
Continental Airlines, Inc.
1997-3 Pass Through Certificates,
Class B
TABLE OF CONTENTS
PAGE
----
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates...............................................2
ARTICLE II
DEFINITIONS AND AMENDMENTS
Section 2.01. Definitions....................................................4
Section 2.02. Amendments.....................................................5
ARTICLE III
DEFAULT
Section 3.01. Purchase Rights of Certificateholders..........................7
ARTICLE IV
THE TRUSTEE
Section 4.01. The Trustee....................................................8
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. Basic Agreement Modified and Ratified..........................8
Section 5.02. GOVERNING LAW..................................................8
Section 5.03. Execution in Counterparts......................................8
This Trust Supplement No. 1997-3B, dated as of September 25, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified
heretofore in the Basic Agreement) which may be issued thereunder, has
heretofore been executed and delivered;
WHEREAS, each Owner Trustee, acting on behalf of its respective Owner
Participant, will issue, on a non-recourse basis, Equipment Notes, among other
things, to refinance the outstanding debt portion of the purchase price of the
aircraft purchased by such Owner Trustee and leased to the Company pursuant to
the related Lease;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "Agreement"), the Trustee shall
purchase such Equipment Notes issued by each Owner Trustee having the same
interest rate as, and final maturity dates not later than the final expected
Regular Distribution Date of, the Certificates issued hereunder and shall hold
such Equipment Notes in trust for the benefit of the Class B Certificateholders;
WHEREAS, the Trustee hereby declares the creation of this Continental
Airlines Pass Through Trust, Series 1997-3B (the "1997-3B Trust"), for the
benefit of the Class B Certificateholders, and the initial Class B
Certificateholders as the grantors of the 1997-3B Trust, by their respective
acceptances of the Certificates issued hereunder, join in the creation of this
1997-3B Trust with the Trustee;
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
"Continental Airlines Pass Through Certificates, Series 1997-3B" (hereinafter
defined as the "Series 1997-3B Certificates"). Each Series 1997-3B Certificate
represents a fractional undivided interest in the 1997-3B Trust created hereby.
The Series 1997-3B Certificates shall be the only instruments evidencing a
fractional undivided interest in the 1997-3B Trust.
The terms and conditions applicable to the Series 1997-3B Certificates
are as follows:
(a) The aggregate principal amount of the Series 1997-3B Certificates
that shall be authenticated under the Agreement (except for Series 1997-3B
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04
and 3.06 of the Basic Agreement) is $19,731,000.
(b) The Cut-off Date is October 31, 1997.
(c) The Regular Distribution Date with respect to any payment of
Scheduled Payments means March 24, June 24, September 24 and December 24,
commencing on December 24, 1997 until payment of all of the Scheduled
Payments to be made under the Equipment Notes has been made.
(d) The Special Distribution Date with respect to the Series 1997-3B
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(e) (i) The Series 1997-3B Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting a Series 1997-3B
Certificate or an interest therein 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 Series 1997-3B Certificates or an interest therein or (ii)
the purchase and holding of Series 1997-3B Certificates or interest therein
are exempt from the prohibited transaction restrictions of ERISA and the
Code pursuant to one or more prohibited transaction statutory or
administrative exemptions.
(ii) The Series 1997-3B Certificates shall be Book-Entry Certificates
and shall be subject to the conditions set forth in the Letter of
Representations between the Company, the Trustee and the Clearing Agency
attached hereto as Exhibit B.
(f) The Scheduled Payments of principal shall be as set forth in
Exhibit C hereto.
(g) All or a portion of the proceeds of the Series 1997-3B
Certificates shall be used to purchase the Equipment Notes in the principal
amounts specified below and the unused portion of such proceeds, if any,
shall be deposited in the Escrow Account to be applied as set forth in the
Agreement:
REGISTRATION NUMBER PRINCIPAL AMOUNT
------------------- ----------------
N14925................................... $1,989,000
N15926................................... 1,989,000
N16927................................... 1,989,000
N17928................................... 2,516,000
N13929................................... 2,516,000
N14930................................... 2,183,000
N14931................................... 2,183,000
N15932................................... 2,183,000
N14933................................... 2,183,000
(h) Each Owner Trustee, acting on behalf of its respective Owner
Participant, will issue, on a non-recourse basis, the Equipment Notes, the
proceeds of which shall be used, among other things, to refinance the
outstanding debt portion of the purchase price to such Owner Trustee of the
following Aircraft:
REGISTRATION NUMBER AIRCRAFT TYPE ENGINE TYPE
------------------- ------------- -----------
N14925 Embraer EMB-145 AE3007A
N15926 Embraer EMB-145 AE3007A
N16927 Embraer EMB-145 AE3007A
N17928 Embraer EMB-145 AE3007A
N13929 Embraer EMB-145 AE3007A
N14930 Embraer EMB-145 AE3007A
N14931 Embraer EMB-145 AE3007A
N15932 Embraer EMB-145 AE3007A
N14933 Embraer EMB-145 AE3007A
(i) The related Note Documents are listed on Exhibit D.
(j) Notice of any termination of the 1997-3B Trust shall be mailed
promptly by the Trustee to the Class B Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding the final
distribution pursuant to the Agreement.
(k) Except as contemplated by Section 2.02(b) of the Basic Agreement,
there will be no deposit agreement or other arrangement prior to the
delivery of any Aircraft.
(l) The Series 1997-3B Certificates are subject to the Intercreditor
Agreement.
(m) The Series 1997-3B Certificates will have the benefit of the
Liquidity Facility.
(n) The Responsible Party is the Company.
(o) The Final Legal Distribution Date is December 24, 2008.
(p) 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 Note Purchase Agreement.
ARTICLE II
DEFINITIONS AND AMENDMENTS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms shall
have the following meanings:
CLASS B CERTIFICATEHOLDER: Means the Person in whose name a Series
1997-3B Certificate is registered on the Register for the Series 1997-3B
Certificates.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
the date hereof among the Trustee, the Other Trustees, the Liquidity
Provider named therein and Wilmington Trust Company, as Subordination Agent
and as trustee, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
LIQUIDITY FACILITY: Means the Revolving Credit Agreement dated as of
the date hereof among Wilmington Trust Company, as Subordination Agent and
trustee for the 1997-3B Trust, and ABN AMRO Bank, N.V., acting through its
Chicago Branch, as amended, replaced, supplemented or otherwise modified
from time to time in accordance with its terms and the terms of the
Intercreditor Agreement..
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement 1997-3A dated as of the date hereof relating to the
Continental Airlines Pass Through Trust created thereunder and (ii) the
Basic Agreement as supplemented by Trust Supplement No. 1997-3C dated the
date hereof relating to the Continental Airlines Pass Through Trust created
thereunder.
OTHER TRUSTEES: Means each of the trustees under the Other Agreements,
and any successor thereunder or other trustee appointed as provided
therein.
PTC EVENT OF DEFAULT: Means the failure to pay within ten Business
Days of the due date thereof: (i) the outstanding Pool Balance of the
Series 1997-3B Certificates on the Final Legal Distribution Date for such
Series 1997-3B Certificates or (ii) interest due on such Series 1997-3B
Certificates on any Distribution Date (unless the Subordination Agent shall
have made an Interest Drawing or Drawings (as defined in the Intercreditor
Agreement), or a withdrawal or withdrawals pursuant to a cash collateral
account under the Intercreditor Agreement, with respect thereto in an
aggregate amount sufficient to pay such interest and shall have distributed
such amount to the Trustee).
Section 2.02. AMENDMENTS. Solely for purposes of this Trust
Supplement, Section 2.02(b) of the Basic Agreement shall be amended to read as
follows:
(b) If on or prior to the Issuance Date with respect to a series of
Certificates the Company shall deliver to the Trustee a Postponement Notice
relating to one or more Postponed Notes, the Trustee shall postpone the
purchase of such Postponed Notes and shall deposit into an escrow account
(as to such Trust, the "ESCROW ACCOUNT") to be maintained as part of the
related Trust an amount equal to the purchase price of such Postponed Notes
(the "ESCROWED Funds"). The portion of the Escrowed Funds so deposited with
respect to any particular Postponed Notes shall be invested by the Trustee
at the written direction of the Responsible Party in Specified Investments
(i) maturing no later than any scheduled Transfer Date relating to such
Postponed Notes or (ii) if no such Transfer Date has been scheduled,
maturing on the next Business Day, or (iii) if the Company has given notice
to the Trustee that such Postponed Notes will not be issued, maturing on
the next applicable Special Distribution Date, if such investments are
reasonably available for purchase. The Trustee shall make withdrawals from
the Escrow Account only as provided in this Agreement. Upon request of the
Company on one or more occasions and the satisfaction or waiver of the
closing conditions specified in the applicable Note Purchase Agreements on
or prior to the related Cut-off Date, the Trustee shall purchase the
applicable Postponed Notes with the Escrowed Funds withdrawn from the
Escrow Account. The purchase price shall equal the principal amount of such
Postponed Notes.
The Trustee shall hold all Specified Investments until the maturity
thereof and will not sell or otherwise transfer Specified Investments. If
Specified Investments held in an Escrow Account mature prior to any
applicable Transfer Date, any proceeds received on the maturity of such
Specified Investments (including any earnings thereon) shall be reinvested
by the Trustee at the written direction of the Responsible Party in
Specified Investments maturing as provided in the preceding paragraph. The
Responsible Party shall pay to the Trustee for deposit to the relevant
Escrow Account an amount equal to any losses on such Specified Investments
as incurred.
On the Initial Regular Distribution Date in respect of the
Certificates of any series, the Responsible Party will pay (in immediately
available funds) to the Trustee an amount equal to (i) the interest that
would have accrued on any Postponed Notes with respect to such
Certificates, if any, purchased after the Issuance Date if such Postponed
Notes had been purchased on the Issuance Date, from the Issuance Date to,
but not including, the date of the purchase of such Postponed Notes by the
Trustee minus (ii) the earnings on Specified Investments (disregarding any
losses thereon) received (with respect to the portion of the Escrow Funds
deposited with respect to the Postponed Notes described in clause (i) of
this paragraph) by the Trustee from and including the Issuance Date to, but
not including, the Initial Regular Distribution Date.
If, in respect of the Certificates of any series, the Company notifies
the Trustee prior to the Cut-off Date that any Postponed Notes will not be
issued on or prior to the Cut-off Date for any reason, on the next Special
Distribution Date for such Certificates occurring not less than 15 days
following the date of such notice, (i) the Responsible Party shall pay to
the Trustee for deposit in the related Special Payments Account, in
immediately available funds, an amount equal to (A) the interest that would
have accrued on the Postponed Notes designated in such notice at a rate
equal to the interest rate applicable to such Certificates from the
Issuance Date to, but not including, such Special Distribution Date minus
(B) the earnings on Specified Investments (disregarding any losses thereon)
received (with respect to the portion of the Escrowed Funds deposited with
respect to the Postponed Notes designated in such notice) by the Trustee
from and including the Issuance Date to, but not including, such Special
Distribution Date and (ii) the Trustee shall transfer an amount equal to
that amount of Escrowed Funds that would have been used to purchase the
Postponed Notes designated in such notice and the amount paid by the
Responsible Party pursuant to the immediately preceding clause (i) to the
related Special Payments Account for distribution as a Special Payment in
accordance with the provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next
such Special Distribution Date occurring not less than 15 days following
such Cut-off Date, (i) the Responsible Party shall pay to the Trustee for
deposit in such Special Payments Account, in immediately available funds,
an amount equal to (A) the interest that would have accrued on such
Postponed Notes contemplated to be purchased with such unused Escrowed
Funds (other than Escrowed Funds referred to in the immediately preceding
paragraph) but not so purchased at a rate equal to the interest rate
applicable to such Certificates from the Issuance Date to, but not
including, such Special Distribution Date minus (B) the earnings on
Specified Investments (disregarding any losses thereon) received (with
respect to the portion of the Escrowed Funds deposited with respect to the
Postponed Notes contemplated to be purchased with such unused Escrowed
Funds (other than Escrowed Funds referred to in the immediately preceding
paragraph) but not so purchased) by the Trustee from and including the
Issuance Date to, but not including, such Special Distribution Date and
(ii) the Trustee shall transfer such unused Escrowed Funds and the amount
paid by the Responsible Party pursuant to the immediately preceding clause
(i) to such Special Payments Account for distribution as a Special Payment
in accordance with the provisions hereof.
ARTICLE III
DEFAULT
Section 3.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the continuance of a Triggering Event, each
Class B Certificateholder shall have the right to purchase, for the purchase
price and otherwise in accordance with and subject to the provisions set forth
in Section 6.01(b) of the Basic Agreement, all, but not less than all, of the
Class A Certificates upon ten days' written notice to the Class A Trustee and
each other Class B Certificateholder, provided that (i) if prior to the end of
such ten day period any other Class B Certificateholder notifies such purchasing
Class B Certificateholder that such other Class B Certificateholder wants to
participate in such purchase, then such other Class B Certificateholder may join
with the purchasing Class B Certificateholder to purchase all, but not less than
all, of the Class A Certificates pro rata based on the Fractional Undivided
Interest in the 1997-3B Trust held by each such Class B Certificateholder and
(ii) if prior to the end of such ten-day period any other Class B
Certificateholder fails to notify the purchasing Class B Certificateholder of
such other Class B Certificateholder's desire to participate in such a purchase,
then such other Class B Certificateholder shall lose its right to purchase the
Class A Certificates pursuant to this Section and Section 6.01(b) of the Basic
Agreement; and
(b) By acceptance of its Series 1997-3B Certificate, each Class B
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event, each Class C Certificateholder shall have
the right (which shall not expire upon any purchase of the Class A Certificates
pursuant to paragraph (a) above) to purchase, for the purchase price and
otherwise in accordance with and subject to the provisions set forth in Section
6.01(b) of the Basic Agreement, all, but not less than all, of the Class A
Certificates and the Series 1997-3B Certificates upon ten days' written notice
to the Class A Trustee, the Trustee and each other Class C Certificateholder,
provided that (i) if prior to the end of such ten-day period any other Class C
Certificateholder notifies such purchasing Class C Certificateholder that such
other Class C Certificateholder wants to participate in such purchase, then such
other Class C Certificateholder may join with the purchasing Class C
Certificateholder to purchase all, but not less than all, of the Class A
Certificates and the Series 1997-3B Certificates pro rata based on the
Fractional Undivided Interest in the Class C Trust held by each such Class C
Certificateholder and (B) if prior to the end of such ten-day period any other
Class C Certificateholder fails to notify the purchasing Class C
Certificateholder of such other Class C Certificateholder's desire to
participate in such a purchase, then such other Class C Certificateholder shall
lose its right to purchase the Class A Certificates and the Series 1997-3B
Certificates pursuant to this Section and Section 6.01(b) of the Basic
Agreement.
(c) As used in this Article III, the terms "Class A Certificate",
"Class A Trustee", "Class C Certificateholder" and "Class C Trust" shall have
the respective meanings assigned to such terms in the Intercreditor Agreement.
ARTICLE IV
THE TRUSTEE
Section 4.01. THE TRUSTEE. The Trustee is hereby directed to execute
and deliver the Intercreditor Agreement on or prior to the Issuance Date in the
form delivered to the Trustee by the Company. The Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement or the due execution hereof by the Company,
or for or in respect of the recitals and statements contained herein, all of
which recitals and statements are made solely by the Company.
The Trustee, upon the execution and delivery of this Trust Supplement,
acknowledges its acceptance of all right, title and interest in and to the Trust
Property with respect to the 1997-3B Trust and declares that the Trustee holds
and will hold such right, title and interest for the benefit of all then present
and future Class B Certificateholders, upon the trusts set forth in the Basic
Agreement and this Trust Supplement. By its acceptance of each Series 1997-3B
Certificate issued to it under the Agreement, each initial Class B
Certificateholder as grantor of the 1997-3B Trust thereby joins in the creation
and declaration of the Trust.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Trust Supplement other than as set forth in the Basic Agreement,
and this Trust Supplement is executed and accepted on behalf of the Trustee,
subject to all the terms and conditions set forth in the Basic Agreement, upon
the effectiveness thereof, as if the same were herein set forth at length.
The Trustee represents and warrants that the Intercreditor Agreement
will be duly executed and delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01. BASIC AGREEMENT MODIFIED AND RATIFIED. The Basic
Agreement is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Trust Supplement as if set forth in full herein, and
is in all respects ratified and confirmed, as supplemented and modified by this
Trust Supplement.
Section 5.02. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE CLASS B
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
Section 5.03. 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.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereunto 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:
EXHIBIT A
---------
Form of Certificate
[Include on each Certificate that is a Global Certificate: Unless this
certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to Issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
CONTINENTAL AIRLINES 1997-3B PASS THROUGH TRUST
Pass Through Certificate,
Series 1997-3B
Issuance Date: September 25, 1997
Final Expected Distribution Date: June 24, 2007
evidencing a fractional undivided interest in a 1997-3B Trust,
the property of which includes certain equipment notes each
secured by aircraft leased to Continental Airlines, Inc.
Certificate
No._____ $________ Fractional Undivided Interest representing 0.0050682%
of the Trust per $1,000 of 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, Series 1997-3B (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"), as supplemented by Trust Supplement No. 1997-3B thereto,
dated as of September 25, 1997 (collectively, the "AGREEMENT") between the
Trustee and Continental Airlines, Inc., a Delaware corporation (the "COMPANY" or
the "ISSUER"), 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
"Continental Airlines Pass Through Certificates, Series 1997-3B" (herein called
_________
This legend to appear on Book-Entry Certificates to be deposited with The
Depository Trust Company.
the "CERTIFICATES"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement. By virtue of its acceptance
hereof, the Certificateholder of this Certificate assents to and agrees to be
bound by the provisions of the Agreement and the Intercreditor Agreement. The
property of the Trust includes certain Equipment Notes and all rights of the
Trust to receive payments under the Intercreditor Agreement and the Liquidity
Facility (the "TRUST PROPERTY"). Each issue of the Equipment Notes is secured
by, among other things, a security interest in 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 each March 24, June 24, September 24 and December 24 (a "REGULAR
DISTRIBUTION DATE"), commencing on December 24, 1997, 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 the presentation or surrender of
this Certificate or the making of any notation hereon. 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, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THIS CERTIFICATE AND THE AGREEMENT HAVE EACH BEEN DELIVERED IN THE
STATE OF NEW YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
CERTIFICATEHOLDERS HEREUNDER AND THE PARTIES THEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES 1997-3B PASS
THROUGH TRUST
By: WILMINGTON TRUST COMPANY,
as Trustee
By: _______________________________
Title:_____________________________
Dated: ______________
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
By: _______________________________________
Name:
Title:
EXHIBIT B
---------
DTC Letter of Representations
EXHIBIT C
---------
Regular Distribution Dates
and
Scheduled Payments
DATE SCHEDULED PAYMENTS OF PRINCIPAL
---- -------------------------------
December 24, 1997................................. $ 193,210
March 24, 1998.................................... 83,136
June 24, 1998..................................... 268,625
September 24, 1998................................ 589,100
December 24, 1998................................. 193,210
March 24, 1999.................................... 125,414
June 24, 1999..................................... 226,267
September 24, 1999................................ 589,100
December 24, 1999................................. 193,210
March 24, 2000.................................... 112,156
June 24, 2000..................................... 239,527
September 24, 2000................................ 589,100
December 24, 2000................................. 193,210
March 24, 2001.................................... 98,898
June 24, 2001..................................... 252,785
September 24, 2001................................ 589,100
December 24, 2001................................. 193,210
March 24, 2002.................................... 85,640
June 24, 2002..................................... 266,043
September 24, 2002................................ 589,100
December 24, 2002................................. 193,210
March 24, 2003.................................... 83,088
June 24, 2003..................................... 268,595
September 24, 2003................................ 654,814
December 24, 2003................................. 342,734
March 24, 2004.................................... 278,670
June 24, 2004..................................... 941,351
September 24, 2004................................ 684,136
December 24, 2004................................. 534,524
March 24, 2005.................................... 785,204
June 24, 2005..................................... 751,447
September 24, 2005................................ 797,890
December 24, 2005................................. 205,858
March 24, 2006.................................... 1,642,589
June 24, 2006..................................... 926,396
September 24, 2006................................ 1,403,842
December 24, 2006................................. 370,976
March 24, 2007.................................... 1,789,232
June 24, 2007..................................... 1,406,403
EXHIBIT D
---------
Related Note Documents
[Information to be added upon receipt
of HHR's Closing memo]
TRUST SUPPLEMENT NO. 1997-3C
Dated September 25, 1997
between
WILMINGTON TRUST COMPANY,
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$14,418,000
Continental Airlines, Inc.
Pass Through Trust, 1997-3C
Continental Airlines, Inc.
1997-3 Pass Through Certificates,
Class C
TABLE OF CONTENTS
PAGE
----
ARTICLE I - THE CERTIFICATES
Section 1.01. The Certificates ..............................................3
ARTICLE II - DEFINITIONS AND AMENDMENTS
Section 2.01. Definitions ...................................................5
Section 2.02. Amendments ....................................................6
ARTICLE III - DEFAULT
Section 3.01. Purchase Rights of Certificateholders .........................8
ARTICLE IV - THE TRUSTEE
Section 4.01. The Trustee ...................................................8
ARTICLE V - MISCELLANEOUS PROVISIONS
Section 5.01. Basic Agreement Modified and Ratified .........................9
Section 5.02. GOVERNING LAW .................................................9
EXHIBIT A Form of Certificate
EXHIBIT B DTC Letter of Representations
EXHIBIT C Regular Distribution Dates and Scheduled Payments
EXHIBIT D Related Note Documents
This Trust Supplement No. 1997-3C, dated as of September 25, 1997
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified
heretofore in the Basic Agreement) which may be issued thereunder, has
heretofore been executed and delivered;
WHEREAS, each Owner Trustee, acting on behalf of its respective Owner
Participant, will issue, on a non-recourse basis, Equipment Notes, among other
things, to refinance the outstanding debt portion of the purchase price of the
aircraft purchased by such Owner Trustee and leased to the Company pursuant to
the related Lease;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "AGREEMENT"), the Trustee shall
purchase such Equipment Notes issued by each Owner Trustee having the same
interest rate as, and final maturity dates not later than the final expected
Regular Distribution Date of, the Certificates issued hereunder and shall hold
such Equipment Notes in trust for the benefit of the Class C Certificateholders;
WHEREAS, the Trustee hereby declares the creation of this Continental
Airlines Pass Through Trust, Series 1997-3C (the "1997-3C TRUST"), for the
benefit of the Class C Certificateholders, and the initial Class C
Certificateholders as the grantors of the 1997-3C Trust, by their respective
acceptances of the Certificates issued hereunder, join in the creation of this
1997-3C Trust with the Trustee;
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
"Continental Airlines Pass Through Certificates, Series 1997-3C" (hereinafter
defined as the "SERIES 1997-3C CERTIFICATES"). Each Series 1997-3C Certificate
represents a fractional undivided interest in the 1997-3C Trust created hereby.
The Series 1997-3C Certificates shall be the only instruments evidencing a
fractional undivided interest in the 1997-3C Trust.
The terms and conditions applicable to the Series 1997-3C Certificates
are as follows:
(a) The aggregate principal amount of the Series 1997-3C
Certificates that shall be authenticated under the Agreement (except
for Series 1997-3C Certificates authenticated and delivered pursuant
to Sections 3.03, 3.04 and 3.06 of the Basic Agreement) is
$14,418,000.
(b) The Cut-off Date is October 31, 1997.
(c) The Regular Distribution Date with respect to any payment of
Scheduled Payments means March 24, June 24, September 24 and December
24, commencing on December 24, 1997 until payment of all of the
Scheduled Payments to be made under the Equipment Notes has been made.
(d) The Special Distribution Date with respect to the Series
1997-3C Certificates means any Business Day on which a Special Payment
is to be distributed pursuant to the Agreement.
(e) (i) The Series 1997-3C Certificates shall be in the form
attached hereto as Exhibit A. Any Person acquiring or accepting a
Series 1997-3C Certificate or an interest therein 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 Series 1997-3C Certificates or an interest therein or (ii)
the purchase and holding of Series 1997-3C Certificates or interest
therein are exempt from the prohibited transaction restrictions of
ERISA and the Code pursuant to one or more prohibited transaction
statutory or administrative exemptions.
(ii) The Series 1997-3C Certificates shall be Book-Entry
Certificates and shall be subject to the conditions set forth in the
Letter of Representations between the Company, the Trustee and the
Clearing Agency attached hereto as Exhibit B.
(f) The Scheduled Payments of principal shall be as set forth in
Exhibit C hereto.
(g) All or a portion of the proceeds of the Series 1997-3C
Certificates shall be used to purchase the Equipment Notes in the
principal amounts specified below and the unused portion of such
proceeds, if any, shall be deposited in the Escrow Account to be
applied as set forth in the Agreement:
REGISTRATION NUMBER PRINCIPAL AMOUNT
------------------- ----------------
N14925........................................$1,692,000
N15926.........................................1,692,000
N16927.........................................1,692,000
N17928.........................................1,409,000
N13929.........................................1,409,000
N14930.........................................1,631,000
N14931.........................................1,631,000
N15932.........................................1,631,000
N14933.........................................1,631,000
(h) Each Owner Trustee, acting on behalf of its respective Owner
Participant, will issue, on a non-recourse basis, the Equipment Notes,
the proceeds of which shall be used, among other things, to refinance
the outstanding debt portion of the purchase price to such Owner
Trustee of the following Aircraft:
REGISTRATION NUMBER AIRCRAFT TYPE ENGINE TYPE
------------------- ------------- -----------
N14925 Embraer EMB-145 AE3007A
N15926 Embraer EMB-145 AE3007A
N16927 Embraer EMB-145 AE3007A
N17928 Embraer EMB-145 AE3007A
N13929 Embraer EMB-145 AE3007A
N14930 Embraer EMB-145 AE3007A
N14931 Embraer EMB-145 AE3007A
N15932 Embraer EMB-145 AE3007A
N14933 Embraer EMB-145 AE3007A
(i) The related Note Documents are listed on Exhibit D.
(j) Notice of any termination of the 1997-3C Trust shall be
mailed promptly by the Trustee to the Class C Certificateholders not
earlier than the 60th day and not later than the 15th day next
preceding the final distribution pursuant to the Agreement.
(k) Except as contemplated by Section 2.02(b) of the Basic
Agreement, there will be no deposit agreement or other arrangement
prior to the delivery of any Aircraft.
(l) The Series 1997-3C Certificates are subject to the
Intercreditor Agreement.
(m) The Series 1997-3C Certificates will have the benefit of the
Liquidity Facility.
(n) The Responsible Party is the Company.
(o) The Final Legal Distribution Date is September 24, 2006.
(p) 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 Note Purchase Agreement.
ARTICLE II
DEFINITIONS AND AMENDMENTS
--------------------------
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms shall
have the following meanings:
CLASS C CERTIFICATEHOLDER: Means the Person in whose name a
Series 1997-3C Certificate is registered on the Register for the
Series 1997-3C Certificates.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated
as of the date hereof among the Trustee, the Other Trustees, the
Liquidity Provider named therein and Wilmington Trust Company, as
Subordination Agent and as trustee, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
LIQUIDITY FACILITY: Means the Revolving Credit Agreement dated as
of the date hereof among Wilmington Trust Company, as Subordination
Agent and trustee for the 1997-3C Trust, and ABN AMRO Bank, N.V.,
acting through its Chicago Branch, as amended, replaced, supplemented
or otherwise modified from time to time in accordance with its terms
and the terms of the Intercreditor Agreement..
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented
by Trust Supplement 1997-3A dated as of the date hereof relating to
the Continental Airlines Pass Through Trust created thereunder and
(ii) the Basic Agreement as supplemented by Trust Supplement No.
1997-3B dated the date hereof relating to the Continental Airlines
Pass Through Trust created thereunder.
OTHER TRUSTEES: Means each of the trustees under the Other
Agreements, and any successor thereunder or other trustee appointed as
provided therein.
PTC EVENT OF DEFAULT: Means the failure to pay within ten
Business Days of the due date thereof: (i) the outstanding Pool
Balance of the Series 1997-3C Certificates on the Final Legal
Distribution Date for such Series 1997-3C Certificates or (ii)
interest due on such Series 1997-3C Certificates on any Distribution
Date (unless the Subordination Agent shall have made an Interest
Drawing or Drawings (as defined in the Intercreditor Agreement), or a
withdrawal or withdrawals pursuant to a cash collateral account under
the Intercreditor Agreement, with respect thereto in an aggregate
amount sufficient to pay such interest and shall have distributed such
amount to the Trustee).
Section 2.02. AMENDMENTS. Solely for purposes of this Trust
Supplement, Section 2.02(b) of the Basic Agreement shall be amended to read as
follows:
(b) If on or prior to the Issuance Date with respect to a series
of Certificates the Company shall deliver to the Trustee a
Postponement Notice relating to one or more Postponed Notes, the
Trustee shall postpone the purchase of such Postponed Notes and shall
deposit into an escrow account (as to such Trust, the "ESCROW
ACCOUNT") to be maintained as part of the related Trust an amount
equal to the purchase price of such Postponed Notes (the "ESCROWED
FUNDS"). The portion of the Escrowed Funds so deposited with respect
to any particular Postponed Notes shall be invested by the Trustee at
the written direction of the Responsible Party in Specified
Investments (i) maturing no later than any scheduled Transfer Date
relating to such Postponed Notes or (ii) if no such Transfer Date has
been scheduled, maturing on the next Business Day, or (iii) if the
Company has given notice to the Trustee that such Postponed Notes will
not be issued, maturing on the next applicable Special Distribution
Date, if such investments are reasonably available for purchase. The
Trustee shall make withdrawals from the Escrow Account only as
provided in this Agreement. Upon request of the Company on one or more
occasions and the satisfaction or waiver of the closing conditions
specified in the applicable Note Purchase Agreements on or prior to
the related Cut-off Date, the Trustee shall purchase the applicable
Postponed Notes with the Escrowed Funds withdrawn from the Escrow
Account. The purchase price shall equal the principal amount of such
Postponed Notes.
The Trustee shall hold all Specified Investments until the
maturity thereof and will not sell or otherwise transfer Specified
Investments. If Specified Investments held in an Escrow Account mature
prior to any applicable Transfer Date, any proceeds received on the
maturity of such Specified Investments (including any earnings
thereon) shall be reinvested by the Trustee at the written direction
of the Responsible Party in Specified Investments maturing as provided
in the preceding paragraph. The Responsible Party shall pay to the
Trustee for deposit to the relevant Escrow Account an amount equal to
any losses on such Specified Investments as incurred.
On the Initial Regular Distribution Date in respect of the
Certificates of any series, the Responsible Party will pay (in
immediately available funds) to the Trustee an amount equal to (i) the
interest that would have accrued on any Postponed Notes with respect
to such Certificates, if any, purchased after the Issuance Date if
such Postponed Notes had been purchased on the Issuance Date, from the
Issuance Date to, but not including, the date of the purchase of such
Postponed Notes by the Trustee minus (ii) the earnings on Specified
Investments (disregarding any losses thereon) received (with respect
to the portion of the Escrow Funds deposited with respect to the
Postponed Notes described in clause (i) of this paragraph) by the
Trustee from and including the Issuance Date to, but not including,
the Initial Regular Distribution Date.
If, in respect of the Certificates of any series, the Company
notifies the Trustee prior to the Cut-off Date that any Postponed
Notes will not be issued on or prior to the Cut-off Date for any
reason, on the next Special Distribution Date for such Certificates
occurring not less than 15 days following the date of such notice, (i)
the Responsible Party shall pay to the Trustee for deposit in the
related Special Payments Account, in immediately available funds, an
amount equal to (A) the interest that would have accrued on the
Postponed Notes designated in such notice at a rate equal to the
interest rate applicable to such Certificates from the Issuance Date
to, but not including, such Special Distribution Date minus (B) the
earnings on Specified Investments (disregarding any losses thereon)
received (with respect to the portion of the Escrowed Funds deposited
with respect to the Postponed Notes designated in such notice) by the
Trustee from and including the Issuance Date to, but not including,
such Special Distribution Date and (ii) the Trustee shall transfer an
amount equal to that amount of Escrowed Funds that would have been
used to purchase the Postponed Notes designated in such notice and the
amount paid by the Responsible Party pursuant to the immediately
preceding clause (i) to the related Special Payments Account for
distribution as a Special Payment in accordance with the provisions
hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the
immediately preceding paragraph) has been used to purchase Postponed
Notes, on the next such Special Distribution Date occurring not less
than 15 days following such Cut-off Date, (i) the Responsible Party
shall pay to the Trustee for deposit in such Special Payments Account,
in immediately available funds, an amount equal to (A) the interest
that would have accrued on such Postponed Notes contemplated to be
purchased with such unused Escrowed Funds (other than Escrowed Funds
referred to in the immediately preceding paragraph) but not so
purchased at a rate equal to the interest rate applicable to such
Certificates from the Issuance Date to, but not including, such
Special Distribution Date minus (B) the earnings on Specified
Investments (disregarding any losses thereon) received (with respect
to the portion of the Escrowed Funds deposited with respect to the
Postponed Notes contemplated to be purchased with such unused Escrowed
Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) but not so purchased) by the Trustee from and
including the Issuance Date to, but not including, such Special
Distribution Date and (ii) the Trustee shall transfer such unused
Escrowed Funds and the amount paid by the Responsible Party pursuant
to the immediately preceding clause (i) to such Special Payments
Account for distribution as a Special Payment in accordance with the
provisions hereof.
ARTICLE III
DEFAULT
-------
Section 3.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) At any time
after the occurrence and during the continuation of a Triggering Event, each
Class C Certificateholder shall have the right (which shall not expire upon any
purchase of the Class A Certificates pursuant to the Class B Trust Agreement),
to purchase, for the purchase price and otherwise in accordance with and subject
to the provisions set forth in Section 6.01(b) of the Basic Agreement, all, but
not less than all, of the Class A Certificates and the Class B Certificates upon
ten days' written notice to the Class A Trustee, the Class B Trustee, and each
other Class C Certificateholder, provided that (i) if prior to the end of such
ten-day period any other Class C Certificateholder notifies such purchasing
Class C Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may join
with the purchasing Class C Certificateholder to purchase all, but not less than
all, of the Class A Certificates and the Class B Certificates pro rata based on
the Fractional Undivided Interest in the 1997-3C Trust held by each such Class C
Certificateholder and (ii) if prior to the end of such ten-day period any other
Class C Certificateholder fails to notify the purchasing Class C
Certificateholder of such other Class C Certificateholder's desire to
participate in such a purchase, then such other Class C Certificateholder shall
lose its right to purchase the Class A Certificates and the Class B Certificates
pursuant to this Section and Section 6.01(b) of the Basic Agreement.
(b) As used in this Article III, the terms "Class A Certificate",
"Class A Trustee", "Class B Certificate", "Class B Trustee", and
"Class B Trust Agreement" shall have the respective meanings assigned
to such terms in the Intercreditor Agreement.
ARTICLE IV
THE TRUSTEE
-----------
Section 4.01. THE TRUSTEE. The Trustee is hereby directed to execute
and deliver the Intercreditor Agreement on or prior to the Issuance Date in the
form delivered to the Trustee by the Company. The Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement or the due execution hereof by the Company,
or for or in respect of the recitals and statements contained herein, all of
which recitals and statements are made solely by the Company.
The Trustee, upon the execution and delivery of this Trust Supplement,
acknowledges its acceptance of all right, title and interest in and to the Trust
Property with respect to the 1997-3C Trust and declares that the Trustee holds
and will hold such right, title and interest for the benefit of all then present
and future Class C Certificateholders, upon the trusts set forth in the Basic
Agreement and this Trust Supplement. By its acceptance of each Series 1997-3C
Certificate issued to it under the Agreement, each initial Class C
Certificateholder as grantor of the 1997-3C Trust thereby joins in the creation
and declaration of the 1997-3C Trust.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed, by the Trustee by
reason of this Trust Supplement other than as set forth in the Basic Agreement,
and this Trust Supplement is executed and accepted on behalf of the Trustee,
subject to all the terms and conditions set forth in the Basic Agreement, upon
the effectiveness thereof, as if the same were herein set forth at length.
The Trustee represents and warrants that the Intercreditor Agreement
will be duly executed and delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.
ARTICLE V
MISCELLANEOUS PROVISIONS
------------------------
Section 5.01. BASIC AGREEMENT MODIFIED AND RATIFIED. The Basic
Agreement is incorporated herein by reference in its entirety, and shall be
deemed to be a part of this Trust Supplement as if set forth in full herein, and
is in all respects ratified and confirmed, as supplemented and modified by this
Trust Supplement.
Section 5.02. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE CLASS C
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
Section 5.03. 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.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereunto 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:
EXHIBIT A
---------
Form of Certificate
[Include on each Certificate that is a Global Certificate: Unless this
certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to Issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
CONTINENTAL AIRLINES 1997-3C PASS THROUGH TRUST
Pass Through
Certificate, Series 1997-3C
Issuance Date: September 25, 1997
Final Expected Distribution Date: March 24, 2005
evidencing a fractional undivided interest in a 1997-3C
Trust, the property of which includes certain equipment
notes each secured by aircraft leased to Continental
Airlines, Inc.
Certificate
No.________ $__________ Fractional Undivided Interest representing 0.0069358%
of the Trust per $1,000 of 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, Series 1997-3C (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"), as supplemented by Trust Supplement No. 1997-3C thereto, dated as
of September 25, 1997 (collectively, the "AGREEMENT") between the Trustee and
Continental Airlines, Inc., a Delaware corporation (the "COMPANY" or the
"ISSUER"), 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
"Continental Airlines Pass Through Certificates, Series 1997-3C" (herein called
the "CERTIFICATES"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement. By virtue of its acceptance
hereof, the Certificateholder of this Certificate assents to and agrees to be
___________________
This legend to appear on Book-Entry Certificates to be deposited with The
Depository Trust Company.
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 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 each March 24, June 24, September 24 and December 24 (a "REGULAR
DISTRIBUTION DATE"), commencing on December 24, 1997, 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 the presentation or surrender of
this Certificate or the making of any notation hereon. 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, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or interest herein
are exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administration
exemptions.
THIS CERTIFICATE AND THE AGREEMENT HAVE EACH BEEN DELIVERED IN THE
STATE OF NEW YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
CERTIFICATEHOLDERS HEREUNDER AND THE PARTIES THEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES 1997-3C PASS
THROUGH TRUST
By: WILMINGTON TRUST COMPANY, as Trustee
By:_____________________________________
Title:_______________________________
Dated:____________________________
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
WILMINGTON TRUST COMPANY, as Trustee
By:_____________________________________
Name:
Title:
EXHIBIT B
---------
DTC Letter of Representations
EXHIBIT C
---------
Regular Distribution Dates
and
Scheduled Payments
DATE SCHEDULED PAYMENTS OF PRINCIPAL
---- -------------------------------
December 24, 1997................................ $ 180,078
March 24, 1998................................... 380,004
June 24, 1998.................................... 643,996
September 24, 1998............................... 39,800
December 24, 1998................................ 144,819
March 24, 1999................................... 597,751
June 24, 1999.................................... 469,114
September 24, 1999............................... 39,800
December 24, 1999................................ 56,826
March 24, 2000................................... 622,060
June 24, 2000.................................... 541,102
September 24, 2000............................... 43,373
December 24, 2000................................ 56,826
March 24, 2001................................... 905,341
June 24, 2001.................................... 728,584
September 24, 2001............................... 198,966
December 24, 2001................................ 253,262
March 24, 2002................................... 973,326
June 24, 2002.................................... 797,789
September 24, 2002............................... 612,707
December 24, 2002................................ 364,716
March 24, 2003................................... 1,176,170
June 24, 2003.................................... 892,114
September 24, 2003............................... 677,321
December 24, 2003................................ 283,844
March 24, 2004................................... 1,066,658
June 24, 2004.................................... 268,731
September 24, 2004............................... 751,110
December 24, 2004................................ 0
March 24, 2005................................... 651,812
EXHIBIT D
---------
Related Note Documents
[Information to be added upon receipt
of HHR's Closing memo]
================================================================================
INTERCREDITOR AGREEMENT
Dated as of
September 25, 1997
among
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Continental Airlines Pass Through Trust 1997-Series 3A,
Continental Airlines Pass Through Trust 1997-Series 3B
and
Continental Airlines Pass Through Trust 1997-Series 3C
ABN AMRO BANK N.V.,
Chicago Branch,
as Class A Liquidity Provider,
Class B Liquidity Provider
and Class C Liquidity Provider,
and
WILMINGTON TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions....................................................2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from
Monies Received Only..........................................20
SECTION 2.2 Trust Accounts................................................20
SECTION 2.3 Deposits to the Collection Account and Special Payments
Account.......................................................22
SECTION 2.4 Distributions of Special Payments.............................22
SECTION 2.5 Designated Representatives....................................24
SECTION 2.6 Controlling Party.............................................25
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution................................26
SECTION 3.2 Distribution of Amounts on Deposit in the Collection
Account.......................................................28
SECTION 3.3 Distribution of Amounts on Deposit Following a Triggering
Event.........................................................30
SECTION 3.4 Other Payments................................................32
SECTION 3.5 Payments to the Trustees and the Liquidity Providers..........32
SECTION 3.6 Liquidity Facilities..........................................32
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party.........................38
SECTION 4.2 Remedies Cumulative...........................................40
SECTION 4.3 Discontinuance of Proceedings.................................40
TABLE OF CONTENTS
(Continued)
PAGE
----
SECTION 4.4 Right of Certificateholders to Receive Payments Not to Be
Impaired......................................................40
SECTION 4.5 Undertaking for Costs.........................................40
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1 Notice of Indenture Default or Triggering Event...............41
SECTION 5.2 Indemnification...............................................41
SECTION 5.3 No Duties Except as Specified in Intercreditor Agreement......41
SECTION 5.4 Notice from the Liquidity Providers and Trustees..............42
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization; Acceptance of Trusts and Duties................42
SECTION 6.2 Absence of Duties.............................................42
SECTION 6.3 No Representations or Warranties as to Documents..............42
SECTION 6.4 No Segregation of Monies; No Interest.........................43
SECTION 6.5 Reliance; Agents; Advice of Counsel...........................43
SECTION 6.6 Capacity in Which Acting......................................43
SECTION 6.7 Compensation..................................................43
SECTION 6.8 May Become Certificateholder..................................44
SECTION 6.9 Subordination Agent Required; Eligibility.....................44
SECTION 6.10 Money to Be Held in Trust.....................................44
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification......................................44
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent; Appointment of
Successor.....................................................45
TABLE OF CONTENTS
(Continued)
PAGE
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ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc......................................46
SECTION 9.2 Subordination Agent Protected.................................47
SECTION 9.3 Effect of Supplemental Agreements.............................47
SECTION 9.4 Notice to Rating Agencies.....................................47
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement........................47
SECTION 10.2 Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent...................48
SECTION 10.3 Notices.......................................................48
SECTION 10.4 Severability..................................................49
SECTION 10.5 No Oral Modifications or Continuing Waivers...................49
SECTION 10.6 Successors and Assigns........................................49
SECTION 10.7 Headings......................................................49
SECTION 10.8 Counterpart Form..............................................49
SECTION 10.9 Subordination.................................................49
SECTION 10.10 Governing Law.................................................51
SECTION 10.11 Submission to Jurisdiction; Waiver of Jury Trial; Waiver
of Immunity...................................................51
INTERCREDITOR AGREEMENT
-----------------------
INTERCREDITOR AGREEMENT dated as of September 25, 1997, among
WILMINGTON TRUST COMPANY, a Delaware corporation ("WTC"), not in its individual
capacity but solely as Trustee of each Trust (each as defined below), ABN AMRO
BANK N.V., a bank organized under the laws of The Netherlands, acting through
its Chicago Branch ("ABN AMRO"), as Class A Liquidity Provider, as Class B
Liquidity Provider and as Class C Liquidity Provider, and WILMINGTON TRUST
COMPANY, not in its individual capacity except as expressly set forth herein,
but solely as Subordination Agent and trustee hereunder (in such capacity,
together with any successor appointed pursuant to Article VIII hereof, the
"SUBORDINATION AGENT").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture, the related Owner Trustee
proposes to issue on a nonrecourse basis three series of Equipment Notes to
finance the current indebtedness of such Owner Trustee originally incurred to
finance the purchase of the Aircraft referred to in such Indenture that has been
leased to Continental pursuant to the related Lease;
WHEREAS, pursuant to the Financing Agreements, each Trust will acquire
Equipment Notes having an interest rate equal to the interest rate applicable to
the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single class of Certificates (a "CLASS") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters
propose to purchase the Certificates issued by each Trust in the aggregate face
amount set forth opposite the name of such Trust on Schedule I thereto on the
terms and subject to the conditions set forth therein;
WHEREAS, each Liquidity Provider proposes to enter into a revolving
credit agreement (each, a "LIQUIDITY Facility") with the Subordination Agent, as
agent for the Trustee of each Trust, respectively, for the benefit of the
Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent, the
Trustees and the Liquidity Providers agree to the terms of subordination set
forth in this Agreement in respect of each Class of Certificates, and the
Subordination Agent, the Trustees and the Liquidity Providers, by entering into
this Agreement, hereby acknowledge and agree to such terms of subordination and
the other provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"ABN AMRO" has the meaning assigned to such term in the recital of
parties to this Agreement.
"ACCELERATION" means, with respect to the amounts payable in respect
of the Equipment Notes issued under any Indenture, such amounts becoming
immediately due and payable by declaration or otherwise. This definition
shall also apply to related uses of the term, including "ACCELERATE" and
"ACCELERATED".
"ADJUSTED EXPECTED DISTRIBUTIONS" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (x)
the amount of accrued and unpaid interest on such Certificates (after
giving effect to any Escrowed Funds Interest Distribution to be made on
such Current Distribution Date with respect to such Certificates) plus (y)
the greater of:
(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (or, if
the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust),
less (if applicable) the aggregate amount of Escrowed Funds for such
Class of Certificates as of such immediately preceding Distribution
Date (or, if the Current Distribution Date is the first Distribution
Date, as of the Closing Date) thereafter distributed to the
Certificateholders of such Class (instead of being used to purchase
Postponed Notes) pursuant to the Trust Agreement for such Class
(excluding the interest component of any such distribution), and (y)
the Pool Balance of such Certificates as of the Current Distribution
Date calculated on the basis that (i) the principal of the
Non-Performing Equipment Notes held in such Trust has been paid in
full and such payments have been distributed to the holders of such
Certificates, (ii) the principal of the Performing Equipment Notes
held in such Trust has been paid when due (but without giving effect
to any unpaid Acceleration of Performing Equipment Notes) and such
payments have been distributed to the holders of such Certificates and
(iii) the principal of any Equipment Notes formerly held in such Trust
that have been sold pursuant to the terms hereof has been paid in full
and such payments have been distributed to the holders of such
Certificates; and
(B) the amount of the excess, if any, of (i) the Pool Balance of
such Class of Certificates as of the immediately preceding
Distribution Date (or if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the
Certificates of such Trust), less (if applicable) the aggregate amount
of Escrowed Funds for such Class of Certificates as of such
immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, as of the Closing
Date) thereafter distributed to the Certificateholders of such Class
(instead of being used to purchase Postponed Notes) pursuant to the
Trust Agreement for such Class (excluding the interest component of
any such distribution), over (ii) the Aggregate LTV Collateral Amount
for such Class of Certificates for the Current Distribution Date;
PROVIDED that, until the initial LTV Appraisals, clause (B) above shall not
apply. For purposes of calculating Adjusted Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust that has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion
thereof applied to the payment of interest on the Certificates of such
Trust or the reduction of the Pool Balance of such Trust) shall be added to
the amount of such Adjusted Expected Distributions.
"ADVANCE", with respect to any Liquidity Facility, has the meaning
assigned to such term in such Liquidity Facility.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control" means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"AGGREGATE LTV COLLATERAL AMOUNT" means for any Class of Certificates
for any Distribution Date the sum of the applicable LTV Collateral Amounts
for each Aircraft minus the Pool Balance for each Class of Certificates, if
any, senior to such Class, after giving effect to any distribution of
principal on such Distribution Date on such senior Class or Classes.
"AIRCRAFT" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"APPRAISED CURRENT MARKET VALUE" of any Aircraft means the lower of
the average or the median of the most recent three LTV Appraisals of such
Aircraft.
"APPRAISERS" means Aircraft Information Services, Inc., BK Associates,
Inc. and Morten Beyer and Associates, Inc.
"AVAILABLE AMOUNT" means, with respect to any Liquidity Facility on
any drawing date, subject to the proviso contained in the first sentence of
Section 3.6(g) hereof, an amount equal to (a) the Stated Amount of such
Liquidity Facility at such time, LESS (b) the aggregate amount of each
Interest Drawing honored by the Liquidity Provider under such Liquidity
Facility on or prior to such date which has not been reimbursed or
reinstated as of such date; PROVIDED that, following a Downgrade Drawing, a
Non-Extension Drawing or a Final Drawing under such Liquidity Facility, the
Available Amount of such Liquidity Facility shall be zero.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, or, so long as any Certificate is outstanding,
the city and state in which any Trustee, the Subordination Agent or any
Mortgagee maintains its Corporate Trust Office or receives and disburses
funds, and that, solely with respect to draws under any Liquidity Facility,
also is a "Business Day" as defined in such Liquidity Facility.
"CASH COLLATERAL ACCOUNT" means the Class A Cash Collateral Account,
the Class B Cash Collateral Account or the Class C Cash Collateral Account,
as applicable.
"CERTIFICATE" means a Class A Certificate, a Class B Certificate or a
Class C Certificate, as applicable.
"CERTIFICATEHOLDER" means any holder of one or more Certificates.
"CLASS" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"CLASS A CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which
all amounts drawn under the Class A Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"CLASS A CERTIFICATEHOLDER" means, at any time, any holder of one or
more Class A Certificates.
"CLASS A CERTIFICATES" means the certificates issued by the Class A
Trust, substantially in the form of Exhibit A to the Class A Trust
Agreement, and authenticated by the Class A Trustee, representing
fractional undivided interests in the Class A Trust, and any certificates
issued in exchange therefor or replacement thereof pursuant to the terms of
the Class A Trust Agreement.
"CLASS A LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of the date hereof between the Subordination Agent, as
agent and trustee for the Class A Trustee, and the Class A Liquidity
Provider, and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case
as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS A LIQUIDITY PROVIDER" means ABN AMRO, together with any
Replacement Liquidity Provider that has issued a Replacement Liquidity
Facility to replace the Class A Liquidity Facility pursuant to Section
3.6(e).
"CLASS A TRUST" means Continental Airlines Pass Through Trust, Series
1997-3A created and administered pursuant to the Class A Trust Agreement.
"CLASS A TRUST AGREEMENT" means the Pass Through Trust Agreement dated
as of September 25, 1997, between Continental and the Class A Trustee, as
supplemented by the Trust Supplement No. 1997-3A thereto dated September
25, 1997, governing the creation and administration of the Continental
Airlines Pass Through Trust Series 1997-3A and the issuance of the Class A
Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"CLASS A TRUSTEE" means WTC, not in its individual capacity except as
expressly set forth in the Class A Trust Agreement, but solely as trustee
under the Class A Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"CLASS B CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which
all amounts drawn under the Class B Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"CLASS B CERTIFICATEHOLDER" means, at any time, any holder of one or
more Class B Certificates.
"CLASS B CERTIFICATES" means the certificates issued by the Class B
Trust, substantially in the form of Exhibit A to the Class B Trust
Agreement, and authenticated by the Class B Trustee, representing
fractional undivided interests in the Class B Trust, and any certificates
issued in exchange therefor or replacement thereof pursuant to the terms of
the Class B Trust Agreement.
"CLASS B LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of the date hereof between the Subordination Agent, as
agent and trustee for the Class B Trustee, and the Class B Liquidity
Provider, and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case
as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS B LIQUIDITY PROVIDER" means ABN AMRO, together with any
Replacement Liquidity Provider that has issued a Replacement Liquidity
Facility to replace the Class B Liquidity Facility pursuant to Section
3.6(e).
"CLASS B TRUST" means Continental Airlines Pass Through Trust, Series
1997-3B created and administered pursuant to the Class B Trust Agreement.
"CLASS B TRUST AGREEMENT" means the Pass Through Trust Agreement dated
as of September 25, 1997, between Continental and the Class B Trustee, as
supplemented by the Trust Supplement No. 1997-3B thereto dated September
25, 1997, governing the creation and administration of the Continental
Airlines Pass Through Trust Series 1997-3B and the issuance of the Class B
Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"CLASS B TRUSTEE" means WTC, not in its individual capacity except as
expressly set forth in the Class B Trust Agreement, but solely as trustee
under the Class B Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"CLASS C CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in
the name of the Subordination Agent and maintained at an Eligible
Institution, which shall be the Subordination Agent if it shall so qualify,
into which all amounts drawn under the Class C Liquidity Facility pursuant
to Section 3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"CLASS C CERTIFICATEHOLDER" means, at any time, any holder of one or
more Class C Certificates.
"CLASS C CERTIFICATES" means the certificates issued by the Class C
Trust, substantially in the form of Exhibit A to the Class C Trust
Agreement, and authenticated by the Class C Trustee, representing
fractional undivided interests in the Class C Trust, and any certificates
issued in exchange therefor or in replacement thereof pursuant to the terms
of the Class C Trust Agreement.
"CLASS C LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of the date hereof between the Subordination Agent, as
agent and trustee for the Class C Trustee, and the Class C Liquidity
Provider and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case
as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS C LIQUIDITY PROVIDER" means ABN AMRO, together with any
Replacement Liquidity Provider that has issued a Replacement Liquidity
Facility to replace the Class C Liquidity Facility pursuant to Section
3.6(e).
"CLASS C TRUST" means Continental Airlines Pass Through Trust, Series
1997-3C created and administered pursuant to the Class C Trust Agreement.
"CLASS C TRUST AGREEMENT" means the Pass Through Trust Agreement dated
as of September 25, 1997, between Continental and the Class C Trustee, as
supplemented by the Trust Supplement No. 1997-3C thereto dated September
25, 1997, governing the creation and administration of the Continental
Airlines Pass Through Trust, Series 1997-3C and the issuance of the Class C
Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"CLASS C TRUSTEE" means WTC, not in its individual capacity except as
expressly set forth in the Class C Trust Agreement, but solely as trustee
under the Class C Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"CLOSING DATE" means September 25, 1997.
"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 assigned to such term in
Section 9.1(a).
"CONTROLLING PARTY" means the Person entitled to act as such pursuant
to the terms of Section 2.6.
"CORPORATE TRUST OFFICE" means, with respect to any Trustee, the
Subordination Agent or any Mortgagee, the office of such Person in the city
at which, at any particular time, its corporate trust business shall be
principally administered.
"CURRENT DISTRIBUTION DATE" means a Distribution Date specified as a
reference date for calculating the Expected Distributions or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of
such Distribution Date.
"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).
"DOWNGRADED FACILITY" has the meaning assigned to such term in Section
3.6(c).
"DRAWING" means an Interest Drawing, a Final Drawing, a Non-Extension
Drawing or a Downgrade Drawing, as the case may be.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the
laws of the United States of America or any one of the states thereof or
the District of Columbia (or any U.S. branch of a foreign bank), having
corporate trust powers and acting as trustee for funds deposited in such
account, so long as any of the securities of such depository institution
has a long-term unsecured debt rating from each Rating Agency of at least
A-3 or its equivalent. An Eligible Deposit Account may be maintained with a
Liquidity Provider so long as such Liquidity Provider is an Eligible
Institution; PROVIDED that such Liquidity Provider shall have waived all
rights of setoff and counterclaim with respect to such account; and
PROVIDED FURTHER that no Cash Collateral Account may be maintained with a
Liquidity Provider at any time Continental holds any participation in the
related Liquidity Facility unless written confirmation shall have been
received from each Rating Agency prior to such time to the effect that such
maintenance of the Cash Collateral Account with the Liquidity Provider will
not result in a withdrawal or downgrading of the ratings of the
Certificates.
"ELIGIBLE INSTITUTION" means (a) the corporate trust department of the
Subordination Agent or any Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any U.S. branch
of a foreign bank), which has a long-term unsecured debt rating from each
Rating Agency of at least A-3 or its equivalent; PROVIDED that a Liquidity
Provider shall not qualify as an Eligible Institution at any time
Continental holds any participation in the related Liquidity Facility
unless written confirmation shall have been received from each Rating
Agency to the effect that such Liquidity Provider's status as an Eligible
Institution will not result in a withdrawal or downgrading of the ratings
of the Certificates.
"ELIGIBLE INVESTMENTS" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than
90 days following the date of such investment, (b) investments in open
market commercial paper of any corporation incorporated under the laws of
the United States of America or any state thereof with a short-term
unsecured debt rating issued by Moody's and Standard & Poor's of at least
A-1 and P-1, respectively, and having maturities no later than 90 days
following the date of such investment or (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial
paper or other direct obligations of, or obligations guaranteed by,
commercial banks organized under the laws of the United States or of any
political subdivision thereof (or any U.S. branch of a foreign bank) with
issuer ratings of at least B/C by Thomson Bankwatch, having maturities no
later than 90 days following the date of such investment; PROVIDED,
HOWEVER, that (x) all Eligible Investments that are bank obligations shall
be denominated in U.S. dollars; and (y) the aggregate amount of Eligible
Investments at any one time that are bank obligations issued by any one
bank shall not be in excess of 5% of such bank's capital surplus; PROVIDED
FURTHER that (1) any investment of the types described in clauses (a), (b)
and (c) above may be made through a repurchase agreement in commercially
reasonable form with a bank or other financial institution qualifying as an
Eligible Institution so long as such investment is held by a third party
custodian also qualifying as an Eligible Institution, and (2) all such
investments set forth in clause (a), (b) or (c) above mature no later than
the Business Day immediately preceding the next Regular Distribution Date;
PROVIDED FURTHER, HOWEVER, that in the case of any Eligible Investment
issued by a domestic branch of a foreign bank, the income from such
investment shall be from sources within the United States for purposes of
the Code. Notwithstanding the foregoing, no investment of the types
described in clause (b) or (c) above which is issued or guaranteed by a
Liquidity Provider or Continental or any of their respective Affiliates,
and no investment in the obligations of any one bank in excess of
$10,000,000, shall be an Eligible Investment at any time Continental holds
any participation in the related Liquidity Facility unless written
confirmation shall have been received from each Rating Agency that the
making of such investment will not result in a withdrawal or downgrading of
the ratings of the Certificates.
"EQUIPMENT NOTES" means, at any time, the Series A Equipment Notes,
the Series B Equipment Notes and the Series C Equipment Notes,
collectively, and in each case, any Equipment Notes issued in exchange
therefor or replacement thereof pursuant to the terms of the Indentures.
"ESCROWED FUNDS", with respect to the Certificates of any Class, has
the meaning assigned to such term in the Trust Agreement for such Class.
"ESCROWED FUNDS INTEREST DISTRIBUTION" means, with respect to the
Certificates of any Class, the interest component of any distribution to
the Certificateholders of such Class on account of Escrowed Funds for such
Class of Certificates, earnings thereon or payments by Continental pursuant
to the third paragraph of Section 2.02(b) of the Trust Agreement for such
Class of Certificates.
"EXPECTED DISTRIBUTIONS" means, with respect to the Certificates of
any Trust on any Current Distribution Date, the sum of (x) accrued and
unpaid interest on such Certificates (after giving effect to any Escrowed
Funds Interest Distribution to be made on such Current Distribution Date
with respect to such Certificates) and (y) the difference between (A) the
Pool Balance of such Certificates as of the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the Certificates
of such Trust), less (if applicable) the aggregate amount of Escrowed Funds
for such Class of Certificates as of such immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, as of the Closing Date) thereafter distributed to the
Certificateholders of such Class (instead of being used to purchase
Postponed Notes) pursuant to the Trust Agreement for such Class (excluding
the interest component of any such distribution), and (B) the Pool Balance
of such Certificates as of the Current Distribution Date calculated on the
basis that (i) the principal of the Equipment Notes held in such Trust has
been paid when due (whether at stated maturity or upon redemption,
prepayment, purchase or Acceleration or otherwise) and such payments have
been distributed to the holders of such Certificates and (ii) the principal
of any Equipment Notes formerly held in such Trust which have been sold
pursuant to the terms hereof have been paid in full and such payments have
been distributed to the holders of such Certificates. For purposes of
calculating Expected Distributions with respect to the Certificates of any
Trust, any premium paid on the Equipment Notes held in such Trust which has
not been distributed to the Certificateholders of such Trust (other than
such premium or a portion thereof applied to the payment of interest on the
Certificates of such Trust or the reduction of the Pool Balance of such
Trust) shall be added to the amount of such Expected Distributions.
"EXPIRY DATE" with respect to any Liquidity Facility, shall have the
meaning set forth in such Liquidity Facility.
"FEE LETTER" means, collectively, the Fee Letter dated September 25,
1997 between ABN AMRO, Rolls-Royce and the Subordination Agent with respect
to the Liquidity Facilities and any fee letter entered into between the
Subordination Agent and any Replacement Liquidity Provider.
"FINAL DISTRIBUTIONS" means, with respect to the Certificates of any
Trust on any Distribution Date, the sum of (a) the aggregate amount of all
accrued and unpaid interest on such Certificates and (b) the Pool Balance
of such Certificates as of the immediately preceding Distribution Date. For
purposes of calculating Final Distributions with respect to the
Certificates of any Trust, any premium paid on the Equipment Notes held in
such Trust which has not been distributed to the Certificateholders of such
Trust (other than such premium or a portion thereof applied to the payment
of interest on the Certificates of such Trust or the reduction of the Pool
Balance of such Trust) shall be added to the amount of such Final
Distributions.
"FINAL DRAWING" has the meaning assigned to such term in Section
3.6(i).
"FINAL LEGAL DISTRIBUTION DATE" means, (i) with respect to the Class A
Certificates, September 24, 2014, (ii) with respect to the Class B
Certificates, December 24, 2008, and (iii) with respect to the Class C
Certificates, September 24, 2006.
"FINANCING AGREEMENTS" means each of the Participation Agreements.
"INDENTURE" means each of the Trust Indentures entered into by an
Owner Trustee and the Mortgagee, initially with respect to the aircraft set
forth on Schedule I hereto, 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).
"INVESTMENT EARNINGS" means investment earnings on funds on deposit in
the Trust Accounts net of losses and investment expenses of the
Subordination Agent in making such investments.
"LEASE" means, with respect to each Indenture, the "Lease" referred to
therein.
"LENDING OFFICE" means, with respect to any Liquidity Facility of the
initial Liquidity Provider, the lending office of such Liquidity Provider
presently located at Chicago, Illinois, or such other lending office as
such Liquidity Provider from time to time shall notify the applicable
Trustee as its lending office under any such Liquidity Facility; PROVIDED
that such Liquidity Provider shall not change its Lending Office to a
Lending Office outside the United States of America except in accordance
with Section 3.01, 3.02 or 3.03 of any such Liquidity Facility.
"LIEN" means any mortgage, pledge, lien, charge, claim, disposition of
title, encumbrance, lease, sublease, sub-sublease or security interest of
any kind, including, without limitation, any thereof arising under any
conditional sales or other title retention agreement.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (i) an
Acceleration of all the Equipment Notes or (ii) a Continental Bankruptcy
Event.
"LIQUIDITY EXPENSES" means all Liquidity Obligations other than (i)
the principal amount of any Drawings under the Liquidity Facilities and
(ii) any interest accrued on any Liquidity Obligations.
"LIQUIDITY FACILITY" means, at any time, the Class A Liquidity
Facility, the Class B Liquidity Facility or the Class C Liquidity Facility,
as applicable.
"LIQUIDITY OBLIGATIONS" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities,
Section 9.1 of the Participation Agreements or the Fee Letter.
"LIQUIDITY PROVIDER" means, at any time, the Class A Liquidity
Provider, the Class B Liquidity Provider or the Class C Liquidity Provider,
as applicable.
"LP INCUMBENCY CERTIFICATE" has the meaning assigned to such term in
Section 2.5(b).
"LP REPRESENTATIVES" has the meaning assigned to such term in Section
2.5(b).
"LTV APPRAISAL" means a current fair market appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed
and willing seller under no compulsion to sell and both having knowledge of
all relevant facts.
"LTV COLLATERAL AMOUNT" of any Aircraft for any Class of Certificates
on any Distribution Date means the lesser of (i) the LTV Ratio for such
Class of Certificates multiplied by the Appraised Current Market Value of
such Aircraft (or with respect to any such Aircraft which has suffered an
Event of Loss under and as defined in the Lease, the amount of insurance
proceeds paid to the Mortgagee under the related Indenture in respect
thereof to the extent then held by such Mortgagee (and/or on deposit in the
Special Payments Account) or payable to such Mortgagee in respect thereof)
and (ii) the outstanding principal amount of the Equipment Notes secured by
such Aircraft after giving effect to any principal payments of such
Equipment Notes on or before such Distribution Date.
"LTV RATIO" means for the Class A Certificates, 41.6%, for the Class B
Certificates, 56.6% and for the Class C Certificates, 67.6%.
"MAXIMUM AVAILABLE COMMITMENT", with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity Facility.
"MINIMUM SALE PRICE" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such Aircraft, at any time, the lesser
of (a) 75% of the Appraised Current Market Value of such Aircraft and (b)
the aggregate outstanding principal amount of such Equipment Notes, plus
accrued and unpaid interest thereon.
"MOODY'S" means Moody's Investors Service, Inc.
"MORTGAGEE" means, with respect to any Indenture, the indenture
trustee thereunder.
"NON-CONTROLLING PARTY" means, at any time, any Trustee or Liquidity
Provider which is not the Controlling Party at such time.
"NON-EXTENDED FACILITY" has the meaning assigned to such term in
Section 3.6(d).
"NON-EXTENSION DRAWING" has the meaning assigned to such term in
Section 3.6(d).
"NON-PERFORMING EQUIPMENT NOTE" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"OFFICER'S CERTIFICATE" of any Person means a certification signed by
a Responsible Officer of such Person.
"OPERATIVE AGREEMENTS" means this Agreement, the Liquidity Facilities,
the Indentures, the Trust Agreements, the Underwriting Agreement, the
Leases, the Participation Agreements, the Fee Letter, the Equipment Notes
and the Certificates, together with all exhibits and schedules included
with any of the foregoing.
"OUTSTANDING" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such
Class theretofore authenticated and delivered under the related Trust
Agreement, except:
(i) Certificates of such Class theretofore cancelled by the
Registrar (as defined in such Trust Agreement) or delivered to the
Trustee thereunder or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full
amount required to make the final distribution with respect to such
Certificates pursuant to Section 11.01 of such Trust Agreement has
been theretofore deposited with the related Trustee in trust for the
holders of such Certificates as provided in Section 4.01 of such Trust
Agreement pending distribution of such money to such
Certificateholders pursuant to such final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of
which other Certificates have been authenticated and delivered
pursuant to such Trust Agreement;
PROVIDED, HOWEVER, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by Continental or any of its Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether such Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates that such Trustee knows to be so owned shall be so
disregarded. Certificates so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction
of the applicable Trustee the pledgee's right so to act with respect to
such Certificates and that the pledgee is not Continental or any of its
Affiliates.
"OVERDUE SCHEDULED PAYMENT" means any Scheduled Payment which is not
in fact received by the Subordination Agent within five days after the
Scheduled Payment Date relating thereto.
"OWNER TRUSTEE" means, with respect to any Indenture, the Owner
Trustee (as defined therein) not in its individual capacity but solely as
trustee under the related owner trust agreement, together with any
successor trustee appointed pursuant to such owner trust agreement.
"PARTICIPATION AGREEMENT" means, with respect to each Indenture, the
"Participation Agreement" referred to therein.
"PAYEE" has the meaning assigned to such term in Section 2.4(e).
"PERFORMING EQUIPMENT NOTE" means an Equipment Note issued pursuant to
an Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration); PROVIDED that in
the event of a bankruptcy proceeding involving Continental under Title 11
of the United States Code (the "BANKRUPTCY CODE"), (i) any payment default
existing during the 60-day period under Section 1110(a)(1)(A) of the
Bankruptcy Code (or such longer period as may apply under Section 1110(b)
of the Bankruptcy Code) (the "SECTION 1110 PERIOD") shall not be taken into
consideration, unless during the Section 1110 Period the trustee in such
proceeding or Continental refuses to assume or agree to perform its
obligations under the Lease related to such Equipment Note and (ii) any
payment default occurring after the date of the order of relief in such
proceeding shall not be taken into consideration if such payment default is
cured under Section 1110(a)(1)(B) of the Bankruptcy Code before the later
of 30 days after the date of such default or the expiration of the Section
1110 Period.
"PERFORMING NOTE DEFICIENCY" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"PERSON" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company,
trust, trustee, unincorporated organization or government or any agency or
political subdivision thereof.
"POOL BALANCE" means, with respect to each Trust or the Certificates
issued by any Trust, as of any date, (i) the original aggregate face amount
of the Certificates of such Trust LESS (ii) the aggregate amount of all
payments made in respect of the Certificates of such Trust other than
payments made in respect of interest or premium thereon or reimbursement of
any costs and expenses in connection therewith. The Pool Balance for each
Trust or the Certificates issued by any Trust as of any Distribution Date
shall be computed after giving effect to the payment of principal, if any,
on the Equipment Notes or other Trust Property held in such Trust and the
distribution thereof to be made on such date.
"POSTPONED NOTES", with respect to the Certificates of any Class, has
the meaning assigned to such term in the Trust Agreement for such Class.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PTC EVENT OF DEFAULT" means, with respect to each Trust Agreement,
the failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the
Final Legal Distribution Date for such Class or (ii) interest due on such
Certificates on any Distribution Date (unless the Subordination Agent shall
have made an Interest Drawing, or a withdrawal from the Cash Collateral
Account, with respect thereto in an aggregate amount sufficient to pay such
interest and shall have distributed such amount to the Trustee entitled
thereto).
"RATING AGENCIES" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. Initially,
the Rating Agencies shall consist of Moody's and Standard & Poor's.
"RATINGS CONFIRMATION" means, with respect to any action proposed to
be taken, a written confirmation from each of the Rating Agencies that such
action would not result in (i) a reduction of the rating for any Class of
Certificates below the then current rating for such Class of Certificates
or (ii) a withdrawal or suspension of the rating of any Class of
Certificates.
"REGULAR DISTRIBUTION DATES" means each March 24, June 24, September
24 and December 24, commencing on December 24, 1997; PROVIDED, HOWEVER,
that, if any such day shall not be a Business Day, the related distribution
shall be made on the next succeeding Business Day without additional
interest.
"REPLACEMENT LIQUIDITY FACILITY" means, for any Liquidity Facility,
one or more irrevocable revolving credit agreements issued by one or more
Persons in substantially the form of the initial Liquidity Facility for
such Trust, including reinstatement provisions, or in such other form
(which may include a letter of credit) as shall permit the Rating Agencies
to confirm in writing their respective ratings then in effect for each
Class of Certificates (before the downgrading of such ratings, if any, as a
result of the downgrading of the replaced Liquidity Provider), in an
aggregate face amount (together with the face amount of any Liquidity
Facility of the same Class which will continue to be outstanding after the
issuance of such Replacement Liquidity Facility and the amount in the Cash
Collateral Account of such Class) equal to the Required Amount for such
Liquidity Facility and issued by one or more Persons having short-term
unsecured debt ratings issued by each Rating Agency that are equal to or
higher than the Threshold Rating. Without limitation of the form that a
Replacement Liquidity Facility otherwise may have pursuant to the preceding
sentence, a Replacement Liquidity Facility for any Class of Certificates
may have a stated expiration date earlier than 15 days after the Final
Maturity Date of such Class of Certificates so long as such Replacement
Liquidity Facility provides for a Non-Extension Drawing as contemplated by
Section 3.6(d) hereof.
"REPLACEMENT LIQUIDITY PROVIDER" means a Person who issues a
Replacement Liquidity Facility.
"REQUIRED AMOUNT" means, with respect to each Liquidity Facility, or
the Cash Collateral Account, for any Class, for any day, the sum of the
aggregate amount of interest, calculated at the rate per annum equal to the
Stated Interest Rate for the related Class of Certificates, that would be
payable on such Class of Certificates on each of the six successive Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding five Regular
Distribution Dates, in each case calculated on the basis of the Pool
Balance of such Class of Certificates on such date and without regard to
expected future payments of principal on such Class of Certificates.
"RESPONSIBLE OFFICER" means (i) with respect to the Subordination
Agent and each of the Trustees, any officer in the corporate trust
administration department of the Subordination Agent or such Trustee or any
other officer customarily performing functions similar to those performed
by the Persons who at the time shall be such officers, respectively, or to
whom any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject and (ii) with respect to each
Liquidity Provider, any authorized officer of such Liquidity Provider.
"ROLLS-ROYCE" means Rolls-Royce plc, an English corporation.
"SCHEDULED PAYMENT" means, with respect to any Equipment Note, (i) any
payment of principal or interest on such Equipment Note (other than an
Overdue Scheduled Payment) due from the obligor thereon or (ii) any payment
of interest on the corresponding Class of Certificates with funds drawn
under any Liquidity Facility, which payment represents the installment of
principal at the stated maturity of such installment of principal on such
Equipment Note, the payment of regularly scheduled interest accrued on the
unpaid principal amount of such Equipment Note, or both; PROVIDED that any
payment of principal of, premium, if any, or interest resulting from the
redemption or purchase of any Equipment Note shall not constitute a
Scheduled Payment.
"SCHEDULED PAYMENT DATE" means, with respect to any Scheduled Payment,
the date on which such Scheduled Payment is scheduled to be made.
"SERIES A EQUIPMENT NOTES" means the 7.160% Series A Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee and
authenticated by the Mortgagee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"SERIES B EQUIPMENT NOTES" means the 7.140% Series B Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee and
authenticated by the Mortgagee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"SERIES C EQUIPMENT NOTES" means the 7.121% Series C Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee and
authenticated by the Mortgagee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"SPECIAL DISTRIBUTION DATE" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section
2.4(a) for the distribution of such Special Payment in accordance with this
Agreement.
"SPECIAL PAYMENT" means any payment (other than a Scheduled Payment)
in respect of, or any proceeds of, any Equipment Note or Trust Indenture
Estate (as defined in each Indenture).
"SPECIAL PAYMENTS ACCOUNT" means the Eligible Deposit Account created
pursuant to Section 2.2 as a sub-account to the Collection Account.
"STANDARD & POOR'S" means Standard & Poor's Ratings Group, a division
of The McGraw-Hill Companies Inc.
"STATED AMOUNT" with respect to any Liquidity Facility, means the
Maximum Commitment (as defined in such Liquidity Facility) of the
applicable Liquidity Provider thereunder.
"STATED EXPIRATION DATE" has the meaning assigned to such term in
Section 3.6(d).
"STATED INTEREST RATE" means (i) with respect to the Class A
Certificates, 7.160% per annum, (ii) with respect to the Class B
Certificates, 7.140% per annum, and (iii) with respect to the Class C
Certificates, 7.121% per annum.
"SUBORDINATION AGENT" has the meaning assigned to it in the
preliminary statements to this Agreement.
"SUBORDINATION AGENT INCUMBENCY CERTIFICATE" has the meaning assigned
to such term in Section 2.5(a).
"SUBORDINATION AGENT REPRESENTATIVES" has the meaning assigned to such
term in Section 2.5(a).
"TAX" and "TAXES" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto)
imposed or otherwise assessed by the United States of America or by any
state, local or foreign government (or any subdivision or agency thereof)
or other taxing authority, including, without limitation: taxes or other
charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment
compensation, or net worth and similar charges; taxes or other charges in
the nature of excise, withholding, ad valorem, stamp, transfer, value
added, taxes on goods and services, gains taxes, license, registration and
documentation fees, customs duties, tariffs, and similar charges.
"TAX LETTER" means, collectively, the Fee Letter dated September 25,
1997 between ABN AMRO and Rolls-Royce with respect to the Liquidity
Facilities and any fee letter entered into between Continental or
Rolls-Royce, on the one hand, and any Replacement Liquidity Provider, on
the other.
"TERMINATION NOTICE" with respect to any Liquidity Facility has the
meaning assigned to such term in such Liquidity Facility.
"THRESHOLD RATING" means the short-term unsecured debt rating of P-1
by Moody's and A-1 by Standard & Poor's.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"TRIGGERING EVENT" means (x) the occurrence of an Indenture Default
under all of the Indentures resulting in a PTC Event of Default with
respect to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of, or a failure to pay at final maturity, all of the
outstanding Equipment Notes or (z) the occurrence of a Continental
Bankruptcy Event.
"TRUST" means any of the Class A Trust, the Class B Trust or the Class
C Trust.
"TRUST ACCOUNTS" has the meaning assigned to such term in Section
2.2(a).
"TRUST AGREEMENT" means any of the Class A Trust Agreement, Class B
Trust Agreement or Class C Trust Agreement.
"TRUST PROPERTY", with respect to any Trust, has the meaning set forth
in the Trust Agreement for such Trust.
"TRUSTEE" means any of the Class A Trustee, the Class B Trustee or the
Class C Trustee.
"TRUSTEE INCUMBENCY CERTIFICATE" has the meaning assigned to such term
in Section 2.5(a).
"TRUSTEE REPRESENTATIVES" has the meaning assigned to such term in
Section 2.5(a).
"UNDERWRITERS" means Morgan Stanley & Co. Incorporated and Citicorp
Securities, Inc.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated
September 12, 1997, among the Underwriters, Rolls-Royce and Continental,
relating to the purchase of the Certificates by the Underwriters, as the
same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"WRITTEN NOTICE" means, from the Subordination Agent, any Trustee or
Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing procedures
shall constitute Written Notice under such Section.
"WTC" has the meaning assigned to it in the preliminary statements to
this Agreement.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 AGREEMENT TO TERMS OF SUBORDINATION; PAYMENTS FROM MONIES
RECEIVED ONLY. (a) Each Trustee hereby acknowledges and agrees to the terms of
subordination set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be applied in
accordance with the terms of this Agreement. In addition, each Trustee hereby
agrees to cause the Equipment Notes purchased by the related Trust to be
registered in the name of the Subordination Agent or its nominee, as agent and
trustee for such Trustee, to be held in trust by the Subordination Agent solely
for the purpose of facilitating the enforcement of the subordination and other
provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1, all payments to be made by the Subordination Agent
hereunder shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments or payments under Section 9.1 of the
Participation Agreements, and only to the extent that the Subordination Agent
shall have received sufficient income or proceeds therefrom to enable it to make
such payments in accordance with the terms hereof. Each of the Trustees and the
Subordination Agent hereby agrees and, as provided in each Trust Agreement, each
Certificateholder, by its acceptance of a Certificate, and each Liquidity
Provider, by entering into the Liquidity Facility to which it is a party, has
agreed to look solely to such amounts to the extent available for distribution
to it as provided in this Agreement and that none of the Trustees, Owner
Trustees, Mortgagees, Owner Participants nor the Subordination Agent is
personally liable to any of them for any amounts payable or any liability under
this Agreement, any Trust Agreement, any Liquidity Facility or such Certificate,
except (in the case of the Subordination Agent) as expressly provided herein or
(in the case of the Trustees) as expressly provided in each Trust Agreement or
(in the case of the Owner Trustees and the Mortgagees) as expressly provided in
any Operative Agreement.
SECTION 2.2 TRUST ACCOUNTS. (a) Upon the execution of this Agreement,
the Subordination Agent shall establish and maintain in its name (i) the
Collection Account as an Eligible Deposit Account, bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Trustees, the Certificateholders and the Liquidity Providers and (ii) as a
sub-account in the Collection Account, the Special Payments Account as an
Eligible Deposit Account, bearing a designation clearly indicating that the
funds deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof. Upon such establishment and
maintenance under Section 3.6(f) hereof, the Cash Collateral Accounts shall,
together with the Collection Account, constitute the "TRUST ACCOUNTS" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.4 hereof, as the case may be, next following the date of such investment;
PROVIDED, HOWEVER, that following the making of a Downgrade Drawing or a
Non-Extension Drawing under any Liquidity Facility, the Subordination Agent
shall invest and reinvest such amounts in Eligible Investments at the direction
of the Liquidity Provider with respect to such Liquidity Facility; PROVIDED
FURTHER, HOWEVER, that upon the occurrence and during the continuation of a
Triggering Event, the Subordination Agent shall invest and reinvest such amounts
in accordance with the written instructions of the Controlling Party. Unless
otherwise expressly provided in this Agreement (including, without limitation,
with respect to Investment Earnings on deposit in the Cash Collateral Accounts,
Section 3.6(f) hereof), any Investment Earnings shall be deposited in the
Collection Account when received by the Subordination Agent and shall be applied
by the Subordination Agent in the same manner as the other amounts on deposit in
the Collection Account are to be applied and any losses shall be charged against
the principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination Agent
shall not be liable for any loss resulting from any investment, reinvestment or
liquidation required to be made under this Agreement other than by reason of its
willful misconduct or gross negligence. Eligible Investments and any other
investment required to be made hereunder shall be held to their maturities
except that any such investment may be sold (without regard to its maturity) by
the Subordination Agent without instructions whenever such sale is necessary to
make a distribution required under this Agreement. Uninvested funds held
hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (including all income thereon, except as otherwise provided
herein with respect to Investment Earnings). The Trust Accounts shall be held in
trust by the Subordination Agent under the sole dominion and control of the
Subordination Agent for the benefit of the Trustees, the Certificateholders and
the Liquidity Providers, as the case may be. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Subordination Agent shall
within 10 Business Days (or such longer period, not to exceed 30 calendar days,
to which each Rating Agency may consent) establish a new Collection Account,
Special Payments Account or Cash Collateral Account, as the case may be, as an
Eligible Deposit Account and shall transfer any cash and/or any investments to
such new Collection Account, Special Payments Account or Cash Collateral
Account, as the case may be. So long as WTC is an Eligible Institution, the
Trust Accounts shall be maintained with it as Eligible Deposit Accounts.
SECTION 2.3 DEPOSITS TO THE COLLECTION ACCOUNT AND SPECIAL PAYMENTS
ACCOUNT. (a) The Subordination Agent shall, upon receipt thereof, deposit in the
Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the Equipment
Notes, deposit in the Special Payments Account the aggregate amount of such
Special Payments.
SECTION 2.4 DISTRIBUTIONS OF SPECIAL PAYMENTS. (a) NOTICE OF SPECIAL
PAYMENT. Except as provided in Section 2.4(e) below, upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any notice
of a Special Payment (or, in the absence of any such notice, upon receipt by the
Subordination Agent of a Special Payment), the Subordination Agent shall
promptly give notice thereof to each Trustee and the Liquidity Providers. The
Subordination Agent shall promptly calculate the amount of the redemption or
purchase of Equipment Notes or the amount of any Overdue Scheduled Payment, as
the case may be, comprising such Special Payment under the applicable Indenture
or Indentures and shall promptly send to each Trustee a Written Notice of such
amount and the amount allocable to each Trust. Such Written Notice shall also
set the distribution date for such Special Payment (a "SPECIAL DISTRIBUTION
DATE"), which shall be the Business Day which immediately follows the later to
occur of (x) the 15th day after the date of such Written Notice or (y) the date
the Subordination Agent has received or expects to receive such Special Payment.
Amounts on deposit in the Special Payments Account shall be distributed in
accordance with Sections 2.4(b) and 2.4(c) hereof, as applicable.
(b) (i) REDEMPTIONS AND PURCHASES OF EQUIPMENT NOTES. So long as no
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b) of
amounts on deposit in the Special Payments Account on account of the redemption,
purchase (including, without limitation, a purchase resulting from a sale of the
Equipment Notes permitted by Article IV hereof) or pre-payment of all of the
Equipment Notes issued pursuant to an Indenture on the Special Distribution Date
for such Special Payment in the following order of priority:
FIRST, such amount as shall be required to pay (A) all accrued and unpaid
Liquidity Expenses then in arrears PLUS (B) the product of (x) the
aggregate amount of all accrued and unpaid Liquidity Expenses not in
arrears to such Special Payment Date MULTIPLIED BY (y) a fraction, the
numerator of which is the aggregate outstanding principal amount of
Equipment Notes being redeemed, purchased or prepaid on such Special
Payment Date and the denominator of which is the aggregate outstanding
principal amount of all Equipment Notes, shall be distributed to the
Liquidity Providers PARI PASSU on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
SECOND, such amount as shall be required to pay (A) all accrued and unpaid
interest then in arrears on all Liquidity Obligations (including interest
accrued and unpaid on any Interest Drawing or any Applied Provider Advance
(as defined in any Liquidity Facility)) PLUS (B) the product of (x) the
aggregate amount of all accrued and unpaid interest on all Liquidity
Obligations not in arrears to such Special Payment Date (at the rate
provided in the applicable Liquidity Facility) MULTIPLIED BY (y) a
fraction, the numerator of which is the aggregate outstanding principal
amount of Equipment Notes being redeemed, purchased or prepaid on such
Special Payment Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes, shall be distributed
to the Liquidity Providers PARI PASSU on the basis of the amount of such
Liquidity Obligations owed to each Liquidity Provider;
THIRD, such amount as shall be required (A) if any Cash Collateral Account
had been previously funded as provided in Section 3.6(f), to fund such Cash
Collateral Account up to its Required Amount shall be deposited in such
Cash Collateral Account, (B) if any Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under such Liquidity Facility have reduced the Maximum
Available Commitment thereunder to zero, to fund the relevant Cash
Collateral Account up to such Cash Collateral Account's Required Amount
shall be deposited in such Cash Collateral Account, and (C) if, with
respect to any particular Liquidity Facility, neither subclause (A) nor
subclause (B) of this clause "third" are applicable, to pay or reimburse
the Liquidity Provider in respect of such Liquidity Facility in an amount
equal to the amount of any unreimbursed Interest Drawings under such
Liquidity Facility shall be distributed to such Liquidity Provider PARI
PASSU on the basis of the amounts of all such deficiencies and/or
unreimbursed Interest Drawings;
FOURTH, if, with respect to any particular Liquidity Facility, any amounts
are to be distributed pursuant to either subclause (A) or (B) of clause
"third" above, then the Liquidity Provider with respect to such Liquidity
Facility shall be paid the excess of (x) the aggregate outstanding amount
of unreimbursed Advances (whether or not then due) under such Liquidity
Facility over (y) the Required Amount for the relevant Class, PARI PASSU on
the basis of such amounts in respect of each Liquidity Provider;
FIFTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Certificates on such Special
Distribution Date shall be distributed to the Class A Trustee;
SIXTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
SEVENTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee; and
EIGHTH, the balance, if any, of such Special Payment shall be transferred
to the Collection Account for distribution in accordance with Section 3.2
hereof.
For the purposes of this Section 2.4(b)(i), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued, due
and unpaid interest on such Certificates (after giving effect to any Escrowed
Funds Interest Distribution to be made on such Current Distribution Date with
respect to such Certificates) together with (without duplication) accrued and
unpaid interest on a portion of such Certificates equal to the outstanding
principal amount of Equipment Notes being redeemed, purchased or prepaid
(immediately prior to such redemption, purchase or prepayment)".
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to
this Section 2.4(b) of amounts on deposit in the Special Payments Account
on account of the redemption or purchase of all of the Equipment Notes
issued pursuant to an Indenture on the Special Distribution Date for such
Special Payment in accordance with Section 3.3 hereof.
(c) OTHER SPECIAL PAYMENTS. Except as provided in clause (e) below,
any amounts on deposit in the Special Payments Account other than in respect of
amounts to be distributed pursuant to Section 2.4(b) shall be distributed on the
Special Distribution Date therefor in accordance with Article III hereof.
(d) INVESTMENT OF AMOUNTS IN SPECIAL PAYMENTS ACCOUNT. Any amounts on
deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b) or (c) shall be invested in accordance with Section
2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.
(e) CERTAIN PAYMENTS. The Subordination Agent will distribute promptly
upon receipt thereof (i) any indemnity payment received by it from the Owner
Participant, the Owner Trustee, Continental or Rolls-Royce in respect of any
Trustee or any Liquidity Provider (collectively, the "PAYEES") and (ii) any
compensation (including, without limitation, any fees payable to any Liquidity
Provider under Section 2.03 of any Liquidity Facility) received by it from the
Owner Participant, the Owner Trustee, Continental or Rolls-Royce under any
Operative Agreement or the Fee Letter in respect of any Payee, directly to the
Payee entitled thereto.
SECTION 2.5 DESIGNATED REPRESENTATIVES. (a) With the delivery of this
Agreement, the Subordination Agent shall furnish to each Liquidity Provider and
each Trustee, and from time to time thereafter may furnish to each Liquidity
Provider and each Trustee, at the Subordination Agent's discretion, or upon any
Liquidity Provider's or Trustee's request (which request shall not be made more
than one time in any 12-month period), a certificate (a "SUBORDINATION AGENT
INCUMBENCY CERTIFICATE") of a Responsible Officer of the Subordination Agent
certifying as to the incumbency and specimen signatures of the officers of the
Subordination Agent and the attorney-in-fact and agents of the Subordination
Agent (the "SUBORDINATION AGENT REPRESENTATIVES") authorized to give Written
Notices on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider and Trustee receives a subsequent Subordination Agent Incumbency
Certificate, it shall be entitled to rely on the last Subordination Agent
Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish to
the Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Trustee's discretion, or upon the Subordination
Agent's request (which request shall not be made more than one time in any
12-month period), a certificate (a "TRUSTEE INCUMBENCY Certificate") of a
Responsible Officer of such Trustee certifying as to the incumbency and specimen
signatures of the officers of such Trustee and the attorney-in-fact and agents
of such Trustee (the "TRUSTEE REPRESENTATIVES") authorized to give Written
Notices on behalf of such Trustee hereunder. Until the Subordination Agent
receives a subsequent Trustee Incumbency Certificate, it shall be entitled to
rely on the last Trustee Incumbency Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Liquidity Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (an "LP INCUMBENCY CERTIFICATE") of
any Responsible Officer of such Liquidity Provider certifying as to the
incumbency and specimen signatures of any officer, attorney-in-fact, agent or
other designated representative of such Liquidity Provider (the "LP
REPRESENTATIVES" and, together with the Subordination Agent Representatives and
the Trustee Representatives, the "DESIGNATED REPRESENTATIVES") authorized to
give Written Notices on behalf of such Liquidity Provider hereunder. Until the
Subordination Agent receives a subsequent LP Incumbency Certificate, it shall be
entitled to rely on the last LP Incumbency Certificate delivered to it
hereunder.
SECTION 2.6 CONTROLLING PARTY. (a) The Trustees and the Liquidity
Providers hereby agree that, with respect to any Indenture at any given time,
the Mortgagee thereunder will be directed (i) in taking, or refraining from
taking, any action under such Indenture or with respect to the Equipment Notes
issued thereunder, so long as no Indenture Default has occurred and is
continuing thereunder, by the holders of at least a majority of the outstanding
principal amount of such Equipment Notes (PROVIDED that, for so long as the
Subordination Agent is the registered holder of the Equipment Notes, the
Subordination Agent shall act with respect to this clause (i) in accordance with
the directions of the Trustees (in the case of each such Trustee, with respect
to the Equipment Notes issued under such Indenture and held as Trust Property of
such Trust) constituting, in the aggregate, directions with respect to such
principal amount of Equipment Notes), and (ii) after the occurrence and during
the continuance of an Indenture Default thereunder (which has not been cured by
the applicable Owner Trustee or the applicable Owner Participant pursuant to
Section 4.03 of such Indenture), in taking, or refraining from taking, any
action under such Indenture or with respect to such Equipment Notes, including
exercising remedies thereunder (including Accelerating the Equipment Notes
issued thereunder or foreclosing the Lien on the Aircraft securing such
Equipment Notes), by the Controlling Party.
(b) The Person who shall be the "CONTROLLING PARTY" with respect to
any Indenture shall be: (x) the Class A Trustee; (y) upon payment of Final
Distributions to the holders of Class A Certificates, the Class B Trustee; and
(z) upon payment of Final Distributions to the holders of Class B Certificates,
the Class C Trustee. For purposes of giving effect to the foregoing, the
Trustees (other than the Controlling Party) irrevocably agree (and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes as
directed by the Controlling Party and any vote so exercised shall be binding
upon the Trustees and all Certificateholders.
The Subordination Agent shall give written notice to all of the other parties to
this Agreement promptly upon a change in the identity of the Controlling Party.
Each of the parties hereto agrees that it shall not exercise any of the rights
of the Controlling Party at such time as it is not the Controlling Party
hereunder; PROVIDED, HOWEVER, that nothing herein contained shall prevent or
prohibit any Non-Controlling Party from exercising such rights as shall be
specifically granted to such Non-Controlling Party hereunder and under the other
Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from
the earlier to occur of (i) the date on which the entire Maximum Available
Commitment under any Liquidity Facility shall have been drawn (for any reason
other than a Downgrade Drawing or a Non-Extension Drawing) and remain
unreimbursed, and (ii) the date on which all Equipment Notes shall have been
Accelerated, the Liquidity Provider with the highest outstanding amount of
Liquidity Obligations shall have the right to elect, by Written Notice to the
Subordination Agent and each of the Trustees, to become the Controlling Party
hereunder with respect to any Indenture at any time from and including the last
day of such 18-month period.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or obligate
any Non-Controlling Party to provide funds necessary to exercise any right or
remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 WRITTEN NOTICE OF DISTRIBUTION. (a) No later than 3:00
P.M. (New York City time) on the Business Day immediately preceding each Regular
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with clause
"FIFTH" of Section 3.2 or 2.4(b), as the case may be, hereof;
(ii) With respect to the Class B Certificates, the Class B
Trustee shall separately set forth the amounts to be paid in accordance
with clause "SIXTH" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in accordance
with clause "SEVENTH" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "FIRST", "SECOND", "THIRD" and "FOURTH" of Section
3.2 or 2.4(b), as the case may be, hereof; and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "EIGHTH" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a schedule
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document may
state that, unless there has been a prepayment of the Certificates, such
schedule or similar document is to remain in effect until any substitute notice
or amendment shall be given to the Subordination Agent by the party providing
such notice.
(b) Following the occurrence of a Triggering Event, the Subordination
Agent shall request the following information from the following Persons, and
each of the following Persons shall, upon the request of the Subordination
Agent, deliver a Written Notice to the Subordination Agent setting forth for
such Person the following information:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "FIRST" (to reimburse payments made by the Class A
Certificateholders pursuant to subclause (iii) of clause "FIRST" of Section
3.3 hereof) and "SEVENTH" of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B
Trustee shall separately set forth the amounts to be paid in accordance
with clauses "FIRST" (to reimburse payments made by the Class B
Certificateholders pursuant to subclause (iii) of clause "FIRST" of Section
3.3 hereof) and "EIGHTH" of Section 3.3 hereof;
(iii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in accordance
with clauses "FIRST" (to reimburse payments made by the Class C
Certificateholders pursuant to subclause (iii) of clause "FIRST" of Section
3.3 hereof) and "NINTH" of Section 3.3 hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid to it
in accordance with subclause (iii) of clause "FIRST" of Section 3.3 hereof
and clauses "second", "THIRD", "FOURTH" and "FIFTH" of Section 3.3 hereof;
and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "SIXTH" of Section 3.3 hereof.
(c) At such time as a Trustee or a Liquidity Provider shall have
received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Section 2.4, 3.2 or 3.3
hereof, as applicable, and, in the case of a Liquidity Provider, its commitment
under the related Liquidity Facility shall have terminated or expired, such
Person shall, by a Written Notice, so inform the Subordination Agent and each
other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall
be fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee or any Liquidity Provider pursuant to paragraphs
(a) through (c) above and shall have no independent obligation to verify,
calculate or recalculate any amount set forth in any Written Notice delivered in
accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity Provider,
as applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof, if made
prior to 10:00 A.M. (New York City time) shall be effective on the date
delivered (or if delivered later shall be effective as of the next Business
Day). Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; PROVIDED, HOWEVER,
that any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraph (a) or (b) above which is required
to enable the Subordination Agent to make a distribution to such Person pursuant
to Section 3.2 or 3.3 hereof, the Subordination Agent shall request such
information and, failing to receive any such information, the Subordination
Agent shall not make such distribution(s) to such Person. In such event, the
Subordination Agent shall make distributions pursuant to clauses "FIRST" through
"NINTH" of Section 3.2 and clauses "FIRST" through "TENTH" of Section 3.3 to the
extent it shall have sufficient information to enable it to make such
distributions, and shall continue to hold any funds remaining, after making such
distributions, until the Subordination Agent shall receive all necessary
information to enable it to distribute any funds so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Trustee shall request, the Subordination Agent shall
send to such party a written statement reflecting all amounts on deposit with
the Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION 3.2 DISTRIBUTION OF AMOUNTS ON DEPOSIT IN THE COLLECTION
ACCOUNT. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments Account)
shall be promptly distributed on each Regular Distribution Date (or, in the case
of any amount described in Section 2.4(c), on the Special Distribution Date
thereof) in the following order of priority and in accordance with the
information provided to the Subordination Agent pursuant to Section 3.1(a)
hereof:
FIRST, such amount as shall be required to pay all accrued and unpaid
Liquidity Expenses owed to each Liquidity Provider shall be distributed to
the Liquidity Providers PARI PASSU on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
SECOND, such amount as shall be required to pay in full the aggregate
amount of interest accrued on all Liquidity Obligations (at the rate
provided in the applicable Liquidity Facility) and unpaid shall be
distributed to the Liquidity Providers PARI PASSU on the basis of the
amount of such Liquidity Obligations owed to each Liquidity Provider;
THIRD, such amount as shall be required (A) if any Cash Collateral Account
had been previously funded as provided in Section 3.6(f), to fund such Cash
Collateral Account up to its Required Amount shall be deposited in such
Cash Collateral Account, (B) if any Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under such Liquidity Facility have reduced the Maximum
Available Commitment thereunder to zero, to fund the relevant Cash
Collateral Account up to such Cash Collateral Account's Required Amount
shall be deposited in such Cash Collateral Account, and (C) if, with
respect to any particular Liquidity Facility, neither subclause (A) nor
subclause (B) of this clause "third" are applicable, to pay or reimburse
the Liquidity Provider in respect of such Liquidity Facility in an amount
equal to the amount of all Liquidity Obligations then due under such
Liquidity Facility (other than amounts payable pursuant to clause "first"
or "second" of this Section 3.2) shall be distributed to such Liquidity
Provider, PARI PASSU on the basis of the amounts of all such deficiencies
and/or unreimbursed Liquidity Obligations;
FOURTH, if, with respect to any particular Liquidity Facility, any amounts
are to be distributed pursuant to either subclause (A) or (B) of clause
"third" above, then the Liquidity Provider with respect to such Liquidity
Facility shall be paid the excess of (x) the aggregate outstanding amount
of unreimbursed Advances (whether or not then due) under such Liquidity
Facility over (y) the Required Amount for the relevant Class, PARI PASSU on
the basis of such amounts in respect of each Liquidity Provider;
FIFTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Certificates on such
Distribution Date shall be distributed to the Class A Trustee;
SIXTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
SEVENTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Certificates on such
Distribution Date shall be distributed to the Class C Trustee;
EIGHTH, such amount as shall be required to pay in full the aggregate
unpaid amount of fees and expenses payable as of such Distribution Date to
the Subordination Agent and each Trustee pursuant to the terms of this
Agreement and the Trust Agreements, as the case may be, shall be
distributed to the Subordination Agent and such Trustee; and
NINTH, the balance, if any, remaining thereafter shall be held in the
Collection Account for later distribution in accordance with this Article
III.
SECTION 3.3 DISTRIBUTION OF AMOUNTS ON DEPOSIT FOLLOWING A TRIGGERING
EVENT. (a) Except as otherwise provided in Sections 3.1(f) and 3.6(b) hereof,
upon the occurrence of a Triggering Event and at all times thereafter, all funds
in the Collection Account or the Special Payments Account shall be promptly
distributed by the Subordination Agent in the following order of priority:
FIRST, such amount as shall be required to reimburse (i) the Subordination
Agent for any out-of-pocket costs and expenses actually incurred by it (to
the extent not previously reimbursed) in the protection of, or the
realization of the value of, the Equipment Notes or any Trust Indenture
Estate, shall be applied by the Subordination Agent in reimbursement of
such costs and expenses, (ii) each Trustee for any amounts of the nature
described in clause (i) above actually incurred by it under the applicable
Trust Agreement (to the extent not previously reimbursed), shall be
distributed to such Trustee and (iii) any Liquidity Provider or
Certificateholder for payments, if any, made by it to the Subordination
Agent or any Trustee in respect of amounts described in clause (i) above,
shall be distributed to such Liquidity Provider or to the applicable
Trustee for the account of such Certificateholder, in each such case, PARI
PASSU on the basis of all amounts described in clauses (i) through (iii)
above;
SECOND, such amount remaining as shall be required to pay all accrued and
unpaid Liquidity Expenses shall be distributed to each Liquidity Provider
PARI PASSU on the basis of the amount of Liquidity Expenses owed to each
Liquidity Provider;
THIRD, such amount remaining as shall be required to pay accrued and unpaid
interest on the Liquidity Obligations as provided in the Liquidity
Facilities shall be distributed to each Liquidity Provider PARI PASSU on
the basis of the amount of such accrued and unpaid interest owed to each
Liquidity Provider;
FOURTH, such amount remaining as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), unless (i) a Performing Note Deficiency exists and a Liquidity
Event of Default shall have occurred and be continuing with respect to the
relevant Liquidity Facility or (ii) a Final Drawing shall have occurred
with respect to such Liquidity Facility, to fund such Cash Collateral
Account up to its Required Amount (less the amount of any repayments of
Interest Drawings under such Liquidity Facility while subclause (A)(i)
above is applicable) shall be deposited in such Cash Collateral Account,
(B) if any Liquidity Facility shall become a Downgraded Facility or a
Non-Extended Facility at a time when unreimbursed Interest Drawings under
such Liquidity Facility have reduced the Maximum Available Commitment
thereunder to zero, unless (i) a Performing Note Deficiency exists and a
Liquidity Event of Default shall have occurred and be continuing with
respect to the relevant Liquidity Facility or (ii) a Final Drawing shall
have occurred with respect to such Liquidity Facility, to fund the relevant
Cash Collateral Account up to such Cash Collateral Account's Required
Amount (less the amount of any repayments of Interest Drawings under such
Liquidity Facility while subclause (B)(i) above is applicable) shall be
deposited in such Cash Collateral Account, and (C) if, with respect to any
particular Liquidity Facility, neither subclause (A) nor subclause (B) of
this clause "fourth" are applicable, to pay in full the outstanding amount
of all Liquidity Obligations then due under such Liquidity Facility (other
than amounts payable pursuant to clause "SECOND" or "THIRD" of this Section
3.3) shall be distributed to such Liquidity Provider, PARI PASSU on the
basis of the amounts of all such deficiencies and/or unreimbursed Liquidity
Obligations;
FIFTH, if, with respect to any particular Liquidity Facility, any amounts
are to be distributed pursuant to either subclause (A) or (B) of clause
"FOURTH" above, then the Liquidity Provider with respect to such Liquidity
Facility shall be paid the excess of (x) the aggregate outstanding amount
of unreimbursed Advances (whether or not then due) under such Liquidity
Facility over (y) the Required Amount for the relevant Class (less the
amount of any repayments of Interest Drawings under such Liquidity Facility
while subclause (A)(i) or (B)(i), as the case may be, of clause "FOURTH"
above is applicable), PARI PASSU on the basis of such amounts in respect of
each Liquidity Provider;
SIXTH, such amount as shall be required to reimburse or pay (i) the
Subordination Agent for any Tax (other than Taxes imposed on compensation
paid hereunder), expense, fee, charge or other loss incurred by or any
other amount payable to the Subordination Agent in connection with the
transactions contemplated hereby (to the extent not previously reimbursed),
shall be applied by the Subordination Agent in reimbursement of such
amount, (ii) each Trustee for any Tax (other than Taxes imposed on
compensation paid under the applicable Trust Agreement), expense, fee,
charge, loss or any other amount payable to such Trustee under the
applicable Trust Agreements (to the extent not previously reimbursed),
shall be distributed to such Trustee and (iii) each Certificateholder for
payments, if any, made by it pursuant to Section 5.2 hereof in respect of
amounts described in clause (i) above, shall be distributed to the
applicable Trustee for the account of such Certificateholder, in each such
case, PARI PASSU on the basis of all amounts described in clauses (i)
through (iii) above;
SEVENTH, such amount remaining as shall be required to pay in full Adjusted
Expected Distributions on the Class A Certificates shall be distributed to
the Class A Trustee;
EIGHTH, such amount remaining as shall be required to pay in full Adjusted
Expected Distributions on the Class B Certificates shall be distributed to
the Class B Trustee;
NINTH, such amount remaining as shall be required to pay in full Adjusted
Expected Distributions on the Class C Certificates shall be distributed to
the Class C Trustee; and
TENTH, such amount remaining shall be retained in the Collection Account
until the immediately succeeding Distribution Date or, if all Classes of
Certificates shall have been paid in full, shall be distributed to the
Owner Trustees.
SECTION 3.4 OTHER PAYMENTS. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent (i) in the
order of priority specified in Section 3.3 hereof and (ii) to the extent
received or realized at any time after the Final Distributions for each Class of
Certificates have been made, in the manner provided in clause "FIRST" of Section
3.3 hereof.
(b) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled Payment
Date relating thereto, but prior to such payment becoming an Overdue Scheduled
Payment, then the Subordination Agent shall deposit such Scheduled Payment in
the Collection Account and promptly distribute such Scheduled Payment in
accordance with the priority of distributions set forth in Section 3.2 hereof;
PROVIDED that, for the purposes of this Section 3.4(b) only, each reference in
clause "EIGHTH" of Section 3.2 to "Distribution Date" shall be deemed to mean
the actual date of payment of such Scheduled Payment and each reference in
clause "FIFTH", "SIXTH" or "SEVENTH" of Section 3.2 to "Distribution Date" shall
be deemed to refer to such Scheduled Payment Date.
SECTION 3.5 PAYMENTS TO THE TRUSTEES AND THE LIQUIDITY PROVIDERS. Any
amounts distributed hereunder to any Liquidity Provider shall be paid to such
Liquidity Provider by wire transfer of funds to the address such Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent shall
provide a Written Notice of any such transfer to the applicable Liquidity
Provider, as the case may be, at the time of such transfer. Any amounts
distributed hereunder by the Subordination Agent to any Trustee which shall not
be the same institution as the Subordination Agent shall be paid to such Trustee
by wire transfer funds at the address such Trustee shall provide to the
Subordination Agent.
SECTION 3.6 LIQUIDITY FACILITIES. (a) INTEREST DRAWINGS. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the Class
A Certificates, the Class B Certificates or the Class C Certificates (at the
Stated Interest Rate for such Class of Certificates), then, prior to 12:00 noon
(New York City time) on the Business Day following such Distribution Date, the
Subordination Agent shall request a drawing (each such drawing, an "INTEREST
DRAWING") under each Liquidity Facility with respect to such Class of
Certificates in an amount equal to the lesser of (i) an amount sufficient to pay
the amount of such accrued interest (at the Stated Interest Rate for such Class
of Certificates) and (ii) the Available Amount under such Liquidity Facility,
and shall pay such amount to the Trustee with respect to such Class of
Certificates in payment of such accrued interest.
(b) APPLICATION OF INTEREST DRAWINGS. Notwithstanding anything to the
contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A Cash Collateral Account, and payable in each case to the Class A
Certificateholders, shall be promptly distributed to the Class A Trustee, (ii)
all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class B Liquidity Facility and all amounts withdrawn by the
Subordination Agent from the Class B Cash Collateral Account, and payable in
each case to the Class B Certificateholders, shall be promptly distributed to
the Class B Trustee and (iii) all payments received by the Subordination Agent
in respect of an Interest Drawing under the Class C Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class C Cash Collateral
Account, and payable in each case to the Class C Certificateholders, shall be
promptly distributed to the Class C Trustee.
(c) DOWNGRADE DRAWINGS. If at any time the short-term unsecured debt
rating of any Liquidity Provider issued by either Rating Agency is lower than
the applicable Threshold Rating, within 10 days after receiving notice of such
downgrading (but no later than the expiration date of the Liquidity Facility
issued by the downgraded Liquidity Provider (the "DOWNGRADED FACILITY")), such
Liquidity Provider or Continental may arrange for a Replacement Liquidity
Provider to issue and deliver a Replacement Liquidity Facility to the
Subordination Agent. If a Downgraded Facility has not been replaced in
accordance with the terms of this paragraph, the Subordination Agent shall, on
such 10th day (or if such 10th day is not a Business Day, on the next succeeding
Business Day) (or, if earlier, the expiration date of such Downgraded Facility),
request a drawing in accordance with and to the extent permitted by such
Downgraded Facility (such drawing, a "DOWNGRADE DRAWING") of all available and
undrawn amounts thereunder. Amounts drawn pursuant to a Downgrade Drawing shall
be maintained and invested as provided in Section 3.6(f) hereof. The Liquidity
Provider may also arrange for a Replacement Liquidity Provider to issue and
deliver a Replacement Liquidity Facility at any time after such Downgrade
Drawing so long as such Downgrade Drawing has not been reimbursed in full to the
Liquidity Provider.
(d) NON-EXTENSION DRAWINGS. If any Liquidity Facility with respect to
any Class of Certificates is scheduled to expire on a date (the "STATED
EXPIRATION DATE") prior to the date that is 15 days after the Final Maturity
Date for such Class of Certificates, then, no earlier than the 60th day and no
later than the 40th day prior to the then Stated Expiration Date, the
Subordination Agent shall request that such Liquidity Provider extend the Stated
Expiration Date for a period of 364 days after the Stated Expiration Date
(unless the obligations of such Liquidity Provider thereunder are earlier
terminated in accordance with such Liquidity Facility). The Liquidity Provider
shall advise the Borrower, no earlier than 40 days and no later than 25 days
prior to such Stated Expiration Date, whether, in its sole discretion, it agrees
to so extend the Stated Expiration Date. If, on or before such 25th day, such
Liquidity Facility shall not have been so extended or replaced in accordance
with Section 3.6(e), or if the Liquidity Provider fails irrevocably and
unconditionally to advise the Borrower on or before the 25th day prior to the
Stated Expiration Date then in effect that such Stated Expiration Date shall be
so extended, the Subordination Agent shall, on such 25th day (or as soon as
possible thereafter), in accordance with and to the extent permitted by the
terms of the expiring Liquidity Facility (a "NON-EXTENDED FACILITY"), request a
drawing under such expiring Liquidity Facility (such drawing, a "NON-EXTENSION
DRAWING") of all available and undrawn amounts thereunder. Amounts drawn
pursuant to a Non-Extension Drawing shall be maintained and invested in
accordance with Section 3.6(f) hereof.
(e) ISSUANCE OF REPLACEMENT LIQUIDITY FACILITY. (i) At any time,
Continental may, at its option, with cause or without cause, arrange for a
Replacement Liquidity Facility to replace the Liquidity Facility for any Class
of Certificates (including any Replacement Liquidity Facility provided pursuant
to Section 3.6(e)(ii) hereof); PROVIDED, HOWEVER, that the initial Liquidity
Provider shall not be replaced by Continental with respect to any Class of
Certificates prior to the fifth anniversary of the Closing Date unless (A) there
shall have become due to the initial Liquidity Provider, or the initial
Liquidity Provider shall have demanded, amounts pursuant to Section 3.1, 3.2 or
3.3 of any Liquidity Facility, or pursuant to the Tax Letter, and the
replacement of the initial Liquidity Provider would reduce or eliminate the
obligation to pay such amounts or Continental determines in good faith that
there is a substantial likelihood that the initial Liquidity Provider will have
the right to claim any such amounts (unless the initial Liquidity Provider
waives, in writing, any right it may have to claim such amounts), which
determination shall be set forth in a certificate delivered by Continental to
the initial Liquidity Provider setting forth the basis for such determination
and accompanied by an opinion of outside counsel selected by Continental and
reasonably acceptable to the initial Liquidity Provider verifying the legal
conclusions, if any, of such certificate relating to such basis, PROVIDED that,
in the case of any likely claim for such amounts based upon any proposed, or
proposed change in, law, rule, regulation, interpretation, directive,
requirement, request or administrative practice, such opinion may assume the
adoption or promulgation of such proposed matter, (B) it shall become unlawful
or impossible for the initial Liquidity Provider (or its Lending Office) to
maintain or fund its LIBOR Advances as described in Section 3.10 of any
Liquidity Facility, (C) the short-term unsecured debt rating of the initial
Liquidity Provider is downgraded by Standard & Poor's from A-1+ to A-1 and there
is a resulting downgrade in the rating by any Rating Agency of any Class of
Certificates, (D) a Downgrade Drawing or a Non-Extension Drawing shall have
occurred under any Liquidity Facility or (E) the initial Liquidity Provider
shall have breached any of its payment (including, without limitation, funding)
obligations under any Liquidity Facility. If such Replacement Liquidity Facility
is provided at any time after a Downgrade Drawing or Non-Extension Drawing has
been made, all funds on deposit in the relevant Cash Collateral Account will be
returned to the Liquidity Provider being replaced.
(ii) If any Liquidity Provider shall determine not to extend any of
its Liquidity Facilities in accordance with Section 3.6(d), then such Liquidity
Provider may, at its option, arrange for a Replacement Liquidity Facility to
replace such Liquidity Facility during the period no earlier than 40 days and no
later than 25 days prior to the then effective Stated Expiration Date of such
Liquidity Facility.
(iii) No Replacement Liquidity Facility arranged by Continental or a
Liquidity Provider in accordance with clause (i) or (ii) above, respectively,
shall become effective and no such Replacement Liquidity Facility shall be
deemed a "Liquidity Facility" under the Operative Agreements (in each case other
than insofar as necessary to permit the repayment of amounts owed to the
replaced Liquidity Provider), unless and until (A) each of the conditions
referred to in clause (iv) below shall have been satisfied, (B) if such
Replacement Liquidity Facility shall materially adversely affect the rights,
remedies, interests or obligations of the Class A Certificateholders, the Class
B Certificateholders or the Class C Certificateholders under any of the
Operative Agreements, the applicable Trustee shall have consented, in writing,
to the execution and issuance of such Replacement Liquidity Facility and (C) in
the case of a Replacement Liquidity Facility arranged by a Liquidity Provider
under Section 3.6(e)(ii), such Replacement Liquidity Facility is acceptable to
Continental.
(iv) In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each Rating
Agency that such Replacement Liquidity Facility will not cause a reduction of
the rating then in effect for any Class of Certificates by such Rating Agency
(without regard to any downgrading of any rating of any Liquidity Provider being
replaced pursuant to Section 3.6(c) hereof), (y) pay all Liquidity Obligations
then owing to the replaced Liquidity Provider (which payment shall be made first
from available funds in the Cash Collateral Account as described in clause (vii)
of Section 3.6(f) hereof and thereafter from any other available source,
including, without limitation, a drawing under the Replacement Liquidity
Facility) and (z) cause the issuer of the Replacement Liquidity Facility to
deliver the Replacement Liquidity Facility to the Subordination Agent, together
with a legal opinion opining that such Replacement Liquidity Facility is an
enforceable obligation of such Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in clauses (iii) and
(iv) of this Section 3.6(e), (w) the replaced Liquidity Facility shall
terminate, (x) the Subordination Agent shall, if and to the extent so requested
by Continental or the Liquidity Provider being replaced, execute and deliver any
certificate or other instrument required in order to terminate the replaced
Liquidity Facility, shall surrender the replaced Liquidity Facility to the
Liquidity Provider being replaced and shall execute and deliver the Replacement
Liquidity Facility and any associated Fee Letter, (y) each of the parties hereto
shall enter into any amendments to this Agreement necessary to give effect to
(1) the replacement of the applicable Liquidity Provider with the applicable
Replacement Liquidity Provider(s) and (2) the replacement of the applicable
Liquidity Facility with the applicable Replacement Liquidity Facility and (z)
each Replacement Liquidity Provider shall be deemed to be a Liquidity Provider
with the rights and obligations of a Liquidity Provider hereunder and under the
other Operative Agreements and each Replacement Liquidity Facility shall be
deemed to be a Liquidity Facility hereunder and under the other Operative
Agreements.
(f) CASH COLLATERAL ACCOUNTS; WITHDRAWALS; INVESTMENTS. In the event
the Subordination Agent shall draw all available amounts under the Class A
Liquidity Facility, the Class B Liquidity Facility or the Class C Liquidity
Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i) hereof, or in the event
amounts are to be deposited in the Cash Collateral Account pursuant to subclause
(B) of clause "THIRD" of Section 2.4(b), subclause (B) of clause "THIRD" of
Section 3.2 or subclause (B) of clause "FOURTH" of Section 3.3, amounts so drawn
or to be deposited, as the case may be, shall be deposited by the Subordination
Agent in the Class A Cash Collateral Account, the Class B Cash Collateral
Account or the Class C Cash Collateral Account, respectively. All amounts on
deposit in each Cash Collateral Account shall be invested and reinvested in
Eligible Investments in accordance with Section 2.2(b) hereof. Investment
Earnings on amounts on deposit in each of the Cash Collateral Accounts shall be
deposited in the Collection Account prior to giving effect to the distributions
below on each Distribution Date commencing on the first Distribution Date after
any such deposit into such Collection Account. The Subordination Agent shall
deliver a written statement to Continental and the Liquidity Provider one day
prior to each Distribution Date setting forth the aggregate amount of Investment
Earnings held in the Cash Collateral Accounts as of such date. In addition, from
and after the date funds are so deposited, the Subordination Agent shall make
withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class A Certificates (at the Stated Interest
Rate for the Class A Certificates) from any other source, withdraw from the
Class A Cash Collateral Account, and pay to the Class A Trustee an amount
equal to the lesser of (x) an amount necessary to pay accrued and unpaid
interest (at the Stated Interest Rate for the Class A Certificates) on such
Class A Certificates and (y) the amount on deposit in the Class A Cash
Collateral Account;
(ii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class B Certificates (at the Stated Interest
Rate for the Class B Certificates) from any other source, withdraw from the
Class B Cash Collateral Account, and pay to the Class B Trustee an amount
equal to the lesser of (x) an amount necessary to pay accrued and unpaid
interest (at the Stated Interest Rate for the Class B Certificates) on such
Class B Certificates and (y) the amount on deposit in the Class B Cash
Collateral Account;
(iii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class C Certificates (at the Stated Interest
Rate for the Class C Certificates) from any other source, withdraw from the
Class C Cash Collateral Account, and pay to the Class C Trustee an amount
equal to the lesser of (x) an amount necessary to pay accrued and unpaid
interest (at the Stated Interest Rate for the Class C Certificates) on such
Class C Certificates and (y) the amount on deposit in the Class C Cash
Collateral Account;
(iv) on each date on which the Pool Balance of the Class A Trust
shall have been reduced by payments made to the Class A Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination Agent shall
withdraw from the Class A Cash Collateral Account such amount as is
necessary so that, after giving effect to the reduction of the Pool Balance
on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class A Cash Collateral Account on
such date), the Required Amount (with respect to the Class A Liquidity
Facility) will be on deposit in the Class A Cash Collateral Account and
shall FIRST, pay such amount to the Class A Liquidity Provider until the
Liquidity Obligations (with respect to the Class A Certificates) owing to
such Liquidity Provider shall have been paid in full, and SECOND, deposit
any remaining amount in the Collection Account;
(v) on each date on which the Pool Balance of the Class B Trust
shall have been reduced by payments made to the Class B Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination Agent shall
withdraw from the Class B Cash Collateral Account such amount as is
necessary so that, after giving effect to the reduction of the Pool Balance
on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class B Cash Collateral Account on
such date), the Required Amount (with respect to the Class B Liquidity
Facility) will be on deposit in the Class B Cash Collateral Account and
shall FIRST, pay such amount to the Class B Liquidity Provider until the
Liquidity Obligations (with respect to the Class B Certificates) owing to
such Liquidity Provider shall have been paid in full, and SECOND, deposit
any remaining amount in the Collection Account;
(vi) on each date on which the Pool Balance of the Class C Trust
shall have been reduced by payments made to the Class C Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination Agent shall
withdraw from the Class C Cash Collateral Account such amount as is
necessary so that, after giving effect to the reduction of the Pool Balance
on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class C Cash Collateral Account on
such date), the Required Amount (with respect to the Class C Liquidity
Facility) will be on deposit in the Class C Cash Collateral Account and
shall FIRST, pay such amount to the Class C Liquidity Provider until the
Liquidity Obligations (with respect to the Class C Certificates) owing to
such Liquidity Provider shall have been paid in full, and SECOND, deposit
any remaining amount in the Collection Account;
(vii) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following the
date on which funds have been deposited into the Cash Collateral Account
for such Class of Certificates, the Subordination Agent shall withdraw all
amounts on deposit in such Cash Collateral Account and shall pay such
amounts to the replaced Liquidity Provider until all Liquidity Obligations
owed to such Person shall have been paid in full, and shall deposit any
remaining amount in the Collection Account; and
(viii) following the payment of Final Distributions with respect
to any Class of Certificates, on the date on which the Subordination Agent
shall have been notified by the Liquidity Provider for such Class of
Certificates that the Liquidity Obligations owed to such Liquidity Provider
have been paid in full, the Subordination Agent shall withdraw all amounts
on deposit in the Cash Collateral Account in respect of such Class of
Certificates and shall deposit such amount in the Collection Account.
(g) REINSTATEMENT. With respect to any Interest Drawing under the
Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Available Amount of such
Liquidity Facility shall be reinstated by an amount equal to the amount of such
Interest Drawing so reimbursed to the applicable Liquidity Provider but not to
exceed the Stated Amount for such Liquidity Facility; PROVIDED, HOWEVER, that
such Liquidity Facility shall not be so reinstated in part or in full at any
time if (x) both a Performing Note Deficiency exists and a Liquidity Event of
Default shall have occurred and be continuing with respect to the relevant
Liquidity Facility or (y) a Final Drawing shall have occurred with resect to
such Liquidity Facility. In the event that, with respect to any particular
Liquidity Facility, (i) funds are withdrawn from any Cash Collateral Account
pursuant to clause (i), (ii) or (iii) of Section 3.6(f) hereof or (ii) such
Liquidity Facility shall become a Downgraded Facility or a Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Maximum Available Commitment thereunder to zero, then funds received
by the Subordination Agent at any time other than (x) any time when a Liquidity
Event of Default shall have occurred and be continuing with respect to such
Liquidity Facility and a Performing Note Deficiency exists or (y) any time after
a Final Drawing shall have occurred with respect to such Liquidity Facility
shall be deposited in such Cash Collateral Account as and to the extent provided
in clause "THIRD" of Section 2.4(b), clause "THIRD" of Section 3.2 or clause
"FOURTH" of Section 3.3, as applicable, and applied in accordance with Section
3.6(f) hereof.
(h) REIMBURSEMENT. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) FINAL DRAWING. Upon receipt from a Liquidity Provider of a
Termination Notice with respect to any Liquidity Facility, the Subordination
Agent shall, not later than the date specified in such Termination Notice, in
accordance with and to the extent permitted by the terms of such Liquidity
Facility, request a drawing under such Liquidity Facility of all available and
undrawn amounts thereunder (a "FINAL DRAWING"). Amounts drawn pursuant to a
Final Drawing shall be maintained and invested in accordance with Section 3.6(f)
hereof.
(j) REDUCTION OF STATED AMOUNT. Promptly following each date on which
the Required Amount of the Liquidity Facility for a Class of Certificates is
reduced as a result of a distribution to the Certificateholders of such Class of
Certificates, the Subordination Agent shall, if any such Liquidity Facility
provides for reductions of the Stated Amount of such Liquidity Facility and if
such reductions are not automatic, request the Liquidity Provider for such Class
of Certificates to reduce such Stated Amount to an amount equal to the Required
Amount with respect to such Liquidity Facility (as calculated by the
Subordination Agent after giving effect to such payment). Each such request
shall be made in accordance with the provisions of the applicable Liquidity
Facility.
(k) RELATION TO SUBORDINATION PROVISIONS. Interest Drawings under the
Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in each
case, in respect of interest on the Certificates of any Class, will be
distributed to the Trustee for such Class of Certificates, notwithstanding
Sections 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 DIRECTIONS FROM THE CONTROLLING PARTY. (a) (i) Following
the occurrence and during the continuation of an Indenture Default under any
Indenture, the Controlling Party shall direct the Subordination Agent, which in
turn shall direct the Mortgagee under such Indenture, in the exercise of
remedies available to the holders of the Equipment Notes issued pursuant to such
Indenture, including, without limitation, the ability to vote all such Equipment
Notes in favor of Accelerating such Equipment Notes in accordance with the
provisions of such Indenture. Subject to the Owner Trustees' and the Owner
Participants' rights, if any, set forth in the Indentures to purchase the
Equipment Notes and the provisions of the next paragraph, if the Equipment Notes
issued pursuant to any Indenture have been Accelerated following an Indenture
Default with respect thereto, the Controlling Party may sell, assign, contract
to sell or otherwise dispose of and deliver all (but not less than all) of such
Equipment Notes to any Person at public or private sale, at any location at the
option of the Controlling Party, all upon such terms and conditions as it may
reasonably deem advisable in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights, if any, set forth in the Indentures to purchase the Equipment Notes, and
notwithstanding the foregoing, so long as any Certificates remain Outstanding,
during the period ending on the date which is nine months after the earlier of
(x) the Acceleration of the Equipment Notes issued pursuant to any Indenture or
(y) the occurrence of a Continental Bankruptcy Event, without the consent of
each Trustee, (A) no Aircraft subject to the Lien of such Indenture or such
Equipment Notes may be sold if the net proceeds from such sale would be less
than the Minimum Sale Price for such Aircraft or such Equipment Notes, and (B)
the amount and payment dates of rentals payable by Continental under the Lease
for such Aircraft may not be adjusted, if, as a result of such adjustment, the
discounted present value of all such rentals would be less than 75% of the
discounted present value of the rentals payable by Continental under such Lease
before giving effect to such adjustment, in each case, using the weighted
average interest rate of the Equipment Notes issued pursuant to such Indenture
as the discount rate.
(iii) At the request of the Controlling Party, the Subordination Agent
may from time to time during the continuance of an Indenture Default (and before
the occurrence of a Triggering Event) commission LTV Appraisals with respect to
the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note becomes a
Non-Performing Equipment Note, the Subordination Agent shall obtain LTV
Appraisals with respect to all of the Aircraft as soon as practicable and
additional LTV Appraisals on or prior to each anniversary of the date of such
initial LTV Appraisals; PROVIDED that, if the Controlling Party reasonably
objects to the appraised value of the Aircraft shown in any such LTV Appraisals,
the Controlling Party shall have the right to obtain or cause to be obtained
substitute LTV Appraisals (including any LTV Appraisals based upon physical
inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may reasonably
deem most effectual to complete the sale or other disposition of such Aircraft
or Equipment Notes. In addition, in lieu of any sale, assignment, contract to
sell or other disposition, the Controlling Party may maintain possession of such
Equipment Notes and continue to apply monies received in respect of such
Equipment Notes in accordance with Article III hereof. In addition, in lieu of
such sale, assignment, contract to sell or other disposition, or in lieu of such
maintenance of possession, the Controlling Party may, subject to the terms and
conditions of the related Indenture, instruct the Mortgagee under such Indenture
to foreclose on the Lien on the related Aircraft.
SECTION 4.2 REMEDIES CUMULATIVE. Each and every right, power and
remedy given to the Trustees, the Liquidity Providers, the Controlling Party or
the Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may, subject always to the terms and conditions
hereof, be exercised from time to time and as often and in such order as may be
deemed expedient by any Trustee, any Liquidity Provider, the Controlling Party
or the Subordination Agent, as appropriate, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by any Trustee, any Liquidity Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
SECTION 4.3 DISCONTINUANCE OF PROCEEDINGS. In case any party to this
Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.
SECTION 4.4 RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT TO BE
IMPAIRED. Anything in this Agreement to the contrary notwithstanding but subject
to each Trust Agreement, the right of any Certificateholder or any Liquidity
Provider, respectively, to receive payments hereunder (including pursuant to
Section 2.4, 3.2 or 3.3 hereof) when due, or to institute suit for the
enforcement of any such payment on or after the applicable Distribution Date,
shall not be impaired or affected without the consent of such Certificateholder
or such Liquidity Provider, respectively.
SECTION 4.5 UNDERTAKING FOR COSTS. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any Proceeding
against any Controlling Party or the Subordination Agent for any action taken or
omitted by it as Controlling Party or Subordination Agent, as the case may be, a
court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. The provisions of
this Section do not apply to a suit instituted by the Subordination Agent, a
Liquidity Provider or a Trustee or a suit by Certificateholders holding more
than 10% of the original principal amount of any Class of Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1 NOTICE OF INDENTURE DEFAULT OR TRIGGERING EVENT. (a) In
the event the Subordination Agent shall have actual knowledge of the occurrence
of an Indenture Default or a Triggering Event, as promptly as practicable, and
in any event within 10 days after obtaining knowledge thereof, the Subordination
Agent shall transmit by mail or courier to the Rating Agencies, the Liquidity
Providers and the Trustees notice of such Indenture Default or Triggering Event,
unless such Indenture Default or Triggering Event shall have been cured or
waived. For all purposes of this Agreement, in the absence of actual knowledge
on the part of a Responsible Officer, the Subordination Agent shall not be
deemed to have knowledge of any Indenture Default or Triggering Event unless
notified in writing by one or more Trustees, one or more Liquidity Providers or
one or more Certificateholders.
(b) OTHER NOTICES. The Subordination Agent will furnish to each
Liquidity Provider and Trustee, promptly upon receipt thereof, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Subordination Agent as
registered holder of the Equipment Notes or otherwise in its capacity as
Subordination Agent to the extent the same shall not have been otherwise
directly distributed to such Liquidity Provider or Trustee, as applicable,
pursuant to the express provision of any other Operative Agreement.
SECTION 5.2 INDEMNIFICATION. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the manner
reasonably satisfactory to the Subordination Agent) against any liability, cost
or expense (including counsel fees and expenses) which may be incurred in
connection therewith. The Subordination Agent shall not be under any obligation
to take any action under this Agreement and nothing contained in this Agreement
shall require the Subordination Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. The
Subordination Agent shall not be required to take any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof, nor shall any
other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or is
otherwise contrary to law.
SECTION 5.3 NO DUTIES EXCEPT AS SPECIFIED IN INTERCREDITOR AGREEMENT.
The Subordination Agent shall not have any duty or obligation to take or refrain
from taking any action under, or in connection with, this Agreement, except as
expressly provided by the terms of this Agreement; and no implied duties or
obligations shall be read into this Agreement against the Subordination Agent.
The Subordination Agent agrees that it will, in its individual capacity and at
its own cost and expense (but without any right of indemnity in respect of any
such cost or expense under Section 7.1 hereof), promptly take such action as may
be necessary to duly discharge all Liens on any of the Trust Accounts or any
monies deposited therein which result from claims against it in its individual
capacity not related to its activities hereunder or any other Operative
Agreement.
SECTION 5.4 NOTICE FROM THE LIQUIDITY PROVIDERS AND TRUSTEES. If any
Liquidity Provider or Trustee has notice of an Indenture Default or a Triggering
Event, such Person shall promptly give notice thereof to all other Liquidity
Providers and Trustees and to the Subordination Agent, PROVIDED, HOWEVER, that
no such Person shall have any liability hereunder as a result of its failure to
deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 AUTHORIZATION; ACCEPTANCE OF TRUSTS AND DUTIES. Each of
the Class A Trustee, Class B Trustee and Class C Trustee hereby designates and
appoints the Subordination Agent as the agent and trustee of such Trustee under
the applicable Liquidity Facility and authorizes the Subordination Agent to
enter into the applicable Liquidity Facility as agent and trustee for such
Trustee. Each of the Liquidity Providers and the Trustees hereby designates and
appoints the Subordination Agent as the Subordination Agent under this
Agreement. WTC hereby accepts the duties hereby created and applicable to it as
the Subordination Agent and agrees to perform the same but only upon the terms
of this Agreement and agrees to receive and disburse all monies received by it
in accordance with the terms hereof. The Subordination Agent shall not be
answerable or accountable under any circumstances, except (a) for its own
willful misconduct or gross negligence (or ordinary negligence in the handling
of funds), (b) as provided in Section 2.2 hereof and (c) for liabilities that
may result from the material inaccuracy of any representation or warranty of the
Subordination Agent made in its individual capacity in any Operative Agreement.
The Subordination Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Subordination Agent, unless it is
proved that the Subordination Agent was negligent in ascertaining the pertinent
facts.
SECTION 6.2 ABSENCE OF DUTIES. The Subordination Agent shall have no
duty to see to any recording or filing of this Agreement or any other document,
or to see to the maintenance of any such recording or filing.
SECTION 6.3 NO REPRESENTATIONS OR WARRANTIES AS TO DOCUMENTS. The
Subordination Agent in its individual capacity does not make nor shall be deemed
to have made any representation or warranty as to the validity, legality or
enforceability of this Agreement or any other Operative Agreement or as to the
correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
SECTION 6.4 NO SEGREGATION OF MONIES; NO INTEREST. Any monies paid to
or retained by the Subordination Agent pursuant to any provision hereof and not
then required to be distributed to any Trustee or any Liquidity Provider as
provided in Articles II and III hereof or deposited into one or more Trust
Accounts need not be segregated in any manner except to the extent required by
such Articles II and III and by law, and the Subordination Agent shall not
(except as otherwise provided in Section 2.2 hereof) be liable for any interest
thereon; PROVIDED, HOWEVER, that any payments received or applied hereunder by
the Subordination Agent shall be accounted for by the Subordination Agent so
that any portion thereof paid or applied pursuant hereto shall be identifiable
as to the source thereof.
SECTION 6.5 RELIANCE; AGENTS; ADVICE OF COUNSEL. The Subordination
Agent shall not incur liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers or the Trustees the manner of ascertainment of which is not
specifically described herein, the Subordination Agent may for all purposes
hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider or Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Subordination Agent shall assume, and shall be
fully protected in assuming, that each of the Liquidity Providers and each of
the Trustees are authorized to enter into this Agreement and to take all action
to be taken by them pursuant to the provisions hereof, and shall not inquire
into the authorization of each of the Liquidity Providers and each of the
Trustees with respect thereto. In the administration of the trusts hereunder,
the Subordination Agent may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents or attorneys
and may consult with counsel, accountants and other skilled persons to be
selected and retained by it, and the Subordination Agent shall not be liable for
the acts or omissions of any agent appointed with due care or for anything done,
suffered or omitted in good faith by it in accordance with the advice or written
opinion of any such counsel, accountants or other skilled persons.
SECTION 6.6 CAPACITY IN WHICH ACTING. The Subordination Agent acts
hereunder solely as agent and trustee herein and not in its individual capacity,
except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7 COMPENSATION. The Subordination Agent shall be entitled to
reasonable compensation, including expenses and disbursements, for all services
rendered hereunder and shall have a priority claim to the extent set forth in
Article III hereof on all monies collected hereunder for the payment of such
compensation, to the extent that such compensation shall not be paid by others.
The Subordination Agent agrees that it shall have no right against any Trustee
or Liquidity Provider for any fee as compensation for its services as agent
under this Agreement. The provisions of this Section 6.7 shall survive the
termination of this Agreement.
SECTION 6.8 MAY BECOME CERTIFICATEHOLDER. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all rights
and benefits of a Certificateholder to the same extent as if it were not the
institution acting as the Subordination Agent.
SECTION 6.9 SUBORDINATION AGENT REQUIRED; ELIGIBILITY. There shall at
all times be a Subordination Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $100,000,000 (or the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States of America, any
State thereof or of the District of Columbia and having a combined capital and
surplus of at least $100,000,000), if there is such an institution willing and
able to perform the duties of the Subordination Agent hereunder upon reasonable
or customary terms. Such corporation shall be a citizen of the United States and
shall be authorized under the laws of the United States or any State thereof or
of the District of Columbia to exercise corporate trust powers and shall be
subject to supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Subordination Agent shall cease to be eligible in
accordance with the provisions of this Section, the Subordination Agent shall
resign immediately in the manner and with the effect specified in Section 8.1.
SECTION 6.10 MONEY TO BE HELD IN TRUST. All Equipment Notes, monies
and other property deposited with or held by the Subordination Agent pursuant to
this Agreement shall be held in trust for the benefit of the parties entitled to
such Equipment Notes, monies and other property. All such Equipment Notes,
monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 SCOPE OF INDEMNIFICATION. The Subordination Agent shall be
indemnified hereunder to the extent and in the manner described in Section 9.1
of the Participation Agreements. The indemnities contained in such Section 9.1
shall survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 REPLACEMENT OF SUBORDINATION AGENT; APPOINTMENT OF
SUCCESSOR. The Subordination Agent may resign at any time by so notifying the
Trustees and the Liquidity Providers. The Controlling Party (or, prior to the
occurrence of a Triggering Event, the Person who would be the Controlling Party
if a Triggering Event had occurred) may remove the Subordination Agent for cause
by so notifying the Subordination Agent and may appoint a successor
Subordination Agent. The Controlling Party (or, prior to the occurrence of a
Triggering Event, the Person who would be the Controlling Party if a Triggering
Event had occurred) shall remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9 hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party (or, prior to the occurrence of a Triggering
Event, the Person who would be the Controlling Party if a Triggering Event had
occurred) shall promptly appoint a successor Subordination Agent.
A successor Subordination Agent shall deliver (x) a written acceptance
of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility to each party hereto, upon which the
resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The successor
Subordination Agent shall mail a notice of its succession to the Liquidity
Providers and the Trustees. The retiring Subordination Agent shall promptly
transfer its rights under each of the Liquidity Facilities and all of the
property held by it as Subordination Agent to the successor Subordination Agent.
If a successor Subordination Agent does not take office within 60 days
after the retiring Subordination Agent resigns or is removed, the retiring
Subordination Agent or one or more of the Trustees may petition any court of
competent jurisdiction for the appointment of a successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof (to
the extent applicable), one or more of the Trustees or one or more of the
Liquidity Providers may petition any court of competent jurisdiction for the
removal of the Subordination Agent and the appointment of a successor
Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 AMENDMENTS, WAIVERS, ETC. (a) This Agreement may not be
supplemented, amended or modified without the consent of each Trustee (acting,
except in the case of any amendment pursuant to Section 3.6(e)(v)(y) hereof and
the last sentence of this Section 9.1(a), with the consent of holders of
Certificates of the related Class evidencing interests in the related Trust
aggregating not less than a majority in interest in such Trust or as otherwise
authorized pursuant to the relevant Trust Agreement), the Subordination Agent
and each Liquidity Provider; provided, however, that this Agreement may be
supplemented, amended or modified without the consent of any Trustee if such
supplement, modification or amendment cures an ambiguity or inconsistency or
does not materially adversely affect such Trustee or the holders of the related
Class of Certificates; PROVIDED FURTHER, HOWEVER, that if such supplement,
amendment or modification would (x) directly or indirectly modify or supersede,
or otherwise conflict with, Section 2.2(b), 3.6(e) or 3.6(f) (other than the
last sentence thereof), the last sentence of this Section 9.1(a) or the second
sentence of Section 10.6 (collectively, together with this proviso, the
"CONTINENTAL PROVISIONS") or (y) otherwise adversely affect the interests of a
potential Replacement Liquidity Provider or of Continental with respect to its
ability to replace any Liquidity Facility or with respect to its payment
obligations under any Participation Agreement or Lease, then such supplement,
amendment or modification shall not be effective without the additional written
consent of Continental. Notwithstanding the foregoing, without the consent of
each Certificateholder and each Liquidity Provider, no supplement, amendment or
modification of this Agreement may (i) reduce the percentage of the interest in
any Trust evidenced by the Certificates issued by such Trust necessary to
consent to modify or amend any provision of this Agreement or to waive
compliance therewith or (ii) modify Section 2.4, 3.2 or 3.3 hereof, relating to
the distribution of monies received by the Subordination Agent hereunder from
the Equipment Notes or pursuant to the Liquidity Facilities. Nothing contained
in this Section shall require the consent of a Trustee at any time following the
payment of Final Distributions with respect to the related Class of
Certificates. If the Replacement Liquidity Facility for any Liquidity Facility
in accordance with Section 3.6(e) hereof is to be comprised of more than one
instrument as contemplated by the definition of the term "Replacement Liquidity
Facility", then each of the parties hereto agrees to amend this Agreement to
incorporate appropriate mechanics for multiple Liquidity Facilities for an
individual Trust.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Notes, receives a request for its consent to any
amendment, modification or waiver under such Equipment Notes, the Indenture
pursuant to which such Equipment Notes were issued, or the related Lease,
Participation Agreement or other related document, (i) if no Indenture Default
shall have occurred and be continuing with respect to such Indenture, the
Subordination Agent shall request directions with respect to each Series of such
Equipment Notes from the Trustee of the Trust which holds such Equipment Notes
and shall vote or consent in accordance with the directions of such Trustee and
(ii) if any Indenture Default (which has not been cured by the applicable Owner
Trustee or the applicable Owner Participant, if applicable, pursuant to Section
4.03 of such Indenture) shall have occurred and be continuing with respect to
such Indenture, the Subordination Agent will exercise its voting rights as
directed by the Controlling Party, subject to Sections 4.1 and 4.4 hereof;
PROVIDED that no such amendment, modification or waiver shall, without the
consent of each Liquidity Provider, reduce the amount of rent, supplemental rent
or stipulated loss values payable by Continental under any Lease.
SECTION 9.2 SUBORDINATION AGENT PROTECTED. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed pursuant to the terms of Section 9.1 affects
any right, duty, immunity or indemnity with respect to it under this Agreement
or any Liquidity Facility, the Subordination Agent may in its discretion decline
to execute such document.
SECTION 9.3 EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of
any amendment, consent or supplement hereto pursuant to the provisions hereof,
this Agreement shall be and be deemed to be and shall be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Agreement of the parties hereto
and beneficiaries hereof shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental agreement shall be and be
deemed to be and shall be part of the terms and conditions of this Agreement for
any and all purposes. In executing or accepting any supplemental agreement
permitted by this Article IX, the Subordination Agent shall be entitled to
receive, and shall be fully protected in relying upon, an opinion of counsel
stating that the execution of such supplemental agreement is authorized or
permitted by this Agreement.
SECTION 9.4 NOTICE TO RATING AGENCIES. Promptly following its receipt
of each amendment, consent, modification, supplement or waiver contemplated by
this Article IX, the Subordination Agent shall send a copy thereof to each
Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 TERMINATION OF INTERCREDITOR AGREEMENT. Following payment
of Final Distributions with respect to each Class of Certificates and the
payment in full of all Liquidity Obligations to the Liquidity Providers and
PROVIDED that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers and the Subordination
Agent hereunder or under the Trust Agreements, and that the commitment of the
Liquidity Providers under the Liquidity Facilities shall have expired or been
terminated, this Agreement and the trusts created hereby shall terminate and
this Agreement shall be of no further force or effect. Except as aforesaid or
otherwise provided, this Agreement and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.
SECTION 10.2 INTERCREDITOR AGREEMENT FOR BENEFIT OF TRUSTEES,
LIQUIDITY PROVIDERS AND SUBORDINATION AGENT. Subject to the second sentence of
Section 10.6 and the provisions of Section 4.4, nothing in this Agreement,
whether express or implied, shall be construed to give to any Person other than
the Trustees, the Liquidity Providers and the Subordination Agent any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.3 NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed to at its office at:
WILMINGTON TRUST COMPANY
One Rodney Square
1100 N. Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Telecopy: (302) 651-8882
(ii) if to any Trustee, addressed to it at its office at:
WILMINGTON TRUST COMPANY
One Rodney Square
1100 N. Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Telecopy: (302) 651-8882
(iii) if to any Liquidity Provider, addressed to it at its office at:
ABN AMRO Bank N.V.
Aerospace Department
135 South LaSalle Street, #820
Chicago, IL 60674-9135
Attention: Claudia Heldring, V.P.
Telephone: (312) 904-5031
Telecopy: (312) 606-8428
with a copy to:
ABN AMRO Bank N.V.
135 South LaSalle Street, #625
Chicago, IL 60674-9135
Attention: Loan Operations
Telephone: (312) 904-2961
Telecopy: (312) 606-6893
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such notice is
received. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this
Agreement.
SECTION 10.4 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.5 NO ORAL MODIFICATIONS OR CONTINUING WAIVERS. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other Person
against whom enforcement of the change, waiver, discharge or termination is
sought and any other party or other Person whose consent is required pursuant to
this Agreement and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
SECTION 10.6 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
parties hereto and the successors and assigns of each, all as herein provided.
In addition, the Continental Provisions shall inure to the benefit of
Continental and its successors and assigns, and (without limitation of the
foregoing) Continental is hereby constituted, and agreed to be, an express third
party beneficiary of the Continental Provisions.
SECTION 10.7 HEADINGS. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8 COUNTERPART FORM. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9 SUBORDINATION. (a) As between the Liquidity Providers, on
the one hand, and the Trustees and the Certificateholders, on the other hand,
this Agreement shall be a subordination agreement for purposes of Section 510 of
the United States Bankruptcy Code, as amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if prior to the
payment in full to the Liquidity Providers of all Liquidity Obligations then due
and payable, any party hereto shall have received any payment or distribution in
respect of Equipment Notes or any other amount under the Indentures or other
Operative Agreements which, had the subordination provisions of this Agreement
been properly applied to such payment, distribution or other amount, would not
have been distributed to such Person, then such payment, distribution or other
amount shall be received and held in trust by such Person and paid over or
delivered to the Subordination Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination Agent
receives any payment in respect of any obligations owing hereunder (or, in the
case of the Liquidity Providers, in respect of the Liquidity Obligations), which
is subsequently invalidated, declared preferential, set aside and/or required to
be repaid to a trustee, receiver or other party, then, to the extent of such
payment, such obligations (or, in the case of the Liquidity Providers, such
Liquidity Obligations) intended to be satisfied shall be revived and continue in
full force and effect as if such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm that
the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall apply in all
circumstances, notwithstanding the fact that the obligations owed to the
Trustees and the holders of Certificates are secured by certain assets and the
Liquidity Obligations may not be so secured. The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations due to their status as secured
creditors in any bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent may take any
of the following actions without impairing its rights under this Agreement:
(i) obtain a Lien on any property to secure any amounts owing to
it hereunder, including, in the case of the Liquidity Providers, the
Liquidity Obligations,
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder, including, in
the case of the Liquidity Providers, any of the Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any amounts
owing to it hereunder, including, in the case of the Liquidity Providers,
any of the Liquidity Obligations, or release or compromise any obligation
of any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated
party or a surety under applicable law;
PROVIDED, HOWEVER, that the taking of any such actions by any of the Trustees,
the Liquidity Providers or the Subordination Agent shall not prejudice the
rights or adversely affect the obligations of any other party under this
Agreement.
SECTION 10.10 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 10.11 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF IMMUNITY. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement, or
for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have been
notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED, including,
without limitation, contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each of the parties warrants and
represents that it has reviewed this waiver with its legal counsel, and that it
knowingly and voluntarily waives its jury trial rights following consultation
with such legal counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States of America or of any State
and waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgment entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any similar
successor legislation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written, and acknowledge that this Agreement has
been made and delivered in The City of New York, and this Agreement has become
effective only upon such execution and delivery.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Trustee for each of the
Trusts
By______________________________________
Name:
Title:
SABN AMRO BANK N.V., acting through its
Chicago branch, as Class A Liquidity
Provider, Class B Liquidity Provider
and Class C Liquidity Provider
By______________________________________
Name:
Title:
By______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity except as
expressly set forth herein but solely
as Subordination Agent and trustee
By______________________________________
Name:
Title:
Schedule I to
INTERCREDITOR AGREEMENT
-----------------------
AIRCRAFT TYPE REGISTRATION NUMBER
------------- -------------------
Embraer EMB-145 N14925
Embraer EMB-145 N15926
Embraer EMB-145 N16927
Embraer EMB-145 N17928
Embraer EMB-145 N13929
Embraer EMB-145 N14930
Embraer EMB-145 N14931
Embraer EMB-145 N15932
Embraer EMB-145 N14933
================================================================================
TRUST AGREEMENT ____
Dated as of September 25, 1997
Between
ICX CORPORATION
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION
One Embraer Model EMB-145 Aircraft
Bearing Manufacturer's Serial No. 145.___
and U.S. Registration No. N_____
with Two Allison Model AE3007A Engines
Bearing Engine Manufacturer's Serial Nos. _______ and _______
================================================================================
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS................................................ 1
SECTION 2. DECLARATION OF TRUST....................................... 1
SECTION 3. AUTHORIZATION; CONDITIONS PRECEDENT........................ 1
3.1 Authorization........................................ 1
3.2 Conditions Precedent................................. 2
SECTION 4. RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST ESTATE............................... 3
4.1 Payments from Trust Estate Only...................... 3
4.2 Distribution of Payments............................. 3
4.2.1 Payments to Mortgagee........................ 3
4.2.2 Payments to Owner Trustee, Other Parties..... 3
4.2.3 Certain Distributions to Owner Participant... 4
4.2.4 Excluded Payments............................ 4
4.3 Method of Payments................................... 4
SECTION 5. DUTIES OF OWNER TRUSTEE.................................... 4
5.1 Notice of Event of Default........................... 4
5.2 Action upon Instructions............................. 5
5.3 Limitations on Duties................................ 5
5.4 No Duties except as Specified; No Action except as
Specified............................................ 6
5.4.1 No Duties except as Specified................ 6
5.4.2 No Action except as Specified................ 6
5.5 Satisfaction of Conditions Precedent................. 6
5.6 Fixed Investment Trust............................... 7
SECTION 6. OWNER TRUSTEE.............................................. 7
6.1 Acceptance of Trusts and Duties...................... 7
6.2 Absence of Certain Duties............................ 7
6.3 No Representations or Warranties as to Certain
Matters.............................................. 8
6.4 No Segregation of Monies; Interest................... 9
6.5 Reliance upon Certificates, Counsel and Agents....... 9
6.6 Not Acting in Individual Capacity.................... 10
TABLE OF CONTENTS
(Continued)
PAGE
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6.7 Fees; Compensation................................... 10
6.8 Tax Returns.......................................... 10
SECTION 7. INDEMNIFICATION OF FIRST SECURITY BY
OWNER PARTICIPANT.......................................... 11
SECTION 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST................... 12
8.1 Transfer of Interest................................. 12
SECTION 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES...................... 12
9.1 Resignation of Owner Trustee; Appointment
of Successor......................................... 12
9.1.1 Resignation or Removal....................... 12
9.1.2 Execution and Delivery of Documents, Etc..... 13
9.1.3 Qualifications............................... 13
9.1.4 Merger, Etc.................................. 13
9.2 Co-Trustees and Separate Trustees.................... 14
SECTION 10. SUPPLEMENTS AND AMENDMENTS TO TRUST
AGREEMENT AND OTHER DOCUMENTS.............................. 15
10.1 Supplements and Amendments and Delivery
Thereof.............................................. 15
10.1.1 Supplements and Amendments................... 15
10.1.2 Delivery of Amendments and Supplements
to Certain Parties........................... 16
10.2 Discretion as to Execution of Documents.............. 16
10.3 Absence of Requirements as to Form................... 16
10.4 Distribution of Documents............................ 16
10.5 No Request Needed as to Lease Supplement and
Trust Indenture Supplement........................... 16
SECTION 11. MISCELLANEOUS.............................................. 16
11.1 Termination of Trust Agreement....................... 16
11.2 Termination at Option of the Owner Participant....... 17
11.3 Owner Participant Has No Legal Title in Trust
Estate............................................... 17
11.4 Assignment, Sale, etc. of Aircraft................... 17
11.5 Trust Agreement for Benefit of Certain Parties Only.. 18
11.6 Citizenship of Owner Participant..................... 18
TABLE OF CONTENTS
(Continued)
PAGE
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11.7 Notices............................................... 18
11.8 Severability.......................................... 18
11.9 Waivers, Etc.......................................... 19
11.10 Counterparts.......................................... 19
11.11 Binding Effect, Etc................................... 19
11.12 Headings; References.................................. 19
11.13 Governing Law......................................... 19
TRUST AGREEMENT ____
This TRUST AGREEMENT ____, dated as of September 25, 1997, between ICX
CORPORATION, an Ohio corporation ("Owner Participant"), and FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association (in its individual
capacity, "First Security" and otherwise not in its individual capacity but
solely as trustee hereunder, "Owner Trustee").
W I T N E S S E T H:
- - - - - - - - - -
SECTION 1. DEFINITIONS
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in Annex A to the Lease.
SECTION 2. DECLARATION OF TRUST
First Security hereby declares that it will hold the Trust Estate as
Owner Trustee upon the trusts hereinafter set forth for the use and benefit of
Owner Participant, subject, however, to the provisions of and the Lien created
by the Trust Indenture and to the provisions of the Lease and the Participation
Agreement.
SECTION 3. AUTHORIZATION; CONDITIONS PRECEDENT
3.1 Authorization
In respect of the Aircraft, Owner Participant hereby authorizes and
directs Owner Trustee to, and Owner Trustee agrees for the benefit of Owner
Participant that it will, on and after the Delivery Date, subject (except with
respect to Section 3.1(a)) to due compliance with the terms of Section 3.2:
(a) execute and deliver the Participation Agreement, the Trust
Indenture, the Lease and the other Owner Trustee Agreements (in the respective
forms in which they are delivered from time to time by Owner Participant to
Owner Trustee);
(b) subject to the terms of this Trust Agreement, exercise (i) its
rights and perform its duties under the Participation Agreement, (ii) the rights
and perform the duties of Lessor under the Lease and (iii) its rights and
perform its duties under the Trust Indenture and the other Owner Trustee
Agreements;
(c) execute, issue and deliver to Mortgagee for authentication and
further delivery to the Subordination Agent the Equipment Notes in the amount
and as provided in Section 2 of the Participation Agreement;
(d) purchase the Aircraft pursuant to the Participation Agreement;
(e) accept from Existing Lessor the delivery of the Aircraft Bill of
Sale, the FAA Bill of Sale and the invoice with respect to such Aircraft;
(f) effect the registration of the Aircraft with the FAA in the name
of Owner Trustee by filing or causing to be filed with the FAA: (i) the FAA Bill
of Sale; (ii) an Aircraft Registration Application in the name of Owner Trustee
(including, without limitation, an affidavit from Owner Trustee in compliance
with the provisions of Section 47.7(c)(2) of the FAA Regulations); and (iii)
this Trust Agreement;
(g) execute and deliver the Financing Statements referred to in
Section 5.1.2 (xxiv) of the Participation Agreement, together with all other
agreements, documents and instruments referred to in Section 5 of the
Participation Agreement to which Owner Trustee is to be a party;
(h) make payment of Lessor's Cost for the Aircraft from the aggregate
amount of the Commitments for the Aircraft of Owner Participant and Loan
Participant, to the extent received by Owner Trustee, in the manner provided in
the Participation Agreement;
(i) execute and deliver Lease Supplement No. 1 covering the Aircraft;
(j) execute and deliver a Trust Indenture Supplement covering the
Aircraft; and
(k) execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the direction of
Owner Participant, as Owner Participant may deem necessary or advisable in
connection with the transactions contemplated by this Trust Agreement and the
other Operative Agreements.
3.2 Conditions Precedent
The rights and obligations of Owner Trustee to take the actions
required by Section 3.1 shall be subject to the following conditions precedent:
(a) Owner Trustee shall have received the notice described in Section
5.1.1 of the Participation Agreement, when and as required thereby, or shall
have been deemed to have waived such notice in accordance with Section 5.1.1 of
the Participation Agreement;
(b) Each Participant shall have made the full amount of its Commitment
specified in Section 2.1 of the Participation Agreement available to Owner
Trustee, in immediately available funds, in accordance with Sections 2 and 4 of
the Participation Agreement; and
(c) Owner Participant shall have notified Owner Trustee that the terms
and conditions of Section 5 of the Participation Agreement, insofar as they
relate to conditions precedent to performance by Owner Participant of its
obligations thereunder, have been either fulfilled to the satisfaction of, or
waived by, Owner Participant. Owner Participant shall, by instructing Owner
Trustee to release the full amount of its Commitment then held by Owner Trustee
as provided in Section 2 of the Participation Agreement, be deemed to have found
satisfactory to it, or waived, all such conditions precedent.
SECTION 4. RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE
TRUST ESTATE
4.1 Payments from Trust Estate Only
Except as provided in Section 7, all payments to be made by Owner
Trustee under this Trust Agreement shall be made only from (a) in the case of
funds made available in accordance with Section 4 of the Participation
Agreement, the Commitments (except as otherwise provided in Section 14 of the
Participation Agreement) and (b) in the case of all other payments, the income
from and proceeds of the Trust Estate to the extent that Owner Trustee shall
have received sufficient income or proceeds from the Trust Estate to make such
payments. Owner Participant agrees that it will look solely (y) in the case of
funds made available in accordance with Section 4 of the Participation
Agreement, to the Commitments and any income therefrom (except as otherwise
provided in Section 14 of the Participation Agreement) and (z) in the case of
all other payments, to the income from and proceeds of the Trust Estate to the
extent available for distribution to Owner Participant as provided in this Trust
Agreement. Except as provided in Section 7, Owner Participant agrees that First
Security is neither personally liable to Owner Participant for any amounts
payable nor subject to any other liability under this Trust Agreement.
4.2 Distribution of Payments
4.2.1 Payments to Mortgagee
Until the Trust Indenture shall have been discharged pursuant to
Section 10.01 thereof, all Rent, insurance proceeds and requisition or other
payments of any kind included in the Trust Estate (other than Excluded Payments)
payable to Owner Trustee shall be payable directly to Mortgagee (and, if any of
the same are received by Owner Trustee, shall upon receipt be paid over to
Mortgagee without deduction, set-off or adjustment of any kind) for distribution
in accordance with the provisions of Article III of the Trust Indenture;
PROVIDED, that any payments received by Owner Trustee from (a) Airframe
Manufacturer with respect to Owner Trustee's fees and disbursements or (b) Owner
Participant pursuant to Section 7 shall not be paid over to Mortgagee but shall
be retained by Owner Trustee and applied toward the purpose for which such
payments were made.
4.2.2 Payments to Owner Trustee, Other Parties
After the Trust Indenture shall have been discharged pursuant to
Section 10.01 thereof, any payment of the type referred to in Section 4.2.1
(other than Excluded Payments) received by Owner Trustee, any payment received
from Mortgagee (other than Excluded Payments) and any other amount received as
part of the Trust Estate and for the application or distribution of which no
provision is made in this Trust Agreement shall be distributed forthwith upon
receipt by Owner Trustee in the following order of priority: FIRST, so much of
such payment as shall be required to reimburse Owner Trustee for any expenses
not otherwise reimbursed as to which Owner Trustee is entitled to be so
reimbursed pursuant to the provisions hereof shall be retained by Owner Trustee;
SECOND, the amount set forth in Schedule 1 hereto, if any, on a Payment Date
shall be paid to Owner Participant; THIRD, the amount set forth in Schedule 2
hereto shall be paid to Equity Guarantor; and FOURTH, the balance, if any, shall
be paid to Owner Participant.
4.2.3 Certain Distributions to Owner Participant
All amounts from time to time distributable by Mortgagee to Owner
Participant pursuant to the Trust Indenture shall, if paid to Owner Trustee, be
distributed by Owner Trustee to Owner Participant in accordance with the
provisions of Article III of the Trust Indenture; PROVIDED, that any payments
received by Owner Trustee from (a) Lessee with respect to Owner Trustee's fees
and disbursements or (b) Owner Participant pursuant to Section 7 shall not be
paid over to Owner Participant but shall be retained by Owner Trustee and
applied toward the purpose for which such payments were made.
4.2.4 Excluded Payments
Any Excluded Payments received by Owner Trustee shall be paid by Owner
Trustee to the Person to whom such Excluded Payments are payable under the
provisions of the Participation Agreement, the Tax Indemnity Agreement or the
Lease.
4.3 Method of Payments
Owner Trustee shall make distributions or cause distributions to be
made to Owner Participant pursuant to this Section 4 by transferring the amount
to be distributed by wire transfer in immediately available funds on the day
received (or on the next succeeding Business Day if the funds to be so
distributed shall not have been received by Owner Trustee by 12:00 noon, New
York City time, and which funds Owner Trustee shall not have been reasonably
able to distribute to Owner Participant on the day received) to Owner
Participant's account set forth in Schedule 1 to the Participation Agreement or
to such other account or accounts of Owner Participant as Owner Participant may
designate from time to time in writing to Owner Trustee; PROVIDED, that Owner
Trustee shall use reasonable efforts to invest overnight, in investments that
would be permitted under Section 4.4 of the Lease, all funds received by it at
or later than 12:00 noon, New York City time, and which funds Owner Trustee
shall not have been reasonably able to distribute to Owner Participant on the
day received).
SECTION 5. DUTIES OF OWNER TRUSTEE
5.1 Notice of Event of Default
(a) If Owner Trustee shall have knowledge of a Lease Default or a
Lease Event of Default or an Indenture Default or an Indenture Event of Default,
Owner Trustee shall give to Owner Participant, Mortgagee, Lessee and Equity
Guarantor prompt telephonic or telex notice thereof followed by prompt
confirmation thereof by certified mail, postage prepaid, PROVIDED, that (i) in
the case of an event which with the passage of time would constitute an
Indenture Event of Default of the type referred to in paragraph (c) or (e) of
Section 4.02 of the Trust Indenture, such notice shall in no event be furnished
later than ten days after Owner Trustee shall first have knowledge of such event
and (ii) in the case of a misrepresentation by Owner Trustee which with the
passage of time would constitute an Indenture Event of Default of the type
referred to in paragraph (d) of Section 4.02 of the Trust Indenture, such notice
shall in no event be furnished later than ten days after Owner Trustee shall
first have knowledge of such event.
(b) Subject to the terms of Section 5.3, Owner Trustee shall take such
action or shall refrain from taking such action, not inconsistent with the
provisions of the Trust Indenture, with respect to such Lease Default, Lease
Event of Default, Indenture Default or Indenture Event of Default or other event
as Owner Trustee shall be directed in writing by Owner Participant. For all
purposes of this Trust Agreement, the Lease and the other Operative Agreements,
in the absence of Actual Knowledge of Owner Trustee, Owner Trustee shall not be
deemed to have knowledge of a Lease Default, Lease Event of Default, Indenture
Default or Indenture Event of Default unless notified in writing by Mortgagee,
Owner Participant or Lessee.
5.2 Action upon Instructions
Subject to the terms of Sections 5.1 and 5.3, upon the written
instructions at any time and from time to time of Owner Participant, Owner
Trustee will take such of the following actions, not inconsistent with the
provisions of the Lease and the Trust Indenture, as may be specified in such
instructions: (a) give such notice or direction or exercise such right, remedy
or power under this Trust Agreement or any of the other Owner Trustee Agreements
or in respect of all or any part of the Trust Estate, or take such other action,
as shall be specified in such instructions (including entering into such
agreements and instruments as shall be necessary under Section 10); (b) take
such action to preserve or protect the Trust Estate (including the discharge of
Liens) as may be specified in such instructions; (c) approve as satisfactory to
it all matters required by the terms of the Lease or the other Operative
Agreements to be satisfactory to Owner Trustee, it being understood that without
written instructions of Owner Participant, Owner Trustee shall not approve any
such matter as satisfactory to it; (d) subject to the rights of Lessee under the
Operative Agreements, after the expiration or earlier termination of the Lease,
convey all of Owner Trustee's right, title and interest in and to the Aircraft
for such amount, on such terms and to such purchaser or purchasers as shall be
designated in such instructions, or retain, lease or otherwise dispose of, or
from time to time take such other action with respect to, the Aircraft on such
terms as shall be designated in such instructions; and (e) take or refrain from
taking such other action or actions as may be specified in such instructions.
5.3 Limitations on Duties
Owner Trustee shall not be required to take any action under Section
5.1 (other than the giving of the notices referred to therein) or 5.2 if Owner
Trustee shall reasonably believe such action is not adequately indemnified by
Owner Participant under Section 7, unless Lessee or Owner Participant agrees to
furnish such additional indemnity as shall reasonably be required, in manner and
form satisfactory to Owner Trustee, and, in addition to the extent not otherwise
paid pursuant to the provisions of the Lease or of the Participation Agreement,
to pay the reasonable compensation of Owner Trustee for the services performed
or to be performed by it pursuant to such direction and any reasonable fees and
disbursements of counsel or agents employed by Owner Trustee in connection
therewith. Owner Trustee shall not be required to take any action under Section
5.1 or 5.2 (other than the giving of the notices referred to therein) if Owner
Trustee shall have been advised by counsel that such action is contrary to the
terms of any of the Owner Trustee Agreements or is otherwise contrary to Law and
Owner Trustee has delivered to Owner Participant written notice of the basis for
its refusal to act.
5.4 No Duties except as Specified; No Action except as Specified
5.4.1 No Duties except as Specified
Owner Trustee shall not have any duty or obligation to manage,
control, use, sell, dispose of or otherwise deal with the Aircraft or any other
part of the Trust Estate or to otherwise take or refrain from taking any action
under, or in connection with, any of the Owner Trustee Agreements, except as
expressly required by the terms of any of the Owner Trustee Agreements, or (to
the extent not inconsistent with the provisions of the Trust Indenture) as
expressly provided by the terms hereof or in a written instruction from Owner
Participant received pursuant to the terms of Section 5.1 or 5.2, and no implied
duties or obligations shall be read into this Trust Agreement against Owner
Trustee. First Security agrees that it will, in its individual capacity and at
its own cost or expense (but without any right of indemnity in respect of any
such cost or expense hereunder or under the Participation Agreement), promptly
take such action as may be necessary to duly discharge and satisfy in full all
Lessor Liens attributable to it in its individual capacity which it is required
to discharge pursuant to Section 7.3.1 of the Participation Agreement and
otherwise comply with the terms of said Section binding upon it.
5.4.2 No Action except as Specified
Owner Trustee shall have no power, right or authority to, and agrees
that it will not, manage, control, use, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Estate except (a) as expressly
required by the terms of any of the Owner Trustee Agreements, (b) as expressly
provided by the terms hereof or (c) as expressly provided in written
instructions from Owner Participant pursuant to Section 5.1 or 5.2.
5.5 Satisfaction of Conditions Precedent
Anything in this Trust Agreement to the contrary notwithstanding,
Owner Trustee shall, subject to the satisfaction of special counsel for Owner
Trustee of the occurrence of all the applicable conditions precedent specified
in Section 3.2, comply with the provisions of Section 3.1.
5.6 Fixed Investment Trust
Notwithstanding anything in this Trust Agreement to the contrary,
Owner Trustee shall not be authorized and shall have no power to "vary the
investment" of Owner Participant within the meaning of Treasury Regulations
Section 301.7701-4(c)(1), it being understood that Owner Trustee shall have the
power and authority to fulfill its obligations under Section 4.3 hereof, Section
4.3.3 of the Participation Agreement and Section 4.4 of the Lease.
SECTION 6. OWNER TRUSTEE
6.1 Acceptance of Trusts and Duties
First Security accepts the trusts hereby created and agrees to perform
the same as Owner Trustee but only upon the terms hereof and the Trust Indenture
applicable to it. Owner Trustee also agrees to receive and disburse all monies
received by it constituting part of the Trust Estate pursuant to the terms
hereof. First Security shall not be answerable or accountable under any
circumstances, except for (a) its own willful misconduct or gross negligence
(including, without limitation, in connection with any activities of Owner
Trustee in violation of Section 5.4.2), (b) its failure (in its individual
capacity) to perform its obligations under Section 5.4.1, (c) its or Owner
Trustee's failure to use ordinary care to receive or disburse funds or to comply
with the first sentence of Section 6.8, (d) liabilities that may result from the
inaccuracy of any representation or breach of warranty of it in its individual
capacity (or from the failure by it in its individual capacity to perform any
covenant) in this Trust Agreement, the Trust Indenture, the Lease or the
Participation Agreement or elsewhere in any of the other Operative Agreements,
(e) taxes, fees or other charges on, based on or measured by any fees,
commissions or compensation received by First Security in connection with the
transactions contemplated by this Trust Agreement and the other Operative
Agreements to which it (in its individual capacity or as Owner Trustee) is a
party, (f) its or Owner Trustee's failure to use ordinary care in receiving or
disbursing funds or in connection with its obligation to invest funds pursuant
to Section 4 of the Participation Agreement, Section 4.4 of the Lease or Section
4.3 hereof, (g) any liability on the part of Owner Trustee arising out of its
negligence or willful or negligent misconduct in connection with its obligations
under Section 5.1 (other than the first sentence thereof), 6.8 or 9.2 hereof or
Section 4.01 of the Trust Indenture. First Security shall have no obligation to
advance its individual funds for any purpose, and Owner Trustee shall have no
obligation to distribute to Owner Participant, Lessee or any third party any
amounts to be paid to Owner Trustee until such amounts are collected by Owner
Trustee.
6.2 Absence of Certain Duties
(a) Except in accordance with written instructions furnished pursuant
to Section 5.1 or 5.2 and except as provided in, and without limiting the
generality of, Sections 3.1 and 5.4.1 and the last sentence of Section 9.1.2,
and subject to Section 4.01 of the Trust Indenture, neither Owner Trustee nor
First Security shall have any duty (i) to see to any recording or filing of any
Operative Agreement or of any supplement to any thereof or to see to the
maintenance of any such recording or filing or any other filing of reports with
the FAA or other governmental agencies, except that of First Security to comply
with the FAA reporting requirements set forth in 14 C.F.R. ss. 47.45 and 14
C.F.R. ss. 47.51, and Owner Trustee shall, to the extent that information for
that purpose is timely supplied by Lessee pursuant to any of the Operative
Agreements, complete and timely submit (and furnish Owner Participant with a
copy of) any and all reports relating to the Aircraft that may from time to time
be required by the FAA or any government or governmental authority having
jurisdiction, (ii) to see to any insurance on the Aircraft or to effect or
maintain any such insurance, whether or not Lessee shall be in default with
respect thereto, other than to forward to Owner Participant copies of all
reports and other written information which Owner Trustee receives from Lessee
pursuant to Section 11 of the Lease, (iii) except as provided in Section 7.3.1
or 7.3.2 of the Participation Agreement, Section 4.01 of the Trust Indenture or
Section 5.4 or 6.1 hereof, to see to the payment or discharge of any tax,
assessment or other governmental charge or any lien or encumbrance of any kind
owing with respect to or assessed or levied against any part of the Trust
Indenture Estate or the Trust Estate, except as provided in Section 6.3.9 of the
Participation Agreement or (iv) to inspect Lessee's books and records with
respect to the Aircraft at any time permitted pursuant to the Lease.
(b) Notwithstanding clause (a), Owner Trustee will furnish to
Mortgagee and Owner Participant, promptly upon receipt thereof, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to Owner Trustee under the Lease or
any other Operative Agreement except to the extent to which a responsible
officer of Owner Trustee reasonably believes (and confirms by telephone call
with Owner Participant) that duplicates or copies thereof have already been
furnished to Owner Participant by some other person.
6.3 No Representations or Warranties as to Certain Matters
NEITHER FIRST SECURITY NOR OWNER TRUSTEE MAKES OR SHALL BE DEEMED TO
HAVE MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS
TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, THE
ABSENCE OF ANY STRICT LIABILITY OBLIGATION OR ANY OTHER REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF
WHATSOEVER, except that First Security warrants to Owner Participant that on the
Delivery Date Owner Trustee shall have received whatever title to the Aircraft
that was conveyed to it and that the Aircraft shall, on the Delivery Date and
during the Term, be free of Lessor Liens attributable to First Security or (b)
any representation or warranty as to the validity, legality or enforceability of
this Trust Agreement or any other Operative Agreement to which First Security,
in its individual capacity or as Owner Trustee, is a party, or any other
document or instrument, or as to the correctness of any statement contained in
any thereof except to the extent that any such statement is expressly made
herein or therein by such party as a representation by First Security, in its
individual capacity or as Owner Trustee, as the case may be, and except that
First Security hereby represents and warrants that it has all corporate power
and authority to execute, deliver and perform this Trust Agreement and that this
Trust Agreement has been, and (assuming due authorization, execution and
delivery by Owner Participant of this Trust Agreement) the other Operative
Agreements to which it or Owner Trustee is a party have been (or at the time of
execution and delivery of any such instrument by it or Owner Trustee under this
Trust Agreement or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of itself or Owner Trustee, as the case may be, and
that this Trust Agreement constitutes the legal, valid and binding obligation of
First Security or Owner Trustee, as the case may be, enforceable against First
Security or Owner Trustee, as the case may be, in accordance with its terms.
6.4 No Segregation of Monies; Interest
Monies received by Owner Trustee under this Trust Agreement need not
be segregated in any manner except to the extent required by Law, or except as
provided in written instructions from Owner Participant, and shall be invested
as provided in Section 4.3 hereof or Section 4.4 of the Lease.
6.5 Reliance upon Certificates, Counsel and Agents
Owner Trustee shall incur no liability to anyone in acting in good
faith in reliance upon and in accordance with any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper reasonably believed by it to be genuine and reasonably
believed by it to be signed by the proper party or parties. Unless other
evidence in respect thereof is specifically prescribed in this Trust Agreement,
any request, direction, order or demand of Owner Participant or Lessee mentioned
in this Trust Agreement or in any of the other Owner Trustee Agreements shall be
sufficiently evidenced by written instruments signed by the Chairman of the
Board, the President, any Vice President or any other officer and in the name of
Owner Participant or Lessee, as the case may be. Owner Trustee may accept a copy
of a resolution of the Board of Directors or Executive Committee of Lessee,
certified by the Secretary or an Assistant Secretary of Lessee as duly adopted
and in full force and effect, as conclusive evidence that such resolution has
been duly adopted by said Board of Directors or Executive Committee and that the
same is in full force and effect. As to any fact or matter the manner of
ascertainment of which is not specifically described in this Trust Agreement,
Owner Trustee may, absent Actual Knowledge to the contrary, for all purposes
rely on a certificate signed by the Chairman of the Board, the President, any
Vice President or any other officer of Lessee, and the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of Lessee, as to such fact
or matter, and such certificate shall constitute full protection to Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon and in accordance therewith. In the administration of trusts
under this Trust Agreement, Owner Trustee may execute any of the trusts or
powers and perform its powers and duties under this Trust Agreement directly or
through agents or attorneys and may, at the expense of the Trust Estate, consult
with counsel, accountants and other skilled persons to be selected and employed
by it. Owner Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled persons.
6.6 Not Acting in Individual Capacity
In acting under this Trust Agreement, First Security acts solely as
Owner Trustee and not in its individual capacity except as otherwise expressly
provided in this Trust Agreement or in the other Operative Agreements to which
it is a party; and, except as may be otherwise expressly provided in this Trust
Agreement, the Lease, the Participation Agreement and the Trust Indenture, all
persons, other than the Owner Participant as provided in this Trust Agreement or
the Trust Indenture, having any claim against Owner Trustee by reason of the
transactions contemplated hereby shall look only to the Trust Estate for payment
or satisfaction thereof except to the extent provided in Section 6.1 or
otherwise as Owner Trustee shall expressly agree otherwise in writing.
6.7 Fees; Compensation
Airframe Manufacturer shall pay the Transaction Expenses and ongoing
fees of Owner Trustee throughout the Term pursuant to Section 9.2 of the
Participation Agreement. The Trust Estate shall not have any liability for any
such fees and expenses; PROVIDED, that the foregoing shall not limit the
obligations of Owner Participant under Sections 5.3 and 7; PROVIDED, that Owner
Trustee shall have a Lien upon the Trust Estate for any such fee not paid by
Airframe Manufacturer as contemplated by Section 9.2 of the Participation
Agreement and such Lien shall entitle Owner Trustee to priority as to payment
thereof over payment to any other Person under this Trust Agreement; PROVIDED,
that such Lien shall be subject and subordinate in all events to the Lien of the
Trust Indenture; and PROVIDED, FURTHER, that Owner Trustee shall have no right
to exercise, and shall not exercise, any rights or remedies Owner Trustee may
have with respect to such Lien unless and until the Secured Obligations have
been paid and performed in full.
6.8 Tax Returns
Owner Trustee shall be responsible for the keeping of all appropriate
books and records relating to the receipt and disbursement of all monies under
this Trust Agreement or any agreement contemplated hereby. Owner Participant
shall be responsible for causing to be prepared and filed all income tax returns
required to be filed by Owner Participant. Owner Trustee shall be responsible
for causing to be prepared, at the expense of Airframe Manufacturer, all income
tax returns required to be filed with respect to the trust created hereby and
shall execute and file such returns; PROVIDED, that Owner Trustee shall send
promptly a completed copy of such return to Owner Participant not more than
sixty nor less than fifteen days prior to the due date of the return, PROVIDED,
that Owner Trustee shall have timely received all necessary information to
complete and deliver to Owner Participant such return. Owner Participant, upon
request, will furnish Owner Trustee with all such information as may be
reasonably required from Owner Participant in connection with the preparation of
such income tax returns. Owner Trustee shall keep copies of all returns
delivered to or filed by it.
SECTION 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT
Owner Participant hereby agrees, whether or not any of the
transactions contemplated hereby shall be consummated, to assume liability for,
and hereby indemnifies, protects, saves and keeps harmless, First Security and
its successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any Taxes
which are not required to be indemnified by Lessee pursuant to Section 9.1 or
9.3 of the Participation Agreement and excluding any taxes payable by First
Security on or measured by any compensation received by First Security for its
services under this Trust Agreement), claims, actions, suits, costs, expenses or
disbursements (including, without limitation, reasonable legal fees and
expenses, but excluding internal costs and expenses such as salaries and
overhead, and including, without limitation, any liability of an owner, any
strict liability and any liability without fault) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against First
Security (whether or not also indemnified against by Lessee under the Lease or
under the Participation Agreement or also indemnified against by any other
Person; PROVIDED, that Owner Participant shall be subrogated to the rights of
Owner Trustee against Lessee or any other indemnitor) in any way relating to or
arising out of this Trust Agreement or any of the other Operative Agreements or
the enforcement of any of the terms of any thereof, or in any way relating to or
arising out of the manufacture, purchase, acceptance, nonacceptance, rejection,
ownership, delivery, lease, possession, use, operation, condition, sale, return
or other disposition of the Aircraft (including, without limitation, latent and
other defects, whether or not discoverable, and any claim for patent, trademark
or copyright infringement), or in any way relating to or arising out of the
administration of the Trust Estate or the action or inaction of Owner Trustee,
under this Trust Agreement, except (a) in the case of gross negligence or
willful misconduct on the part of First Security, in its individual capacity or
as Owner Trustee, in the performance or nonperformance of its duties under this
Trust Agreement or under any of the other Owner Trustee Agreements or (b) those
Claims resulting from the inaccuracy of any representation or warranty of First
Security (or from the failure of First Security to perform any of its covenants)
in Section 6.3, in Section 6.03 of the Trust Indenture, in Section 4 of the
Lease, in Section 6.3 of the Participation Agreement or elsewhere in any of the
other Operative Agreements or (c) as may result from a breach by First Security
of its covenant in the last sentence of Section 5.4.1 or (d) in the case of the
failure to use ordinary care on the part of First Security, in its individual
capacity or as Owner Trustee, in the receipt or disbursement of funds or in
connection with its obligation to invest funds pursuant to Section 4 of the
Participation Agreement, Section 4.4 of the Lease or Section 4.3 hereof or in
compliance with the provisions of the first sentence of Section 6.8 or (e) any
liability on the part of Owner Trustee arising out of its negligence or willful
or negligent misconduct in connection with its obligations under Section 5.1,
6.8 or 9.2 hereof or Section 4.01 of the Trust Indenture, or (f) those claims
arising under any circumstances or upon any terms where Lessee would not have
been required to indemnify First Security pursuant to Section 9.1 or 9.3 of the
Participation Agreement (disregarding for purposes of this paragraph Sections
9.1.2(b) and 9.3.2(j)); PROVIDED, that before asserting its right to
indemnification, if any, pursuant to this Section 7, First Security shall first
demand its corresponding right to indemnification pursuant to Section 9 of the
Participation Agreement (but need not exhaust any or all remedies available
thereunder). The indemnities contained in this Section 7 extend to First
Security only in its individual capacity and shall not be construed as
indemnities of the Trust Indenture Estate or the Trust Estate (except to the
extent, if any, that First Security has been reimbursed by the Trust Indenture
Estate or the Trust Estate for amounts covered by the indemnities contained in
this Section 7). The indemnities contained in this Section 7 shall survive the
termination of this Trust Agreement. In addition, if necessary, First Security
shall be entitled to indemnification from the Trust Estate, subject to the Lien
of the Trust Indenture, for any liability, obligation, loss, damage, penalty,
tax, claim, action, suit, cost, expense or disbursement indemnified against
pursuant to this Section 7 to the extent not reimbursed by Lessee, Owner
Participant or others, but without releasing any of them from their respective
agreements of reimbursement; and, to secure the same First Security shall have a
lien on the Trust Estate, subject to the lien of the Trust Indenture and subject
further to the provisions of Section 6.7, which shall be prior to any interest
therein of Owner Participant. The payor of any indemnity under this Section 7
shall be subrogated to any right of the person indemnified in respect of the
matter as to which such indemnity was paid.
SECTION 8. TRANSFER OF OWNER PARTICIPANT'S INTEREST
8.1 Transfer of Interest
All provisions of Section 10 of the Participation Agreement shall
(with the same force and effect as if set forth in full in this Section 8.1) be
applicable to any assignment, conveyance or other transfer by Owner Participant
of any of its right, title or interest in and to the Participation Agreement,
the Trust Estate or this Trust Agreement.
SECTION 9. SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES
9.1 Resignation of Owner Trustee; Appointment of Successor
9.1.1 Resignation or Removal
Owner Trustee or any successor Owner Trustee (a) shall resign if
required to do so pursuant to Section 13.3 of the Participation Agreement or
upon obtaining Actual Knowledge of any facts that would cast doubt upon its
continuing status as a Citizen of the United States and (b) may resign at any
time without cause by giving at least 60 days' prior written notice to Owner
Participant, Mortgagee and Lessee, such resignation to be effective upon the
assumption of the trusts hereunder by the successor Owner Trustee under Section
9.1.2. In addition, Owner Participant may at any time remove Owner Trustee, with
or without cause by a notice in writing delivered to Owner Trustee, Mortgagee
and Lessee, such removal to be effective upon the assumption of the trusts
hereunder by the successor Owner Trustee under Section 9.1.2, PROVIDED, that, in
the case of a removal without cause, unless a Lease Event of Default shall have
occurred and be continuing, such removal shall be subject to the consent of
Lessee (which consent shall not be unreasonably withheld). In the case of the
resignation or removal of Owner Trustee, Owner Participant may appoint a
successor Owner Trustee by an instrument signed by Owner Participant, with,
unless a Lease Event of Default shall have occurred and be continuing, the
consent of Lessee (which consent shall not be unreasonably withheld). If a
successor Owner Trustee shall not have been appointed within 30 days after such
notice of resignation or removal, Owner Trustee, any Owner Participant, Lessee
or Mortgagee may apply to any court of competent jurisdiction to appoint a
successor Owner Trustee to act until such time, if any, as a successor shall
have been appointed as above provided. Any successor Owner Trustee so appointed
by such court shall immediately and without further act be superseded by any
successor Owner Trustee appointed as above provided within one year from the
date of the appointment by such court.
9.1.2 Execution and Delivery of Documents, Etc.
Any successor Owner Trustee, however appointed, shall execute and
deliver to the predecessor Owner Trustee, with a copy to Owner Participant,
Lessee and Mortgagee, an instrument accepting such appointment and assuming the
obligations of Owner Trustee, in its individual capacity and as Owner Trustee,
under the Owner Trustee Agreements, and thereupon such successor Owner Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers, duties and trusts of the predecessor Owner Trustee in the trusts
under this Trust Agreement with like effect as if originally named Owner Trustee
in this Trust Agreement; but nevertheless, upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trusts herein expressed, all the estates, properties, rights, powers and trusts
of such predecessor Owner Trustee, and such predecessor Owner Trustee shall duly
assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon the
trusts herein expressed. Upon the appointment of any successor Owner Trustee
under this Section 9.1, the predecessor Owner Trustee will execute such
documents as are provided to it by such successor Owner Trustee and will take
such further actions as are requested of it by such successor Owner Trustee as
are required to cause registration of the Aircraft included in the Trust Estate
to be transferred upon the records of the FAA, or other governmental authority
having jurisdiction, into the name of the successor Owner Trustee.
9.1.3 Qualifications
Any successor Owner Trustee, however appointed, shall be a Citizen of
the United States and shall also be a bank or trust company organized under the
Laws of the United States or any state thereof having a combined capital and
surplus of at least $100,000,000, if there be such an institution willing, able
and legally qualified to perform the duties of Owner Trustee under this Trust
Agreement upon reasonable or customary terms. No such successor Owner Trustee
shall be located in a jurisdiction which creates material adverse consequences
for Lessee (unless such material adverse consequences would be created by
substantially all jurisdictions where major banking or trust institutions are
located).
9.1.4 Merger, Etc.
Any corporation into which First Security may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which First Security shall be a party, or
any corporation to which substantially all the corporate trust business of First
Security may be transferred, shall, subject to the terms of Section 9.1.3, be
Owner Trustee under this Trust Agreement without further act, PROVIDED, that
such corporation shall not also be the Mortgagee.
9.2 Co-Trustees and Separate Trustees
(a) If at any time it shall be necessary or prudent in order to
conform to any Law of any jurisdiction in which all or any part of the Trust
Estate is located, or Owner Trustee being advised by counsel shall determine
that it is so necessary or prudent in the interest of Owner Participant or Owner
Trustee, or Owner Trustee shall have been directed to do so by Owner
Participant, Owner Trustee and Owner Participant shall execute and deliver an
agreement supplemental hereto and all other instruments and agreements necessary
or proper to constitute another bank or trust company or one or more persons
(any or all of which shall be a Citizen of the United States) approved by Owner
Trustee and Owner Participant, either to act as co-trustee, jointly with Owner
Trustee, or to act as separate trustee under this Trust Agreement (any such
co-trustee or separate trustee being herein sometimes referred to as an
"additional trustee"). In the event Owner Participant shall not have joined in
the execution of such agreements' supplemental hereto within ten days after the
receipt of a written request from Owner Trustee so to do, or in case a Lease
Event of Default or Indenture Event of Default shall occur and be continuing,
Owner Trustee may act under the foregoing provisions of this Section 9.2 without
the concurrence of Owner Participant; and Owner Participant hereby appoints
Owner Trustee its agent and attorney-in-fact to act for it under the foregoing
provisions of this Section 9.2 in either of such contingencies.
(b) Every additional trustee under this Trust Agreement shall, to the
extent permitted by Law, be appointed and act, and Owner Trustee and its
successors shall act, subject to the following provisions and conditions:
(i) All powers, duties, obligations and rights conferred upon Owner
Trustee in respect of the custody, control and management of monies, the
Aircraft or documents authorized to be delivered under this Trust Agreement
or under the Participation Agreement shall be exercised solely by Owner
Trustee;
(ii) All other rights, powers, duties and obligations conferred or
imposed upon Owner Trustee shall be conferred or imposed upon and exercised
or performed by Owner Trustee and such additional trustee jointly, except
to the extent that under any Law of any jurisdiction in which any
particular act or acts are to be performed (including the holding of title
to the Trust Estate) Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations shall be exercised and performed by such additional trustee;
(iii) No power given to, or which it is provided hereby may be
exercised by, any such additional trustee shall be exercised under this
Trust Agreement by such additional trustee, except jointly with, or with
the consent in writing of, Owner Trustee;
(iv) No trustee under this Trust Agreement shall be personally liable
by reason of any action or omission of any other trustee under this Trust
Agreement;
(v) Owner Participant, at any time, by an instrument in writing may
remove any such additional trustee. In the event that Owner Participant
shall not have joined in the execution of any such instrument within ten
days after the receipt of a written request from Owner Trustee so to do,
Owner Trustee shall have the power to remove any such additional trustee
without the concurrence of Owner Participant; and Owner Participant hereby
appoints Owner Trustee its agent and attorney-in-fact to act for it in such
connection in such contingency; and
(vi) No appointment of, or action by, any additional trustee will
relieve Owner Trustee of any of its obligations under, or otherwise affect
any of the terms of, the Trust Indenture or affect the interests of
Mortgagee or the Note Holders in the Trust Indenture Estate.
(c) In case any separate trustee under this Section 9.2 shall die,
become incapable of acting, resign or be removed, the title to the Trust Estate
and all rights and duties of such separate trustee shall, so far as permitted by
Law, vest in and be exercised by Owner Trustee, without the appointment of a
successor to such separate trustee.
SECTION 10. SUPPLEMENTS AND AMENDMENTS TO TRUST AGREEMENT AND OTHER
DOCUMENTS
10.1 Supplements and Amendments and Delivery Thereof
10.1.1 Supplements and Amendments
Subject to Section 7.2.2 of the Participation Agreement, this Trust
Agreement may not be amended, supplemented or otherwise modified except by an
instrument in writing signed by Owner Trustee and Owner Participant. Subject to
Section 10.2, Section 9.01 of the Trust Indenture and Section 7.6.7 of the
Participation Agreement, Owner Trustee will execute any amendment, supplement or
other modification of this Trust Agreement or of any other Owner Trustee
Agreement which it is requested in writing to execute by Owner Participant,
except that Owner Trustee shall not execute any such amendment, supplement or
other modification which, by the express provisions of any of the above
documents, requires the consent of any other party unless such consent shall
have been obtained; and PROVIDED, that, without the prior written consent of
Owner Participant, (a) no such supplement, amendment or modification shall (i)
modify any of the provisions of Section 4 or this Section 10.1, (ii) reduce,
modify or amend any indemnities in favor of Owner Participant as set forth in
Section 9 of the Participation Agreement or in the Tax Indemnity Agreement,
(iii) reduce the amount or extend the time of payment of Basic Rent,
Supplemental Rent, Stipulated Loss Value or Termination Value as set forth in
the Lease (except in accordance with Section 3 of the Lease) or (iv) modify any
of the rights of Owner Participant under the Trust Indenture and (b) no such
supplement, amendment or modification shall require Owner Participant to invest
or advance funds or shall entail any additional personal liability or the
surrender of any indemnification, claim or individual right on the part of Owner
Participant with respect to any agreement or obligation.
10.1.2 Delivery of Amendments and Supplements to Certain Parties
A signed copy of each amendment or supplement referred to in Section
10.1.1 to which Lessee is not a party shall be delivered promptly by Owner
Trustee to Lessee, and a signed copy of each amendment or supplement referred to
in Section 10.1.1 shall be delivered promptly by Owner Trustee to Mortgagee.
10.2 Discretion as to Execution of Documents
Prior to executing any document required to be executed by it pursuant
to the terms of Section 10.1, Owner Trustee shall be entitled to receive an
opinion of its counsel to the effect that the execution of such document is
authorized under this Trust Agreement. If in the opinion of Owner Trustee any
such document adversely affects any right, duty, immunity or indemnity in favor
of Owner Trustee under this Trust Agreement or under any other Owner Trustee
Agreement, Owner Trustee may in its discretion decline to execute such document
unless Owner Trustee is furnished with indemnification from Lessee or any other
party upon terms and in amounts reasonably satisfactory to Owner Trustee to
protect the Trust Estate and the Owner Trustee against any and all liabilities,
costs and expenses arising out of the execution of such documents.
10.3 Absence of Requirements as to Form
It shall not be necessary for any written request furnished pursuant
to Section 10.1 to specify the particular form of the proposed documents to be
executed pursuant to such Section 10.1, but it shall be sufficient if such
request shall indicate the substance thereof.
10.4 Distribution of Documents
Promptly after the execution by Owner Trustee of any document entered
into pursuant to Section 10.1, Owner Trustee shall mail, by certified mail,
postage prepaid, a conformed copy thereof to Owner Participant, but the failure
of Owner Trustee to mail such conformed copy shall not impair or affect the
validity of such document.
10.5 No Request Needed as to Lease Supplement and Trust Indenture
Supplement
No written request pursuant to Section 10.1 shall be required to
enable Owner Trustee to enter into, pursuant to Section 3.1 and the Lease or the
Trust Indenture, as the case may be, the Lease Supplement with Lessee and the
Trust Indenture Supplement.
SECTION 11. MISCELLANEOUS
11.1 Termination of Trust Agreement
This Trust Agreement and the trusts created hereby shall be of no
further force or effect upon the earlier of (a) both the final discharge of the
Trust Indenture pursuant to Section 10.01 thereof and the sale or other final
disposition by Owner Trustee of all property constituting part of the Trust
Estate and the final distribution by Owner Trustee of all monies or other
property or proceeds constituting part of the Trust Estate in accordance with
Section 4, PROVIDED, that at such time Lessee shall have fully complied with all
of the terms of the Lease and the Participation Agreement or (b) 21 years less
one day after the death of the last survivor of all of the descendants of the
grandparents of David C. Rockefeller living on the date of the earliest
execution of this Trust Agreement by any party hereto, but if this Trust
Agreement and the trusts created hereby shall be or become authorized under
applicable Law to be valid for a period commencing on the 21st anniversary of
the death of such last survivor (or, without limiting the generality of the
foregoing, if legislation shall become effective providing for the validity of
this Trust Agreement and the trusts created hereby for a period in gross
exceeding the period for which this Trust Agreement and the trusts created
hereby are hereinabove stated to extend and be valid), then this Trust Agreement
and the trusts created hereby shall not terminate under this clause (b) but
shall extend to and continue in effect, but only if such nontermination and
extension shall then be valid under applicable Law, until the day preceding such
date as the same shall, under applicable Law, cease to be valid; otherwise this
Trust Agreement and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof. Except as expressly set forth in
Section 11.2, this Trust Agreement and the trusts created hereby may not be
revoked by Owner Participant.
11.2 Termination at Option of the Owner Participant
Notwithstanding Section 11.1 hereof, this Agreement and trust created
hereby shall terminate and the Trust Estate shall be distributed to the Owner
Participant, and this Agreement shall be of no further force and effect, upon
the election of the Owner Participant by notice to the Owner Trustee, if such
notice shall be accompanied by the written agreement (in form and substance
satisfactory to the Owner Trustee) of the Owner Participant assuming all
obligations of the Owner Trustee under or contemplated by the Operative
Agreements or incurred by it as trustee hereunder and releasing the Owner
Trustee therefrom; provided, however, that such notice may be given only after
the time the Lien of the Trust Indenture is discharged under Section 10.01 of
the Trust Indenture and after the Lease shall no longer be in effect.
11.3 Owner Participant Has No Legal Title in Trust Estate
Owner Participant shall not have legal title to any part of the Trust
Estate. No transfer, by operation of Law or otherwise, of any right, title and
interest of Owner Participant in and to the Trust Estate under this Trust
Agreement shall operate to terminate this Trust Agreement or the trusts under
this Trust Agreement or entitle any successors or transferees of Owner
Participant to an accounting or to the transfer of legal title to any part of
the Trust Estate.
11.4 Assignment, Sale, etc. of Aircraft
Any assignment, sale, transfer or other conveyance of the Aircraft by
Owner Trustee made pursuant to the terms of this Trust Agreement or of the Lease
or the Participation Agreement shall bind Owner Participant and shall be
effective to transfer or convey all right, title and interest of Owner Trustee
and Owner Participant in and to the Aircraft. No purchaser or other grantee
shall be required to inquire as to the authorization, necessity, expediency or
regularity of such assignment, sale, transfer or conveyance or as to the
application of any sale or other proceeds with respect thereto by Owner Trustee.
11.5 Trust Agreement for Benefit of Certain Parties Only
Except for the terms of Section 10 of the Participation Agreement
incorporated in Section 8 and except as otherwise provided in Sections 5.1, 6.7,
9, 10.1 and 11.1, nothing in this Trust Agreement, whether express or implied,
shall be construed to give any person other than Owner Trustee and Owner
Participant any legal or equitable right, remedy or claim under or in respect of
this Trust Agreement; and this Trust Agreement shall be held to be for the sole
and exclusive benefit of Owner Trustee and Owner Participant.
11.6 Citizenship of Owner Participant
Reserved.
11.7 Notices
Unless otherwise expressly permitted by the terms of this Trust
Agreement, all notices, requests, demands, authorizations, directions, consents,
waivers and other communications required or permitted to be made, given,
furnished or filed under this Trust Agreement shall be in writing, shall refer
specifically to this Trust Agreement and shall be personally delivered, sent by
telecopy, telex or other means of electronic facsimile or telecommunication
transmission, sent by registered mail or certified mail, return receipt
requested, postage prepaid, or sent by overnight courier service, in each case
to the respective telex, telecopy or other number or address set forth for such
party in Schedule 1 to the Participation Agreement, or to such other telex,
telecopy or other number or address as each party hereto may hereafter specify
by notice to the other parties hereto. Each such notice, request, demand,
authorization, direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed (a) by telecopy
or other means of electronic facsimile or telecommunication transmission, when
confirmed, or (b) by registered or certified mail, three Business Days after
being deposited, properly addressed, in the U.S. mail.
11.8 Severability
If any provision of this Trust Agreement shall be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the extent
permitted by Law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
such provision in any other jurisdiction. If, however, any Law pursuant to which
such provisions are held invalid, illegal or unenforceable may be waived, such
Law is hereby waived by the parties hereto to the full extent permitted, to the
end that this Trust Agreement shall be deemed to be a valid and binding
agreement in all respects, enforceable in accordance with its terms.
11.9 Waivers, Etc.
No term or provision hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing entered into in
compliance with the terms of Section 10; and any waiver of the terms hereof
shall be effective only in the specific instance and for the specific purpose
given.
11.10 Counterparts
This Trust Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original, and all of which
counterparts, taken together, shall constitute one and the same instrument.
11.11 Binding Effect, Etc.
All covenants and agreements contained in this Trust Agreement shall
be binding upon, and inure to the benefit of, Owner Trustee and its successors
and assigns, and Owner Participant and its successors and, to the extent
permitted by Section 8, assigns. Any request, notice, direction, consent, waiver
or other instrument or action by Owner Participant shall bind its successors and
assigns.
11.12 Headings; References
The headings and the table of contents used in this Trust Agreement
are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof and shall not in any way affect the construction of,
or be taken into consideration in interpreting, this Trust Agreement.
11.13 Governing Law
THIS TRUST AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF
THE STATE OF UTAH, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
[This space intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
ICX CORPORATION
By______________________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION
By______________________________________
Name:
Title:
TRUST AGREEMENT ____
Dated as of September 25, 1997
Between
METLIFE CAPITAL CREDIT L.P.
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION
One Embraer Model EMB-145 Aircraft
Bearing Manufacturer's Serial No. 145.___
and U.S. Registration No. N_____
with Two Allison Model AE3007A Engines
Bearing Engine Manufacturer's
Serial Nos. _________ and _________
TABLE OF CONTENTS
PAGE
----
Section 1. Definitions.............................................. 1
Section 2. Declaration Of Trust..................................... 1
Section 3. Authorization; Conditions Precedent...................... 1
3.1 Authorization............................................ 1
3.2 Conditions Precedent..................................... 2
3.3 Limitations on Control................................... 3
Section 4. Receipt, Distribution And Application Of Income From
The Trust Estate......................................... 4
4.1 Payments from Trust Estate Only.......................... 4
4.2 Distribution of Payments................................. 4
4.2.1 Payments to Mortgagee........................... 4
4.2.2 Payments to Owner Trustee, Other Parties........ 4
4.2.3 Certain Distributions to Owner Participant...... 5
4.2.4 Excluded Payments............................... 5
4.3 Method of Payments....................................... 5
Section 5. Duties Of Owner Trustee.................................. 5
5.1 Notice of Event of Default............................... 5
5.2 Action upon Instructions................................. 6
5.3 Limitations on Duties.................................... 6
5.4 No Duties except as Specified; No Action except
as Specified............................................. 7
5.4.1 No Duties except as Specified................... 7
5.4.2 No Action except as Specified................... 7
5.5 Satisfaction of Conditions Precedent..................... 7
5.6 Fixed Investment Trust................................... 7
Section 6. Owner Trustee............................................ 7
6.1 Acceptance of Trusts and Duties.......................... 7
6.2 Absence of Certain Duties................................ 8
6.3 No Representations or Warranties as to Certain Matters... 9
6.4 No Segregation of Monies; Interest....................... 9
6.5 Reliance upon Certificates, Counsel and Agents........... 9
6.6 Not Acting in Individual Capacity........................ 10
6.7 Fees; Compensation....................................... 10
6.8 Tax Returns.............................................. 11
Section 7. Indemnification Of First Security By Owner Participant... 11
TABLE OF CONTENTS
(Continued)
PAGE
----
Section 8. Transfer Of Owner Participant's Interest.................. 12
8.1 Transfer of Interest...................................... 12
Section 9. Successor Owner Trustees; Co-Trustees..................... 12
9.1 Resignation of Owner Trustee; Appointment of Successor.... 12
9.1.1 Resignation or Removal........................... 12
9.1.2 Execution and Delivery of Documents, Etc......... 13
9.1.3 Qualifications................................... 14
9.1.4 Merger, Etc...................................... 14
9.2 Co-Trustees and Separate Trustees......................... 14
Section 10. Supplements And Amendments To Trust Agreement And Other
Documents................................................ 15
10.1 Supplements and Amendments and Delivery Thereof.......... 15
10.1.1 Supplements and Amendments...................... 15
10.1.2 Delivery of Amendments and Supplements to
Certain Parties................................. 16
10.2 Discretion as to Execution of Documents.................. 16
10.3 Absence of Requirements as to Form....................... 16
10.4 Distribution of Documents................................ 18
10.5 No Request Needed as to Lease Supplement and Trust
Indenture Supplement..................................... 17
Section 11. Miscellaneous............................................ 17
11.1 Termination of Trust Agreement........................... 17
11.2 Termination at Option of the Owner Participant........... 17
11.3 Owner Participant Has No Legal Title in Trust Estate..... 18
11.4 Assignment, Sale, etc. of Aircraft....................... 18
11.5 Trust Agreement for Benefit of Certain Parties Only...... 18
11.6 Citizenship of Owner Participant......................... 18
11.7 Notices.................................................. 18
11.8 Severability............................................. 18
11.9 Waivers, Etc............................................. 19
11.10 Counterparts............................................. 19
11.11 Binding Effect, Etc...................................... 19
11.12 Headings; References..................................... 19
11.13 Governing Law............................................ 19
TRUST AGREEMENT ____
This TRUST AGREEMENT ____, dated as of September 25, 1997, between
METLIFE CAPITAL CREDIT L.P., a Delaware limited partnership ("Owner
Participant"), and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association (in its individual capacity, "First Security" and otherwise not in
its individual capacity but solely as trustee hereunder, "Owner Trustee").
W I T N E S S E T H:
- - - - - - - - - -
Section 1. DEFINITIONS. Capitalized terms used but not defined herein
shall have the respective meanings set forth or incorporated by reference, and
shall be construed and interpreted in the manner described, in Annex A to the
Lease.
Section 2. DECLARATION OF TRUST. First Security hereby declares that
it will hold the Trust Estate as Owner Trustee upon the trusts hereinafter set
forth for the use and benefit of Owner Participant, subject, however, to the
provisions of and the Lien created by the Trust Indenture and to the provisions
of the Lease and the Participation Agreement.
Section 3. Authorization; Conditions Precedent
3.1 AUTHORIZATION. In respect of the Aircraft, Owner Participant
hereby authorizes and directs Owner Trustee to, and Owner Trustee agrees for the
benefit of Owner Participant that it will, on and after the Delivery Date,
subject (except with respect to Section 3.1(a)) to due compliance with the terms
of Section 3.2:
(a) execute and deliver the Participation Agreement, the Trust
Indenture, the Lease and the other Owner Trustee Agreements (in the
respective forms in which they are delivered from time to time by Owner
Participant to Owner Trustee);
(b) subject to the terms of this Trust Agreement, exercise (i) its
rights and perform its duties under the Participation Agreement, (ii) the
rights and perform the duties of Lessor under the Lease and (iii) its
rights and perform its duties under the Trust Indenture and the other Owner
Trustee Agreements;
(c) execute, issue and deliver to Mortgagee for authentication and
further delivery to the Subordination Agent the Equipment Notes in the
amount and as provided in Section 2 of the Participation Agreement;
(d) purchase the Aircraft pursuant to the Participation Agreement;
(e) accept from Existing Lessor the delivery of the Aircraft Bill of
Sale, the FAA Bill of Sale and the invoice with respect to such Aircraft;
(f) effect the registration of the Aircraft with the FAA in the name
of Owner Trustee by filing or causing to be filed with the FAA: (i) the FAA
Bill of Sale; (ii) an Aircraft Registration Application in the name of
Owner Trustee (including, without limitation, an affidavit from Owner
Trustee in compliance with the provisions of Section 47.7(c)(2) of the FAA
Regulations); and (iii) this Trust Agreement;
(g) execute and deliver the Financing Statements referred to in
Section 5.1.2 (xxiv) of the Participation Agreement, together with all
other agreements, documents and instruments referred to in Section 5 of the
Participation Agreement to which Owner Trustee is to be a party;
(h) make payment of Lessor's Cost for the Aircraft from the aggregate
amount of the Commitments for the Aircraft of Owner Participant and Loan
Participant, to the extent received by Owner Trustee, in the manner
provided in the Participation Agreement;
(i) execute and deliver Lease Supplement No. 1 covering the Aircraft;
(j) execute and deliver a Trust Indenture Supplement covering the
Aircraft; and
(k) execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
direction of Owner Participant, as Owner Participant may deem necessary or
advisable in connection with the transactions contemplated by this Trust
Agreement and the other Operative Agreements.
3.2 CONDITIONS PRECEDENT. The rights and obligations of Owner Trustee
to take the actions required by Section 3.1 shall be subject to the following
conditions precedent:
(a) Owner Trustee shall have received the notice described in Section
5.1.1 of the Participation Agreement, when and as required thereby, or
shall have been deemed to have waived such notice in accordance with
Section 5.1.1 of the Participation Agreement;
(b) Each Participant shall have made the full amount of its Commitment
specified in Section 2.1 of the Participation Agreement available to Owner
Trustee, in immediately available funds, in accordance with Sections 2 and
4 of the Participation Agreement; and
(c) Owner Participant shall have notified Owner Trustee that the terms
and conditions of Section 5 of the Participation Agreement, insofar as they
relate to conditions precedent to performance by Owner Participant of its
obligations thereunder, have been either fulfilled to the satisfaction of,
or waived by, Owner Participant. Owner Participant shall, by instructing
Owner Trustee to release the full amount of its Commitment then held by
Owner Trustee as provided in Section 2 of the Participation Agreement, be
deemed to have found satisfactory to it, or waived, all such conditions
precedent.
3.3 LIMITATIONS ON CONTROL.
(a) Notwithstanding any other provision of this Trust Agreement, but
subject to paragraph (b) of this Section 3.3, the Owner Participant will
have no rights or powers to direct, influence or control the Owner Trustee
in the performance of the Owner Trustee's duties under this Trust Agreement
in connection with matters involving the ownership and operation of the
Aircraft by the Owner Trustee. In all matters involving the ownership and
operation of the Aircraft by the Owner Trustee, the Owner Trustee shall
have absolute and complete discretion in connection therewith and shall be
free of any kind of influence or control whatsoever by the Owner
Participant, and the Owner Trustee shall exercise its duties under this
Trust Agreement in connection with matters involving the ownership and
operation of the Aircraft by the Owner Trustee as it, in its discretion,
shall deem necessary to protect the interests of the United States,
notwithstanding any countervailing interest of any foreign power which, or
whose citizens may have a direct or indirect interest in the Owner
Participant and any such action by the Owner Trustee shall not be
considered malfeasance or in breach of any obligation which the Owner
Trustee might otherwise have to the Owner Participant; PROVIDED, HOWEVER,
that subject to the foregoing limitations, the Owner Trustee shall exercise
its discretion in all matters involving the ownership and operation of the
Aircraft by the Owner Trustee with due regard for the interests of the
Owner Participant. In exercising any of its rights and duties under this
Trust Agreement in connection with matters which may arise not relating to
the ownership and operation of the Aircraft, the Owner Trustee shall be
permitted to seek the advice of the Owner Participant before taking, or
refraining from taking, any action with respect thereto. The Owner Trustee
shall notify the Owner Participant of its exercise of rights and duties
under this Trust Agreement in connection with matters involving the
ownership and operation of the Aircraft by the Owner Trustee.
(b) Subject to the requirements of the preceding paragraph (a), the
Owner Trustee agrees that it will not, without the prior written consent of
the Owner Participant, (i) sell, mortgage, pledge or otherwise dispose of
the Aircraft or other assets held in the Trust Estate relating thereto
except as otherwise expressly provided for herein, or (ii) amend the Lease,
any Permitted Sublease or other Operative Agreements or give any consents
thereunder.
(c) The purpose of this Section 3.3 is to give the Owner Trustee the
power to manage and control the Aircraft with respect to matters involving
the ownership and operation of the Aircraft by the Owner Trustee in the
event that the Owner Trustee becomes the owner of the Aircraft or is deemed
to be the owner of the Aircraft pursuant to Law so as to assure that (i)
the Aircraft shall be controlled with respect to such matters by a Citizen
of the United States, (ii) the Owner Participant shall have no power to
influence or control the exercise of the Owner Trustee's authority with
respect to such matters and (iii) the Owner Trustee shall be able to give
the affidavit required by Section 47.7(c)(2)(iii) of the Federal Aviation
Regulations, 14 C.F.R. 47.7(c)(2)(iii). This Section 3.3 shall be construed
in furtherance of the foregoing purpose.
Section 4. Receipt, Distribution And Application Of Income From The
Trust Estate
4.1 PAYMENTS FROM TRUST ESTATE ONLY. Except as provided in Section 7,
all payments to be made by Owner Trustee under this Trust Agreement shall be
made only from (a) in the case of funds made available in accordance with
Section 4 of the Participation Agreement, the Commitments (except as otherwise
provided in Section 14 of the Participation Agreement) and (b) in the case of
all other payments, the income from and proceeds of the Trust Estate to the
extent that Owner Trustee shall have received sufficient income or proceeds from
the Trust Estate to make such payments. Owner Participant agrees that it will
look solely (y) in the case of funds made available in accordance with Section 4
of the Participation Agreement, to the Commitments and any income therefrom
(except as otherwise provided in Section 14 of the Participation Agreement) and
(z) in the case of all other payments, to the income from and proceeds of the
Trust Estate to the extent available for distribution to Owner Participant as
provided in this Trust Agreement. Except as provided in Section 7, Owner
Participant agrees that First Security is neither personally liable to Owner
Participant for any amounts payable nor subject to any other liability under
this Trust Agreement.
4.2 Distribution of Payments.
4.2.1 PAYMENTS TO MORTGAGEE. Until the Trust Indenture shall have
been discharged pursuant to Section 10.01 thereof, all Rent, insurance
proceeds and requisition or other payments of any kind included in the
Trust Estate (other than Excluded Payments) payable to Owner Trustee shall
be payable directly to Mortgagee (and, if any of the same are received by
Owner Trustee, shall upon receipt be paid over to Mortgagee without
deduction, set-off or adjustment of any kind) for distribution in
accordance with the provisions of Article III of the Trust Indenture;
PROVIDED, that any payments received by Owner Trustee from (a) Airframe
Manufacturer with respect to Owner Trustee's fees and disbursements or (b)
Owner Participant pursuant to Section 7 shall not be paid over to Mortgagee
but shall be retained by Owner Trustee and applied toward the purpose for
which such payments were made.
4.2.2 PAYMENTS TO OWNER TRUSTEE, OTHER PARTIES. After the Trust
Indenture shall have been discharged pursuant to Section 10.01 thereof, any
payment of the type referred to in Section 4.2.1 (other than Excluded
Payments) received by Owner Trustee, any payment received from Mortgagee
(other than Excluded Payments) and any other amount received as part of the
Trust Estate and for the application or distribution of which no provision
is made in this Trust Agreement shall be distributed forthwith upon receipt
by Owner Trustee in the following order of priority: FIRST, so much of such
payment as shall be required to reimburse Owner Trustee for any expenses
not otherwise reimbursed as to which Owner Trustee is entitled to be so
reimbursed pursuant to the provisions hereof shall be retained by Owner
Trustee; SECOND, the amount set forth in Schedule 1 hereto, if any, on a
Payment Date shall be paid to Owner Participant; THIRD, the amount set
forth in Schedule 2 hereto shall be paid to Equity Guarantor; and FOURTH,
the balance, if any, shall be paid to Owner Participant.
4.2.3 CERTAIN DISTRIBUTIONS TO OWNER PARTICIPANT. All amounts
from time to time distributable by Mortgagee to Owner Participant pursuant
to the Trust Indenture shall, if paid to Owner Trustee, be distributed by
Owner Trustee to Owner Participant in accordance with the provisions of
Article III of the Trust Indenture; PROVIDED, that any payments received by
Owner Trustee from (a) Lessee with respect to Owner Trustee's fees and
disbursements or (b) Owner Participant pursuant to Section 7 shall not be
paid over to Owner Participant but shall be retained by Owner Trustee and
applied toward the purpose for which such payments were made.
4.2.4 EXCLUDED PAYMENTS. Any Excluded Payments received by Owner
Trustee shall be paid by Owner Trustee to the Person to whom such Excluded
Payments are payable under the provisions of the Participation Agreement,
the Tax Indemnity Agreement or the Lease.
4.3 METHOD OF PAYMENTS. Owner Trustee shall make distributions or
cause distributions to be made to Owner Participant pursuant to this Section 4
by transferring the amount to be distributed by wire transfer in immediately
available funds on the day received (or on the next succeeding Business Day if
the funds to be so distributed shall not have been received by Owner Trustee by
12:00 noon, New York City time, and which funds Owner Trustee shall not have
been reasonably able to distribute to Owner Participant on the day received) to
Owner Participant's account set forth in Schedule 1 to the Participation
Agreement or to such other account or accounts of Owner Participant as Owner
Participant may designate from time to time in writing to Owner Trustee;
PROVIDED, that Owner Trustee shall use reasonable efforts to invest overnight,
in investments that would be permitted under Section 4.4 of the Lease, all funds
received by it at or later than 12:00 noon, New York City time, and which funds
Owner Trustee shall not have been reasonably able to distribute to Owner
Participant on the day received).
Section 5.Duties Of Owner Trustee.
5.1 NOTICE OF EVENT OF DEFAULT
(a) If Owner Trustee shall have knowledge of a Lease Default or a
Lease Event of Default or an Indenture Default or an Indenture Event of
Default, Owner Trustee shall give to Owner Participant, Mortgagee, Lessee
and Equity Guarantor prompt telephonic or telex notice thereof followed by
prompt confirmation thereof by certified mail, postage prepaid, PROVIDED,
that (i) in the case of an event which with the passage of time would
constitute an Indenture Event of Default of the type referred to in
paragraph (c) or (e) of Section 4.02 of the Trust Indenture, such notice
shall in no event be furnished later than ten days after Owner Trustee
shall first have knowledge of such event and (ii) in the case of a
misrepresentation by Owner Trustee which with the passage of time would
constitute an Indenture Event of Default of the type referred to in
paragraph (d) of Section 4.02 of the Trust Indenture, such notice shall in
no event be furnished later than ten days after Owner Trustee shall first
have knowledge of such event.
(b) Subject to the terms of Section 5.3, Owner Trustee shall take such
action or shall refrain from taking such action, not inconsistent with the
provisions of the Trust Indenture, with respect to such Lease Default,
Lease Event of Default, Indenture Default or Indenture Event of Default or
other event as Owner Trustee shall be directed in writing by Owner
Participant. For all purposes of this Trust Agreement, the Lease and the
other Operative Agreements, in the absence of Actual Knowledge of Owner
Trustee, Owner Trustee shall not be deemed to have knowledge of a Lease
Default, Lease Event of Default, Indenture Default or Indenture Event of
Default unless notified in writing by Mortgagee, Owner Participant or
Lessee.
5.2 ACTION UPON INSTRUCTIONS. Subject to the terms of Sections 5.1 and
5.3, upon the written instructions at any time and from time to time of Owner
Participant, Owner Trustee will take such of the following actions, not
inconsistent with the provisions of the Lease and the Trust Indenture, as may be
specified in such instructions: (a) give such notice or direction or exercise
such right, remedy or power under this Trust Agreement or any of the other Owner
Trustee Agreements or in respect of all or any part of the Trust Estate, or take
such other action, as shall be specified in such instructions (including
entering into such agreements and instruments as shall be necessary under
Section 10); (b) take such action to preserve or protect the Trust Estate
(including the discharge of Liens) as may be specified in such instructions; (c)
approve as satisfactory to it all matters required by the terms of the Lease or
the other Operative Agreements to be satisfactory to Owner Trustee, it being
understood that without written instructions of Owner Participant, Owner Trustee
shall not approve any such matter as satisfactory to it; (d) subject to the
rights of Lessee under the Operative Agreements, after the expiration or earlier
termination of the Lease, convey all of Owner Trustee's right, title and
interest in and to the Aircraft for such amount, on such terms and to such
purchaser or purchasers as shall be designated in such instructions, or retain,
lease or otherwise dispose of, or from time to time take such other action with
respect to, the Aircraft on such terms as shall be designated in such
instructions; and (e) take or refrain from taking such other action or actions
as may be specified in such instructions.
5.3 LIMITATIONS ON DUTIES. Owner Trustee shall not be required to take
any action under Section 5.1 (other than the giving of the notices referred to
therein) or 5.2 if Owner Trustee shall reasonably believe such action is not
adequately indemnified by Owner Participant under Section 7, unless Lessee or
Owner Participant agrees to furnish such additional indemnity as shall
reasonably be required, in manner and form satisfactory to Owner Trustee, and,
in addition to the extent not otherwise paid pursuant to the provisions of the
Lease or of the Participation Agreement, to pay the reasonable compensation of
Owner Trustee for the services performed or to be performed by it pursuant to
such direction and any reasonable fees and disbursements of counsel or agents
employed by Owner Trustee in connection therewith. Owner Trustee shall not be
required to take any action under Section 5.1 or 5.2 (other than the giving of
the notices referred to therein) if Owner Trustee shall have been advised by
counsel that such action is contrary to the terms of any of the Owner Trustee
Agreements or is otherwise contrary to Law and Owner Trustee has delivered to
Owner Participant written notice of the basis for its refusal to act.
5.4 No Duties except as Specified; No Action except as Specified.
5.4.1 NO DUTIES EXCEPT AS SPECIFIED. Owner Trustee shall not have
any duty or obligation to manage, control, use, sell, dispose of or
otherwise deal with the Aircraft or any other part of the Trust Estate or
to otherwise take or refrain from taking any action under, or in connection
with, any of the Owner Trustee Agreements, except as expressly required by
the terms of any of the Owner Trustee Agreements, or (to the extent not
inconsistent with the provisions of the Trust Indenture) as expressly
provided by the terms hereof or in a written instruction from Owner
Participant received pursuant to the terms of Section 5.1 or 5.2, and no
implied duties or obligations shall be read into this Trust Agreement
against Owner Trustee. First Security agrees that it will, in its
individual capacity and at its own cost or expense (but without any right
of indemnity in respect of any such cost or expense hereunder or under the
Participation Agreement), promptly take such action as may be necessary to
duly discharge and satisfy in full all Lessor Liens attributable to it in
its individual capacity which it is required to discharge pursuant to
Section 7.3.1 of the Participation Agreement and otherwise comply with the
terms of said Section binding upon it.
5.4.2 NO ACTION EXCEPT AS SPECIFIED. Owner Trustee shall have no
power, right or authority to, and agrees that it will not, manage, control,
use, sell, dispose of or otherwise deal with the Aircraft or any other part
of the Trust Estate except (a) as expressly required by the terms of any of
the Owner Trustee Agreements, (b) as expressly provided by the terms hereof
or (c) as expressly provided in written instructions from Owner Participant
pursuant to Section 5.1 or 5.2.
5.5 SATISFACTION OF CONDITIONS PRECEDENT. Anything in this Trust
Agreement to the contrary notwithstanding, Owner Trustee shall, subject to the
satisfaction of special counsel for Owner Trustee of the occurrence of all the
applicable conditions precedent specified in Section 3.2, comply with the
provisions of Section 3.1.
5.6 FIXED INVESTMENT TRUST. Notwithstanding anything in this Trust
Agreement to the contrary, Owner Trustee shall not be authorized and shall have
no power to "vary the investment" of Owner Participant within the meaning of
Treasury Regulations Section 301.7701-4(c)(1), it being understood that Owner
Trustee shall have the power and authority to fulfill its obligations under
Section 4.3 hereof, Section 4.3.3 of the Participation Agreement and Section 4.4
of the Lease.
Section 6. Owner Trustee.
6.1 ACCEPTANCE OF TRUSTS AND DUTIES. First Security accepts the trusts
hereby created and agrees to perform the same as Owner Trustee but only upon the
terms hereof and the Trust Indenture applicable to it. Owner Trustee also agrees
to receive and disburse all monies received by it constituting part of the Trust
Estate pursuant to the terms hereof. First Security shall not be answerable or
accountable under any circumstances, except for (a) its own willful misconduct
or gross negligence (including, without limitation, in connection with any
activities of Owner Trustee in violation of Section 5.4.2), (b) its failure (in
its individual capacity) to perform its obligations under Section 5.4.1, (c) its
or Owner Trustee's failure to use ordinary care to receive or disburse funds or
to comply with the first sentence of Section 6.8, (d) liabilities that may
result from the inaccuracy of any representation or breach of warranty of it in
its individual capacity (or from the failure by it in its individual capacity to
perform any covenant) in this Trust Agreement, the Trust Indenture, the Lease or
the Participation Agreement or elsewhere in any of the other Operative
Agreements, (e) taxes, fees or other charges on, based on or measured by any
fees, commissions or compensation received by First Security in connection with
the transactions contemplated by this Trust Agreement and the other Operative
Agreements to which it (in its individual capacity or as Owner Trustee) is a
party, (f) its or Owner Trustee's failure to use ordinary care in receiving or
disbursing funds or in connection with its obligation to invest funds pursuant
to Section 4 of the Participation Agreement, Section 4.4 of the Lease or Section
4.3 hereof, (g) any liability on the part of Owner Trustee arising out of its
negligence or willful or negligent misconduct in connection with its obligations
under Section 5.1 (other than the first sentence thereof), 6.8 or 9.2 hereof or
Section 4.01 of the Trust Indenture. First Security shall have no obligation to
advance its individual funds for any purpose, and Owner Trustee shall have no
obligation to distribute to Owner Participant, Lessee or any third party any
amounts to be paid to Owner Trustee until such amounts are collected by Owner
Trustee.
6.2 ABSENCE OF CERTAIN DUTIES.
(a) Except in accordance with written instructions furnished pursuant
to Section 5.1 or 5.2 and except as provided in, and without limiting the
generality of, Sections 3.1 and 5.4.1 and the last sentence of Section
9.1.2, and subject to Section 4.01 of the Trust Indenture, neither Owner
Trustee nor First Security shall have any duty (i) to see to any recording
or filing of any Operative Agreement or of any supplement to any thereof or
to see to the maintenance of any such recording or filing or any other
filing of reports with the FAA or other governmental agencies, except that
of First Security to comply with the FAA reporting requirements set forth
in 14 C.F.R. ss. 47.45 and 14 C.F.R. ss. 47.51, and Owner Trustee shall, to
the extent that information for that purpose is timely supplied by Lessee
pursuant to any of the Operative Agreements, complete and timely submit
(and furnish Owner Participant with a copy of) any and all reports relating
to the Aircraft that may from time to time be required by the FAA or any
government or governmental authority having jurisdiction, (ii) to see to
any insurance on the Aircraft or to effect or maintain any such insurance,
whether or not Lessee shall be in default with respect thereto, other than
to forward to Owner Participant copies of all reports and other written
information which Owner Trustee receives from Lessee pursuant to Section 11
of the Lease, (iii) except as provided in Section 7.3.1 or 7.3.2 of the
Participation Agreement, Section 4.01 of the Trust Indenture or Section 5.4
or 6.1 hereof, to see to the payment or discharge of any tax, assessment or
other governmental charge or any lien or encumbrance of any kind owing with
respect to or assessed or levied against any part of the Trust Indenture
Estate or the Trust Estate, except as provided in Section 6.3.9 of the
Participation Agreement or (iv) to inspect Lessee's books and records with
respect to the Aircraft at any time permitted pursuant to the Lease.
(b) Notwithstanding clause (a), Owner Trustee will furnish to
Mortgagee and Owner Participant, promptly upon receipt thereof, duplicates
or copies of all reports, notices, requests, demands, certificates,
financial statements and other instruments furnished to Owner Trustee under
the Lease or any other Operative Agreement except to the extent to which a
responsible officer of Owner Trustee reasonably believes (and confirms by
telephone call with Owner Participant) that duplicates or copies thereof
have already been furnished to Owner Participant by some other person.
6.3 NO REPRESENTATIONS OR WARRANTIES AS TO CERTAIN MATTERS. NEITHER
FIRST SECURITY NOR OWNER TRUSTEE MAKES OR SHALL BE DEEMED TO HAVE MADE (a) ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS,
VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, THE ABSENCE OF ANY STRICT
LIABILITY OBLIGATION OR ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF WHATSOEVER, except
that First Security warrants to Owner Participant that on the Delivery Date
Owner Trustee shall have received whatever title to the Aircraft that was
conveyed to it and that the Aircraft shall, on the Delivery Date and during the
Term, be free of Lessor Liens attributable to First Security or (b) any
representation or warranty as to the validity, legality or enforceability of
this Trust Agreement or any other Operative Agreement to which First Security,
in its individual capacity or as Owner Trustee, is a party, or any other
document or instrument, or as to the correctness of any statement contained in
any thereof except to the extent that any such statement is expressly made
herein or therein by such party as a representation by First Security, in its
individual capacity or as Owner Trustee, as the case may be, and except that
First Security hereby represents and warrants that it has all corporate power
and authority to execute, deliver and perform this Trust Agreement and that this
Trust Agreement has been, and (assuming due authorization, execution and
delivery by Owner Participant of this Trust Agreement) the other Operative
Agreements to which it or Owner Trustee is a party have been (or at the time of
execution and delivery of any such instrument by it or Owner Trustee under this
Trust Agreement or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of itself or Owner Trustee, as the case may be, and
that this Trust Agreement constitutes the legal, valid and binding obligation of
First Security or Owner Trustee, as the case may be, enforceable against First
Security or Owner Trustee, as the case may be, in accordance with its terms.
6.4 NO SEGREGATION OF MONIES; INTEREST. Monies received by Owner
Trustee under this Trust Agreement need not be segregated in any manner except
to the extent required by Law, or except as provided in written instructions
from Owner Participant, and shall be invested as provided in Section 4.3 hereof
or Section 4.4 of the Lease.
6.5 RELIANCE UPON CERTIFICATES, COUNSEL AND AGENTS. Owner Trustee
shall incur no liability to anyone in acting in good faith in reliance upon and
in accordance with any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
reasonably believed by it to be genuine and reasonably believed by it to be
signed by the proper party or parties. Unless other evidence in respect thereof
is specifically prescribed in this Trust Agreement, any request, direction,
order or demand of Owner Participant or Lessee mentioned in this Trust Agreement
or in any of the other Owner Trustee Agreements shall be sufficiently evidenced
by written instruments signed by the Chairman of the Board, the President, any
Vice President or any other officer and in the name of Owner Participant or
Lessee, as the case may be. Owner Trustee may accept a copy of a resolution of
the Board of Directors or Executive Committee of Lessee, certified by the
Secretary or an Assistant Secretary of Lessee as duly adopted and in full force
and effect, as conclusive evidence that such resolution has been duly adopted by
said Board of Directors or Executive Committee and that the same is in full
force and effect. As to any fact or matter the manner of ascertainment of which
is not specifically described in this Trust Agreement, Owner Trustee may, absent
Actual Knowledge to the contrary, for all purposes rely on a certificate signed
by the Chairman of the Board, the President, any Vice President or any other
officer of Lessee, and the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary of Lessee, as to such fact or matter, and such
certificate shall constitute full protection to Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon and in
accordance therewith. In the administration of trusts under this Trust
Agreement, Owner Trustee may execute any of the trusts or powers and perform its
powers and duties under this Trust Agreement directly or through agents or
attorneys and may, at the expense of the Trust Estate, consult with counsel,
accountants and other skilled persons to be selected and employed by it. Owner
Trustee shall not be liable for anything done, suffered or omitted in good faith
by it in accordance with the advice or opinion of any such counsel, accountants
or other skilled persons.
6.6 NOT ACTING IN INDIVIDUAL CAPACITY. In acting under this Trust
Agreement, First Security acts solely as Owner Trustee and not in its individual
capacity except as otherwise expressly provided in this Trust Agreement or in
the other Operative Agreements to which it is a party; and, except as may be
otherwise expressly provided in this Trust Agreement, the Lease, the
Participation Agreement and the Trust Indenture, all persons, other than the
Owner Participant as provided in this Trust Agreement or the Trust Indenture,
having any claim against Owner Trustee by reason of the transactions
contemplated hereby shall look only to the Trust Estate for payment or
satisfaction thereof except to the extent provided in Section 6.1 or otherwise
as Owner Trustee shall expressly agree otherwise in writing.
6.7 FEES; COMPENSATION. Airframe Manufacturer shall pay the
Transaction Expenses and ongoing fees of Owner Trustee throughout the Term
pursuant to Section 9.2 of the Participation Agreement. The Trust Estate shall
not have any liability for any such fees and expenses; PROVIDED, that the
foregoing shall not limit the obligations of Owner Participant under Sections
5.3 and 7; PROVIDED, that Owner Trustee shall have a Lien upon the Trust Estate
for any such fee not paid by Airframe Manufacturer as contemplated by Section
9.2 of the Participation Agreement and such Lien shall entitle Owner Trustee to
priority as to payment thereof over payment to any other Person under this Trust
Agreement; PROVIDED, that such Lien shall be subject and subordinate in all
events to the Lien of the Trust Indenture; and PROVIDED, FURTHER, that Owner
Trustee shall have no right to exercise, and shall not exercise, any rights or
remedies Owner Trustee may have with respect to such Lien unless and until the
Secured Obligations have been paid and performed in full.
6.8 TAX RETURNS. Owner Trustee shall be responsible for the keeping of
all appropriate books and records relating to the receipt and disbursement of
all monies under this Trust Agreement or any agreement contemplated hereby.
Owner Participant shall be responsible for causing to be prepared and filed all
income tax returns required to be filed by Owner Participant. Owner Trustee
shall be responsible for causing to be prepared, at the expense of Airframe
Manufacturer, all income tax returns required to be filed with respect to the
trust created hereby and shall execute and file such returns; PROVIDED, that
Owner Trustee shall send promptly a completed copy of such return to Owner
Participant not more than sixty nor less than fifteen days prior to the due date
of the return, PROVIDED, that Owner Trustee shall have timely received all
necessary information to complete and deliver to Owner Participant such return.
Owner Participant, upon request, will furnish Owner Trustee with all such
information as may be reasonably required from Owner Participant in connection
with the preparation of such income tax returns. Owner Trustee shall keep copies
of all returns delivered to or filed by it.
Section 7. INDEMNIFICATION OF FIRST SECURITY BY OWNER PARTICIPANT.
Owner Participant hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and hereby
indemnifies, protects, saves and keeps harmless, First Security and its
successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any Taxes
which are not required to be indemnified by Lessee pursuant to Section 9.1 or
9.3 of the Participation Agreement and excluding any taxes payable by First
Security on or measured by any compensation received by First Security for its
services under this Trust Agreement), claims, actions, suits, costs, expenses or
disbursements (including, without limitation, reasonable legal fees and
expenses, but excluding internal costs and expenses such as salaries and
overhead, and including, without limitation, any liability of an owner, any
strict liability and any liability without fault) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against First
Security (whether or not also indemnified against by Lessee under the Lease or
under the Participation Agreement or also indemnified against by any other
Person; PROVIDED, that Owner Participant shall be subrogated to the rights of
Owner Trustee against Lessee or any other indemnitor) in any way relating to or
arising out of this Trust Agreement or any of the other Operative Agreements or
the enforcement of any of the terms of any thereof, or in any way relating to or
arising out of the manufacture, purchase, acceptance, nonacceptance, rejection,
ownership, delivery, lease, possession, use, operation, condition, sale, return
or other disposition of the Aircraft (including, without limitation, latent and
other defects, whether or not discoverable, and any claim for patent, trademark
or copyright infringement), or in any way relating to or arising out of the
administration of the Trust Estate or the action or inaction of Owner Trustee,
under this Trust Agreement, except (a) in the case of gross negligence or
willful misconduct on the part of First Security, in its individual capacity or
as Owner Trustee, in the performance or nonperformance of its duties under this
Trust Agreement or under any of the other Owner Trustee Agreements or (b) those
Claims resulting from the inaccuracy of any representation or warranty of First
Security (or from the failure of First Security to perform any of its covenants)
in Section 6.3, in Section 6.03 of the Trust Indenture, in Section 4 of the
Lease, in Section 6.3 of the Participation Agreement or elsewhere in any of the
other Operative Agreements or (c) as may result from a breach by First Security
of its covenant in the last sentence of Section 5.4.1 or (d) in the case of the
failure to use ordinary care on the part of First Security, in its individual
capacity or as Owner Trustee, in the receipt or disbursement of funds or in
connection with its obligation to invest funds pursuant to Section 4 of the
Participation Agreement, Section 4.4 of the Lease or Section 4.3 hereof or in
compliance with the provisions of the first sentence of Section 6.8 or (e) any
liability on the part of Owner Trustee arising out of its negligence or willful
or negligent misconduct in connection with its obligations under Section 5.1,
6.8 or 9.2 hereof or Section 4.01 of the Trust Indenture, or (f) those claims
arising under any circumstances or upon any terms where Lessee would not have
been required to indemnify First Security pursuant to Section 9.1 or 9.3 of the
Participation Agreement (disregarding for purposes of this paragraph Sections
9.1.2(b) and 9.3.2(j)); PROVIDED, that before asserting its right to
indemnification, if any, pursuant to this Section 7, First Security shall first
demand its corresponding right to indemnification pursuant to Section 9 of the
Participation Agreement (but need not exhaust any or all remedies available
thereunder). The indemnities contained in this Section 7 extend to First
Security only in its individual capacity and shall not be construed as
indemnities of the Trust Indenture Estate or the Trust Estate (except to the
extent, if any, that First Security has been reimbursed by the Trust Indenture
Estate or the Trust Estate for amounts covered by the indemnities contained in
this Section 7). The indemnities contained in this Section 7 shall survive the
termination of this Trust Agreement. In addition, if necessary, First Security
shall be entitled to indemnification from the Trust Estate, subject to the Lien
of the Trust Indenture, for any liability, obligation, loss, damage, penalty,
tax, claim, action, suit, cost, expense or disbursement indemnified against
pursuant to this Section 7 to the extent not reimbursed by Lessee, Owner
Participant or others, but without releasing any of them from their respective
agreements of reimbursement; and, to secure the same First Security shall have a
lien on the Trust Estate, subject to the lien of the Trust Indenture and subject
further to the provisions of Section 6.7, which shall be prior to any interest
therein of Owner Participant. The payor of any indemnity under this Section 7
shall be subrogated to any right of the person indemnified in respect of the
matter as to which such indemnity was paid.
Section 8. Transfer Of Owner Participant's Interest.
8.1 TRANSFER OF INTEREST. All provisions of Section 10 of the
Participation Agreement shall (with the same force and effect as if set forth in
full in this Section 8.1) be applicable to any assignment, conveyance or other
transfer by Owner Participant of any of its right, title or interest in and to
the Participation Agreement, the Trust Estate or this Trust Agreement.
Section 9. Successor Owner Trustees; Co-Trustees.
9.1 RESIGNATION OF OWNER TRUSTEE; APPOINTMENT OF SUCCESSOR
9.1.1 RESIGNATION OR REMOVAL. Owner Trustee or any successor
Owner Trustee (a) shall resign if required to do so pursuant to Section
13.3 of the Participation Agreement or upon obtaining Actual Knowledge of
any facts that would cast doubt upon its continuing status as a Citizen of
the United States and (b) may resign at any time without cause by giving at
least 60 days' prior written notice to Owner Participant, Mortgagee and
Lessee, such resignation to be effective upon the assumption of the trusts
hereunder by the successor Owner Trustee under Section 9.1.2. In addition,
Owner Participant may at any time remove Owner Trustee, with or without
cause by a notice in writing delivered to Owner Trustee, Mortgagee and
Lessee, such removal to be effective upon the assumption of the trusts
hereunder by the successor Owner Trustee under Section 9.1.2, PROVIDED,
that, in the case of a removal without cause, unless a Lease Event of
Default shall have occurred and be continuing, such removal shall be
subject to the consent of Lessee (which consent shall not be unreasonably
withheld). In the case of the resignation or removal of Owner Trustee,
Owner Participant may appoint a successor Owner Trustee by an instrument
signed by Owner Participant, with, unless a Lease Event of Default shall
have occurred and be continuing, the consent of Lessee (which consent shall
not be unreasonably withheld). If a successor Owner Trustee shall not have
been appointed within 30 days after such notice of resignation or removal,
Owner Trustee, any Owner Participant, Lessee or Mortgagee may apply to any
court of competent jurisdiction to appoint a successor Owner Trustee to act
until such time, if any, as a successor shall have been appointed as above
provided. Any successor Owner Trustee so appointed by such court shall
immediately and without further act be superseded by any successor Owner
Trustee appointed as above provided within one year from the date of the
appointment by such court.
9.1.2 EXECUTION AND DELIVERY OF DOCUMENTS, ETC. Any successor
Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to Owner Participant, Lessee and
Mortgagee, an instrument accepting such appointment and assuming the
obligations of Owner Trustee, in its individual capacity and as Owner
Trustee, under the Owner Trustee Agreements, and thereupon such successor
Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trusts of the predecessor
Owner Trustee in the trusts under this Trust Agreement with like effect as
if originally named Owner Trustee in this Trust Agreement; but
nevertheless, upon the written request of such successor Owner Trustee,
such predecessor Owner Trustee shall execute and deliver an instrument
transferring to such successor Owner Trustee, upon the trusts herein
expressed, all the estates, properties, rights, powers and trusts of such
predecessor Owner Trustee, and such predecessor Owner Trustee shall duly
assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon
the trusts herein expressed. Upon the appointment of any successor Owner
Trustee under this Section 9.1, the predecessor Owner Trustee will execute
such documents as are provided to it by such successor Owner Trustee and
will take such further actions as are requested of it by such successor
Owner Trustee as are required to cause registration of the Aircraft
included in the Trust Estate to be transferred upon the records of the FAA,
or other governmental authority having jurisdiction, into the name of the
successor Owner Trustee.
9.1.3 QUALIFICATIONS. Any successor Owner Trustee, however
appointed, shall be a Citizen of the United States and shall also be a bank
or trust company organized under the Laws of the United States or any state
thereof having a combined capital and surplus of at least $100,000,000, if
there be such an institution willing, able and legally qualified to perform
the duties of Owner Trustee under this Trust Agreement upon reasonable or
customary terms. No such successor Owner Trustee shall be located in a
jurisdiction which creates material adverse consequences for Lessee (unless
such material adverse consequences would be created by substantially all
jurisdictions where major banking or trust institutions are located).
9.1.4 MERGER, ETC. Any corporation into which First Security may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
First Security shall be a party, or any corporation to which substantially
all the corporate trust business of First Security may be transferred,
shall, subject to the terms of Section 9.1.3, be Owner Trustee under this
Trust Agreement without further act, PROVIDED, that such corporation shall
not also be the Mortgagee.
9.2 CO-TRUSTEES AND SEPARATE TRUSTEES.
(a) If at any time it shall be necessary or prudent in order to
conform to any Law of any jurisdiction in which all or any part of the
Trust Estate is located, or Owner Trustee being advised by counsel shall
determine that it is so necessary or prudent in the interest of Owner
Participant or Owner Trustee, or Owner Trustee shall have been directed to
do so by Owner Participant, Owner Trustee and Owner Participant shall
execute and deliver an agreement supplemental hereto and all other
instruments and agreements necessary or proper to constitute another bank
or trust company or one or more persons (any or all of which shall be a
Citizen of the United States) approved by Owner Trustee and Owner
Participant, either to act as co-trustee, jointly with Owner Trustee, or to
act as separate trustee under this Trust Agreement (any such co-trustee or
separate trustee being herein sometimes referred to as an "additional
trustee"). In the event Owner Participant shall not have joined in the
execution of such agreements' supplemental hereto within ten days after the
receipt of a written request from Owner Trustee so to do, or in case a
Lease Event of Default or Indenture Event of Default shall occur and be
continuing, Owner Trustee may act under the foregoing provisions of this
Section 9.2 without the concurrence of Owner Participant; and Owner
Participant hereby appoints Owner Trustee its agent and attorney-in-fact to
act for it under the foregoing provisions of this Section 9.2 in either of
such contingencies.
(b) Every additional trustee under this Trust Agreement shall, to the
extent permitted by Law, be appointed and act, and Owner Trustee and its
successors shall act, subject to the following provisions and conditions:
(i) All powers, duties, obligations and rights conferred upon
Owner Trustee in respect of the custody, control and management of
monies, the Aircraft or documents authorized to be delivered under
this Trust Agreement or under the Participation Agreement shall be
exercised solely by Owner Trustee;
(ii) All other rights, powers, duties and obligations conferred
or imposed upon Owner Trustee shall be conferred or imposed upon and
exercised or performed by Owner Trustee and such additional trustee
jointly, except to the extent that under any Law of any jurisdiction
in which any particular act or acts are to be performed (including the
holding of title to the Trust Estate) Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such additional trustee;
(iii) No power given to, or which it is provided hereby may be
exercised by, any such additional trustee shall be exercised under
this Trust Agreement by such additional trustee, except jointly with,
or with the consent in writing of, Owner Trustee;
(iv) No trustee under this Trust Agreement shall be personally
liable by reason of any action or omission of any other trustee under
this Trust Agreement;
(v) Owner Participan 