As filed with the Securities and Exchange Commission on May 30, 1996
REGISTRATION NO. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CONTINENTAL AIRLINES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 4512 74-2099724
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
2929 ALLEN PARKWAY, SUITE 2010
HOUSTON, TEXAS 77019
(713) 834-2950
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------------
JEFFERY A. SMISEK, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CONTINENTAL AIRLINES, INC.
2929 ALLEN PARKWAY, SUITE 2010
HOUSTON, TEXAS 77019
(713) 834-2950
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES OF CORRESPONDENCE TO:
MICHAEL L. RYAN, ESQ.
CLEARY, GOTTLIEB, STEEN & HAMILTON
ONE LIBERTY PLAZA
NEW YORK, NEW YORK 10006
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE
OF THE SECURITIES TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [_]
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CALCULATION OF REGISTRATION FEE
======================================================================================================================
PROPOSED PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER UNIT PRICE (1) REGISTRATION FEE(2)
- ----------------------------------------------------------------------------------------------------------------------
1996-A Pass Through Certificates $269,518,000 100% $269,518,000 $ 92,937
- --------------------------------------------------------------------------------------------------------------------
1996-B Pass Through Certificates $ 94,332,000 100% $ 94,332,000 $ 32,528
- --------------------------------------------------------------------------------------------------------------------
1996-C Pass Through Certificates $ 74,117,000 100% $ 74,117,000 $ 28,558
- --------------------------------------------------------------------------------------------------------------------
1996-D Pass Through Certificates $ 51,300,000 100% $ 51,300,000 $ 17,690
- --------------------------------------------------------------------------------------------------------------------
Total $489,267,000 100% $489,267,000 $168,713
====================================================================================================================
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457.
(2) Fee was previously paid with the Registration Statement on Form S-3
(File No. 33-79688).
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PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
PROSPECTUSES INCLUDED IN THIS REGISTRATION STATEMENT ALSO RELATE TO $510,733,000
IN AGGREGATE PRINCIPAL AMOUNT OF PASS THROUGH CERTIFICATES AND DEBT SECURITIES
PREVIOUSLY REGISTERED UNDER A REGISTRATION STATEMENT ON FORM S-3
(FILE NO. 33-79688).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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CONTINENTAL AIRLINES, INC.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING LOCATION IN THE PROSPECTUS
OF INFORMATION REQUIRED BY ITEMS IN FORM S-4
ITEM
----
1. Forepart of the
Registration Statement and
Outside Front Cover Page
of Prospectus.................... Facing Page of the Registration Statement; Cross Reference
Sheet; Outside Front Cover Page of Prospectus
2. Inside Front and Outside
Back Cover Pages of
Prospectus....................... Available Information; Outside Back Cover Page of Prospectus
3. Risk Factors, Ratio of
Earnings to Fixed Charges
and Other Information............ Prospectus Summary; Risk Factors; The Company; Selected Financial Data
4. Terms of the Transaction......... Prospectus Summary; Risk Factors; The Exchange Offer;
Description of New Certificates; Plan of
Distribution; Certain Federal Income Tax Considerations
5. Pro Forma Financial
Information...................... Not Applicable
6. Material Contracts With the
Company Being Acquired........... Not Applicable
7. Additional Information
Required for Reoffering by
Persons and Parties Deemed
to be Underwriters............... Not Applicable
8. Interests of Named Experts
and Counsel...................... Not Applicable
9. Disclosure of Commission
Position on
Indemnification for
Securities Act Liabilities....... Not Applicable
10. Information with Respect
to S-3 Registrants............... Prospectus Summary; The Company; Recent Developments
11. Incorporation of Certain
Information by Reference......... Available Information; Incorporation of Certain Documents
by Reference
12. Information with Respect
to S-2 or S-3 Registrants........ Not Applicable
13. Incorporation of Certain
Information by Reference......... Not Applicable
14. Information with Respect
to Registrants Other Than
S-3 or S-2 Registrants........... Not Applicable
15. Information with Respect
to S-3 Companies................. Not Applicable
16. Information with Respect
or S-2 to S-3 Companies.......... Not Applicable
17. Information with Respect
to Companies Other Than
S-3 or S-2 Companies............. Not Applicable
18. Information if Proxies,
Consents or Authorizations
Are to be Solicited.............. Not Applicable
19. Information if Proxies,
Consents or Authorizations
Are Not to be Solicited or
in an Exchange Offer............. Prospectus Summary; The Exchange Offer; Description of
New Certificates
INTRODUCTORY NOTE
This Registration Statement contains three forms of prospectus: (i) a
prospectus relating to the offer to exchange Pass Through Certificates, Series
1996, (ii) a prospectus relating to the Offering of Pass Through Certificates
and (iii) a prospectus relating to the Offering of Debt Securities. The
Prospectuses described in (ii) and (iii) were previously included in
Registration Statement (File No. 33-79688).
SUBJECT TO COMPLETION--DATED MAY 30, 1996
PROSPECTUS
Continental Airlines, Inc.
Offer to Exchange Pass Through Certificates, Series 1996,
which have been registered under the Securities Act of 1933, as amended,
for any and all outstanding Pass Through Certificates, Series 1996
The Exchange Offer will expire at 5:00 p.m., New York City time, on
[_____________], 1996, unless extended.
Pass Through Certificates, Series 1996 (the "New Certificates"), which have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to a Registration Statement of which this Prospectus is a part,
are hereby offered, upon the terms and subject to the conditions set forth in
this Prospectus and the accompanying letter of transmittal (the "Letter of
Transmittal" and, together with this Prospectus, the "Exchange Offer"), in
exchange for an equal principal amount of outstanding Pass Through Certificates,
Series 1996 (the "Old Certificates"), of which $489,267,000 aggregate principal
amount is outstanding as of the date hereof. The New Certificates and the Old
Certificates are collectively referred to herein as the "Certificates."
Any and all Old Certificates that are validly tendered and not withdrawn on
or prior to 5:00 P.M., New York City time, on the date the Exchange Offer
expires, which will be [_________], 1996 (30 calendar days following the
commencement of the Exchange Offer) unless the Exchange Offer is extended (such
date, including as extended, the "Expiration Date") will be accepted for
exchange. Tenders of Old Certificates may be withdrawn at any time prior to 5:00
P.M., New York City time on the Expiration Date. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Certificates being tendered
for exchange. However, the Exchange Offer is subject to certain customary
conditions which may be waived by the Company and to the terms of the
Registration Rights Agreement (as defined herein). Old Certificates may be
tendered only in integral multiples of $1,000. See "The Exchange Offer."
The New Certificates will be entitled to the benefits of the same Pass-
Through Trust Agreements (as defined herein) which govern the Old Certificates
and will govern the New Certificates. The form and terms of the New Certificates
are the same in all material respects as the form and terms of the Old
Certificates, except that the New Certificates do not contain terms with respect
to the interest rate step-up provisions and the New Certificates have been
registered under the Securities Act and therefore will not bear legends
restricting the transfer thereof. See "The Exchange Offer" and "Description of
New Certificates."
(continued on next page)
--------------------
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PARTICIPANTS IN THE EXCHANGE OFFER, SEE "RISK FACTORS" BEGINNING ON PAGE 28 OF
THIS PROSPECTUS.
--------------------
Final Expected
Pass Through Certificates Principal Amount Interest Rate Distribution Date
------------------------- ---------------- ------------- -----------------
1996-A................... $269,518,000 6.94% October 15, 2013
1996-B................... $ 94,332,000 7.82% October 15, 2013
1996-C................... $ 74,117,000 9.50% October 15, 2013
1996-D................... $ 51,300,000 12.48% October 15, 2013
------------
TOTAL $489,267,000
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1996
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+ OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS +
+ OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Each Certificate represents a fractional undivided interest in one of the
four Continental Airlines 1996 Pass Through Trusts (the "Class A Trust", the
"Class B Trust", the "Class C Trust" and the "Class D Trust" and, collectively,
the "Trusts") formed pursuant to four separate pass through trust agreements
(the "Pass Through Trust Agreements") between Continental and Wilmington Trust
Company (the "Trustee"), as trustee under each Trust. Pursuant to an
Intercreditor Agreement (as defined herein), (i) the Certificates of the Class B
Trust are subordinated in right of payment to the Certificates of the Class A
Trust, (ii) the Certificates of the Class C Trust are subordinated in right of
payment to the Certificates of the Class B Trust and (iii) the Certificates of
the Class D Trust are subordinated in right of payment to the Certificates of
the Class C Trust. Payments of interest on the Certificates issued by each Trust
(other than the Class D Trust) are supported by separate liquidity facilities
for the benefit of the holders of such Certificates, each such facility provided
initially by Credit Suisse, acting through its New York branch, in an amount
sufficient to pay interest thereon at the applicable interest rate for such
Trust on six successive quarterly distribution dates. The Certificates issued by
the Class D Trust were acquired by the Owner Participant (as defined herein) or
its affiliate.
The property of the Trusts includes, among other things, equipment notes
(the "Equipment Notes") issued on a nonrecourse basis by the trustees of
separate owner trusts (each, an "Owner Trustee") in connection with 18 separate
leveraged lease transactions that refinanced the indebtedness of such Owner
Trustees, originally incurred to finance the purchase of nine Boeing 737-524
aircraft and nine Boeing 757-224 aircraft (collectively, the "Aircraft") which
have been leased to Continental. The Equipment Notes in respect of each Aircraft
were issued in four series. Each Trust has purchased one series of the Equipment
Notes issued with respect to each of the Aircraft such that all of the Equipment
Notes held in each Trust will have an interest rate corresponding to the
interest rate applicable to the Certificates issued by such Trust. The maturity
dates of the Equipment Notes acquired by each Trust will occur on or before the
final expected distribution date applicable to the Certificates issued by such
Trust. The Equipment Notes issued with respect to each Aircraft are secured by a
security interest in such Aircraft and an assignment of the lease relating
thereto, including the right to receive rentals payable with respect to such
Aircraft by Continental. Although neither the Certificates nor the Equipment
Notes are direct obligations of, or guaranteed by, Continental, the amounts
unconditionally payable by Continental for lease of the Aircraft will be
sufficient to pay in full when due all amounts required to be paid on the
Equipment Notes held in the Trusts.
All of the Equipment Notes held in each Trust will accrue interest at the
applicable rate per annum for such Trust, payable on January 15, April 15, July
15 and October 15 of each year commencing on April 15, 1996. Such interest will
be passed through to Certificateholders (as defined herein) of such Trust on
each such date, in each case subject to the Intercreditor Agreement. See
"Description of New Certificates--General" and "--Payments and Distributions."
The New Certificates will accrue interest at the applicable per annum rate for
such Trust, from the last date on which interest was paid on the Old
Certificates surrendered in exchange therefor. See "The Exchange Offer--Interest
on New Certificates."
Scheduled principal payments on the Equipment Notes held in each Trust will
be passed through to the Certificateholders of each such Trust on January 15,
April 15, July 15 and October 15 in certain years, commencing on January 15,
1997, in the case of each of the Class A Trust, the Class B Trust and the Class
C Trust and January 15, 1999, in the case of the Class D Trust, in accordance
with the principal repayment schedule set forth below under "Description of New
Certificates--Pool Factors" and "Description of the Equipment Notes--Principal
and Interest Payments," in each case subject to the Intercreditor Agreement.
Under each Pass Through Trust Agreement, an Event of Default will occur if
the Trustee fails to pay within 10 business days of the due date thereof: (i)
the outstanding Pool Balance (as defined herein) of the applicable Class of
Certificates on the Final Maturity Date (as defined herein) for such Class or
(ii) interest due on such Certificates on any distribution date (unless the
Subordination Agent (as defined herein) shall have made an Interest Drawing (as
defined herein) in an amount sufficient to pay such interest and shall have
distributed such amount to the Certificateholders entitled thereto).
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to third
parties, including Exxon Capital Holdings Corporation, SEC No-Action Letter
(available April 13, 1989) (the "Exxon Capital Letter"), Morgan Stanley & Co.
Incorporated, SEC No-Action Letter (available June 5, 1991) (the "Morgan Stanley
Letter") and Shearman & Sterling, SEC No-Action Letter (available July 2, 1993)
(the "Shearman & Sterling Letter") (collectively, the "Exchange Offer No-Action
Letters"), the Company believes that the New Certificates issued pursuant to the
Exchange Offer may be offered for resale, resold or otherwise transferred by
holders thereof (other than a broker-dealer who acquires such New Certificates
directly from the Trustee for resale pursuant to Rule 144A under the Securities
Act or any other available exemption under the Securities Act or any holder that
is an "affiliate" of the Company as defined under Rule 405 of the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Certificates are
acquired in the ordinary course of such holders' business and such holders are
not engaged in, and do not intend to engage in, a distribution of such New
Certificates and have no arrangement with any person to participate in a
distribution of such New Certificates. However, the staff of the Commission has
not considered the Exchange Offer in the context of a no-action letter and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer as in such other circumstances.
By tendering the Old Certificates in exchange for New Certificates, each holder,
other than a broker-dealer, will represent to the Company that: (i) it is not an
affiliate of the Company (as defined under Rule 405 of the Securities Act) nor a
broker-dealer tendering Old Certificates acquired directly from the Company for
its own account; (ii) any New Certificates to be received by it will be acquired
in the ordinary course of its business; and (iii) it is not engaged in, and does
not intend to engage in, a distribution of such New Certificates and has no
arrangement or understanding to participate in a distribution of the New
Certificates. If a holder of Series A Notes is engaged in or intends to engage
in a distribution of the Series B Notes or has any arrangement or understanding
with respect to the distribution of the Series B Notes to be acquired pursuant
to the Exchange Offer, such holder may not rely on the applicable
interpretations of the staff of the Commission and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction. Each broker-dealer that
receives New Certificates for its own account pursuant to the Exchange Offer (a
"Participating Broker-Dealer") must acknowledge that it will deliver a
prospectus in connection with any resale of such New Certificates. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of New Certificates received in
exchange for Old Certificates where such Old Certificates were acquired by such
Participating Broker-Dealer as a result of market-making activities or other
trading activities. Pursuant to the Registration Rights Agreement, the Company
has agreed that, starting on the Expiration Date and ending on the close of
business 180 days after the Expiration Date, it will make this Prospectus
available to any Participating Broker-Dealer for use in connection with any such
resale. See "Plan of Distribution."
The Company will not receive any proceeds from this offering. The Company
has agreed to pay the expenses of the Exchange Offer. No underwriter is being
utilized in connection with the Exchange Offer.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD CERTIFICATES IN ANY JURISDICTION IN
WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES AND BLUE SKY LAWS OF SUCH JURISDICTION.
Prior to this Exchange Offer, there has been no public market for the Old
Certificates or New Certificates. If such a market were to develop, the New
Certificates could trade at prices that may be higher or lower than their
principal amount. Neither Continental nor any Trust has applied or intends to
apply for listing of the New Certificates on any national securities exchange or
for quotation of the New Certificates through the National Association of
Securities Dealers Automated Quotation System. One or more of CS First Boston
Corporation, Morgan Stanley & Co. Incorporated, Lehman Brothers, Merrill Lynch &
Co. and FIELDSTONE FPCG SERVICES, L.P. (the "Initial Purchasers") have
previously made a market in the Old Certificates and Continental has been
advised by the Initial Purchasers that one or more of them intends to make a
market in the New Certificates, as permitted by applicable laws and regulations,
after consummation of the Exchange Offer. None of the Initial Purchasers is
obligated, however, to make a market in the Old Certificates or the New
Certificates and any such market making activity may be discontinued at any time
without notice at the sole discretion of each Initial Purchaser. There can be no
assurance as to the liquidity of the pubic market for the New Certificates or
that any active public market for the New Certificates will develop or continue.
If an active public market does not develop or continue, the market prices and
liquidity of the New Certificates may be adversely affected. See "Risk Factors--
Absence of a Public Market for the New Certificates."
AVAILABLE INFORMATION
Continental is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information may be
inspected and copied at the following public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Seven World Trade Center, 13th Floor, New York, New York
10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may also be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of prescribed rates. In
addition, reports, proxy statements and other information concerning Continental
may be inspected and copied at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005.
Continental is the successor to Continental Airlines Holdings, Inc.
("Holdings"), which merged with and into Continental on April 27, 1993.
Holdings had also been subject to the informational requirements of the Exchange
Act.
This Prospectus constitutes a part of a registration statement on Form S-4
(together with all amendments and exhibits, the "Registration Statement") filed
by Continental with the Commission under the Securities Act, with respect to the
New Certificates offered hereby. This Prospectus omits certain of the
information contained in the Registration Statement, and reference is hereby
made to the Registration Statement for further information with respect to
Continental and Holdings and the securities offered hereby. Although statements
concerning and summaries of certain documents are included herein, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. These documents may be
inspected without charge at the office of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and copies may be obtained at fees
and charges prescribed by the Commission.
REPORTS TO PASS THROUGH CERTIFICATEHOLDERS
Wilmington Trust Company, in its capacity as Pass Through Trustee under
each of the Trusts, will provide the certificateholders of each Trust certain
periodic reports concerning the distributions made from such Trust. See
"Description of New Certificates -- Reports to Certificateholders."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 0-9781) are
hereby incorporated by reference in this Prospectus: (i) Continental's Annual
Report on Form 10-K for the year ended December 31, 1995 (as amended by Forms
10-K/A1 and 10-K/A2 filed on March 8, 1996 and April 10, 1996, respectively),
(ii) Continental's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, (iii) Continental's Current Reports on Form 8-K, filed on January 31,
1996, March 26, 1996 and May 7, 1996.
All reports and any definitive proxy or information statements filed by
Continental pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the securities offered hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated herein by reference, or contained in this Prospectus, shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE THAT ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE WITHOUT CHARGE TO
ANY PERSON TO WHOM A PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF
SUCH PERSON, FROM CONTINENTAL AIRLINES, INC., 2929 ALLEN PARKWAY, SUITE 2010,
HOUSTON, TEXAS 77019, ATTENTION: SECRETARY, TELEPHONE (713) 834-2950. IN ORDER
TO ENSURE TIMELY DELIVER OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY
, 1996.
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by the
detailed information and financial statements (including the notes thereto)
appearing elsewhere or incorporated by reference in this Prospectus. Prospective
investors should consider carefully the matters discussed under the caption
"Risk Factors." Unless otherwise stated or unless the context otherwise
requires, references to "Continental" or the "Company" include Continental
Airlines, Inc. and its predecessors and subsidiaries. All route, fleet, traffic
and similar information appearing in this Prospectus is as of or for the period
ended March 31, 1996, unless otherwise stated herein.
THE COMPANY
Continental Airlines, Inc. is a major United States air carrier engaged in
the business of transporting passengers, cargo and mail. Continental is the
fifth largest United States airline (as measured by revenue passenger miles in
the first three months of 1996) and, together with its wholly owned subsidiary,
Continental Express, Inc. ("Express"), and its 91%-owned subsidiary, Continental
Micronesia, Inc. ("CMI"), serves 175 airports worldwide.
The Company operates its route system primarily through domestic hubs at
Newark, Houston Intercontinental and Cleveland, and a Pacific hub on Guam and
Saipan. Each of Continental's three U.S. hubs is located in a large business and
population center, contributing to a high volume of "origin and destination"
traffic. The Guam/Saipan hub is strategically located to provide service from
Japanese and other Asian cities to popular resort destinations in the western
Pacific. Continental is the primary carrier at each of these hubs, accounting
for 51%, 78%, 54% and 58% of all daily jet departures, respectively.
Continental directly serves 118 U.S. cities, with additional cities
(principally in the western and southwestern United States) connected to
Continental's route system under agreements with America West Airlines, Inc.
("America West"). Internationally, Continental flies to 57 destinations and
offers additional connecting service through alliances with foreign carriers.
Continental operates 52 weekly departures to five European cities and markets
service to four other cities through code-sharing agreements. Continental is one
of the leading airlines providing service to Mexico and Central America, serving
more destinations in Mexico than any other United States airline. In addition,
Continental flies to four cities in South America and plans to commence service
between Newark and Bogota, Colombia, with service on to Quito, Ecuador, in June
1996. Through its Guam/Saipan hub, Continental provides extensive service in the
western Pacific, including service to more Japanese cities than any other United
States carrier.
The Company is a Delaware corporation. Its executive offices are located at
2929 Allen Parkway, Suite 2010, Houston, Texas 77019, and its telephone number
is (713) 834-2950.
THE EXCHANGE OFFER
Registration Rights Agreement
The Old Certificates were issued on January 31, 1996 to the Initial Purchasers
and the Owner Participant. The Initial Purchasers placed the Old Certificates
with institutional investors. In connection therewith, the Company, the Trustee,
as trustee under each of the Trusts, and the Initial Purchasers entered into the
Registration Rights Agreement providing, among other things, for the Exchange
Offer. See "The Exchange Offer."
The Exchange Offer
New Certificates are being offered in exchange for an equal principal amount of
Old Certificates. As of the date hereof, $489,267,000 aggregate principal amount
of Old Certificates are outstanding. Old Certificates may be tendered only in
integral
5
multiples of $1000.
Resale of New Certificates
Based on interpretations by the staff of the Commission, as set forth in no-
action letters issued to third parties, including the Exchange Offer No-Action
Letters, the Company believes that the New Certificates issued pursuant to the
Exchange Offer may be offered for resale, resold or otherwise transferred by
holders thereof (other than a broker-dealer who acquires such New Certificates
directly from the Trustee for resale pursuant to Rule 144A under the Securities
Act or any other available exemption under the Securities Act or any holder that
is an "affiliate" of the Company as defined under Rule 405 of the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Certificates are
acquired in the ordinary course of such holders' business and such holders are
not engaged in, and do not intend to engage in, a distribution of such New
Certificates and have no arrangement with any person to participate in a
distribution of such New Certificates. However, the staff of the Commission has
not considered the Exchange Offer in the context of a no-action letter and there
can be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer as in such other circumstances.
By tendering the Old Certificates in exchange for New Certificates, each holder,
other than a broker-dealer, will represent to the Company that: (i) it is not an
affiliate of the Company (as defined under Rule 405 of the Securities Act) nor a
broker-dealer tendering Old Certificates acquired directly from the Company for
its own account; (ii) any New Certificates to be received by it were acquired in
the ordinary course of its business; and (iii) it is not engaged in, and does
not intend to engage in, a distribution of such New Certificates and has no
arrangement or understanding to participate in a distribution of the New
Certificates. If a holder of Series A Notes is engaged in or intends to engage
in a distribution of the Series B Notes or has any arrangement or understanding
with respect to the distribution of the Series B Notes to be acquired pursuant
to the Exchange Offer, such holder may not rely on the applicable
interpretations of the staff of the Commission and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction. Each Participating Broker-
Dealer that receives New Certificates for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such New Certificates. The Letter of Transmittal states that
by so acknowledging and by delivering a prospectus, a Participating Broker-
Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of New Certificates received in exchange for Old
Certificates where such Old Certificates were acquired by such Participating
Broker-Dealer as a result of market-making activities
6
or other trading activities. The Company has agreed that, starting on the
Expiration Date and ending on the close of business 180 days after the
Expiration Date, it will make this Prospectus available to any Participating
Broker-Dealer for use in connection with any such resale. See "Plan of
Distribution." To comply with the securities laws of certain jurisdictions, it
may be necessary to qualify for sale or register the New Certificates prior to
offering or selling such New Certificates. The Company has agreed, pursuant to
the Registration Rights Agreement and subject to certain specified limitations
therein, to register or qualify the New Certificates for offer or sale under the
securities or "blue sky" laws of such jurisdictions as may be necessary to
permit the holders of New Certificates to trade the New Certificates without any
restrictions or limitations under the securities laws of the several states of
the United States.
Consequences of Failure to Exchange Old Certificates
Upon consummation of the Exchange Offer, subject to certain exceptions, holders
of Old Certificates who do not exchange their Old Certificates for New
Certificates in the Exchange Offer will no longer be entitled to registration
rights and will not be able to offer or sell their Old Certificates, unless such
Old Certificates are subsequently registered under the Securities Act (which,
subject to certain limited exceptions, the Company will have no obligation to
do), except pursuant to an exemption from, or in a transaction not subject to,
the Securities Act and applicable state securities laws. See "Risk Factors--
Consequences of Failure to Exchange" and "The Exchange Offer--Terms of the
Exchange Offer."
Expiration Date
5:00 p.m., New York City time, on , 1996 (30 calendar days
following the commencement of the Exchange Offer), unless the Exchange Offer is
extended, in which case the term "Expiration Date" means the latest date and
time to which the Exchange Offer is extended.
Interest on the New Certificates
The New Certificates will accrue interest at the applicable per annum for such
Trust set forth on the cover page of this Prospectus, from the last date on
which interest was paid on the Old Certificates surrendered in exchange
therefor. Interest on the New Certificates is payable on January 15, April 15,
July 15 and October 15 of each year commencing April 15, 1996, subject to the
terms of the Intercreditor Agreement.
Conditions to the Exchange Offer
The Exchange Offer is not conditioned upon any minimum principal amount of Old
Certificates being tendered for exchange. However, the Exchange Offer is
subject to certain customary conditions, which may be waived by the Company.
See "The Exchange Offer--Conditions." Except for the requirements of applicable
Federal and state securities laws, there are no Federal or state regulatory
requirements to be complied with or obtained by the Company in connection with
the Exchange Offer.
Procedures for Tendering Old
7
Certificates
Each holder of Old Certificates wishing to accept the Exchange Offer must
complete, sign and date the Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein and therein, and mail or
otherwise deliver such Letter of Transmittal, or such facsimile, together with
the Old Certificates to be exchanged and any other required documentation to the
Exchange Agent (as defined herein) at the address set forth herein or effect a
tender of Old Certificates pursuant to the procedures for book-entry transfer as
provided for herein. See "The Exchange Offer--Procedures for Tendering" and
"--Book Entry Transfer."
Guaranteed Delivery Procedures
Holders of Old Certificates who wish to tender their Old Certificates and whose
Old Certificates are not immediately available or who cannot deliver their Old
Certificates and a properly completed Letter of Transmittal or any other
documents required by the Letter of Transmittal to the Exchange Agent prior to
the Expiration Date may tender their Old Certificates according to the
guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed
Delivery Procedures."
Withdrawal Rights
Tenders of Old Certificates may be withdrawn at any time prior to 5:00 p.m., New
York City time, on the Expiration Date. To withdraw a tender of Old
Certificates, a written or facsimile transmission notice of withdrawal must be
received by the Exchange Agent at its address set forth herein under "The
Exchange Offer--Exchange Agent" prior to 5:00 p.m., New York City time, on the
Expiration Date.
Acceptance of Old Certificates and Delivery of New Certificates
Subject to certain conditions, any and all Old Certificates which are properly
tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on the
Expiration Date will be accepted for exchange. The New Certificates issued
pursuant to the Exchange Offer will be delivered promptly following the
Expiration Date. See "The Exchange Offer--Terms of the Exchange Offer."
Certain Tax Considerations
The exchange of New Certificates for Old Certificates should not be a sale or
exchange or otherwise a taxable event for Federal income tax purposes. See
"Certain Federal Income Tax Considerations."
Exchange Agent
Wilmington Trust Company is serving as exchange agent (the "Exchange Agent") in
connection with the Exchange Offer
Fees and Expenses
All expenses incident to the Company's consummation of the Exchange Offer and
compliance with the Registration Rights Agreement will be borne by the Company.
See "The Exchange Offer--Fees and Expenses."
8
Use of Proceeds
There will be no cash proceeds payable to Continental from the issuance of the
New Certificates pursuant to the Exchange Offer. The proceeds from the sale of
the Old Class A, B and C Certificates were used to purchase the Series A, B and
C Equipment Notes issued by the related Owner Trustees in connection with the
refinancing of the indebtedness incurred by the Owner Trustees to finance the
purchase of each Aircraft. Such Equipment Notes, together with the Series D
Equipment Notes contributed to the Class D Trust by the Owner Participant,
represent in the aggregate the entire debt portion currently outstanding of the
leveraged lease transactions relating to all of the Aircraft. Continental did
not receive any of the proceeds from the original sale of the Old Certificates.
See "Use of Proceeds."
SUMMARY OF TERMS OF NEW CERTIFICATES
The Exchange Offer relates to the exchange of up to $489,267,000
aggregate principal amount of Old Certificates for up to an equal aggregate
principal amount of New Certificates. The New Certificates will be entitled to
the benefits of the same Indenture which governs the Old Certificates and will
govern the New Certificates. The form and terms of the New Certificates are the
same in all material respects as the form and terms of the Old Certificates,
except that the New Certificates do not contain terms with respect to the
interest rate step-up provisions and the New Certificates have been registered
under the Securities Act and therefore will not bear legends restricting the
transfer thereof. See "Description of New Certificates."
For additional information concerning the New Certificates, see "Description of
New Certificates."
Trusts
Each of the Continental Airlines 1996-A Pass Through Trust, the Continental
Airlines 1996-B Pass Through Trust, the Continental Airlines 1996-C Pass Through
Trust and the Continental Airlines 1996-D Pass Through Trust was formed pursuant
to one of the four separate Pass Through Trust Agreements entered into between
the Company and Wilmington Trust Company, as trustee under each Trust. Each
Trust is a separate entity.
Certificates Offered
Pass Through Certificates issued by each Trust, representing fractional
undivided interests in such Trust. The Certificates issued by the Class A Trust,
the Class B Trust, the Class C Trust and the Class D Trust are referred to
herein as "Class A Certificates", "Class B Certificates", "Class C
Certificates:, and "Class D Certificates, respectively.
Subordination Agent
Wilmington Trust Company, as subordination agent under the Intercreditor
Agreement (the "Subordination Agent").
Liquidity Provider
Initially, Credit Suisse, a bank organized under the laws of Switzerland, acting
through its New York branch ("Credit Suisse"). Credit Suisse has provided three
separate liquidity facilities for the benefit of the holders of Class A
Certificates, Class B Certificates and Class C Certificates, respectively.
9
Trust Property
The property of each Trust (the "Trust Property") consists of (i) Equipment
Notes issued on a nonrecourse basis by each of the Owner Trustees in 18 separate
leveraged lease transactions that refinanced the indebtedness of the related
Owner Trustee, originally incurred to finance the purchase of each of nine
Boeing 737-524 Aircraft and nine Boeing 757-224 Aircraft leased by the related
Owner Trustee to Continental, (ii) the rights of such Trust under the
Intercreditor Agreement (including all monies receivable in respect of such
rights), (iii) except for the Class D Trust, all monies receivable under the
Liquidity Facility for such Trust and (iv) funds from time to time deposited
with the Trustee in accounts relating to such Trust. The Equipment Notes with
respect to each Aircraft were issued in four series under an Indenture (each, an
"Indenture") between the applicable Owner Trustee and the indenture trustee
thereunder (the "Loan Trustee"). Each Trust has acquired, pursuant to certain
Refunding Agreements (each, a "Refunding Agreement"), those Equipment Notes
having an interest rate equal to the interest rate applicable to the
Certificates to be issued by such Trust. The maturity dates of the Equipment
Notes acquired by each Trust will occur on or before the final expected Regular
Distribution Date applicable to the Certificates to be issued by such Trust. The
aggregate original principal amount of the Equipment Notes held in each Trust is
the same as the aggregate original face amount of the Certificates issued by
such Trust.
10
SUMMARY OF TERMS OF CERTIFICATES
CLASS A CLASS B CLASS C CLASS D
CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES
------------ ------------ ------------ ------------
Aggregate Face Amount $269,518,000 $94,332,000 $74,117,000 $51,300,000
Initial Loan to Aircraft Value
(cumulative)(1) 39.9% 53.9% 64.8% 72.4%
Expected Principal Distribution
Window (in years) 1.0-17.7 1.0-17.7 1.0-17.7 3.0-17.7
Initial Average Life (in years) 10.0 10.0 10.0 11.4
Regular Distribution Dates January 15, April 15, January 15, April 15 January 15, April 15 January 15, April 15
July 15 & July 15 & July 15 & July 15 &
October 15 October 15 October 15 October 15
Final Expected Regular
Distribution Date October 15, 2013 October 15, 2013 October 15, 2013 October 15, 2013
Final Maturity Date April 15, 2015 April 15, 2015 April 15, 2015 April 15, 2015
Minimum Denomination $100,000 $100,000 $100,000 $100,000
(S) 1110 Protection (2) Yes Yes Yes Yes
Liquidity Facility Coverage 6 quarterly 6 quarterly 6 quarterly None
interest payments interest payments interest payments
Initial Liquidity Facility
Amount (3) $30,078,208.80 $11,772,633.60 $11,117,550.00 None
- -------------------
(1) Assumes an aggregate appraised Aircraft Value of $675,428,333.
(2) The benefits of Section 1110 of the Bankruptcy Code are available to the
Loan Trustees.
(3) For each Class of Certificates (other than the Class D Certificates), the
initial amount of the Liquidity Facility covers the first six quarterly
interest payments (without regard to any future payments of principal on
such Certificates). In aggregate for Class A, B and C Certificates, the
initial amount of Liquidity Facilities is $52,968,392.40.
11
EQUIPMENT NOTES AND THE AIRCRAFT
Set forth below is certain information about the Equipment Notes held in
the Trusts and the Aircraft securing such Equipment Notes:
OUTSTANDING
AIRCRAFT PRINCIPAL AMOUNT OF
REGISTRATION AIRCRAFT MATURITY EQUIPMENT APPRAISED
NUMBER AIRCRAFT TYPE DELIVERY DATE DATE NOTES VALUE
- ----------- ------------- ------------- -------- ------------------ ---------
N17104 Boeing 757-224 July 1994 October 2013 $ 34,831,833 $ 48,690,000
N17105 Boeing 757-224 August 1994 October 2013 34,950,567 48,839,333
N14106 Boeing 757-224 September 1994 October 2013 35,069,083 48,988,333
N14107 Boeing 757-224 October 1994 October 2013 35,185,433 49,134,000
N21108 Boeing 757-224 November 1994 October 2013 35,303,950 49,283,000
N12109 Boeing 757-224 December 1994 October 2013 35,422,683 49,432,333
N13110 Boeing 757-224 December 1994 October 2013 35,422,683 49,432,333
N18112 Boeing 757-224 February 1995 October 2013 35,670,768 49,730,668
N13113 Boeing 757-224 April 1995 October 2013 35,915,850 50,025,333
N17620 Boeing 737-524 February 1995 October 2012 18,910,750 25,555,000
N19623 Boeing 737-524 January 1995 October 2012 18,875,000 25,441,000
N13624 Boeing 737-524 February 1995 October 2012 18,910,750 25,555,000
N46625 Boeing 737-524 January 1995 October 2012 18,875,000 25,441,000
N32626 Boeing 737-524 April 1995 April 2013 19,058,950 25,783,000
N17627 Boeing 737-524 April 1995 April 2013 19,058,950 25,783,000
N62631 Boeing 737-524 June 1995 July 2013 19,207,150 26,011,000
N16632 Boeing 737-524 July 1995 July 2013 19,281,250 26,125,000
N24633 Boeing 737-524 August 1995 July 2013 19,316,350 26,179,000
------------ ------------
$ 489,267,000 $ 675,428,333
- ----------------
The appraised value of each Aircraft set forth above is based upon the
lesser of the average or median fair market value of such Aircraft as appraised
by three independent appraisal and consulting firms: Aircraft Information
Services, Inc. ("AISI"), BK Associates, Inc. ("BK") and Morten Beyer and
Associates, Inc. ("MBA") (collectively, the "Appraisers") as of January 3, 1996.
See "Risk Factors--Appraisals and Realizable Value of Aircraft" and "Description
of the Aircraft and the Appraisals".
12
LOAN TO AIRCRAFT VALUE RATIOS
The following table sets forth loan to Aircraft value ratios ("LTVs") for
each Class of Certificates as of the Regular Distribution Dates specified
therein. The LTVs for each Class of Certificates were obtained for each such
Regular Distribution Date by dividing (i) the expected Pool Balance of such
Class of Certificates together in each case with the expected Pool Balance of
all other Classes of Certificates senior in right of payment to such Class of
Certificates under the Intercreditor Agreement determined immediately after
giving effect to the distributions expected to be made on such Regular
Distribution Date, by (ii) the assumed value of all of the Aircraft (the
"Assumed Aggregate Aircraft Value") on such Regular Distribution Date based on
the assumptions set forth below.
The table is based on the assumption that the value of each Aircraft
included in the Assumed Aggregate Aircraft Value opposite January 1996
depreciates by 2% per year until the fifteenth year after the year of delivery
of such Aircraft and 4% per year thereafter. Other rates or methods of
depreciation would result in materially different LTVs and no assurance can be
given (i) that the depreciation rates and method assumed for the purpose of the
table are the ones most likely to occur or (ii) as to the actual future value of
any Aircraft. Although the table is compiled on an aggregate basis, it should be
noted that, since the Equipment Notes are not cross-collateralized with respect
to the Aircraft, the excess proceeds realized from the disposition of any
particular Aircraft would not be available to offset shortfalls on the Equipment
Notes relating to any other Aircraft. Therefore, upon the occurrence of an
Indenture Default, even if the Aircraft as a group could be sold for more than
the total amounts payable in respect of all of the outstanding Equipment Notes,
if certain Aircraft were sold for less than the total amount payable in respect
of the related Equipment Notes, there would not be sufficient proceeds to pay
all Classes of Certificates in full. See "Description of the Equipment Notes--
Security" for additional information regarding LTVs for the Equipment Notes
issued in respect of each Aircraft which may be more relevant in a default
situation than the aggregate values shown in the following table. Thus, the
table should not be considered a forecast or prediction of expected or likely
LTVs but simply a mathematical calculation based on one set of assumptions.
Assumed Class A Class B Class C Class D
Regular Aggregate Certificates Class A Certificates Class B Certificates Class C Certificates Class D
Distribution Aircraft Pool Certificates Pool Certificates Pool Certificates Pool Certificates
Date Value (1) Balance LTV Balance LTV Balance LTV Balance LTV
---- --------- ------- --- ------- --- ------- --- ------- ---
January 1996 $675,428,333 $269,518,000 39.90% $94,332,000 53.87% $74,117,000 64.84% $51,300,000 72.44%
January 1997 661,919,767 264,233,332 39.92 92,482,354 53.89 72,663,725 64.87 51,300,000 72.62
January 1998 648,411,200 259,032,772 39.95 90,662,145 53.93 71,233,578 64.92 51,300,000 72.83
January 1999 634,902,633 250,794,034 39.50 87,778,554 53.33 68,967,944 64.19 47,793,051 71.72
January 2000 621,394,067 239,121,593 38.48 83,693,163 51.95 65,758,043 62.53 46,536,115 70.02
January 2001 607,885,500 225,745,475 37.14 79,011,491 50.13 62,079,627 60.35 46,536,115 68.00
January 2002 594,376,933 206,221,031 34.70 72,177,883 46.84 56,710,436 56.38 46,536,115 64.21
January 2003 580,868,367 185,903,625 32.00 65,066,737 43.21 51,123,181 52.01 46,536,115 60.02
January 2004 567,359,800 169,515,666 29.88 59,330,915 40.34 46,616,514 48.55 46,536,115 56.75
January 2005 553,851,233 152,042,236 27.45 53,215,176 37.06 41,811,345 44.61 45,865,832 52.89
January 2006 540,342,667 135,415,490 25.06 47,395,782 33.83 37,239,014 40.72 35,083,602 47.22
January 2007 526,834,100 118,271,350 22.45 41,395,298 30.31 32,524,401 36.48 22,943,184 40.84
January 2008 513,325,533 91,294,275 17.78 31,953,260 24.01 25,105,747 28.90 17,160,335 32.24
January 2009 499,816,967 69,099,185 13.82 24,184,899 18.66 19,002,151 22.47 13,255,258 25.12
January 2010 479,432,413 56,341,836 11.75 19,719,786 15.86 15,493,909 19.10 11,198,303 21.43
January 2011 452,415,280 39,790,496 8.80 13,926,766 11.87 10,942,324 14.29 9,210,679 16.33
January 2012 426,420,347 20,863,519 4.89 7,302,266 6.61 5,737,445 7.95 7,471,052 9.70
January 2013 337,185,813 2,189,921 0.65 766,473 0.88 602,228 1.06 3,284,825 2.03
- ------------------
(1) The Assumed Aggregate Aircraft Value set forth opposite January 1996 (but
not the Assumed Aggregate Aircraft Values for subsequent periods) was
determined based upon the lesser of the average or median fair market value
of all Aircraft as appraised by the Appraisers as of January 1996 (see
"Description of the Aircraft and the Appraisals"). No assuance can be given
that such value represents the realizable value of any Aircraft. See "Risk
Factors--Appraisals and Realizable Value of Aircraft" and "Description of
the Aircraft and the Appraisals".
13
CASH FLOW STRUCTURE
Set forth below is a diagram illustrating the structure for the offering of
the Certificates and certain cash flows.
[Chart appears here]
* Each Aircraft is subject to a separate Lease and the related Indenture.
14
Certificates; Denominations
The new Certificates of each Trust will be issued in a minimum denomination of
$1000 and in integral multiples thereof. See "Description of New Certificates--
General".
Regular Distribution Dates
January 15, April 15, July 15 and October 15, commencing April 15, 1996.
Special Distribution Dates
Any Business Day on which Special Payment is to be distributed.
Record Dates
The fifteenth day preceding a Regular Distribution Date or a Special
Distribution Date.
Distributions
All payments of principal, premium (if any) and interest received by the Trustee
on the Equipment Notes held in each Trust will be distributed by the Trustee to
the holders of the Certificates (the "Certificateholders") of such Trust on the
Regular Distribution Dates referred to above, subject to the provisions of the
Intercreditor Agreement. Payments on the Equipment Notes held in each Trust are
scheduled to be received in specified amounts by the Trustee of such Trust on
January 15, April 15, July 15 and October 15, commencing on April 15, 1996, and
to be distributed to the Certificateholders of such Trust on the corresponding
Regular Distribution Date, subject to the provisions of the Intercreditor
Agreement. Payments of principal, premium (if any) and interest resulting from
the early redemption or purchase (if any) of the Equipment Notes held in any
Trust will be distributed on a Special Distribution Date after not less than 20
days' notice from the Trustee to the Certificateholders of such Trust, subject
to the provisions of the Intercreditor Agreement. For a discussion of
distributions upon an Indenture Default, see "Description of New Certificates--
Indenture Defaults and Certain Rights Upon an Indenture Default".
Events of Default
Events of Default under each Pass Through Trust Agreement (each, a "PTC Event of
Default") are 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 Maturity Date for such Class or (ii) interest due on
such Certificates on any distribution date (unless in the case of the Class A, B
or C Certificates the Subordination Agent shall have made an Interest Drawing
with respect thereto in an amount sufficient to pay such interest and shall have
distributed such amount to the Certificateholders entitled thereto). The Final
Maturity Dates for each of the Class A, B, C and D Certificates is April 15,
2015. Any failure to make expected principal distributions on any Class of
Certificates on any Regular Distribution Date (other than the Final Maturity
Date) will not constitute a PTC Event of Default with respect to such
Certificates.
Purchase Rights of
Certificateholders
Upon the occurrence and during the continuation of a Triggering Event (as
defined below), (i) the Class B Certificateholders shall
15
have the right to purchase all, but not less than all, of the Class A
Certificates, (ii) the Class C Certificateholders shall have the right to
purchase all, but not less than all, of the Class A Certificates and the Class B
Certificates and (iii) the Class D Certificateholders shall have the right to
purchase all, but not less than all, of the Class A Certificates, the Class B
Certificates and the Class C Certificates, in each case at a purchase price
equal to the Pool Balance of the relevant Class or Classes of Certificates plus
accrued and unpaid interest thereon to the date of purchase without premium but
including any other amounts due to the Certificateholders of such Class or
Classes.
"Triggering Event" means (x) the occurrence of an Indenture Default under all
Indentures resulting in a PTC Event of Default with respect to the most senior
Class of Certificates then outstanding, (y) the acceleration of all of the
outstanding Equipment Notes or (z) certain bankruptcy or insolvency events
involving Continental.
Equipment Notes
(a) Interest
The Equipment Notes held in each Trust accrue interest at the applicable rate
per annum for such Trust, payable on January 15, April 15, July 15 and October
15 of each year commencing on April 15, 1996, and such interest payments will be
passed through to Certificateholders of such Trust on each such date until the
final distribution date for such Certificates, in each case, subject to the
Intercreditor Agreement. Interest is calculated on the basis of a 360-day year
consisting of twelve 30-day months. See "Description of New Certificates--
General" and "--Payments and Distributions". The interest rates for the
Equipment Notes are subject to increases under certain circumstances described
in "The Exchange Offer--Terms of the Exchange Offer" to the same extent as the
interest rates for the Old Certificates. The New Certificates do not contain
terms with respect to interest rate step-up provisions of the Old Certificates.
(b) Principal
Scheduled principal payments on the Equipment Notes held in each Trust will be
passed through to the Certificateholders of each such Trust on January 15, April
15, July 15 and October 15 in certain years, commencing on January 15, 1997, in
the case of each of the Class A Trust, the Class B Trust and the Class C Trust
and January 15, 1999, in the case of the Class D Trust, in accordance with the
principal repayment schedule set forth below under "Description of New
Certificates--Pool Factors" and "Description of the Equipment Notes--Principal
and Interest Payments", in each case, subject to the Intercreditor Agreement.
(c) Redemption and Purchase
(i) The Equipment Notes issued with respect to an Aircraft will be redeemed in
whole upon the occurrence of an Event of Loss with respect to such
Aircraft if such Aircraft is not replaced by Continental under the related
Lease, in each case at a price equal to the aggregate unpaid principal
16
thereof, together with accrued interest thereon to, but not including, the
date of redemption, but without any premium.
(ii) All of the Equipment Notes issued with respect to any Aircraft may be
redeemed prior to maturity at a price equal to the aggregate unpaid
principal thereof, together with accrued interest thereon to, but not
including, the date of redemption, plus a Make-Whole Premium (as defined
herein). See "Description of the Equipment Notes--Redemption" for a
description of the manner of computing such Make-Whole Premium and the
circumstances under which the Equipment Notes may be so redeemed.
(iii) If, with respect to an Aircraft, (x) one or more Lease Events of Default
shall have occurred and be continuing, (y) the Loan Trustee with respect
to such Equipment Notes shall take action or notify the applicable Owner
Trustee that it intends to take action to foreclose the lien of the
related Indenture or otherwise commence the exercise of any significant
remedy under such Indenture or the related Lease or (z) the Equipment
Notes with respect to such Aircraft shall have been accelerated, then in
each case the Equipment Notes issued with respect to such Aircraft may
be purchased by the Owner Trustee or Owner Participant on the applicable
purchase date at a price equal to the aggregate unpaid principal
thereof, together with accrued interest thereon to, but not including,
the purchase date, but without any premium (provided that a premium
shall be payable if such Equipment Notes are to be purchased pursuant to
clause (x) above when (A) a Lease Event of Default shall have occurred
and be continuing for less than 120 days or (B) the only Lease Event of
Default under the related Lease arises from the cross-default provisions
of such Lease).
(d) Security
The Equipment Notes issued with respect to each Aircraft are secured by a
security interest in such Aircraft and an assignment to the related Loan Trustee
of certain of the related Owner Trustee's rights under the Lease with respect to
such Aircraft, including the right to receive payments of rent thereunder, with
certain exceptions. The Equipment Notes are not cross-collateralized and,
consequently, the Equipment Notes issued in respect of any one Aircraft are not
secured by any of the other Aircraft or the Leases related thereto. There are no
cross-default provisions in the Indentures. Consequently, events resulting in an
Indenture Default under any particular Indenture may or may not result in an
Indenture Default occurring under any other Indenture. However, a Lease Event of
Default under any particular Lease will constitute a Lease Event of Default
under all Leases due to the cross-default provisions in the Leases, and will
consequently result in an Indenture Default under all Indentures. If the
Equipment Notes issued with
17
respect to one or more Aircraft are in default and the Equipment Notes issued
with respect to the remaining Aircraft are not in default, no remedies will be
exercisable under the Indentures with respect to such remaining Aircraft. See
"Description of the Equipment Notes--Security" and "--Indenture Defaults, Notice
and Waiver".
Although the Equipment Notes are not obligations of, or guaranteed by,
Continental, the amounts unconditionally payable by Continental for lease of the
Aircraft will be sufficient to pay in full when due all amounts required to be
paid on the Equipment Notes. See "Description of the Equipment Notes--General".
(e) Section 1110 Protection
Cleary, Gottlieb, Steen & Hamilton, counsel to Continental, has advised the Loan
Trustees that the Owner Trustee, as lessor under the Lease relating to each
Aircraft, and the related Loan Trustee, as assignee of such Owner Trustee's
rights under such Lease pursuant to the related Indenture, are entitled to the
benefits of 11 U.S.C. (S)1110 with respect to the airframe and engines
comprising the related Aircraft. See "Description of the Equipment Notes--
Remedies" for a description of that opinion and certain assumptions contained
therein.
The Bankruptcy Reform Act of 1994 (the "Act") amended Section 1110 by, among
other things, providing that the lessor under a lease of aircraft first placed
in service prior to the date of the enactment of the Act will be entitled to the
benefits of Section 1110 if the lessor and the lessee have expressed in the
applicable agreement or in a substantially contemporaneous writing that the
applicable agreement is to be treated as a lease for Federal income tax
purposes. Each of the Leases relating to the four Aircraft placed in service
prior to the enactment of the Act contains such a written statement.
(f) Ranking
Series B Equipment Notes issued in respect of any Aircraft are subordinated in
right of payment to Series A Equipment Notes issued in respect of such Aircraft;
Series C Equipment Notes issued in respect of such Aircraft are subordinated in
right of payment to such Series B Equipment Notes; and Series D Equipment Notes
issued in respect of such Aircraft are subordinated in right of payment to such
Series C Equipment Notes. On each Distribution Date, (i) payments of interest
and principal due on Series A Equipment Notes issued in respect of any Aircraft
will be made prior to payments of interest and principal due on Series B
Equipment Notes issued in respect of such Aircraft, (ii) payments of interest
and principal due on such Series B Equipment Notes will be made prior to
payments of interest and principal due on Series C Equipment Notes issued in
respect of such Aircraft and (iii) payments of interest and principal due on
such Series C Equipment Notes will be made prior to payments of interest and
principal due on Series D Equipment Notes issued in respect of such Aircraft.
(g) Owner Participant
General Electric Company is currently the owner participant ("Owner
Participant") with respect to all of the eighteen leveraged
18
leases for the Aircraft. The Owner Participant or its affiliate acquired all of
the Class D Certificates at the time of their issuance. The Owner Participant
and certain of its affiliates have various business relationships with
Continental, including as a secured lender and a supplier of certain equipment
and services to Continental. Due to such relationships and GE's capacities as
both the Owner Participant and the Class D Certificateholder, interests of GE
may not be consistent with, or may conflict with, interests of other
Certificateholders. General Electric Company has the right to sell, assign or
otherwise transfer its interests as Owner Participant in any or all of such
leveraged leases, subject to the terms and conditions of the relevant
Participation Agreement and related documents, and the Class D Certificateholder
will have the right to sell any or all Class D Certificates, subject to the
terms and conditions of the Pass Through Trust Agreement for the Class D Trust.
Liquidity Facilities
The Subordination Agent and the Liquidity Provider have entered into a revolving
credit agreement (each, a "Liquidity Facility") with respect to each Trust
(other than the Class D Trust). Under each of the Liquidity Facilities, the
Liquidity Provider will, if necessary, make advances ("Interest Drawings") in an
aggregate amount sufficient to pay interest on the Class A, B or C Certificates,
as the case may be, on up to six successive quarterly Regular Distribution Dates
(without regard to any future payments of principal on such Certificates) at the
respective interest rates (without any penalty or default margin but after
giving pro forma effect to adjustments arising from Registration Defaults,
provided that such adjustments shall cease to apply at such time as the interest
rate borne by such Certificates is no longer subject to increase pursuant to the
terms of the Registration Rights Agreement) on such Certificates (the "Stated
Interest Rates"). The initial amount available under the Liquidity Facilities
for the Class A Certificates, the Class B Certificates and the Class C
Certificates will be $30,078,208.80, $11,772,633.60 and $11,117,550.00,
respectively. An Interest Drawing under the relevant Liquidity Facility will be
made promptly after any Regular Distribution Date if, after giving effect to the
subordination provisions of the Intercreditor Agreement, there are insufficient
funds available to the Subordination Agent to pay interest on any Class A, B or
C Certificates; provided, however, that on any date the maximum amount available
under such Liquidity Facility to fund any shortfall in interest due on such
Certificates will not exceed an amount equal to the then stated amount of such
Liquidity Facility. The Liquidity Facility for any Class of Certificates does
not provide for drawings thereunder to pay for principal of or premium on the
Certificates of such Class, any interest on the Certificates of such Class in
excess of the Stated Interest Rates, or principal of or interest or premium on
the Certificates of any other Class.
Upon each Interest Drawing under any Liquidity Facility, the Subordination Agent
will be obligated to reimburse (to the extent that the Subordination Agent has
available funds therefor) the
19
Liquidity Provider for the amount of such drawing. Such reimbursement obligation
and any other amounts owing to the Liquidity Provider under each Liquidity
Facility or certain other agreements (the "Liquidity Obligations") will rank
pari passu with the Liquidity Obligations relating to all other Liquidity
Facilities and will rank senior to the Certificates in right of payment. Upon
reimbursement in full of the Interest Drawings (but not other Drawings),
together with any accrued interest thereon, under any Liquidity Facility, the
amount available under such Liquidity Facility will be reinstated to the then
stated amount of such Liquidity Facility; provided that the amount will not be
so reinstated if (i) a Triggering Event shall have occurred and be continuing
and (ii) less than 65% of the aggregate outstanding principal amount of all
Equipment Notes are Performing Equipment Notes.
If at any time the short-term unsecured debt rating of any Liquidity Provider
issued by either Rating Agency is lower than the Threshold Rating, the Liquidity
Facility for the related Class of Certificates will be required to be replaced
by another similar facility to be provided by a financial institution having
unsecured short-term debt ratings issued by both Rating Agencies which are equal
to or higher than the Threshold Rating. If such Liquidity Facility is not
replaced within 10 days after notice of the downgrading, such Liquidity Facility
will be drawn in full (the "Downgrade Drawing") and the proceeds will be
deposited into the Cash Collateral Account for the related Class of Certificates
and used for the same purposes and under the same circumstances and subject to
the same conditions as cash payments of Interest Drawings under such Liquidity
Facility would be used. In addition, the Intercreditor Agreement will provide
for the replacement or extension of the Liquidity Facility for any Class of
Certificates which is scheduled to expire prior to the date that is fifteen days
after the Final Maturity Date for such Class. If such Liquidity Facility cannot
be so replaced or extended by the date that is 25 days prior to the then
scheduled expiration date of such Liquidity Facility, such Liquidity Facility
will be drawn in full (the "Non-Extension Drawing") and the proceeds will be
deposited in the Cash Collateral Account for the related Class of Certificates
and used for the same purposes and under the same circumstances and subject to
the same conditions as cash payments of Interest Drawings under such Liquidity
Facility would be used. Each initial Liquidity Facility is scheduled to expire
on January 29, 1997, subject to annual extensions by mutual agreement.
Continental, in consultation with the Subordination Agent, may direct the Owner
Participants (which shall follow such direction unless they have a bona fide,
good faith reason not to) to arrange for a replacement facility at any time to
replace the Liquidity Facility for any Trust. If such replacement facility is
provided at any time after a Downgrade Drawing or Non-Extension Drawing under
such Liquidity Facility, the funds on deposit in the Cash Collateral Account for
such Trust will be returned to the Liquidity Provider
20
being replaced.
Notwithstanding the subordination provisions of the Intercreditor Agreement, the
holders of the Certificates to be issued by each Trust (other than the Class D
Trust) will be entitled to receive and retain the proceeds of drawings under the
Liquidity Facility for such Trust. See "Description of the Liquidity
Facilities".
Intercreditor Agreement
(a) Subordination
The Trusts, the Liquidity Providers and the Subordination Agent have entered
into an agreement (the "Intercreditor Agreement") which provides as follows:
(i) All payments made in respect of the Equipment Notes and certain other
payments will be made to the Subordination Agent which will distribute
such payments in accordance with the provisions of paragraphs (ii)
through (iv) below.
(ii) On any Regular Distribution Date or Special Distribution Date (each, a
"Distribution Date"), so long as no Triggering Event shall have occurred
(whether or not continuing), all payments received by the Subordination
Agent in respect of the Equipment Notes and certain other payments will
be distributed in the following order: (1) payment of the Liquidity
Obligations; (2) payment of Expected Distributions to the holders of
Class A Certificates; (3) payment of Expected Distributions to the
holders of Class B Certificates; (4) payment of Expected Distributions
to the holders of Class C Certificates; (5) payment of Expected
Distributions to the holders of Class D Certificates; and (6) payment of
certain fees and expenses of the Subordination Agent and the Trustees.
"Expected Distributions" means, with respect to the Certificates of any
Trust on any Distribution Date (the "Current Distribution Date") the sum
of (x) accrued and unpaid interest on such Certificates and (y) the
difference between (A) the Pool Balance of such Certificates as of the
immediately preceding Distribution Date and (B) the Pool Balance of such
Certificates as of the Current Distribution Date, calculated on the
basis that the principal of the Equipment Notes held in such Trust has
been paid when due (whether at stated maturity, upon redemption,
prepayment or acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates.
(iii) Upon the occurrence of a Triggering Event and at all times thereafter,
subject to the provisions of paragraph (iv) below, all payments received
by the Subordination Agent in respect of the Equipment Notes and certain
other payments will be distributed in the following order: (1) to the
Liquidity Provider
21
in payment of the Liquidity Obligations and certain other parties in
payment of the Administration Expenses (as defined herein); (2) to the
holders of Class A Certificates in payment of Final Distributions; (3)
to the holders of Class B Certificates in payment of Final
Distributions; (4) to the holders of Class C Certificates in payment of
Final Distributions; and (5) to the holders of Class D Certificates in
payment of Final Distributions.
"Final Distributions" means, with respect to the Certificates of any
Trust on any Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates and (y) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date.
(iv) Notwithstanding the foregoing paragraph, after the occurrence of a
Triggering Event (whether or not continuing), so long as no PTC Event of
Default shall have occurred and be continuing with respect to the most
senior Class of Certificates outstanding, any regularly scheduled
payment received on any Equipment Notes (the "Performing Equipment
Notes") with respect to which there is no payment default (without
giving effect to any acceleration thereof) shall be distributed as
follows:
(x) interest paid on all of the Performing Equipment Notes (the
"Performing Equipment Notes Interest Payment") will be distributed in
the following order: (1) to the Liquidity Providers in payment of the
Liquidity Obligations and certain other parties in payment of the
Administration Expenses (as defined herein); (2) to the holders of
Class A Certificates in payment of accrued and unpaid interest on the
Class A Certificates; (3) to the holders of Class B Certificates in
payment of accrued and unpaid interest on the Class B Certificates;
(4) to the holders of Class C Certificates in payment of accrued and
unpaid interest on the Class C Certificates; and (5) to the holders
of Class D Certificates; provided that the provisions of this
paragraph (x) will be given effect before distribution of any funds
received in respect of any Equipment Notes other than the Performing
Equipment Notes (the "Non-Performing Equipment Notes");
(y) principal paid in respect of the Performing Equipment Notes (after
paying in full the Liquidity Obligations and the Administration
Expenses) (the "Performing Equipment Notes Principal Payment") will
be distributed in the following order: (1) to the holders of Class A
Certificates in payment of the greater of (A) the Adjusted Expected
Distributions to such holders on such
22
Distribution Date and (B) such holders' pro rata portion of the
Performing Equipment Notes Principal Payment based on the Adjusted
Pool Balance of such Trust; (2) to the holders of Class B
Certificates in payment of the greater of (A) the Adjusted Expected
Distributions to such holders on such Distribution Date and (B) such
holders' pro rata portion of the Performing Equipment Notes Principal
Payment based on the Adjusted Pool Balance of such Trust; (3) to the
holders of Class C Certificates in payment of the greater of (A) the
Adjusted Expected Distributions to such holders on such Distribution
Date and (B) such holders' pro rata portion of the Performing
Equipment Notes Principal Payment based on the Adjusted Pool Balance
of such Trust; and (4) to the holders of Class D Certificates;
provided that the provisions of this paragraph (y) will be given
effect after distributing any funds received in respect of any Non-
Performing Equipment Notes;
provided that if the aggregate amount of future scheduled payments in respect of
the Performing Equipment Notes, together with the Performing Equipment Notes
Principal Payment as of such Distribution Date, will be (assuming the
distribution of such amount as contemplated by paragraphs (x) and (y) and that
no further payment will be received at any time from the Non-Performing
Equipment Notes) insufficient to pay interest on any Class of Certificates and
reduce the Pool Balance of such Class of Certificates to zero before the Final
Maturity Date thereof, the amount of distributions to be made to the holders of
such Class of Certificates on such Distribution Date will be increased by the
amount necessary to eliminate such insufficiency prior to making any
distributions to the holders of any Class of Certificates junior to such Class
of Certificates and such increase shall be taken into account for the purpose of
applying this proviso to the holders of any such junior Class of Certificates.
"Adjusted Expected Distribution" for the Certificates of any Trust means, with
respect to any Distribution Date, the sum of (x) accrued and unpaid interest on
such Certificates (after taking into account the distribution of the Performing
Equipment Notes Interest Payment and any funds received in respect of Non-
Performing Equipment Notes on such Distribution Date) plus (y) the amount (which
shall not be less than zero) equal to (A) the Adjusted Pool Balance of such
Trust as of such Distribution Date minus (B) the Pool Balance of such Trust as
of such Distribution Date, calculated on the basis that all payments on the
Equipment Notes held in such Trust have been paid when due (but without giving
effect to any acceleration of Performing Equipment Notes held in such Trust) and
such payments have been distributed to the holders of such Certificates.
23
"Adjusted Pool Balance" of any Trust means, with respect to any Current
Distribution Date, the Pool Balance of such Trust as of the immediately
preceding Distribution Date minus any amounts received in respect of any Non-
Performing Equipment Notes distributed to the holders of the Certificates of
such Trust on the Current Distribution Date other than in respect of interest or
premium thereon.
(b) Intercreditor Rights
Pursuant to the Intercreditor Agreement, the Trustees and the Liquidity Provider
have agreed that, with respect to any Indenture at any given time, the Loan
Trustee will be directed (a) in taking, or refraining from taking, any action
thereunder by the holders of at least a majority of the outstanding principal
amount of the Equipment Notes issued thereunder as long as no Indenture Default
has occurred and is continuing thereunder and (b) subject to certain conditions,
in exercising remedies thereunder (including acceleration of such Equipment
Notes or foreclosing the lien on the Aircraft securing such Equipment Notes) by
the Controlling Party insofar as an Indenture Default thereunder has occurred
and is continuing.
"Controlling Party" with respect to any Indenture means: (w) the Class A
Trustee; (x) upon payment of Final Distributions to the holders of Class A
Certificates, the Class B Trustee; (y) upon payment of Final Distributions to
the holders of Class B Certificates, the Class C Trustee; and (z) upon payment
of Final Distributions to the holders of Class C Certificates, the Class D
Trustee. See "Description of New Certificates--Indenture Defaults and Certain
Rights Upon an Indenture Default" for a description of the rights of the
Certificateholders of each Trust to direct the respective Trustees.
Notwithstanding the foregoing, subject to certain limitations, the Liquidity
Provider shall have the right to direct such Loan Trustee at any time after 18
months from the acceleration of the Equipment Notes under such Indenture, if at
the time of such election the Liquidity Obligations have not been paid in full;
provided that if there is more than one Liquidity Provider, the Liquidity
Provider with the greatest amount of unreimbursed Liquidity Obligations shall
have such right. For purposes of giving effect to the foregoing, the Trustees
(other than the Controlling Party) shall 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) to exercise their voting rights as directed by the Controlling
Party.
(i) Upon the occurrence and during the continuation of any Indenture Default
under any Indenture, the Controlling Party may accelerate and sell all
(but not less than all) of the Equipment Notes issued under such
Indenture to any person, subject to the provisions of paragraph (ii)
below. The proceeds of such sale will be distributed pursuant to the
provisions of the Intercreditor Agreement.
24
(ii) So long as any Certificates are outstanding, during nine months after
the earlier of (x) the acceleration of the Equipment Notes under any
Indenture or (y) the bankruptcy or insolvency of Continental, 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 under such
Indenture as the discount rate.
"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 (1) 75% of the appraised value of such Aircraft based upon the
most recent appraisal and (2) the aggregate outstanding principal amount
of such Equipment Notes, plus accrued and unpaid interest thereon.
Certificates; Book-Entry Registration
Each New Certificate to be issued will be represented by one or more permanent
global Certificates registered in the name of Cede & Co. ("Cede"), as nominee of
The Depository Trust Company ("DTC"). See "Description of New Certificates--
Book Entry; Delivery and Form".
Method of Distribution
The persons in whose names the Certificates are registered will be treated as
the owners of such Certificates for the purpose of receiving payments of
principal of and interest on such Certificates and for all other purposes
whatsoever. Therefore, none of the Trustee, Continental, the Loan Trustee, the
Owner Participant or the Owner Trustee has any direct responsibility or
liability for distributions or payments to owners of beneficial interests in the
Certificates (the "Certificate Owners"). Distributions by the Trustee in respect
of Certificates registered in the name of Cede, as nominee of DTC, including the
final distribution of principal with respect to such Certificates of any Trust,
will be made in same-day funds to DTC. DTC will in turn make distributions in
same-day funds to those participants in DTC who are credited with ownership of
such Certificates ("DTC Participants") in amounts proportionate to the amount of
each such DTC Participant's respective holdings of beneficial interests in such
Certificates. Corresponding payments by the DTC Participants to beneficial
owners of such Certificates will be the responsibility of such DTC Participants
and will be made in accordance with customary industry practices. Distributions
by the Trustee to Certificateholders in respect of Certificates issued in
25
definitive form, other than the final distribution, will be made by check mailed
to each such Certificateholder of record on the applicable record date at its
address appearing on the register. The final distribution with respect to the
Certificates of any Trust will be made only upon surrender and presentation
thereof to the Trustee. See "Description of New Certificates--Book-Entry;
Delivery and Form".
Absence of a Public Market for the Certificates
Prior to this Exchange Offer, there has been no public market for the Old
Certificates or the New Certificates. Neither Continental nor any Trust has
applied or intends to apply for listing of the New Certificates on any national
securities exchange or for quotation of the New Certificates through the
National Association of Securities Dealers Automated Quotation System.
[Describe market making by Initial Purchasers in the Old Certificates, and
Continental has been advised by the Initial Purchasers that one or more of them
intends to make a market in the New Certificates, as permitted by applicable
laws and regulations, after consummation of the Exchange Offer. None of the
Initial Purchasers is obligated, however, to make a market in the Old
Certificates or the New Certificates and any such market making activity may be
discontinued at any time without notice at the sole discretion of each Initial
Purchaser. There can be no assurance as to the liquidity of the public market
for the Certificates or that any active public market for the Certificates will
develop. If an active public market does not develop, the market price and
liquidity of the Certificates may be adversely affected.]
Trustee
Wilmington Trust Company will act as Trustee and as paying agent and registrar
for the Certificates of each Trust. Wilmington Trust Company will also act as
Loan Trustee, as paying agent and registrar for each Series of Equipment Notes
and as Subordination Agent under the Intercreditor Agreement.
Federal Income Tax Consequences
The exchange of New Certificates for Old Certificates should not be a sale or
exchange or otherwise a taxable event for Federal income tax purposes.
ERISA Considerations
A fiduciary of any employee benefit plan which is subject to the fiduciary
responsibility provisions 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"), or of any governmental
plan which is subject to any federal, state or local law which is substantially
similar to the foregoing provisions of ERISA or the Code which proposes to hold
any Class A Certificates should consult with its own legal counsel with respect
to the applicability of ERISA and the Code to such investment and the
transactions contemplated by the Exchange Offer, including the availability of
any statutory or administrative
26
prohibited transaction exemption. See "ERISA Considerations".
The Class B Certificates, Class C Certificates and Class D Certificates may not
be held by any Plan or any entity that is using the assets of a Plan to hold its
interest in a Class B Certificate, a Class C Certificate or a Class D
Certificate, and holders of Class B Certificates, Class C Certificates and Class
D Certificates that tender such Old Certificates in exchange for a New
Certificates will be required to make certain representations to that effect.
Notwithstanding the foregoing, the Class B Certificates, the Class C
Certificates and the Class D Certificates may be held with the assets of an
insurance company general account, provided that the conditions of Prohibited
Transaction Class Exemption ("PTCE") 95-60 have been satisfied. Any insurance
company that uses general account assets to hold Class B Certificates, Class C
Certificates or Class D Certificates that tenders such Old Certificates in
exchange for New Certificates will be required to represent that PTCE 95-60
applies to its tender and the holding of such Class B Certificates, Class C
Certificates or Class D Certificates. See "ERISA Considerations".
27
RISK FACTORS
Holders of New Certificates should carefully consider the following risk
factors, as well as other information set forth in this Prospectus, before
tendering their New Certificates in the Exchange Offer. The risk factors set
forth below (other than "--Risk Factors Relating to the Certificates--
Consequences of Failure to Exchange") are generally applicable to the Old
Certificates as well as the New Certificates.
Risk Factors Relating to the Company
Continental's History of Operating Losses
Although Continental recorded net income of $224 million in 1995 and $88
million in the three months ended March 31, 1996, it had experienced significant
operating losses in the previous eight years. In the long term, Continental's
viability depends on its ability to sustain profitable results of operations.
Leverage and Liquidity
Continental has successfully negotiated a variety of agreements to increase
its liquidity during 1995 and 1996. Nevertheless, Continental remains more
leveraged and has significantly less liquidity than certain of its competitors,
several of whom have available lines of credit and/or significant unencumbered
assets. Accordingly, Continental may be less able than certain of its
competitors to withstand a prolonged recession in the airline industry.
As of March 31, 1996, Continental and its consolidated subsidiaries had
approximately $1.7 billion (including current maturities) of long-term
indebtedness and capital lease obligations and had approximately $702 million of
minority interest, preferred securities of trust, redeemable preferred stock and
common stockholders' equity. Common stockholders' equity reflects the adjustment
of the Company's balance sheet and the recording of assets and liabilities at
fair market value as of April 27, 1993 in accordance with fresh start reporting.
During the first and second quarters of 1995, in connection with
negotiations with various lenders and lessors, Continental ceased or reduced
contractually required payments under various agreements, which produced a
significant number of events of default under debt, capital lease and operating
lease agreements. Through agreements reached with the various lenders and
lessors, Continental has cured all of these events of default. The last such
agreement was put in place during the fourth quarter of 1995.
As of March 31, 1996, Continental had approximately $657 million of cash
and cash equivalents, including restricted cash and cash equivalents of $124
million. Continental does not have general lines of credit and has no
significant unencumbered assets.
Continental has firm commitments with The Boeing Company ("Boeing") to take
delivery of 43 new jet aircraft during the years 1998 through 2002. The
estimated aggregate cost of these aircraft is $2.6 billion. In addition, six
Beech 1900-D aircraft are scheduled to be delivered later in 1996. The Company
currently anticipates that the firm financing commitments available to it with
respect to its acquisition of new aircraft from Beech Acceptance Corporation
("Beech") will be sufficient to fund all deliveries scheduled during 1996, and
that it will have remaining financing commitments from aircraft manufacturers of
$676 million for jet aircraft deliveries beyond 1996. However, the Company
believes that further financing will be needed to satisfy the remaining amount
of such capital commitments. There can be no assurance that sufficient financing
will be available for all aircraft and other capital expenditures not covered by
firm financing commitments.
28
For 1996, Continental expects to incur cash expenditures under operating
leases of approximately $586 million, compared with $521 million for 1995,
relating to aircraft and approximately $229 million relating to facilities and
other rentals, the same amount as for 1995. In addition, Continental has capital
requirements relating to compliance with regulations that are discussed below.
See "--Regulatory Matters."
Continental and CMI have secured borrowings from certain affiliates of
General Electric Company (General Electric Company and affiliates, collectively,
"GE") which aggregated $373 million as of March 31, 1996. CMI's secured loans
contain significant financial covenants, including requirements to maintain a
minimum cash balance and consolidated net worth, restrictions on unsecured
borrowings and mandatory prepayments on the sale of most assets. These financial
covenants limit the ability of CMI to pay dividends to Continental. In addition,
Continental's secured loans require Continental to, among other things, maintain
a minimum cumulative operating cash flow, a minimum monthly cash balance and a
minimum ratio of operating cash flow to fixed charges. Continental also is
prohibited generally from paying cash dividends on its capital stock, from
purchasing or prepaying indebtedness and from incurring certain additional
secured indebtedness.
Aircraft Fuel
Since fuel costs constitute a significant portion of Continental's
operating costs (approximately 12.5% for the year ended December 31, 1995 and
12.9% for the three months ended March 31, 1996), significant changes in fuel
costs would materially affect the Company's operating results. Fuel prices
continue to be susceptible to international events, and the Company cannot
predict near or longer-term fuel prices. The Company has entered into petroleum
option contracts to provide some short-term protection (currently approximately
seven months) against a sharp increase in jet fuel prices. In the event of a
fuel supply shortage resulting from a disruption of oil imports or otherwise,
higher fuel prices or curtailment of scheduled service could result.
Certain Tax Matters
The Company's United States federal income tax return reflects net
operating loss carryforwards ("NOLs") of $2.5 billion, subject to audit by the
Internal Revenue Service, of which $1.2 billion are not subject to the
limitations of Section 382 of the Internal Revenue Code ("Section 382"). As a
result, the Company will not pay United States federal income taxes (other than
alternative minimum tax) until it has recorded approximately an additional $1.2
billion of taxable income following December 31, 1995. For financial reporting
purposes, Continental will be required to begin accruing tax expense on its
income statement once it has realized an additional $122 million of taxable
income following March 31, 1996. Section 382 imposes limitations on a
corporation's ability to utilize NOLs if it experiences an "ownership change."
In general terms, an ownership change may result from transactions increasing
the ownership of certain stockholders in the stock of a corporation by more than
50 percentage points over a three-year period. The sale of the Company's common
stock in the Secondary Offering (as defined herein) as described under "Recent
Developments" will give rise to an increase in percentage ownership by certain
stockholders for this purpose. Based upon the advice of counsel, the Company
believes that such percentage increase will not give rise to an ownership change
under Section 382 as a result of the Secondary Offering. However, no assurance
can be given that future transactions, whether within or outside the control of
the Company, will not cause a change in ownership, thereby substantially
limiting the potential utilization of the NOLs in a given future year. In the
event that an ownership change should occur, utilization of Continental's NOLs
would be subject to an annual limitation under Section 382. This Section 382
limitation for any post-change year would be determined by multiplying the value
of the Company's stock (including both common and preferred stock) of the time
of the ownership change by the applicable long-term tax exempt rate (which is
5.31% for April 1996). Unused annual limitation may be carried over to later
years, and the limitation may under certain circumstances be increased by the
built-in gains in assets held by the Company at the time of the change that are
recognized in the five-year period after the change. Under current conditions,
if an ownership change were to occur, Continental's NOL utilization would be
limited to a minimum of approximately $90 million.
29
In connection with the Company's 1993 reorganization under Chapter 11 of
the U.S. bankruptcy code effective April 27, 1993 (the "Reorganization") and the
recording of assets and liabilities at fair market value under the American
Institute of Certified Public Accountants' Statement of Position 90-7--
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code"
("SOP 90-7"), the Company recorded a deferred tax liability at April 27, 1993,
net of the amount of the Company's estimated realizable net operating loss
carryforwards as required by Statement of Financial Accounting Standards No.
109--"Accounting for Income Taxes." Realization of a substantial portion of the
Company's net operating loss carryforwards will require the completion during
the five-year period following the Reorganization of transactions resulting in
recognition of built-in gains for federal income tax purposes. The Company has
consummated one such transaction, which had the effect of realizing
approximately 40% of the built-in gains required to be realized over the five-
year period, and currently intends to consummate one or more additional
transactions. If the Company were to determine in the future that not all such
transactions will be completed, an adjustment to the net deferred tax liability
of up to $116 million would be charged to income in the period such
determination was made.
CMI
CMI's operating profit margins have consistently been greater than the
Company's margins overall. In addition to its non-stop service between Honolulu
and Tokyo, CMI's operations focus on the neighboring islands of Guam and Saipan,
resort destinations that cater primarily to Japanese travelers. Because the
majority of CMI's traffic originates in Japan, its results of operations are
substantially affected by the Japanese economy and changes in the value of the
yen as compared to the dollar. Appreciation of the yen against the dollar during
1993 and 1994 increased CMI's profitability and a decline of the yen against the
dollar may be expected to decrease it. To reduce the potential negative impact
on CMI's dollar earnings, CMI from time to time purchases average rate options
as a hedge against a portion of its expected net yen cash flow position. Any
significant and sustained decrease in traffic or yields to and from Japan could
materially adversely affect Continental's consolidated profitability.
Principal Stockholders
After the Secondary Offering (as defined herein), which was completed on
May 14, 1996 and the conversion by Air Canada of its Class A common stock into
Class B common stock, Air Canada holds approximately 10.1% of the common equity
interests and 4.0% of the general voting power of the Company, and Air Partners
holds approximately 9.9% of the common equity interests and 39.4% of the general
voting power of the Company. In addition, assuming exercise of all of the
warrants held by Air Partners, approximately 23.4% of the common equity
interests and 52.2% of the general voting power would be held by Air Partners.
See "Recent Developments."
Various provisions in the Company's Restated Certificate of Incorporation
(the "Certificate of Incorporation"), the Company's bylaws (the "Bylaws") and
the Subscription and Stockholders' Agreement among the Company, Air Partners and
Air Canada dated as of April 27, 1993 (the "Stockholders' Agreement") currently
provide Air Partners and Air Canada with a variety of special rights to elect
directors and otherwise affect the corporate governance of the Company; a number
of these provisions could have the effect of delaying, deferring or preventing a
change in control of the Company. The Company has proposed to eliminate a number
of these provisions and will propose for approval by its stockholders the
related amendments to the Certificate of Incorporation at its annual meeting of
stockholders on June 26, 1996 (the "Annual Meeting"). Air Canada and Air
Partners (unless otherwise directed by its investors) have agreed to vote in
favor of these amendments at the Annual Meeting. See "Recent Developments."
Industry Conditions and Competition
The airline industry is highly competitive and susceptible to price
discounting. The Company has in the past both responded to discounting actions
taken by other carriers and initiated significant discounting
30
actions itself. Continental's competitors include carriers with substantially
greater financial resources, as well as smaller carriers with lower cost
structures. Airline profit levels are highly sensitive to, and during recent
years have been severely impacted by, changes in fuel costs, fare levels (or
"average yield") and passenger demand. Passenger demand and yields have been
adversely affected by, among other things, the general state of the economy,
international events and actions taken by carriers with respect to fares. From
1990 to 1993, these factors contributed to the domestic airline industry's
incurring unprecedented losses. Although fare levels have increased recently,
significant industry-wide discounts could be reimplemented at any time, and the
introduction of broadly available, deeply discounted fares by a major United
States airline would likely result in lower yields for the entire industry and
could have a material adverse effect on the Company's operating results.
The airline industry has consolidated in past years as a result of mergers
and liquidations and may further consolidate in the future. Among other effects,
such consolidation has allowed certain of Continental's major competitors to
expand (in particular) their international operations and increase their market
strength. Furthermore, the emergence in recent years of several new carriers,
typically with low cost structures, has further increased the competitive
pressures on the major United States airlines. In many cases, the new entrants
have initiated or triggered price discounting. Aircraft, skilled labor and gates
at most airports continue to be readily available to start-up carriers. Although
management believes that Continental is better able than some of its major
competitors to compete with fares offered by start-up carriers because of its
lower cost structure, competition with new carriers or other low cost
competitors on Continental's routes could negatively impact Continental's
operating results.
Regulatory Matters
In the last several years, the United States Federal Aviation
Administration (the "FAA") has issued a number of maintenance directives and
other regulations relating to, among other things, retirement of older aircraft,
collision avoidance systems, airborne windshear avoidance systems, noise
abatement, commuter aircraft safety and increased inspections and maintenance
procedures to be conducted on older aircraft. The Company expects to continue
incurring expenses for the purpose of complying with the FAA's noise and aging
aircraft regulations. In addition, several airports have recently sought to
increase substantially the rates charged to airlines, and the ability of
airlines to contest such increases has been restricted by federal legislation,
U.S. Department of Transportation regulations and judicial decisions.
Management believes that the Company benefited from the expiration of the
aviation trust fund tax (the "ticket tax") on December 31, 1995, although the
amount of any such benefit resulting directly from the expiration of the ticket
tax cannot be determined. Reinstatement of the ticket tax will result in higher
costs to consumers, which may have an adverse effect on passenger traffic,
revenue and margins. The Company is unable to predict when or in what form the
ticket tax may be reenacted.
Additional laws and regulations have been proposed from time to time that
could significantly increase the cost of airline operations by imposing
additional requirements or restrictions on operations. Laws and regulations have
also been considered that would prohibit or restrict the ownership and/or
transfer of airline routes or takeoff and landing slots. Also, the availability
of international routes to United States carriers is regulated by treaties and
related agreements between the United States and foreign governments that are
amendable. Continental cannot predict what laws and regulations may be adopted
or their impact, but there can be no assurance that laws or regulations
currently enacted or enacted in the future will not adversely affect the
Company.
RISK FACTORS RELATING TO THE CERTIFICATES
Consequences of Failure to Exchange
Holders of Old Certificates who do not exchange their Old Certificates for
New Certificates pursuant to the Exchange Offer will continue to be subject to
the restrictions on transfer of such Old Certificates as set forth
31
in the legend thereon as a consequence of the issuance of the Old Certificates
pursuant to exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, the Old Certificates may not be offered or sold, unless registered
under the Securities Act, except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act and applicable state securities
laws. The Company does not currently anticipate that it will register the Old
Certificates under the Securities Act. To the extent that Old Certificates are
tendered and accepted in the Exchange Offer, the trading market for untendered
and tendered but unaccepted Old Certificates could be adversely affected.
Appraisals and Realizable Value of Aircraft
Appraisals in respect of the Aircraft (without physical inspection thereof)
have been prepared by AISI, BK and MBA. According to the appraisals of the three
firms, the Aircraft had an aggregate appraised value of $711,760,000,
$652,500,000, and $687,989,000, respectively, in each case as of January 3,
1996. See "Description of the Aircraft and the Appraisals". However, an
appraisal is only an estimate of value and should not be relied upon as a
measure of realizable value; the proceeds realized upon a sale of any Aircraft
may be less than the appraised value thereof. The value of the Aircraft in the
event of the exercise of remedies under the applicable Indenture will depend on
market and economic conditions, the availability of buyers, the condition of the
Aircraft and other factors. Accordingly, there can be no assurance that the
proceeds realized upon any such exercise with respect to the Equipment Notes and
the Aircraft pursuant to the applicable Pass Through Trust Agreement and the
applicable Indenture would be sufficient to satisfy in full payments due on the
Certificates.
Priority of Distributions; Subordination
Pursuant to the Intercreditor Agreement to which the Trusts, the
Subordination Agent and the Liquidity Providers shall be parties, on each
Distribution Date, so long as no Triggering Event shall have occurred, all
payments received by the Subordination Agent will be distributed in the
following order: (1) payment of the Liquidity Obligations to the Liquidity
Providers; (2) payment of Expected Distributions to the holders of Class A
Certificates; (3) payment of Expected Distributions to the holders of Class B
Certificates; (4) payment of Expected Distributions to the holders of Class C
Certificates; (5) payment of Expected Distributions to the holders of Class D
Certificates; and (6) payment of certain fees and expenses of the Subordination
Agent and the Trustees.
In addition, upon the occurrence of a Triggering Event and at all times
thereafter, subject to the provisions of the next paragraph, all payments
received by the Subordination Agent in respect of the Equipment Notes and
certain other payments will be distributed under the Intercreditor Agreement in
the following order: (1) to the Liquidity Providers in payment of the Liquidity
Obligations and certain other parties in payment of the Administration Expenses;
(2) to the holders of Class A Certificates in payment of Final Distributions;
(3) to the holders of Class B Certificates in payment of Final Distributions;
(4) to the holders of Class C Certificates in payment of Final Distributions;
and (5) to the holders of Class D Certificates in payment of Final
Distributions.
Notwithstanding the provisions of the foregoing paragraph, after the
occurrence of a Triggering Event but so long as no PTC Event of Default shall
have occurred and be continuing with respect to the most senior Class of
Certificates outstanding, any regularly scheduled payment received on the
Performing Equipment Notes shall be distributed as follows:
(x) the Performing Equipment Notes Interest Payment will be distributed in
the following order: (1) to the Liquidity Providers in payment of the
Liquidity Obligations and certain other parties in payment of the
Administration Expenses; (2) to the holders of Class A Certificates in payment
of accrued and unpaid interest on the Class A Certificates; (3) to the holders
of Class B Certificates in payment of accrued and unpaid interest on the Class
B Certificates; (4) to the holders of Class C Certificates in payment of
accrued and unpaid interest on the Class C Certificates; and (5) to the
holders of Class D Certificates; provided that
32
the provisions of this paragraph (x) will be given effect before distribution
of any funds received in respect of any Non-Performing Equipment Notes;
(y) the Performing Equipment Notes Principal Payment will be distributed in
the following order: (1) to the holders of Class A Certificates in payment of
the greater of (A) the Adjusted Expected Distributions to such holders on such
Distribution Date and (B) such holders' pro rata portion of the Performing
Equipment Notes Principal Payment based on the Adjusted Pool Balance of such
Trust; (2) to the holders of Class B Certificates in payment of the greater of
(A) the Adjusted Expected Distributions to such holders on such Distribution
Date and (B) such holders' pro rata portion of the Performing Equipment Notes
Principal Payment based on the Adjusted Pool Balance of such Trust; (3) to the
holders of Class C Certificates in payment of the greater of (A) the Adjusted
Expected Distributions to such holders on such Distribution Date and (B) such
holders' pro rata portion of the Performing Equipment Notes Principal Payment
based on the Adjusted Pool Balance of such Trust; and (4) to the holders of
Class D Certificates; provided that the provisions of this paragraph (y) will
be given effect after distributing any funds received in respect of any Non-
Performing Equipment Notes;
provided that if the aggregate amount of future scheduled payments in respect of
the Performing Equipment Notes, together with the Performing Equipment Notes
Principal Payment as of such Distribution Date, will be (assuming the
distribution of such amount as contemplated by paragraphs (x) and (y) and that
no further payment will be received at any time from the Non-Performing
Equipment Notes) insufficient to pay interest on any Class of Certificates and
reduce the Pool Balance of such Class of Certificates to zero before the Final
Maturity Date thereof, the amount of distributions to be made to the holders of
such Class of Certificates on such Distribution Date will be increased by the
amount necessary to eliminate such insufficiency prior to making any
distributions to the holders of any Class of Certificates junior to such Class
of Certificates and such increase shall be taken into account for the purpose of
applying this proviso to the holders of any such junior Class of Certificates.
Control over Collateral; Sale of Collateral
Pursuant to the Intercreditor Agreement, the Trustees and the Liquidity
Provider shall agree that, with respect to any Indenture at any given time, the
Loan Trustee will be directed (a) in taking, or refraining from taking, any
action thereunder by the holders of at least a majority of the outstanding
principal amount of the Equipment Notes issued thereunder as long as no
Indenture Default has occurred and is continuing thereunder and (b) subject to
certain conditions, in exercising remedies thereunder (including acceleration of
such Equipment Notes or foreclosing the lien on the Aircraft securing such
Equipment Notes) insofar as an Indenture Default has occurred and is continuing
by the Controlling Party. See "Description of New Certificates--Indenture
Defaults and Certain Rights Upon an Indenture Default" for a description of the
rights of the Certificateholders of each Trust to direct the respective
Trustees. Notwithstanding the foregoing, subject to certain limitations, the
Liquidity Provider shall have the right to direct such Loan Trustee at any time
after 18 months from the acceleration of the Equipment Notes under such
Indenture, if at the time of such election the Liquidity Obligations have not
been paid in full. For purposes of giving effect to the foregoing, the Trustees
(other than the Controlling Party) shall 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) to exercise their voting rights as directed by the Controlling
Party.
Upon the occurrence and during the continuation of any Indenture Default
under any Indenture, the Controlling Party may accelerate and, subject to the
provisions of the immediately following sentence, sell all (but not less than
all) of the Equipment Notes issued under such Indenture to any person. So long
as any Certificates are outstanding, during nine months after the earlier of (x)
the acceleration of the Equipment Notes under any Indenture or (y) the
bankruptcy or insolvency of Continental, 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
33
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 under such Indenture as the
discount rate.
Potential Conflict of Interest
General Electric Company is currently the Owner Participant with respect to all
of the eighteen leveraged leases for the Aircraft. The Owner Participant or its
affiliate will also acquire all of the Class D Certificates contemporaneously
with the consummation of the Offering. The Owner Participant and certain of its
affiliates have various business relationships with Continental, including as a
lender and a supplier of certain equipment and services to Continental. Certain
of the obligations of Continental to the Owner Participant with respect to the
Aircraft are currently secured by a pledge of unrelated assets, most of which
assets are also pledged to GE to secure unrelated obligations. Due to such
relationships and GE's capacities as both the Owner Participant and the Class D
Certificateholder, interests of GE may not be consistent with, or may conflict
with, interests of other Certificateholders. General Electric Company has the
right to sell, assign or otherwise transfer its interests as Owner Participant
in any or all of such leveraged leases, subject to the terms and conditions of
the relevant Participation Agreement and related documents, and the Class D
Certificateholder will have the right to sell any or all Class D Certificates,
subject to the terms and conditions of the Pass Through Trust Agreement for the
Class D Trust.
Absence of a Public Market for the Certificates
Prior to the Exchange Offer, there has been no public market for the Old
Certificates or tne New Certificates. Neither Continental nor any Trust has
applied or intends to apply for listing of the New Certificates on any national
securities exchange or for quotation of the New Certificates through the
National Association of Securities Dealers Automated Quotation System. Certain
of the Initial Purchasers have previously make a market in the Old Certificates,
and Continental has been advised by the Initial Purchasers that one or more of
them presently intends to make a market in the New Certificates, as permitted by
applicable laws and regulations, after consummation of the Exchange Offer. None
of the Initial Purchasers is obligated, however, to make a market in the Old
Certificates or the New Certificates and any such market making activity may be
discontinued at any time without notice at the sole discretion of each Initial
Purchaser. There can be no assurance as to the liquidity of the public market
for the Certificates or that any active public market for the Certificates will
develop or continue. If an active public market does not develop or continue,
the market prices and liquidity of the Certificates may be adversely affected.
34
RECENT DEVELOPMENTS
On April 19, 1996, the Company's Board of Directors approved certain
agreements (the "Agreements") with its two major stockholders, Air Canada and
Air Partners. The Agreements contain a variety of arrangements intended
generally to reflect the intention that Air Canada has expressed to the Company
of divesting its investment in Continental by early 1997, subject to market
conditions. Air Canada has indicated to the Company that its original investment
in Continental has become less central to Air Canada in light of other
initiatives it has undertaken -- particularly expansion within Canada and
exploitation of the 1995 Open Skies agreement to expand Air Canada's own flights
into the U.S. Because of these initiatives Air Canada has determined it
appropriate to redeploy the funds invested in the Company into other uses in Air
Canada's business. The Agreements also reflect the recent distribution by Air
Partners, effective March 29, 1996, to its investors (the "AP Investors") of all
of the shares of the Class B common stock held by Air Partners and the desire of
some of the AP Investors to realize the increase in value of their investment in
in the Company by selling all or a portion of their shares of Class B common
stock.
Among other things, the Agreements required the Company to file a
registration statement under the Securities Act to permit the sale by Air Canada
of 2,200,000 shares of Class B common stock held by it and by certain of the AP
Investors of an aggregate of 1,730,240 such shares pursuant to an underwritten
public offering arranged by the Company (the "Secondary Offering"). The
Secondary Offering was completed on May 14, 1996. The Agreements provide for the
following additional steps to be taken in connection with the completion of this
offering:
. in light of its then-reduced equity stake in the Company, Air Canada will
no longer be entitled to designate nominees to the Board of Directors of
the Company, will cause the four present or former members of the Air
Canada board who currently serve as directors of Continental to decline
nomination for reelection as directors (except in limited circumstances),
and will convert all of its Class A common stock to Class B common stock;
. Air Canada and Air Partners have entered into a number of agreements
restricting, prior to December 16, 1996, further disposition of the common
stock of the Company held by either of them; and
. each of the existing Stockholders' Agreement and the registration rights
agreement (the ("Original Registration Rights Agreement") among the parties
will be modified in a number of respects to reflect, among other matters,
the changing composition of the respective equity interests of the parties.
After such sale and the conversion by Air Canada of its Class A common
stock into Class B common stock, Air Canada holds approximately 10.1% of the
common equity interests and 4.0% of the general voting power of the Company, and
Air Partners holds approximately 9.9% of the common equity interests and 39.4%
of the general voting power of the Company. In addition, assuming exercise of
all of the warrants held by Air Partners, approximately 23.4% of the common
equity interests and 52.2% of the general voting power would be held by Air
Partners.
Reflecting the reduction of Air Canada's interest and the decision of the
current directors designated by Air Canada not to stand for reelection (except
under certain limited circumstances), along with the expiration of various
provisions specifically included at the time of the Company's reorganization,
Continental's Board of Directors has also approved changes to the Company's
Certificate of Incorporation and Bylaws (the "Proposed Amendments") generally
eliminating special classes of directors (except for Air Partners' right to
35
elect directors in certain circumstances) and supermajority provisions, and
making a variety of other modifications aimed at streamlining the Company's
corporate governance structure.
The Proposed Amendments also provide that, at any time after January 1,
1997, shares of Class A common stock would become freely convertible into an
equal number of Class B common stock. Under agreements put in place at the time
of the Company's reorganization in 1993, and designed in part to ensure
compliance with the foreign ownership limitations applicable to United States
air carriers in light of the substantial stake in the Company then held by Air
Canada, holders of Class A common stock (other than Air Canada) are not
currently permitted under the Company's Certificate of Incorporation to convert
their shares to Class B common stock. In recent periods, the market price of
Class A common stock has generally been below the price of Class B common stock,
which the Company believes is attributable in part to the reduced liquidity
present in the trading market for Class A common stock. A number of Class A
stockholders have requested that the Company provide for free convertibility of
Class A common stock into Class B common stock, and in light of the reduction of
Air Canada's equity stake, the Company has determined that the restriction is no
longer necessary. Any such conversion would effectively increase the relative
voting power of those Class B stockholders who do not convert.
The Company and Air Canada also expect to enter into discussions regarding
modifications to the Company's existing "synergy" agreements with Air Canada,
covering items such as maintenance and ground facilities, with a view to
resolving certain outstanding commercial issues under the agreements and
otherwise modifying the agreements to reflect Continental's and Air Canada's
current needs. The Company has entered into an agreement with Air Partners for
the sale by Air Partners to the Company from time to time at Air Partners'
election for the one-year period beginning August 15, 1996, of up to an
aggregate of $50 million in intrinsic value (then-current Class B common stock
price minus exercise price) of Air Partners' Class B common stock warrants. The
purchase price would be payable in cash. The Board of Directors has authorized
the Company to publicly issue up to $50 million of Class B common stock in
connection with any such purchase. In connection with this agreement, the
Company will reclassify $50 million from common equity to redeemable warrants.
Because certain aspects of the Agreements raised issues under the change in
control provisions of certain of the Company's employment agreements and
employee benefit plans, these agreements and plans are being modified to provide
a revised change of control definition that the Company believes is appropriate
in light of the prospective changes to its equity ownership structure. In
connection with the modifications, payments are being made to certain employees,
benefits are being granted to certain employees and options equal to 10% of the
amount of the options previously granted to each optionee are being granted
(subject to certain conditions) to substantially all employees holding
outstanding options.
Certain of the Proposed Amendments and employee benefit actions are subject
to stockholder approval at the Annual Meeting. Air Canada has delivered an
irrevocable proxy in favor of Air Partners, authorizing Air Partners to vote, in
its sole discretion, all the shares of common stock beneficially owned, directly
or indirectly, by Air Canada as of the record date, April 30, 1996,
(approximately 23.6% of the voting power of all voting securities outstanding as
of such record date) with respect to the Proposed Amendments and employee
benefit actions, among other matters to be voted on by the Company's
stockholders. Air Partners has indicated to the Company that it intends to vote
all such shares in favor of all such matters and, unless otherwise directed by
its investors with respect to the shares of the Company held by Air Partners
that are attributable to such investors' respective limited partnership
interests, to vote the shares of common stock held by it as of the record date
(approximately 35.7% of the voting power of all voting securities outstanding as
of such date) in favor of all such matters. A majority vote of shareholders is
required to approve the employee benefit matters; a two-thirds vote is required
to approve the Proposed Amendments.
36
USE OF PROCEEDS
There will be no cash proceeds payable to Continental from the issuance of
the New Certificates pursuant to the Exchange Offer. The proceeds from the sale
of the Old Certificates were used to purchase the Series A, B and C Equipment
Notes issued by the related Owner Trustees in connection with the refinancing of
the indebtedness incurred by the Owner Trustees to finance the purchase of each
of the Aircraft. Such Equipment Notes, together with the Series D Equipment
Notes contributed to the Class D Trust by the Owner Participant, represent in
the aggregate the entire debt portion currently outstanding of the leveraged
lease transactions relating to all of the Aircraft. Continental did not receive
any of the proceeds from the sale of the Old Certificates.
RATIOS OF EARNINGS TO FIXED CHARGES
The following information for the years ended December 31, 1991 and 1992
and for the period January 1, 1993 through April 27, 1993 relates to
Continental's predecessor, Holdings. Information for the period April 28, 1993
through December 31, 1993, for the two years ended December 31, 1994 and 1995
and for the three months ended March 31, 1995 and 1996 relates to Continental.
The information as to Continental has not been prepared on a consistent basis of
accounting with the information as to Holdings due to Continental's adoption,
effective April 27, 1993, of fresh start reporting in accordance with SOP 90-7.
For the years ended December 31, 1991 and 1992, for the periods January 1,
1993 through April 27, 1993 and April 28, 1993 through December 31, 1993, for
the year ended December 31, 1994 and for the three months ended March 31, 1995,
earnings were not sufficient to cover fixed charges. Additional earnings of $316
million, $131 million, $979 million, $60 million, $667 million and $28 million,
respectively, would have been required to achieve ratios of earnings to fixed
charges of 1.0. The ratio of earnings to fixed charges for the year ended
December 31, 1995 was 1.53. The ratio of earnings to fixed charges for the three
months ended March 31, 1996 was 1.70. For purposes of calculating this ratio,
earnings consist of earnings before taxes, minority interest and extraordinary
items plus interest expense (net of capitalized interest), the portion of rental
expense deemed representative of the interest expense and amortization of
previously capitalized interest. Fixed charges consist of interest expense and
the portion of rental expense representative of interest expense.
37
SELECTED FINANCIAL DATA
The following tables set forth selected financial data of (i) the Company
for the three months ended March 31, 1996 and 1995, the two years ended December
31, 1995 and 1994 and for the period from April 28, 1993 through December 31,
1993 and (ii) Holdings for the period from January 1, 1993 through April 27,
1993. The consolidated financial data of both the Company, for the two years
ended December 31, 1995 and 1994 and for the period from April 28, 1993 through
December 31, 1993, and Holdings, for the period from January 1, 1993 through
April 27, 1993, are derived from their respective audited consolidated financial
statements. On April 27, 1993, in connection with the Reorganization, the
Company adopted fresh start reporting in accordance with SOP 90-7. A vertical
black line is shown in the table below to separate Continental's post-
reorganized consolidated financial data from the pre-reorganized consolidated
financial data of Holdings since they have not been prepared on a consistent
basis of accounting. The consolidated financial data of the Company for the
three months ended March 31, 1996 and 1995 are derived from its unaudited
consolidated financial statements, which include all adjustments (consisting
solely of normal recurring accruals) that the Company considers necessary for
the presentation of the financial position and results of operations for these
periods. Operating results for the three months ended March 31, 1996 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1996. The Company's selected consolidated financial data should be
read in conjunction with, and are qualified in their entirety by reference to,
the consolidated financial statements, including the notes thereto, incorporated
by reference herein.
PERIOD FROM PERIOD FROM
REORGANIZATION JANUARY 1,
THREE MONTHS YEAR ENDED (APRIL 28,1993) 1993
ENDED MARCH 31, DECEMBER 31, THROUGH THROUGH
--------------------- ------------------- DECEMBER 31, APRIL 27,
1996 1995 1995 1994 1993 1993
--------- -------- -------- -------- ------------ ------------
STATEMENT OF OPERATIONS DATA: (IN MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)
(unaudited)
Operating Revenue:
Passenger................................... $1,375 $1,240 $5,302 $5,036 $3,493 $1,622
Cargo, mail and other....................... 114 169 523 634 417 235
------ ------ ------ ------ ------ ------
1,489 1,409 5,825 5,670 3,910 1,857
------ ------ ------ ------ ------ ------
Operating Expenses:
Wages, salaries and related costs........... 364 366 1,432(1) 1,532 1,000 502
Aircraft fuel............................... 177 169 681 741 540 272
Aircraft rentals............................ 124 123 497 433 261 154
Commissions................................. 126 119 489 439 378 175
Maintenance, materials and repairs.......... 112 97 429 495 363 184
Other rentals and landing fees.............. 84 92 356 392 258 120
Depreciation and amortization............... 65 64 253 258 162 77
Other....................................... 317 351 1,303 1,391 853 487
------ ------ ------ ------ ------ ------
1,369 1,381 5,440 5,681 3,815 1,971
------ ------ ------ ------ ------ ------
Operating Income (Loss)....................... 120 28 385 (11) 95 (114)
------ ------ ------ ------ ------ ------
Nonoperating Income (Expense):
Interest expense............................ (47) (53) (213) (241) (165) (52)
Interest capitalized........................ 1 1 6 17 8 2
Interest income............................. 9 6 31 23 14 -
Gain on System One transactions............. - - 108 - - -
Reorganization items, net................... - - - - - (818)
Other, net.................................. 12 (10) (7) (439)(2) (4) 5
------ ------ ------ ------ ------ ------
(25) (56) (75) (640) (147) (863)
------ ------ ------ ------ ------ ------
38
Income (Loss) before Income Taxes, Minority
Interest and Extraordinary Gain.............. 95 (28) 310 (651) (52) (977)
Net Income (Loss)............................. $ 88 $ (30) $ 224 $ (613) $ (39) $2,640(3)
Earnings (Loss) per Common and Common
Equivalent Share............................. $ 2.70 $(1.21) $ 7.20 $(23.76) $(2.33) N.M.(4)
====== ====== ====== ======= ====== ======
Earnings (Loss) per Common
Share Assuming Full Dilution................. $ 2.36 $(1.21) $ 6.29 $(23.76) $(2.33) N.M.(4)
====== ====== ====== ======= ====== ======
AS OF AS OF
MARCH 31, DECEMBER 31,
------------- --------------
1996 1995
------------- --------------
BALANCE SHEET DATA: (In millions of dollars)
(unaudited)
Cash and Cash Equivalents, including restricted
Cash and Cash Equivalents of $124 and $144,
respectively(5)................................... $ 657 $ 747
Other Current Assets............................... 655 568
Total Property and Equipment, Net.................. 1,410 1,461
Routes, Gates and Slots, Net....................... 1,517 1,531
Other Assets, Net.................................. 507 514
------ ------
Total Assets................................... $4,746 $4,821
====== ======
Current Liabilities................................ $2,040 $1,984
Long-term Debt and Capital Leases.................. 1,462 1,658
Deferred Credits and Other Long-term Liabilities... 542 564
Minority Interest.................................. 28 27
Continental-Obligated Mandatorily Redeemable
Preferred Securities of Trust(6).................. 242 242
Redeemable Preferred Stock......................... 42 41
Common Stockholders' Equity........................ 390 305
------ ------
Total Liabilities and Stockholders' Equity..... $4,746 $4,821
====== ======
(1) Includes a $20 million cash payment in 1995 by the Company in connection
with a 24-month collective bargaining agreement entered into by the Company
and the Independent Association of Continental Pilots.
(2) Includes a provision of $447 million recorded in the fourth quarter of 1994
associated with the planned early retirement of certain aircraft and closed
or underutilized airport and maintenance facilities and other assets.
(3) Reflects a $3.6 billion extraordinary gain from extinguishment of debt.
(4) Historical per share data for Holdings is not meaningful since the Company
has been recapitalized and has adopted fresh start reporting as of April
27, 1993.
(5) Restricted cash and cash equivalents agreements relate primarily to
workers' compensation claims and the terms of certain other agreements. In
addition, CMI is required by its loan agreement with GE to maintain certain
minimum cash balances and net worth levels, which effectively restrict the
amount of cash available to Continental from CMI.
(6) The sole assets of the Trust are convertible debentures which are expected
to be repaid by 2020. Upon repayment, the Continental-Obligated
Mandatorily Redeemable Preferred Securities of Trust will be mandatorily
redeemed.
39
THE EXCHANGE OFFER
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and reference is made to the
provisions of the Registration Rights Agreement, which has been filed as an
exhibit to the Registration Statement and a copy of which is available upon
request to the Trustee.
TERMS OF THE EXCHANGE OFFER
General
In connection with the issuance of the Old Certificates pursuant to a
Purchase Agreement dated as of January 28, 1996, between the Company and the
Initial Purchasers, the Initial Purchasers and the Owner Participant and their
respective assignees became entitled to the benefits of the Registration Rights
Agreement.
Under the Registration Rights Agreement, the Company is obligated to (i)
file the Registration Statement of which this Prospectus is a part for a
registered exchange offer with respect to an issue of new certificates identical
in all material respects to the Old Certificates within 120 calendar days after
January 31, 1996, the date the Old Certificates were issued (the "Issue Date"),
(ii) use its best efforts to cause the Registration Statement to become
effective within 60 days after filing of the Registration Statement and (iii) to
consummate the Exchange Offer within 30 calendar days after the date the
Registration Statement is declared effective by the Commission. The Company will
keep the Exchange Offer open for a period of not less than 30 calendar days. The
Exchange Offer being made hereby, if commenced and consummated within the time
periods described in this paragraph, will satisfy those requirements under the
Registration Rights Agreement.
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal (which together constitute the Exchange Offer),
all Old Certificates validly tendered and not withdrawn prior to 5:00 p.m., New
York City time, on the Expiration Date will be accepted for exchange. New
Certificates of the same class will be issued in exchange for an equal principal
amount of outstanding Old Certificates accepted in the Exchange Offer. As of the
date of this Prospectus, $489,267,000 aggregate principal amount of Old
Certificates is outstanding. Old Certificates may be tendered only in integral
multiples of $1000. This Prospectus, together with the Letter of Transmittal, is
being sent to all registered holders as of , 1996. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Certificates being tendered
for exchange. However, the obligation to accept Old Certificates for exchange
pursuant to the Exchange Offer is subject to certain conditions as set forth
herein under "--Conditions."
Old Certificates shall be deemed to have been accepted validly tendered
when, as and if the Trustee has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
of Old Certificates for the purposes of receiving the New Certificates and
delivering New Certificates to such holders.
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, including the Exchange Offer No-
Action Letters, the Company believes that the New Certificates issued pursuant
to the Exchange Offer may be offered for resale, resold or otherwise transferred
by holders thereof (other than a broker-dealer who acquires such New
Certificates directly from the Trustee for resale pursuant to Rule 144A under
the Securities Act or any other available exemption under the Securities Act or
any holder that is an "affiliate" of the Company as defined under Rule 405 of
the Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such New Certificates
are acquired in the ordinary course of such holders' business and such holders
are not engaged in, and do not intend to engage in, a distribution of such New
Certificates and have no arrangement with any person to participate in a
distribution of such New Certificates. However, the staff of the Commission has
not considered the Exchange
40
Offer in the context of a no-action letter and there can be no assurance that
the staff of the Commission would make a similar determination with respect to
the Exchange Offer as in such other circumstances. By tendering the Old
Certificates in exchange for New Certificates, each holder, other than a broker-
dealer, will represent to the Company that: (i) it is not an affiliate of the
Company (as defined under Rule 405 of the Securities Act) nor a broker-dealer
tendering Old Certificates acquired directly from the Company for its own
account; (ii) any New Certificates to be received by it will be acquired in the
ordinary course of its business; and (iii) it is not engaged in, and does not
intend to engage in, a distribution of such New Certificates and has no
arrangement or understanding to participate in a distribution of the New
Certificates. If a holder of Series A Notes is engaged in or intends to engage
in a distribution of the Series B Notes or has any arrangement or understanding
with respect to the distribution of the Series B Notes to be acquired pursuant
to the Exchange Offer, such holder may not rely on the applicable
interpretations of the staff of the Commission and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction. Each Participating Broker-
Dealer that receives New Certificates for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with any resale of such New Certificates. The Letter of Transmittal states that
by so acknowledging and by delivering a prospectus, a Participating Broker-
Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of New Certificates received in exchange for Old
Certificates where such Old Certificates were acquired by such Participating
Broker-Dealer as a result of market-making activities or other trading
activities. The Company has agreed that, starting on the Expiration Date and
ending on the close of business 180 days after the Expiration Date, it will make
this Prospectus available to any Participating Broker-Dealer for use in
connection with any such resale. See "Plan of Distribution."
In the event that (i) any changes in law or the applicable interpretations
of the staff of the Commission do not permit Continental to effect the Exchange
Offer, (ii) for any reason the Registration Statement is not declared effective
within 60 calendar days after the filing thereof with the Commission or the
Exchange Offer is not consummated within 30 days after the Registration
Statement is declared effective, (iii) any holder of Old Certificates (other
than an Initial Purchaser) is not eligible to participate in the Exchange Offer
or (iv) an Initial Purchaser (with respect to Old Certificates which it acquired
directly from the Company), following consummation of the Exchange Offer, is not
permitted, in the opinion of counsel to such Initial Purchaser, to participate
in the Exchange Offer (and upon request of such Initial Purchaser), Continental
will, at its cost, (a) as promptly as practicable, file with the Commission a
shelf registration statement covering resales of the Old Certificates (the
"Shelf Registration Statement"), (b) use its best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act by the
210th calendar day after the Issue Date and (c) use its best efforts to keep
effective the Shelf Registration Statement for a period of three years after the
Issue Date (or for such shorter period as shall end when all of the Old
Certificates covered by the Shelf Registration Statement have been sold pursuant
thereto or may be freely sold pursuant to Rule 144 under the Securities Act).
In the event that either (i) (x) the Registration Statement was not filed
with the Commission on or prior to the 120th calendar day following the Issue
Date, or (y) the Registration Statement has not been declared effective on or
prior to the 60th calendar day following the filing thereof with the Commission
or (z) the Exchange Offer is not consummated on or prior to the 30th calendar
day following the effectiveness of the Registration Statement or (ii) a Shelf
Registration Statement is required to be filed with the Commission pursuant to
the Registration Rights Agreement and such Shelf Registration Statement is not
declared effective on or prior to the 210th calendar day following the Issue
Date (each, a "Registration Default"), the interest rate per annum borne by the
Equipment Notes and passed through to holders of Old Certificates shall be
increased by (1) 0.25% from and including the day following such Registration
Default to but excluding the 90th day following such Registration Default and
(2) 0.50% thereafter; provided, however, that such increase shall cease to be in
effect from and including the date on which such Registration Default has been
cured. In the event that the Shelf Registration Statement ceases to be effective
at any time, during the period the Company is required to keep such Shelf
Registration Statement effective, for more than 60 days, whether or not
consecutive, during any 12-month
41
period, the interest rate per annum borne by the Equipment Notes shall be
increased by 0.50% from the 61st day of the applicable 12-month period such
Shelf Registration Statement ceases to be effective until such time as the Shelf
Registration Statement again becomes effective.
Upon consummation of the Exchange Offer, subject to certain exceptions,
holders of Old Certificates who do not exchange their Old Certificates for New
Certificates in the Exchange Offer will no longer be entitled to registration
rights and will not be able to offer or sell their Old Certificates, unless such
Old Certificates are subsequently registered under the Securities Act (which,
subject to certain limited exceptions, the Company will have no obligation to
do), except pursuant to an exemption from, or in a transaction not subject to,
the Securities Act and applicable state securities laws. See "Risk Factors--Risk
Factors Relating to the Certificates--Consequences of Failure to Exchange."
Expiration Date; Extensions; Amendments; Termination
The term "Expiration Date" shall mean _________, 1996 (30 calendar days
following the commencement of the Exchange Offer), unless the Company, in its
sole discretion, extends the Exchange Offer, in which case the term "Expiration
Date" shall mean the latest date to which the Exchange Offer is extended.
Notwithstanding any extension of the Exchange Offer, if the Exchange Offer is
not consummated by , 1996, the interest rate borne by the Equipment
Notes and passed through to the Certificateholders is subject to increase. See
"--General."
In order to extend the Expiration Date, the Company will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
record holders of Old Certificates an announcement thereof, each prior to 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Such announcement may state that the Company is
extending the Exchange Offer for a specified period of time.
The Company reserves the right (i) to delay acceptance of any Old
Certificates, to extend the Exchange Offer or to terminate the Exchange Offer
and not permit acceptance of Old Certificates not previously accepted if any of
the conditions set forth herein under "-- Conditions" shall have occurred and
shall not have been waived by the Company, by giving oral or written notice of
such delay, extension or termination to the Exchange Agent, or (ii) to amend the
terms of the Exchange Offer in any manner deemed by it to be advantageous to the
holders of the Old Certificates. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral or
written notice thereof to the Exchange Agent. If the Exchange Offer is amended
in a manner determined by the Company to constitute a material change, the
Company will promptly disclose such amendment in a manner reasonably calculated
to inform the holders of the Old Certificates of such amendment.
Without limiting the manner in which the Company may choose to make public
announcement of any delay, extension, amendment or termination of the Exchange
Offer, the Company shall have no obligation to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
INTEREST ON THE NEW CERTIFICATES
The New Certificates will accrue interest at the applicable per annum for
such Trust set forth on the cover page of this Prospectus, from the last date on
which interest was paid on the Old Certificates surrendered in exchange
therefor. Interest on the New Certificates is payable on January 15, April 15,
July 15 and October 15 of each year commencing April 15, 1996, subject to the
terms of the Intercreditor Agreement.
42
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with any other
required documents, to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date. In addition, either (i) certificates for such Old
Certificates must be received by the Exchange Agent along with the Letter of
Transmittal, (ii) a timely confirmation of a book-entry transfer (a "Book-Entry
Confirmation") of such Old Certificates, if such procedure is available, into
the Exchange Agent's account at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedure for book-entry transfer described
below, must be received by the Exchange Agent prior to the Expiration Date or
(iii) the holder must comply with the guaranteed delivery procedures described
below. THE METHOD OF DELIVERY OF OLD CERTIFICATES, LETTERS OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF
SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY
INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR OLD
CERTIFICATES SHOULD BE SENT TO THE COMPANY. Delivery of all documents must be
made to the Exchange Agent at its address set forth below. Holders may also
request their respective brokers, dealers, commercial banks, trust companies or
nominees to effect such tender for such holders.
The tender by a holder of Old Certificates will constitute an agreement
between such holder and the Company in accordance with the terms and subject to
the conditions set forth herein and in the Letter of Transmittal.
Only a holder of Old Certificates may tender such Old Certificates in the
Exchange Offer. The term "holder" with respect to the Exchange Offer means any
person in whose name Old Certificates are registered on the books of the Company
or any other person who has obtained a properly completed bond power from the
registered holder.
Any beneficial owner whose Old Certificates are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the Letter of Transmittal and delivering his Old Certificates, either
make appropriate arrangements to register ownership of the Old Certificates in
such owner's name or obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by any member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor" institution within the meaning of Rule
17Ad-15 under the Exchange Act (each an "Eligible Institution") unless the Old
Certificates tendered pursuant thereto are tendered (i) by a registered holder
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Certificates listed therein, such Old Certificates
must be endorsed or accompanied by bond powers and a proxy which authorizes such
person to tender the Old Certificates on behalf of the registered holder, in
each case as the name of the registered holder or holders appears on the Old
Certificates.
43
If the Letter of Transmittal or any Old Certificates or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and withdrawal of the tendered Old Certificates will be determined by
the Company in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any and all Old
Certificates not properly tendered or any Old Certificates which, if accepted,
would, in the opinion of counsel for the Company, be unlawful. The Company also
reserves the absolute right to waive any irregularities or conditions of tender
as to particular Old Certificates. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Certificates must be
cured within such time as the Company shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give notification
of defects or irregularities with respect to tenders of Old Certificates, nor
shall any of them incur any liability for failure to give such notification.
Tenders of Old Certificates will not be deemed to have been made until such
irregularities have been cured or waived. Any Old Certificates received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned without cost to
such holder by the Exchange Agent to the tendering holders of Old Certificates,
unless otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
In addition, the Company reserves the right in its sole discretion, subject
to the provisions of the Indenture, to (i) purchase or make offers for any Old
Certificates that remain outstanding subsequent to the Expiration Date or, as
set forth under "-- Conditions," to terminate the Exchange Offer in accordance
with the terms of the Registration Rights Agreement and (ii) to the extent
permitted by applicable law, purchase Old Certificates in the open market, in
privately negotiated transactions or otherwise. The terms of any such purchases
or offers could differ from the terms of the Exchange Offer.
ACCEPTANCE OF OLD CERTIFICATES FOR EXCHANGE; DELIVERY OF NEW CERTIFICATES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
all Old Certificates properly tendered will be accepted, promptly after the
Expiration Date, and the New Certificates will be issued promptly after
acceptance of the Old Certificates. See "--Conditions" below. For purposes of
the Exchange Offer, Old Certificates shall be deemed to have been accepted
validly tendered for exchange when, as and if the Company has given oral or
written notice thereof to the Exchange Agent.
In all cases, issuance of New Certificates for Old Certificates that are
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Old Certificates
or a timely Book-Entry Confirmation of such Old Certificates into the Exchange
Agent's account at the Book-Entry Transfer Facility, a properly completed and
duly executed Letter of Transmittal and all other required documents. If any
tendered Old Certificates are not accepted for any reason set forth in the terms
and conditions of the Exchange Offer or if Old Certificates are submitted for a
greater principal amount than the holder desires to exchange, such unaccepted or
nonexchanged Old Certificates will be returned without expense to the tendering
holder thereof (or, in the case of Old Certificates tendered by book-entry
transfer procedures described below, such nonexchanged Old Certificates will be
credited to an account maintained with such Book-Entry Transfer Facility) as
promptly as practicable after the expiration or termination of the Exchange
Offer.
44
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Certificates at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Certificates by causing
the Book-Entry Transfer Facility to transfer such Old Certificates into the
Exchange Agent's account at the Book-Entry Transfer Facility in accordance with
such Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Old Certificates may be effected through book-entry transfer at the
Book-Entry Transfer Facility, the Letter of Transmittal or facsimile thereof
with any required signature guarantees and any other required documents must, in
any case, be transmitted to and received by the Exchange Agent at one of the
addresses set forth below under "-- Exchange Agent" on or prior to the
Expiration Date or the guaranteed delivery procedures described below must be
complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Old Certificates desires to tender such Old
Certificates, and the Old Certificates are not immediately available, or time
will not permit such holder's Old Certificates or other required documents to
reach the Exchange Agent before the Expiration Date, or the procedures for book-
entry transfer cannot be completed on a timely basis, a tender may be effected
if (i) the tender is made through an Eligible Institution, (ii) prior to the
Expiration Date, the Exchange Agent receives from such Eligible Institution a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) and Notice of Guaranteed Delivery, substantially in the form provided
by the Company (by facsimile transmission, mail or hand delivery), setting forth
the name and address of the holder of Old Certificates and the amount of Old
Certificates tendered, stating that the tender is being made thereby and
guaranteeing that within three New York Stock Exchange ("NYSE") trading days
after the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Old Certificates, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent and (iii) the certificates for all
physically tendered Old Certificates, in proper form for transfer, or a Book-
Entry Confirmation, as the case may be, and all other documents required by the
Letter of Transmittal are received by the Exchange Agent within three NYSE
trading days after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Tenders of Old Certificates may be withdrawn at any time prior to 5:00
p.m., New York City time on the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent prior to 5:00 p.m., New York City time on the
Expiration Date at one of the addresses set forth below under "--Exchange
Agent." Any such notice of withdrawal must specify the name of the person having
tendered the Old Certificates to be withdrawn, identify the Old Certificates to
be withdrawn (including the principal amount of such Old Certificates) and
(where certificates for Old Certificates have been transmitted) specify the name
in which such Old Certificates are registered, if different from that of the
withdrawing holder. If certificates for Old Certificates have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Old Certificates have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Old Certificates and otherwise comply with the
procedures of such facility. All questions as to the validity, form and
eligibility
45
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old
Certificates so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Old Certificates which have
been tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder (or, in the case of
Old Certificates tendered by book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the book-entry transfer
procedures described above, such Old Certificates will be credited to an account
maintained with such Book-Entry Transfer Facility for the Old Certificates) as
soon as practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Certificates may be retendered by
following one of the procedures described under "-- Procedures for Tendering"
and "--Book-entry Transfer" above at any time on or prior to the Expiration
Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, Old Certificates will
not be required to be accepted for exchange, nor will New Certificates be issued
in exchange for, any Old Certificates and the Company may terminate or amend the
Exchange Offer as provided herein before the acceptance of such Old
Certificates, if because of any change in law, or applicable interpretations
thereof by the Commission, the Company determines that it is not permitted to
effect the Exchange Offer, and the Company has no obligation to, and will not
knowingly, permit acceptance of tenders of Old Certificates from affiliates of
the Company (within the meaning of Rule 405 under the Securities Act) or from
any other holder or holders who are not eligible to participate in the Exchange
Offer under applicable law or interpretations thereof by the Commission, or if
the New Certificates to be received by such holder or holders of Old
Certificates in the Exchange Offer, upon receipt, will not be tradable by such
holder without restriction under the Securities Act and the Exchange Act and
without material restrictions under the "blue sky" or securities laws of
substantially all of the states of the United States.
EXCHANGE AGENT
Wilmington Trust Company has been appointed as Exchange Agent for the
Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
By Mail, Overnight Delivery: By Hand:
Wilmington Trust Company Wilmington Trust Company
1100 North Market Street 1105 North Market Street, 1st Floor
Wilmington, Delaware 19890-0001 Wilmington, Delaware 19890
Attention: Jill Rylee Attention: Corporate Trust Operations
Facsimile Transmission:
(302) 651-1079
Confirm by Telephone:
(302) 651-8869
Jill Rylee
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail; however, additional solicitations may be
made by telegraph, telephone, telecopy or in person by officers and regular
employees of the Company.
46
The Company will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. The Company, however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse the Exchange Agent for its reasonable out-of-pocket expenses in
connection therewith. The Company may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of the Prospectus and related documents to
the beneficial owners of the Old Certificates, and in handling or forwarding
tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer will be
paid by the Company, including fees and expenses of the Exchange Agent and
Trustee (as hereinafter defined) and accounting, legal, printing and related
fees and expenses.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Certificates pursuant to the Exchange Offer. If, however, certificates
representing New Certificates or Old Certificates for principal amounts not
tendered or accepted for exchange are to be delivered to, or are to be
registered or issued in the name of, any person other than the registered holder
of the Old Certificates tendered, or if tendered Old Certificates are registered
in the name of any person other than the person signing the Letter of
Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Old Certificates pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or any other
persons) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
47
DESCRIPTION OF THE NEW CERTIFICATES
The Certificates have been issued pursuant to four separate Pass Through
Trust Agreements. The following summary describes certain terms of the
Certificates and the Pass Through Trust Agreements. The summary does not purport
to be complete and reference is made to the provisions of the Certificates and
the Pass Through Trust Agreements, which have been filed as exhibits to the
Registration Statement. Except as otherwise indicated, the following summary
relates to each of the Trusts and the Certificates issued by each Trust. The
terms and conditions governing each of the Trusts will be substantially the
same, except as described under "--Subordination" below and except that the
principal amount, the interest rate, scheduled repayments of principal, and
maturity date applicable to the Equipment Notes held by each Trust and the final
Distribution Date applicable to each Trust will differ. Citations to the
relevant sections of the Pass Through Trust Agreements appear below in
parentheses unless otherwise indicated. Copies of the Pass Through Trust
Agreements are filed as exhibits to the Registration Statement and are available
from the Trustee.
GENERAL
The Certificates of each Trust have been issued in fully registered form
only. Each Certificate represents a fractional undivided interest in the Trust
created by the Pass Through Trust Agreement pursuant to which such Certificate
is issued. The Trust Property consists of (i) the Equipment Notes held in such
Trust, all monies at any time paid thereon and all monies due and to become due
thereunder, (ii) the rights of such Trust under the Intercreditor Agreement
(including all monies receivable in respect of such rights), (iii) except for
the Class D Trust, all monies receivable under the Liquidity Facility for such
Trust and (iv) funds from time to time deposited with the Trustee in accounts
relating to such Trust. Certificates represent pro rata shares of the Equipment
Notes and other property held in the related Trust and have been issued only in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof. (Section 3.01).
The Certificates represent interests in the respective Trusts and all
payments and distributions thereon will be made only from the Trust Property.
(Section 3.11) The Certificates do not represent an interest in or obligation of
Continental, the Trustees, any of the Loan Trustees or Owner Trustees in their
individual capacities, any Owner Participant, or any affiliate of any thereof.
The existence of each Trust will not limit the liability that Certificate
holders of such Trust would otherwise incur if such holders owned directly the
corresponding Equipment Notes or incurred directly the obligations of such
Trust.
SUBORDINATION
Pursuant to the Intercreditor Agreement to which the Trusts, the
Subordination Agent and the Liquidity Providers are parties, on each
Distribution Date, so long as no Triggering Event shall have occurred, all
payments received by the Subordination Agent will be distributed in the
following order: (1) payment of the Liquidity Obligations to the Liquidity
Providers; (2) payments of Expected Distributions to the holders of Class A
Certificates; (3) payment of Expected Distributions to the holders of Class B
Certificates; (4) payment of Expected Distributions to the holders of Class C
Certificates; (5) payment of Expected Distributions to the holders of Class D
Certificates; and (6) payment of certain fees and expenses of the Subordination
Agent and the Trustees.
In addition, upon the occurrence of a Triggering Event and at all times
thereafter, subject to the provisions set forth below, all payments received by
the Subordination Agent in respect of the Equipment Notes and certain other
payments will be distributed under the Intercreditor Agreement in the following
order: (1) to the Liquidity Provider in payment of the Liquidity Obligations and
certain other parties in payment of the Administration Expenses; (2) to the
holders of Class A Certificates in payment of Final Distributions; (3) to the
holders of Class B Certificates in payment of Final Distributions; (4) to the
holders of Class C Certificates in payment of Final Distributions; and (5) to
the holders of Class D Certificates in payment of Final Distributions.
48
For purposes of calculating Expected Distributions or Final Distributions,
any premium paid on the Equipment Notes held in any 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 Expected Distributions or Final Distributions.
Notwithstanding the foregoing provisions, after the occurrence of a
Triggering Event but so long as no PTC Event of Default shall have occurred and
be continuing with respect to the most senior Class of Certificates outstanding,
any regularly scheduled payment received on the Performing Equipment Notes shall
be distributed as follows:
(x) the Performing Equipment Notes Interest Payment will be distributed
in the following order: (1) to the Liquidity Providers in payment of the
Liquidity Obligations and certain other parties in payment of the
Administration Expenses; (2) to the holders of Class A Certificates in
payment of accrued and unpaid interest on the Class A Certificates; (3) to
the holders of Class B Certificates in payment of accrued and unpaid
interest on the Class B Certificates; (4) to the holders of Class C
Certificates in payment of accrued and unpaid interest on the Class C
Certificates; and (5) to the holders of Class D Certificates; provided that
the provisions of this paragraph (x) will be given effect before
distribution of any funds received in respect of any Non-Performing
Equipment Notes;
(y) the Performing Equipment Notes Principal Payment will be distributed
in the following order: (1) to the holders of Class A Certificates in
payment of the greater of (A) the Adjusted Expected Distributions to such
holders on such Distribution Date and (B) such holders' pro rata portion of
the Performing Equipment Notes Principal Payment based on the Adjusted Pool
Balance of such Trust; (2) to the holders of Class B Certificates in
payment of the greater of (A) the Adjusted Expected Distributions to such
holders on such Distribution Date and (B) such holders' pro rata portion of
the Performing Equipment Notes Principal Payment based on the Adjusted Pool
Balance of such Trust; (3) to the holders of Class C Certificates in
payment of the greater of (A) the Adjusted Expected Distributions to such
holders on such Distribution Date and (B) such holders' pro rata portion of
the Performing Equipment Notes Principal Payment based on the Adjusted Pool
Balance of such Trust; and (4) to the holders of Class D Certificates;
provided that the provisions of this paragraph (y) will be given effect
after distributing any funds received in respect of any Non-Performing
Equipment Notes;
provided that if the aggregate amount of future scheduled payments in respect of
the Performing Equipment Notes, together with the Performing Equipment Notes
Principal Payment as of such Distribution Date, will be (assuming the
distribution of such amount as contemplated by paragraphs (x) and (y) and that
no further payment will be received at any time from the Non-Performing
Equipment Notes) insufficient to pay interest on any Class of Certificates and
reduce the Pool Balance of such Class of Certificates to zero before the Final
Maturity Date thereof, the amount of distributions to be made to the holders of
such Class of Certificates on such Distribution Date will be increased by the
amount necessary to eliminate such insufficiency prior to making any
distributions to the holders of any Class of Certificates junior to such Class
of Certificates and such increase shall be taken into account for the purpose of
applying this proviso to the holders of any such junior Class of Certificates.
PAYMENTS AND DISTRIBUTIONS
Payments of principal, premium (if any) and interest with respect to the
Equipment Notes or other Trust Property held in each Trust will be distributed
by the Trustee to Certificateholders of such Trust on the date receipt of such
payment is confirmed, except in the case of certain types of Special Payments
(as defined herein).
The Equipment Notes held in each Trust will accrue interest at the
applicable rate per annum for such Trust set forth on the cover page of this
Prospectus, payable on January 15, April 15, July 15 and October 15 of
49
each year commencing on April 15, 1996 and such interest payments will be passed
through to Certificateholders of such Trust on each such date until the final
Distribution Date for such Trust, in each case, subject to the Intercreditor
Agreement. Interest is calculated on the basis of a 360-day year consisting of
twelve 30-day months. The interest rates for the Certificates are subject to
increases under certain circumstances. See "The Exchange Offer--General".
Payments of interest on the Certificates to be issued by each Trust (other than
the Class D Trust) will be supported by a separate Liquidity Facility to be
provided by Credit Suisse (the "Liquidity Provider") for the benefit of the
holders of such Certificates in an amount sufficient to pay interest thereon at
the Stated Interest Rate for such Trust on six successive quarterly Distribution
Dates. Notwithstanding the subordination provisions of the Intercreditor
Agreement, the holders of the Certificates to be issued by each Trust (other
than the Class D Trust) will be entitled to receive and retain the proceeds of
drawings under the Liquidity Facility for such Trust. See "Description of the
Liquidity Facilities".
Payments of principal on the Equipment Notes held in each Trust are
scheduled to be received by the Trustee on January 15, April 15, July 15 or
December 15, in certain years depending upon the terms of the Equipment Notes
held in such Trust commencing January 15, 1997, in the case of each of the Class
A Trust, the Class B Trust and the Class C Trust and January 15, 1999, in the
case of the Class D Trust. Scheduled payments of interest and principal on the
Equipment Notes are herein referred to as "Scheduled Payments", and January 15,
April 15, July 15 and October 15 of each year are herein referred to as "Regular
Distribution Dates". See "Description of the Equipment Notes--Principal and
Interest Payments". The Final Maturity Date for each Certificate is April 15,
2015.
The Trustee of each Trust will distribute, subject to the Intercreditor
Agreement, on each Regular Distribution Date to the Certificateholders of such
Trust all Scheduled Payments, the receipt of which is confirmed by the Trustee
on such Regular Distribution Date. Each Certificateholder of each Trust will be
entitled to receive a pro rata share of any distribution in respect of Scheduled
Payments of principal and interest made on the Equipment Notes held in such
Trust. Each such distribution of Scheduled Payments will be made by the Trustee
of each Trust to the Certificateholders of record of such Trust on the Record
Date applicable to such Scheduled Payment subject to certain exceptions.
(Sections 4.01 and 4.02) If a Scheduled Payment is not received by the Trustee
on a Regular Distribution Date but is received within five days thereafter, it
will be distributed to such holders of record on the date received. If it is
received after such five-day period, it will be treated as a Special Payment (as
defined below) and distributed as described below.
Any payment in respect of, or any proceeds of, any Equipment Note or the
Trust Indenture Estate under (and as defined in) each Indenture (other than a
Scheduled Payment) (each, a "Special Payment")) will be distributed on, in the
case of an early redemption or a purchase of the Equipment Notes relating to one
or more Aircraft, the date of such early redemption or purchase (which shall be
a Business Day), and otherwise on the Business Day specified for distribution of
such Special Payment pursuant to a notice delivered by the Trustee as soon as
practicable after the Trustee has received funds for such Special Payment, in
each case subject to the Intercreditor Agreement. The Trustee will mail notice
to the Certificateholders of the applicable Trust not less than 20 days prior to
the Special Distribution Date on which any Special Payment is scheduled to be
distributed by the Trustee stating such anticipated Special Distribution Date.
(Section 4.02(c)) Each distribution of a Special Payment, other than a final
distribution, on a Special Distribution Date for any Trust will be made by the
Trustee to the Certificateholders of record of such Trust on the Record Date
applicable to such Special Payment. See "--Indenture Defaults and Certain Rights
Upon an Indenture Default" and "Description of the Equipment Notes--Redemption".
Each Pass Through Trust Agreement requires that the Trustee establish and
maintain, for the related Trust and for the benefit of the Certificateholders of
such Trust, one or more accounts (the "Certificate Account") for the deposit of
payments representing Scheduled Payments on the Equipment Notes held in such
Trust. Each Pass Through Trust Agreement also requires that the Trustee
establish and maintain, for the related Trust and for the benefit of the
Certificateholders of such Trust, one or more accounts (the "Special Payments
50
Account") for the deposit of payments representing Special Payments, which
account shall be non-interest bearing except in certain circumstances where the
Trustee may invest amounts in such account in certain permitted investments.
Pursuant to the terms of each Pass Through Trust Agreement, the Trustee is
required to deposit any Scheduled Payments relating to the applicable Trust
received by it in the Certificate Account of such Trust and to deposit any
Special Payments so received by it in the Special Payments Account of such
Trust. (Section 4.01) All amounts so deposited will be distributed by the
Trustee on a Regular Distribution Date or a Special Distribution Date, as
appropriate. (Section 4.02)
Distributions by the Trustee from the Certificate Account or the Special
Payments Account of each Trust on a Regular Distribution Date or a Special
Distribution Date in respect of Certificates issued by such Trust in definitive
form will be made to each Certificateholder of record of such Certificates on
the applicable Record Date. (Section 4.02) The final distribution for each
Trust, however, will be made only upon presentation and surrender of the
Certificates for such Trust at the office or agency of the Trustee specified in
the notice given by the Trustee of such final distribution. The Trustee will
mail such notice of the final distribution to the Certificateholders of such
Trust, specifying the date set for such final distribution and the amount of
such distribution. (Section 11.01) See "--Termination of the Trusts".
Distributions in respect of Certificates issued in global form will be made as
described in "--Book Entry; Delivery and Form" below.
If any Regular Distribution Date or Special Distribution Date is not a
Business Day, distributions scheduled to be made on such Regular Distribution
Date or Special Distribution Date will be made on the next succeeding Business
Day without additional interest.
POOL FACTORS
Unless there has been an early redemption, purchase, or a default in the
payment of principal or interest, in respect of one or more issues of the
Equipment Notes held in a Trust, as described in "--Indenture Defaults and
Certain Rights Upon an Indenture Default" and "Description of the Equipment
Notes--Redemption", the Pool Factor with respect to each Trust will decline in
proportion to the scheduled repayments of principal on the Equipment Notes held
in such Trust as described below in "Description of the Equipment Notes--
General." In the event of such redemption, purchase or default, the Pool Factor
and the Pool Balance of each Trust so affected will be recomputed after giving
effect thereto and notice thereof will be mailed to the Certificateholders of
such Trust. Each Trust will have a separate Pool Factor.
The "Pool Balance" for each Trust or for the Certificates issued by any
Trust indicates, as of any date, the original aggregate face amount of the
Certificates of such Trust less 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 as of any Regular
Distribution Date or Special 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
that date.
The "Pool Factor" for each Trust as of any Regular Distribution Date or
Special Distribution Date is the quotient (rounded to the seventh decimal place)
computed by dividing (i) the Pool Balance by (ii) the original aggregate face
amount of the Certificates of such Trust. The Pool Factor for each Trust as of
any Regular Distribution Date or Special 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 that date. Assuming that no early redemption or purchase, or default, in
respect of any Equipment Notes shall have occurred, the Pool Factor for each
Trust will be 1.0000000 on the date of issuance of the Certificates; thereafter,
the Pool Factor for each Trust will decline as described herein to reflect
reductions in the Pool Balance of such Trust. The amount of a
Certificateholder's pro rata share of the Pool Balance of a Trust can be
determined by multiplying the par value of the holder's Certificate of such
Trust by the Pool Factor for such
51
Trust as of the applicable Regular Distribution Date or Special Distribution
Date. Notice of the Pool Factor and the Pool Balance for each Trust will be
mailed to Certificateholders of such Trust on each Regular Distribution Date and
Special Distribution Date.
As of the date of sale by the Trustee of the Certificates and assuming that
no early redemption or purchase, or default in the payment of principal, in
respect of any Equipment Notes shall occur, the Scheduled Payments of principal
on the Equipment Notes held in the Class A Trust, the Class B Trust, the Class C
Trust and the Class D Trust, and the resulting Pool Factors for such Trusts
after taking into account each Scheduled Payment, are set forth below:
1996-A Trust 1996-B Trust 1996-C Trust 1996-D Trust
Equipment Equipment Equipment Equipment
Notes Notes Notes Notes
Scheduled 1996-A Trust Scheduled 1996-B Trust Scheduled 1996-C Trust Scheduled 1996-D Trust
Regular Payments of Expected Payments of Expected Payments of Expected Payments of Expected
Distribution Dates Principal Pool Factor Principal Pool Factor Principal Pool Factor Principal Pool Factor
- ------------------ ----------- ----------- ----------- ----------- ----------- ------------ ------------ ------------
April 1996....... 0 1.0000000 0 1.0000000 0 1.0000000 0 1.0000000
July 1996........ 0 1.0000000 0 1.0000000 0 1.0000000 0 1.0000000
October 1996..... 0 1.0000000 0 1.0000000 0 1.0000000 0 1.0000000
January 1997..... 5,284,668 0.9803922 1,849,646 0.9803922 1,453,275 0.9803921 0 1.0000000
April 1997....... 0 0.9803922 0 0.9803922 0 0.9803921 0 1.0000000
July 1997........ 0 0.9803922 0 0.9803922 0 0.9803921 0 1.0000000
October 1997..... 0 0.9803922 0 0.9803922 0 0.9803921 0 1.0000000
January 1998..... 5,200,561 0.9610964 1,820,209 0.9610964 1,430,147 0.9610963 0 1.0000000
April 1998....... 0 0.9610964 0 0.9610964 0 0.9610963 0 1.0000000
July 1998........ 0 0.9610964 0 0.9610964 0 0.9610963 0 1.0000000
October 1998..... 1,881,631 0.9541149 658,583 0.9541149 517,441 0.9541149 0 1.0000000
January 1999..... 6,357,107 0.9305280 2,225,009 0.9305279 1,748,192 0.9305280 3,506,949 0.9316384
April 1999....... 0 0.9305280 0 0.9305279 0 0.9305280 0 0.9316384
July 1999........ 0 0.9305280 0 0.9305279 0 0.9305280 0 0.9316384
October 1999..... 5,151,648 0.9114137 1,803,084 0.9114136 1,416,700 0.9114136 856,524 0.9149467
January 2000..... 6,520,793 0.8872194 2,282,307 0.8872192 1,793,201 0.8872194 400,652 0.9071367
April 2000....... 0 0.8872194 0 0.8872192 0 0.8872194 0 0.9071367
July 2000........ 0 0.8872194 0 0.8872192 0 0.8872194 0 0.9071367
October 2000..... 5,902,865 0.8653178 2,066,003 0.8653178 1,623,289 0.8653177 0 0.9071367
January 2001..... 7,473,253 0.8375896 2,615,670 0.8375895 2,055,126 0.8375896 0 0.9071367
April 2001...... 0 0.8375896 0 0.8375895 0 0.8375896 0 0.9071367
July 2001........ 0 0.8375896 0 0.8375895 0 0.8375896 0 0.9071367
October 2001..... 6,296,432 0.8142278 2,203,755 0.8142278 1,731,518 0.8142276 0 0.9071367
January 2002..... 13,228,012 0.7651475 4,629,853 0.7651474 3,637,674 0.7651475 0 0.9071367
April 2002....... 0 0.7651475 0 0.7651474 0 0.7651475 0 0.9071367
July 2002........ 0 0.7651475 0 0.7651474 0 0.7651475 0 0.9071367
October 2002..... 4,756,545 0.7474992 1,664,791 0.7474992 1,308,051 0.7474990 0 0.9071367
January 2003..... 15,560,862 0.6897633 5,446,355 0.6897631 4,279,204 0.6897632 0 0.9071367
April 2003....... 0 0.6897633 0 0.6897631 0 0.6897632 0 0.9071367
July 2003........ 0 0.6897633 0 0.6897631 0 0.6897632 0 0.9071367
October 2003..... 4,703,788 0.6723107 1,646,326 0.6723104 1,293,542 0.6723105 0 0.9071637
January 2004..... 11,684,171 0.6289586 4,089,496 0.6289585 3,213,125 0.6289585 0 0.9071367
April 2004....... 0 0.6289586 0 0.6289585 0 0.6289585 0 0.9071367
July 2004........ 0 0.6289586 0 0.6289585 0 0.6289585 0 0.9071367
October 2004..... 7,590,687 0.6007947 2,656,749 0.6007947 2,087,434 0.6007944 81,724 0.9055437
January 2005..... 9,882,743 0.5641265 3,458,990 0.5641264 2,717,735 0.5641262 588,558 0.8940708
April 2005....... 0 0.5641265 0 0.5641264 0 0.5641262 1,283,740 0.8690466
July 2005........ 0 0.5641265 0 0.5641264 0 0.5641262 2,939,531 0.8117458
October 2005..... 8,279,727 0.5334060 2,897,911 0.5334061 2,276,920 0.5334056 4,204,644 0.7297840
January 2006..... 8,347,019 0.5024358 2,921,483 0.5024359 2,295,412 0.5024355 2,354,316 0.6838909
April 2006....... 0 0.5024358 0 0.5024359 0 0.5024355 2,972,939 0.6259388
July 2006........ 0 0.5024358 0 0.5024359 0 0.5024355 3,395,369 0.5597523
October 2006..... 12,492,889 0.4560831 4,372,538 0.4560832 3,435,525 0.4560878 3,779,755 0.4860729
January 2007..... 4,651,251 0.4388254 1,627,946 0.4388256 1,279,088 0.4388251 1,992,355 0.4472355
April 2007....... 1,762,951 0.4322843 617,033 0.4322845 484,811 0.4322839 855,654 0.4305561
July 2007........ 0 0.4322843 0 0.4322845 0 0.4322839 84,738 0.4289043
October 2007..... 19,579,916 0.3596364 6,853,032 0.3596365 5,384,436 0.3596362 3,796,117 0.3549059
January 2008..... 5,634,209 0.3387316 1,971,972 0.3387319 1,549,406 0.3387313 1,046,339 0.3345095
April 2008....... 0 0.3387316 0 0.3387319 0 0.3387313 23,463 0.3340521
July 2008........ 0 0.3387316 0 0.3387319 0 0.3387313 0 0.3340521
October 2008..... 17,480,052 0.2738749 6,118,097 0.2738749 4,806,962 0.2738749 3,005,458 0.2754662
January 2009..... 4,715,038 0.2563806 1,650,264 0.2563806 1,296,634 0.2561805 876,156 0.2583871
April 2009....... 0 0.2563806 0 0.2563806 0 0.2561805 0 0.2583871
July 2009........ 0 0.2563806 0 0.2563806 0 0.2561805 0 0.2583871
October 2009..... 9,982,773 0.2193412 3,494,004 0.2193412 2,745,240 0.2193412 1,549,605 0.2281804
January 2010..... 2,774,576 0.2090467 971,109 0.2090466 763,002 0.2090466 507,351 0.2182905
April 2010....... 229,494 0.2081952 80,323 0.2081951 63,111 0.2081951 0 0.2182905
July 2010........ 1,058,899 0.2042663 370,615 0.2042663 291,197 0.2042662 0 0.2182905
October 2010..... 9,714,697 0.1682216 3,400,172 0.1682216 2,671,523 0.1682216 1,425,031 0.1905121
January 2011..... 5,548,251 0.1476358 1,941,909 0.1476357 1,525,754 0.1476358 562,592 0.1795454
April 2011....... 125,922 0.1471686 44,073 0.1471684 34,629 0.1471686 21,726 0.1791219
July 2011........ 1,255,151 0.1425115 439,303 0.1425115 345,166 0.1425116 216,556 0.1749005
October 2011..... 8,481,267 0.1110432 2,968,462 0.1110432 2,332,336 0.1110432 719,133 0.1608823
January 2012..... 9,064,636 0.0774105 3,172,663 0.0774103 2,492,748 0.0774106 782,212 0.1456345
April 2012....... 146,241 0.0768679 51,184 0.0768677 40,216 0.0768680 0 0.1456345
52
1996-A Trust 1996-B Trust 1996-C Trust 1996-D Trust
Equipment Equipment Equipment Equipment
Notes Notes Notes Notes
Scheduled 1996-A Trust Scheduled 1996-B Trust Scheduled 1996-C Trust Scheduled 1996-D Trust
Regular Payments of Expected Payments of Expected Payments of Expected Payments of Expected
Distribution Dates Principal Pool Factor Principal Pool Factor Principal Pool Factor Principal Pool Factor
- ------------------ ----------- ----------- ----------- ----------- ----------- ------------ ------------ ------------
July 2012........ 886,893 0.0735772 310,413 0.0735770 243,895 0.0735774 79,990 0.1440753
October 2012..... 8,153,758 0.0433241 2,853,848 0.0433238 2,242,262 0.0433244 2,748,810 0.0904922
January 2013..... 9,486,707 0.0081253 3,320,348 0.0081253 2,608,844 0.0081254 1,357,427 0.0640317
April 2013....... 0 0.0081253 0 0.0081253 0 0.0081254 717,371 0.0500478
July 2013........ 532,107 0.0061510 186,238 0.0061510 146,329 0.0061511 873,473 0.0330211
October 2013..... 532,107 0.0061510 186,238 0.0061510 146,329 0.0061511 873,473 0.0330211
Any failure to make expected principal distributions on any Class of
Certificates on any Regular Distribution Date (other than the Final Maturity
Date) will not constitute a PTC Event of Default with respect to such
Certificates.
Reports to Certificateholders
On each Regular Distribution Date and Special Distribution Date, the
applicable Trustee will include with each distribution of a Scheduled Payment or
Special Payment, respectively, to Certificateholders of the related Trust a
statement, giving effect to such distribution to be made on such Regular
Distribution Date or Special Distribution Date, setting forth the following
information (per $1,000 aggregate principal amount of Certificate for such
Trust, as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal and the amount
allocable to premium (if any);
(ii) the amount of such distribution allocable to interest; and
(iii) the Pool Balance and the Pool Factor for such Trust. (Section 4.03)
With respect to the Certificates registered in the name of Cede, as nominee
for DTC, on the record date prior to each Distribution Date, the applicable
Trustee will request from DTC a Securities Position Listing setting forth the
names of all DTC Participants reflected on DTC's books as holding interests in
the Certificates on such record date. On each Distribution Date, the applicable
Trustee will mail to each such DTC Participant the statement described above and
will make available additional copies as requested by such DTC Participant for
forwarding to holders of Certificates.
In addition, after the end of each calendar year, the applicable Trustee
will prepare for each Certificateholder of each Trust at any time during the
preceding calendar year a report containing the sum of the amounts determined
pursuant to clauses (i) and (ii) above with respect to the Trust for such
calendar year or, in the event such person was a Certificateholder during only a
portion of such calendar year, for the applicable portion of such calendar year,
and such other items as are readily available to such Trustee and which a
Certificateholder shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its U.S. federal income tax returns. (Section
4.03) Such report and such other items shall be prepared on the basis of
information supplied to the applicable Trustee by the DTC Participants and shall
be delivered by such Trustee to such DTC Participants to be available for
forwarding by such DTC Participants to Certificate Owners in the manner
described above.
With respect to the Certificates issued in definitive form, the applicable
Trustee will prepare and deliver the information described above to each
Certificateholder of record of each Trust as the name of such Certificateholder
appears on the records of the registrar of the Certificates.
53
INDENTURE DEFAULTS AND CERTAIN RIGHTS UPON AN INDENTURE DEFAULT
An event of default under an Indenture (an "Indenture Default") will
include an event of default under the related Lease (a "Lease Event of
Default"). Since the Equipment Notes issued under an Indenture may be held in
more than one Trust, a continuing Indenture Default under such Indenture would
affect the Equipment Notes held by each such Trust. There are no cross-default
provisions in the Indentures. Consequently, events resulting in an Indenture
Default under any particular Indenture may or may not result in an Indenture
Default under any other Indenture. However, a Lease Event of Default under any
Lease will constitute a Lease Event of Default under all Leases due to the
cross-default provisions in the Leases, and will consequently result in an
Indenture Default under all Indentures. If an Indenture Default occurs in fewer
than all of the Indentures, notwithstanding the treatment of Equipment Notes
issued under any Indenture under which an Indenture Default has occurred,
payments of principal and interest on the Equipment Notes issued pursuant to
Indentures with respect to which an Indenture Default has not occurred will
continue to be distributed to the holders of the Certificates as originally
scheduled, subject to the Intercreditor Agreement. See "Description of the
Intercreditor Agreement--Priority of Distributions".
With respect to each Aircraft, the applicable Owner Trustee and Owner
Participant will, under the related Indenture, have the right under certain
circumstances to cure Indenture Defaults that result from the occurrence of a
Lease Event of Default under the related Lease. If the Owner Trustee or the
Owner Participant exercises any such cure right, the Indenture Default will be
deemed to have been cured.
In the event that the same institution acts as Trustee of multiple Trusts,
in the absence of instructions from the Certificateholders of any such Trust,
such Trustee could be faced with a potential conflict of interest upon an
Indenture Default. In such event, each Trustee has indicated that it would
resign as Trustee of one or all such Trusts, and a successor trustee would be
appointed in accordance with the terms of the applicable Pass Through Trust
Agreement.
Upon the occurrence and continuation of any Indenture Default under any
Indenture, the Controlling Party may accelerate and sell all (but not less than
all) of the Equipment Notes issued under such Indenture to any person, subject
to certain limitations. The proceeds of such sale will be distributed pursuant
to the provisions of the Intercreditor Agreement. Any proceeds received by the
applicable Trustee upon any such sale shall be deposited in the applicable
Special Payments Account and shall be distributed to the Certificateholders of
such Trust on a Special Distribution Date. (Sections 4.01 and 4.02) The market
for Equipment Notes at the time of the existence of any Indenture Default may be
very limited, and there can be no assurance as to the price at which they could
be sold. If such Trustee sells any such Equipment Notes for less than their
outstanding principal amount, the Certificateholders will receive a smaller
amount of principal distributions than anticipated and will not have any claim
for the shortfall against Continental, any Owner Trustee, any Owner Participant
or any Trustee.
Any amount, other than Scheduled Payments received on a Regular
Distribution Date, distributed to the Trustee of any Trust by the Subordination
Agent on account of the Equipment Notes or other Trust Property held in such
Trust following an Indenture Default under any Indenture shall be deposited in
the Special Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. (Section 4.02)
In addition, if, following an Indenture Default under any Indenture relating to
an Aircraft, the applicable Owner Trustee exercises its option to redeem or
purchase the outstanding Equipment Notes issued under such Indenture, the price
paid by such Owner Trustee for the Equipment Notes issued under such Indenture
and distributed to such Trust by the Subordination Agent shall be deposited in
the Special Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. (Section 4.02)
54
Any funds representing payments received with respect to any defaulted
Equipment Notes held in a Trust, or the proceeds from the sale of any Equipment
Notes, held by such Trustee in the Special Payments Account for such Trust
shall, to the extent practicable, be invested and reinvested by such Trustee in
Permitted Investments pending the distribution of such funds on a Special
Distribution Date. (Section 4.04) Permitted Investments are defined as
obligations of the United States or agencies or instrumentalities thereof the
payment of which is backed by the full faith and credit of the United States and
which mature in not more than 60 days or such lesser time as is required for the
distribution of any such funds on a Special Distribution Date. (Section 1.01)
Each Pass Through Trust Agreement provides that the Trustee of the related
Trust shall, within 90 days after the occurrence of any Indenture Default, give
to the Certificateholders of such Trust notice, transmitted by mail, of all
uncured or unwaived defaults with respect to such Trust known to it, provided
that, except in the case of default in the payment of principal, premium, if
any, or interest on any of the Equipment Notes or other Trust Property held in
such Trust, the applicable Trustee shall be protected in withholding such notice
if it in good faith determines that the withholding of such notice is in the
interests of such Certificateholders. (Section 7.02)
Each Pass Through Trust Agreement contains a provision entitling the
Trustee of the related Trust, subject to the duty of such Trustee during a
default to act with the required standard of care, to be offered reasonable
security or indemnity by the holders of the Certificates of such Trust before
proceeding to exercise any right or power under such Pass Through Agreement at
the request of such Certificateholders. (Section 7.03(e))
In certain cases, the holders of the Certificates of a Trust evidencing
fractional undivided interests aggregating not less than a majority in interest
of such Trust may on behalf of the holders of all the Certificates of such Trust
waive any past default under the related Pass Through Trust Agreement or, if the
Trustee of such Trust is the Controlling Party, may direct the Trustee to
instruct the applicable Loan Trustee to waive any past Indenture Default with
respect to such Trust and thereby annul any direction given by such holders to
such Loan Trustee with respect thereto, except (i) a default in the deposit of
any Scheduled Payment or Special Payment or in the distribution thereof, (ii) a
default in payment of the principal, premium, if any, or interest with respect
to any of the Equipment Notes held in such Trust and (iii) a default in respect
of any covenant or provision of the related Pass through Trust Agreement that
cannot be modified or amended without the consent of each Certificateholder of
such Trust affected thereby. (Section 6.05) Each Indenture will provide that,
with certain exceptions, the holders of the majority in aggregate unpaid
principal amount of the Equipment Notes issued thereunder may on behalf of all
such holders waive any past default or Indenture Default thereunder.
Notwithstanding the foregoing provisions of this paragraph, however, pursuant to
the Intercreditor Agreement, only the Controlling Party will be entitled to
waive any such past default or Indenture Default.
PURCHASE RIGHTS OF CERTIFICATEHOLDERS
Upon the occurrence and during the continuation of a Triggering Event, (i)
the Class B Certificateholders shall have the right to purchase all, but not
less than all, of the Class A Certificates, (ii) the Class C Certificateholders
shall have the right to purchase all, but not less than all, of the Class A
Certificates and the Class B Certificates and (iii) the Class D
Certificateholders shall have the right to purchase all, but not less than all,
of the Class A Certificates, the Class B Certificates and the Class C
Certificates, in each case at a purchase price equal to the Pool Balance of the
relevant Class or Classes of Certificates plus accrued and unpaid interest
thereon to the date of purchase without premium but including any other amounts
due to the Certificateholders of such Class or Classes.
55
PTC EVENT OF DEFAULT
A PTC Event of Default is defined under each Pass Through Trust Agreement
as 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
Maturity 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 with respect thereto in an amount sufficient to pay such interest and
shall have distributed such amount to the Certificateholders entitled thereto).
A PTC Event of Default with respect to the most senior Class of Certificates
resulting from an Indenture Default under all Indentures will constitute a
Triggering Event.
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
Continental is prohibited from consolidating with or merging into any other
corporation or transferring substantially all of its assets as an entirety to
any other corporation unless (i) the surviving successor or transferee
corporation shall (a) be a "citizen of the United States" as defined in Section
40102(a)(15) of Title 49 of the United States Code, as amended, relating to
aviation (the "Aviation Act"), (b) be a United States certificated air carrier
and (c) expressly assume all of the obligations of Continental contained in the
Pass Through Trust Agreements, the Refunding Agreements, the Indentures, the
Participation Agreements and the Leases, and any other operative documents; (ii)
immediately after giving effect to such transaction, no Lease Event of Default
shall have occurred and be continuing; and (iii) Continental shall have
delivered a certificate and an opinion or opinions of counsel indicating that
such transaction complies with such conditions. (Section 5.02; Leases, Section
13.2)
The Pass Through Trust Agreements and the Indentures do not contain any
covenants or provisions which may afford the applicable Trustee or
Certificateholders protection in the event of a highly leveraged transaction,
including transactions effected by management or affiliates, which may or may
not result in a change in control of Continental.
MODIFICATIONS OF THE PASS THROUGH TRUST AGREEMENTS AND CERTAIN OTHER AGREEMENTS
Each Pass Through Trust Agreement contains provisions permitting the
execution of supplemental trust agreements, without the consent of the holders
of any of the Certificates of such Trust, (i) to evidence the succession of
another corporation to Continental and the assumption by such corporation of
Continental's obligations under such Pass Through Trust Agreement, (ii) to add
to the covenants of Continental for the benefit of holders of such Certificates
or to surrender any right or power in such Pass Through Trust Agreement
conferred upon Continental, (iii) to correct or supplement any defective or
inconsistent provision of such Pass Through Trust Agreement or to modify any
other provisions with respect to matters or questions arising thereunder,
provided such action shall not materially adversely affect the interests of the
holders of such Certificates, or to cure any ambiguity or correct any mistake,
(iv) to add to such Pass Through Trust Agreement such other provisions as may be
expressly permitted by the Trust Indenture Act and (v) to provide for a
successor Trustee or to add to or change any provision of such Pass Through
Trust Agreement as shall be necessary to facilitate the administration of the
Trust thereunder by more than one Trustee. In addition, each Pass Through Trust
Agreement provides that the Trustee will be permitted to enter into any
amendment or supplement to the Intercreditor Agreement or the Liquidity
Facilities, without the consent of the holders of any Certificates, to cure any
ambiguity or correct any mistake or to correct or supplement any defective or
inconsistent provision thereof or to modify any other provision with respect to
matters or questions arising thereunder; provided that such action shall not
materially adversely affect the interests of the Certificateholders. (Section
9.01)
Each Pass Through Trust Agreement also contains provisions permitting the
execution, with the consent of the holders of the Certificates of the related
Trust evidencing fractional undivided interests aggregating not less than a
majority in interest of such Trust, and with the consent of the applicable Owner
Trustee (such consent
56
not to be unreasonably withheld), of supplemental trust agreements adding any
provisions to or changing or eliminating any of the provisions of such Pass
Through Trust Agreement or modifying the rights of the Certificateholders,
except that no such supplemental trust agreement may, without the consent of the
holder of each Certificate so affected thereby, (a) reduce in any manner the
amount of, or delay the timing of, any receipt by the Trustee of payments on the
Equipment Notes or other Trust Property held in such Trust or distributions in
respect of any Certificate related to such Trust, or change the date or place of
any payment in respect of any Certificate, or make distributions payable in coin
or currency other than that provided for in such Certificates, or impair the
right of any Certificateholder of such Trust to institute suit for the
enforcement of any such payment when due, (b) permit the disposition of any
Equipment Note held in such Trust, except as provided in such Pass Through Trust
Agreement, or otherwise deprive any Certificateholder of the benefit of the
ownership of the applicable Equipment Notes, (c) alter the priority of
distributions specified in the Intercreditor Agreement, (d) reduce the
percentage of the aggregate fractional undivided interests of the Trust provided
for in such Pass Through Trust Agreement, the consent of the holders of which is
required for any such supplemental trust agreement or for any waiver provided
for in such Pass Through Trust Agreement or (e) modify any of the provisions
relating to the rights of the Certificateholders in respect of the waiver of
Events of Default or receipt of payment. (Section 9.02)
TERMINATION OF THE TRUSTS
The obligations of Continental and the applicable Trustee with respect to a
Trust will terminate upon the distribution to Certificateholders of such Trust
of all amounts required to be distributed to them pursuant to applicable Pass
Through Trust Agreement and the disposition of all property held in such Trust.
The applicable Trustee will send to each Certificateholder of record of such
Trust notice of the termination of such Trust, the amount of the proposed final
payment and the proposed date for the distribution of such final payment for
such Trust. The final distribution to any Certificateholder of such Trust will
be made only upon surrender of such Certificateholder's Certificates at the
office or agency of the applicable Trustee specified in such notice of
termination. (Section 11.01)
DELAYED PURCHASE
In the event that on the date of the consummation of the Offering, the
conditions to delivery of the Equipment Notes are not all satisfied and, as a
result, any portion of the proceeds from the sale of the Certificates is not
used to purchase the Equipment Notes issuable under any Indenture, such
Equipment Notes may be purchased by the Trustees at any time on or prior to
March 31, 1996. In such event, the Trustees will hold such proceeds not used to
purchase Equipment Notes in an escrow account pending the purchase of the
Equipment Notes not so purchased. Such proceeds will be invested in certain
specified investments at the direction and risk of, and for the account of,
Continental. Earnings on such investments in the escrow account for each Trust
will be paid to Continental periodically, and Continental will be responsible
for any losses. (Section 2.01(b))
THE TRUSTEES
The Trustee for each Trust is Wilmington Trust Company.
With certain exceptions, the Trustee makes no representations as to the
validity or sufficiency of the Pass Through Trust Agreements, the Certificates,
the Equipment Notes, the Indentures, the Leases or other related documents.
(Sections 7.04 and 7.15) The Trustee of any Trust shall not be liable, with
respect to the Certificates of such Trust, for any action taken or omitted to be
taken by it in good faith in accordance with the direction of the holders of a
majority in principal amount of outstanding Certificates of such Trust. Subject
to certain provisions, the Trustees shall be under no obligation to exercise any
of their rights or powers under any Pass Through Trust Agreement at the request
of any holders of Certificates issued thereunder unless there shall
57
have been offered to the Trustees indemnity satisfactory to them. (Section
7.03(d)) Each Pass Through Trust Agreement provides that the Trustees in their
individual or any other capacity may acquire and hold Certificates issued
thereunder and, subject to certain conditions, may otherwise deal with
Continental and with any Owner Trustee with the same rights they would have if
they were not the Trustees. (Section 7.05)
Any Trustee may resign with respect to any or all of the Trusts of which it
is the Trustee at any time, in which event Continental will be obligated to
appoint a successor trustee. If any Trustee ceases to be eligible to continue as
Trustee with respect to a Trust or becomes incapable of acting as Trustee or
becomes insolvent, Continental may, with the consent of the Owner Participants
for the Aircraft (which consent shall not be unreasonably withheld), remove such
Trustee or any holder of the Certificates of such Trust for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of such Trustee and the appointment of
a successor trustee. Any resignation or removal of the Trustee with respect to a
Trust and appointment of a successor trustee for such Trust does not become
effective until acceptance of the appointment by the successor trustee.
(Sections 7.09 and 7.10)
Each Pass Through Trust Agreement provides that Continental or the Owner
Participant will pay the applicable Trustee's fees and expenses. (Section 7.07)
BOOK-ENTRY; DELIVERY AND FORM
The New Certificates of each Trust will be represented by a single,
permanent global Certificate, in definitive, fully registered form without
interest coupons (the "Global Certificate"), to be deposited with the Trustee as
custodian for DTC and registered in the name of a nominee of DTC.
Old Certificates originally issued in definitive, fully registered form
with respect to any Trust ("Definitive Certificates") will be exchanged for
beneficial interests in the Global Certificate, representing the New
Certificates of such Trust.
DTC has advised Continental as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "Clearing Agency" registered pursuant to the
provision of Section 17A of the Exchange Act. DTC was created to hold securities
for its participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and certain other organizations.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants").
Upon the issuance of the Global Certificates, DTC or its custodian
credited, on its internal system, the respective principal amount of the
individual beneficial interests represented by such Global Certificates to the
accounts of persons who have accounts with such depositary. Ownership of
beneficial interests in the Global Certificates is limited to persons who have
accounts with DTC ("participants") or persons who hold interests through
participants. Ownership of beneficial interests in the Global Certificates is
shown on, and the transfer of that ownership is effected only through, records
maintained by DTC or its nominee (with respect to interests of participants) and
the records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities. Such limits and such laws
may limit the market for beneficial interests in the Global Certificates.
Qualified institutional buyers may hold their interests in the Global
Certificates directly through DTC if they are participants in such system, or
indirectly through organizations which are participants in such system.
58
So long as DTC or its nominee is the registered owner or holder of the
Global Certificates, DTC or such nominee, as the case may be, will be considered
the sole record owner or holder of the Certificates represented by such Global
Certificates for all purposes under the related Pass Through Trust Agreements.
No beneficial owners of an interest in the Global Certificates will be able to
transfer that interest except in accordance with DTC's applicable procedures, in
addition to those provided for under the Pass Through Trust Agreements and, if
applicable, Euroclear or Cedel.
Payments of the principal of, premium, if any, and interest on the Global
Certificates will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. Neither Continental, the Trustee, nor any paying agent
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in the Global
Certificates or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Continental expects that DTC or its nominee, upon receipt of any payment of
principal, premium, if any, or interest in respect of the Global Certificates
will credit participants' accounts with payments in amounts proportionate to
their respective beneficial ownership interests in the principal amount of such
Global Certificates, as shown on the records of DTC or its nominee. Continental
also expects that payments by participants to owners of beneficial interests in
such Global Certificates held through such participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.
Neither Continental nor the Trustee has any responsibility for the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
If DTC is at any time unwilling or unable to continue as a depositary for
the Global Certificates and a successor depositary is not appointed by within 90
days, the Trusts will issue Definitive Certificates in exchange for the Global
Certificates.
59
DESCRIPTION OF THE LIQUIDITY FACILITIES
The following summary describes certain terms of the Liquidity Facilities
and certain provisions of the Intercreditor Agreement relating to the Liquidity
Facilities. The summary does not purport to be complete and reference is made to
the provisions of the Liquidity Facilities and such provisions of the
Intercreditor Agreement, which has been filed as an exhibit to the Registration
Statement. The provisions of the Liquidity Facilities are substantially
identical except as otherwise indicated. Upon request, copies of such documents
will be furnished to any prospective investor in the Certificates. Copies of
such documents are filed as exhibits to the Registration Statement and are
available from the Trustee.
GENERAL
With respect to the Certificates of each Trust (other than the Class D
Trust), the Subordination Agent has entered into a Liquidity Facility with the
Liquidity Provider pursuant to which the Liquidity Provider will make one or
more advances to the Subordination Agent to pay interest on such Certificates
subject to certain limitations. The Liquidity Facility for any Trust is intended
to enhance the likelihood of timely receipt by the Certificateholders of such
Trust of the interest payable on the Certificates of such Trust at the Stated
Interest Rate therefor on six consecutive Regular Distribution Dates. If
interest payment defaults occur which exceed the amount covered by or available
under the Liquidity Facility for any Trust, the Certificateholders of such Trust
will bear their allocable share of the deficiencies to the extent that there are
no other sources of funds. Although Credit Suisse is the initial Liquidity
Provider for each of the Class A Trust, the Class B Trust and the Class C Trust,
Credit Suisse may be replaced by another entity with respect to one or more
Trusts under certain circumstances. Therefore, the liquidity provider for any
Trust may be different from the liquidity provider for any other Trust.
DRAWINGS
The initial stated amount available under each of the Liquidity Facilities
for the Class A Trust, the Class B Trust and the Class C Trust is
$30,078,208.00, $11,772,633.60 and $11,117,550.00, respectively. Except as
otherwise provided below, the Liquidity Facility for each Trust will enable the
Subordination Agent to make Interest Drawings thereunder promptly after any
Regular Distribution Date to pay interest then due and payable on the
Certificates of such Trust at the Stated Interest Rate for such Trust to the
extent that the amount, if any, available to the Subordination Agent on such
Regular Distribution Date is not sufficient to pay such interest; provided,
however, that the maximum amount available to be drawn under such Liquidity
Facility on any Regular Distribution Date to fund any shortfall of interest on
such Certificates will not exceed an amount equal to the then stated amount of
such Liquidity Facility. The Liquidity Facility for any Trust does not provide
for drawings thereunder to pay for principal of or premium on the Certificates
of such Trust or any interest on the Certificates of such Trust in excess of the
Stated Interest Rate for such Trust or more than six quarterly installments of
interest thereon or principal of or interest or premium on the Certificates of
any other Trust. (Liquidity Facilities, Section 2.02; Intercreditor Agreement,
Section 3.6(b))
Each payment by the Liquidity Provider under each Liquidity Facility
reduces pro tanto the amount available to be drawn under such Liquidity
Facility, subject to reinstatement as hereinafter described. With respect to any
Interest Drawings under the Liquidity Facility for any Trusts, upon
reimbursement of the Liquidity Provider in full for the amount of such Interest
Drawings plus interest thereon, the amount available to be drawn under such
Liquidity Facility in respect of interest on the Certificates of such Trust
shall be reinstated to an amount equal to the then stated amount of such
Liquidity Facility; provided, however, that such Liquidity Facility shall not be
so reinstated at any time after (i) a Triggering Event shall have occurred and
be continuing and (ii) less than 65% of the then aggregate outstanding principal
amount of all Equipment Notes are Performing Equipment Notes. With respect to
any other drawings under such Liquidity Facility, amounts available to be drawn
thereunder are not subject to reinstatement. The stated amount of the Liquidity
Facility for any Trust will
60
be automatically reduced from time to time to an amount equal to the next six
successive interest payments due on the Certificates of such Trust (without
regard to expected future payment of principal of such Certificates) at the
Stated Interest Rate for such Trust. (Liquidity Facilities, Section 2.04(a);
Intercreditor Agreement, Section 3.6(j))
If at any time the short-term unsecured debt rating of the Liquidity
Provider for any Trust then issued by either Rating Agency is lower than the
Threshold Rating, the Liquidity Facility for such Trust will be required to be
replaced by a Replacement Facility (as defined below). In the event that such
Liquidity Facility is not replaced with a Replacement Facility within 10 days
after notice of the downgrading and as otherwise provided in the Intercreditor
Agreement, the Subordination Agent shall request the Downgrade Drawing in an
amount equal to all available and undrawn amounts thereunder and shall hold the
proceeds thereof in the Cash Collateral Account for such Trust as cash
collateral to be used for the same purposes and under the same circumstances as
cash payments of Interest Drawings under such Liquidity Facility would be used.
(Liquidity Facilities, Section 2.02(c); Intercreditor Agreement, Section 3.6(c))
A "Replacement Facility" for any Trust means an irrevocable liquidity
facility 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 the Certificates (before
downgrading of such ratings, if any, as a result of the downgrading of the
Liquidity Provider), in a face amount equal to the amount of interest payable on
the Certificates of such Trust (at the Stated Interest Rate for such Trust, and
without regard to expected future principal payments) on the six Regular
Distribution Dates following the date of replacement of such Liquidity Facility
and issued by a Person having unsecured short-term debt ratings issued by both
Rating Agencies which are (i) equal to or higher than the Threshold Rating and
(ii) equal to or higher than the unsecured short-term debt ratings of the
Liquidity Provider being replaced issued by both Rating Agencies. (Intercreditor
Agreement, Section 1.1)
"Threshold Rating" means the short-term unsecured debt rating of P-2 by
Moody's and A-1 by Standard & Poor's.
The Liquidity Facility for each Trust provides that the Liquidity
Provider's obligations thereunder will expire on the earliest of (i) January 29,
1997; (ii) the date on which such Liquidity Facility is surrendered to the
Liquidity Provider together with a certification that all of the Certificates of
such Trust have been paid in full; (iii) the date such Liquidity Facility is
surrendered to the Liquidity Provider together with a certification that a
Replacement Facility has been substituted for such Liquidity Facility; (iv) the
fifth Business Day following receipt by the Subordination Agent of a Termination
Notice from the Liquidity Provider (see "--Liquidity Events of Default"); and
(v) the date on which no amount is or may (by reason of reinstatement) become
available for drawing under such Liquidity Facility. Each Liquidity Facility
provides that the scheduled expiration date thereof may be extended for
additional one-year periods by mutual agreement. The Intercreditor Agreement
provides for the replacement of the Liquidity Facility for any Trust (other than
a Liquidity Facility which expires no earlier than 15 days later than the final
maturity date) in the event that such Liquidity Facility is not extended at
least 25 days prior to its then scheduled expiration date. In the event such
Liquidity Facility is not so extended or replaced within 25 days prior to its
then scheduled expiration date, the Subordination Agent shall request the Non-
Extension Drawing in an amount equal to all available and undrawn amounts
thereunder and hold the proceeds thereof in the Cash Collateral Account for such
Trust as cash collateral to be used for the same purposes and under the same
circumstances, and subject to the same conditions, as cash payments of Interest
Drawings under such Liquidity Facility would be used. (Liquidity Facilities,
Section 2.02(b); Intercreditor Agreement, Section 3.6(d))
Continental, in consultation with the Subordination Agent, may direct the
Owner Participants (which shall follow such direction unless they have a bona
fide, good faith reason not to) to arrange for a replacement facility at any
time to replace the Liquidity Facility for any Trust. If such replacement
facility is provided at any
61
time after the Downgrade Drawing or the Non-Extension Drawing under such
Liquidity Facility, the funds on deposit in the Cash Collateral Account for such
Trust will be returned to the Liquidity Provider being replaced. (Intercreditor
Agreement, Section 3.6(e))
The Intercreditor Agreement provides that, upon receipt by the
Subordination Agent of a Termination Notice with respect to any Liquidity
Facility from the Liquidity Provider, the Subordination Agent shall request a
final drawing (the "Final Drawing") under such Liquidity Facility in an amount
equal to all available and undrawn amounts thereunder and shall hold the
proceeds thereof in the Cash Collateral Account for the related Trust as cash
collateral to be used for the same purposes and under the same circumstances,
and subject to the same conditions, as cash payments of Interest Drawings under
such Liquidity Facility would be used. (Liquidity Facilities, Section 2.02(d);
Intercreditor Agreement, Section 3.6(i))
Drawings under any Liquidity Facility will be made by delivery by the
Subordination Agent of a certificate in the form required by such Liquidity
Facility. Upon receipt of such a certificate, the Liquidity Provider is
obligated to make payment of the drawing requested thereby in immediately
available funds. Upon payment by the Liquidity Provider of the amount specified
in any drawing under any Liquidity Facility, the Liquidity Provider will be
fully discharged of its obligations under such Liquidity Facility with respect
to such drawing and will not thereafter be obligated to make any further
payments under such Liquidity Facility in respect of such drawing to the
Subordination Agent or any other person or entity who makes a demand for payment
in respect of interest on the related Certificates.
REIMBURSEMENT OF DRAWINGS
Amounts drawn under any Liquidity Facility by reason of an Interest Drawing
or the Final Drawing will be immediately due and payable, together with interest
on the amount of such drawing at a rate equal to the applicable LIBOR plus 2.00%
per annum; provided that the Subordination Agent will be obligated to reimburse
such amounts only to the extent that the Subordination Agent has available funds
therefor.
The amount drawn under the Liquidity Facility for any Trust by reason of
the Downgrade Drawing or the Non-Extension Drawing will be treated as follows:
(i) such amount will be released on any Regular Distribution Date to the
Liquidity Provider to the extent that such amount exceeds the amount of interest
payable on the then outstanding aggregate principal amount of the Certificates
of such Trust at the Stated Interest Rate for such Trust on six consecutive
Regular Distribution Dates (without regard to expected future payments of
principal of such Certificates) minus any unreimbursed Interest Drawings under
such Liquidity Facility; (ii) any portion of such amount withdrawn from the Cash
Collateral Account for such Certificates to pay interest on such Certificates
will be treated in the same way as Interest Drawings; and (iii) the balance of
such amount will be invested in Eligible Investments. Any portion of the
Downgrade Drawing or the Non-Extension Drawing under any Liquidity Facility
remaining unreimbursed as of the tenth anniversary of the consummation of the
Offering (or, if such Liquidity is extended beyond such tenth anniversary, the
expiration date thereof so extended) shall be payable in eight quarterly
installments, commencing on the Regular Distribution Date immediately following
such date; provided that such principal installments shall not be required to be
paid so long as Continental complies with its obligation to purchase
participation interests in the Liquidity Facilities pursuant to a separate
agreement with Credit Suisse. The Downgrade Drawing or the Non-Extension Drawing
under any Liquidity Facility will bear interest at a rate equal to the
applicable LIBOR plus 0.75% per annum. (Liquidity Facilities, Section 2.06)
LIQUIDITY EVENTS OF DEFAULT
Events of Default under each Liquidity Facility (each, a "Liquidity Event
of Default") will consist of: (i) the acceleration of all the Equipment Notes;
and (ii) certain bankruptcy or similar events involving Continental. (Liquidity
Facilities, Section 1.01)
62
If (i) any Liquidity Event of Default occurs under any Liquidity Facility
and (ii) less than 65% of the aggregate outstanding principal amount of all
Equipment Notes are Performing Equipment Notes, the Liquidity Provider may, in
its discretion, give a notice of termination of the related Liquidity Facility
and accelerate the reimbursement obligations thereunder (a "Termination Notice")
the effect of which shall be to cause (i) such Liquidity Facility to expire on
the fifth Business Day after the date on which such Termination Notice is
received by the Subordination Agent, (ii) any Drawing remaining unreimbursed as
of the date of termination to be automatically converted into a Final Drawing
under such Liquidity Facility, and (iii) all amounts owing to the Liquidity
Provider automatically to become accelerated. Notwithstanding the foregoing, the
Subordination Agent will be obligated to pay amounts owing to the Liquidity
Provider only to the extent of funds available therefor after giving effect to
the payments in accordance with the provisions set forth under "Description of
the Intercreditor Agreement--Priority of Distributions". (Liquidity Facilities,
Section 6.01)
Upon the circumstances described below under "Description of the
Intercreditor Agreement--Intercreditor Rights", the Liquidity Provider may
become the Controlling Party with respect to the exercise of remedies under the
Indentures. (Intercreditor Agreement, Section 2.6(c))
LIQUIDITY PROVIDER
The initial Liquidity Provider is Credit Suisse.
Founded in 1856, Credit Suisse is the oldest of Switzerland's three major
banks and maintains its corporate headquarters in Zurich, Switzerland. Within
Switzerland, Credit Suisse conducts its operations through 311 offices and
branches. Internationally, Credit Suisse maintains a presence on five continents
through its 73 foreign branches, representative offices and subsidiaries.
Banking operations of Credit Suisse in the United States began in 1940 and
currently include branches in New York and Los Angeles, an agency in Miami, and
representative offices in San Francisco, Atlanta, Chicago and Houston.
63
DESCRIPTION OF THE INTERCREDITOR AGREEMENT
The following summary describes certain provisions of the Intercreditor
Agreement. The summary does not purport to be complete and reference is made to
the provisions of the Intercreditor Agreement. The Intercreditor Agreement is
filed as an exhibit to the Registration Statement and is available from the
Trustee.
INTERCREDITOR RIGHTS
Controlling Party
Pursuant to the Intercreditor Agreement, the Trustees and the Liquidity
Provider have agreed that, with respect to any Indenture at any given time, the
Loan Trustee is directed (a) in taking, or refraining from taking, any action
thereunder by the holders of at least a majority of the outstanding principal
amount of the Equipment Notes issued thereunder (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 (a) in accordance with
the directions of the Trustees), so long as no Indenture Default shall have
occurred and be continuing thereunder and (b) after the occurrence and during
the continuance of an Indenture Default thereunder, in taking, or refraining
from taking, any action thereunder, including exercising remedies thereunder
(including acceleration of such Equipment Notes or foreclosing the lien on the
Aircraft securing such Equipment Notes), by the Controlling Party. See
"Description of New Certificates--Indenture Defaults and Certain Rights Upon an
Indenture Default" for a description of the rights of the Certificateholders of
each Trust to direct the respective Trustees. Notwithstanding the foregoing, the
Liquidity Provider shall have the right to direct such Loan Trustee with respect
to such matters at any time after 18 months from the acceleration of the
Equipment Notes under such Indenture, if at the time of such election the
Liquidity Obligations have not been paid in full; provided that if there is more
than one Liquidity Provider, the Liquidity Provider with the greatest amount of
unreimbursed Liquidity Obligations shall have such right; provided that at any
time after Continental has acquired 100% participation interests in the
Liquidity Facilities, the Liquidity Provider shall not have the right to become
the Controlling Party. For purposes of giving effect to the foregoing, the
Trustees (other than the Controlling Party) shall 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) to exercise their voting rights as directed by the Controlling
Party. (Intercreditor Agreement, Section 2.6)
The Controlling Party may not, without the consent of the Liquidity
Provider (which consent shall not be unreasonably withheld or delayed), amend
the provisions of or direct the exercise of any remedy or the taking of any
other action (including the sale of any Equipment Note, Lease or Aircraft unless
its market value is paid within two years from the earliest such amendment,
exercise or other action) under the Indentures or various other agreements, if
the effect thereof would be to impair the ability of the Subordination Agent to
cause all Liquidity Obligations to be paid in full within one year of the date
when due; provided that, if the Controlling Party is an Owner Participant or its
affiliate, the consent requirements will apply to any disposition of any
Equipment Note, Lease or Aircraft, regardless of the terms of disposition.
Sale of Equipment Notes or Aircraft
Upon the occurrence and during the continuation of any Indenture Default
under any Indenture, the Controlling Party may accelerate and, subject to the
provisions of the immediately following sentence, sell all (but not less than
all) of the Equipment Notes issued under such Indenture to any person. So long
as any Certificates are outstanding, during nine months after the earlier of (x)
the acceleration of the Equipment Notes under any Indenture or (y) the
bankruptcy or insolvency of Continental, 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
64
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 under such Indenture as the discount rate.
The Subordination Agent may from time to time during the continuance of an
Indenture Default commission an Appraisal with respect to the related Aircraft
at the request of the Controlling Party. (Intercreditor Agreement, Section 4.1)
"Appraisal" means a fair market value appraisal (which may be a "desktop"
appraisal) performed by any Appraiser or any other nationally recognized
appraiser on the basis of an arm's-length transaction between an informed and
willing purchaser under no compulsion to buy and an informed and willing seller
under no compulsion to sell and both having knowledge of all relevant facts.
"Appraised Value" means at any time with respect to any Aircraft, the
appraised value thereof as set forth in the most recent Appraisal, provided that
initially, the Appraised Value of any Aircraft means the lower of the average or
the median of the three appraisals provided by the Appraisers for such Aircraft.
Priority of Distributions
So long as no Triggering Event shall have occurred, the payments in respect
of the Equipment Notes and certain other payments received on any Distribution
Date will be promptly distributed by the Subordination Agent on such
Distribution Date in the following order of priority:
(i) to pay the Liquidity Obligations (other than any interest accrued
thereon or the principal amount of any Drawing) (the "Liquidity Expenses")
to the Liquidity Provider;
(ii) to pay interest accrued on the Liquidity Obligations to the
Liquidity Provider;
(iii) to pay or reimburse the Liquidity Provider for the Liquidity
Obligations and, if applicable, to replenish each Cash Collateral Account
up to the amount of interest payable on the related Class of Certificates
at the Stated Interest Rate therefor on six consecutive Regular
Distribution Dates (the "Required Amount");
(iv) to pay Expected Distributions to the holders of Class A
Certificates;
(v) to pay Expected Distributions to the holders of Class B
Certificates;
(vi) to pay Expected Distributions to the holders of Class C
Certificates;
(vii) to pay Expected Distributions to the holders of Class D
Certificates; and
(viii) to pay certain fees and expenses of the Subordination Agent and
the Trustees.
Subject to the terms of the Intercreditor Agreement, upon the occurrence of
a Triggering Event and at all times thereafter, all funds received by the
Subordination Agent in respect of the Equipment Notes and certain other payments
will be promptly distributed by the Subordination Agent in the following order
of priority:
(i) to pay certain out-of-pocket costs and expenses actually incurred
by the Subordination Agent, any Trustee, any Certificateholder or the
Liquidity Provider in connection with the protection and realization of the
Equipment Notes or the Trust Indenture Estate;
65
(ii) to the Liquidity Provider, to pay the Liquidity Expenses;
(iii) to the Liquidity Provider, to pay interest accrued on the
Liquidity Obligations;
(iv) to the Liquidity Provider, to pay the outstanding amount of all
Liquidity Obligations and, if applicable, so long as at least 65% of the
aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes, to replenish each Cash Collateral Account up to
the Required Amount for the related Class of Certificates;
(v) to pay certain fees, taxes, charges and other amounts payable to
the Subordination Agent, any Trustee or any Certificateholder;
(vi) to pay Final Distributions to the holders of Class A Certificates
(reducing the Pool Balance thereof to zero);
(vii) to pay Final Distributions to the holders of Class B
Certificates (reducing the Pool Balance thereof to zero);
(viii) to pay Final Distributions to the holders of Class C
Certificates (reducing the Pool Balance thereof to zero); and
(ix) to pay Final Distributions to the holders of Class D Certificates
(reducing the Pool Balance thereof to zero).
Notwithstanding the foregoing provisions, so long as no PTC Event of
Default shall have occurred and be continuing with respect to the most senior
Class of Certificates outstanding, any regularly scheduled payment received on
the Performing Equipment Notes shall be distributed as follows:
(x) the Performing Equipment Notes Interest Payment will be
distributed in the following order:
(1) to the Liquidity Provider in payment of the Liquidity
Obligations, and to the Subordination Agent, the Trustees, the
Certificateholders or the Liquidity Provider, as the case may be, in
payment of the amounts payable to such parties in clauses (i) and (v)
immediately above (the "Administration Expenses");
(2) to the holders of Class A Certificates in payment of accrued
and unpaid interest on the Class A Certificates;
(3) to the holders of Class B Certificates in payment of accrued
and unpaid interest on the Class B Certificates;
(4) to the holders of Class C Certificates in payment of accrued
and unpaid interest on the Class C Certificates; and
(5) to the holders of Class D Certificates;
provided that the provisions of this paragraph (x) will be given effect before
distribution of any funds received in respect of any Non-Performing Equipment
Notes;
(y) the Performing Equipment Notes Principal Payment will be
distributed in the following order:
66
(1) to the holders of Class A Certificates in payment of the
greater of (A) the Adjusted Expected Distributions to such holders on
such Distribution Date and (B) such holders' pro rata portion of the
Performing Equipment Notes Principal Payment based on the Adjusted
Pool Balance of such Trust;
(2) to the holders of Class B Certificates in payment of the
greater of (A) the Adjusted Expected Distributions to such holders on
such Distribution Date and (B) such holders' pro rata portion of the
Performing Equipment Notes Principal Payment based on the Adjusted
Pool Balance of such Trust;
(3) to the holders of Class C Certificates in payment of the
greater of (A) the Adjusted Expected Distributions to such holders on
such Distribution Date and (B) such holders' pro rata portion of the
Performing Equipment Notes Principal Payment based on the Adjusted
Pool Balance of such Trust; and
(4) to the holders of Class D Certificates;
provided that the provisions of this paragraph (y) will be given effect
after distributing any funds received in respect of any Non-Performing
Equipment Notes;
provided that if the aggregate amount of future scheduled payments in respect of
the Performing Equipment Notes, together with the Performing Equipment Notes
Principal Payment as of such Distribution Date, will be (assuming the
distribution of such amount as contemplated by paragraphs (x) and (y) and that
no further payment will be received at any time from the Non-Performing
Equipment Notes) insufficient to pay interest on any Class of Certificates and
reduce the Pool Balance of such Class of Certificates to zero before the Final
Maturity Date thereof, the amount of distributions to be made to the holders of
such Class of Certificates on such Distribution Date will be increased by the
amount of such deficiency prior to making any distributions to the holders of
any Class of Certificates junior to such Class of Certificates and such increase
shall be taken into account for the purpose of applying this proviso to the
holders of any such junior Class of Certificates.
Interest Drawings under the Liquidity Facility and withdrawals from the
Cash Collateral Account, in each case in respect of interest on the Certificates
of any Trust (other than the Class D Trust), will be distributed to the Trustee
for such Trust, notwithstanding the priority of distributions set forth in the
Intercreditor Agreement and otherwise described herein. All amounts on deposit
in the Cash Collateral Account for any Trust which are in excess of amounts
required to be maintained therein to pay interest on the Certificates of such
Trust at the Stated Interest Rate for such Trust on six consecutive Regular
Distribution Dates and all investment earnings on such amounts on deposit in the
Cash Collateral Account will be paid to the Liquidity Provider.
VOTING OF EQUIPMENT NOTES
In the event that the Subordination Agent, as the registered holder of any
Equipment Note, receives a request for its consent to any amendment,
modification or waiver under such Equipment Note, the Indenture, the Lease, the
Participation Agreement or other related document, (i) if no Indenture Default
shall have occurred and be continuing, the Subordination Agent shall request
instructions from the Certificateholders and shall vote or consent in accordance
with the vote of the Certificateholders and (ii) if any Indenture Default 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. (Intercreditor Agreement, Section 9.1)
67
THE SUBORDINATION AGENT
Wilmington Trust Company is the Subordination Agent under the Intercreditor
Agreement. Continental and its affiliates may from time to time enter into
banking and trustee relationships with the Subordination Agent and its
affiliates. The Subordination Agent's address is Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration.
The Subordination Agent may resign at any time, in which event a successor
Subordination Agent will be appointed as provided in the Intercreditor
Agreement. The Controlling Party may remove the Subordination Agent for cause as
provided in the Intercreditor Agreement. In such circumstances, a successor
Subordination Agent will be appointed as provided in the Intercreditor
Agreement. Any resignation or removal of the Subordination Agent and appointment
of a successor Subordination Agent does not become effective until acceptance of
the appointment by the successor Subordination Agent.
68
DESCRIPTION OF THE AIRCRAFT AND THE APPRAISALS
THE AIRCRAFT
The Aircraft are comprised of nine Boeing 737-500 aircraft and nine Boeing
757-200 aircraft. The Aircraft are designed to be in compliance with Stage III
noise level standards, which constitute the most restrictive regulatory
standards currently in effect in the United States for aircraft noise abatement.
The table below sets forth certain additional information for the Aircraft.
Appraised Value
FAA Aircraft Engine Delivery ------------------------------
Number Type Type Date AISI BK MBA
- ------ -------- ------ -------- ----- ---- ----
(dollars in millions)
N17104 757-200 RB21 1-535E4B July 1994 $48.80 $47.50 $49.77
N17105 757-200 RB21 1-535E4B Aug. 1994 49.02 47.50 50.00
N14106 757-200 RB21 1-535E4B Sept. 1994 49.24 47.50 50.23
N14107 757-200 RB21 1-535E4B Oct. 1994 49.45 47.50 50.45
N21108 757-200 RB21 1-535E4B Nov. 1994 49.67 47.50 50.68
N12109 757-200 RB21 1-535E4B Dec. 1994 49.89 47.50 50.91
N13110 757-200 RB21 1-535E4B Dec. 1994 49.89 47.50 50.91
N18112 757-200 RB21 1-535E4B Feb. 1995 50.33 47.50 51.36
N13113 757-200 RB21 1-535E4B April 1995 50.76 47.50 51.82
N17620 737-500 CFM56-3B 1 Feb. 1995 28.93 25.00 25.56
N19623 737-500 CFM56-3B 1 Jan. 1995 28.68 25.00 25.44
N13624 737-500 CFM56-3B 1 Feb. 1995 28.93 25.00 25.56
N46625 737-500 CFM56-3B 1 Jan. 1995 28.68 25.00 25.44
N32626 737-500 CFM56-3B 1 April 1995 29.44 25.00 25.78
N17627 737-500 CFM56-3B 1 April 1995 29.44 25.00 25.78
N62631 737-500 CFM56-3B 1 June 1995 29.95 25.00 26.01
N16632 737-500 CFM56-3B 1 July 1995 30.20 25.00 26.13
N24633 737-500 CFM56-3B 1 Aug. 1995 30.46 25.00 26.18
APPRAISED VALUE
The appraised values set forth in the foregoing chart were determined by
the following three independent aircraft appraisal and consulting firms: AISI,
BK and MBA. Each Appraiser was asked to provide its opinion as to the fair
market value of each Aircraft as of January 3, 1996. As part of this process,
all three Appraisers performed "desk-top" appraisals without any physical
inspection of the Aircraft.
However, an appraisal is only an estimate of value and should not be relied
upon as a measure of realizable value; the proceeds realized upon a sale of any
Aircraft may be less than the appraised value thereof. The value of the Aircraft
in the event of the exercise of remedies under the applicable Indenture will
depend on market and economic conditions, the availability of buyers, the
condition of the Aircraft and other similar factors. Accordingly, there can be
no assurance that the proceeds realized upon any such exercise with respect to
the Equipment Notes and the Aircraft pursuant to the applicable Indenture would
be as appraised or sufficient to satisfy in full payments due on the Equipment
Notes issued thereunder.
69
DESCRIPTION OF THE EQUIPMENT NOTES
The statements under this caption are summaries and do not purport to be
complete. The summaries make use of terms defined in the Equipment Notes, the
Indentures, the Leases, the Participation Agreements, the Trust Agreements and
the Refunding Agreements and reference is made to all of the provisions of such
documents. Except as otherwise indicated, the following summaries relate to the
Equipment Notes, the Indenture, the Lease, the Participation Agreement, the
Trust Agreement and the Refunding Agreement relating to each Aircraft, forms of
which are filed as exhibits to the Registration Statement.
GENERAL
The Equipment Notes have been issued in four series with respect to each
Aircraft. The Equipment Notes with respect to each Aircraft were issued under a
separate Indenture between First Security Bank of Utah, National Association, as
Owner Trustee of a trust for the benefit of the Owner Participant who is the
beneficial owner of such Aircraft, and Wilmington Trust Company, as Loan
Trustee.
The related Owner Trustee leases each Aircraft to Continental pursuant to a
separate Lease between such Owner Trustee and Continental with respect to such
Aircraft. Under each Lease, Continental is obligated to make or cause to be made
rental and other payments to the related Loan Trustee on behalf of the related
Owner Trustee, which rental and other payments will be at least sufficient to
pay in full when due all payments required to be made on the Equipment Notes
issued with respect to such Aircraft. The Equipment Notes are not, however,
direct obligations of, or guaranteed by, Continental. Continental's rental
obligations under each Lease are general obligations of Continental.
General Electric Company is currently the Owner Participant with respect to
all of the eighteen leveraged leases for the Aircraft. The Owner Participant or
its affiliate also acquired all of the Class D Certificates contemporaneously
with the consummation of the Offering. General Electric Company has the right to
sell, assign or otherwise transfer its interests as Owner Participant in any or
all of such leveraged leases, subject to the terms and conditions of the
relevant Participation Agreement and related documents, and the Class D
Certificateholder will have the right to sell any or all Class D Certificates,
subject to the terms and conditions of the Pass Through Trust Agreement for the
Class D Trust.
SUBORDINATION
Series B Equipment Notes issued in respect of any Aircraft are subordinated
in right of payment to Series A Equipment Notes issued in respect of such
Aircraft; Series C Equipment Notes issued in respect of such Aircraft are
subordinated in right of payment to such Series B Equipment Notes; and Series D
Equipment Notes issued in respect of such Aircraft are subordinated in right of
payment to such Series C Equipment Notes. On each Equipment Note payment date,
(i) payments of interest and principal due on Series A Equipment Notes issued in
respect of any Aircraft will be made prior to payments of interest and principal
due on Series B Equipment Notes issued in respect of such Aircraft, (ii) payment
of interest and principal due on such Series B Equipment Notes will be made
prior to payments of interest and principal due on Series C Equipment Notes
issued in respect of such Aircraft and (iii) payments of interest and principal
due on such Series C Equipment Notes will be made prior to payments of interest
and principal due on Series D Equipment Notes issued in respect of such
Aircraft.
PRINCIPAL AND INTEREST PAYMENTS
Subject to the provisions of the Intercreditor Agreement, interest paid on
the Equipment Notes held in each Trust will be passed through to the
Certificateholders of such Trust on the dates and at the rate per annum set
forth on the cover page of this Prospectus until the final expected Regular
Distribution Date for such Trust.
70
Subject to the provisions of the Intercreditor Agreement, principal paid on the
Equipment Notes held in each Trust will be passed through to the
Certificateholders of such Trust in scheduled amounts on the dates set forth
herein until the final expected Regular Distribution Date for such Trust.
The aggregate original principal amounts of the Equipment Notes issued with
respect to each Aircraft, as such Equipment Notes will be held in each of the
Trusts, are as follows:
Trust 1996-A Trust 1996-B Trust 1996-C Trust 1996-D
% % % %
Aircraft No. Equipment Notes Equipment Notes Equipment Notes Equipment Notes Total
- ------------ --------------- --------------- --------------- --------------- -----
N17620.......... $ 10,222,000.00 $ 3,577,700.00 $ 2,811,050.00 $ 2,300,000.00 $ 18,910,750.00
N19623.......... 10,200,000.00 3,570,000.00 2,805,000.00 2,300,000.00 18,875,000.00
N13624.......... 10,222,000.00 3,577,700.00 2,811,050.00 2,300,000.00 18,910,750.00
N46625.......... 10,200,000.00 3,570,000.00 2,805,000.00 2,300,000.00 18,875,000.00
N32626.......... 10,313,200.00 3,609,620.00 2,836,130.00 2,300,000.00 19,058,950.00
N17627.......... 10,313,200.00 3,609,620.00 2,836,130.00 2,300,000.00 19,058,950.00
N62631.......... 10,404,400.00 3,641,540.00 2,861,210.00 2,300,000.00 19,207,150.00
N16632.......... 10,450,000.00 3,657,500.00 2,873,750.00 2,300,000.00 19,281,250.00
N24633.......... 10,471,600.00 3,665,060.00 2,879,690.00 2,300,000.00 19,316,350.00
N17104.......... 19,342,666.67 6,769,933.33 5,319,233.33 3,400,000.00 34,831,833.33
N17105.......... 19,415,733.33 6,795,506.67 5,339,326.67 3,400,000.00 34,950,566.67
N14106.......... 19,488,666.67 6,821,033.33 5,359,383.33 3,400,000.00 35,069,083.33
N14107.......... 19,560,266.67 6,846,093.33 5,379,073.33 3,400,000.00 35,185,433.33
N21108.......... 19,633,200.00 6,871,620.00 5,399,130.00 3,400,000.00 35,303,950.00
N12109.......... 19,706,266.67 6,897,193.33 5,419,223.33 3,400,000.00 35,422,683.33
N13110.......... 19,706,266.67 6,897,193.33 5,419,223.33 3,400,000.00 35,422,683.33
N18112.......... 19,858,933.33 6,950,626.67 5,461,206.67 3,400,000.00 35,670,766.67
N13113.......... 20,009,599.99 7,004,060.01 5,502,190.01 3,400,000.00 35,915,850.01
--------------- -------------- -------------- -------------- ---------------
Total......... $269,518,000.00 $94,332,000.00 $74,117,000.00 $51,300,000.00 $489,267,000.00
=============== ============== ============== ============== ===============
Interest is payable on the unpaid principal amount of each Equipment Note
at the rate applicable to such Equipment Note on January 15, April 15, July 15
and October 15 in each year, commencing April 15, 1996. Such interest is
computed on the basis of a 360-day year of twelve 30-day months. Under certain
circumstances described in "The Exchange Offer--General", the interest
rates for the Equipment Notes may be increased to the extent described therein.
If any date scheduled for any payment of principal, premium (if any) or
interest with respect to the Equipment Notes is not a Business Day, such payment
will be made on the next succeeding Business Day without any additional
interest.
REDEMPTION
The Equipment Notes issued with respect to any Aircraft will be redeemed,
in whole, at a price equal to the aggregate unpaid principal amount thereof,
together with accrued interest thereon to, but not including, the date of
redemption, but without premium, on a Special Distribution Date upon the
occurrence of an Event of Loss to such Aircraft if such Aircraft is not
replaced. (Indentures, Section 2.10(a))
The Equipment Notes relating to an Aircraft will be redeemed, in whole, on
a Special Distribution Date in connection with Continental's exercise of its
right to terminate the applicable Lease under Section 9 of such Lease at a price
equal to the aggregate unpaid principal amount thereof, together with accrued
interest thereon to, but not including, the date of redemption, plus a Make-
Whole Premium (as defined below). (Indentures, Section 2.10(b)). See "--The
Leases--Lease Termination".
71
All of the Equipment Notes issued with respect to an Aircraft may be
redeemed prior to maturity as part of a refunding or refinancing thereof under
Section 13 of the applicable Participation Agreement at a price equal to the
aggregate unpaid principal thereof, together with accrued interest thereon to,
but not including, the date of redemption, plus a Make-Whole Premium, if any.
(Indentures, Section 2.11)
If notice of such a redemption shall have been given in connection with a
refinancing of such Equipment Notes, such notice may be revoked not later than
three days prior to the proposed redemption date. (Indentures, Section 2.12)
If, with respect to an Aircraft, (x) one or more Lease Events of Default
shall have occurred and be continuing, (y) the Loan Trustee with respect to such
Equipment Notes shall take action or notify the applicable Owner Trustee that it
intends to take action to foreclose the lien of the related Indenture or
commence the exercise of any significant remedy under such Indenture or the
related Lease or (z) the Equipment Notes with respect to such Aircraft shall
have been accelerated, then in each case the Equipment Notes issued with respect
to such Aircraft may be purchased by the Owner Trustee or Owner Participant on
the applicable purchase date at a price equal to the Redemption Price, but
without any premium (provided that a Make-Whole Premium shall be payable if such
Equipment Notes are to be purchased pursuant to clause (x) when (A) a Lease
Event of Default shall have occurred and be continuing for less than 120 days or
(B) the only Lease Event of Default under the related Lease arises from the
cross-default provisions of such Lease (in which event the option to purchase
may not be exercised for 60 days after the date of notice thereof). (Indentures,
Section 2.14)
"Make-Whole Premium" means, with respect to a redemption or purchase of an
Equipment Note, an amount equal to the greater of (i) zero and (ii) (x) the
present value, discounted on a quarterly compounded basis utilizing an interest
factor equal to the Reinvestment Yield, of the principal payments provided for
in the amortization schedule for such Equipment Note (including the payment at
final maturity) and the scheduled interest payments from the respective dates on
which, but for such redemption or purchase, such principal payments and interest
payments would have been payable on such Equipment Note, minus (y) the principal
amount of such Equipment Note so to be redeemed or purchased plus accrued but
unpaid interest thereon.
For purposes of the foregoing definition, "Reinvestment Yield" shall mean
the arithmetic mean of the two most recent weekly average yields to maturity for
actively traded marketable U.S. Treasury fixed interest rate securities
(adjusted to constant maturities equal to the remaining Weighted Average Life to
Maturity of such Equipment Note as of the date of the proposed redemption or
purchase), as published by the Federal Reserve Board in its Statistical Release
H.15(519) or any successor publication for the two calendar weeks ending on the
Saturday next preceding such date or, if such average is not published for such
period, of such reasonably comparable index as may be designated in good faith
by the Independent Investment Banker for such period. If no possible maturity
exactly corresponds to such Weighted Average Life to Maturity, yields for the
two most closely corresponding published maturities shall be calculated pursuant
to the immediately preceding sentence and the Reinvestment Yield shall be
interpolated from such yields on a straight-line basis, rounding each of such
relevant periods to the nearest month.
"Weighted Average Life to Maturity" of each Equipment Note means at the
time of the determination thereof the number of years obtained by dividing the
then Remaining Dollar-years of such Equipment Note by the then-outstanding
principal amount of such Equipment Note. The term "Remaining Dollar-years" shall
mean the amount obtained by (1) multiplying the amount of each then-remaining
principal payment on such Equipment Note provided for in the amortization
schedule for such Equipment Note by the number of years (calculated at the
nearest one-twelfth) that will elapse between the date of determination of the
Weighted Average Life to Maturity of such Equipment Note and the date of that
required payment and (2) totaling all the products obtained in clause (1) above.
72
SECURITY
The Equipment Notes issued with respect to each Aircraft are secured by (i)
an assignment by the related Owner Trustee to the related Loan Trustee of such
Owner Trustee's rights, except for certain limited rights, under the Lease with
respect to the related Aircraft, including the right to receive payments of rent
thereunder, (ii) a mortgage to such Loan Trustee of such Aircraft, subject to
the rights of Continental under such Lease, and (iii) an assignment to such Loan
Trustee of certain of such Owner Trustee's rights under the purchase agreement
between Continental and the related manufacturer. Unless and until an Indenture
Default with respect to an Aircraft has occurred and is continuing, the Loan
Trustee may not exercise the rights of the Owner Trustee under the related
Lease, except the Owner Trustee's right to receive payments of rent due
thereunder. The assignment by the Owner Trustee to the Loan Trustee of its
rights under the related Lease will exclude rights of such Owner Trustee and the
related Owner Participant relating to indemnification by Continental for certain
matters, insurance proceeds payable to such Owner Trustee in its individual
capacity and to such Owner Participant under liability insurance maintained by
Continental under such Lease or by such Owner Trustee or such Owner Participant,
insurance proceeds payable to such Owner Trustee in its individual capacity or
to such Owner Participant under certain casualty insurance maintained by such
Owner Trustee or such Owner Participant under such Lease and certain
reimbursement payments made by Continental to such Owner Trustee. (Indenture,
Granting Clause) The Equipment Notes are not cross-collateralized, and,
consequently, the Equipment Notes issued in respect of any one Aircraft are not
secured by any of the other Aircraft or replacement aircraft (as described in
"--The Leases--Events of Loss") or the Leases related thereto.
Funds, if any, held from time to time by the Loan Trustee with respect to
any Aircraft, including funds held as the result of an Event of Loss to such
Aircraft or termination of the Lease, if any, relating thereto, will be invested
and reinvested by such Loan Trustee, at the direction of the related Owner
Trustee (except in the case of certain Indenture Defaults), in investments
described in the related Indenture.
73
LOAN TO VALUE RATIOS OF EQUIPMENT NOTES
The following table sets forth loan to Aircraft value ratios for the
Equipment Notes issued in respect of each Aircraft as of the dates specified and
was obtained by dividing (i) the outstanding balance (assuming no payment
default) of such Equipment Notes determined immediately after giving effect to
the payments scheduled to be made in each such month by (ii) the assumed value
(the "Assumed Aircraft Value") of the Aircraft securing such Equipment Notes.
Loan to value ratios below cannot be recalculated due to rounding.
The table is based on the assumption that the value of each Aircraft set
forth opposite January 1996 depreciates by 2% per year until the fifteenth year
after the year of delivery of such Aircraft and 4% per year thereafter. Other
rates or methods of depreciation would result in materially different loan-to-
value ratios and no assurance can be given (i) that the depreciation rates and
method assumed for the purposes of the table are the ones most likely to occur
or (ii) as to the actual value of any Aircraft. Thus the table should not be
considered a forecast or prediction of expected or likely loan to Aircraft value
ratios but simply a mathematical calculation based on one set of assumptions.
Aircraft No. N17620 Aircraft No. N19623 Aircraft No. N13624
-------------------------------- ---------------------------------- ---------------------------------
Equipment Equipment Equipment
Note Assumed Note Assumed Note Assumed
Outstanding Aircraft Outstanding Aircraft Outstanding Aircraft
Balance Value Loan to Balance Value Loan to Balance Value Loan to
(millions) (millions) Value Ratio (millions) (millions) Value Ratio (millions) (millions) Value Ratio
------------ ---------- ----------- ---------- ---------- ----------- ---------- ---------- -----------
January 1996 $18.91 $25.56 74.00% $18.88 $25.44 74.19% $18.91 $25.56 74.00%
January 1997 18.59 25.04 74.21 18.55 24.93 74.40 18.59 25.04 74.21
January 1998 18.27 24.53 74.45 18.23 24.42 74.65 18.27 24.53 74.45
January 1999 17.82 24.02 74.18 17.79 23.91 74.37 17.82 24.02 74.18
January 2000 17.38 23.51 73.91 17.40 23.41 74.34 17.37 23.51 73.90
January 2001 16.44 23.00 71.49 16.45 22.90 71.84 16.44 23.00 71.47
January 2002 15.44 22.49 68.65 15.42 22.39 68.89 15.43 22.49 68.62
January 2003 14.34 21.98 65.23 14.32 21.88 65.46 14.35 21.98 65.29
January 2004 13.09 21.47 60.99 13.08 21.37 61.20 13.10 21.47 61.04
January 2005 11.73 20.96 55.99 11.78 20.86 56.46 11.81 20.96 56.35
January 2006 9.84 20.44 48.13 9.91 20.35 48.68 9.94 20.44 48.64
January 2007 7.13 19.93 35.79 7.81 19.84 39.36 7.81 19.93 39.19
January 2008 5.42 19.42 27.90 5.46 19.34 28.23 5.45 19.42 28.08
January 2009 4.52 18.91 23.90 4.53 18.83 24.05 4.52 18.91 23.91
January 2010 3.49 18.40 18.97 3.45 18.32 18.84 3.40 18.40 18.71
January 2011 2.40 17.38 13.79 2.27 17.30 13.12 2.26 17.38 12.99
January 2012 0.54 16.36 3.30 1.01 16.28 6.21 0.99 16.36 6.06
January 2013 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
74
Aircraft No. N46625 Aircraft No. N32626 Aircraft No. N17627
------------------------------------ ------------------------------------ ------------------------------------
Equipment Equipment Equipment
Note Assumed Note Assumed Note Assumed
Outstanding Aircraft Outstanding Aircraft Outstanding Aircraft
Balance Value Loan to Balance Value Loan to Balance Value Loan to
(millions) (millions) Value Ratio (millions) (millions) Value Ratio (millions) (millions) Value Ratio
----------- ---------- ----------- ----------- ---------- ----------- ----------- ---------- -----------
January 1996 $18.88 $25.44 74.19% $19.06 $25.78 73.92% $19.06 $25.78 73.92%
January 1997 18.55 24.93 74.40 18.73 25.27 74.13 18.73 25.27 74.13
January 1998 18.23 24.42 74.65 18.41 24.75 74.37 18.41 24.75 74.37
January 1999 17.79 23.91 74.37 17.96 24.24 74.10 17.96 24.24 74.10
January 2000 17.40 23.41 74.35 17.53 23.72 73.91 17.53 23.72 73.91
January 2001 16.45 22.90 71.84 16.54 23.20 71.28 16.55 23.20 71.30
January 2002 15.43 22.39 68.91 15.47 22.69 68.17 15.47 22.69 68.18
January 2003 14.33 21.88 65.48 14.28 22.17 64.41 14.28 22.17 64.42
January 2004 13.08 21.37 61.21 13.03 21.66 60.16 13.03 21.66 60.17
January 2005 11.78 20.86 56.47 11.78 21.14 55.72 11.79 21.14 55.75
January 2006 9.92 20.35 48.72 9.91 20.63 48.05 9.92 20.63 48.09
January 2007 7.81 19.84 39.37 7.84 20.11 39.00 7.84 20.11 39.00
January 2008 5.46 19.34 28.23 5.50 19.60 28.09 5.50 19.60 28.09
January 2009 4.53 18.83 24.05 4.61 19.08 24.15 4.61 19.08 24.15
January 2010 3.45 18.32 18.84 3.59 18.56 19.32 3.58 18.56 19.30
January 2011 2.27 17.30 13.13 2.48 17.53 14.15 2.48 17.53 14.13
January 2012 1.01 16.28 6.20 1.30 16.50 7.91 1.30 16.50 7.88
January 2013 0.00 0.00 0.00 0.36 15.47 2.32 0.36 15.47 2.32
Aircraft No. N62631 Aircraft No. N16632 Aircraft No. N24633
------------------------------------ ------------------------------------ ------------------------------------
Equipment Equipment Equipment
Note Assumed Note Assumed Note Assumed
Outstanding Aircraft Outstanding Aircraft Outstanding Aircraft
Balance Value Loan to Balance Value Loan to Balance Value Loan to
(millions) (millions) Value Ratio (millions) (millions) Value Ratio (millions) (millions) Value Ratio
----------- ---------- ----------- ----------- ---------- ----------- ----------- ---------- -----------
January 1996.... $19.2 $26.0 73.84 $19.2 $26.1 73.80 $19.3 $26.1 73.79
January 1997.... 18.8 25.4 74.05 18.9 25.6 74.01 18.9 25.6 73.99
January 1998.... 18.5 24.9 74.29 18.6 25.0 74.25 18.6 25.1 74.23
January 1999.... 18.1 24.4 74.02 18.1 24.5 73.99 18.2 24.6 73.97
January 2000.... 17.5 23.9 73.37 17.5 24.0 73.10 17.5 24.0 73.00
January 2001.... 16.5 23.4 70.62 16.5 23.5 70.45 16.5 23.5 70.36
January 2002.... 15.4 22.8 67.42 15.4 22.9 67.39 15.5 23.0 67.27
January 2003.... 14.2 22.3 63.57 14.3 22.4 63.69 14.3 22.5 63.54
January 2004.... 12.9 21.8 59.23 13.0 21.9 59.51 13.0 21.9 59.33
January 2005.... 11.6 21.3 54.58 11.8 21.4 55.30 11.8 21.4 55.11
January 2006.... 9.7 20.8 46.85 9.9 20.9 47.78 9.9 20.9 47.58
January 2007.... 7.5 20.2 37.34 7.8 20.3 38.66 7.8 20.4 38.34
January 2008.... 5.2 19.7 26.45 5.6 19.8 28.30 5.5 19.9 28.11
January 2009.... 4.6 19.2 24.09 4.7 19.3 24.57 4.7 19.3 24.37
January 2010.... 3.6 18.7 19.22 3.7 18.8 19.95 3.7 18.8 19.75
January 2011.... 2.4 17.6 14.00 2.6 17.7 15.07 2.6 17.8 14.82
January 2012.... 1.3 16.6 7.79 1.5 16.7 9.28 1.5 16.7 8.95
January 2013.... 0.3 15.6 2.34 0.6 15.6 3.88 0.5 15.7 3.70
75
Aircraft No. N17104 Aircraft No. N17105 Aircraft No. N14106
------------------------------------ ------------------------------------ ------------------------------------
Equipment Equipment Equipment
Note Assumed Note Assumed Note Assumed
Outstanding Aircraft Outstanding Aircraft Outstanding Aircraft
Balance Value Loan to Balance Value Loan to Balance Value Loan to
(millions) (millions) Value Ratio (millions) (millions) Value Ratio (millions) (millions) Value Ratio
----------- ---------- ----------- ----------- ---------- ----------- ----------- ---------- -----------
January 1996 $34.83 $48.69 71.54% $34.95 $48.84 71.56% $35.07 $48.99 71.59%
January 1997 34.22 47.72 71.71 34.33 47.86 71.73 34.45 48.01 71.75
January 1998 33.61 46.74 71.91 33.73 46.89 71.93 33.84 47.03 71.95
January 1999 32.56 45.77 71.15 32.55 45.91 70.90 32.82 46.05 71.27
January 2000 30.76 44.79 68.66 30.69 44.93 68.31 31.08 45.07 68.97
January 2001 29.33 43.82 66.92 29.24 43.96 66.53 29.65 44.09 67.24
January 2002 26.85 42.85 62.66 26.74 42.98 62.22 27.19 43.11 63.07
January 2003 24.34 41.87 58.12 24.28 42.00 57.80 24.56 42.13 58.29
January 2004 22.63 40.90 55.34 22.56 41.03 55.00 22.85 41.15 55.53
January 2005 20.67 39.93 51.77 20.62 40.05 51.48 20.90 40.17 52.03
January 2006 18.37 38.95 47.15 18.29 39.07 46.82 18.73 39.19 47.80
January 2007 16.24 37.98 42.76 16.14 38.09 42.38 15.55 38.21 40.70
January 2008 13.01 37.00 35.15 13.15 37.12 35.42 10.77 37.23 28.92
January 2009 9.29 36.03 25.77 9.24 36.14 25.57 9.37 36.25 25.85
January 2010 7.79 34.08 22.86 7.69 34.19 22.50 7.88 34.29 22.97
January 2011 6.07 32.14 18.89 5.96 32.23 18.48 6.25 32.33 19.35
January 2012 4.13 30.19 13.68 4.07 30.28 13.44 4.50 30.37 14.80
January 2013 0.37 28.24 1.32 2.01 28.33 7.08 0.01 28.41 0.04
Aircraft No. N14107 Aircraft No. N21108 Aircraft No. N12109
------------------------------------ ------------------------------------ ------------------------------------
Equipment Equipment Equipment
Note Assumed Note Assumed Note Assumed
Outstanding Aircraft Outstanding Aircraft Outstanding Aircraft
Balance Value Loan to Balance Value Loan to Balance Value Loan to
(millions) (millions) Value Ratio (millions) (millions) Value Ratio (millions) (millions) Value Ratio
----------- ---------- ----------- ----------- ---------- ----------- ----------- ---------- -----------
January 1996 $35.19 $49.13 71.61% $35.30 $49.28 71.64% $35.42 $49.43 71.66%
January 1997 34.56 48.15 71.78 34.68 48.30 71.80 34.79 48.44 71.83
January 1998 33.95 47.17 71.98 34.07 47.31 72.00 34.18 47.46 72.02
January 1999 32.44 46.19 70.23 32.64 46.33 70.46 32.69 46.47 70.36
January 2000 30.69 45.20 67.90 30.83 45.34 68.00 31.05 45.48 68.27
January 2001 29.23 44.22 66.09 29.41 44.35 66.30 29.65 44.49 66.65
January 2002 26.74 43.24 61.84 26.94 43.37 62.11 27.18 43.50 62.49
January 2003 24.25 42.26 57.39 24.47 42.38 57.74 24.61 42.51 57.88
January 2004 22.54 41.27 54.62 22.76 41.40 54.98 22.92 41.52 55.19
January 2005 20.59 40.29 51.11 20.83 40.41 51.53 20.94 40.53 51.67
January 2006 18.22 39.31 46.35 18.51 39.43 46.94 18.57 39.55 46.97
January 2007 15.86 38.32 41.39 16.40 38.44 42.65 16.46 38.56 42.69
January 2008 12.70 37.34 34.02 13.47 37.46 35.95 13.54 37.57 36.05
January 2009 8.77 36.36 24.11 9.63 36.47 26.41 9.73 36.58 26.60
January 2010 7.66 34.39 22.28 8.14 34.50 23.59 8.41 34.60 24.29
January 2011 5.88 32.43 18.13 6.48 32.53 19.93 6.69 32.63 20.49
January 2012 3.94 30.46 12.92 4.61 30.56 15.09 3.14 30.65 10.24
January 2013 1.85 28.50 6.50 0.10 28.58 0.36 0.10 28.67 0.36
76
Aircraft No. N13110 Aircraft No. N18112 Aircraft No. N13113
------------------------------------ ------------------------------------ ------------------------------------
Equipment Equipment Equipment
Note Assumed Note Assumed Note Assumed
Outstanding Aircraft Outstanding Aircraft Outstanding Aircraft
Balance Value Loan to Balance Value Loan to Balance Value Loan to
(millions) (millions) Value Ratio (millions) (millions) Value Ratio (millions) (millions) Value Ratio
----------- ---------- ----------- ----------- ---------- ----------- ----------- ---------- -----------
January 1996 $35.42 $49.43 71.66% $35.67 $49.73 71.73% $35.92 $50.03 71.80%
January 1997 34.79 48.44 71.83 35.04 48.74 71.89 35.28 49.02 71.96
January 1998 34.18 47.46 72.02 34.42 47.74 72.09 34.62 48.02 72.09
January 1999 32.67 46.47 70.31 32.64 46.75 69.82 32.72 47.02 69.58
January 2000 30.94 45.48 68.03 30.88 45.75 67.49 30.85 46.02 67.04
January 2001 29.54 44.49 66.39 29.40 44.76 65.69 29.39 45.02 65.29
January 2002 27.06 43.50 62.22 26.93 43.76 61.54 26.93 44.02 61.17
January 2003 24.60 42.51 57.87 24.38 42.77 57.01 24.42 43.02 56.76
January 2004 22.89 41.52 55.12 22.68 41.77 54.30 22.70 42.02 54.01
January 2005 20.92 40.53 51.60 20.75 40.78 50.88 20.74 41.02 50.55
January 2006 18.56 39.55 46.93 18.38 39.78 46.21 18.36 40.02 45.88
January 2007 16.44 38.56 42.64 16.26 38.79 41.93 16.24 39.02 41.62
January 2008 13.52 37.57 35.98 13.04 37.80 34.49 13.09 38.02 34.43
January 2009 9.70 36.58 26.52 9.16 36.80 24.88 9.24 37.02 24.95
January 2010 8.37 34.60 24.18 7.35 35.81 20.52 7.40 36.02 20.55
January 2011 6.64 32.63 20.37 2.78 33.82 8.22 5.17 34.02 15.20
January 2012 3.09 30.65 10.08 0.87 31.83 2.74 2.53 32.02 7.90
January 2013 0.10 28.67 0.36 0.01 29.84 0.03 0.01 30.02 0.03
LIMITATION OF LIABILITY
The Equipment Notes are not direct obligations of, or guaranteed by,
Continental, the Owner Participant or the Owner Trustees in their individual
capacity. None of the Owner Trustees, the Owner Participants or the Loan
Trustees, or any affiliates thereof, shall be personally liable to any holder of
an Equipment Note or, in the case of the Owner Trustees and the Owner
Participants, to the Loan Trustees for any amounts payable under the Equipment
Notes or, except as provided in each Indenture, for any liability under such
Indenture. All payments of principal of, premium, if any, and interest on the
Equipment Notes issued with respect to any Aircraft (other than payments made in
connection with an optional redemption or purchase of Equipment Notes by the
related Owner Trustee or the related Owner Participant) will be made only from
the assets subject to the lien of the Indenture with respect to such Aircraft or
the income and proceeds received by the related Loan Trustee therefrom
(including rent payable by Continental under the Lease with respect to such
Aircraft).
Except as otherwise provided in the Indentures, each Owner Trustee in its
individual capacity shall not be answerable or accountable under the Indentures
or under the Equipment Notes under any circumstances except for its own willful
misconduct or gross negligence. None of the Owner Participants will have any
duty or responsibility under any of the Indentures or the Equipment Notes to the
Loan Trustees or to any holder of any Equipment Note.
INDENTURE DEFAULTS, NOTICE AND WAIVER
Indenture Defaults under each Indenture include: (a) the occurrence of any
Lease Event of Default under the related Lease (other than the failure to make
certain indemnity payments and other payments to the related Owner Trustee or
Owner Participant unless a notice is given by such Owner Trustee that such
failure shall constitute an Indenture Default), (b) the failure by the Owner
Trustee (other than as a result of a Lease Default or Lease Event of Default) to
pay any interest or principal or premium, if any, when due, under such Indenture
or under any Equipment Note issued thereunder continued for more than 10
business days, (c) the failure by the Owner Participant or the Owner Trustee to
discharge certain liens, continued after notice and specified cure periods, (d)
any representation or warranty made by the related Owner Trustee or Owner
Participant in such Indenture, the related Participation Agreement, the related
Refunding Agreement or certain related documents furnished to the Loan Trustee
pursuant thereto being false or incorrect when made and continuing to be
material and remaining unremedied after notice and specified cure periods, (e)
failure by the related Owner Trustee or Owner Participant to perform or observe
any covenant or obligation for the benefit of
77
the Loan Trustee or holders of Equipment Notes under such Indenture or certain
related documents, continued after notice and specified cure periods, (f) the
registration of the related Aircraft ceasing to be effective as a result of the
Owner Participant not being a citizen of the United States or (g) the occurrence
of certain events of bankruptcy, reorganization or insolvency of the related
Owner Trustee or Owner Participant. (Indentures, Section 4.02) There are no
cross-default provisions in the Indentures. Consequently, events resulting in an
Indenture Default under any particular Indenture may or may not result in an
Indenture Default occurring under any other Indenture. However, a Lease Event of
Default under any Lease will constitute a Lease Event of Default under all
Leases due to the cross-default provisions in the Leases, and will consequently
result in an Indenture Default under all Indentures. (Leases, Section 14.8)
If Continental fails to make any quarterly basic rental payment due under
any Lease, within a specified period after such failure the applicable Owner
Trustee may furnish to the Loan Trustee the amount due on the Equipment Notes,
together with any interest thereon on account of the delayed payment thereof, in
which event the Loan Trustee and the holders of outstanding Equipment Notes
issued under such Indenture may not exercise any remedies otherwise available
under such Indenture or such Lease as the result of such failure to make such
rental payment, unless Continental has failed to make a rental payment when due
on the six or more immediately preceding quarterly basic rental payment dates or
on any twelve or more previous quarterly basic rental payment dates. The
applicable Owner Trustee also may cure any other default by Continental in the
performance of its obligations under any Lease which can be cured with the
payment of money. (Indentures, Section 4.03)
The holders of a majority in principal amount of the outstanding Equipment
Notes issued with respect to any Aircraft, by notice to the Loan Trustee, may on
behalf of all the holders waive any existing default and its consequences under
the Indenture with respect to such Aircraft, except a default in the payment of
the principal of or interest on any such Equipment Notes or a default in respect
of any covenant or provision of such Indenture that cannot be modified or
amended without the consent of each holder of Equipment Notes affected thereby.
(Indentures, Section 4.08)
REMEDIES
If an Indenture Default occurs and is continuing under an Indenture, the
related Loan Trustee or the holders of a majority in principal amount of the
Equipment Notes outstanding under such Indenture may, subject to the applicable
Owner Participant's or Owner Trustee's right to cure, as discussed above,
declare the principal of all such Equipment Notes issued thereunder immediately
due and payable, together with all accrued but unpaid interest thereon. The
holders of a majority in principal amount of Equipment Notes outstanding under
such Indenture may rescind any such declaration at any time before the judgment
or decree for the payment of the money so due shall be entered if (i) there has
been paid to the related Loan Trustee an amount sufficient to pay all principal,
interest, and premium, if any, on any such Equipment Notes, to the extent such
amounts have become due otherwise than by such declaration of acceleration and
(ii) all other Indenture Defaults and potential Indenture Defaults under such
Indenture have been cured or waived. (Indentures, Section 4.04(b))
Each Indenture provides that if an Indenture Default under such Indenture
has occurred and is continuing, the related Loan Trustee may exercise certain
rights or remedies available to it under such Indenture or under applicable law,
including (if the corresponding Lease has been declared in default) one or more
of the remedies under such Indenture or such Lease with respect to the Aircraft
subject to such Lease. The related Loan Trustee's right to exercise remedies
under such Indenture is subject, with certain exceptions, to its having
proceeded to exercise one or more of the dispossessory remedies under the Lease
with respect to such Aircraft; provided that the requirement to exercise such
remedies under such Lease shall not apply in circumstances where such exercise
has been involuntarily stayed or prohibited by applicable law or court order for
a continuous period in excess of 60 days or such other period as may be
specified in Section 1110(a)(1)(A) of the Federal Bankruptcy Code (the
"Bankruptcy Code") (plus an additional period, if any, resulting from (i) the
trustee in such proceeding assuming, or agreeing to perform its obligations
under, such Lease with the approval of the
78
applicable court or such Loan Trustee's consent to an extension of such period,
(ii) such Loan Trustee's failure to give any requisite notice, or (iii)
Continental's assumption of such Lease with the approval of the relevant court).
See "--The Leases--Lease Events of Default." Such remedies may be exercised by
the related Loan Trustee to the exclusion of the related Owner Trustee, subject
to certain conditions specified in such Indenture, and Continental, subject to
the terms of such Lease. Any Aircraft sold in the exercise of such remedies will
be free and clear of any rights of those parties, including the rights of
Continental under the Lease with respect to such Aircraft; provided that no
exercise of any remedies by the related Loan Trustee may affect the rights of
Continental under any Lease unless a Lease Event of Default has occurred and is
continuing. (Indentures, Section 4.04; Leases, Section 15)
If the Equipment Notes issued in respect of one Aircraft are in default,
the Equipment Notes issued in respect of the other Aircraft may not be in
default, and, if not, no remedies will be exercisable under the applicable
Indentures with respect to such other Aircraft.
Section 1110 of the Bankruptcy Code provides that the right of lessors,
conditional vendors and holders of security interests with respect to
"equipment" (as defined in Section 1110 of the Bankruptcy Code) to take
possession of such equipment in compliance with the provisions of a lease,
conditional sale contract or security agreement, as the case may be, is not
affected by (a) the automatic stay provision of the Bankruptcy Code, which
provision enjoins repossessions by creditors for the duration of the
reorganization period, (b) the provision of the Bankruptcy Code allowing the
trustee in reorganization to use property of the debtor during the
reorganization period, (c) Section 1129 of the Bankruptcy Code (which governs
the confirmation of plans of reorganization in Chapter 11 cases) and (d) any
power of the bankruptcy court to enjoin a repossession. Section 1110 provides,
however, that the right of a lessor, conditional vendor or holder of a security
interest to take possession of an aircraft in the event of an event of default
may not be exercised for 60 days following the date of commencement of the
reorganization proceedings (unless specifically permitted by the bankruptcy
court) and may not be exercised at all if, within such 60-day period (or such
longer period consented to by the lessor, conditional vendor or holder of a
security interest), the trustee in reorganization agrees to perform the debtor's
obligations that become due on or after such date and cures all existing
defaults (other than defaults resulting solely from the financial condition,
bankruptcy, insolvency or reorganization of the debtor). "Equipment" is defined
in Section 1110 of the Bankruptcy Code, in part, as "an aircraft, aircraft
engine, propeller, appliance, or spare part (as defined in section 40102 of
title 49) that is subject to a security interest granted by, leased to, or
conditionally sold to a debtor that is a citizen of the United States (as
defined in section 40102 of title 49) holding an air carrier operating
certificate issued by the Secretary of Transportation pursuant to chapter 447 of
title 49 for aircraft capable of carrying 10 or more individuals or 6,000 pounds
or more of cargo".
The Bankruptcy Reform Act of 1994 amended Section 1110 by, among other
things, providing that the lessor under a lease of aircraft first placed in
service on or prior to the date of the enactment of that Act will be entitled to
the benefits of Section 1110 if the lessor and the lessee have expressed in the
applicable agreement or in a substantially contemporaneous writing that the
applicable agreement is to be treated as a lease for Federal income tax
purposes. Each of the Leases relating to the four Aircraft placed in service
prior to the enactment of the Act contains such a written statement.
Cleary, Gottlieb, Steen & Hamilton, counsel to Continental, has advised the
Loan Trustees that the right of the Owner Trustee, as lessor under each of the
Leases, and the Loan Trustee, as assignee of such Owner Trustee's rights under
each of the Leases pursuant to each of the related Indentures, to exercise its
right to take possession of the respective Aircraft under each of the Leases is
entitled to the benefits of Section 1110 of the Bankruptcy Code with respect to
the airframe and engines comprising the related Aircraft. This opinion assumes
that Continental is and will be a citizen of the United States holding an air
carrier operating certificate issued by the Secretary of Transportation pursuant
to chapter 447 of title 49 of the U.S. Code for aircraft capable of carrying 10
or more individuals or 6,000 pounds or more of cargo. For a description of
certain limitations on the Loan Trustee's exercise of rights contained in the
Indenture, see "--Indenture Defaults, Notice and Waiver".
79
The opinion of Cleary, Gottlieb, Steen & Hamilton does not address the
possible replacement of an Aircraft after an Event of Loss in the future, the
consummation of which is conditioned upon the contemporaneous delivery of an
opinion of counsel to the effect that the related Loan Trustee's entitlement to
Section 1110 benefits should not be diminished as a result of such replacement.
See "--The Leases--Events of Loss". The opinion of Cleary, Gottlieb, Steen &
Hamilton will also not address the availability of Section 1110 with respect to
any possible sublessee of an Aircraft subleased by Continental.
If an Indenture Default under any Indenture occurs and is continuing, any
sums held or received by the related Loan Trustee may be applied to reimburse
such Loan Trustee for any tax, expense or other loss incurred by it and to pay
any other amounts due to such Loan Trustee prior to any payments to holders of
the Equipment Notes issued under such Indenture. (Indentures, Section 3.03)
In the event of bankruptcy, insolvency, receivership or like proceedings
involving an Owner Participant, it is possible that, notwithstanding that the
applicable Aircraft is owned by the related Owner Trustee in trust, such
Aircraft and the related Lease and Equipment Notes might become part of such
proceeding. In such event, payments under such Lease or on such Equipment Notes
might be interrupted and the ability of the related Loan Trustee to exercise its
remedies under the related Indenture might be restricted, although such Loan
Trustee would retain its status as a secured creditor in respect of the related
Lease and the related Aircraft.
MODIFICATION OF INDENTURES AND LEASES
Without the consent of holders of a majority in principal amount of the
Equipment Notes outstanding under any Indenture, the provisions of such
Indenture and the Lease, the Participation Agreement and the Trust Agreement
corresponding thereto may not be amended or modified, except to the extent
indicated below.
Certain provisions of any Indenture, and of the Lease (so long as no
Indenture Default has occurred and is continuing), the Participation Agreement,
and the Trust Agreement related thereto, may be amended or modified by the
parties thereto without the consent of any holders of the Equipment Notes
outstanding under such Indenture. In the case of each Lease, such provisions
include, among others, provisions relating to (i) the return to the related
Owner Trustee of the related Aircraft at the end of the term of such Lease and
(ii) the renewal of such Lease and the option of Continental at the end of the
term of such Lease to purchase the related Aircraft. (Indentures, Section 9.01)
Without the consent of the holder of each Equipment Note outstanding under
any Indenture affected thereby, no amendment or modification of such Indenture
may among other things (a) reduce the principal amount of, or premium, if any,
or interest payable on, any Equipment Notes issued under such Indenture or
change the date on which any principal or premium, if any, or interest is due
and payable, (b) create any security interest with respect to the property
subject to the lien of such Indenture, except as provided in such Indenture, or
deprive any holder of an Equipment Note issued under such Indenture of the lien
of such Indenture upon the property subject thereto or (c) reduce the percentage
in principal amount of outstanding Equipment Notes issued under such Indenture
necessary to modify or amend any provision of such Indenture or to waive
compliance therewith. (Indentures, Section 9.01(a))
OWNER PARTICIPANT'S RIGHT TO RESTRUCTURE
So long as GE or any of its affiliates is the Owner Participant with
respect to the leveraged lease of any Aircraft, subject to certain conditions,
such Owner Participant will have the right to restructure such leveraged lease
transaction using a "cross-border lease", a tax lease or head-lease/sublease
structure and any other type of transaction. In no event, however, shall any
such restructuring (i) change the terms and conditions of the rights and
obligations of any holder of Equipment Notes under the relevant Operative
Agreements or any holder of Certificates or (ii) expose any such holder to any
additional risks. As a precondition to any such restructuring,
80
the Owner Participant will be obligated to deliver to the Loan Trustee an
appropriate officer's certificate as to the satisfaction of the foregoing
conditions and obtain a written confirmation from the Rating Agencies prior to
the implementation of such restructuring to the effect that such restructuring
will not adversely affect the ratings of the Certificates.
INDEMNIFICATION
Continental is required to indemnify each Loan Trustee, each Owner
Participant and each Owner Trustee for certain losses, claims and other matters.
Continental is required under certain circumstances to indemnify each Owner
Participant against the loss of depreciation deductions and certain other
benefits allowable for certain income tax purposes with respect to the related
Aircraft. Each Owner Participant is required to indemnify the related Loan
Trustee and the holders of the Equipment Notes issued with respect to the
Aircraft in which such Owner Participant has an interest for certain losses that
may be suffered as a result of the failure of such Owner Participant to
discharge certain liens or claims on or against the assets subject to the lien
of the related Indenture.
THE LEASES
Each Aircraft is leased to Continental by the relevant Owner Trustee under
the relevant Lease.
Lease Term Rentals
Each Aircraft has been leased separately by the relevant Owner Trustee to
Continental for a term commencing on the date on which the Aircraft was acquired
by the Owner Trustee and expiring on a date not earlier than the latest maturity
date of the relevant Equipment Notes, unless terminated prior to the originally
scheduled expiration date as permitted by the applicable Lease. The quarterly
basic rent payment under each Lease is payable by Continental on each related
Lease Payment Date (as defined below) (or, if such day is not a business day, on
the next business day), and has been assigned by the Owner Trustee under the
corresponding Indenture to provide the funds necessary to make payments of
principal and interest due from the Owner Trustee on the Equipment Notes issued
under such Indenture. In certain cases, the quarterly basic rent payments under
the Leases may be adjusted, but each lease provides that under no circumstances
will rent payments by Continental be less than the scheduled payments on the
related Equipment Notes. In addition, the amount of basic rent may be increased
in an amount equal to any increase in the amount of interest due on the
Equipment Notes on the relevant Lease Payment Date as a result of the resetting
of the rate of interest on the Equipment Notes as required by the terms thereof-
- -for example, if certain terms of the Registration Rights Agreement require such
a resetting. See "The Exchange Offer--General". Any balance of each such
quarterly basic rent payment under each Lease, after payment of amounts due on
the Equipment Notes issued under the Indenture corresponding to such Lease, will
be paid over to the Owner Trustee. (Leases, Section 3; Indentures, Section 3.01)
"Lease Payment Date" means, with respect to each Lease, January 15, April
15, July 15 or October 15 during the term of such Lease.
Net Lease
Under the terms of each Lease, Continental's obligations in respect of each
Aircraft will be those of a lessee under a "net lease". Accordingly, under each
Lease Continental is obligated, among other things and at its expense, to keep
each Aircraft duly registered and insured, to pay all costs of operating the
Aircraft and to maintain, service, repair and overhaul the Aircraft so as to
keep it in as good an operating condition as when delivered to Continental,
ordinary wear and tear excepted, and in such condition as required to maintain
the
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airworthiness certificate for the Aircraft in good standing at all times.
(Leases, Sections 7.1 and 8.1 and Annex C)
Possession, Sublease and Transfer
Each Aircraft may be operated by Continental or under lease, sublease or
interchange arrangements, subject to certain restrictions. Normal interchange
and pooling agreements with respect to any Engine are permitted with U.S. air
carriers and foreign air carriers in countries with which the United States
maintains normal diplomatic relations and which recognize and give effect to the
rights of lessors and mortgagees. Subleases for a term of up to 60 months are
also permitted with solvent U.S. air carriers and with certain specified foreign
air carriers, so long as they are solvent, subject to a reasonably satisfactory
opinion that such country would give effect to the title of the Owner Trustee in
and to the Aircraft and would give effect to the priority and validity of the
lien of the Indenture, as the case may be, as if such country were a party to
the Convention on the International Recognition of Rights in Aircraft (Geneva
1948) (the "Convention"). (Leases, Section 7) It is uncertain to what extent the
relevant Loan Trustee's security interest would be recognized in an Aircraft
located in a country that is not a party to the Convention, and to what extent
such security interest would be recognized in a jurisdiction adhering to the
Convention if the Aircraft is registered in a jurisdiction not a party to the
Convention. Moreover, in the case of an Event of Default under an Indenture, the
ability of the related Loan Trustee to realize upon its security interest in an
Aircraft could be adversely affected as a legal or practical matter if such
Aircraft were registered or located outside the United States.
Registration
Continental is required to keep each Aircraft duly registered under the
Transportation Code with the FAA, except if the relevant Owner Trustee or the
relevant Owner Participant fails to meet the applicable citizenship
requirements, and to record each Lease and Indenture and certain other documents
under the Transportation Code. (Leases, Section 7) Such recordation of the
Indenture and other documents with respect to each Aircraft will give the
relevant Loan Trustee a first-priority, perfected security interest in such
Aircraft whenever it is located in the United States or any of its territories
and possessions. The Convention provides that such security interest will also
be recognized, with certain limited exceptions, in those jurisdictions that have
ratified or adhere to the Convention. (Leases, Section 7.1.1)
So long as no Lease default or Lease Event of Default exists, Continental
has the right to register the Aircraft subject to such Lease in a country other
than the United States at its own expense in connection with a permitted
sublease of the Aircraft to certain specified foreign air carriers, subject to
certain conditions set forth in the related Participation Agreement. These
conditions include a requirement that the country of registration recognizes the
interests of lessors, owner participants and mortgagees and provides
substantially equivalent protection to such interests as provided by law in the
United States. (Leases, Section 7.1.2; Participation Agreements, Section 8.7.12)
Liens
Continental is required to maintain each Aircraft free of any liens, other
than the rights of the relevant Loan Trustee, the holders of the related
Equipment Notes, Continental, the Owner Participant and Owner Trustee arising
under the applicable Indenture, the Lease or the other operative documents
related thereto, and other than certain limited liens permitted under such
documents, including (i) liens for taxes either not yet due or being contested
in good faith by appropriate proceedings; (ii) materialmen's, mechanics' and
other similar liens arising in the ordinary course of business and securing
obligations that either are not yet delinquent or are being contested in good
faith by appropriate proceedings; and (iii) judgment liens so long as such
judgment is discharged or vacated within 30 days or the execution of such
judgment is stayed pending appeal and discharged, vacated or reversed within 30
days after expiration of such stay; provided that in the case of each of the
liens
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described in the foregoing clauses (i), (ii) and (iii), such liens and
proceedings do not involve any material risk of the sale, forfeiture or loss of
such Aircraft or any interest therein or any discernible risk of criminal
liability or any material risk of civil penalty against the relevant Loan
Trustee, Owner Trustee or Owner Participant. (Leases, Section 6)
Replacement of Parts; Alterations
Continental is obligated to replace all parts at its expense that may from
time to time be incorporated or installed in or attached to any Aircraft and
that may become lost, damaged beyond repair, worn out, stolen, seized,
confiscated or rendered permanently unfit for use (other than severable parts
added at the option of Continental and obsolete or unsuitable parts that
Continental is permitted to remove to the extent described below). Continental
or any permitted sublessee has the right, at its own expense, to make such
alterations, modifications and additions with respect to each Aircraft as it
deems desirable in the proper conduct of its business and to remove parts which
it deems to be obsolete or no longer suitable or appropriate for use; provided
that such alteration, modification, addition or removal does not diminish the
value, utility, performance or the remaining useful life of the related
Aircraft, Airframe or Engine or adversely affect the commercial use of the
Aircraft for passenger service in the United States or invalidate the Aircraft's
airworthiness certificate, except that the value of the Aircraft may be reduced
by the removal of obsolete or unsuitable parts so long as the aggregate original
cost of all such parts removed from any one Aircraft and not replaced shall not
exceed $250,000 for each 757-224 Aircraft and $200,000 for each 737-524
Aircraft. (Leases, Section 8.1 and Annex C)
Insurance
The Leases require Continental to maintain, at its expense (or at the
expense of a permitted sublessee), all-risk aircraft hull insurance covering
each Aircraft, at all times in an amount not less than the stipulated loss value
of the Aircraft (which exceeds the aggregate outstanding principal amount of the
Equipment Notes related to such Aircraft, together with accrued interest
thereon), and all-risk property damage insurance covering Engines and parts
while removed from an aircraft in an amount not less than the replacement cost
of such Engines and parts. All insurance proceeds with respect to a total loss
of an Aircraft, Airframe or Engine and all insurance proceeds in excess of
$3,000,000 per occurrence with respect to repairable damage to an Aircraft,
Airframe or Engine are payable to the relevant Owner Trustee or to the
applicable Loan Trustee, for so long as the relevant Indenture shall be in
effect. Insurance proceeds of up to $3,000,000 per occurrence with respect to
repairable damage to an Aircraft, Airframe or engine are payable directly to
Continental so long as the Owner Trustee has not notified the insurance
underwriters that a Lease default or a Lease Event of Default exists. So long as
the loss does not constitute an Event of Loss (as defined below), insurance
proceeds will be applied to repair or replace the property. (Leases, Sections
11.1 and 11.5 and Annex D)
In addition, Continental is obligated to maintain comprehensive airline
liability insurance at its expense (or at the expense of a permitted sublessee),
including, without limitation, third-party and passenger liability and property
damage, cargo and products liability and contractual liability insurance with
respect to each Aircraft. Such liability insurance shall be of the type usually
carried by prudent major United States commercial air carriers and cover the
kind of risks against which prudent United States commercial air carriers
customarily insure. Such liability insurance shall be underwritten by nationally
or internationally recognized insurers of substantial financial capacity used by
other major United States commercial air carriers. The amount of such liability
insurance coverage per occurrence shall be not less than the amount of
comprehensive airline liability insurance from time to time applicable to
aircraft owned or leased and operated by Continental of the same type as such
Aircraft. Continental (but no permitted sublessee) shall have the right to self-
insure to the extent of any applicable minimum amount per aircraft (or, if
applicable, per annum or other period) hull or liability insurance deductible
imposed by the insurer providing such aircraft hull or liability insurance,
which are commensurate
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with the standard deductibles in the airline insurance industry available to
major U.S. airlines. (Leases, Section 11.1 and Annex D, Section A)
Continental is also required to maintain war-risk, hijacking or allied
perils insurance if it (or any permitted sublessee) operates any Aircraft,
Airframe or Engine in any area of recognized or threatened hostilities or if
Continental (or any permitted sublessee) maintains such insurance with respect
to other aircraft on the same routes or areas or if the Aircraft is operated
outside the United States or Canada. Continental (but no permitted sublessee)
may self-insure to the extent of any hull or liability insurance deductible
imposed by the insurer, provided such deductibles are commensurate with standard
deductibles in the aircraft insurance industry. (Leases, Annex D, Section H)
In respect of each Aircraft, Continental is required to cause the relevant
Loan Trustee, holders of the Equipment Notes, Owner Participant and Owner
Trustee, in its individual capacity and as owner of such Aircraft, and certain
other parties to be named as additional insured parties under all liability,
hull and property and war risk, hijacking and allied perils insurance policies
required with respect to such Aircraft. In addition, the insurance policies
maintained under the Leases will be required to provide that, in respect of the
interests of such additional insured persons, the insurance shall not be
invalidated or impaired by any act or omission of Continental or any other
person and to insure the respective interests of such additional insured
persons, regardless of any breach or violation of any representation, warranty,
declaration, term or condition contained in such policies by Continental, any
permitted sublessee or any other person. (Leases, Annex D, Section D)
Lease Termination
Unless a Lease default or Lease Event of Default shall have occurred and be
continuing, Continental may terminate any Lease on any Lease Payment Date
occurring on or after the tenth anniversary of the date on which such Lease
commenced and on or before one year prior to the date on which such Lease is
scheduled to expire, if it determines that such Aircraft is economically
obsolete or surplus to its requirements. Such determination must be made on a
nondiscriminatory basis with respect to the Aircraft subject to such Lease and
all similar aircraft operated by Continental which could also be terminated.
Continental is required to give notice of its intention to exercise its right of
termination described in this paragraph at least six months prior to the
proposed date of termination (which notice may be withdrawn up to 25 days prior
to such proposed date if Continental determines that no bid for the Aircraft of
a reasonable amount has been received); provided that Continental may give only
three such termination notices. In such a situation, if the Owner Trustee elects
(subject to the rights of Continental to purchase the Aircraft as described
below) to sell such Aircraft, Continental is required to use best reasonable
efforts to sell such Aircraft as an agent for such Owner Trustee. If the Owner
Trustee elects to accept any bid, such Owner Trustee shall sell such Aircraft on
the date of termination to the highest cash bidder. If such sale occurs, the
Equipment Notes related thereto are required to be prepaid. The net proceeds of
such sale shall be payable to the applicable Owner Trustee. If the net proceeds
to be received from such sale are less than the termination value for such
Aircraft (which is set forth in a schedule to each Lease), Continental is
required to pay to the applicable Owner Trustee an amount equal to the excess,
if any, of the applicable termination value for such Aircraft over such net
proceeds. Upon payment of termination value for such Aircraft and an amount
equal to the Make-Whole Premium, if any, payable on such date of payment,
together with certain additional amounts and together with all accrued and
unpaid interest thereon, the lien of the relevant Indenture shall be released,
the relevant Lease shall terminate, and the obligation of Continental thereafter
to make scheduled rent payments under such Lease shall cease. However, certain
payment obligations of Continental shall survive the termination of the Lease.
If such Aircraft is not sold by the proposed termination date, such Lease,
including all of Continental's obligations thereunder, shall continue in effect,
and the Equipment Notes related thereto will not be prepaid. (Leases, Section 9;
Indentures, Section 2.10(b))
The Owner Trustee has the option to retain title to the Aircraft if
Continental has given a notice of termination under the Lease. In such event,
such Owner Trustee shall pay to the applicable Loan Trustee an
84
amount sufficient to prepay the outstanding Equipment Notes issued with respect
to such Aircraft, and Continental shall pay to the Owner Trustee an amount equal
to the excess, if any, of the termination value of such Aircraft over the
highest bona fide cash bid made for the Aircraft, together with the Make-Whole
Premium, if any, on such Equipment Notes and all other amounts due and payable
to the Owner Trustee and Owner Participant under such Lease, the related
Participation Agreement or any other related operative document. (Leases,
Section 9; Indentures, Section 2.10(b))
Events of Loss
If an Event of Loss occurs with respect to the Airframe or the Airframe and
Engines of an Aircraft, Continental must elect within 20 days after such
occurrence either to make payment with respect to such Event of Loss or to
replace such Airframe and any such Engines. Not later than the first business
day following the sixty-first day following the date of occurrence of such Event
of Loss, or, if earlier, the second business day following the receipt of the
insurance proceeds in respect of such Event of Loss, Continental must either (i)
pay to the applicable Owner Trustee the stipulated loss value of such Aircraft,
together with certain additional amounts, but, in any case, without any Make-
Whole Premium or (ii) unless a Lease default or any Lease Event of Default shall
have occurred and be continuing, substitute an aircraft (or airframe and one or
more engines, as the case may be) for the Aircraft, Airframe or Engine(s) that
suffered such Event of Loss. (Leases, Sections 10.1.1 and 10.1.2; Indentures,
Section 2.10(a))
If Continental elects to replace an Aircraft (or Airframe or Airframe and
one or more Engines, as the case may be) that suffered such Event of Loss, it
shall convey to the related Owner Trustee title to an aircraft (or airframe or
airframe and one or more engines, as the case may be), and (i) in the case of
any replacement airframe, such airframe must be (a) manufactured by Boeing under
a certain purchase agreement between The Boeing Company and Continental and (b)
delivered under such agreement after the Airframe to be replaced was delivered
to Continental, (ii) such replacement airframe or airframe and engines must be
the same model as the Airframe or Airframe and Engines to be replaced or an
improved model, with performance and durability characteristics and a value,
utility and remaining useful life at least equal to, and in at least as good an
operating condition as, the Airframe or Airframe and Engines to be replaced
(assuming that such Airframe and such Engines were of the value and utility and
in the condition and repair required by the terms of such Lease immediately
prior to the occurrence of such Event of Loss). Continental is also required to
provide to the relevant Owner Trustee, Owner Participant and Loan Trustee (a) a
certification as to compliance with the foregoing requirements from a qualified
aircraft appraiser, together with a certified report setting forth such
appraiser's opinion as to the fair market value of such replacement airframe or
engine and (b) reasonably acceptable opinions of counsel to the effect that (i)
such Owner Trustee will acquire good title to such replacement airframe and, if
applicable, replacement engine, free and clear of all liens (other than
permitted liens), (ii) such replacement airframe and, if applicable, engine will
be made subject to the applicable Indenture to the same extent as the Airframe
and, if applicable, Engine replaced thereby, (iii) such Owner Trustee and Loan
Trustee (as assignee of lessor's rights and interests under the Lease) will be
entitled to receive the benefits and protections of Section 1110 of the
Bankruptcy Code with respect to any such replacement airframe and (to the extent
such opinion can be rendered, in view of applicable law) such replacement engine
and (iv) such replacement airframe has been duly registered and each supplement
to such Lease or Indenture has been duly recorded. (Leases, Sections 10.1.3 and
10.3)
If Continental elects not to replace such Aircraft, then upon payment of
the stipulated loss value for such Aircraft, together with all additional
amounts then due and unpaid with respect to the Aircraft, which must be at least
sufficient to pay in full as of the date of payment thereof the aggregate unpaid
principal amount under such Equipment Notes together with accrued but unpaid
interest thereon and all other amounts due and owing in respect of such
Equipment Notes, the lien of the Indenture and the Lease relating to such
Aircraft shall terminate with respect to such Aircraft, the obligation of
Continental thereafter to make the scheduled rent payments with respect thereto
shall cease and the related Owner Trustee shall transfer all of its right, title
and interest in and to
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the related Aircraft to Continental. The stipulated loss value and other
payments made under the Leases by Continental shall be deposited with the
applicable Loan Trustee. Amounts in excess of the amounts due and owing under
the Equipment Notes issued with respect to such Aircraft will be distributed by
such Loan Trustee to the applicable Owner Trustee. (Leases, Section 10.1.2;
Indentures, Sections 2.06 and 3.02)
If the Owner Trustee and the Loan Trustee are not entitled to Section 1110
benefits with respect to any replacement airframe or engine or if certain Lease
defaults or any Lease Event of Default has occurred and is continuing,
Continental shall not be entitled to replace such Airframe and shall be required
instead to pay the stipulated loss value applicable to such Airframe and the
related Engines, plus certain additional amounts. (Leases, Section 10.3.2)
If an Event of Loss occurs with respect to an Engine alone, Continental
will be required to replace such Engine within 60 days after the occurrence of
such Event of Loss with another engine, free and clear of all liens (other than
certain permitted liens). Such replacement engine shall be the same make and
model as the Engine to be replaced, suitable for installation and use on the
Aircraft, and having performance and durability characteristics and a value and
utility at least equal to, and in at least as good an operating condition as,
the Engine to be replaced (assuming that such Engine was of the value and
utility and in the condition and repair required by the terms of the relevant
Lease immediately prior to the occurrence of the Event of Loss). (Leases,
Section 10.2)
An Event of Loss with respect to an Aircraft, Airframe or any Engine means
any of the following events with respect to such property: (i) the destruction
of such property, damage to such property beyond practical or economic repair or
rendition of such property permanently unfit for normal use; (ii) the actual or
constructive total loss of such property or any damage to such property or
requisition of title or use of such property which results in an insurance
settlement with respect to such property on the basis of a total loss or a
constructive or compromised total loss; (iii) any loss of such property or loss
of use of such property for a period of 90 days or more as a consequence of any
theft, hijacking or disappearance of such property; (iv) any seizure,
condemnation, confiscation, taking or requisition of title to such property by
any governmental entity or purported non-U.S. governmental entity; (v) any
seizure, condemnation, confiscation, taking or requisition of use of such
property that continues until the earliest to occur of (A) the last day of the
Lease term, (B) the date on which the Aircraft is modified in such a manner as
would render conversion of such property for use in normal commercial passenger
service impractical or uneconomical, (C) the date on which such property is
operated or located in any area excluded from coverage by any insurance policy
required to be maintained by such Lease (unless an indemnity from the U.S.
Government is obtained in lieu of such insurance), and (D) the date that is 90
days following the commencement of such loss of use (unless such loss of use
results from action by the U.S. Government); or (vi) as a result of any law,
rule, regulation, order or other action by the FAA or any governmental entity,
the use of such property in the normal course of Continental's business of
passenger air transportation is prohibited for 180 days (or 360 days, if
Continental diligently implements all steps which are necessary or desirable to
permit the normal use of such property by it) or for a period expiring on the
last day of the Lease term, whichever is earlier. (Leases, Annex A)
Purchase Options under the Leases
So long as no Lease default or Lease Event of Default has occurred and is
continuing, Continental will have the option to purchase any Aircraft subject to
a Lease on the last business day of the original Lease or on the last business
day of either of the two, in the case of the 757-224 Aircraft, or four, in the
case of the 737-524 Aircraft, one-year renewal terms at a purchase price equal
to the fair market sales value of such Aircraft. The fair market sales value of
such Aircraft shall be determined not more than 170 days nor less than 150 days
prior to the date of purchase by mutual agreement of Continental and the Owner
Trustee or, if they are unable to agree, by an appraisal. Continental may
exercise its purchase option by delivering an irrevocable notice to the Owner
Trustee not more than 180 days nor less than 120 days prior to the proposed date
of purchase. The Owner
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Trustee shall not be under any obligation to sell the Aircraft to Continental if
the fair market sales value of the Aircraft is determined to be less than a
certain minimum residual value amount. Upon receipt by the Owner Trustee of
payment of the applicable fair market sales value of the Aircraft and all other
amounts due and payable by Continental under the relevant Lease, Participation
Agreement and any other related operative document, the Owner Trustee shall
transfer title to the Aircraft to Continental, provided that all related
Equipment Notes have previously been paid in full. (Leases, Section 17.3;
Indentures, Section 10.01)
The holder of the Equipment Notes issued under an Indenture shall not have
any right to amounts payable by Continental in connection with its exercise of
purchase options for the related Aircraft to the extent that all amounts payable
by the relevant Owner Trustee to such holder under such Equipment Notes, such
Indenture and related operative agreements have been paid in full.
Lease Events of Default
Lease Events of Default under each Lease include, among other things, (i)
failure by Continental to make any payment of basic rent, renewal rent,
stipulated loss value or termination value under such Lease within five business
days after the same shall have become due, or failure by Continental to pay any
other amount due under such Lease or under any other related operative document
within five business days from and after the date of any written demand therefor
from the owner trustee; (ii) failure by Continental to make any excluded payment
within five business days after written notice that such failure constitutes a
Lease Event of Default is given by the relevant Owner Participant to Continental
and the relevant Loan Trustee; (iii) failure by Continental to carry and
maintain insurance on and in respect of the Aircraft, Airframe and Engines
subject to such Lease, in accordance with the provisions of such Lease or the
operation of the Aircraft, Airframe or Engines subject to such Lease at any time
when such insurance is not in effect; (iv) failure by Continental to maintain
its corporate existence except as permitted by the Lease, or the winding up,
liquidation or dissolution of Continental; (v) failure to maintain the
registration of the Aircraft with the FAA or with a permitted foreign registry,
failure to record the Indenture or maintain the Indenture of record as a first-
priority, perfected mortgage (subject to permitted liens) or operation of the
Aircraft in any area excluded by insurance coverage required by such Lease or in
any recognized or threatened area of hostilities unless fully covered by war-
risk insurance, as required by Section 11 of such Lease (subject to certain
exceptions); (vi) breach of the covenants in such Lease pertaining to
possession, interchange and pooling of Engines and subleasing; (vii) breach of
certain prohibitions against attempted assignments by Continental of its
obligations under such Lease and against the merger of Continental with any
other person, except as expressly permitted by such Lease; and (viii) failure by
Continental to perform or observe any other covenant or agreement to be
performed or observed by it under such Lease or the related Participation
Agreement or any other related operative document (other than (a) the agreement
by Continental to treat the Lease as a lease for U.S. Federal income tax
purposes and (b) nonpayment provisions under the related tax indemnity agreement
between Continental and the Owner Participant), and such failure shall continue
unremedied for a period of 30 days (or such other shorter applicable period)
after written notice of such failure by the applicable Owner Trustee or Loan
Trustee; (ix) (a) any representation or warranty made by Continental in such
Lease or the related Participation Agreement or in any other related operative
document (other than in the related tax indemnity agreement between Continental
and the Owner Participant) shall prove to have been untrue, inaccurate or
misleading in any material respect at the time made, (b) such representation or
warranty is material at the time in question and (c) the same shall remain
uncured for more than 30 days after the date of written notice thereof to
Continental; (x) the occurrence of certain voluntary events of bankruptcy,
reorganization or insolvency of Continental or the occurrence of involuntary
events of bankruptcy, reorganization or insolvency which shall continue
undismissed or unstayed for a period of 60 days; and (xi) a Lease Event of
Default under any other Lease. (Leases, Section 14)
Remedies Exercisable upon Lease Events of Default
87
If a Lease Event of Default has occurred and is continuing, the applicable
Owner Trustee may (or, so long as the Indenture shall be in effect, the
applicable Loan Trustee may, subject to the terms of the Indenture) exercise one
or more of the remedies provided in such Lease with respect to the related
Aircraft. These remedies include the right to repossess and use or operate such
Aircraft, to rescind or terminate such Lease, to sell or re-lease such Aircraft
free and clear of Continental's rights, except as set forth in the Lease, and
retain the proceeds, and to require Continental to pay, as liquidated damages
any due and unpaid basic rent or renewal rent plus an amount equal to the excess
of the termination value for such Aircraft (specified in schedules to such
Lease) over, at such Owner Trustee's (or, subject to the terms of the relevant
Indenture, the Loan Trustee's) option, any of (i) the discounted fair market
rental value of such Aircraft for the remainder of the term of the Lease
relating to such Aircraft (using a discount rate equal to 10 per cent per
annum), (ii) the fair market sales value of such Aircraft or (iii) if such
Aircraft has been sold, the net sales proceeds from the sale of such Aircraft
(unless such Aircraft is sold at a private sale to the Owner Trustee, Loan
Trustee, Owner Participant or any of their affiliates, in which case the fair
market sales value shall be used). (Leases, Section 15; Indenture, Section
4.04). If the Loan Trustee has validly terminated such Lease, the Loan Trustee
may not sell or lease or otherwise afford the use of such Aircraft to
Continental or any of its affiliates. (Indentures, Sections 4.03 and 4.04)
Notwithstanding that an Event of Default under an Indenture has occurred
and is continuing, so long as the Equipment Notes thereunder have not been
accelerated or the Loan Trustee has not taken action or notified the Owner
Trustee that it intends to take action to foreclose the lien of such Indenture
or otherwise commence the exercise of any significant remedy under such
Indenture or the related Lease, the Loan Trustee may not, without the consent of
the Owner Trustee, enter into any amendment, modification, waiver or consent in
respect of any of the provisions of the related Lease, which consent shall not
be unreasonably withheld if no right or interest of the relevant Owner Trustee
or Owner Participant would be diminished or impaired thereby. (Indentures,
Section 5.02)
Transfer of Owner Participant Interests
Subject to certain restrictions, each Owner Participant may transfer all or
any part of, or grant participations in, its interest in the related Aircraft.
(Participation Agreements, Section 12.1.1)
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
EXCHANGE OF OLD CERTIFICATES FOR NEW CERTIFICATES
The following summary describes the principal U.S. federal income tax
consequences to Certificateholders of the exchange of the Old Certificates for
New Certificates. This summary is intended to address the beneficial owners of
Certificates that are citizens or residents of the United States, corporations,
partnerships or other entities created or organized in or under the laws of the
United States or any State, or estates or trusts the income of which is subject
to U.S. federal income taxation regardless of its source that will hold the
Certificates as capital assets.
The exchange of Old Certificates for New Certificates (the "Exchange")
pursuant to the Exchange Offer will not be a taxable event for U.S. federal
income tax purposes. As a result, a holder of an Old Certificate whose Old
Certificate is accepted in an Exchange Offer will not recognize gain on the
Exchange. A tendering holder's tax basis in the New Certificates will be the
same as such holder's tax basis in its Old Certificates. A tendering holder's
holding period for the New Certificates received pursuant to the Exchange Offer
will include its holding period for the Old Certificates surrendered therefor.
ALL HOLDERS OF OLD CERTIFICATES ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISORS REGARDING THE UNITED STATES FEDERAL, STATE AND LOCAL TAX CONSEQUENCES
OF THE EXCHANGE OF OLD CERTIFICATES FOR NEW CERTIFICATES AND OF THE OWNERSHIP
AND DISPOSITION OF NEW CERTIFICATES RECEIVED IN THE EXCHANGE OFFER IN LIGHT OF
THEIR OWN PARTICULAR CIRCUMSTANCES.
ERISA CONSIDERATIONS
IN GENERAL
ERISA imposes certain requirements on employee benefit plans subject to
ERISA ("ERISA Plans"), and on those persons who are fiduciaries with respect to
ERISA Plans. Investments by ERISA Plans are subject to ERISA's general fiduciary
requirements, including the requirement of investment prudence and
diversification and the requirement that an ERISA Plan's investments be made in
accordance with the documents governing the ERISA Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit certain
transactions involving the assets of an ERISA Plan (as well as those plans that
are not subject to ERISA but which are subject to Section 4975 of the Code, such
as individual retirement accounts (together with ERISA Plans, "Plans")) and
certain persons (referred to as "parties in interest" or "disqualified persons")
having certain relationships to such Plans, unless a statutory or administrative
exemption is applicable to the transaction. A party in interest or disqualified
person who engages in a prohibited transaction may be subject to excise taxes
and other penalties and liabilities under ERISA and the Code.
The Department of Labor has promulgated a regulation, 29 CFR Section 2510.
3-101 (the "Plan Asset Regulation"), describing what constitutes the assets of a
Plan with respect to the Plan's investment in an entity for purposes of ERISA
and Section 4975 of the Code. Under the Plan Asset Regulation, if a Plan invests
in a Certificate, the Plan's assets would include both the Certificate and an
undivided interest in each of the underlying assets of the corresponding Trust,
including the Equipment Notes held by such Trust, unless it is established that
equity participation in the Trust by employee benefit plans (including Plans and
entities whose underlying assets include plan assets by reason of an employee
benefit plan's investment in the entity) is not "significant" within the meaning
of the Plan Asset Regulation. In that regard, the extent to which there is
equity participation in a particular Trust on the part of employee benefit plans
is not being monitored. If the assets of a
89
Trust were deemed to constitute the assets of a Plan, transactions involving the
assets of such Trust could be subject to the prohibited transaction provisions
of ERISA and Section 4975 of the Code unless a statutory or administrative
exemption were applicable to the transaction.
The fiduciary of a Plan that holds any Old Certificate or proposes to
exchange such Old Certificate and hold any New Certificates should consider
whether such holding or exchange may involve the indirect extension of credit to
a party in interest or a disqualified person. In addition, whether or not the
assets of a Trust are deemed to be Plan assets under the Plan Asset Regulation,
if Certificates are held by a Plan and Certificates of a subordinate Class are
held by a party in interest or a disqualified person with respect to such Plan,
the exercise by the holder of the subordinate Class of Certificates of its right
to purchase the senior Classes of Certificates upon the occurrence and during
the continuation of a Triggering Event could be considered to constitute a
prohibited transaction unless a statutory or administrative exemption were
applicable. Depending on the identity of the Plan fiduciary making the decision
to hold Certificates on behalf of a Plan, PTCE 91-38 (relating to investments by
bank collective investment funds), PTCE 84-14 (relating to transactions effected
by a "qualified professional asset manager"), PTCE 95-60 (relating to
investments by an insurance company general account), PTCE 96-23 (relating to
transactions directed by an in-house professional asset manager) or PTCE 90-1
(relating to investments by insurance company pooled separate accounts)
(collectively, the "Class Exemptions") could provide an exemption from the
prohibited transaction provisions of ERISA and Section 4975 of the Code. There
can be no assurance that any of the Class Exemptions or any other exemption will
be available with respect to any particular transaction involving the
Certificates.
Governmental plans and certain church plans, while not subject to the
fiduciary responsibility provisions of ERISA or the provisions of Section 4975
of the Code, may nevertheless be subject to state or other federal laws that are
substantially similar to the foregoing provisions of ERISA and the Code.
Fiduciaries of any such plans should consult with their counsel before
exchanging or holding any Certificates.
Any Plan fiduciary which proposes to cause a Plan to hold or exchange any
Certificates should consult with its counsel regarding the applicability of the
fiduciary responsibility and prohibited transaction provisions of ERISA and
Section 4975 of the Code to such an investment, and to confirm that such holding
or exchange will not constitute or result in a non-exempt prohibited transaction
or any other violation of an applicable requirement of ERISA.
CLASS A CERTIFICATES
In addition to the Class Exemptions referred to above, an individual
exemption may apply to the holding of Class A Certificates and the exchange of
Old Certificates that are Class A Certificates for New Certificates that are
Class A Certificates by Plans, provided that certain specified conditions are
met. In particular, the Department of Labor has issued individual administrative
exemptions to certain of the Initial Purchasers which are substantially the same
as the administrative exemption issued to The First Boston Corporation,
Prohibited Transaction Exemption 89-90 (54 Fed. Reg. 42597, October 17, 1989),
as amended (the "Underwriter Exemption"), which generally exempts from the
application of certain, but not all, of the prohibited transaction provisions of
Section 406 of ERISA and Section 4975 of the Code certain transactions relating
to the initial purchase, holding and subsequent secondary market sale of pass-
through certificates which represent an interest in a trust, the assets of which
include equipment notes secured by leases, provided that certain conditions set
forth in the Underwriter Exemption are satisfied.
The Underwriter Exemption sets a number of general and specific conditions
which must be satisfied for a transaction involving the initial purchase,
holding or secondary market sale of Class A Certificates to be eligible for
exemptive relief thereunder. In particular, the acquisition of Class A
Certificates by a Plan must be on terms that are at least as favorable to the
Plan as they would be in an arm's-length transaction with an unrelated party;
the rights and interests evidenced by the Certificates must not be subordinated
to the rights and
90
interests evidenced by other Certificates of the same trust estate; the
Certificates at the time of acquisition by the Plan must be rated in one of the
three highest generic rating categories by Moody's Investors Service, Inc.,
Standard & Poor's Ratings Group, Duff & Phelps Inc. or Fitch Investors Service,
Inc. (although not entirely clear, it would appear that the exchange of an Old
Certificate for a New Certificate should not constitute an "acquisition" of the
New Certificate for this purpose); and the investing Plan must be an accredited
investor as defined in Rule 501(a)(1) of Regulation D of the Commission under
the Securities Act.
The Underwriter Exemption does not apply to the Class B Certificates, the
Class C Certificates and the Class D Certificates. Even if all of the conditions
of the Underwriter Exemption are satisfied with respect to the Class A
Certificates, no assurance can be given that the Underwriter Exemption would
apply with respect to all transactions involving the Class A Certificates or the
assets of the Class A Trust. In particular, it appears that the Underwriter
Exemption would not apply to the purchase by Class B Certificateholders, Class C
Certificateholders or Class D Certificateholders of Class A Certificates in
connection with the exercise of their rights upon the occurrence and during the
continuance of a Triggering Event. Therefore, the fiduciary of a Plan
considering the continued holding of a Class A Certificate or the exchange of
Old Certificates for New Certificates should consider the availability of the
exemptive relief provided by the Underwriter Exemption, as well as the
availability of any other exemptions with respect to transactions to which the
Underwriter Exemption may not apply.
CLASS B CERTIFICATES, CLASS C CERTIFICATES AND CLASS D CERTIFICATES
The Class B Certificates, Class C Certificates Class D Certificates may not
be acquired by any Plan or by any entity that is using the assets of any Plan to
purchase or hold its interest in a Class B Certificate, Class C Certificate or
Class D Certificate (a "Plan Transferee"), except that such Certificates may be
acquired with the assets of an insurance company general account that may be
deemed to constitute Plan assets if the conditions of PTCE 95-60 have been
satisfied. Any insurance company that uses general account assets to hold Class
B Certificates, Class C Certificates or Class D Certificates that tenders such
Old Certificates in exchange for New Certificates will be required to represent
that PTCE 95-60 applies to its tender and the holding of such Class B
Certificates, Class C Certificates or Class D Certificates.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Certificates for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Certificates. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Certificates received in
exchange for Old Certificates where such Old Certificates were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, starting on the Expiration Date and ending on the close of business
180 days after the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until such date all broker-dealers effecting transactions
in the New Certificates may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of New Certificates
by broker-dealers. New Certificates received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in on or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Certificates or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Certificates. Any broker-
dealer that resells New Certificates that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New
91
Certificates may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit of any such resale of New Certificates and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Notes) other than commissions or concessions of any brokers or
dealers and will indemnify the Holders of the New Certificates (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the New Certificates is being passed upon for Continental
by Cleary, Gottlieb, Steen & Hamilton, New York, New York. Cleary, Gottlieb,
Steen & Hamilton will rely on the opinion of Richards, Layton & Finger,
Wilmington, Delaware, counsel for Wilmington Trust Company, as Trustee, as to
matters relating to the authorization, execution and delivery of the New
Certificates under the Pass Through Trust Agreements.
EXPERTS
The consolidated financial statements (including schedules) of Continental
Airlines, Inc. appearing in Continental Airlines, Inc.'s Annual Report (Form 10-
K) as of December 31, 1995 and 1994, and for the two years ended December 31,
1995 and the period April 28, 1993 through December 31, 1993 and the
consolidated statements of operations, redeemable and non-redeemable preferred
stock and common stockholders' equity and cash flows of Continental Airlines
Holdings, Inc. for the period January 1, 1993 through April 27, 1993,
incorporated by reference in this Prospectus have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon included
therein and incorporated herein by reference, in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
92
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus and the accompanying Letter of Transmittal and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company or the Exchange Agent. Neither this Prospectus nor
the accompanying Letter of Transmittal, or both together, constitute an offer to
sell or the solicitation of an offer to buy securities in any jurisdiction to
any person to whom it is unlawful to make such offer or solicitation. Neither
the delivery of this Prospectus, nor the accompanying Letter of Transmittal, or
both together, nor any sale made hereunder shall, under any circumstances,
create an implication that there has been no change in the affairs of the
Company since the date hereof or that the information contained herein is
correct at any time subsequent to the date hereof or thereof.
TABLE OF CONTENTS
Page
Available Information...........................................
Incorporation of Certain Documents by Reference.................
Prospectus Summary..............................................
Risk Factors....................................................
Recent Developments.............................................
Use of Proceeds.................................................
Ratio of Earnings to Fixed Charges..............................
Selected Financial Data.........................................
The Exchange Offer..............................................
Description of New Certificates.................................
Description of the Liquidity Facilities.........................
Description of the Intercreditor Agreement......................
Description of the Aircraft and Appraisals......................
Description of the Equipment Notes..............................
Certain U.S. Federal Income Tax Consequences....................
ERISA Considerations............................................
Plan of Distribution............................................
Legal Matters...................................................
Experts.........................................................
Continental Airlines, Inc.
Offer to Exchange
Pass Through Certificates, Series 1996,
which have been registered under the
Securities Act of 1933, as amended,
for any and all outstanding
Pass Through Certificates, Series 1996
PROSPECTUS
, 1996
Information contained herein is subject to completion
or amendment. A registration statement relating to
these securities has been filed with the Securities and
Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any
sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION - DATED MAY 30, 1996
PROSPECTUS
Continental Airlines, Inc.
Pass Through Certificates
Up to $510,733,000 aggregate principal amount of Pass
Through Certificates (the "Certificates") (or such greater
amount, if Certificates are issued at an original issue discount,
as shall result in aggregate proceeds of $510,733,000 may be
offered for sale from time to time pursuant to this Prospectus
and related Prospectus Supplements (as defined below).
Certificates may be issued in one or more series in amounts, at
prices and on terms to be determined at the time of the offering.
In respect of each offering of Certificates, a separate
Continental Airlines Pass Through Trust for each series of
Certificates being offered (each, a "Trust") will be formed
pursuant to a Pass Through Trust Agreement (a "Basic Agreement")
and the supplement thereto (a "Trust Supplement") relating to
such Trust between Continental Airlines, Inc. (the "Company"),
and Shawmut Bank Connecticut, National Association, or First
Security Bank of Utah, National Association (each a "Trustee"),
as trustee. Each Certificate of a series will represent a
fractional undivided interest in the related Trust and, except as
described in the applicable Prospectus Supplement, will have no
rights, benefits or interests in respect of any other Trust. The
property of the Trusts will consist of securities including,
equipment notes issued (a) on a nonrecourse basis by one or more
owner trustees pursuant to separate leveraged lease transactions
(the "Leased Aircraft Notes") to finance or refinance a portion
of the equipment cost of aircraft, including engines (each, a
"Leased Aircraft" and collectively, the "Leased Aircraft"), which
have been or will be leased to the Company, or (b) with recourse
to the Company (the "Owned Aircraft Notes" and, together with any
Leased Aircraft Notes, the "Equipment Notes") to finance all or a
portion of the equipment cost of, or to purchase all or a portion
of the outstanding debt with respect to, aircraft, including
engines (each, an "Owned Aircraft" and collectively, the "Owned
Aircraft" and, together with Leased Aircraft, the "Aircraft"),
which have been or will be purchased and owned by the Company.
Certain specific terms of the particular Certificates in
respect of which this Prospectus is being delivered are set forth
in the accompanying Prospectus Supplement (the "Prospectus
93
Supplement"), including, where applicable, the specific
designation, form, aggregate principal amount, initial public
offering price and distribution dates relating to such
Certificates, the Trustees, the Trust or Trusts relating to such
Certificates, the Equipment Notes to be purchased by such Trust
or Trusts, the Aircraft relating to such Equipment Notes, the
leveraged lease transactions or financing arrangements, as the
case may be, relating to such Equipment Notes, a description of
any other securities to be purchased by such Trust or Trusts and
other special terms relating to such Certificates and the net
proceeds from the offering of such Certificates. If so specified
in the applicable Prospectus Supplement, the Certificates may be
issued in accordance with a book-entry system.
Equipment Notes may be issued in respect of an Aircraft in
one or more series, each series having its own interest rate and
final maturity date. One or more series of Equipment Notes
issued in respect of an Aircraft may be senior or subordinate to
one or more other series of Equipment Notes. A separate Trust
will purchase all of the series of the Equipment Notes relating
to the respective Aircraft and having an interest rate equal to
the interest rate applicable to the Certificates issued by such
Trust and maturity dates occurring on or before the final
distribution date applicable to such Certificates. Interest paid
on the Equipment Notes and other securities, if any, held in each
Trust will be passed through to the holders of the Certificates
relating to such Trust on the dates and at the rate per annum set
forth in the Prospectus Supplement relating to such Certificates
until the final distribution date for such Trust. Principal paid
on the Equipment Notes and other securities, if any, held in each
Trust will be passed through to the holders of the Certificates
relating to such Trust in scheduled amounts on the dates set
forth in the Prospectus Supplement relating to such Certificates
until the final distribution date for such Trust.
The Equipment Notes issued with respect to each Aircraft
will be secured by a security interest in the owner's right,
title and interest in such Aircraft and, in the case of the
Leased Aircraft, by a security interest in the lessor's right,
title and interest in the lease relating thereto, including the
right to receive rentals payable by the Company in respect of
such Leased Aircraft. Although the Leased Aircraft Notes will
not be direct obligations of, or guaranteed by, the Company, the
amounts unconditionally payable by the Company for lease of
Leased Aircraft will be sufficient to pay in full when due all
payments scheduled to be made on the corresponding Leased
Aircraft Notes.
The Certificates may be sold to or through underwriters,
through dealers or agents or directly to purchasers. See "Plan
of Distribution". The accompanying Prospectus Supplement sets
forth the names of any underwriters, dealers or agents involved
in the sale of the Certificates in respect of which this
Prospectus is being delivered and any applicable fee, commission
or discount arrangements with them. See "Plan of Distribution"
for information concerning secondary trading of the Certificates.
This Prospectus may not be used to consummate sales of
Certificates unless accompanied by a Prospectus Supplement.
94
--------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------------------
The date of this Prospectus is , 1996.
95
No dealer, salesman or other person has been authorized to
give any information or to make any representation not contained
in this Prospectus or any accompanying Prospectus Supplement and,
if given or made, such information or representation must not be
relied upon as having been authorized by the Company or any
underwriter, dealer, broker or agent. This Prospectus and any
accompanying Prospectus Supplement do not constitute an offer to
sell or a solicitation of an offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction.
--------------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements
and other information may be inspected and copied at the
following public reference facilities maintained by the
Commission: Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Suite 1300, Seven World Trade Center, New
York, New York 10048; and The Citicorp Center, Suite 1400, 500
West Madison Street, Chicago, Illinois 60661. Copies of such
material may also be obtained from the Public Reference Section
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of prescribed
rates. In addition, reports, proxy statements and other
information concerning Continental may be inspected and copied at
the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
Continental is the successor to Continental Airlines
Holdings, Inc. ("Holdings"), which merged with and into
Continental on April 27, 1993. Holdings had also been subject to
the informational requirements of the Exchange Act.
This Prospectus constitutes a part of a registration
statement on Form S-3 (together with all amendments and exhibits,
the "Registration Statement") filed by Continental with the
Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement, and
reference is hereby made to the Registration Statement for further
information with respect to Continental and Holdings and the
securities offered hereby. Although statements concerning and
summaries of certain documents are included herein, reference is made
to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. These documents
may be inspected without charge at the office of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and copies may be obtained at fees and charges prescribed by the
Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File
No. 0-9781) are hereby incorporated by reference in this Prospectus:
96
(i) Continental's Annual Report on Form 10-K for the year ended
December 31, 1995 (as amended by Forms 10-K/A1 and 10-K/A2 filed
on March 8, 1996 and April 10, 1996, respectively), (ii) Continental's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996
and (iii) Continental's Current Reports on Forms 8-K, filed on
January 31, 1996, March 26, 1996 and May 7, 1996.
All reports and any definitive proxy or information
statements filed by Continental pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the
Securities offered hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated herein by
reference, or contained in this Prospectus, shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
Continental will provide without charge to each person to
whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all documents
incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests for such documents
should be directed to Continental Airlines, Inc., 2929 Allen
Parkway, Suite 2010, Houston, Texas 77019, Attention: Secretary,
telephone (713) 834-2950.
THE COMPANY
Continental Airlines, Inc. is a major United States air
carrier engaged in the business of transporting passengers, cargo
and mail. Continental is the fifth largest United States airline
(as measured by revenue passenger miles in the first three months
of 1996) and, together with its wholly owned subsidiary,
Continental Express, Inc. ("Express"), and its 91%-owned
subsidiary, Continental Micronesia, Inc. ("CMI"), serves 175
airports worldwide.
The Company operates its route system primarily through
domestic hubs at Newark, Houston Intercontinental and Cleveland,
and a Pacific hub on Guam and Saipan. Each of Continental's
three U.S. hubs is located in a large business and population
center, contributing a high volume of "origin and destination"
traffic. The Guam/Saipan hub is strategically located to provide
service from Japanese and other Asian cities to popular resort
destinations in the western Pacific. Continental is the primary
carrier at each of these hubs, accounting for 51%, 78%, 54% and
58% of all daily jet departures, respectively.
Continental directly serves 118 U.S. cities, with additional
cities (principally in the western and southwestern United
States) connected to Continental's route system under agreements
with America West Airlines, Inc. ("America West"). Internationally,
97
Continental flies to 57 destinations and offers
additional connecting service through alliances with foreign
carriers. Continental operates 52 weekly departures to five
European cities and markets service to four other cities through
code-sharing agreements. Continental is one of the leading
airlines providing service to Mexico and Central America, serving
more destinations in Mexico than any other United States airline.
In addition, Continental flies to four cities in South America
and plans to commence service between Newark and Bogota,
Colombia, with service on to Quito, Ecuador, in June 1996.
Through its Guam/Saipan hub, Continental provides extensive
service in the western Pacific, including service to more
Japanese cities than any other United States carrier.
The Company is a Delaware corporation. Its executive
offices are located at 2929 Allen Parkway, Suite 2010, Houston,
Texas 77019, and its telephone number is (713) 834-2950.
FORMATION OF THE TRUSTS
In respect of each offering of Certificates, one or more
Trusts will be formed, and the related Certificates issued,
pursuant to separate Trust Supplements to be entered into between
a Trustee and Continental in accordance with the terms of the
relevant Basic Agreement. Concurrently with the execution and
delivery of each Trust Supplement, the relevant Trustee, on
behalf of the Trust formed thereby, will enter into a separate
financing, refinancing or purchase agreement with respect to one
or more Equipment Notes (each such financing, refinancing or
purchase agreement being herein referred to as a "Note Purchase
Agreement") relating to one or more of the Aircraft described in
the applicable Prospectus Supplement. Pursuant to the applicable
Note Purchase Agreement or Note Purchase Agreements, the
Trustee, on behalf of each Trust, will purchase all of the
series of Equipment Notes relating to the respective Aircraft
and having an interest rate equal to the interest rate
applicable to the Certificates issued by such Trust. The
maturity dates of the Equipment Notes acquired by each Trust
will occur on or before the final distribution date applicable
to the Certificates that will be issued by such Trust. The
Trustee will distribute the amount of payments of principal,
premium, if any, and interest received by it as holder of
the Equipment Notes to the Certificateholders (as defined
in the Basic Agreements) of the Trust in which such
Equipment Notes are held. See "Description of the Certificates"
and "Description of the Equipment Notes".
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus
Supplement, the Certificates offered pursuant to any Prospectus
Supplement will be issued in order to facilitate (a) the
financing or refinancing of the debt portion and, in certain
cases, the refinancing of some of the equity portion of one or
more separate leveraged lease transactions entered into by
Continental, as lessee, with respect to the Leased Aircraft as
described in the applicable Prospectus Supplement, (b) the
financing of the aggregate principal amount of debt to be issued,
or the purchase of the aggregate principal amount of the debt
previously issued, by Continental in respect of the Owned
98
Aircraft as described in the applicable Prospectus Supplement and
(c) the purchase of certain merchandise, insurance and services,
as described in the Prospectus Supplement. Unless otherwise
specified in the applicable Prospectus Supplement, the proceeds
from the sale of the Certificates offered pursuant to any
Prospectus Supplement will be used by the Trustee on behalf of
the applicable Trust or Trusts to purchase either (a) Leased
Aircraft Notes issued by the respective Owner Trustee or Owner
Trustees (as defined below) to finance or refinance a portion (as
specified in the applicable Prospectus Supplement) of the
equipment cost of the related Leased Aircraft or (b) Owned
Aircraft Notes issued by Continental to finance all or a portion
(as specified in the applicable Prospectus Supplement) of the
equipment cost of the related Owned Aircraft, as described in the
Prospectus Supplement. Unless otherwise specified in the
applicable Prospectus Supplement, any portion of the proceeds
from the sale of Certificates not used by the Trustee to purchase
Equipment Notes on or prior to the date specified therefor
in the applicable Prospectus Supplement will be distributed
on a Special Distribution Date (as hereinafter defined)
to the applicable Certificateholders, together with
interest, but without premium. See "Description of the
Certificates -- Special Distribution Upon Unavailability of
Aircraft".
The Leased Aircraft Notes will be issued under separate
Trust Indenture and Security Agreements (the "Leased Aircraft
Indentures") between an institution specified in the related
Prospectus Supplement as trustee thereunder (in such capacity,
herein referred to as the "Loan Trustee") and an institution
specified in the related Prospectus Supplement acting, not in its
individual capacity, but solely as owner trustee (an "Owner
Trustee") of a separate trust for the benefit of one or more
institutional investors (each individually, and collectively as
to each such trust, the "Owner Participant"). With respect to
each Leased Aircraft, the related Owner Participant will have
provided or will provide from sources other than the Leased
Aircraft Notes a portion (as specified in the applicable
Prospectus Supplement) of the equipment cost of the related
Leased Aircraft. No Owner Participant, however, will be
personally liable for any amount payable under the related Leased
Aircraft Indenture or the Leased Aircraft Notes issued
thereunder. Simultaneously with the acquisition of each Leased
Aircraft, the related Owner Trustee leased or will lease such
Aircraft to Continental pursuant to a separate lease agreement
(each such lease agreement being herein referred to as a
"Lease"). The Owned Aircraft Notes will be issued under separate
Trust Indenture and Security Agreements (the "Owned Aircraft
Indentures" and, collectively, with any Leased Aircraft
Indentures, the "Indentures") between the applicable Loan Trustee
and Continental.
RATIOS OF EARNINGS TO FIXED CHARGES
The following information for the years ended December 31,
1991 and 1992 and for the period January 1, 1993 through April
27, 1993 relates to Continental's predecessor, Holdings.
Information for the period April 28, 1993 through December 31,
1993 for the years ended December 31, 1994 and 1995 and for
the three months ended March 31, 1995 and 1996 relates
99
to Continental. The information as to Continental has not been
prepared on a consistent basis of accounting with the information
as to Holdings due to Continental's adoption, effective April 27,
1993, of fresh start reporting in accordance with the American
Institute of Certified Public Accountants' Statement of Position
90-7 "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code".
For the years ended December 31, 1991 and 1992, for the
periods January 1, 1993 through April 27, 1993 and April 28, 1993
through December 31, 1993, for the year ended December 31, 1994
and for the three months ended March 31, 1995, earnings were
not sufficient to cover fixed charges. Additional earnings
of $316 million, $131 million, $979 million, $60 million,
$667 million and $28 million, respectively, would have been
required to achieve ratios of earnings to fixed charges of
1.0. The ratio of earnings to fixed charges for the year
ended December 31, 1995 was 1.53. The ratio of earnings to
fixed charges for the three months ended March 31, 1996 was
1.70. For purposes of calculating this ratio, earnings
consist of earnings before taxes and minority interest plus
interest expense (net of capitalized interest), the portion of
rental expense representative of interest expense and
amortization of previously capitalized interest. Fixed charges
consist of interest expense and the portion of rental expense
representative of interest expense.
DESCRIPTION OF THE CERTIFICATES
In connection with each offering of Certificates, one or
more separate trusts will be formed and one or more series of
Certificates will be issued pursuant to a Basic Agreement either
between Continental and Shawmut Bank Connecticut, National
Association, as Trustee, or between Continental and First
Security Bank of Utah, National Association, as Trustee, and one
or more separate Trust Supplements to be entered into between
Continental and the relevant Trustee. The statements made under
this caption are summaries, and reference is made to the detailed
provisions of the Basic Agreements, which have been filed as
exhibits to the Registration Statement of which this Prospectus
is a part. The Basic Agreements are substantially identical,
except for the identity of the Trustee. The summaries relate to
the Basic Agreements and each of the Trust Supplements, the
Trusts to be formed thereby and the Certificates to be issued by
each Trust except to the extent, if any, described in the
applicable Prospectus Supplement. The Prospectus Supplement that
accompanies this Prospectus contains a glossary of the material
terms used with respect to the specific series of Certificates
being offered thereby and identifies which Trustee will act with
respect to each specific series of Certificates. The Trust
Supplement relating to each series of Certificates and the forms
of the related Note Purchase Agreement and Indenture and, if the
Certificates relate to Leased Aircraft, the forms of the related
Lease, Trust Agreement and Participation Agreement will be filed as
exhibits to a Current Report on Form 8-K, Quarterly Report on
Form 10-Q or Annual Report on Form 10-K, to be filed by
Continental with the Commission. Citations to certain relevant
sections of the Basic Agreements appear below in parentheses.
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The Certificates offered pursuant to this Prospectus will be
limited to $510,733,000 aggregate principal amount (or such
greater amount if Certificates are issued at an original issue
discount, as shall result in aggregate proceeds to Continental of
$510,733,000).
Certain provisions of the description of the Certificates in
this Prospectus do not necessarily apply to one Certificate of
each Trust which may be issued in a denomination of less than
$1,000.
General
Each Certificate will represent a fractional undivided
interest in the Trust created by the Trust Supplement pursuant to
which such Certificate was issued and all payments and
distributions shall be made only from the related Trust Property
(as defined below). The property of each Trust (the "Trust
Property") will include the Equipment Notes held in such Trust,
all monies at any time paid thereon, all monies due and to
become due thereunder and funds from time to time deposited
with the Trustee for the benefit of Certificateholders in
accounts relating to such Trust. Each Certificate will
represent a pro rata share of the outstanding principal
amount of the Equipment Notes held in the related Trust
and, unless otherwise specified in the applicable Prospectus
Supplement, will be issued in minimum denominations of
$1,000 or any integral multiple thereof. (Sections 2.1
and 3.1) The Certificates do not represent an interest
in or obligation of Continental, the Trustee, any of the
Loan Trustees or Owner Trustees in their individual capacities,
any Owner Participant, or any affiliate of any of the foregoing.
Reference is made to the Prospectus Supplement that
accompanies this Prospectus for a description of the specific
series of Certificates being offered thereby, including: (1) the
specific designation and title of such Certificates; (2) the
Regular Distribution Dates (as hereinafter defined) and Special
Distribution Dates (as hereinafter defined) applicable to such
Certificates; (3) the specific form of such Certificates,
including whether or not such Certificates are to be issued in
accordance with a book-entry system; (4) a description of the
Equipment Notes to be purchased by the related Trust, including
(a) whether or not such Equipment Notes are senior or subordinate
to any other Equipment Notes and if so, the terms and conditions
pursuant to which such Equipment Notes are senior to or
subordinate to other Equipment Notes, and (b) the period or
periods within which, the price or prices at which, and the terms
and conditions upon which such Equipment Notes may or must be
redeemed, in whole or in part; (5) a description of each related
Aircraft, including whether the Aircraft is a Leased Aircraft or
an Owned Aircraft; (6) a description of each related Note
Purchase Agreement and Indenture, including a description of the
events of default under each such related Indenture, the remedies
exercisable upon the occurrence of such events of default and any
limitations on the exercise of such remedies with respect to the
related Equipment Notes; (7) if such Certificates relate to
Leased Aircraft, a description of each related Lease, Trust
Agreement and Participation Agreement, including (a) the names of
each related Owner Trustee, (b) a description of the events of
101
default under each such related Lease, the remedies exercisable
upon the occurrence of such events of default and any limitations
on the exercise of such remedies, and (c) the rights, if any, of
each related Owner Trustee and/or Owner Participant to cure
failures of Continental to pay rent under the related Lease;
(8) the extent, if any, to which the provisions of the operative
documents applicable to such Equipment Notes may be amended by
the parties thereto without the consent of the holders of, or
only upon the consent of the holders of a specified percentage of
aggregate principal amount of, such Equipment Notes; (9) the
extent, if any, to which the Company may acquire Certificates and
deliver such Certificates or cash to the respective Trusts and
obtain the release of Equipment Notes held by such Trusts; (10)
whether the Certificates are issuable as registered Certificates,
bearer Certificates or both, and the terms upon which bearer
Certificates may be exchanged for registered Certificates; and
(11) any other special terms pertaining to such Certificates,
including any modification of the terms set forth herein.
Book-Entry Registration
The Certificates of each Trust may be issued in bearer or
fully registered form and may be issued pursuant to a book-entry
system. In the event that the Certificates of any series in
registered form are issued pursuant to a book-entry system, it is
anticipated that such Certificates will be registered in the name
of Cede & Co. ("Cede") as the nominee of The Depository Trust
Company ("DTC"). No person acquiring an interest in such
Certificates ("Certificate Owner") will be entitled to receive a
certificate representing such person's interest in such
Certificates, except as set forth below under "Definitive
Certificates." Unless and until Definitive Certificates are
issued under the limited circumstances described herein, all
references to actions by Certificateholders shall refer to
actions taken by DTC upon instructions from DTC Participants (as
defined below), and all references herein to distributions,
notices, reports and statements to Certificateholders shall
refer, as the case may be, to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of such
Certificates, or to DTC Participants for distribution to
Certificate Owners in accordance with DTC procedures. (Section
3.9)
Continental has been advised that DTC is a limited-purpose
trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to
section 17A of the Exchange Act. DTC was created to hold
securities for its participants ("DTC Participants") and to
facilitate the clearance and settlement of securities
transactions between DTC Participants through electronic
book-entries, thereby eliminating the need for physical transfer
of certificates. DTC Participants include securities brokers and
dealers, banks, trust companies and clearing corporations.
Indirect access to the DTC system also is available to others
such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a DTC
Participant either directly or indirectly ("Indirect
102
Participants").
Certificate Owners that are not DTC Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer
ownership of, or other interests in, the Certificates may do so
only through DTC Participants and Indirect Participants. In
addition, Certificate Owners will receive all distributions of
principal and interest, as well as notices and other reports,
from the relevant Trustee through DTC Participants or Indirect
Participants, as the case may be. Under a book-entry format,
Certificate Owners may experience some delay in their receipt of
payments, as well as notices and other reports, since such
payments, notices and other reports will be forwarded by the
relevant Trustee to Cede, as nominee for DTC. DTC will forward
such payments, notices and other reports to DTC Participants,
which will thereafter forward such payments, notices and other
reports to Indirect Participants or Certificate Owners, as the
case may be, in accordance with customary industry practices.
The forwarding of such distributions to the Certificate Owners
will be the responsibility of such DTC Participants. Unless and
until the Definitive Certificates are issued under the limited
circumstances described herein, it is anticipated that the only
"Certificateholder" will be Cede, as nominee of DTC. Certificate
Owners will not be recognized by the relevant Trustee as
Certificateholders, as such term is used in the Basic Agreements,
and Certificate Owners will be permitted to exercise the rights
of Certificateholders only indirectly through DTC and DTC
Participants.
Under the rules, regulations and procedures creating and
affecting DTC and its operations (the "Rules"), DTC is required
to make book-entry transfers of the Certificates among DTC
Participants on whose behalf it acts with respect to the
Certificates and to receive and transmit distributions of
principal, premium, if any, and interest with respect to the
Certificates. DTC Participants and Indirect Participants with
which Certificate Owners have accounts with respect to the
Certificates similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of their
respective customers. Accordingly, although Certificate Owners
will not possess the Certificates, the Rules provide a mechanism
by which Certificate Owners will receive payments and will be
able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who
in turn act on behalf of Indirect Participants or Certificate
Owners, the ability of a Certificate Owner to pledge the
Certificates to persons or entities that do not participate in
the DTC system, or to otherwise act with respect to such
Certificates, may be limited due to the inability of Certificate
Owners to obtain a physical certificate for such Certificates.
Continental has been advised that DTC will take any action
permitted to be taken by a Certificateholder under a Basic
Agreement only at the direction of one or more DTC Participants
to whose accounts with DTC the Certificates are credited.
Additionally, Continental has been advised that in the event any
action requires approval by Certificateholders of a certain
percentage of beneficial interest in each Trust, DTC will take
such action only at the direction of and on behalf of DTC
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Participants whose holders include undivided interests that
satisfy any such percentage. DTC may take conflicting actions
with respect to other undivided interests to the extent that such
actions are taken on behalf of DTC Participants whose holders
include such undivided interests.
Neither Continental nor the relevant Trustee will have any
liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in the
Certificates held by Cede, as nominee for DTC, or for
maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Definitive Certificates
In the event Certificates in registered form are issued
pursuant to a book-entry system as described above, such
Certificates may be issued in certificated form ("Definitive
Certificates") to Certificate Owners or their nominees, rather
than to DTC or its nominee, only if (i) Continental advises the
relevant Trustee in writing that DTC is no longer willing or able
to discharge properly its responsibilities as depository with
respect to such Certificates and Continental is unable to locate
a qualified successor, (ii) Continental, at its option, elects to
terminate participation in the book-entry system through DTC in
respect of the Certificates or (iii) after the occurrence of an
Indenture Default (as hereinafter defined), Certificate Owners
with fractional undivided interests aggregating not less than a
majority in interest in such Trust advise the relevant Trustee
and Continental through DTC in writing that the continuation of a
book-entry system through DTC (or a successor thereto) is no
longer in the Certificate Owners' best interest. (Section 3.9)
Upon the occurrence of any event described in the
immediately preceding paragraph, the relevant Trustee will be
required to notify all Certificate Owners through DTC of the
availability of Definitive Certificates. Upon surrender by DTC
of the certificates representing the Certificates and receipt of
written instructions for re-registration, the relevant Trustee
will reissue the Certificates as Definitive Certificates to the
persons designated by DTC in such written instructions.
(Section 3.9)
Distributions of principal, premium, if any, and interest
with respect to Certificates will thereafter be made by the
relevant Trustee directly in accordance with the procedures set
forth in the applicable Basic Agreement and the applicable Trust
Supplements, to holders in whose names the Definitive
Certificates were registered at the close of business on the
applicable record date. Such distributions will be made by check
mailed to the address of each such holder as it appears on the
register maintained by the relevant Trustee. The final payment
on any Certificate, however, will be made only upon presentation
and surrender of such Certificate at the office or agency
specified in the notice of final distribution to
Certificateholders. (Sections 4.2 and 11.1)
Definitive Certificates in registered form will be freely
transferable and exchangeable at the office of the relevant
Trustee upon compliance with the requirements set forth in the
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applicable Basic Agreement and the applicable Trust Supplements.
No service charge will be imposed for any registration of
transfer or exchange, but payment of a sum sufficient to cover
any tax or other governmental charge shall be required. (Section
3.4)
Payments and Distributions
Payments of principal, premium, if any, and interest with
respect to the Equipment Notes held in each Trust will be
distributed by the relevant Trustee to Certificateholders
of such Trust on the dates specified in the applicable
Prospectus Supplement, except in certain cases when some
or all of such Equipment Notes are in default. See
"-- Events of Default and Certain Rights Upon an Event
of Default". Payments of principal of, and interest on,
the unpaid principal amount of the Equipment Notes held in each
Trust will be scheduled to be received by the relevant Trustee on
the dates specified in the applicable Prospectus Supplement (such
scheduled payments of interest and principal on the Equipment
Notes are herein referred to as "Scheduled Payments," and the
dates specified in the applicable Prospectus Supplement are
herein referred to as "Regular Distribution Dates"). See
"Description of the Equipment Notes -- General". Except as
otherwise specified in the applicable Prospectus Supplement, each
Certificateholder of each Trust will be entitled to receive a pro
rata share of any distribution in respect of Scheduled Payments
of principal and interest made on the Equipment Notes held in the
Trust.
Payments of principal, premium, if any, and interest
received by the relevant Trustee on account of the early
redemption, if any, of the Equipment Notes relating to one or
more Aircraft held in a Trust, and payments, other than Scheduled
Payments received on a Regular Distribution Date, received by the
relevant Trustee following a default in respect of Equipment
Notes held in a Trust relating to one or more Aircraft ("Special
Payments") will be distributed on the date determined as
described in the applicable Prospectus Supplement (a "Special
Distribution Date"). The relevant Trustee will mail notice to
the Certificateholders of record of the applicable Trust not less
than 20 days prior to the Special Distribution Date on which any
Special Payment is scheduled to be distributed by the relevant
Trustee stating such anticipated Special Distribution Date.
(Section 4.2)
Pool Factors
Unless there has been an early redemption, a purchase of an
issue of Equipment Notes by the related Owner Trustee after an
Indenture Default (as defined below) or a default in the payment
of principal or interest, in respect of one or more issues of the
Equipment Notes held in a Trust, as described in the applicable
Prospectus Supplement or below in "-- Events of Default and
Certain Rights Upon an Event of Default", the Pool Factor (as
defined below) for the Trusts will decline in proportion to the
scheduled repayments of principal on the Equipment Notes held in
such Trust as described in the applicable Prospectus Supplement.
In the event of such redemption, purchase or default, the Pool
Factor and the Pool Balance (as defined below) of each Trust so
105
affected will be recomputed after giving effect thereto and
notice thereof will be mailed to the Certificateholders of such
Trust. Each Trust will have a separate Pool Factor.
The "Pool Balance" for each Trust indicates, as of any date,
the aggregate unpaid principal amount of the Equipment Notes held
in such Trust on such date plus any amounts in respect of
principal on such Equipment Notes held by the Trustee and not yet
distributed. The Pool Balance for each Trust as of any Regular
Distribution Date or Special Distribution Date shall be computed
after giving effect to the payment of principal, if any, on the
Equipment Notes held in such Trust and distribution thereof to be
made on that date.
The "Pool Factor" for each Trust as of any Regular
Distribution Date or Special Distribution Date is the quotient
(rounded to the seventh decimal place) computed by dividing
(i) the Pool Balance by (ii) the aggregate original principal
amount of the Equipment Notes held in such Trust. The Pool
Factor for each Trust as of any Regular Distribution Date or
Special Distribution Date shall be computed after giving effect
to the payment of principal, if any, on the Equipment Notes held
in such Trust and distribution thereof to be made on that date.
The Pool Factor for each Trust will initially be l.0000000;
thereafter, the Pool Factor for each Trust will decline as
described above to reflect reductions in the Pool Balance of such
Trust. The amount of a Certificateholder's pro rata share of the
Pool Balance of a Trust can be determined by multiplying the
original denomination of the holder's Certificate of such Trust
by the Pool Factor for such Trust as of the applicable Regular
Distribution Date or Special Distribution Date. The Pool Factor
and the Pool Balance for each Trust will be mailed to
Certificateholders of such Trust on each Regular Distribution
Date and Special Distribution Date.
Reports to Certificateholders
On each Regular Distribution Date and Special Distribution
Date, the relevant Trustee will include with each distribution of
a Scheduled Payment or Special Payment to Certificateholders of
record of the related Trust as of the immediately preceding
record date a statement, giving effect to such distribution to be
made on such Regular Distribution Date or Special Distribution
Date, setting forth the following information (per $1,000
aggregate principal amount of Certificates for such Trust, as to
(i) and (ii) below):
(i) the amount of such distribution allocable to
principal and the amount allocable to premium, if any;
(ii) the amount of such distribution allocable to
interest; and
(iii) the Pool Balance and the Pool Factor for
such Trust. (Section 4.3(a))
So long as the Certificates are registered in the name of
Cede, as nominee for DTC, (a) on the record date immediately
prior to each Regular Distribution Date and Special Distribution
Date, the Trustee will request from DTC a Securities Position
106
Listing setting forth the names of all DTC Participants reflected
on DTC's books as holding interests in the Certificates on such
record date and (b) on each Regular Distribution Date and Special
Distribution Date, the relevant Trustee will deliver to each such
DTC Participant the statement described above and will make
available additional copies as requested by such DTC Participant
for forwarding by such DTC Participant to Certificate Owners.
(Section 3.9(c))
In addition, after the end of each calendar year, the
relevant Trustee will prepare for each Certificateholder of
record of each Trust at any time during the preceding calendar
year a report containing the sum of the amounts determined
pursuant to clauses (i) and (ii) above with respect to the Trust
for such calendar year or, in the event such person was a
Certificateholder of record during only a portion of such
calendar year, for the applicable portion of such calendar year,
and such other items as are readily available to the relevant
Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation
of its federal income tax returns. (Section 4.3(b)) Such report
and such other items shall be prepared on the basis of
information supplied to the relevant Trustee by the DTC
Participants and shall be delivered by the relevant Trustee to
such DTC Participants to be available for forwarding by such DTC
Participants to Certificate Owners in the manner described above.
At such time, if any, as the Certificates are issued in the
form of Definitive Certificates, the relevant Trustee will
prepare and deliver the information described above to each
Certificateholder of record of each Trust as the name and period
of beneficial ownership of such Certificateholder appears on the
records of the registrar of the Certificates.
Voting of Equipment Notes
The Trustee, as holder of the Equipment Notes held in each
Trust, has the right to vote and give consents and waivers with
respect to such Equipment Notes under the related Indentures.
Each Basic Agreement sets forth the circumstances in which the
Trustee thereunder shall direct any action or cast any vote as
the holder of the Equipment Notes held in the applicable Trust at
its own discretion and the circumstances in which such Trustee
shall seek instructions from the Certificateholders of such
Trust. Prior to an Event of Default (as defined below) with
respect to any Trust, the principal amount of the Equipment Notes
held in such Trust directing any action or being voted for or
against any proposal shall be in proportion to the principal
amount of Certificates held by the Certificateholders of such
Trust taking the corresponding position. (Sections 6.1 and 10.1)
Events of Default and Certain Rights Upon an Event of Default
An event of default under the Basic Agreement (an "Event of
Default") is defined as the occurrence and continuance of an
event of default under one or more of the Indentures (an
"Indenture Default"). The Indenture Defaults under an Indenture
will be described in the applicable Prospectus Supplement and,
with respect to the Leased Aircraft, will include an event of
default under the related Lease (a "Lease Event of Default").
107
Since the Equipment Notes issued under an Indenture may be held
in more than one Trust, a continuing Indenture Default under such
Indenture would result in an Event of Default under each such
Trust. There will be, however, no cross-default provisions in
the Indentures, and events resulting in an Indenture Default
under any particular Indenture will not necessarily result in an
Indenture Default occurring under any other Indenture. If an
Indenture Default occurs in fewer than all of the Indentures,
notwithstanding the treatment of Equipment Notes issued under any
Indenture under which an Indenture Default has occurred, payments
of principal and interest on the Equipment Notes issued pursuant
to Indentures with respect to which an Indenture Default has not
occurred will continue to be distributed to the holders of the
Certificates as originally scheduled.
With respect to each Leased Aircraft, the applicable Owner
Trustee and Owner Participant will, under the related Indenture,
have the right under certain circumstances to cure Indenture
Defaults that result from the occurrence of a Lease Event of
Default under the related Lease. If the Owner Trustee or the
Owner Participant exercises such cure right, the Indenture
Default and consequently the Event of Default with respect to the
related Trust or Trusts will be deemed to have been cured.
The Basic Agreements provide that, as long as an Indenture
Default under any Indenture relating to the Equipment Notes held
in a Trust shall have occurred and be continuing, the Trustee of
such Trust may vote all of the Equipment Notes issued under such
Indenture that are held in such Trust and, upon the direction of
the holders of Certificates evidencing fractional undivided
interests aggregating not less than a majority in interest of
such Trust, shall vote a corresponding majority of such Equipment
Notes in favor of directing the Loan Trustee under such Indenture
to declare the unpaid principal amount of all Equipment Notes
issued under such Indenture and any accrued and unpaid interest
thereon to be due and payable. The Basic Agreements also provide
that, if an Indenture Default under any Indenture relating to the
Equipment Notes held in a Trust shall have occurred and be
continuing, the Trustee of such Trust may, and upon the direction
of the holders of Certificates evidencing fractional undivided
interests aggregating not less than a majority in interest of
such Trust shall, vote all of the Equipment Notes issued under
such Indenture that are held in such Trust in favor of directing
the Loan Trustee as to the time, method and place of conducting
any proceeding for any remedy available to the Loan Trustee or of
exercising any trust or power conferred on the Loan Trustee under
such Indenture. (Sections 6.1 and 6.4)
The ability of the holders of the Certificates issued with
respect to any one Trust to cause the Loan Trustee with respect
to any Equipment Notes held in such Trust to accelerate the
Equipment Notes under the related Indenture or to direct the
exercise of remedies by the Loan Trustee under the related
Indenture will depend, in part, upon the proportion between the
aggregate principal amount of the Equipment Notes outstanding
under such Indenture and held in such Trust and the aggregate
principal amount of all Equipment Notes outstanding under such
Indenture. If, for example, the Equipment Notes held in such
Trust constitute only 45% in aggregate principal amount of the
Equipment Notes issued under such Indenture, even if all of the
108
Certificateholders of such Trust were to instruct the Trustee of
such Trust to direct the Loan Trustee to declare the acceleration
of the Equipment Notes issued under such Indenture, the Equipment
Notes so voted by such Trust in favor of acceleration would not
alone be sufficient under the terms of the Indenture to compel
the Loan Trustee to act. Moreover, there can be no assurance
that the Certificateholders of any of the other Trusts would at
such time vote the Equipment Notes held in such Trusts in favor
of acceleration. Each Trust will hold Equipment Notes with
different terms from the Equipment Notes held in the other Trusts
and therefore the Certificateholders of a Trust may have
divergent or conflicting interests from those of the
Certificateholders of the other Trusts holding Equipment Notes
relating to the same Aircraft. In addition, so long as the same
institution acts as Trustee of two or more Trusts, in the absence
of instructions from the Certificateholders of any such Trust,
the Trustee for such Trust could for the same reason be faced
with a potential conflict of interest upon an Indenture Default.
In such event, each Trustee has indicated that it would resign as
trustee of one or all such Trusts, and a successor trustee would
be appointed in accordance with the terms of the applicable Basic
Agreement.
As an additional remedy, if an Indenture Default shall have
occurred and be continuing, the Basic Agreements provide that the
Trustee of the Trust holding Equipment Notes issued under such
Indenture may, and upon the direction of the holders of the
Certificates evidencing fractional undivided interests
aggregating not less than a majority in interest of such Trust
shall, sell for cash to any person all or part of such Equipment
Notes in accordance with applicable laws, including any
applicable securities laws. (Sections 6.1 and 6.2) Any proceeds
received by such Trustee upon any such sale shall be deposited in
an account established by such Trustee for the benefit of the
Certificateholders of such Trust for the deposit of such Special
Payments (the "Special Payments Account") and shall be
distributed to the Certificateholders of such Trust on a Special
Distribution Date. (Sections 4.1 and 4.2) The market for
Equipment Notes in default may be very limited, and there can be
no assurance that they could be sold for a reasonable price or
that the net proceeds from such sale would be equal to the unpaid
principal amount of and interest on such Equipment Notes.
Furthermore, so long as the same institution acts as Trustee of
multiple Trusts, it may be faced with a conflict in deciding from
which Trust to sell Equipment Notes to available buyers. If the
Trustee of any Trust sells any such Equipment Notes with respect
to which an Indenture Default exists for less than their
outstanding principal amount, the Certificateholders of such
Trust will receive a smaller amount of principal distributions
than anticipated and will not have any claim for the shortfall
against Continental, any Owner Trustee, any Owner Participant or
such Trustee. Furthermore, neither such Trustee nor the
Certificateholders of such Trust could take any action with
respect to any remaining Equipment Notes held in such Trust so
long as no Indenture Defaults existed with respect thereto.
Any amount, other than Scheduled Payments received on a
Regular Distribution Date, distributed to the Trustee of any
Trust by the Loan Trustee under any Indenture on account of the
Equipment Notes held in such Trust following an Indenture Default
109
under such Indenture shall be deposited in the Special Payments
Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date.
In addition, if, following an Indenture Default under any
Indenture relating to a Leased Aircraft, the applicable Owner
Trustee exercises its option to redeem or purchase the
outstanding Equipment Notes issued under such Indenture as
described in the related Prospectus Supplement, the price paid by
such Owner Trustee to the Trustee of any Trust for the Equipment
Notes issued under such Indenture and held in such Trust shall be
deposited in the Special Payments Account for such Trust and
shall be distributed to the Certificateholders of such Trust on a
Special Distribution Date. (Sections 4.1, 4.2 and 6.2)
Any funds representing payments received with respect to any
Equipment Notes held in a Trust in default, or the proceeds from
the sale by the Trustee of any such Equipment Notes, held by the
Trustee in the Special Payments Account for such Trust shall, to
the extent practicable, be invested and reinvested by the Trustee
in Permitted Investments pending the distribution of such funds
on a Special Distribution Date. Permitted Investments are
defined as obligations of the United States or agencies or
instrumentalities thereof, the payment of which is backed by the
full faith and credit of the United States and which mature in
not more than 60 days or such lesser time as is required for the
distribution of any such funds on a Special Distribution Date.
(Sections 1.1 and 4.4)
The Basic Agreements provide that the Trustee of each Trust
shall, within 90 days after the occurrence of any event known to
it to be a default in respect of such Trust, give to the
Certificateholders of such Trust notice, transmitted by mail, of
all uncured or unwaived defaults with respect to such Trust known
to it, provided that, except in the case of default in the
payment of principal of, premium, if any, or interest on any of
the Equipment Notes held in such Trust, the Trustee shall be
protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the
interests of such Certificateholders. (Section 7.1)
Each Basic Agreement contains a provision entitling the
Trustee of each Trust, subject to the duty of the Trustee during
a default to act with the required standard of care, to be
offered reasonable security or indemnity by the holders of the
Certificates of such Trust before proceeding to exercise any
right or power under such Basic Agreement at the request of such
Certificateholders. (Section 7.2)
In certain cases, the holders of the Certificates of a Trust
evidencing fractional undivided interests aggregating not less
than a majority in interest of such Trust may on behalf of the
holders of all the Certificates of such Trust waive any past
default or Event of Default with respect to such Trust and its
consequences and may instruct the Trustees to waive any past
default under the related Indenture or the Basic Agreement or the
applicable Trust Supplement and its consequences, except (i) a
default in the deposit of any Scheduled Payment or Special
Payment or in the distribution thereof, (ii) a default in payment
of the principal, premium, if any, or interest with respect to
any of the Equipment Notes held in such Trust and (iii) a default
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in respect of any covenant or provision of the Basic Agreement or
the related Trust Supplement that cannot be modified or amended
without the consent of each Certificateholder of such Trust
affected thereby. (Section 6.5) Each Indenture will provide
that, with certain exceptions, the holders of a majority in
aggregate unpaid principal amount of the Equipment Notes issued
thereunder may on behalf of all such holders waive any past
default or Indenture Default thereunder. In the event of a
waiver with respect to a Trust as described above, the principal
amount of the Equipment Notes issued under the related Indenture
and held in such Trust shall be counted as waived in the
determination of the majority in aggregate unpaid principal
amount of Equipment Notes required to waive a default or an
Indenture Default. Therefore, if the Certificateholders of a
Trust or Trusts waive a past default or Event of Default such
that the principal amount of the Equipment Notes held either
individually in such Trust or in the aggregate in such Trusts
constitutes the required majority in aggregate unpaid principal
amount under the applicable Indenture, such past default or
Indenture Default shall be waived.
Merger, Consolidation and Transfer of Assets
Continental will be prohibited from consolidating with or
merging into any other corporation or transferring substantially
all of its assets as an entirety to any other Person unless
(i) the surviving successor or transferee shall (a) be organized
and validly existing under the laws of the United States or any
jurisdiction thereof, (b) be 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
Code (as defined below) with respect to the Owned Aircraft
Indentures and the Leases and (c) expressly assume all of the
obligations of Continental contained in the Basic Agreements, any
Trust Supplement, the Note Purchase Agreements and the Indentures
and, with respect to the Leased Aircraft Notes, the Participation
Agreements and the Leases, and any other operative documents to
which Continental was a party immediately prior to such
transaction; (ii) no Indenture Default or Lease Event of Default
shall arise as a result of such consolidation, merger or transfer
of assets and (iii) Continental shall have delivered a
certificate and an opinion or opinions of counsel indicating that
such transaction, in effect, complies with such conditions.
(Section 5.2)
The Basic Agreements do not and, except as otherwise
described in the applicable Prospectus Supplement, the Indentures
will not contain any covenants or provisions which may afford the
Trustee or Certificateholders protection in the event of a highly
leveraged transaction, including transactions effected by
management or affiliates, which may or may not result in a change
in control of Continental.
Modifications of the Basic Agreements
Each Basic Agreement contains provisions permitting
Continental and the Trustee of each Trust to enter into a
supplemental trust agreement, without the consent of the holders
of any of the Certificates held in such Trust, (i) to provide for
the formation of such Trust and the issuance of a series of
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Certificates, (ii) to evidence the succession of another
corporation to Continental and the assumption by such corporation
of Continental's obligations under such Basic Agreement and the
applicable Trust Supplement, (iii) to add to the covenants of
Continental for the benefit of holders of such Certificates or to
surrender any right or power in such Basic Agreement conferred
upon Continental, (iv) to correct or supplement any defective or
inconsistent provision of such Basic Agreement or the applicable
Trust Supplement or to make any other provisions with respect to
matters or questions arising thereunder, provided such action
shall not adversely affect the interests of the holders of such
Certificates or to cure any ambiguity or correct any mistake,
(v) to modify, eliminate or add to the provisions of such Basic
Agreement to such extent as shall be necessary to continue the
qualification of such Basic Agreement (including any supplemental
agreement) under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and to add to such Basic Agreement such
other provisions as may be expressly permitted by the Trust
Indenture Act, (vi) to provide for a successor Trustee or to add
to or change any provision of such Basic Agreement as shall be
necessary to facilitate the administration of the Trusts
thereunder by more than one Trustee, and (vii) to make any other
amendments or modifications to such Basic Agreement, provided
such amendments or modifications shall only apply to Certificates
issued thereafter. (Section 9.1)
The Basic Agreements also contain provisions permitting
Continental and the Trustee of each Trust, with the consent of
the holders of the Certificates of such Trust evidencing
fractional undivided interests aggregating not less than a
majority in interest of such Trust, and, with respect to any
Leased Aircraft in certain cases, with the consent of the
applicable Owner Trustee (such consent not to be unreasonably
withheld), to execute supplemental trust agreements adding any
provisions to or changing or eliminating any of the provisions of
the Basic Agreements, to the extent relating to such Trust, and
the applicable Trust Supplement, or modifying the rights of the
Certificateholders, except that no such supplemental trust
agreement may, without the consent of the holder of each
Certificate so affected thereby, (a) 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 in respect of any Certificate related to such
Trust, or change the date or place of any payment in respect of
any Certificate, or make distributions payable in coin or
currency other than that provided for in such Certificates, or
impair the right of any Certificateholder of such Trust to
institute suit for the enforcement of any such payment when due,
(b) permit the disposition of any Equipment Note held in such
Trust, except as provided in the Basic Agreements or the
applicable Trust Supplement, or otherwise deprive any
Certificateholder of the benefit of the ownership of the
applicable Equipment Notes, (c) reduce the percentage of the
aggregate fractional undivided interests of the Trust provided
for in the Basic Agreements or the applicable Trust Supplement,
the consent of the holders of which is required for any such
supplemental trust agreement or for any waiver provided for in
the Basic Agreements or such Trust Supplement, or (d) modify any
of the provisions relating to the rights of the
Certificateholders in respect of the waiver of events of default
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or receipt of payment. (Section 9.2)
Modification of Indenture and Related Agreements
In the event that a Trustee, as the holder of any Equipment
Notes held in a Trust, receives a request for its consent to any
amendment, modification or waiver under the Indenture or other
documents relating to such Equipment Notes (including any Lease
with respect to Leased Aircraft Notes), such Trustee shall send a
notice of such proposed amendment, modification or waiver to each
Certificateholder of such Trust of record as of the date of such
notice. Such Trustee shall request instructions from the
Certificateholders of such Trust as to whether or not to consent
to such amendment, modification or waiver. Such Trustee shall
vote or consent with respect to such Equipment Notes in such
Trust in the same proportion as the Certificates of such Trust
were actually voted by the holders thereof by a certain date.
Notwithstanding the foregoing, if an Event of Default in respect
of such Trust shall have occurred and be continuing, such Trustee
may, in the absence of instructions from Certificateholders
holding a majority in interest of such Trust, in its own
discretion consent to such amendment, modification or waiver and
may so notify the relevant Loan Trustee. (Section 10.1)
Termination of the Trusts
The obligations of Continental and the Trustee with respect
to a Trust will terminate upon the distribution to
Certificateholders of such Trust of all amounts required to be
distributed to them pursuant to the Basic Agreements and the
applicable Trust Supplement and the disposition of all property
held in such Trust. Such Trustee will send to each
Certificateholder of record of such Trust notice of the
termination of such Trust, the amount of the proposed final
payment and the proposed date for the distribution of such final
payment for such Trust. The final distribution to any
Certificateholder of such Trust will be made only upon surrender
of such Certificateholder's Certificates at the office or agency
of such Trustee specified in such notice of termination.
(Section 11.1)
Delayed Purchase
In the event that, on the delivery date of any Certificates,
all of the proceeds from the sale of such Certificates are not
used to purchase the Equipment Notes contemplated to be held
in the related Trust, such Equipment Notes may be purchased
by the relevant Trustee at any time on or prior to the date
specified in the applicable Prospectus Supplement. In such
event, such Trustee will hold the proceeds from the sale of
such Certificates not used to purchase such Equipment Notes
in an escrow account pending the purchase of such Equipment
Notes not so purchased. Such proceeds will be invested at
the direction and risk of, and for the account of, Continental
in certain specified investments, which may include:
(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
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its equivalent by Standard & Poor's Corporation,
(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 short-term deposit rating of P1 by Moody's Investors
Service, Inc. or its equivalent by Standard & Poor's Corporation;
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
(iii) 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 (i) through (iv) as collateral; provided 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; and provided further that no
investment shall be eligible as a "specified investment" unless
the final maturity date or date of return of such investment is
on or before (x) the scheduled date for the purchase of such
Equipment Notes, or (y) if no date has been scheduled for the
purchase of such Equipment Notes, the next Business Day, or
(z) if Continental has given notice that such Equipment Notes
will not be purchased, the next applicable Special Distribution
Date. Earnings on such investments in the escrow account for
each Trust will be paid to Continental periodically, upon its
demand, and Continental will be responsible for any losses.
(Section 2.2(b))
Unless otherwise specified in the applicable Prospectus
Supplement, on the next Regular Distribution Date specified in
the applicable Prospectus Supplement, Continental will pay to the
relevant Trustee an amount equal to the interest that would have
accrued on any Equipment Notes purchased after the date of the
issuance of such Certificates from the date of the issuance of
such Certificates to, but excluding, the date of the purchase
of such Equipment Notes by such Trustee. (Section 2.2(b))
Special Distribution Upon Unavailability of Aircraft
To the extent, due to a casualty to, or other event causing
the unavailability of, one or more Aircraft, that the full amount
of the proceeds from the sale of any Certificates held in the
escrow account referred to above is not used to purchase
Equipment Notes on or prior to the date specified in the
applicable Prospectus Supplement, an amount equal to the unused
proceeds will be distributed by the relevant Trustee to the
holders of record of such Certificates on a pro rata basis upon
not less than 20 days' prior notice to them as a Special
Distribution on the date specified in the applicable Prospectus
Supplement together with interest thereon at a rate equal to the
rate applicable to such Certificates, but without premium, and
Continental will pay to the relevant Trustee on such date an
amount equal to such interest. (Section 2.2(b))
The Trustees
With certain exceptions, no Trustee makes any
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representations as to the validity or sufficiency of the Basic
Agreement to which it is a party, the Trust Supplements, the
Certificates, the Equipment Notes, the Indentures, the Leases or
other related documents. No Trustee shall be liable with respect
to any series of Certificates, for any action taken or omitted to
be taken by it in good faith in accordance with the direction of
the holders of a majority in principal amount of outstanding
Certificates of such series issued under the Basic Agreement to
which it is a party. Subject to such provisions, such Trustee
shall be under no obligation to exercise any of its rights or
powers under such Basic Agreement at the request of any holders
of Certificates issued thereunder unless they shall have offered
to such Trustee indemnity satisfactory to it. Each Basic
Agreement provides that the Trustee thereunder in its individual
or any other capacity may acquire and hold Certificates issued
thereunder and, subject to certain conditions, may otherwise deal
with Continental and, with respect to the Leased Aircraft, with
any Owner Trustee or Owner Participant with the same rights it
would have if it were not the Trustee. (Sections 7.2, 7.3 and
7.4)
A Trustee may resign with respect to any or all of the
Trusts at any time, in which event Continental will be obligated
to appoint a successor trustee. If a Trustee ceases to be
eligible to continue as Trustee with respect to a Trust or
becomes incapable of acting as Trustee or becomes insolvent,
Continental may remove such Trustee, or any holder of the
Certificates of such Trust for at least six months may, on behalf
of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of such Trustee and the
appointment of a successor trustee. Any resignation or removal
of a Trustee with respect to a Trust and appointment of a
successor trustee for such Trust does not become effective until
acceptance of the appointment by the successor trustee. (Section
7.8) Pursuant to such resignation and successor trustee
provisions, it is possible that a different trustee could be
appointed to act as the successor trustee with respect to each
Trust. All references in this Prospectus to a Trustee should be
read to take into account the possibility that the Trusts could
have different successor trustees in the event of such a
resignation or removal.
Each Basic Agreement provides that Continental will pay the
reasonable fees and expenses of the Trustee thereunder and
indemnify such Trustee against certain losses and liabilities.
To secure such obligation of the Company, such Trustee will have
a lien prior to the Certificates of a series on all property and
funds held by it with respect to the Certificates of such series.
(Section 7.6)
DESCRIPTION OF THE EQUIPMENT NOTES
The statements made under this caption are summaries and
reference is made to the entire Prospectus and detailed
information appearing in the applicable Prospectus Supplement.
Where no distinction is made between the Leased Aircraft Notes
and the Owned Aircraft Notes or between their respective
Indentures, such statements refer to any Equipment Notes and any
Indenture.
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General
Each Equipment Note issued under the same Indenture will
relate to a single Aircraft. The Equipment Notes with respect to
each Aircraft will be issued under a separate Indenture either
(a) between the related Owner Trustee of a trust for the benefit
of the Owner Participant who is the beneficial owner of such
Aircraft, and the related Loan Trustee, or (b) between
Continental and the related Loan Trustee.
The Equipment Notes issued under an Indenture may rank pari
passu with each other or may be issued in two or more series of
different rank. If such Equipment Notes are issued in two or
more series of different rank, the terms and conditions upon
which each such series is senior to or subordinate to each other
such series will be set forth in the applicable Prospectus
Supplement.
With respect to each Leased Aircraft, the related Owner
Trustee has acquired or will acquire such Aircraft from
Continental or the manufacturer of such Aircraft, as the case may
be, has granted or will grant a security interest in its right,
title and interest in such Aircraft to the related Loan Trustee
as security for the payments of the related Leased Aircraft
Notes, and has leased or will lease such Aircraft to Continental
pursuant to the related Lease which has been or will be assigned
as security to the related Loan Trustee. Pursuant to each such
Lease, Continental will be obligated to make or cause to be made
rental and other payments to the related Owner Trustee in amounts
that will be sufficient to make payments of the principal and
interest scheduled to be made in respect of such Leased Aircraft
Notes when and as due and payable.
The rental obligations of Continental under each Lease and
the obligations of Continental under each Owned Aircraft
Indenture and under the Owned Aircraft Notes will be general
obligations of Continental. Except in certain circumstances
involving Continental's purchase of a Leased Aircraft and the
assumption of the Leased Aircraft Notes related thereto, the
Leased Aircraft Notes are not obligations of, or guaranteed by,
Continental. See "--Assumption of Obligations by Continental".
Principal and Interest Payments
Interest paid on the Equipment Notes held in each Trust will
be passed through to the Certificateholders of such Trust on the
dates and at the rate per annum set forth in the applicable
Prospectus Supplement until the final distribution for such
Trust. Principal paid on the Equipment Notes held in each Trust
will be passed through to the Certificateholders of such Trust in
scheduled amounts on the dates set forth in the applicable
Prospectus Supplement until the final distribution date for such
Trust.
If any date scheduled for any payment of principal, premium,
if any, or interest with respect to the Equipment Notes is not a
Business Day, such payment will be made on the next succeeding
Business Day without any additional interest.
Security
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The Leased Aircraft Notes will be secured by (i) an
assignment by the related Owner Trustee to the related Loan
Trustee of such Owner Trustee's rights (except for certain
rights, including those described below) under the Lease with
respect to the related Leased Aircraft, including the right to
receive payments of rent thereunder, (ii) a mortgage granted to
such Loan Trustee of the Owner Trustee's right, title and
interest in such Aircraft, subject to the rights of Continental
under such Lease and (iii) an assignment to such Loan Trustee of
certain of such Owner Trustee's rights with respect to such
Aircraft under the purchase agreement for such Aircraft. Under
the terms of each Lease, Continental's obligations in respect of
each Leased Aircraft will be those of a lessee under a "net
lease". Accordingly, Continental will be obligated, among other
things and at its expense, to cause each Leased Aircraft to be
duly registered, to pay (or cause to be paid) all costs of
operating such Aircraft and to maintain, service, repair and
overhaul (or cause to be maintained, serviced, repaired and
overhauled) such Aircraft.
The Owned Aircraft Notes will be secured by a mortgage
granted to the related Loan Trustee of all of Continental's
right, title and interest in and to the related Owned Aircraft
and a security interest in certain of Continental's rights with
respect to such Aircraft under the purchase agreement between
Continental and the related manufacturer. If so specified in a
Prospectus Supplement, prior to the delivery of an Owned
Aircraft, the Equipment Notes with respect thereto may be secured
by the Company's interest in the purchase agreement for such
Owned Aircraft. Under the terms of each Owned Aircraft
Indenture, Continental will be obligated, among other things and
at its expense, to cause each Owned Aircraft to be duly
registered, to pay (or cause to be paid) all costs of operating
such Aircraft and to maintain, service, repair and overhaul (or
cause to be maintained, serviced, repaired and overhauled) such
Aircraft.
Continental will be required, except under certain
circumstances, to keep each Aircraft registered under the Federal
Aviation Act of 1958, as amended (the "Aviation Act"), and to
record the Indenture and the Lease, if any, among other
documents, with respect to each Aircraft under the Aviation Act.
Such recordation of the Indenture, the Lease, if any, and other
documents with respect to each Aircraft will give the related
Loan Trustee a perfected security interest in the related
Aircraft whenever it is located in the United States or any of
its territories and possessions and, with certain exceptions, in
those jurisdictions that have ratified or adhered to the
Convention on the International Recognition of Rights in Aircraft
(the "Convention"). Continental will have the right, subject to
certain conditions, at its own expense to register each Aircraft
in countries other than the United States. Unless otherwise
specified in the applicable Prospectus Supplement, prior to any
such change in the jurisdiction of registry, the related Loan
Trustee shall have received an opinion of Continental's counsel
that, among other things, confirms that the Loan Trustee's right
to repossession under the Indenture is valid and enforceable
under the laws of such country in each case subject, in certain
cases, to certain filings, recordations or other actions.
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Subject to certain limitations, each Aircraft may also be
operated by Continental or under lease, sublease or interchange
arrangements in countries that are not parties to the Convention.
The extent to which the related Loan Trustee's security interest
would be recognized in an Aircraft located in a country that is
not a party to the Convention, and the extent to which such
security interest would be recognized in a jurisdiction adhering
to the Convention if the Aircraft is registered in a jurisdiction
not a party to the Convention, is uncertain. Moreover, in the
case of an Indenture Default, the ability of the related Loan
Trustee to realize upon its security interest in an Aircraft
could be adversely affected as a legal or practical matter if
such Aircraft were registered or located outside the United
States.
Unless otherwise specified in the applicable Prospectus
Supplement, the Equipment Notes are not cross-collateralized and
consequently the Equipment Notes issued in respect of any one
Aircraft will not be secured by any other Aircraft or, in the
case of Leased Aircraft Notes, any other Lease. Unless and until
an Indenture Default with respect to a Leased Aircraft has
occurred and is continuing, the related Loan Trustee may not
exercise any of the rights of the related Owner Trustee under the
related Lease, except the right to receive payments thereunder.
With respect to the Leased Aircraft, the assignment by the
related Owner Trustee to the related Loan Trustee of its rights
under the related Lease will exclude, among other things, rights
of such Owner Trustee and the related Owner Participant relating
to indemnification by Continental for certain matters, insurance
proceeds payable to such Owner Trustee in its individual capacity
and to such Owner Participant under liability insurance
maintained by Continental pursuant to such Lease or by such Owner
Trustee or such Owner Participant, insurance proceeds payable to
such Owner Trustee in its individual capacity or to such Owner
Participant under certain casualty insurance maintained by such
Owner Trustee or such Owner Participant pursuant to such Lease
and any rights of such Owner Participant or such Owner Trustee to
enforce payment of the foregoing amounts and their respective
rights to the proceeds of the foregoing.
Unless otherwise indicated in the applicable Prospectus
Supplement, Continental will be obligated to carry insurance with
insurers of recognized responsibility with respect to each
Aircraft, at its own cost and expense, against such risks, in
such amounts, with such deductibles or self-insurance amounts and
in such form as Continental customarily maintains with respect to
other aircraft owned or operated by Continental, in each case
similar to the respective Aircraft, and operating on similar
routes in similar geographic locations. Continental may be
permitted to maintain coverage below certain stipulated values
and, with respect to certain Aircraft, may be permitted to self-
insure, in certain circumstances. Therefore, no assurance will
be given that any insurance will be carried in the future, or, if
it is carried, as to the amount of such insurance. Continental
and any permitted sublessee of an Aircraft will be named as
insured parties under all insurance policies required by the
related Lease. The related Trustee, Loan Trustee, Owner Trustee,
if any, and Owner Participant, if any, will be named additional
insureds, which will afford each of them the rights but not the
obligations of a coinsured or an additional insured.
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Funds, if any, held from time to time by the Loan Trustee
with respect to any Aircraft, prior to the distribution thereof,
will be invested and reinvested by such Loan Trustee. Such
investment and reinvestment will be at the direction of
Continental (except in the case of a Lease Event of Default under
the applicable Lease, if any, or, in the case of an Indenture
Default under the applicable Indenture) in certain investments
described in the related Indenture. The net amount of any loss
resulting from any such investments will be paid by Continental.
Section 1110 of Title 11 of the United States Code (the
"Bankruptcy Code") provides that the right of a secured party
with a purchase money equipment security interest in, or of a
lessor or conditional vendor of, aircraft, aircraft engines,
propellers, appliances, or spare parts, as defined in Section 101
of the Aviation Act, that are subject to a purchase money
equipment security interest granted by, leased to, or
conditionally sold to, an air carrier operating under a
certificate of convenience and necessity issued by the Civil
Aeronautics Board, to take possession of such equipment in
compliance with the provisions of a purchase money equipment
security agreement, lease, or conditional sale contract, as the
case may be, is not affected by (i) the automatic stay provision
of the Bankruptcy Code, which provision enjoins repossessions by
creditors for the duration of the reorganization period, (ii) the
provision of the Bankruptcy Code allowing the debtor in
possession and/or the bankruptcy trustee to use property of the
bankruptcy estate during the bankruptcy case and (iii) any power
of the bankruptcy court to enjoin a repossession. Section 1110
of the Bankruptcy Code provides, however, that the right of a
lessor, conditional vendor or holder of a purchase money
equipment security interest to take possession of an aircraft in
the event of an event of default may not be exercised for 60 days
following the date of commencement of the reorganization
proceedings (unless specifically permitted by the bankruptcy
court) and may not be exercised at all if within such 60-day
period, the debtor in possession and/or the bankruptcy trustee
agrees to perform the debtor's obligations that become due on or
after such date and cures all existing defaults (other than
defaults resulting solely from the financial condition,
bankruptcy, insolvency or reorganization of the debtor). The
Prospectus Supplement for each offering will discuss the
availability of Section 1110 of the Bankruptcy Code with respect
to the related Aircraft.
Payments and Limitation of Liability
Each Leased Aircraft will be leased separately by the
related Owner Trustee to Continental for a term commencing on the
delivery date thereof to such Owner Trustee and expiring on a
date not earlier than the latest maturity date of the Leased
Aircraft Notes, unless previously terminated as permitted by the
terms of the related Lease. The basic rent and other payments
under each such Lease will be payable by Continental in
accordance with the terms specified in the applicable Prospectus
Supplement, and will be assigned by the related Owner Trustee
under the related Indenture to provide the funds necessary to pay
scheduled principal and interest due from such Owner Trustee on
the Leased Aircraft Notes issued under such Indenture. In
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certain cases, the basic rent payments under a Lease may be
adjusted, but each Lease will provide that under no circumstances
will rent payments by Continental be less than the scheduled
payments on the related Leased Aircraft Notes. The balance of
any basic rent payment under each Lease, after payment of amounts
due on the Leased Aircraft Notes issued under the Indenture
corresponding to such Lease, will be paid over to the applicable
Owner Trustee. Continental's obligation to pay rent and to cause
other payments to be made under each Lease will be general
obligations of Continental.
With respect to the Leased Aircraft Notes, except in certain
circumstances involving Continental's purchase of a Leased
Aircraft and the assumption of the Leased Aircraft Notes related
thereto, the Leased Aircraft Notes will not be obligations of, or
guaranteed by, Continental. With respect to the Leased Aircraft
Notes, none of the Owner Trustees, the Owner Participants or the
Loan Trustees shall be personally liable in respect of such
Leased Aircraft Notes for amounts payable under such Leased
Aircraft Notes, or, except as provided in the Indentures relating
thereto in the case of the Owner Trustees and the Indenture
Trustees, for any liability under such Indentures. Except in the
circumstances referred to above, all amounts payable under any
Leased Aircraft Notes (other than payments made in connection
with an optional redemption or purchase by the related Owner
Trustee or the related Owner Participant) will be made only from
the assets subject to the lien of the related Indenture with
respect to such Aircraft or the income and proceeds received by
the related Loan Trustee therefrom (including rent payable by
Continental).
With respect to the Leased Aircraft Notes, except as
otherwise provided in the related Indentures, no Owner Trustee
shall be personally liable for any amount payable or for any
statements, representations, warranties, agreements or
obligations under such Indentures or under such Leased Aircraft
Notes except for its own willful misconduct or gross negligence.
None of the Owner Participants shall have any duty or
responsibility under the Leased Aircraft Indentures or under such
Leased Aircraft Notes.
Continental's obligations under each Owned Aircraft
Indenture and under the Owned Aircraft Notes will be general
obligations of Continental.
Defeasance and Covenant Defeasance in Certain Circumstances
Unless otherwise specified in the applicable Prospectus
Supplement, (i) the obligations of Continental with respect to
Owned Aircraft Notes of or within any series and the obligations
of the Owner Trustee with respect to any Leased Aircraft Notes of
or within any series shall be deemed to have been discharged and
paid in full ("defeasance") (except for certain obligations,
including the obligations to register the transfer or exchange of
Equipment Notes, to replace stolen, lost, destroyed or mutilated
Equipment Notes and to maintain paying agencies and hold money
for payment in trust) or (ii) Continental shall be deemed to have
been released from its obligations with respect to certain
covenants applicable to the Equipment Notes of or within any
series ("covenant defeasance"), on the 91st day after the date of
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irrevocable deposit with the related Loan Trustee of money or
certain obligations of the United States or any agency or
instrumentality thereof the payment of which is backed by the
full faith and credit of the United States which, through the
payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an aggregate
amount sufficient to pay when due (including as a consequence of
redemption in respect of which notice is given on or prior to the
date of such deposit) principal of, premium, if any, and interest
on all Equipment Notes issued thereunder in accordance with the
terms of such Indenture. Such defeasance may occur only if,
among other things, the Loan Trustee has received (a) an opinion
of counsel, to the effect that holders of such Equipment Notes
will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance or covenant
defeasance, as the case may be (such opinion of counsel, in the
case of defeasance, must refer to and be based upon a ruling of
the Internal Revenue Service or a change in applicable Federal
income tax law occurring after the date such Equipment Notes were
issued), and will be subject to federal income tax on the same
amount and in the same manner and at the same time as would have
been the case if such defeasance or covenant defeasance had not
occurred, (b) an officers' certificate and an opinion of counsel
with respect to compliance with the conditions precedent to such
defeasance or covenant defeasance and (c) any additional
conditions to such defeasance or covenant defeasance which may be
imposed on the Company. In addition, a nationally recognized
firm of independent public accounts must deliver to the Loan
Trustee a written certification as to the sufficiency of the
trust funds deposited for the defeasance or covenant defeasance
of such Equipment Notes. The Indentures do not provide the
holders of the Equipment Notes with recourse against such firm.
The Company may exercise its defeasance option with respect
to such Equipment Notes notwithstanding its prior exercise of its
covenant defeasance option. If the Company exercises its
defeasance option, payment of such Equipment Notes may not be
accelerated because of a Default or an Event of Default. If the
Company exercises its covenant defeasance option, payment of such
Equipment Notes may not be accelerated by reason of a Default or
an Event of Default with respect to the covenants to which such
covenant defeasance is applicable. However, if such acceleration
were to occur, the realizable value at the acceleration date of
the money and Government Obligations in the defeasance trust
could be less than the principal and interest then due on such
Equipment Notes, in that the required deposit in the defeasance
trust is based upon scheduled cash flow rather than market value,
which will vary depending upon interest rates and other factors.
Upon such defeasance, or upon payment in full of the
principal of, premium, if any, and interest on all Equipment
Notes issued under any Indenture on the maturity date therefor or
deposit with the applicable Loan Trustee of money sufficient
therefor no earlier than one year prior to the date of such
maturity, the holders of such Equipment Notes will have no
beneficial interest in or other rights with respect to the
related Aircraft or other assets subject to the lien of such
Indenture and such lien shall terminate. Upon the occurrence of
a covenant defeasance, the holder of the Equipment Notes will
have no beneficial interest in or other rights with respect to
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the related Aircraft or other assets subject to the lien of such
Indenture and such lien shall terminate and the Company will be
released only from its obligations to comply with certain
covenants contained in the Indenture, as more fully discussed in
the applicable Prospectus Supplement.
Assumption of Obligations by Continental
Unless otherwise specified in the applicable Prospectus
Supplement with respect to Leased Aircraft, upon the exercise by
Continental of any purchase options it may have under the related
Lease prior to the end of the term of such Lease, Continental may
assume on a full recourse basis all of the obligations of the
Owner Trustee (other than its obligations in its individual
capacity) under the Indenture with respect to such Aircraft,
including the obligations to make payments in respect of the
related Leased Aircraft Notes. In such event, certain relevant
provisions of the related Lease, including (among others)
provisions relating to maintenance, possession and use of the
related Aircraft, liens, insurance and events of default will be
incorporated into such Indenture, and the Leased Aircraft Notes
issued under such Indenture will not be redeemed and will
continue to be secured by such Aircraft. It is a condition to
such assumption that, if such Aircraft is registered under the
laws of the United States, an opinion of counsel be delivered at
the time of such assumption substantially to the effect that the
related Loan Trustee under such Indenture should, immediately
following such assumption, be entitled to the benefits of Section
1110 of the Bankruptcy Code with respect to such Aircraft
(including the engines related thereto), but such opinion need
not be delivered to the extent that the benefits of such Section
1110 are not available to the Loan Trustee with respect to such
Aircraft or any engine related thereto immediately prior to such
assumption.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the anticipated
material United States federal income tax consequences of the
purchase, ownership and disposition of the Certificates to the initial
purchasers thereof and should be read in conjunction with any
additional discussion of federal income tax consequences included
in the applicable Prospectus Supplement. The discussion is based
on laws, regulations, rulings and decisions, all as in effect on
the date of this Prospectus and all of which are subject to
change or different interpretations. The discussion below does
not purport to address all of the federal income tax consequences
that may be applicable to particular categories of investors,
some of which (for example, insurance companies and foreign
investors) may be subject to special rules. The statements of
law and legal conclusions set forth herein are based upon the
opinion of Hughes Hubbard & Reed, counsel to Continental.
Investors should consult their own tax advisors in determining
the federal, state, local and any other tax consequences to them
of the purchase, ownership and disposition of the Certificates.
The Trusts are not indemnified for any federal income taxes that
may be imposed upon them, and the imposition of any such taxes
could result in a reduction in the amounts available for
distribution to the Certificate Owners of the affected Trust.
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General
Based upon an interpretation of analogous authorities under
currently applicable law, and assuming that the Trusts'
activities are limited to those currently set forth in the
relevant Basic Agreement, the Trusts should not be classified as
associations taxable as corporations, but, rather, each should be
classified as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended
(the "Code"), and each Certificate Owner of each Trust should be
treated as the owner of a pro rata undivided interest in each of
the Equipment Notes and any other property held by such Trust.
Each Certificate Owner should be required to report on its
federal income tax return its pro rata share of the entire income
from the Equipment Notes and any other property held by the
related Trust, in accordance with such Certificate Owner's method
of accounting. A Certificate Owner using the cash method of
accounting must take into account its pro rata share of income as
and when received (or deemed received) by the Trustee of such
Trust. A Certificate Owner using an accrual method of accounting
must take into account its pro rata share of income as it accrues
or is received by the Trustee of such Trust, whichever is
earlier.
A purchaser of a Certificate should be treated as purchasing
an interest in each Equipment Note and any other property in the
related Trust at a price determined by allocating the purchase
price paid for the Certificate among such Equipment Notes and
other property in proportion to their fair market values at the
time of purchase of the Certificate. Unless otherwise indicated
in a Prospectus Supplement, the Company believes that when all
the Equipment Notes have been acquired by the related Trust the
purchase price paid for a Certificate by an original purchaser of
a Certificate should be allocated among the Equipment Notes in
the related Trust in proportion to their respective principal
amounts.
If an Equipment Note held by a Trust is sold, redeemed, or
otherwise disposed of, a Certificate Owner should be considered
to have sold its pro rata share of that Equipment Note, and will
recognize gain or loss equal to the difference between its
adjusted tax basis in its interest in the Equipment Note and its
pro rata share of the amount realized by the Trust on the sale,
redemption, or disposition (except to the extent attributable to
accrued interest, which would be taxable as interest income if
not previously included in income). Subject to the market
discount provisions of the Code (described below), any such gain
or loss will be capital gain or loss if the Equipment Note is a
capital asset in the hands of the Certificate Owner and will be
long-term capital gain or loss if the Equipment Note is
considered to have been held for more than one year. Net long-
term capital gains of individuals are, under certain
circumstances, taxed at lower rates than items of ordinary
income.
Sales of Certificates
A Certificate Owner that sells a Certificate should
recognize gain or loss as though it sold its pro rata portion of
123
the assets held by the Trust, with the federal income tax
consequences described above.
Original Issue Discount
The Equipment Notes may be issued with original issue
discount ("OID"). The Prospectus Supplement will state whether
any Equipment Notes to be held by the related Trust will be
issued with OID. Generally, a holder of a debt instrument issued
with OID that is not de minimis must include such OID in income
for federal income tax purposes as it accrues, in advance of the
receipt of the cash attributable to such income, under a method
that takes into account the compounding of interest.
Market Discount
A Certificate Owner should be considered to have acquired an
interest in an Equipment Note at a "market discount" to the
extent the remaining principal amount of the Equipment Note (or,
in the case of an Equipment Note issued with OID, its adjusted
issue price) allocable to such Certificate Owner's Certificate
exceeds such Certificate Owner's tax basis allocable to such
Equipment Note, unless the excess does not exceed a prescribed de
minimis amount. In the event such excess exceeds the de minimis
amount, the Certificate Owner should be subject to the market
discount rules of Sections 1276 to 1278 of the Code with regard
to its interest in the Equipment Note.
In the case of a sale, redemption or certain other
dispositions of indebtedness subject to the market discount
rules, Section 1276 of the Code requires that gain, if any, from
such sale, redemption, or disposition be treated as ordinary
income to the extent such gain represents market discount that
has accrued during the period in which such indebtedness was
held.
In the case of a partial principal payment on indebtedness
subject to the market discount rules, Section 1276 of the Code
requires that such payment be included in gross income as
ordinary income to the extent such payment does not exceed the
market discount that has accrued during the period such
indebtedness was held. The amount of any accrued market discount
later required to be included in gross income as ordinary income
upon a sale or disposition or subsequent partial principal
payment will be reduced by the amount of accrued market discount
previously so included.
Generally, market discount accrues under a straight line
method, or, at the election of the taxpayer, a constant interest
method. However, in the case of installment obligations (such as
certain or all of the Equipment Notes), the manner in which
market discount is to be accrued has been left to Treasury
regulations not yet issued. Until such Treasury regulations are
issued, the explanatory Conference Committee Report to the Tax
Reform Act of 1986 (the "Conference Report") indicates that
holders of installment obligations with market discount may elect
to accrue market discount either on the basis of a constant
interest rate or as follows: in the case of an installment
obligation issued without OID, the amount of market discount that
is deemed to accrue during any accrual period is the amount of
124
market discount that bears the same ratio to the total amount of
remaining market discount that the amount of stated interest paid
in the accrual period bears to the total amount of stated
interest remaining to be paid on the installment obligation as of
the beginning of such period, and, in the case of an installment
obligation issued with OID, market discount is deemed to occur
during any accrual period in proportion to the accrual of OID for
such period.
Under Section 1277 of the Code, if in any taxable year
interest paid or accrued on indebtedness incurred or continued to
purchase or carry indebtedness subject to the market discount
rules exceeds the interest currently includible in income with
respect to such indebtedness, deduction of the excess interest
must be deferred to the extent of the market discount allocable
to the taxable year. The deferred portion of any interest
expense will generally be deductible when such market discount is
included in income upon the sale or other disposition (including
repayment) of the indebtedness.
Section 1278 of the Code allows a taxpayer to make an
election to include market discount in his gross income as it
accrues. If such election is made, the rules of Sections 1276
and 1277 (described above) will not apply to the taxpayer.
Premium
A Certificate Owner should generally be considered to have
acquired an interest in an Equipment Note at a premium to the
extent such Certificate Owner's tax basis allocable to such
Equipment Note exceeds the remaining principal amount of the
Equipment Note allocable to such Certificate Owner's Certificate.
In that event, a Certificate Owner that holds such Certificate as
a capital asset may elect to amortize such premium as an offset
to interest income under Section 171 of the Code with
corresponding reductions in such Certificate Owner's tax basis in
such Equipment Note. Generally, such amortization is on a
constant yield basis. However, in the case of installment
obligations (such as certain or all of the Equipment Notes), the
Conference Report indicates a Congressional intent that
amortization will be in accordance with the same rules that will
apply to the accrual of market discount on installment
obligations. See "Federal Income Tax Consequences -- Market
Discount".
If Equipment Notes may be called at a premium prior to
maturity, amortizable premium may be determined by reference to
an early call date. Due to the complexities of the amortizable
premium rules, particularly where there is more than one possible
call date and the amount of any premium is uncertain, Certificate
Owners are urged to consult their own tax advisors as to the
amount of any such amortizable premium.
Backup Withholding
Payments made on the Certificates, and proceeds from the
sale of the Certificates to or through certain brokers, may be
subject to a "backup" withholding tax of 31% unless the
Certificate Owner complies with certain reporting procedures or
is exempt from such requirements (and adequately demonstrates
125
such exemption) under section 6049(b)(4) of the Code. Any such
withheld amounts are allowed as a credit against the Certificate
Owner's federal income tax.
Information Reporting
Information reports will be made by the relevant Trustee to
the Internal Revenue Service, and to Certificate Owners that are
not exempt from the reporting requirements, annually or as
otherwise required with respect to interest paid (and accrued
OID, if any) on the Certificates.
CERTAIN STATE TAX CONSEQUENCES
In respect of each offering of Certificates, a separate Trust for
each series of Certificates being offered will be formed pursuant
to a Basic Agreement between the Company and either Shawmut Bank
Connecticut, a National Association with its corporate trust
office in Connecticut ("Shawmut"), as trustee, or First Security
Bank of Utah, a National Association with its corporate trust
office in Utah ("First Security Bank"), as trustee. Set forth
below is a description of the opinion of Shipman & Goodman as to
certain Connecticut state tax consequences for each Trust under
which Shawmut is Trustee and the opinion of Ray, Quinney &
Nebeker as to certain Utah state tax consequences for each Trust
under with First Security Bank is Trustee.
Each of Shipman & Goodwin, counsel to Shawmut, and Ray, Quinney &
Nebeker, counsel to First Security Bank, has advised the Company
that, in its opinion, under currently applicable law, assuming
that the Trusts will not be taxable as corporations, but, rather,
will be classified as grantor trusts under subpart E, Part I of
Subchapter J of the Code, and that the Trusts' activities are
limited to those currently set forth in the relevant Basic
Agreement (i) the Trusts will not be subject to any tax
(including, without limitation, net or gross income, tangible or
intangible property, net worth, capital, franchise or doing
business tax), fee or other governmental charge under the laws of
the State of Connecticut or the State of Utah, respectively, or
any political subdivision thereof and (ii) Certificate Owners
that are not residents of or otherwise subject to tax in
Connecticut or Utah, respectively, will not be subject to any tax
(including, without limitation, net or gross income, tangible or
intangible property, net worth, capital, franchise or doing
business tax), fee or other governmental charge under the laws of
the State of Connecticut or the State of Utah, respectively, or
any political subdivision thereof as a result of purchasing,
holding (including receiving payments with respect to) or selling
a Certificate. Neither the Trusts nor the Certificate Owners
will be indemnified for any state or local taxes imposed on them,
and the imposition of any such taxes on a Trust could result in a
reduction in the amounts available for distribution to the
Certificate Owners of such Trust. In general, should a
Certificate Owner or a Trust be subject to any state or local tax
which would not be imposed if the Trustee were located in a
different jurisdiction in the United States, the Trustee will
resign and a new Trustee in such other jurisdiction will be
appointed.
ERISA CONSIDERATIONS
126
Unless otherwise indicated in the applicable Prospectus
Supplement, the Certificates may, subject to certain legal
restrictions, be purchased and held by an employee benefit plan
(a "Plan") subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or an individual
retirement account or an employee benefit plan subject to section
4975 of the Code. A fiduciary of a Plan must determine that the
purchase and holding of a Certificate is consistent with its
fiduciary duties under ERISA and does not result in a non-exempt
prohibited transaction as defined in section 406 of ERISA or
section 4975 of the Code. Employee benefit plans which are
governmental plans (as defined in section 3(32) of ERISA) and
certain church plans (as defined in section 3(33) of ERISA) are
not subject to Title I of ERISA or section 4975 of the Code. The
Certificates may, subject to certain legal restrictions, be
purchased and held by such plans.
INFORMATION TO BE PROVIDED BY PROSPECTUS SUPPLEMENT
The Prospectus Supplement which accompanies this Prospectus
provides (i) more detailed information on use of proceeds
(including the interest rate and maturity date of debt to be
repaid, if any, with the proceeds of Certificates offered by such
Prospectus Supplement), (ii) the amount of debt ranking senior to
or in parity with the securities being offered by such Prospectus
Supplement and (iii) the anticipated market for the securities
being offered by such Prospectus Supplement. The Prospectus
Supplement also provides a diagram illustrating the transactions
pursuant to which the specific series of Certificates are being
offered.
PLAN OF DISTRIBUTION
The Certificates being offered hereby may be sold in any one or
more of the following ways from time to time: (i) through agents;
(ii) to or through underwriters; (iii) through dealers; and (iv)
directly to other purchasers.
The distribution of the Certificates may be effected from time to
time in one or more transactions at a fixed price or prices,
which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at
negotiated prices.
Offers to purchase the Certificates may be solicited by agents
designated by Continental from time to time. Any such agent
involved in the offer or sale of the Certificates in respect of
which this Prospectus is delivered will be named, and any
commissions payable by Continental to such agent will be set
forth, in the applicable Prospectus Supplement. Unless otherwise
indicated in such Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
Any such agent may be deemed to be an underwriter, as that term
is defined in the Securities Act, of the Certificates so offered
and sold.
If the Certificates are sold by means of an underwritten
offering, Continental will execute an underwriting agreement with
an underwriter or underwriters at the time an agreement for such
127
sale is reached, and the names of the specific managing
underwriter or underwriters, as well as any other underwriters,
and the terms of the transaction, including commissions,
discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement
which will be used by the underwriters to make offers and sales
of the Certificates in respect of which this Prospectus is
delivered to the public. If underwriters are utilized in the
sale of the Certificates in respect of which this Prospectus is
delivered, the Certificates will be acquired by the underwriters
for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at fixed
public offering prices or at varying prices determined by the
underwriters at the time of sale. The Certificates may be
offered to the public either through underwriting syndicates
represented by managing underwriters or directly by the managing
underwriters. If any underwriter or underwriters are utilized in
the sale of the Certificates, unless otherwise indicated in the
Prospectus Supplement, the underwriting agreement will provide
that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a
sale of the Certificates will be obligated to purchase all such
Certificates if any are purchased. Continental does not intend
to apply for listing of the Certificates on a national securities
exchange. If the Certificates are sold by means of an
underwritten offering, the underwriters may make a market in the
Certificates as permitted by applicable laws and regulations. No
underwriter would be obligated, however, to make a market in the
Certificates and any such market making could be discontinued at
any time at the sole discretion of such underwriter.
Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the Certificates.
If a dealer is utilized in the sale of the Certificates in
respect of which this Prospectus is delivered, such Certificates
will be sold to the dealer as principal. The dealer may then
resell such Certificates to the public at varying prices to be
determined by such dealer at the time of resale. Any such dealer
may be deemed to be an underwriter, as such term is defined in
the Securities Act, of the Certificates so offered and sold. The
name of the dealer and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Offers to purchase the Certificates may be solicited directly and
the sale thereof may be made directly to institutional investors
or others, who may be deemed to be underwriters within the
meaning of the Securities Act with respect to any resale thereof.
In addition, certain executive officers of the Company may engage
in solicitations of offers to purchase Certificates. The terms
of any such sales will be described in the Prospectus Supplement
relating thereto.
Agents, underwriters and dealers may be entitled under relevant
agreements to indemnification or contribution by Continental
against certain liabilities, including liabilities under the
Securities Act.
Agents, underwriters and dealers may engage in transactions with,
or perform services for, Continental in the ordinary course of
business.
128
The following information is included in this Prospectus because
Certificates are to be offered and sold in the State of Florida.
The Company pays a small fee (approximately $83,000 in 1995) to
Cubana Airlines, a company located in Cuba, in connection with
overflights of Cuba. This information is accurate as of the date
of this Prospectus. Current information concerning the business
dealings of the Company or its affiliates with the government of
Cuba or with any person or affiliate located in Cuba may be
obtained from the Florida Department of Banking and Finance,
Division of Securities and Investor Protection, The Capitol,
Tallahassee, Florida 32399-0350, telephone number (904) 488-9805.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus
Supplement, the validity of the Certificates offered hereby has
been passed upon for Continental by Hughes Hubbard & Reed, 1
Battery Park Plaza, New York, New York 10004. Unless otherwise
indicated in the applicable Prospectus Supplement, Hughes Hubbard
& Reed will rely on the opinions of counsel for each Trustee for
the Certificates of each Trust, as to certain matters relating to
the authorization, execution and delivery of such Certificates
by, and the valid and binding effect thereof on, such Trustee.
EXPERTS
The consolidated financial statements (including schedules
incorporated by reference) of Continental Airlines, Inc. at
December 31, 1995 and 1994 and for each of the two years ended
December 31, 1995 and for the period April 28, 1993 through
December 31, 1993, and the consolidated statements of operations,
redeemable and non-redeemable preferred stock and common
stockholders' equity and cash flows of Continental Airlines
Holdings, Inc. for the period January 1, 1993 through April 27,
1993, incorporated by reference in this Prospectus and
Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon
included therein and incorporated herein by reference, in
reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
129
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No person has been authorized to give any
information or to make any representations other
than those contained or incorporated by reference
in this Prospectus or in any accompanying
Prospectus Supplement in connection with the offer
contained in this Prospectus and any accompanying
Prospectus Supplement, and, if given or made, such
information or representations must not be relied
upon as having been authorized by the Company or
any underwriters, agents or dealers. Neither this
Prospectus nor any accompanying Prospectus
Supplement constitutes an offer to sell or the
solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful
to make such offer or solicitation. Neither the
delivery of this Prospectus or any accompanying
Prospectus Supplement nor any sale made hereunder
and thereunder shall, under any circumstances,
create an implication that there has been no
change in the affairs of the Company since the
date hereof or thereof or that the information
contained herein or therein is correct at any time
subsequent to the date hereof or thereof.
_______________________
TABLE OF CONTENTS
Available Information
Incorporation of Certain Documents by
Reference
The Company
Formation of the Trusts
Use of Proceeds
Ratio of Earnings to Fixed Charges
Description of the Certificates
Description of the Equipment Notes
Federal Income Tax Consequences
Certain State Tax Consequences
ERISA Considerations
Information to be Provided by Prospectus
Supplement
Plan of Distribution
Legal Opinions
Experts
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130
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Continental
Airlines, Inc.
Pass Through Certificates
-------------------
PROSPECTUS
-------------------
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131
Information contained herein is subject to completion
or amendment. A registration statement relating to
these securities has been filed with the Securities and
Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any
sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION - DATED MAY 30, 1996
PROSPECTUS
Continental Airlines, Inc.
Debt Securities
Continental Airlines, Inc. (the "Company" or "Continental")
may from time to time offer, together or separately, its debt
securities, consisting of debentures, notes and/or other evidences
of indebtedness representing unsecured obligations of the Company
(the "Debt Securities"), in amounts, at prices and on terms to be
determined at the time of offering. The Debt Securities offered
pursuant to this Prospectus may be issued as unsecured and
unsubordinated Debt Securities ("Senior Debt Securities") or as
unsecured and subordinated Debt Securities ("Subordinated Debt
Securities"), in one or more series and will be limited to
$510,733,000 aggregate principal amount (or (i) its equivalent
(based on the applicable exchange rate at the time of sale), if
Debt Securities are issued with principal amounts denominated in
one or more foreign currencies or currency units as shall be
designated by the Company, or (ii) such greater amount, if Debt
Securities are issued at an original issue discount, as shall
result in aggregate proceeds of up to $510,733,000). The Debt
Securities will effectively rank junior to (i) any secured
indebtedness of the Company to the extent of the assets securing
such indebtedness and (ii) any indebtedness of the Company's
subsidiaries to the extent of the assets of such subsidiaries.
As March 31, 1996, the Company had aggregate indebtedness
of $986 million secured by various of its assets, and
its subsidiaries had aggregate indebtedness of $261 million
outstanding to third parties. At the same date, the Company had
$117 million of indebtedness that ranked pari passu with the
Senior Debt Securities and senior to the Subordinated Debt
Securities. Certain specific terms of the particular Debt
Securities in respect of which this Prospectus is being delivered
(the "Offered Securities") are set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement"), including,
where applicable: the specific designation (including whether the
Offered Securities are Senior Debt Securities or Subordinated
Debt Securities); the aggregate principal amount; the
denomination; the maturity; the prepayment premium, if any; the
rate (which may be fixed or variable) at which such Debt
Securities will bear interest or the method of calculating such
132
rate, if any; the time of payment of interest, if any; the place
or places where principal of, premium, if any, and interest, if
any, on such Debt Securities will be payable; the currency in
which principal of, premium, if any, and interest, if any, on
such Debt Securities will be payable; terms, if any, for
conversion into shares of the Company's Class B common stock, par
value $.01 per share ("Class B common stock"); any terms of
redemption at the option of the Company or the holder; any sinking
fund provisions; the initial public offering price; and other
special terms. The Debt Securities may be denominated in United
States dollars or, at the option of the Company if so specified in
the applicable Prospectus Supplement, in one or more foreign
currencies or currency units. The Debt Securities may be issued in
registered form or bearer form, or both. If so specified in the
applicable Prospectus Supplement, Debt Securities of a series may
be issued in whole or in part in the form of one or more temporary
or permanent global securities.
--------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------------------
The Company may sell the Debt Securities to or through
underwriters, through dealers or agents or directly to purchasers.
See "Plan of Distribution". The accompanying Prospectus Supplement
sets forth the names of any underwriters, dealers or agents
involved in the sale of the Offered Securities in respect of which
this Prospectus is being delivered and any applicable fee,
commission or discount arrangements with them.
This Prospectus may not be used to consummate sales of Debt
Securities unless accompanied by a Prospectus Supplement.
The date of this Prospectus is , 1996.
133
No dealer, salesman or other person has been authorized to
give any information or to make any representation not contained in
this Prospectus or any accompanying Prospectus Supplement and, if
given or made, such information or representation must not be
relied upon as having been authorized by the Company or any
underwriter, broker, dealer or agent. This Prospectus and any
accompanying Prospectus Supplement do not constitute an offer to
sell or a solicitation of an offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction.
--------------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at the following public
reference facilities maintained by the Commission: Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549;
Suite 1300, Seven World Trade Center, New York, New York 10048; and
The Citicorp Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material may also be obtained from
the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
upon payment of prescribed rates. In addition, reports, proxy
statements and other information concerning Continental may be
inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
Continental is the successor to Continental Airlines Holdings,
Inc. ("Holdings"), which merged with and into Continental on April
27, 1993. Holdings had also been subject to the informational
requirements of the Exchange Act.
This Prospectus constitutes a part of a registration statement
on Form S-3 (together with all amendments and exhibits, the
"Registration Statement") filed by Continental with the Commission
under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus omits certain of the information contained
in the Registration Statement, and reference is hereby made to the
Registration Statement for further information with respect to
Continental and Holdings and the securities offered hereby. Although
statements concerning and summaries of certain documents are contained
herein, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the
Commission. These documents may be inspected without charge at
the office of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies may be obtained at fees
and charges prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No.
0-9781) are hereby incorporated by reference in this Prospectus:
(i) Continental's Annual Report on Form 10-K for the year ended
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December 31, 1995 (as amended by Forms 10-K/A1 and 10-K/A2 filed
on March 8, 1996 and April 10, 1996, respectively), (ii) the
description of the Class B common stock contained in
Continental's registration statement (Registration No. 0-21542)
on Form 8-A, and any amendment or report filed for the purpose of
updating such description, (iii) Continental's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996 and (iv)
Continental's Current Reports on Forms 8-K, filed on January 31,
1996, March 26, 1996 and May 7, 1996.
All reports and any definitive proxy or information statements
filed by Continental pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities offered
hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or
deemed to be incorporated herein by reference, or contained in this
Prospectus, shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Continental will provide without charge to each person to whom
this Prospectus is delivered, upon the written or oral request of
such person, a copy of any or all documents incorporated herein by
reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such
documents). Requests for such documents should be directed to
Continental Airlines, Inc., 2929 Allen Parkway, Suite 2010,
Houston, Texas 77019, Attention: Secretary, telephone (713) 834-
2950.
THE COMPANY
Continental Airlines, Inc. is a major United States air
carrier engaged in the business of transporting passengers, cargo
and mail. Continental is the fifth largest United States airline
(as measured by revenue passenger miles in the first three months
of 1996) and, together with its wholly owned subsidiary,
Continental Express, Inc. ("Express"), and its 91%-owned
subsidiary, Continental Micronesia, Inc. ("CMI"), serves 175
airports worldwide.
The Company operates its route system primarily through
domestic hubs at Newark, Houston Intercontinental and Cleveland,
and a Pacific hub on Guam and Saipan. Each of Continental's
three U.S. hubs is located in a large business and population
center, contributing to a high volume of "origin and destination"
traffic. The Guam/Saipan hub is strategically located to provide
service from Japanese and other Asian cities to popular resort
destinations in the western Pacific. Continental is the primary
carrier at each of these hubs, accounting for 51%, 78%, 54% and
58% of all daily jet departures, respectively.
Continental directly serves 118 U.S. cities, with additional
cities (principally in the western and southwestern United
135
States) connected to Continental's route system under agreements
with America West Airlines, Inc. ("America West"). Internationally,
Continental flies to 57 destinations and offers
additional connecting service through alliances with foreign
carriers. Continental operates 52 weekly departures to five
European cities and markets service to four other cities through
code-sharing agreements. Continental is one of the leading
airlines providing service to Mexico and Central America, serving
more destinations in Mexico than any other United States airline.
In addition, Continental flies to four cities in South America
and plans to commence service between Newark and Bogota,
Colombia, with service on to Quito, Ecuador, in June 1996.
Through its Guam/Saipan hub, Continental provides extensive
service in the western Pacific, including service to more
Japanese cities than any other United States carrier.
The Company is a Delaware corporation. Its executive offices
are located at 2929 Allen Parkway, Suite 2010, Houston, Texas
77019, and its telephone number is (713) 834-2950.
RATIOS OF EARNINGS TO FIXED CHARGES
The following information for the years ended December 31,
1991 and 1992 and for the period January 1, 1993 through April 27,
1993 relates to Continental's predecessor, Holdings. Information
for the period April 28, 1993 through December 31, 1993, for the
years ended December 31, 1994 and 1995 and for the three months
ended March 31, 1995 and 1996 relates to Continental. The
information as to Continental has not been prepared on a consistent
basis of accounting with the information as to Holdings due to
Continental's adoption, effective April 27, 1993, of fresh start
reporting in accordance with the American Institute of Certified
Public Accountants' Statement of Position 90-7 "Financial Reporting
by Entities in Reorganization Under the Bankruptcy Code".
For the years ended December 31, 1991 and 1992, for the
periods January 1, 1993 through April 27, 1993 and April 28, 1993
through December 31, 1993, for the year ended December 31, 1994
and for the three months ended March 31, 1995, earnings were
not sufficient to cover fixed charges. Additional earnings
of $316 million, $131 million, $979 million, $60 million,
$667 million and $28 million, respectively, would have been
required to achieve ratios of earnings to fixed charges of
1.0. The ratio of earnings to fixed charges for the year
ended December 31, 1995 was 1.53. The ratio of earnings to
fixed charges for the three months ended March 31, 1996 was 1.70.
For purposes of calculating this ratio, earnings consist of
earnings before taxes and minority interest plus interest expense
(net of capitalized interest), the portion of rental expense
representative of interest expense and amortization of previously
capitalized interest. Fixed charges consist of interest expense
and the portion of rental expense representative of interest
expense.
USE OF PROCEEDS
Unless otherwise indicated in an applicable Prospectus
Supplement, the net proceeds to Continental from the sale of the
Securities offered by Continental hereby will be added to the
working capital of Continental and will be available for general
136
corporate purposes, among which may be repayment of outstanding
indebtedness and the financing of capital expenditures by
Continental.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued either as Senior Debt
Securities or Subordinated Debt Securities. The Senior Debt
Securities are to be issued under an Indenture between Continental
and Bank One, Texas, National Association, as Trustee (the "Senior
Indenture"). The Subordinated Debt Securities are to be issued
under an Indenture between Continental and WTC Corporate Trust
Services, as Trustee (the "Subordinated Indenture"). In this
Prospectus, the Senior Indenture and the Subordinated Indenture are
sometimes collectively referred to as the "Indentures" and
individually as an "Indenture", and the trustees thereunder are
sometimes collectively referred to as the "Trustees" and
individually as a "Trustee". A copy of each Indenture is filed as
an exhibit to the Registration Statement of which this Prospectus
is a part. The following descriptions are summaries, and reference
is made to the detailed provisions of the Indentures. Capitalized
terms used but not defined below under "Description of Debt
Securities" are used as defined in the Indentures. The Indentures
are substantially identical, except for certain provisions relating
to subordination.
The Debt Securities offered pursuant to this Prospectus will
be limited to $1,000,000,000 aggregate principal amount (or (i) its
equivalent (based on the applicable exchange rate at the time of
sale), if Debt Securities are issued with principal amounts
denominated in one or more foreign currencies or currency units as
shall be designated by the Company, or (ii) such greater amount, if
Debt Securities are issued at an original issue discount, as shall
result in aggregate proceeds of up to $510,733,000). The
statements herein relating to the Debt Securities and the
Indentures are summaries, and reference is made to the detailed
provisions of the Indentures, including the definitions therein of
certain terms capitalized in this Prospectus. Without limiting the
generality of the preceding sentence, whenever particular sections
or defined terms of the Indentures are referred to herein or in a
Prospectus Supplement, such sections or defined terms are
incorporated herein or therein by reference. A glossary of certain
defined terms used herein with respect to the Debt Securities is
set forth under the heading "Glossary" below. Citations to certain
relevant sections of the Indentures appear below in parentheses.
General
The Indentures do not limit the aggregate principal amount
of Debt Securities which may be issued thereunder and provide
that Debt Securities may be issued from time to time in one or
more series. Senior Debt Securities will be unsecured and
unsubordinated obligations of the Company and will rank on a
parity with all other unsecured and unsubordinated indebtedness
of the Company. Subordinated Debt Securities will be unsecured
obligations of the Company and will be subordinate in right of
payment to all Senior Debt. The Debt Securities will effectively
rank junior to (i) any secured indebtedness of the Company to the
extent of the assets securing such indebtedness and (ii) any
indebtedness of the Company's subsidiaries to the extent of the
137
assets of such subsidiaries. As of March 31, 1996, the Company
had aggregate indebtedness of $986 million secured by
various of its assets, and its subsidiaries had aggregate
indebtedness of $261 million outstanding to third parties. At
the same date, the Company had $117 million of indebtedness
that ranked pari passu with the Senior Debt Securities and senior
to the Subordinated Debt Securities. The accompanying Prospectus
Supplement or the information incorporated herein by reference
will set forth the amount of secured indebtedness of the Company
and indebtedness of the Company's subsidiaries that effectively
ranks senior to the Debt Securities and the indebtedness of the
Company that ranks pari passu with the Senior Debt Securities and
senior to the Subordinated Debt Securities.
Reference is made to the Prospectus Supplement which
accompanies this Prospectus for a description of the specific
series of Debt Securities being offered thereby, including: (1)
the specific designation of such Debt Securities, including whether
the Debt Securities are Senior Debt Securities or Subordinated Debt
Securities; (2) any limit upon the aggregate principal amount of
such Debt Securities; (3) the date or dates on which the principal
of such Debt Securities will mature or the method of determining
such date or dates; (4) the rate or rates (which may be fixed or
variable) at which such Debt Securities will bear interest, if any,
or the method of calculating such rate or rates; (5) the date or
dates from which interest, if any, will accrue or the method by
which such date or dates will be determined; (6) the date or dates
on which interest, if any, will be payable and the record date or
dates therefor; (7) the place or places where principal of,
premium, if any, and interest, if any, on such Debt Securities will
be payable; (8) the period or periods within which, the price or
prices at which, the currency or currencies (including currency
units) in which, and the terms and conditions upon which, such Debt
Securities may be redeemed, in whole or in part, at the option of
the Company; (9) the obligation, if any, of the Company to redeem
or purchase such Debt Securities pursuant to any sinking fund or
analogous provisions, upon the happening of a specified event, or
at the option of a holder thereof or of the Company and the period
or periods within which, the price or prices at which and the terms
and conditions upon which, such Debt Securities shall be redeemed
or purchased, in whole or in part, pursuant to such rights or
obligations; (10) the denominations in which such Debt Securities
are authorized to be issued; (11) the currency or currency units
for which Debt Securities may be purchased or in which Debt
Securities may be denominated and/or the currency or currency units
in which principal of, premium, if any, and/or interest, if any, on
such Debt Securities will be payable and whether the Company or the
holders of any such Debt Securities may elect to receive payments
in respect of such Debt Securities in a currency or currency units
other than that in which such Debt Securities are stated to be
payable; (12) if other than the principal amount thereof, the
portion of the principal amount of such Debt Securities which will
be payable upon declaration of the acceleration of the maturity
thereof or the method by which such portion shall be determined;
(13) the person to whom any interest on any such Debt Security
shall be payable if other than the person in whose name such Debt
Security is registered on the applicable record date; (14) any
addition to, or modification or deletion of, any Event of Default
or any covenant of the Company specified in the Indenture with
respect to such Debt Securities; (15) the application, if any, of
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such means of defeasance or covenant defeasance as may be specified
for such Debt Securities and coupons; (16) whether such Debt
Securities are to be issued in whole or in part in the form of one
or more temporary or permanent global securities and, if so, the
identity of the depositary for such global security or securities;
(17) the terms, if any, upon which Debt Securities may be converted
into stock or other securities of the Company, including the
initial conversion price or conversion rate, the conversion period
and other conversion provisions; (18) whether the Debt Securities
are issuable as registered Debt Securities, bearer Debt Securities
or both, and the terms upon which bearer Debt Securities may be
exchanged for registered Debt Securities; (19) if applicable, the
terms of any blockage periods and any other special terms of
subordination; and (20) any other special terms pertaining to such
Debt Securities, including any modification of the terms set forth
herein. Unless otherwise specified in the applicable Prospectus
Supplement, the Debt Securities will not be listed on any
securities exchange. (Section 3.1)
Unless otherwise specified in the applicable Prospectus
Supplement, Debt Securities will be issued in fully registered form
without coupons. Where Debt Securities of any series are issued in
bearer form, the special restrictions and considerations, including
special offering restrictions and special Federal income tax
considerations, applicable to any such Debt Securities and to
payment on and transfer and exchange of such Debt Securities will
be described in the applicable Prospectus Supplement. Bearer Debt
Securities will be transferable by delivery. (Section 3.5)
Debt Securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at
a rate which at the time of issuance is below market rates.
Certain Federal income tax consequences and special considerations
applicable to any such Debt Securities will be described in the
applicable Prospectus Supplement.
If the purchase price of any Debt Securities is payable in one
or more foreign currencies or currency units or if any Debt
Securities are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or
interest, if any, on any Debt Securities is payable in one or more
foreign currencies or currency units, the restrictions, elections,
certain Federal income tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such
foreign currency or currency units will be set forth in the
applicable Prospectus Supplement.
The Indentures do not contain any covenant or provision which
may afford holders of the Debt Securities protection in the event
of a highly leveraged transaction which may or may not result in a
change of control of the Company.
Any covenants or other provisions included in a supplement or
amendment to the Indentures for the benefit of the holders of any
particular series of Debt Securities will be described in the
applicable Prospectus Supplement.
Glossary
Set forth below is a glossary of certain of the defined terms
139
used in this Prospectus with respect to the Debt Securities.
Reference is made to the Indentures for the full definition of such
terms, as well as any capitalized terms used herein for which no
definition is provided.
"Debt Securities" shall have the meaning set forth on the
cover page.
"Default" shall have the meaning set forth in the Section
entitled "Events of Default, Notice and Certain Rights on Default."
"Depositary" shall have the meaning set forth in the Section
entitled "Global Debt Securities."
"Offered Securities" shall have the meaning set forth on the
cover page.
"Registered Global Security" shall have the meaning set forth
in the Section entitled "Global Debt Securities."
"Senior Debt Securities" shall have the meaning set forth on
the cover page.
"Subordinated Debt Securities" shall have the meaning set
forth on the cover page.
Payment, Registration, Transfer and Exchange
Unless otherwise provided in the applicable Prospectus
Supplement, payments in respect of the Debt Securities will be made
in the designated currency at such office or agency of the Company
maintained for that purpose as the Company may designate from time
to time, except that, at the option of the Company, interest
payments, if any, on Debt Securities in registered form may be made
(i) by checks mailed by the Trustee to the holders of Debt
Securities entitled thereto at their registered addresses or (ii)
by wire transfer to an account maintained by the Person entitled
thereto as specified in the Register. (Sections 3.7(a) and 9.2)
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on Debt Securities in
registered form will be made to the Person in whose name such Debt
Security is registered at the close of business on the regular
record date for such interest. (Section 3.7(a))
Payment in respect of Debt Securities in bearer form will be
payable in the currency and in the manner designated in the
Prospectus Supplement, subject to any applicable laws and
regulations, at such paying agencies outside the United States as
the Company may appoint from time to time. The paying agents
outside the United States initially appointed by the Company for a
series of Debt Securities will be named in the Prospectus
Supplement. The Company may at any time designate additional
Paying Agents or rescind the designation of any paying agents,
except that, if Debt Securities of a series are issuable as
Registered Securities, the Company will be required to maintain at
least one paying agent in each Place of Payment for such series
and, if Debt Securities of a series are issuable as Bearer
Securities, the Company will be required to maintain a Paying Agent
in a Place of Payment outside the United States where Debt
Securities of such series and any coupons appertaining thereto may
140
be presented and surrendered for payment. (Section 9.2)
Unless otherwise provided in the applicable Prospectus
Supplement, Debt Securities in registered form will be transferable
or exchangeable at the agency of the Company maintained for such
purpose as designated by the Company from time to time. (Sections
3.5 and 9.2) Debt Securities may be transferred or exchanged
without service charge, other than any tax or other governmental
charge imposed in connection therewith. (Section 3.5)
Global Debt Securities
The Debt Securities of a series may be issued in whole or in
part in the form of one or more fully registered global securities
(a "Registered Global Security") that will be deposited with a
depositary (the "Depositary") or with a nominee or custodian for
the Depositary identified in the applicable Prospectus Supplement.
In such a case, one or more Registered Global Securities will be
issued in a denomination or aggregate denominations equal to the
portion of the aggregate principal amount of outstanding Debt
Securities of the series to be represented by such Registered
Global Security or Securities. Unless and until it is exchanged in
whole or in part for Debt Securities in definitive certificated
form, a Registered Global Security may not be registered for
transfer or exchange except as a whole by the Depositary for such
Registered Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of
such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor
Depositary and except in the circumstances described in the
applicable Prospectus Supplement. (Section 3.5)
The specific terms of the depositary arrangement with respect
to any portion of a series of Debt Securities to be represented by
a Registered Global Security will be described in the applicable
Prospectus Supplement. The Company expects that the following
provisions will apply to depositary arrangements.
Upon the issuance of any Registered Global Security, and the
deposit of such Registered Global Security with or on behalf of the
Depositary for such Registered Global Security, the Depositary will
credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by
such Registered Global Security to the accounts of institutions
("participants") that have accounts with the Depositary or its
nominee. The accounts to be credited will be designated by the
underwriters or agents engaging in the distribution of such Debt
Securities or by the Company, if such Debt Securities are offered
and sold directly by the Company. Ownership of beneficial
interests in a Registered Global Security will be limited to
participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in
such Registered Global Security will be shown on, and the transfer
of that ownership interest will be effected only through, records
maintained by the Depositary for such Registered Global Security or
by its nominee. Ownership of beneficial interests in such
Registered Global Security by persons that hold through
participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through,
records maintained by such participant. The laws of some
141
jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificated form. The
foregoing limitations and such laws may impair the ability to
transfer beneficial interests in such Registered Global Securities.
So long as the Depositary for a Registered Global Security, or
its nominee, is the registered owner of such Registered Global
Security, such Depositary or such nominee, as the case may be, will
be considered the sole owner or holder of the Debt Securities
represented by such Registered Global Security for all purposes
under the Indentures. Unless otherwise specified in the applicable
Prospectus Supplement and except as specified below, owners of
beneficial interests in such Registered Global Security will not be
entitled to have Debt Securities of the series represented by such
Registered Global Security registered in their names, will not
receive or be entitled to receive physical delivery of Debt
Securities of such series in certificated form and will not be
considered the holders thereof for any purposes under the
Indentures. (Section 3.8) Accordingly, each person owning a
beneficial interest in such Registered Global Security must rely on
the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a holder
under the Indentures. The Depositary may grant proxies and
otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other
action which a holder is entitled to give or take under the
Indentures. The Company understands that, under existing industry
practices, if the Company requests any action of holders or an
owner of a beneficial interest in such Registered Global Security
desires to give any notice or take any action a holder is entitled
to give or take under the Indentures, the Depositary would
authorize the participants to give such notice or take such action,
and participants would authorize beneficial owners owning through
such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning
through them.
Unless otherwise specified in the applicable Prospectus
Supplement, payments with respect to principal, premium, if any,
and interest, if any, on Debt Securities represented by a
Registered Global Security registered in the name of a Depositary
or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owner of such Registered Global
Security.
The Company expects that the Depositary for any Debt
Securities represented by a Registered Global Security, upon
receipt of any payment of principal, premium, if any, or interest,
if any, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Registered Global
Security as shown on the records of such Depositary. The Company
also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such
participants will be governed by standing instructions and
customary practices, as is now the case with the securities held
for the accounts of customers registered in "street name", and will
be the responsibility of such participants. None of the Company,
the Trustee or any agent of the Company shall have any
142
responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of
a Registered Global Security, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership
interests. (Section 3.8)
Unless otherwise specified in the applicable Prospectus
Supplement, if the Depositary for any Debt Securities represented
by a Registered Global Security is at any time unwilling or unable
to continue as Depositary and a successor Depositary is not
appointed by the Company within ninety days, the Company will issue
such Debt Securities in definitive certificated form in exchange
for such Registered Global Security. In addition, the Company may
at any time and in its sole discretion determine not to have any of
the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt
Securities of such series in definitive certificated form in
exchange for all of the Registered Global Securities representing
such Debt Securities. (Section 3.5)
Conversion Rights
The terms on which Convertible Debt Securities of any series
are convertible into Class B common stock will be set forth in the
Prospectus Supplement relating thereto. Such terms shall include
provisions as to whether conversion is mandatory, at the option of
the holder, or at the option of the Company, and may include
provisions in which the number of shares of Class B common stock to
be received by the holders of Convertible Debt Securities would be
calculated according to the market price of Class B common stock as
of a time stated in the Prospectus Supplement.
Consolidation, Merger or Sale by the Company
The Indentures provide that the Company may merge or
consolidate with or into any other corporation or sell, convey,
transfer or otherwise dispose of all or substantially all of its
assets to any person, firm or corporation, if (i) (a) in the case
of a merger or consolidation, the Company is the surviving
corporation or (b) in the case of a merger or consolidation where
the Company is not the surviving corporation and in the case of
such a sale, conveyance or other disposition, the successor or
acquiring corporation is a corporation organized and existing under
the laws of the United States of America or a State thereof and
such corporation expressly assumes by supplemental indenture all
the obligations of the Company under the Debt Securities and any
coupons appertaining thereto and under the Indentures, (ii) no
Default or Event of Default shall arise as a result of such merger
or consolidation, or such sale, conveyance, transfer or other
disposition and (iii) the Company delivers to the Trustee an
Officer's Certificate and an Opinion of Counsel, in each case stating
that such consolidation, merger or transfer and such supplemental
indenture comply with the foregoing provisions. In the
event a successor corporation assumes the obligations of the
Company, such successor corporation shall succeed to and be
substituted for the Company under the Indentures and under the Debt
Securities and any coupons appertaining thereto and all obligations
of the Company shall terminate. (Section 7.1)
Events of Default, Notice and Certain Rights on Default
143
The Indentures provide that, if an Event of Default specified
therein occurs with respect to the Debt Securities of any series
issued thereunder and is continuing, the Trustee for such series or
the holders of 25% in aggregate principal amount of all of the
outstanding Debt Securities affected thereby (voting as a class),
by written notice to the Company (and to the Trustee for such
series, if notice is given by such holders of Debt Securities), may
declare the principal (or, if the Debt Securities of such series
are original issue discount Debt Securities or indexed Debt
Securities, such portion of the principal amount specified in the
Prospectus Supplement) of all the Debt Securities of such series to
be due and payable, provided that Debt Securities shall become
immediately due and payable without prior notice upon a bankruptcy
or insolvency of the Company. (Section 5.2)
Events of Default with respect to Debt Securities of any
series issued thereunder are defined in the Indentures as being:
default for thirty days in payment of any interest on any Debt
Security of that series or any additional amount payable with
respect to Debt Securities of such series as specified in the
applicable Prospectus Supplement when due; default in payment of
principal of or premium, if any, on any Debt Securities of that
series when due at maturity, upon acceleration, redemption or
otherwise; default for forty-five days after notice to the Company
by the Trustee for such series, or after notice by the holders of
25% in aggregate principal amount of the Debt Securities to which
such covenant or agreement is applicable (treated as a class), in
the performance of any other covenant or agreement in the Debt
Securities of that series, in the Indenture or in any supplemental
indenture or board resolution referred to therein under which the
Debt Securities of that series may have been issued; and certain
events of bankruptcy, insolvency or reorganization of the Company.
(Section 5.1)
Events of Default, voting, notice and other provisions with
respect to a specified series of Debt Securities may be added to
the Indenture under which the series is issued and, if so added,
will be described in the applicable Prospectus Supplement.
(Section 3.1)
The Indentures provide that the Trustee for any series of Debt
Securities shall, within ninety days after the occurrence of a
Default with respect to Debt Securities of that series, give to the
holder of the Debt Securities of that series notice of all uncured
Defaults known to it; provided that, except in the case of default
in payment on the Debt Securities of that series, the Trustee may
withhold the notice if and so long as a committee of its
Responsible Officers (as defined therein) in good faith first
determines that withholding such notice is in the interest of the
holders of the Debt Securities of that series. (Section 6.6)
"Default" means any event which is, or, after notice or passage of
time or both, would be, an Event of Default. (Section 1.l)
The Indentures provide that the holders of a majority in
aggregate principal amount of the Debt Securities of all series
affected (voting as a class) may direct the time, method and place
of conducting any proceeding for any remedy available to the
Trustee for such series, or exercising any trust or power conferred
on such Trustee. (Section 5.8)
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The Indentures include a covenant that the Company will file
annually with the Trustee a certificate as to the Company's
compliance with all conditions and covenants of the Indentures.
(Section 9.6)
The holders of a majority in aggregate principal amount of all
series of Debt Securities affected (voting as a class) by notice to
the Trustee for each such series may waive, on behalf of the
holders of all Debt Securities of all such series, any past Default
or Event of Default with respect to all such series and its
consequences except a Default or Event of Default in the payment of
the principal of, premium, if any, or interest, if any, on any of
such series of Debt Securities. (Section 5.2) In addition, the
holders of a majority in aggregate principal amount of any series
of Debt Securities by notice to the Trustee for such series may
waive, on behalf of the holders of all Debt Securities of such
series, any past Default or Event of Default with respect to that
series and its consequences except a Default or Event of Default in
the payment of the principal of, premium, if any, and interest, if
any, on any such Debt Securities and certain other Defaults.
(Section 5.7)
Modification of the Indentures
The Indentures contain provisions permitting the Company and
the Trustees to enter into one or more supplemental indentures
without the consent of the holders of any of the Debt Securities in
order (i) to evidence the succession of another corporation to the
Company and the assumption of the covenants of the Company by a
successor to the Company; (ii) to add to the covenants of the
Company or surrender any right or power of the Company; (iii) to
add additional Events of Default with respect to any series; (iv)
to add or change any provisions to such extent as necessary to
permit or facilitate the issuance of Debt Securities in bearer form
or in global form; (v) to add to, change or eliminate any provision
affecting Debt Securities not yet issued; (vi) to secure the Debt
Securities; (vii) to establish the form or terms of Debt
Securities; (viii) to evidence and provide for successor Trustees;
(ix) if allowed without penalty under applicable laws and
regulations, to permit payment in respect of Debt Securities in
bearer form in the United States; or (x) to cure any ambiguity or
correct any mistake and to correct or supplement any inconsistent
provisions or to make any other provisions as the Company may deem
necessary or desirable with respect to matters or questions arising
under the Indentures, provided that such action does not adversely
affect the interests of any holder of Debt Securities of any series
issued under the Indentures. (Section 8.1)
The Indentures also contain provisions permitting the Company
and the Trustees, with the consent of the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of
each series affected by such supplemental indenture, to execute
supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the Indentures or any
supplemental indenture or modifying the rights of the holders of
Debt Securities of such series, except that no such supplemental
indenture may, without the consent of the holder of each Debt
Security so affected, (i) change the time for payment of principal
or interest, if any, on any Debt Security; (ii) reduce the
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principal of, or any installment of principal of, or interest, if
any, on any Debt Security; (iii) reduce the amount of premium, if
any, payable upon the redemption of any Debt Security; (iv) reduce
the amount of principal payable upon acceleration of the maturity
of an Original Issue Discount Debt Security; (v) change the coin or
currency in which any Debt Security or any premium or interest
thereon is payable; (vi) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security;
(vii) reduce the percentage in principal amount of the outstanding
Debt Securities of any series the consent of whose holders is
required for modification or amendment of the Indentures or for
waiver of compliance with certain provisions of the Indentures or
for waiver of certain defaults; (viii) change the obligation of the
Company to maintain an office or agency in the places and for the
purposes specified in the Indentures; (ix) if applicable, modify
the subordination provisions in a manner adverse to the Holders of
Subordinated Debt Securities or make any change that adversely
affects the right to convert any Debt Security or (except as
provided in the Indentures) decrease the conversion rate or
increase the conversion price of any Debt Security; (x) modify the
provisions relating to waiver of certain defaults or any of the
foregoing provisions. (Section 8.2)
Defeasance and Covenant Defeasance
If indicated in the Prospectus Supplement, the Company may
elect either (i) to defease and be discharged from any and all
obligations with respect to the Debt Securities of or within any
series (except as described below) ("defeasance") or (ii) to be
released from its obligations with respect to certain covenants
applicable to the Debt Securities of or within any series
("covenant defeasance"), upon the deposit with the Trustee for such
series (or other qualifying trustee), in trust for such purpose, of
money and/or Government Obligations which through the payment of
principal and interest in accordance with their terms will provide
money in the amount sufficient to pay the principal of and any
premium or interest on such Debt Securities to Maturity or
redemption, as the case may be, and any mandatory sinking fund or
analogous payments thereon. Upon the occurrence of a defeasance,
the Company will be deemed to have paid and discharged the entire
indebtedness represented by such Debt Securities and any coupons
appertaining thereto and to have satisfied all of its other
obligations under such Debt Securities and any coupons appertaining
thereto (except for (i) the rights of holders of such Debt
Securities to receive, solely from the trust funds deposited to
defease such Debt Securities, payments in respect of the principal
of, premium, if any, and interest, if any, on such Debt Securities
or any coupons appertaining thereto when such payments are due and
(ii) certain other obligations as provided in the Indentures). Upon
the occurrence of a covenant defeasance, the Company will be
released only from its obligations to comply with certain covenants
contained in the Indenture relating to such Debt Securities, will
continue to be obligated in all other respects under such Debt
Securities and will continue to be contingently liable with respect
to the payment of principal, interest, if any, and premium, if any,
with respect to such Debt Securities.
Unless otherwise specified in the applicable Prospectus
Supplement and except as described below, the conditions to both
defeasance and covenant defeasance are as follows: (i) such
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defeasance or covenant defeasance must not result in a breach or
violation of, or constitute a Default or Event of Default under,
the applicable Indenture, or result in a breach or violation of, or
constitute a default under, any other material agreement or
instrument of the Company; (ii) certain bankruptcy-related Defaults
or Events of Default with respect to the Company must not have
occurred and be continuing during the period commencing on the date
of the deposit of the trust funds to defease such Debt Securities
and ending on the 91st day after such date; (iii) the Company must
deliver to the applicable Trustee an Opinion of Counsel to the
effect that the holders of such Debt Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance or covenant defeasance and will be subject to
Federal income tax on the same amounts and in the same manner and
at all the same times as would have been the case if such
defeasance or covenant defeasance had not occurred (such Opinion of
Counsel, in the case of defeasance, must refer to and be based upon
a ruling of the Internal Revenue Service or a change in applicable
Federal income tax law occurring after the date of the Indentures);
(iv) the Company must deliver to the applicable Trustee an
Officers' Certificate and an Opinion of Counsel with respect to
compliance with the conditions precedent to such defeasance or
covenant defeasance and with respect to certain registration
requirements under the Investment Company Act of 1940, as amended
and (v) any additional conditions to such defeasance or covenant
defeasance which may be imposed on the Company pursuant to the
applicable Indenture. (Article 4) The Indentures require that a
nationally recognized firm of independent public accountants
deliver to the applicable Trustee a written certification as to the
sufficiency of the trust funds deposited for the defeasance or
covenant defeasance of such Debt Securities. The Indentures do not
provide the holders of such Debt Securities with recourse against
such firm. If indicated in the applicable Prospectus Supplement,
in addition to obligations of the United States or an agency or
instrumentality thereof, Government Obligations may include
obligations of the government, an agency or instrumentality of the
government issuing the currency in which Debt Securities of such
series are payable. (Sections 1.1 and 3.1) In the event that
Government Obligations deposited with the applicable Trustee for
the defeasance of such Debt Securities decrease in value or default
subsequent to their being deposited, the Company will have no
further obligation, and the holders of such Debt Securities will
have no additional recourse against the Company, as a result of
such decrease in value or default. As described above, in the event
of a covenant defeasance, the Company will remain contingently
liable with respect to the payment of principal, interest, if any,
and premium, if any, with respect to the Debt Securities.
The Company may exercise its defeasance option with respect to
such Debt Securities notwithstanding its prior exercise of its
covenant defeasance option. If the Company exercises its
defeasance option, payment of such Debt Securities may not be
accelerated because of a Default or an Event of Default. If the
Company exercises its covenant defeasance option, payment of such
Debt Securities may not be accelerated by reason of a Default or an
Event of Default with respect to the covenants to which such
covenant defeasance is applicable. However, if such acceleration
were to occur, the realizable value at the acceleration date of the
money and Government Obligations in the defeasance trust could be
less than the principal and interest then due on such Debt
147
Securities, in that the required deposit in the defeasance trust is
based upon scheduled cash flow rather than market value, which will
vary depending upon interest rates and other factors.
INFORMATION TO BE PROVIDED BY PROSPECTUS SUPPLEMENT
The Prospectus Supplement which accompanies this Prospectus
provides (i) more detailed information on use of proceeds
(including the interest rate and maturity date of debt to be
repaid, if any, with the proceeds of Debt Securities offered by
such Prospectus Supplement), and (ii) the anticipated market for
the Debt Securities being offered by such Prospectus Supplement.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to one or more
underwriters for public offering and sale by them or may sell
Securities to investors or other persons directly or through
agents. Any such underwriter or agent involved in the offer and
sale of the Offered Securities will be named in an applicable
Prospectus Supplement. In addition, certain executive officers
of the Company may engage in solicitations of sales of the
Offered Securities.
Underwriters may offer and sell the Offered Securities at a
fixed price or prices, which may be changed, or from time to time
at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The
Company also may, from time to time, authorize underwriters acting
as the Company's agents to offer and sell the Offered Securities
upon the terms and conditions as shall be set forth in any
Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting discounts
or commissions and may also receive commissions from purchasers of
Offered Securities for whom they may act as agent. Underwriters
may sell Offered Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be
changed from time to time) from the purchasers for whom they may
act as agent.
Any underwriting compensation paid by the Company to
underwriters or agents in connection with the offering of Offered
Securities, and any discounts, concessions or commissions allowed
by underwriters to participating dealers, will be set forth in an
applicable Prospectus Supplement. Underwriters, dealers and agents
participating in the distribution of the Offered Securities may be
deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the
Offered Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. Underwriters, dealers and
agents may be entitled, under agreements with the Company, to
indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.
Underwriters, dealers and agents may engage in transactions
with, or perform services for, the Company and its subsidiaries in
148
the ordinary course of business.
If so indicated in an applicable Prospectus Supplement, the
Company will authorize dealers acting as the Company's agents to
solicit offers by certain institutions to purchase Offered
Securities from the Company at the public offering price set forth
in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in such Prospectus Supplement. Each Contract
will be for an amount not less than, and the aggregate principal
amount of Offered Securities sold pursuant to Contracts shall not
be less nor more than, the respective amounts stated in such
Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, but
will in all cases be subject to the approval of the Company.
Contracts will not be subject to any conditions except (i) the
purchase by an institution of the Offered Securities covered by its
Contracts shall not at the time of delivery be prohibited under the
laws of any jurisdiction in the United States to which such
institution is subject, and (ii) if the Offered Securities are
being sold to underwriters, the Company shall have sold to such
underwriters the total principal amount of the Offered Securities
less the principal amount thereof covered by Contracts. Agents and
underwriters will have no responsibility in respect of the delivery
or performance of Contracts.
The Offered Securities may or may not be listed on a national
securities exchange or a foreign securities exchange. No
assurances can be given that there will be a market for the Offered
Securities.
The following information is included in this Prospectus
because Debt Securities may be offered and sold in the State of
Florida. The Company pays a small fee (approximately $83,000 in
1995) to Cubana Airlines, a company located in Cuba, in connection
with overflights of Cuba. This information is accurate as of the
date of this Prospectus. Current information concerning the
business dealings of the Company or its affiliates with the
government of Cuba or with any person or affiliate located in Cuba
may be obtained from the Florida Department of Banking and Finance,
Division of Securities and Investor Protection, The Capitol,
Tallahassee, Florida 32399-0350, telephone number (904) 488-9805.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus
Supplement, the validity of the Debt Securities offered hereby has
been passed upon for Continental by Mayor, Day, Caldwell & Keeton,
L.L.P., 700 Louisiana, Suite 1900, Houston, Texas 77002-2778.
EXPERTS
The consolidated financial statements (including schedules
incorporated by reference) of Continental Airlines, Inc. at
December 31, 1995 and 1994 and for each of the two years ended
December 31, 1995 and for the period April 28, 1993 through
December 31, 1993, and the consolidated statements of operations,
redeemable and non-redeemable preferred stock and common
149
stockholders' equity and cash flows of Continental Airlines
Holdings, Inc. for the period January 1, 1993 through April 27,
1993, incorporated by reference in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included therein
and incorporated herein by reference, in reliance upon such reports
given upon the authority of such firm as experts in accounting and
auditing.
150
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No person has been authorized to give any
information or to make any representations other
than those contained or incorporated by reference
in this Prospectus or in any accompanying
Prospectus Supplement in connection with the offer
contained in this Prospectus and in the
accompanying Prospectus Supplement, and, if given
or made, such information or representations must
not be relied upon as having been authorized by the
Company, any Selling Shareholder or any
underwriters, agents or dealers. Neither this
Prospectus nor any accompanying Prospectus
Supplement constitutes an offer to sell or the
solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful
to make such offer or solicitation. Neither the
delivery of this Prospectus or any accompanying
Prospectus Supplement nor any sale made hereunder
and thereunder shall, under any circumstances,
create an implication that there has been no change
in the affairs of the Company since the date hereof
or thereof or that the information contained herein
or therein is correct at any time subsequent to the
date hereof or thereof.
_______________________
TABLE OF CONTENTS
Available Information
Incorporation of Certain Documents
by Reference
The Company
Ratios of Earnings to Fixed Charges
Use of Proceeds
Description of Debt Securities
Description of Capital Stock
Information to be Provided by Prospectus
Supplement
Plan of Distribution
Legal Opinions
Experts
==================================================
151
==================================================
Continental
Airlines, Inc.
Debt Securities
-------------------
PROSPECTUS
-------------------
==================================================
152
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation and bylaws provide that the
Company will indemnify each of its directors and officers to the full extent
permitted by the laws of the State of Delaware and may indemnify certain other
persons as authorized by the Delaware General Corporation Law (the "GCL").
Section 145 of the GCL provides as follows:
"(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b). Such
determination shall be made (1) by a majority vote of the board of directors who
are not parties to such action, suit or proceeding, even though less than a
quorum, or (2) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (3) by the stockholders.
II-1
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative, or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees) incurred
by other employees and agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent for such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees)."
The Certificate of Incorporation and bylaws also limit the personal
liability of directors to the Company and its stockholders for monetary damages
resulting from certain breaches of the directors' fiduciary duties. The bylaws
of the Company provide as follows:
"No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (i) for any
II-2
breach of the Director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the . . .
GCL, or (iv) for any transaction from which the Director derived any improper
personal benefit. If the GCL is amended to authorize corporate action further
eliminating or limiting the personal liability of Directors, then the liability
of Directors of the Corporation shall be eliminated or limited to the full
extent permitted by the GCL, as so amended."
The Company maintains directors' and officers' liability insurance.
Item 21. Exhibits.
Exhibit
Number Exhibit Description
- ------- -------------------
4.1* Form of New 6.94% Continental Airlines Pass Through Certificate Series
1996-A
4.2* Form of New 7.82% Continental Airlines Pass Through Certificate Series
1996-B
4.3* Form of New 9.50% Continental Airlines Pass Through Certificate Series
1996-C
4.4* Form of New 12.48% Continental Airlines Pass Through Certificate Series
1996-D
4.5* Pass Through Trust Agreement, dated as of January 31, 1996, between
Continental Airlines, Inc., and Wilmington Trust Company, as Trustee,
relating to the formation of Continental Airlines 1996-A Pass Through
Trust
4.6* Pass Through Trust Agreement, dated as of January 31, 1996, between
Continental Airlines, Inc., and Wilmington Trust Company, as Trustee,
relating to the formation of Continental Airlines 1996-B Pass Through
Trust
4.7* Pass Through Trust Agreement, dated as of January 31, 1996, between
Continental Airlines, Inc., and Wilmington Trust Company, as Trustee,
relating to the formation of Continental Airlines 1996-C Pass Through
Trust
4.8* Pass Through Trust Agreement, dated as of January 31, 1996, between
Continental Airlines, Inc., and Wilmington Trust Company, as Trustee,
relating to the formation of Continental Airlines 1996-D Pass Through
Trust
4.9** Participation Purchase Agreement, dated as of January 31, 1996, between
Credit Suisse, acting through its New York Branch, and Continental
Airlines, Inc.
4.10* Revolving Credit Agreement, dated January 31, 1996, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines 1996-A Pass Through Trust, as Borrower and Credit
Suisse, acting through its New York Branch as Liquidity Provider
4.11* Revolving Credit Agreement, dated January 31, 1996, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines 1996-B Pass Through Trust, as Borrower and Credit
Suisse, acting through its New York Branch as Liquidity Provider
4.12* Revolving Credit Agreement, dated January 31, 1996, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines 1996-C Pass Through Trust, as Borrower and Credit
Suisse, acting through its New York Branch as Liquidity Provider
4.13* Intercreditor Agreement dated as of January 31, 1996, among Wilmington
Trust Company, not in its sole individual capacity but solely as Trustee
under the Continental Airlines Pass Through Trust 1996-A, Continental
Airlines Pass Through Trust 1996-B, Continental Airlines Pass Through
Trust 1996-C and Continental Pass Through Trust 1996-D, Credit Suisse,
acting through its New York Branch as Class A Liquidity Provider, Class
B Liquidity Provider, Class C
II-3
Liquidity Provider, and Wilmington Trust Company, not in its individual
capacity except as expressly set forth herein but solely as
Subordination Agent and Trustee
4.14* Registration Rights Agreement, dated as of January 31, 1996, among
Continental Airlines, Inc., Wilmington Trust Company, as Trustee under
Continental Airlines Pass Through Trust 1996-A, Continental Airlines
Pass Through Trust 1996-B, Continental Airlines Pass Through Trust 1996-
C, Continental Airlines Pass Through Trust 1996-D, and the Initial
Purchasers
4.15* Refunding Agreement, dated as of January 31, 1996, among Continental
Airlines, Inc., as Lessee, First Security Bank of Utah, National
Association, as Owner Trustee, Wilmington Trust Company, as Pass Through
Trustee under each of the Continental Airlines 1996 Pass Through Trust
Agreements, The Boeing Company, as Initial Loan Participant, General
Electric Company, as Owner Participant and Loan Participant, Wilmington
Trust Company, as Subordination Agent, and Wilmington Trust Company, as
Loan Trustee
4.16** Form of Participation Agreement dated as of September 15, 1994 among
Continental Airlines, Inc., General Electric Company, as Owner
Participant, Wilmington Trust Company, not in its individual capacity
but solely as Subordination Agent and Loan Participant, First Security
Bank of Utah, National Association, as Owner Trustee, and Wilmington
Trust Company as Loan Trustee
4.17** Form of Waiver dated as of December 22, 1995 among Continental Airlines,
Inc., General Electric Company, as Owner Participant, Wilmington Trust
Company, not in its individual capacity but solely as Subordination
Agent and Loan Participant, First Security Bank of Utah, National
Association, as Owner Trustee, and Wilmington Trust Company as Loan
Trustee
4.18** Form of Participation Agreement Amendment No. 2, dated as of January 31,
1996, among Continental Airlines, Inc., General Electric Company, as
Owner Participant, Wilmington Trust Company, not in its individual
capacity but solely as Subordination Agent and Loan Participant, First
Security Bank of Utah, National Association, as Owner Trustee, and
Wilmington Trust Company as Loan Trustee
4.19** Form of Lease Agreement dated as of April 1, 1995 between First Security
Bank of Utah, National Association, as Owner Trustee and Continental
Airlines, Inc.
4.20** Form of Lease Agreement Amendment No. 2, dated as of January 31, 1996,
between First Security Bank of Utah, National Association, as Owner
Trustee, and Continental Airlines, Inc.
4.21** Form of Amended and Restated Trust Indenture and Mortgage Amendment No.
1, dated as of January 31, 1996, between First Security Bank of Utah,
National Association, as Owner Trustee, and Wilmington Trust Company, as
Loan Trustee
4.22* Form of Series A Equipment Note, dated January 31, 1996, by First
Security Bank of Utah, National Association, as Owner trustee, payable
to Wilmington Trust Company, as Subordination Agent
4.23* Form of Series B Equipment Note, dated January 31, 1996, by First
Security Bank of Utah, National Association, as Owner trustee, payable
to Wilmington Trust Company, as Subordination Agent
4.24* Form of Series C Equipment Note, dated January 31, 1996, by First
Security Bank of Utah, National Association, as Owner trustee, payable
to Wilmington Trust Company, as Subordination Agent
4.25* Form of Series D Equipment Note, dated January 31, 1996, by First
Security Bank of Utah, National Association, as Owner trustee, payable
to Wilmington Trust Company, as Subordination Agent
4.26** Form of Trust Agreement, dated as of July 15, 1994, between Gaucho-2
Inc. and First Security Bank of Utah, National Association
4.27*** Form of Pass through Trust Agreement between Continental Airlines, Inc.
and Shawmut Bank Connecticut, National Association, as Trustee, relating
to certain Pass through Certificates
4.28*** Form of Pass Through Certificate (included in Exhibit 4.1)
4.29*** Form of Pass Through Trust Agreement between Continental Airlines, Inc.
and First Security Bank of Utah, National Association, as Trustee,
relating to certain Pass Through Certificates
4.30*** Form of Pass through Certificate (included in Exhibit 4.3)
4.31*** Form of Indenture between Continental Airlines, Inc. and Bank One,
Texas, National Association, as Trustee, relating to Senior Debt
Securities
4.32*** Form of Indenture between Continental Airlines, Inc. and Bank One,
Texas, National Association, as Trustee, relating to Subordinated Debt
Securities
5.1** Opinion of Cleary, Gottlieb, Steen & Hamilton relating to validity of
New Certificates
II-4
5.2** Opinion of Richards, Layton & Finger
5.3*** Opinion of Hughes Hubbard & Reed, counsel for Continental Airlines,
Inc., relating to Pass Through Certificates
5.4*** Opinion of Mayor, Day, Caldwell & Keeton, L.L.P., counsel for
Continental Airlines, Inc., relating to Debt Securities
5.5*** Opinion of Shipman & Goodwin, counsel for Shawmut Bank Connecticut,
National Association, relating to certain Pass Through Certificates
5.6*** Opinion of Ray, Quinney & Nebeker, counsel for First Security Bank of
Utah, National Association, relating to certain Pass Through
Certificates
8.1*** Tax Opinion of Hughes Hubbard & Reed, counsel for Continental Airlines,
Inc., relating to Pass Through Certificates (included in Exhibit 5.1)
8.2*** Tax Opinion of Shipman & Goodwin, counsel for Shawmut Bank Connecticut,
National Association, relating to certain Pass through Certificates
(included in Exhibit 5.3)
8.3*** Tax Opinion of Ray, Quinney & Nebeker, counsel for First Security Bank
of Utah, National Association, relating to certain Pass Through
Certificates (included in Exhibit 5.4)
12.1 Computation of Ratio of Earnings to Fixed Charges (incorporated by
reference to the Company's Registration Statement (File No. 333-03591))
23.1* Consent of Ernst & Young LLP
23.2** Consent of Cleary, Gottlieb, Steen, and Hamilton (included in its
opinion filed as exhibit 5.1)
23.3** Consent of Cleary, Gottlieb, Steen & Hamilton
23.4** Consent of Richards, Layton & Finger
23.5* Consent of Aircraft Information Services, Inc.
23.6* Consent of BK Associates, Inc.
23.7** Consent of Morten Beyer and Associates, Inc.
23.8*** Consent of Hughes Hubbard & Reed, counsel for Continental Airlines,
Inc. (included in Exhibit 5.1)
23.9*** Consent of Mayor, Day, Caldwell & Keeton, L.L.P., counsel for
Continental Airlines, Inc. (included in Exhibit 5.2)
23.10*** Consent of Shipman & Goodwin, counsel for Shawmut Bank Connecticut,
National Association (included in Exhibit 5.3)
23.11*** Consent of Ray, Quinney & Nebeker, counsel for First Security Bank of
Utah, National Association (included in Exhibit 5.4)
24.1* Powers of Attorney
25.1* Statement of Eligibility of Wilmington Trust Company for the 1996-A
Pass Through Certificates, on Form T-1
25.2* Statement of Eligibility of Wilmington Trust Company for the 1996-B
Pass Through Certificates, on Form T-1
25.3* Statement of Eligibility of Wilmington Trust Company for the 1996-C
Pass Through Certificates, on Form T-1
25.4* Statement of Eligibility of Wilmington Trust Company for the 1996-D
Pass Through Certificates, on Form T-1
25.5*** Statement of Eligibility of Shawmut Bank Connecticut, National
Association, on Form T-1
25.6*** Statement of Eligibility of First Security Bank of Utah, National
Association, on Form T-1
25.7*** Statement of Eligibility of Bank One, Texas, National Association, on
Form T-1
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
99.4* Form of Letter to Clients
- -----------------
* Filed herewith
** To be filed by amendment
*** Previously filed in connection with Registration Statement (File No.
33-79688)
Item 22. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from the low or high and of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
II-5
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant, pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by any such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether or not
such indemnification is against public policy as expressed in the Securities Act
of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on May 30, 1996.
CONTINENTAL AIRLINES, INC.
By: /s/ Jeffrey A. Smisek
--------------------------
Jeffery A. Smisek
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated, on May 30, 1996.
Signature Title
--------- ------
*
- ----------------------------- President, Chief Executive Officer (Principal
Gordon M. Bethune Executive Officer) and Director
*
- ----------------------------- Senior Vice President and Chief Financial
Lawrence W. Kellner Officer (Principal Financial Officer)
*
- ----------------------------- Staff Vice President and Controller
Michael P. Bonds (Principal Accounting Officer)
*
- ----------------------------- Director
Thomas J. Barrack, Jr.
*
- ----------------------------- Director
David Bonderman
*
- ----------------------------- Director
Gregory D. Brenneman
*
- ----------------------------- Director
Joel H. Cowan
*
- ----------------------------- Director
Patrick Foley
*
- ----------------------------- Director
Rowland C. Frazee, C.C.
*
- ----------------------------- Director
Hollis L. Harris
*
- ----------------------------- Director
Dean C. Kehler
*
- ----------------------------- Director
Robert L. Lumpkins
*
- ----------------------------- Director
Douglas H. McCorkindale
*
- ----------------------------- Director
David E. Mitchell, O.C.
*
- ----------------------------- Director
Richard W. Pogue
*
- ----------------------------- Director
William S. Price III
*
- ----------------------------- Director
Donald L. Sturm
*
- ----------------------------- Director
Claude I. Taylor, O.C.
*
- ----------------------------- Director
Karen Hastie Williams
*
- ----------------------------- Director
Charles A. Yamarone
By: /s/ Scott R. Peterson
--------------------------
Scott R. Peterson, Attorney-in-fact
Exhibit 4.1
FORM OF CERTIFICATE
REGISTERED
No. __________
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
EXCHANGE FOR THIS CERTIFICATE 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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS
3.05 AND 3.06 OF THE PASS THROUGH TRUST AGREEMENT REFERRED TO
HEREIN.
GLOBAL CERTIFICATE
CONTINENTAL AIRLINES 1996-A PASS THROUGH TRUST
6.94% Continental Airlines Exchange Pass Through Certificate
Series 1996-A
Final Distribution Date: October 15, 2013
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes each secured
by an Aircraft leased to Continental Airlines, Inc.
$________ 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 1996-A
Pass Through Trust (the "Trust" created pursuant to a Pass
Through Trust Agreement, dated as of January 31, 1996 (the
"Agreement"), between Wilmington Trust Company (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 "6.94% Continental Airlines Exchange Pass Through Certificates
Series 1996-A" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms,
provisions, and conditions of the Agreement. By virtue of its
acceptance hereof the Certificateholder of this Certificate
assents to and agrees to be bound by the provisions of the
Agreement and the Intercreditor Agreement. The property of the
Trust includes certain Equipment Notes and all rights of the
Trust to receive payments under the Intercreditor Agreement and
the Liquidity Facilities (the "Trust Property"). Each issue of
the Equipment Notes is secured by, among other things, a security
interest in the 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 assets or property
other than the Trust Property.
Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, from and to the extent
of funds then available to the Trustee, there will be distributed
on each January 15, April 15, July 15 and October 15 (a "Regular
Distribution Date"), commencing on April 15, 1996, 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.
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 AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
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.
Dated: CONTINENTAL AIRLINES
1996-A PASS THROUGH TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee
Attest: By:________________________
Name:
Title:
______________________
Authorized Signature
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By:___________________________
Authorized Officer
[REVERSE OF CERTIFICATE]
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 of their affiliates. The
Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under
the Agreement shall be made only from the Trust Property and only
to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof,
agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to
such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and
duties evidenced hereby. A copy of the Agreement may be examined
during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Certificateholders under the Agreement at any time by the Company
and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and
upon all future Certificateholders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein 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, in the Borough of Manhattan, the City of New
York, 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 of $1,000 in
excess thereof. 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 by the Holder 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.
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
______________________
______________________
please print or typewrite name and address including zip code of
assignee
_____________________
the within Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
_____________________
attorney to transfer said Certificate on the books of the Trustee
with full power of substitution in the premises.
Date:_______________ [Name of Transferor]
NOTE: The signature must
correspond with the name as
written upon the face of the
within-mentioned instrument in
every particular, without
alteration or any change
whatsoever.
Signature Guarantee: ______________________
Exhibit 4.2
FORM OF CERTIFICATE
REGISTERED
No. __________________
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
EXCHANGE FOR THIS CERTIFICATE 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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS
3.05 AND 3.06 OF THE PASS THROUGH TRUST AGREEMENT REFERRED TO
HEREIN.
GLOBAL CERTIFICATE
CONTINENTAL AIRLINES 1996-B PASS THROUGH TRUST
7.82% Continental Airlines Exchange Pass Through Certificate
Series 1996-B
Final Distribution Date: October 15, 2013
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes each secured
by an Aircraft leased to Continental Airlines, Inc.
$__________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 1996-B Pass
Through Trust (the "Trust") created pursuant to a Pass Through
Trust Agreement, dated as of January 31, 1996 (the "Agreement"),
between Wilmington Trust Company (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 "7.82% Continental
Airlines Exchange Pass Through Certificates Series 1996-B"
(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
Cerificateholder 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 Facilities (the "Trust
Property"). Each issue of the Equipment Notes is secured by,
among other things, a security interest in the 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 assets or property
other than the Trust Property.
Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, from and to the extent
of funds then available to the Trustee, there will be distributed
on each January 15, April 15, July 15 and October 15 (a "Regular
Distribution Date"), commencing on April 15, 1996, 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.
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 AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth in this place.
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.
Dated: CONTINENTAL AIRLINES
1996-B PASS THROUGH TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee
Attest:
By:----------------------
Name:
Title:
- --------------------
Authorized Signature
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee
By: --------------------
Authorized Officer
[REVERSE OF CERTIFICATE]
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 of their affiliates. The
Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under
the Agreement shall be made only from the Trust Property and only
to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof,
agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to
such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and
duties evidenced hereby. A copy of the Agreement may be examined
during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Certificateholders under the Agreement at any time by the Company
and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust.
Any such Consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and
upon all future Certificateholders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein 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, in the Borough of Manhattan, the City of New
York, duly endorsed or accompanied by 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 of $1,000 in
excess thereof. 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 by the Holder of a sum sufficient to cover any
tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and the 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 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.
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
_________________________________
_________________________________
please print or typewrite name and address including zip code of
assignee
________________________________
the within Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________
attorney to transfer said Certificate on the books of the Trustee
with full power of substitution in the premises.
Date:___________________________ [Name of Transferor]
Note the signature must
correspond with the name
as written upon the face
of the within-mentioned
instrument in every
particular, without
alteration or any
change whatsoever.
Signature Guarantee: _____________________
Exhibit 4.3
FORM OF CERTIFICATE
REGISTERED
No. _________
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
EXCHANGE FOR THIS CERTIFICATE 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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS
3.05 AND 3.06 OF THE PASS THROUGH TRUST AGREEMENT REFERRED TO
HEREIN.
GLOBAL CERTIFICATE
CONTINENTAL AIRLINES 1996-C PASS THROUGH TRUST
9.50% Continental Airlines Exchange Pass Through Certificate
Series 1996-C
First Distribution Date: October 15, 2013
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes each secured
by an Aircraft leased to Continental Airlines, Inc.
$_____ 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 1996-C Pass
Through Trust (the "Trust") created pursuant to a Pass Through
Trust Agreement, dated as of January 31, 1996 (the "Agreement"),
between Wilmington Trust Company (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 "9.50% Continental
Airlines Exchange Pass Through Certificates Series 1996-C"
(herein called the "Certificates"). This Certificate is issued
under and is subject to the terms, provisions, and conditions of
the Agreement. By virtue of its acceptance hereof the
Certificateholder of this Certificate assents to and agrees to be
bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment
Notes and all rights of the Trust to receive payments under the
Intercreditor Agreement and the Liquidity Facilities (the "Trust
Property"). Each issue of the Equipment Notes is secured by,
among other things, a security interest in the 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 assets or property
other than the Trust Property.
Subject to and in accordance with the terms of the
Agreement and the Inercreditor Agreement, from and to the extent
of funds then available to the Trustee, there will be distributed
on each January 15, April 15, July 15 and October 15 (a "Regular
Distribution Date"), commencing on April 15, 1996, 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.
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 AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
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.
Dated: CONTINENTAL AIRLINES
1996-C PASS THROUGH TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
Attest: By: ____________________________
Name:
Title:
____________________
Authorized Signature
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: ________________________
Authorized Officer
[REVERSE OF CERTIFICATE]
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 of their affiliates. The
Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under
the Agreement shall be made only from the Trust Property and only
to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof,
agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to
such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and
duties evidenced hereby. A copy of the Agreement may be examined
during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Certificateholders under the Agreement at any time by the Company
and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and
upon all future Certificateholders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein 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, in the Borough of Manhattan, the City of New
York, 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 of $1,000 in
excess thereof. 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 by the Holder 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.
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
________________________
________________________
please print or typewrite name and address including zip code of
assignee
_______________________
the within Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
______________________
attorney to transfer said Certificate on the books of the Trustee
with full power of substitution in the premises.
Date: _______________ [Name of Transferor]
NOTE: The signature must
correspond with the name
as written upon the face of
the within-mentioned instrument
in every particular, without
alteration or any change
whatsoever.
Signature Guarantee: ________________
Exhibit 4.4
FORM OF CERTIFICATE
REGISTERED
No. ___________
CONTINENTAL AIRLINES 1996-d PASS THROUGH TRUST
12.48% Continental Airlines Exchange Pass Through Certificate
Series 1996-D
Final Distribution Date: October 15, 2013
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes each secured
by an Aircraft leased to Continental Airlines, Inc.
$________ 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 1996-D Pass Through Trust (the "Trust") created pursuant
to a Pass Through Trust Agreement, dated as of January 31, 1996
(the "Agreement"), between Wilmington Trust Company (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 "12.48% Continental Airlines Exchange Pass Through
Certificates Series 1996-D" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms,
provisions, and conditions of the Agreement. By virtue of its
acceptance hereof the Certificateholder of this Certificate
assents to and agrees to be bound by the provisions of the
Agreement and the Intercreditor Agreement. The property of the
Trust includes certain Equipment Notes and all rights of the
Trust to receive payments under the Intercreditor Agreement (the
"Trust Property"). Each issue of the Equipment Notes is secured
by, among other things, a security interest in the 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 as sets or
property other than the Trust Property.
Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, from and to the extent
of funds then available to the trustee, there will be distributed
on each January 15, April 15, July 15 and October 15 (a "Regular
Distribution Date"), commencing on April 15, 1996, 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 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.
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 AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
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.
Dated: CONTINENTAL AIRLINES
1996-D PASS THROUGH TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee
Attest: By: _______________________
Name:
Title:
______________________
Authorized Signature
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee
By: __________________________
Authorized Officer
[REVERSE OF CERTIFICATE]
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 of their affiliates. The
Certificates are limited in right or payment, all as more
specifically set forth on the fact hereof and in 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
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 therein 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, in the Borough of Manhattan, the City of New
York, 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 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 of $1,000 in
excess thereof. 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 by the Holder 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.
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
____________________________
____________________________
please print or typewrite name and address including zip code of
assignee
____________________________
the within Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
____________________________
attorney to transfer said Certificate on the books of the Trustee
with full power of substitution in the premises.
Date:_______________________ [Name of Transferor]_____________
NOTE: The signature must
correspond with the name as
written upon the face of the
within-mentioned instrument in
every particular, without
alteration or any change
whatsoever.
Signature Guarantee: ________________
Exhibit 4.5
- -----------------------------------------------------------------
PASS THROUGH TRUST AGREEMENT
Dated as of January 31, 1996
among
CONTINENTAL AIRLINES, INC.
and
WILMINGTON TRUST COMPANY,
as Trustee
Continental Airlines 1996-A Pass Through Trust
6.94% 1996-A Initial Pass Through Certificates
6.94% 1996-A Exchange Pass Through Certificates
- -----------------------------------------------------------------
Reconciliation and tie between Continental Airlines 1996-A Pass
Through Trust Agreement, dated as of January 31, 1996, 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) 7.08
(a)(2) 7.08
312(a) 3.05; 8.01; 8.02
313(a) 8.03
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) 1.04(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) 12.06
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01. Definitions. . . . . . . . . . . . . . . . . . 2
1.02. Compliance Certificates and Opinions . . . . . 12
1.03. Form of Documents Delivered to Trustee . . . . 13
1.04. Directions of Certificateholders . . . . . . . 13
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
2.01. Issuance of Certificates; Acquisition
of Equipment Notes . . . . . . . . . . . . . 15
2.02. Acceptance by Trustee. . . . . . . . . . . . . 17
2.03. Limitation of Powers . . . . . . . . . . . . . 17
ARTICLE III
THE CERTIFICATES
3.01. Title, Form, Denomination and Execution of
Certificates . . . . . . . . . . . . . . . . 18
3.02. Restrictive Legends. . . . . . . . . . . . . . 19
3.03. Authentication of Certificates . . . . . . . . 21
3.04. Transfer and Exchange. . . . . . . . . . . . . 21
3.05. Book-Entry Provisions for U.S. Global
Certificate and Offshore Global
Certificates . . . . . . . . . . . . . . . . 22
3.06. Special Transfer Provisions. . . . . . . . . . 23
3.07. Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . 26
3.08. Persons Deemed Owners. . . . . . . . . . . . . 27
3.09. Cancellation . . . . . . . . . . . . . . . . . 27
3.10. Temporary Certificates . . . . . . . . . . . . 27
3.11. Limitation of Liability for Payments . . . . . 27
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
4.01. Certificate Account and Special Payments
Account. . . . . . . . . . . . . . . . . . . 28
4.02. Distributions from Certificate Account and
Special Payments Account . . . . . . . . . . 28
4.03. Statements to Certificateholders . . . . . . . 30
4.04. Investment of Special Payment Moneys . . . . . 31
ARTICLE V
THE COMPANY
5.01. Maintenance of Corporate Existence . . . . . . 31
5.02. Consolidation, Merger, etc.. . . . . . . . . . 31
ARTICLE VI
DEFAULT
6.01. Events of Default. . . . . . . . . . . . . . . 32
6.02. [Intentionally omitted.] . . . . . . . . . . . 35
6.03. Judicial Proceedings Instituted by Trustee;
Trustee May Bring Suit . . . . . . . . . . . 35
6.04. Control by Certificateholders. . . . . . . . . 35
6.05. Waiver of Past Defaults. . . . . . . . . . . . 36
6.06. Right of Certificateholders to Receive
Payments Not to Be Impaired. . . . . . . . . 36
6.07. Certificateholders May Not Bring Suit Except
Under Certain Conditions . . . . . . . . . . 36
6.08. Remedies Cumulative. . . . . . . . . . . . . . 37
ARTICLE VII
THE TRUSTEE
7.01. Certain Duties and Responsibilities. . . . . . 37
7.02. Notice of Defaults . . . . . . . . . . . . . . 38
7.03. Certain Rights of Trustee. . . . . . . . . . . 38
7.04. Not Responsible for Recitals or Issuance of
Certificates . . . . . . . . . . . . . . . . 40
7.05. May Hold Certificates. . . . . . . . . . . . . 40
7.06. Money Held in Trust. . . . . . . . . . . . . . 40
7.07. Compensation and Reimbursement . . . . . . . . 40
7.08. Corporate Trustee Required; Eligibility. . . . 41
7.09. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . . 41
7.10. Acceptance of Appointment by Successor . . . . 43
7.11. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . 43
7.12. Maintenance of Agencies. . . . . . . . . . . . 44
7.13. Money for Certificate Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . . 45
7.14. Registration of Equipment Notes in Name of
Subordination Agent. . . . . . . . . . . . . 45
7.15. Representations and Warranties of Trustee. . . 46
7.16. Withholding Taxes; Information Reporting . . . 47
7.17. Trustee's Liens. . . . . . . . . . . . . . . . 47
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
8.01. The Company to Furnish Trustee with Names
and Addresses of Certificateholders. . . . . 47
8.02. Preservation of Information; Communications
to Certificateholders. . . . . . . . . . . . 48
8.03. Reports by Trustee . . . . . . . . . . . . . . 48
8.04. Reports by the Company . . . . . . . . . . . . 48
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
9.01. Supplemental Agreements Without Consent of
Certificateholders . . . . . . . . . . . . . 49
9.02. Supplemental Agreements with Consent of
Certificateholders . . . . . . . . . . . . . 50
9.03. Documents Affecting Immunity or Indemnity. . . 51
9.04. Execution of Supplemental Agreements . . . . . 51
9.05. Effect of Supplemental Agreements. . . . . . . 51
9.06. Conformity with Trust Indenture Act. . . . . . 52
9.07. Reference in Certificates to Supplemental
Agreements . . . . . . . . . . . . . . . . . 52
ARTICLE X
AMENDMENTS TO INDENTURES AND REFUNDING DOCUMENTS
10.01. Amendments and Supplements to Indentures
and Other Refunding Documents. . . . . . . . 52
ARTICLE XI
TERMINATION OF TRUST
11.01. Termination of the Trust. . . . . . . . . . . 53
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01. Limitation on Rights of Certificateholders. . 54
12.02. Certificates Nonassessable and Fully Paid . . 54
12.03. Notices . . . . . . . . . . . . . . . . . . . 54
12.04. Governing Law . . . . . . . . . . . . . . . . 55
12.05. Severability of Provisions. . . . . . . . . . 55
12.06. Trust Indenture Act Controls. . . . . . . . . 56
12.07. Effect of Headings and Table of Contents. . . 56
12.08. Successors and Assigns. . . . . . . . . . . . 56
12.09. Benefits of Agreement . . . . . . . . . . . . 56
12.10. Legal Holidays. . . . . . . . . . . . . . . . 56
12.11. Counterparts. . . . . . . . . . . . . . . . . 56
12.12. Intention of Parties. . . . . . . . . . . . . 57
Schedule 1 - Indentures
Schedule 2 - Refunding Agreements
Exhibit A - Form of Certificate
Exhibit B - Form of Certificate for Unlegended Certificates
Exhibit C - Form of Certificate to Be Delivered in Connection
with Transfers Pursuant to Regulation S
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of
January 31, 1996, between CONTINENTAL AIRLINES, INC., a Delaware
corporation, and WILMINGTON TRUST COMPANY, as Trustee, is made
with respect to the formation of Continental Airlines 1996-A Pass
Through Trust and the issuance of 6.94% Continental Airlines
1996-A Pass Through Certificates representing fractional
undivided interests in the Trust.
WITNESSETH:
WHEREAS, the Company, the Owner Trustees and the Owner
Participants (as such terms and certain other capitalized terms
used herein are defined below) have previously entered into
eighteen separate leveraged lease transactions in connection with
the purchase of nine Boeing 737-524 aircraft and nine
Boeing 757-224 aircraft (collectively, the "Aircraft") from the
manufacturer;
WHEREAS, each Owner Trustee, acting on behalf of the
corresponding Owner Participant, will issue pursuant to an
Indenture, on a non-recourse basis, four series of Equipment
Notes, among other things, to refinance the current indebtedness
of such Owner Trustee originally incurred to finance the purchase
price of the related Aircraft;
WHEREAS, the Trustee, upon execution and delivery of
this Agreement, hereby declares the creation of the Trust for the
benefit of the Certificateholders, and the initial
Certificateholders, as the grantors of the Trust, by their
respective acceptances of the Certificates, join in the creation
of this Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Trust
will evidence fractional undivided interests in the Trust and
will convey no rights, benefits or interests in respect of any
property other than the Trust Property;
WHEREAS, pursuant to the terms and conditions of this
Agreement and each of the Refunding Agreements to be entered into
by the Trustee simultaneously with the execution and delivery of
this Agreement, the Trustee on behalf of the 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 Certificates issued hereunder
and shall hold such Equipment Notes in trust for the benefit of
the Certificateholders;
WHEREAS, to facilitate the sale of Equipment Notes to,
and the purchase of Equipment Notes by, the Trustee on behalf of
the Trust, the Company has duly authorized the execution and
delivery of this Agreement 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 pursuant hereto and
as the "obligor", as such term is defined in and solely for
purposes of the Trust Indenture Act of 1939, as amended, with
respect to all such Certificates and is undertaking to perform
certain administrative and ministerial duties hereunder and is
also undertaking to pay the ongoing fees and expenses of the
Trustee;
WHEREAS, all of the conditions and requirements
necessary to make this Agreement, when duly executed and
delivered, a valid, binding and legal instrument, enforceable in
accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and
delivery of this Agreement in the form and with the terms hereof
have been in all respects duly authorized; and
WHEREAS, upon issuance of the Exchange Certificates, if
any, or the effectiveness of the Registration Statement, this
Agreement, as amended or supplemented from time to time, will be
subject to the provisions of the Trust Indenture Act of 1939, 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
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 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 Agreement to
designated "Articles", "Sections", "Subsections" and other
subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this Agreement;
(4) 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,
Subsection or other subdivision; and
(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".
Affiliate: Means, with respect to any Person, any
other Person directly or indirectly controlling or
controlled by or under 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 purposes of this definition, "control" 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.
Agent Members: Has the meaning specified in
Section 3.05.
Aircraft: Has the meaning specified in the first
recital to this Agreement.
Authorized Agent: Means any Paying Agent or
Registrar for the Certificates.
Avoidable Tax: Means a state or local tax
(i) upon (w) the Trust, (x) the Trust Property,
(y) Certificateholders or (z) the Trustee for which the
Trustee is entitled to seek reimbursement from the Trust
Property, and (ii) which would be avoided if the Trustee
were located in another state, or jurisdiction within a
state, within the United States. A tax shall not be an
Avoidable Tax if the Company or any Owner Trustee shall
agree to pay, and shall pay, such tax.
Business Day: Means any day other than a
Saturday, a Sunday or a day on which commercial banks are
required or authorized to close in Houston, Texas, New York,
New York, or, so long as any Certificate is outstanding, the
city and state in which the Trustee or any Loan Trustee
maintains its Corporate Trust Office or receives and
disburses funds.
Cedel: Means Cedel Bank societe anonyme.
Certificate: Means any one of the Initial
Certificates or Exchange Certificates and any such
Certificates issued in exchange therefor or replacement
thereof pursuant to this Agreement.
Certificate Account: Means the account or
accounts created and maintained pursuant to
Section 4.01(a).
Certificateholder or Holder: Means the Person in
whose name a Certificate is registered in the Register.
Company: Means Continental Airlines, Inc., a
Delaware corporation, or its successor in interest pursuant
to Section 5.02, or any other obligor (within the meaning of
the Trust Indenture Act) with respect to the Certificates.
Controlling Party: Has the meaning specified in
the Intercreditor Agreement.
Corporate Trust Office: With respect to the
Trustee or any Loan Trustee, means the office of such
trustee in the city at which at any particular time its
corporate trust business shall be principally administered.
Cut-off Date: Means March 31, 1996.
Depositary: Means the Depository Trust Company,
its nominees and their respective successors.
Direction: Has the meaning specified in
Section 1.04(a).
Distribution Date: Means any Regular Distribution
Date or Special Distribution Date.
Equipment Notes: Means the equipment notes issued
under the Indentures.
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 specified in
Section 2.01(b).
Escrowed Funds: Has the meaning specified in
Section 2.01(b).
Euroclear: Means the Euroclear System.
Event of Default: Means an Indenture Default
under any Indenture pursuant to which Equipment Notes held
by the Trust were issued.
Exchange Certificates: Means the certificates
substantially in the form of Exhibit A hereto issued in
exchange for the Initial Certificates pursuant to the
Registration Rights Agreement and authenticated hereunder.
Exchange Offer Registration Statement: Means the
Exchange Offer Registration Statement defined in the
Registration Rights Agreement.
Fractional Undivided Interest: Means the
fractional undivided interest in the Trust that is evidenced
by a Certificate.
Global Certificates: Has the meaning assigned to
such term in Section 3.01.
Indentures: Means each of the eighteen separate
Amended and Restated Trust Indentures and Mortgages listed
on Schedule 1 hereto, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
Indenture Default: With respect to any Indenture,
means any Event of Default (as such term is defined in such
Indenture).
Initial Certificates: Means the certificates
issued and authenticated hereunder substantially in the form
of Exhibit A hereto other than the Exchange Certificates.
Initial Purchasers: Means, collectively, CS First
Boston Corporation, Morgan Stanley & Co. Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman
Brothers Inc. and Fieldstone FPCG Services, L.P.
Initial Regular Distribution Date: Means the
first Regular Distribution Date on which a Scheduled Payment
is to be made.
Institutional Accredited Investor: Means an
institutional investor that is an "accredited investor"
within the meaning set forth in Rule 501(a)(1), (2), (3)
or (7) of Regulation D under the Securities Act.
Intercreditor Agreement: Means the Intercreditor
Agreement dated the date hereof among the Trustee, the Other
Trustees, the Liquidity Provider, the liquidity provider, if
any, relating to the Certificates issued under (and as
defined in) each of the Other Pass Through Trust Agreements,
and Wilmington Trust Company, as Subordination Agent
thereunder, as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
Issuance Date: Means the date of the issuance of
the Initial Certificates.
Lease: Means the lease between an Owner Trustee,
as the lessor, and the Company, as the lessee, referred to
in the related Indenture, as each such lease may be amended,
supplemented or otherwise modified in accordance with its
terms.
Liquidity Facility: Means the Revolving Credit
Agreement dated the date hereof relating to the
Certificates, between the Liquidity Provider and the
Subordination Agent, as amended, replaced, supplemented or
otherwise modified from time to time in accordance with its
terms and the terms of the Intercreditor Agreement.
Liquidity Provider: Means, initially, Credit
Suisse, acting through its New York Branch, together with
any replacement or successor therefor appointed in
accordance with the Liquidity Facility and the Intercreditor
Agreement.
Loan Trustee: With respect to any Equipment Note
or the Indenture applicable thereto, means the bank or trust
company designated as indenture trustee under such
Indenture, together with any successor to such Loan Trustee
appointed pursuant thereto.
Non-U.S. Person: Means a Person that is not a
"U.S. person", as defined in Regulation S.
Officer's Certificate: Means a certificate
signed, (a) in the case of the Company, by (i) the Chairman
or Vice Chairman of the Board of Directors, the President,
any Executive Vice President, any Senior Vice President or
the Treasurer of the Company, signing alone or (ii) any Vice
President of the Company signing together with the
Secretary, the Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company or, (b) in the case of an
Owner Trustee or a Loan Trustee, a Responsible Officer of
such Owner Trustee or such Loan Trustee, as the case may be.
Offshore Certificates Exchange Date: Has the
meaning specified in Section 3.01.
Offshore Global Certificates: Has the meaning
assigned to such term in Section 3.01.
Offshore Physical Certificates: Has the meaning
assigned to such term in Section 3.01.
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) Cleary, Gottlieb, Steen & Hamilton, (iii) Hughes
Hubbard & Reed, or (iv) such other counsel designated by the
Company and reasonably acceptable to the Trustee and (b) in
the case of counsel for 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 Pass Through Trust Agreements: Means each
of the three other Continental Airlines 1996 Pass Through
Trust Agreements relating to Continental Airlines 1996-B
Pass Through Trust, Continental Airlines 1996-C Pass Through
Trust and Continental Airlines 1996-D Pass Through Trust,
dated the date hereof.
Other Trustees: Means the trustee under the Other
Pass Through Trust Agreements, and any successor or other
trustee appointed as provided therein.
Outstanding: When used with respect to
Certificates, means, as of the date of determination, all
Certificates theretofore authenticated and delivered under
this Agreement, except:
(i) Certificates theretofore cancelled by
the Registrar or delivered to the Trustee or the
Registrar for cancellation;
(ii) Certificates for which money in the
full amount required to make the final distribution
with respect to such Certificates pursuant to
Section 11.01 hereof has been theretofore deposited
with the Trustee in trust for the Holders of such
Certificates as provided in Section 4.01 pending
distribution of such money to such Certificateholders
pursuant to payment of such final distribution; and
(iii) Certificates in exchange for or in
lieu of which other Certificates have been
authenticated and delivered pursuant to this Agreement.
Owner Participant: With respect to any Equipment Note,
means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued
and any permitted successor or assign of such Owner
Participant; and Owner Participants at any time of
determination means all of the Owner Participants thus
referred to in the Indentures.
Owner Trustee: With respect to any Equipment Note,
means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and Owner
Trustees means all of the Owner Trustees party to any of the
Indentures.
Participation Agreement: With respect to any Aircraft,
means the Participation Agreement referred to in the related
Indenture.
Paying Agent: Means the paying agent maintained and
appointed for the Certificates pursuant to Section 7.12.
Permanent Offshore Global Certificates: Has the
meaning specified in Section 3.01.
Permanent Offshore Physical Certificates: Has the
meaning specified in Section 3.01.
Permitted Investments: Means obligations of the United
States of America or agencies or instrumentalities thereof
the payment of which is backed by the full faith and credit
of the United States of America and which mature 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, partnership, joint venture, association, joint-
stock company, trust, trustee, unincorporated organization,
or government or any agency or political subdivision
thereof.
Physical Certificates: Has the meaning specified in
Section 3.01.
Pool Balance: Means, as of any date, (i) the original
aggregate face amount of the Certificates less (ii) the
aggregate amount of all payments made in respect of 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 such Trust and the
distribution thereof to be made on such Distribution Date.
Pool Factor: Means, as of any date, the quotient
(rounded to the seventh decimal place) computed by dividing (i)
the Pool Balance as at such date by (ii) the original aggregate
face amount of the Certificates. 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 and the distribution thereof to be made on such
Distribution Date.
Postponed Notes: Means the Equipment Notes to be held
in the Trust as to which a Postponement Notice shall have
been delivered pursuant to Section 2.01(b).
Postponement Notice: Means an Officer's Certificate of
the Company (1) requesting that the Trustee temporarily
postpone the purchase pursuant to one or more of the
Refunding Agreements of certain of the Equipment Notes to a
date which is later than the Issuance Date, (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, 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.
Private Placement Legend: Has the meaning specified in
Section 3.02.
PTC Event of Default: Means any failure to pay within
10 Business Days of the due date thereof: (i) the
outstanding Pool Balance on April 15, 2015 or (ii) interest
due on the Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing (as
defined in the Intercreditor Agreement) with respect thereto
in an amount sufficient to pay such interest and shall have
distributed such amount to the Certificateholders).
QIB: Means a qualified institutional buyer as defined
in Rule 144A.
Record Date: Means (i) for Scheduled Payments to be
distributed on any Regular Distribution Date, other than the
final distribution, 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, the
15th day (whether or not a Business Day) preceding such
Special Distribution Date.
Refunding Agreements: Means each of the eighteen
separate Refunding Agreements dated the date hereof, listed
on Schedule 2 hereto, providing for, among other things, the
purchase of Equipment Notes by the Trustee on behalf of the
Trust, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
Refunding Documents: With respect to any Equipment
Note, means the related Indenture, Refunding Agreement,
Lease and Participation Agreement.
Register and Registrar: Mean the register maintained
and the registrar appointed pursuant to Sections 3.04
and 7.12.
Registration Rights Agreement: Means the Registration
Rights Agreement dated January 31, 1996, among the Initial
Purchasers, the Trustee, the Other Trustees and the Company,
as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
Registration Statement: Means the Registration
Statement defined in the Registration Rights Agreement.
Regular Distribution Date: With respect to
distributions of Scheduled Payments in respect of the
Certificates, means each date designated as a Regular
Distribution Date in this Agreement, until payment of all
the Scheduled Payments to be made under the Equipment Notes
held in the Trust have been made; 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.
Regulation S: Means Regulation S under the Securities
Act or any successor regulation thereto.
Responsible Officer: With respect to the Trustee, any
Loan Trustee and any Owner Trustee, means any officer in the
Corporate Trust Office 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.
Rule 144A: Means Rule 144A under the Securities Act
and any successor rule thereto.
Scheduled Payment: With respect to any Equipment Note,
means (i) any payment of principal and interest on such
Equipment Note (other than any such payment which is not in
fact received by the Subordination Agent within five days of
the date on which such payment is scheduled to be made) due
from the obligor thereon or (ii) any payment of interest on
the Certificates with funds drawn under the 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, 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.
Securities Act: Means the United States Securities Act
of 1933, as amended from time to time, or any successor
thereto.
Special Distribution Date: Means each date on which a
Special Payment is to be distributed as specified in this
Agreement; 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.
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 2.01(b) or
(iii) the amounts required to be distributed pursuant to the
penultimate paragraph of Section 2.01(b).
Special Payments Account: Means the account or
accounts created and maintained pursuant to Section 4.01(b).
Specified Investments: Means (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 Group,
(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 short-term deposit rating of P1 by
Moody's Investors Service, Inc. or its equivalent by
Standard & Poor's Ratings Group; 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 respect to any of the obligations described in
clauses (i) through (iv) above as collateral; provided
further that if all of the above investments are
unavailable, all 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 in the
Intercreditor Agreement.
Temporary Offshore Global Certificates: Has the
meaning specified in Section 3.01.
Transfer Date: Has the meaning assigned to the term
"Refunding Date" in each Refunding Agreement.
Triggering Event: Has the meaning assigned to such
term in the Intercreditor Agreement.
Trust: Means the trust created by this Agreement, the
estate of which consists of the Trust Property.
Trust Indenture Act: Except as otherwise provided in
Section 9.06, means the United States Trust Indenture Act of
1939 as in force at the date hereof.
Trust Property: Means (i) the Equipment Notes held as
the property of the Trust and 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 Escrow
Account, the Certificate Account and the Special Payments
Account, and (iii) all rights of the Trust and the Trustee,
on behalf of the Trust, under the Intercreditor Agreement
and the Liquidity Facility, including, without limitation,
all rights to receive certain payments thereunder, and all
monies paid to the Trustee on behalf of the Trust pursuant
to the Intercreditor Agreement or the Liquidity Facility.
Trustee: Means Wilmington Trust Company, or its
successor in interest, and any successor or other trustee
appointed as provided herein.
Trustee's Lien: Has the meaning specified in Section
7.17.
U.S. Global Certificate: Has the meaning specified in
Section 3.01.
U.S. Physical Certificates: Has the meaning specified
in Section 3.01.
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 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 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 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 Agreement
(other than a certificate provided pursuant to Section 8.04(d))
shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions in 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 Agreement
or, in respect of the Certificates, 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 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, where it is hereby expressly required pursuant to this
Agreement, to the Company or any Loan Trustee. 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
Agreement and conclusive in favor of the Trustee, the Company and
any Loan Trustee, if made in the manner provided in this Section.
(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
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 Outstanding, such
Certificates shall not be so disregarded, and (ii) if any amount
of Certificates 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 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 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 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 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 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 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.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01. Issuance of Certificates; Acquisition of
Equipment Notes. (a) The Trustee is hereby directed to execute
and deliver the Intercreditor Agreement, the Registration Rights
Agreement and each of the Refunding Agreements on or prior to the
Issuance Date, each in the form delivered to the Trustee by the
Company. Upon request of the Company and the satisfaction of the
closing conditions specified in each of the Refunding Agreements,
the Trustee shall execute, deliver and authenticate Certificates
equalling in the aggregate the aggregate principal amount of the
Equipment Notes to be purchased by the Trustee pursuant to each
of the Refunding Agreements on the Transfer Date, and evidencing
the entire ownership interest in the Trust. The Trustee shall
issue and sell such Certificates, in authorized denominations and
in such Fractional Undivided Interests, so as to result in the
receipt by the Trustee of consideration in an amount equal to the
aggregate principal amount of such Equipment Notes and,
concurrently therewith, the Trustee shall purchase, pursuant to
the terms and conditions of the Refunding Agreements, the
Equipment Notes at a purchase price equal to the amount of such
consideration so received. Except as provided in Sections 3.04
and 3.07 hereof, the Trustee shall not execute, authenticate or
deliver Certificates 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, the Company
shall deliver to the Trustee a Postponement Notice relating to
one or more Postponed Notes (which Postponement Notice may be
given by the Company only if one or more conditions to the
purchase of such Postponed Notes by the Trustee shall not have
been satisfied or waived pursuant to the related Refunding
Agreement), the Trustee shall postpone the purchase of such
Postponed Notes from the consideration received from the sale of
Certificates and shall promptly deposit funds in an amount equal
to the purchase price of such Postponed Notes (the "Escrowed
Funds") into an escrow account (the "Escrow Account") with the
Trustee to be maintained as a part of the Trust. The Escrowed
Funds so deposited shall be invested by the Trustee at the
direction and risk of, and for the benefit of, the Company in
Specified Investments (i) maturing no later than any scheduled
Transfer Date relating to the Certificates 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
any Postponed Notes will not be issued, with respect to the
portion of the Escrowed Funds relating to such Postponed Notes,
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 of the closing conditions
specified in the applicable Refunding 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 direction and risk of, and for the benefit of, the
Company 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
Company. The Company shall pay to the Trustee for deposit to the
Escrow Account an amount equal to any losses on such Specified
Investments as incurred. On the Initial Regular Distribution
Date, the Company will pay (in immediately available funds) to
the Trustee an amount equal to the interest that would have
accrued on any Postponed Notes 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 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 occurring more than 20 days following the date
of such notice (i) the Company shall pay to the Trustee for
deposit in the 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 the 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 plus the amount
paid by the Company pursuant to the immediately preceding
clause (i) to the Special Payments Account for distribution as a
Special Payment in accordance with the provisions hereof.
If, on the 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 Special Distribution Date occurring
more than 20 days following the Cut-off Date (i) the Company
shall pay to the Trustee for deposit in the Special Payments
Account, in immediately available funds, an amount equal to the
interest that would have accrued on Postponed Notes originally
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 the 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 Company pursuant to the immediately
preceding clause (i) to the Special Payments Account for
distribution as a Special Payment in accordance with the
provisions hereof.
Section 2.02. Acceptance by Trustee. The Trustee,
upon the execution and delivery of this Agreement, acknowledges
its acceptance of all right, title and interest in and to the
Equipment Notes acquired pursuant to Section 2.01 hereof and the
Refunding Agreements and declares that the Trustee holds and will
hold such right, title and interest, together with all other
property constituting the Trust Property, for the benefit of all
then present and future Certificateholders, upon the trusts
herein set forth. Subject to Section 7.14, the Trustee shall
take all actions reasonably necessary to effect the registration
of all such Equipment Notes in the name of the Subordination
Agent. By its payment for and acceptance of each Certificate
issued to it under this Agreement, each initial Certificateholder
as grantor of the Trust thereby joins in the creation and
declaration of the Trust.
Section 2.03. Limitation of Powers. The Trust is
constituted solely for the purpose of making the investment in
the Equipment Notes, 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. Title, Form, Denomination and Execution
of Certificates. (a) The Initial Certificates shall be known as
the "6.94% 1996-A Initial Pass Through Certificates" and the
Exchange Certificates shall be known as the "6.94% 1996-A
Exchange Pass Through Certificates", in each case, of the Trust.
Each Certificate will represent a fractional undivided interest
in the Trust and shall be substantially in the form set forth as
Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or 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 or as may, consistently herewith, be
determined by the officers executing such Certificates, as
evidenced by their execution of the Certificates. Any portion of
the text of any Certificate may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the
Certificate.
(b) The Initial Certificates shall be issued only in
fully registered form without coupons and only in denominations
of $100,000 or integral multiples of $1,000 in excess thereof,
except that one Certificate may be issued in a denomination of
less than $100,000. The Exchange Certificates will be issued in
denominations of $1,000 or integral multiples thereof. Each
Certificate shall be dated the date of its authentication. The
aggregate Fractional Undivided Interest of Certificates shall not
at any time exceed $269,518,000.
(c) Initial Certificates offered and sold in reliance
on Rule 144A shall be issued initially in the form of a single
permanent global Certificate in registered form, substantially in
the form set forth as Exhibit A hereto (the "U.S. Global
Certificate"), duly executed and authenticated by the Trustee as
hereinafter provided. The U.S. Global Certificate will be
registered in the name of a nominee for the Depositary and
deposited with the Trustee, as custodian for the Depositary. The
aggregate principal amount of the U.S. Global Certificate may
from time to time be increased or decreased by adjustments made
on the records of the Depositary or its nominee, or of the
Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
(d) Initial Certificates offered and sold in offshore
transactions in reliance on Regulation S shall be issued
initially in the form of a single temporary global Certificate in
registered form, substantially in the form set forth as Exhibit A
hereto (the "Temporary Offshore Global Certificate") duly
executed and authenticated by the Trustee as hereinafter
provided. The Temporary Offshore Global Certificates will be
registered in the name of a nominee of the Depositary for credit
to the account of the Agent Members acting as depositaries for
Euroclear and Cedel and deposited with the Trustee as custodian
for the Depositary. At any time following March 11, 1996 (the
"Offshore Certificates Exchange Date"), upon receipt by the
Trustee of a certificate substantially in the form of Exhibit B
hereto, a single permanent global Certificate in registered form
substantially in the form set forth in Exhibit A (the "Permanent
Offshore Global Certificate"; and together with the Temporary
Offshore Global Certificate, the "Offshore Global Certificates"),
duly executed and authenticated by the Trustee as hereinafter
provided, shall be registered in the name of a nominee for the
Depositary and deposited with the Trustee, as custodian for the
Depositary, and the Registrar shall reflect on its books and
records the date of such transfer and a decrease in the principal
amount of any Temporary Offshore Global Certificate in an amount
equal to the principal amount of the beneficial interest in such
Temporary Offshore Global Certificate transferred. The U.S.
Global Certificate and the Offshore Global Certificates are
sometimes referred to as the "Global Certificates".
(e) Initial Certificates offered and sold to
Institutional Accredited Investors shall be issued in the form of
permanent certificated Certificates in registered form in
substantially the form set forth as Exhibit A hereto (the "U.S.
Physical Certificates"). Certificates issued pursuant to Section
3.05(b) in exchange for interests in any Offshore Global
Certificate shall be in the form of permanent certificated
Certificates in registered form substantially in the form set
forth in Exhibit A (the "Offshore Physical Certificates"). The
Offshore Physical Certificates and U.S. Physical Certificates are
sometimes collectively herein referred to as the "Physical
Certificates".
(f) The definitive Certificates shall be in registered
form and shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced
in any other manner, all as determined by the officers executing
such Certificates, as evidenced by their execution of such
Certificates.
Section 3.02. Restrictive Legends. (a) Subject to
Section 3.06, unless and until (i) an Initial Certificate is sold
under an effective Registration Statement or (ii) an Initial
Certificate is exchanged for an Exchange Certificate pursuant to
an effective Exchange Offer Registration Statement, in each case
as provided for in the Registration Rights Agreement, each Global
Certificate (other than the Permanent Offshore Global
Certificate) and each U.S. Physical Certificate shall bear the
following legend (the "Private Placement Legend") on the face
thereof:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS
HELD BY CONTINENTAL AIRLINES, INC., THE TRUSTEE OR ANY
AFFILIATE OF ANY OF SUCH PERSONS RESELL OR OTHERWISE
TRANSFER THIS CERTIFICATE EXCEPT (A) TO CONTINENTAL
AIRLINES, INC., (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS CERTIFICATE WITHIN THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THIS CERTIFICATE OR THE
LAST DATE ON WHICH THIS CERTIFICATE WAS HELD BY CONTINENTAL
AIRLINES, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH
PERSONS THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) Each Global Certificate shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE 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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.05 AND 3.06 OF THE PASS
THROUGH TRUST AGREEMENT REFERRED TO HEREIN.
Section 3.03. Authentication of Certificates. (a)
The Trustee shall duly execute, authenticate and deliver
Certificates in authorized denominations equalling in the
aggregate the aggregate principal amount of the Equipment Notes
to be purchased by the Trustee pursuant to the Refunding
Agreements and evidencing the entire ownership of the Trust.
(b) No Certificate shall be entitled to any benefit
under this Agreement or be valid or obligatory for any purpose,
unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Certificate
shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder.
Section 3.04. Transfer and Exchange. (a) 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 of this
Agreement a register (the "Register") for the Certificates in
which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of the
Certificates and of transfers and exchanges of the Certificates
as herein provided. The Trustee shall initially be the registrar
(the "Registrar") for the purpose of registering the Certificates
and transfers and exchanges of the Certificates as herein
provided. A Certificateholder may transfer a Certificate by
written application to the Registrar stating the name of the
proposed transferee and otherwise complying with the terms of
this Agreement, including providing a written certificate or
other evidence of compliance with any restrictions on transfer.
No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Certificateholder only upon,
final acceptance and registration of the transfer by the
Registrar in the Register. Prior to the registration of any
transfer by a Certificateholder as provided herein, the Trustee
shall treat the person in whose name the Certificate is
registered as the owner thereof for all purposes, and the Trustee
shall not be affected by notice to the contrary. Furthermore,
the Depositary shall, by acceptance of a Global Certificate,
agree that transfers of beneficial interests in such Global
Certificate may be effected only through a book-entry system
maintained by the Depositary (or its agent), and that ownership
of a beneficial interest in the Certificate shall be required to
be reflected in a book entry. When Certificates are presented to
the Registrar with a request to register the transfer or to
exchange them for an equal face amount of Certificates of other
authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if its requirements
for such transactions are met. To permit registrations of
transfers and exchanges in accordance with the terms, conditions
and restrictions hereof, the Trustee shall execute and
authenticate Certificates at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange
of the Certificates, but the Trustee may require payment by the
transferor of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental
charges payable upon exchanges pursuant to Section 3.10 or 9.07).
Section 3.05. Book-Entry Provisions for U.S. Global
Certificate and Offshore Global Certificates. (a) Members of,
or participants in, the Depositary ("Agent Members") shall have
no rights under this Agreement with respect to any Global
Certificate held on their behalf by the Depositary, or the
Trustee as its custodian, and the Depositary may be treated by
the Trustee and any agent of the Trustee as the absolute owner of
such Global Certificate for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Trustee or any agent of the Trustee from giving effect to any
written certification, proxy or other authorization furnished by
the Depositary or shall impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Certificate. Upon the
issuance of any Global Certificate, the Registrar or its duly
appointed agent shall record a nominee of the Depositary as the
registered holder of such Global Certificate.
(b) Transfers of any Global Certificate shall be
limited to transfers of such Global Certificate or Offshore
Global Certificate in whole, but not in part, to nominees of the
Depositary, its successor or such successor's nominees.
Beneficial interests in the U.S. Global Certificate and any
Offshore Global Certificate may be transferred in accordance with
the rules and procedures of the Depositary and the provisions of
Section 3.06. Beneficial interests in the U.S. Global
Certificate or an Offshore Global Certificate shall be delivered
to all beneficial owners in the form of U.S. Physical
Certificates or Offshore Physical Certificates, as the case may
be, if (i) the Depositary notifies the Trustee that it is
unwilling or unable to continue as Depositary for the U.S. Global
Certificate or such Offshore Global Certificate, as the case may
be, and a successor depositary is not appointed by the Trustee
within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a
request from the Depositary to issue Physical Certificates.
(c) Any beneficial interest in one of the Global
Certificates that is transferred to a Person who takes delivery
in the form of an interest in the other Global Certificate will,
upon such transfer, cease to be an interest in such Global
Certificate and become an interest in the other Global
Certificate and, accordingly, will thereafter be subject to all
transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Certificate for as long
as it remains such an interest.
(d) [Intentionally omitted.]
(e) In connection with the transfer of the entire U.S.
Global Certificate or an entire Offshore Global Certificate to
the beneficial owners thereof pursuant to paragraph (b) of this
Section 3.05, such U.S. Global Certificate or Offshore Global
Certificate, as the case may be, shall be deemed to be
surrendered to the Trustee for cancellation, and the Trustee
shall execute, authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial
interest in such U.S. Global Certificate or Offshore Global
Certificate, as the case may be, an equal aggregate principal
amount of U.S. Physical Certificates or Offshore Physical
Certificates, as the case may be, of authorized denominations.
(f) Any U.S. Physical Certificate delivered in
exchange for an interest in the U.S. Global Certificate pursuant
to paragraph (b) of this Section 3.05 shall, except as otherwise
provided by paragraph (f) of Section 3.06, bear the Private
Placement Legend.
(g) Any Offshore Physical Certificate delivered in
exchange for an interest in an Offshore Global Certificate
pursuant to paragraph (b) of this Section shall, except as
otherwise provided by paragraph (f) of Section 3.06, bear the
applicable legend regarding transfer restrictions set forth in
Section 3.02(a).
(h) The registered holder of the U.S. Global
Certificate or any Offshore Global Certificate may grant proxies
and otherwise authorize any Person, including Agent Members and
Persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this
Agreement or the Certificates.
Section 3.06. Special Transfer Provisions. Unless and
until (i) an Initial Certificate is sold under an effective
Registration Statement, or (ii) an Initial Certificate is
exchanged for an Exchange Certificate pursuant to an effective
Exchange Offer Registration Statement, in each case pursuant to
the Registration Rights Agreement, the following provisions shall
apply to such Initial Certificates:
(a) [intentionally omitted.]
(b) Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed transfer
of an Initial Certificate to a QIB (excluding Non-U.S. Persons):
(i) If the Certificate to be transferred consists of
U.S. Physical Certificates or an interest in any Temporary
Offshore Global Certificate, the Registrar shall register
the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form
of Initial Certificate stating, or has otherwise advised the
Trustee and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on
the form of Initial Certificate stating, or has otherwise
advised the Trustee and the Registrar in writing, that it is
purchasing the Initial Certificate for its own account or an
account with respect to which it exercises sole investment
discretion and that it, or the Person on whose behalf it is
acting with respect to any such account, is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Trust and/or the
Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is
aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) Upon receipt by the Registrar of the documents
referred to in clause (i) above and instructions given in
accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its
books and records the date of such transfer and an increase
in the principal amount of the U.S. Global Certificate in an
amount equal to the principal amount of the U.S. Physical
Certificates or interests in the Temporary Offshore Global
Certificate, as the case may be, being transferred, and the
Trustee shall cancel such Physical Certificates or decrease
the amount of such Temporary Offshore Global Certificate so
transferred.
(c) [intentionally omitted.]
(d) Transfers of Interests in the Permanent Offshore
Global Certificate or Offshore Physical Certificates. The
Registrar shall register any transfer of interests in the
Permanent Offshore Global Certificate or Offshore Physical
Certificates without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The
following provisions shall apply with respect to any registration
of any transfer of an Initial Certificate to a Non-U.S. Person:
(i) Prior to the Offshore Certificates Exchange Date,
the Registrar shall register any proposed transfer of an
Initial Certificate to a Non-U.S. Person upon receipt of a
certificate substantially in the form set forth as Exhibit C
hereto from the proposed transferor.
(ii) On and after the Offshore Certificates Exchange
Date, the Registrar shall register any proposed transfer to
any Non-U.S. Person if the Certificate to be transferred is
a U.S. Physical Certificate or an interest in the U.S.
Global Certificate, upon receipt of a certificate
substantially in the form of Exhibit C from the proposed
transferor. The Registrar shall promptly send a copy of
such certificate to the Company.
(iii) Upon receipt by the Registrar of (x) the
documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its
books and records the date of such transfer and a decrease
in the principal amount of such U.S. Global Certificate in
an amount equal to the principal amount of the beneficial
interest in such U.S. Global Certificate to be transferred,
and (B) upon receipt by the Registrar of instructions given
in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of
the Offshore Global Certificate in an amount equal to the
principal amount of the U.S. Physical Certificate or the
U.S. Global Certificate, as the case may be, to be
transferred, and the Trustee shall cancel the Physical
Certificate, if any, so transferred or decrease the amount
of such U.S. Global Certificate.
(f) Private Placement Legend. Upon the transfer,
exchange or replacement of Certificates not bearing the Private
Placement Legend, the Registrar shall deliver Certificates that
do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Certificates bearing the Private
Placement Legend, the Registrar shall deliver only Certificates
that bear the Private Placement Legend unless either (i) the
circumstances contemplated by paragraph (a)(i)(x) or (e)(ii) of
this Section 3.06 exist or (ii) there is delivered to the
Registrar an Opinion of Counsel to the effect that neither such
legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the
Securities Act.
(g) General. By its acceptance of any Certificate
bearing the Private Placement Legend, each Holder of such a
Certificate acknowledges the restrictions on transfer of such
Certificate set forth in this Agreement and agrees that it will
transfer such Certificate only as provided in this Agreement.
The Registrar shall not register a transfer of any Certificate
unless such transfer complies with the restrictions on transfer
of such Certificate set forth in this Agreement. In connection
with any transfer of Certificates, each Certificateholder agrees
by its acceptance of the Certificates to furnish the Registrar or
the Trustee such certifications, legal opinions or other
information as either of them may reasonably require to confirm
that such transfer is being made pursuant to an exemption from,
or a transaction not subject to, the registration requirements of
the Securities Act; provided that the Registrar shall not be
required to determine the sufficiency of any such certifications,
legal opinions or other information.
Until such time as no Certificates remain Outstanding,
the Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.05 or
this Section 3.06. The Trustee, if not the Registrar at such
time, shall have the right to inspect and make copies of all such
letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to
the Registrar.
Section 3.07. 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 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, 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 3.07, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee and the
Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this
Section 3.07 shall constitute conclusive evidence of the
appropriate Fractional Undivided Interest in the 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 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 3.08. 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 3.09. 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, 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 3.10. Temporary Certificates. Until
definitive Certificates are ready for delivery, the Trustee shall
authenticate temporary Certificates. Temporary Certificates
shall be substantially in the form of definitive Certificates but
may have insertions, substitutions, omissions and other
variations determined to be appropriate by the officers executing
the temporary Certificates, as evidenced by their execution of
such temporary Certificates. If temporary Certificates are
issued, the Trustee will cause definitive Certificates to be
prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the
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 authorized
denominations. Until so exchanged, the temporary Certificates
shall be entitled to the same benefits under this Agreement as
definitive Certificates.
Section 3.11. Limitation of Liability for Payments.
All payments and distributions made to Certificateholders 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 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 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.
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 a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold the
Certificate Account in trust for the benefit of the
Certificateholders, 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 the Intercreditor
Agreement, the Trustee upon receipt thereof shall immediately
deposit the aggregate amount of such Scheduled Payment in the
Certificate Account.
(b) The Trustee shall establish and maintain on
behalf of the Certificateholders 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 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, the Trustee, upon
receipt thereof, shall immediately deposit the aggregate amount
of such Special Payments in the Special Payments Account.
(c) The Trustee shall 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 or as soon thereafter as the Trustee has confirmed receipt
of the payment of all or any part of the Scheduled Payments due
on such date, the Trustee shall distribute out of the Certificate
Account the entire amount deposited therein pursuant to
Section 4.01(a). There shall be so distributed to each
Certificateholder of record 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 Certificate
Account, except that, with respect to Certificates registered on
the Record Date in the name of the nominee of the Depositary
(initially, such nominee to be Cede & Co.), such distribution
shall be made by wire transfer in immediately available funds to
the account designated by such nominee.
(b) On each Special Distribution Date with respect to
any Special Payment or as soon thereafter as the Trustee has
confirmed receipt of any Special Payments, the Trustee shall
distribute out of the Special Payments Account the entire amount
of such Special Payment deposited therein pursuant to
Section 4.01(b). There shall be so distributed to each
Certificateholder of record 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 Trust held by such
Certificateholder) of the total amount in the Special Payments
Account on account of such Special Payment, except that, with
respect to Certificates registered on the Record Date in the name
of the nominee of the Depositary (initially, such nominee to be
Cede & Co.), such distribution shall be made by wire transfer in
immediately available funds to the account designated by such
nominee.
(c) The Trustee shall, at the expense of the Company,
cause notice of each Special Payment to be mailed to each
Certificateholder at his address as it appears in the Register.
In the event of redemption or purchase of Equipment Notes held in
the Trust, such notice shall be mailed not less than 20 days
prior to the Special Distribution Date for the Special Payment
resulting from such redemption or purchase, which Special
Distribution Date shall be the date of such redemption or
purchase. In the case of any other Special Payments, such notice
shall be mailed as soon as practicable after the Trustee has
confirmed that it has received funds for such Special Payment,
stating the Special Distribution Date for such Special Payment
which shall occur not less than 20 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 for each $1,000
face amount Certificate (taking into account any payment to
be made by the Company pursuant to Section 2.01(b)) and the
amount thereof constituting principal, premium, if any, and
interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date
as a Regular Distribution Date, the total amount to be
received on such date for each $1,000 face amount
Certificate.
If the amount of premium, if any, payable upon the redemption or
purchase of an Equipment Note has not been calculated at the time
that the Trustee mails notice of a Special Payment, it shall be
sufficient if the notice sets forth the other amounts to be
distributed and states that any premium received will also be
distributed.
If any redemption of the Equipment Notes held in the
Trust is cancelled, the Trustee, as soon as possible after
learning thereof, shall cause notice thereof to be mailed to each
Certificateholder at its address as it appears on the Register.
Section 4.03. Statements to Certificateholders. (a)
On each Distribution Date, the Trustee will include with each
distribution to Certificateholders of a Scheduled Payment or
Special Payment, as the case may be, a statement setting forth
the following information (per $1,000 face amount Certificate as
to (i) and (ii) below):
(i) the amount of such distribution allocable to
principal and the amount allocable to premium, if any;
(ii) the amount of such distribution allocable to
interest; and
(iii) the Pool Balance and the Pool Factor.
With respect to the Certificates registered in the name
of Cede & Co., as nominee for the Depositary, on the Record Date
prior to each Distribution Date, the Trustee will request from
the Depositary a Securities Position Listing setting forth the
names of all Agent Members reflected on the Depositary's books as
holding interests in the Certificates on such Record Date. On
each Distribution Date, the Trustee will mail to each such Agent
Member the statement described above and will make available
additional copies as requested by such Agent Member 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
Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar
year, for such portion of such year, and such other items as are
readily available to the Trustee and which a Certificateholder
shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax
returns. Such statement and such other items shall be prepared
on the basis of information supplied to the Trustee by the Agent
Members and shall be delivered by the Trustee to such Agent
Members to be available for forwarding by such Agent Members 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 to be promptly
distributed 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. 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.
Section 1110), with respect to the Leases;
(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 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
this Agreement, the Other Pass Through Trust Agreements, the
Refunding Agreements, and each other Refunding Document 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 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 Refunding
Document 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 Default under any Indenture, the Trustee may, to the
extent it is the Controlling Party at such time (as determined
pursuant to the Intercreditor Agreement), direct the exercise of
remedies as provided in the Intercreditor Agreement.
(b) Purchase Rights of Certificateholders. By
acceptance of its Certificate, each 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
Certificates upon ten days' written notice to the Trustee
and each other Class B Certificateholder, provided that (A)
if prior to the end of such ten-day period any other Class B
Certificateholder notifies such purchasing Class B
Certificateholder that such other Class B Certificateholder
wants to participate in such purchase, then such other Class
B Certificateholder may join with the purchasing Class B
Certificateholder to purchase all, but not less than all, of
the 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 Certificates pursuant
to this Section 6.01(b);
(ii) each Class C Certificateholder shall have the
right (which shall not expire upon any purchase of the
Certificates pursuant to clause (i) above) to purchase all,
but not less than all, of the Certificates and the Class B
Certificates upon ten days' written notice to the Trustee,
the Class B Trustee and each other Class C
Certificateholder, provided that (A) if prior to the end of
such ten-day period any other Class C Certificateholder
notifies such purchasing Class C Certificateholder that such
other Class C Certificateholder wants to participate in such
purchase, then such other Class C Certificateholder may join
with the purchasing Class C Certificateholder to purchase
all, but not less than all, of the Certificates and the
Class B Certificates pro rata based on the Fractional
Undivided Interest in the Class C Trust held by each such
Class C Certificateholder and (B) if prior to the end of
such ten day period any other Class C Certificateholder
fails to notify the purchasing Class C Certificateholder of
such other Class C Certificateholder's desire to participate
in such a purchase, then such other Class C
Certificateholder shall lose its right to purchase the
Certificates pursuant to this Section 6.01(b); and
(iii) each Class D Certificateholder shall have the
right (which shall not expire upon any purchase of the
Certificates pursuant to clause (i) above or the purchase of
the Certificates and the Class B Certificates pursuant to
clause (ii) above) to purchase all, but not less than all,
of the Certificates, the Class B Certificates and the Class
C Certificates upon ten days' written notice to the Trustee,
the Class B Trustee, the Class C Trustee and each other
Class D Certificateholder, provided that (A) if prior to the
end of such ten-day period any other Class D
Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder
wants to participate in such purchase, then such other Class
D Certificateholder may join with the purchasing
Certificateholder to purchase all, but not less than all, of
the Certificates, the Class B Certificates and the Class C
Certificates pro rata based on the Fractional Undivided
Interest in the Class D Trust held by each such Class D
Certificateholder and (B) if prior to the end of such ten
day period any other Class D Certificateholder fails to
notify the purchasing Class D Certificateholder of such
other Class D Certificateholder's desire to participate in
such a purchase, then such other Class D Certificateholder
shall lose its right to purchase the Certificates, the Class
B Certificates and the Class C Certificates pursuant to this
Section 6.01(b).
The purchase price with respect to the Certificates
shall be equal to the Pool Balance of the Certificates, together
with accrued and unpaid interest thereon to the date of such
purchase, without premium, but including any other amounts then
due and payable to the Certificateholders under this Agreement,
the Intercreditor Agreement or any other Refunding Document or on
or in respect of the Certificates; provided, however, that no
such purchase of Certificates shall be effective unless the
purchaser shall certify to the Trustee that contemporaneously
with such purchase, such purchaser is purchasing, pursuant to the
terms of this Agreement and the Other Pass Through Trust
Agreements, the Certificates, the Class B Certificates and the
Class C Certificates which are senior to the securities held by
such purchaser. Each payment of the purchase price of the
Certificates referred to in the first sentence hereof shall be
made to an account or accounts designated by the Trustee and each
such purchase shall be subject to the terms of this Section
6.01(b). Each Certificateholder agrees by its acceptance of its
Certificate that it will, subject to Section 3.04 hereof, upon
payment from such Class B Certificateholder(s), Class C
Certificateholder(s) or Class D Certificateholder(s), as the case
may be, of the purchase price set forth in the first sentence of
this paragraph, forthwith sell, assign, transfer and convey to
the purchaser thereof (without recourse, representation or
warranty of any kind except for its own acts), all of the right,
title, interest and obligation of such Certificateholder in, this
Agreement, the Intercreditor Agreement, the Liquidity Facility,
the Refunding Documents and all Certificates held by such
Certificateholder (excluding all right, title and interest under
any of the foregoing to the extent such right, title or interest
is with respect to an obligation not then due and payable as
respects any action or inaction or state of affairs occurring
prior to such sale) and the purchaser shall assume all of such
Certificateholder's obligations under this Agreement, the
Intercreditor Agreement, the Liquidity Facility and the Refunding
Documents. The Certificates will be deemed to be purchased on
the date payment of the purchase price is made notwithstanding
the failure of the Certificateholders to deliver any Certificates
(whether in the form of Physical Certificates or beneficial
interests in Global Certificates) and, upon such a purchase, (i)
the only rights of the Certificateholders will be to deliver the
Certificates to the purchaser and receive the purchase price for
such Certificates and (ii) if the purchaser shall so request,
such Certificateholder will comply with all the provisions of
Section 3.04 hereof to enable new Certificates to be issued to
the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the purchaser thereof.
As used in this Section 6.01(b), the terms
"Certificateholder", "Class", "Class B Certificate", "Class B
Certificateholder", "Class B Trust", "Class B Trustee", "Class C
Certificate", "Class C Certificateholder", "Class C Trust",
"Class C Trustee", "Class D Certificate", "Class D
Certificateholder", "Class D Trust" and "Class D Trustee", shall
have the respective meanings assigned to such terms in the
Intercreditor Agreement.
Section 6.02. [Intentionally omitted.].
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, 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 the
Intercreditor Agreement and the Refunding Documents (subject to
the rights of the applicable Owner Trustee or Owner Participant
to cure any such failure in accordance with Section 4.03 of 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 the Intercreditor Agreement, the
Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in
interest in the 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 the Trust or pursuant to
the terms of the Intercreditor Agreement, or exercising any trust
or power conferred on the Trustee under this Agreement or the
Intercreditor Agreement, including any right of the Trustee as
Controlling Party under the Intercreditor Agreement or as holder
of the Equipment Notes, provided that
(1) such Direction shall not 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 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 the
Intercreditor Agreement, the Certificateholders holding
Certificates 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
Default under any 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, or
(2) in the payment of the principal of (premium, if
any) or interest on the Equipment Notes, or
(3) in respect of a covenant or provision hereof
which under Article X cannot be modified or amended without
the consent of each Certificateholder holding an Outstanding
Certificate affected thereby.
Upon any such waiver, such default shall cease to exist
with respect to the Certificates 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 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 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 the Intercreditor Agreement,
the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.02 hereof on the
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 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 evidencing
Fractional Undivided Interests aggregating not less than 25%
of the 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 such an 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
evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust.
It is understood and intended that no one or more of
the Certificateholders shall have any right in any manner
whatsoever hereunder or under the Certificates to (i) surrender,
impair, waive, affect, disturb or prejudice any property in the
Trust Property or the lien of any Indenture on any property
subject thereto, or the rights of the Certificateholders or the
holders of the Equipment Notes, (ii) obtain or seek to obtain
priority over or preference with respect to any other such
Certificateholder 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
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
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.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default, the
Trustee undertakes to perform such duties 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 has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, 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 its 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 wilful
misconduct, except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section; 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 Trust 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.
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, the Trustee shall transmit by mail to the Company, the
Owner Trustees, the Owner Participants, the Loan Trustees and the
Certificateholders 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 on 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 determine that
the withholding of such notice is in the interests of the
Certificateholders. For the purpose of this Section, the term
"default" means any event that is, or after notice or lapse of
time or both would become, an Event of Default.
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 written
description of the subject matter thereof accompanied by an
Officer's Certificate and an Opinion of Counsel as provided
in Section 1.02 of this Agreement;
(c) whenever in the administration of this 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 Owner Trustee or any 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 at the Direction of any of the Certificateholders
pursuant to this 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 perform any duties under this
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;
(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 evidencing Fractional Undivided
Interests aggregating not less than a majority in interest
in the 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; 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, 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 Agreement, any Refunding
Agreement, any Equipment Notes, the Certificates or any other
Refunding Document, except that the Trustee hereby represents and
warrants that this Agreement has been, and the Intercreditor
Agreement, the Registration Rights Agreement, each Refunding
Agreement and each Certificate will be, executed, authenticated
and delivered by one of its officers who is duly authorized to
execute, authenticate 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, the 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 hereunder 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);
(2) except as otherwise expressly provided herein, 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 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 the Trustee pursuant to Section 10.1
of the Participation Agreements (as amended by the
Amendments No. 2 thereto dated as of the date hereof) (as
defined in the Intercreditor Agreement).
The Trustee shall be entitled to reimbursement from,
and shall have a lien prior to the Certificates upon, the Trust
Property 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. 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
circumstances thereof to all Certificateholders as their names
and addresses appear in the Register.
Section 7.08. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder 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, the Trustee shall resign immediately as
Trustee 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 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 by
giving prior written notice thereof to the Company, the
Authorized Agents, the Owner Trustees and the Loan Trustees. If
an instrument of acceptance by a successor Trustee shall not have
been delivered to the Company, the Authorized Agents, the Owner
Trustees, the Loan 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 holding Certificates
evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the Trust delivered to the Trustee
and to the Company, the Owner Trustees and the Loan Trustees.
(d) If at any time:
(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, with the consent of the
Owner Participants, which consent may not be unreasonably
withheld, remove the Trustee or (ii) any Certificateholder 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.
(e) If a Responsible Officer of the Trustee shall
obtain actual knowledge of an Avoidable Tax 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
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 in a
jurisdiction where there are no Avoidable Taxes.
(f) If the Trustee shall resign, be removed or become
incapable of acting or if a vacancy shall occur in the office of
the Trustee for any cause, the Company shall promptly appoint a
successor Trustee. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a
successor Trustee shall be appointed by Direction of the
Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in
interest in the Trust delivered to the Company, the Owner
Trustees, the Loan Trustees and the retiring Trustee, and the
Company approves such appointment, which approval shall not be
unreasonably withheld, then the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede the successor Trustee
appointed as provided above. If no successor Trustee shall have
been so appointed as provided above and accepted appointment in
the manner hereinafter provided, any Certificateholder who has
been a bona fide Certificateholder 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.
(g) The successor Trustee 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 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, the Authorized Agents, the Owner Trustees
and the Loan Trustees and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee 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 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.
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 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) There
shall at all times be maintained an office or agency in the
location set forth in Section 12.03 where Certificates 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 (e.g., the Certificates shall be represented by
Physical 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, the Owner Trustees, the Loan Trustees (in the case of
any Owner Trustee or Loan Trustee, at its address specified in
the Refunding Agreements or such other address as may be notified
to the Trustee) and the Certificateholders. 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. 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, if the Trustee shall be acting as
the Registrar or Paying Agent hereunder, 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. 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
hereunder, if such successor corporation is otherwise eligible
under this Section, 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,
the Owner Trustees and the 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 (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. The Company shall give written notice of any such
appointment made by it to the Trustee, the Owner Trustees and the
Loan Trustees; and in each case the Trustee shall mail notice of
such appointment to all Certificateholders as their names and
addresses appear on the Register.
(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.
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 Name
of Subordination Agent. The Trustee agrees that all Equipment
Notes to be purchased by the Trust shall be issued in the name of
the Subordination Agent or its nominee and held by the
Subordination Agent in trust for the benefit of the
Certificateholders, or, if not so held, the 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 7.15. Representations and Warranties of
Trustee. 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, the
Intercreditor Agreement, the Registration Rights Agreement
and the Refunding Agreements and has taken all necessary
action to authorize the execution, delivery, and performance
by it of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding Agreements;
(c) the execution, delivery and performance by the
Trustee of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding Agreements
(i) will not violate any provision of 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, or (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, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding 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, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding 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 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. The Trustee, as trustee of the 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
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, to withhold such
amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Certificateholders, 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 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 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 which is attributable to the
Trustee either (i) in its individual capacity and which is
unrelated to the transactions contemplated by this Agreement, the
Intercreditor Agreement, the Refunding Agreements or the
Refunding 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.
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, 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, 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 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 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 the Certificates, the Trustee shall
transmit to the Certificateholders, 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 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;
(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 or her 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 any time
and from time to time, enter into one or more agreements
supplemental hereto or, if applicable, to the Intercreditor
Agreement or the Liquidity Facility in form satisfactory to the
Trustee, for any of the following purposes:
(1) 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
(2) to add to the covenants of the Company for the
benefit of the Certificateholders, or to surrender any right
or power in this Agreement conferred upon the Company; or
(3) to correct or supplement any provision in this
Agreement, the Intercreditor Agreement or the Liquidity
Facility which may be defective or inconsistent with any
other provision herein or to cure any ambiguity or correct
any mistake or to modify any other provision with respect to
matters or questions arising under this Agreement, the
Intercreditor Agreement or the Liquidity Facility, provided
that any such action shall not materially adversely affect
the interests of the Certificateholders; or
(4) to modify, eliminate or add to the provisions of
this Agreement to such extent as shall be necessary to
continue the qualification of this Agreement (including any
supplemental agreement) under the Trust Indenture Act or
under any similar Federal statute hereafter enacted, and to
add to this Agreement 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 instrument was executed or any corresponding provision
in any similar Federal statute hereafter enacted; or
(5) to evidence and provide for the acceptance of
appointment under this Agreement by the Trustee of a
successor Trustee and to add to or change any of the
provisions of this Agreement as shall be necessary to
provide for or facilitate the administration of the Trust,
pursuant to the requirements of Section 7.10; or
(6) to provide the information required under
Section 7.12 and Section 12.03 as to the Trustee; or
(7) to modify or eliminate provisions relating to the
transfer or exchange of Exchange Certificates or the Initial
Certificates upon consummation of the Exchange Offer (as
defined in the Registration Rights Agreement) or
effectiveness of the Registration Statement.
Section 9.02. Supplemental Agreements with Consent of
Certificateholders. With the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the 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, which consent shall not be unreasonably
withheld), and the Trustee (subject to Section 9.03) shall, enter
into an agreement or agreements for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, the Intercreditor Agreement, the
Liquidity Facility, the Registration Rights Agreement or any
Refunding Agreement to the extent applicable to such
Certificateholders or of modifying in any manner the rights and
obligations of such Certificateholders under this Agreement, the
Intercreditor Agreement, the Liquidity Facility, the Registration
Rights Agreement or any Refunding Agreement; 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 the Trust or distributions that are
required to be made herein on any Certificate, or change any
date of payment on any Certificate, or change the place of
payment where, or the coin or currency in which, any
Certificate 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 except as permitted by this
Agreement, or otherwise deprive such Certificateholder of
the benefit of the ownership of the Equipment Notes in the
Trust; or
(3) reduce the percentage of the aggregate Fractional
Undivided Interests of the Trust which is required for any
such supplemental agreement, or reduce such 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
(4) waive, amend or modify Section 2.4, 3.2 or 3.3 of
the Intercreditor Agreement in a manner adverse to the
Certificateholders; 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 affected thereby.
It shall not be necessary for any Direction of
Certificateholders under this Section 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 Agreement, 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
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 Agreement shall be modified in
accordance therewith, and such supplemental agreement shall form
a part of this Agreement for all purposes; and every Holder of a
Certificate theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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 authenticated and
delivered after the execution of any supplemental agreement
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 after proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND REFUNDING DOCUMENTS
Section 10.01. Amendments and Supplements to
Indentures and Other Refunding Documents. In the event that the
Trustee, as holder of any Equipment Note in trust for the benefit
of the Certificateholders or as Controlling Party under the
Intercreditor Agreement, receives a request for a consent to any
amendment, modification, waiver or supplement under any Indenture
or other Refunding Document, the Trustee shall forthwith send a
notice of such proposed amendment, modification, waiver or
supplement to each Certificateholder registered on the Register
as of the date of such notice. The Trustee shall request from
the Certificateholders a Direction as to (a) whether or not to
take or refrain from taking any action which a holder of such
Equipment Note has the option to direct, (b) whether or not to
give or execute any waivers, consents, amendments, modifications
or supplements as a holder of such Equipment Note and (c) how to
vote any Equipment 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, the Trustee shall vote for or give consent to any
such action with respect to such Equipment Note in the same
proportion as that of (i) 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 (ii) the
aggregate face amount of all Outstanding Certificates. 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 two Business
Days before the Trustee directs such action or casts such vote or
gives such consent. Notwithstanding the foregoing, but subject
to Section 6.04 and the Intercreditor Agreement, the Trustee may,
in its own discretion and at its own direction, consent and
notify the relevant Loan Trustee of such consent to any
amendment, modification, waiver or supplement under the relevant
Indenture or any other Refunding Document, if an Event of Default
hereunder shall have occurred and be continuing, or if such
amendment, modification or waiver will not adversely affect the
interests of the Certificateholders.
ARTICLE XI
TERMINATION OF TRUST
Section 11.01. Termination of the Trust. The
respective obligations and responsibilities of the Company and
the Trustee with respect to the Trust shall terminate upon the
distribution to all Holders of Certificates and the Trustee of
all amounts required to be distributed to them pursuant to this
Agreement and the disposition of all property held as part of the
Trust Property; provided, however, that in no event shall the
Trust continue beyond one hundred ten (110) years following the
date of the earliest execution of this Trust Agreement.
Notice of any termination, specifying the Regular
Distribution Date (or Special Distribution Date, as the case may
be) upon which the Certificateholders may surrender their
Certificates to the Trustee for payment of the final Distribution
Date and cancellation, shall be mailed promptly by the Trustee to
Certificateholders not earlier than the 60th day and not later
than the 20th day next preceding such final Distribution Date
specifying (A) the Regular Distribution Date (or Special
Distribution Date, as the case may be) upon which the proposed
final payment of the Certificates will be made upon presentation
and surrender of Certificates at the office or agency of the
Trustee therein specified, (B) the amount of any such proposed
final payment, and (C) that the Record Date otherwise applicable
to such 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 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. Upon presentation and surrender of
the Certificates in accordance with such notice, the Trustee
shall cause to be distributed to Certificateholders such final
payments.
In the event that all of the Certificateholders 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 to surrender their Certificates for
cancellation and receive the final distribution with respect
thereto. No additional interest shall accrue on the Certificates
after the Regular Distribution Date (or Special Distribution
Date, as the case may be) specified in the first written notice.
In the event that any money held by the Trustee for the payment
of distributions on the Certificates shall remain unclaimed for
two years (or such lesser time as the Trustee shall be satisfied,
after sixty days' notice from the Company, is one month prior to
the escheat period provided under applicable law) after the final
distribution date with respect thereto, the Trustee shall pay to
each Loan Trustee the appropriate amount of money relating to
such Loan Trustee and shall give written notice thereof to the
related Owner Trustees, the Owner Participants and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of
Certificateholders. The death or incapacity of any
Certificateholder shall not operate to terminate this Agreement
or the 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. Certificates Nonassessable and Fully
Paid. Except as set forth in the last sentence of this Section
12.02, Certificateholders shall not be personally liable for
obligations of the Trust, the Fractional Undivided Interests
represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and
Certificates, upon authentication thereof by the Trustee pursuant
to Section 3.03, are and shall be deemed fully paid. No
Certificateholder shall have any right (except as expressly
provided herein) to vote or in any manner otherwise control the
operation and management of the Trust Property, the Trust, or the
obligations of the parties hereto, nor shall anything set forth
herein, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to
time as partners or members of an association. Neither the
existence of the Trust nor any provision herein 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. Notices. (a) Unless otherwise
specifically provided herein, all notices required under the
terms and provisions of this Agreement 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, to:
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Attention: Chief Financial Officer and
General Counsel
Facsimile: (713) 523-2831
if to the Trustee, to:
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
shall be mailed by first-class mail to the addresses for
Certificateholders shown on the Register kept by the Registrar.
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.
(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, it shall mail a copy to the Trustee and
to the Paying Agent 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 12.04. Governing Law. THIS AGREEMENT HAS BEEN
DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT AND THE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS-OF-LAW PRINCIPLES.
Section 12.05. 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 Trust, or of the Certificates or the rights of the
Certificateholders thereof.
Section 12.06. 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.
Section 12.07. 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 12.08. 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 12.09. Benefits of Agreement. Nothing in this
Agreement or in the Certificates, express or implied, shall give
to any Person, other than the parties hereto and their successors
hereunder, and the Certificateholders, any benefit or any legal
or equitable right, remedy or claim under this Agreement.
Section 12.10. Legal Holidays. In any case where any
Regular Distribution Date or Special Distribution Date relating
to any Certificate shall not be a Business Day, 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 12.11. 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 12.12. Intention of Parties. The parties
hereto intend that the 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
REGISTERED
No. ______________
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT
WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS CERTIFICATE OR THE LAST DATE ON WHICH
THIS CERTIFICATE WAS HELD BY CONTINENTAL AIRLINES,
INC., THE TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH
PERSONS RESELL OR OTHERWISE TRANSFER THIS CERTIFICATE
EXCEPT (A) TO CONTINENTAL AIRLINES, INC., (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS CERTIFICATE WITHIN
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF
THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS
CERTIFICATE WAS HELD BY CONTINENTAL AIRLINES, INC., THE
TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH PERSONS THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER
AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT. THE
PASS THROUGH TRUST AGREEMENT CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.]*
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE
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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS
3.05 AND 3.06 OF THE PASS THROUGH TRUST AGREEMENT
REFERRED TO HEREIN.]**
[GLOBAL CERTIFICATE]***
CONTINENTAL AIRLINES 1996-A PASS THROUGH TRUST
6.94% Continental Airlines [Initial] [Exchange]
Pass Through Certificate
Series 1996-A
Final Distribution Date: October 15, 2013
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes each secured
by an Aircraft leased to Continental Airlines, Inc.
$__________ 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 1996-A Pass Through Trust (the "Trust") created pursuant
to a Pass Through Trust Agreement, dated as of January 31, 1996
(the "Agreement"), between Wilmington Trust Company (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 "6.94% Continental Airlines [Initial]
[Exchange] Pass Through Certificates Series 1996-A" (herein
called the "Certificates"). This Certificate is issued under and
is subject to the terms, provisions, and conditions of the
Agreement. By virtue of its acceptance hereof the
Certificateholder of this Certificate assents to and agrees to be
bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment
Notes and all rights of the Trust to receive payments under the
Intercreditor Agreement and the Liquidity Facilities (the "Trust
Property"). Each issue of the Equipment Notes is secured by,
among other things, a security interest in the 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 assets or property
other than the Trust Property.
Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, from and to the extent
of funds then available to the Trustee, there will be distributed
on each January 15, April 15, July 15 and October 15 (a "Regular
Distribution Date"), commencing on April 15, 1996, 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.
[The Holder of this Certificate is entitled to the
benefits of the Registration Rights Agreement, dated as of
January 31, 1996, among the Company, the Trustee and the Initial
Purchasers named therein (the "Registration Rights Agreement").
In the event that either (a) (x) the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement) is
not filed with the SEC on or prior to the 120th calendar day
following the date of the Agreement, or (y) the Exchange Offer
Registration Statement has not been declared effective on or
prior to the 60th calendar day following the filing thereof with
the SEC or (z) the Exchange Offer (as defined in the Registration
Rights Agreement) is not consummated on or prior to the 30th
calendar day following the effectiveness of the Exchange Offer
Registration Statement (in each case other than under certain
circumstances described in the Registration Rights Agreement) or
(b) a Shelf Registration Statement (as defined in the
Registration Rights Agreement) is required to be filed with the
SEC pursuant to the Registration Rights Agreement, and such Shelf
Registration Statement is not declared effective on or prior to
the 210th calendar day following the date of the Agreement (each,
a "Registration Default"), the interest rate per annum borne by
the Equipment Notes shall be increased by (1) 0.25% from and
including the day following such Registration Default to but
excluding the 90th day following such Registration Default and
(2) 0.50% thereafter; provided, however, that such increase shall
cease to be in effect from and including the date on which such
Registration Default has been cured. In the event that the Shelf
Registration Statement ceases to be effective at any time during
the period specified by the Registration Rights Agreement for
more than 60 days, whether or not consecutive, during any 12-
month period, the interest rate per annum borne by the Equipment
Notes shall be increased by 0.50% from the 61st day of the
applicable 12-month period such Shelf Registration Statement
ceases to be effective until such time as the Shelf Registration
Statement again becomes effective.]****
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 AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
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.
Dated: CONTINENTAL AIRLINES
1996-A PASS THROUGH TRUST
By: WILMINGTON TRUST
COMPANY,
not in its individual
capacity but solely as
Trustee
Attest: By: ______________________
Name:
Title:
____________________
Authorized Signature
__________________
* Not to be included on the face of the Permanent Offshore
Global Certificate.
** To be included on the face of each Global Certificate.
*** To be included on the face of each Global Certificate.
**** To be included only on each Initial Certificate.
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee
By: ______________________
Authorized Officer
[REVERSE OF CERTIFICATE]
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 of their affiliates. The
Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under
the Agreement shall be made only from the Trust Property and only
to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof,
agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to
such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and
duties evidenced hereby. A copy of the Agreement may be examined
during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Certificateholders under the Agreement at any time by the Company
and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and
upon all future Certificateholders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein 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, in the Borough of Manhattan, the City of New
York, 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
[$100,000]* [$1,000]** Fractional Undivided Interest and integral
multiples of $1,000 in excess thereof [except that one
Certificate may be in a denomination of less than $100,000]*. 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 by the Holder 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.
____________________
* To be included only on each Initial Certificate.
** To be included only on each Exchange Certificate.
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
__________________________________
__________________________________
please print or typewrite name and address including zip code of
assignee
__________________________________
the within Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
__________________________________
attorney to transfer said Certificate on the books of the Trustee
with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT PERMANENT OFFSHORE GLOBAL AND
OFFSHORE PHYSICAL CERTIFICATES]
In connection with any transfer of this Certificate
occurring prior to the date that is the earlier of the date of an
effective Registration Statement or __________, 1999, the
undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[ ] (a) this Certificate is being transferred in
compliance with the exemption from registration under
the Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
or
[ ] (b) this Certificate is being transferred other than
in accordance with (a) above and documents are being
furnished that comply with the conditions of transfer
set forth in this Certificate and the Agreement.
If neither of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this
Certificate in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 3.06 of the
Agreement shall have been satisfied.
Date:_____________ [Name of Transferor]
----------------------------
NOTE: The signature must
correspond with the name as
written upon the face of the
within-mentioned instrument in
every particular, without
alteration or any change
whatsoever.
Signature Guarantee: __________________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is
purchasing this Certificate for its own account or an account
with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933,
as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ____________________ ___________________________
NOTE: To be executed by an
executive officer.
EXHIBIT B
FORM OF CERTIFICATE FOR UNLEGENDED CERTIFICATES
[Date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996 Pass Through Trust,
Class A Pass Through Trust Certificates (the
"Certificates")
Dear Sirs:
This letter relates to U.S. $__________ Fractional
Undivided Interest of Certificates represented by a Certificate
(the "Legended Certificate") which bears a legend outlining
restrictions upon transfer of such Legended Certificate.
Pursuant to Section 3.01 of the Pass Through Trust Agreement
relating to the Certificates dated as of January 31, 1996 (the
"Trust Agreement"), between Continental Airlines, Inc.
("Continental") and you, we hereby certify that we are (or we
will hold such securities on behalf of) a person outside the
United States to whom the Certificates could be transferred in
accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are
hereby requested to exchange the legended certificate for an
unlegended certificate representing an identical principal amount
of Certificates, all in the manner provided for in the Trust
Agreement.
You and Continental are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters
covered hereby. Terms used in this certificate have the meanings
set forth in Regulation S.
Very truly yours,
[Name of Certificateholder]
By:____________________________
Authorized Signature
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
[date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996-A Pass Through
Trust (the "Trust"), 6.94% Continental
Airlines Pass Through Certificates Series
1996-A (the "Certificates")
Sirs:
In connection with our proposed sale of $_______
Fractional Undivided Interest of the Certificates, we confirm
that such sale has been effected pursuant to and in accordance
with Regulation S under the Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Certificates was not made to a
person in the United States;
(2) either (a) at the time the buy order was
originated, the transferee was outside the United States or
we and any person acting on our behalf reasonably believed
that the transferee was outside the United States or (b) the
transaction was executed in, on or through the facilities of
a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction
has been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted
period and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of
Regulation S are applicable thereto, we confirm that such sale
has been made in accordance with the applicable provisions of
Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You and Continental Airlines, Inc. are entitled to rely
upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_______________________
Authorized Signature
Exhibit 4.6
- -----------------------------------------------------------------
PASS THROUGH TRUST AGREEMENT
Dated as of January 31, 1996
among
CONTINENTAL AIRLINES, INC.
and
WILMINGTON TRUST COMPANY,
as Trustee
Continental Airlines 1996-B Pass Through Trust
7.82% 1996-B Initial Pass Through Certificates
7.82% 1996-B Exchange Pass Through Certificates
- -----------------------------------------------------------------
Reconciliation and tie between Continental Airlines 1996-B Pass
Through Trust Agreement, dated as of January 31, 1996, 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) 7.08
(a)(2) 7.08
312(a) 3.05; 8.01; 8.02
313(a) 8.03
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) 1.04(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) 12.06
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01. Definitions. . . . . . . . . . . . . . . . . . . . 2
1.02. Compliance Certificates and Opinions . . . . . . . 12
1.03. Form of Documents Delivered to Trustee . . . . . . 13
1.04. Directions of Certificateholders . . . . . . . . . 14
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
2.01. Issuance of Certificates; Acquisition of
Equipment Notes. . . . . . . . . . . . . . . . . . 15
2.02. Acceptance by Trustee. . . . . . . . . . . . . . . 17
2.03. Limitation of Powers . . . . . . . . . . . . . . . 17
ARTICLE III
THE CERTIFICATES
3.01. Title, Form, Denomination and Execution of
Certificates . . . . . . . . . . . . . . . . . . . 18
3.02. Restrictive Legends. . . . . . . . . . . . . . . . 19
3.03. Authentication of Certificates . . . . . . . . . . 21
3.04. Transfer and Exchange. . . . . . . . . . . . . . . 22
3.05. Book-Entry Provisions for U.S. Global
Certificate and Offshore Global Certificates . . . 22
3.06. Special Transfer Provisions. . . . . . . . . . . . 24
3.07. Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . . . . 26
3.08. Persons Deemed Owners. . . . . . . . . . . . . . . 27
3.09. Cancellation . . . . . . . . . . . . . . . . . . . 27
3.10. Temporary Certificates . . . . . . . . . . . . . . 27
3.11. Limitation of Liability for Payments . . . . . . . 28
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
4.01. Certificate Account and Special Payments
Account. . . . . . . . . . . . . . . . . . . . . . 28
4.02. Distributions from Certificate Account and
Special Payments Account . . . . . . . . . . . . . 29
4.03. Statements to Certificateholders . . . . . . . . . 30
4.04. Investment of Special Payment Moneys . . . . . . . 31
ARTICLE V
THE COMPANY
5.01. Maintenance of Corporate Existence . . . . . . . . 32
5.02. Consolidation, Merger, etc.. . . . . . . . . . . . 32
ARTICLE VI
DEFAULT
6.01. Events of Default. . . . . . . . . . . . . . . . . 33
6.02. [Intentionally omitted.] . . . . . . . . . . . . . 35
6.03. Judicial Proceedings Instituted by Trustee;
Trustee May Bring Suit . . . . . . . . . . . . . . 35
6.04. Control by Certificateholders. . . . . . . . . . . 36
6.05. Waiver of Past Defaults. . . . . . . . . . . . . . 36
6.06. Right of Certificateholders to Receive Payments
Not to Be Impaired . . . . . . . . . . . . . . . . 37
6.07. Certificateholders May Not Bring Suit Except
Under Certain Conditions . . . . . . . . . . . . . 37
6.08. Remedies Cumulative. . . . . . . . . . . . . . . . 38
ARTICLE VII
THE TRUSTEE
7.01. Certain Duties and Responsibilities. . . . . . . . 38
7.02. Notice of Defaults . . . . . . . . . . . . . . . . 39
7.03. Certain Rights of Trustee. . . . . . . . . . . . . 39
7.04. Not Responsible for Recitals or Issuance of
Certificates . . . . . . . . . . . . . . . . . . . 40
7.05. May Hold Certificates. . . . . . . . . . . . . . . 40
7.06. Money Held in Trust. . . . . . . . . . . . . . . . 41
7.07. Compensation and Reimbursement . . . . . . . . . . 41
7.08. Corporate Trustee Required; Eligibility. . . . . . 41
7.09. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . 42
7.10. Acceptance of Appointment by Successor . . . . . . 43
7.11. Merger, Conversion, Consolidation or Succession
to Business. . . . . . . . . . . . . . . . . . . . 44
7.12. Maintenance of Agencies. . . . . . . . . . . . . . 44
7.13. Money for Certificate Payments to Be Held
in Trust . . . . . . . . . . . . . . . . . . . . . 46
7.14. Registration of Equipment Notes in Name of
Subordination Agent. . . . . . . . . . . . . . . . 46
7.15. Representations and Warranties of Trustee. . . . . 46
7.16. Withholding Taxes; Information Reporting . . . . . 47
7.17. Trustee's Liens. . . . . . . . . . . . . . . . . . 47
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders. . . . . . . . . . 48
8.02. Preservation of Information; Communications to
Certificateholders . . . . . . . . . . . . . . . . 48
8.03. Reports by Trustee . . . . . . . . . . . . . . . . 48
8.04. Reports by the Company . . . . . . . . . . . . . . 48
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
9.01. Supplemental Agreements Without Consent of
Certificateholders . . . . . . . . . . . . . . . . 49
9.02. Supplemental Agreements with Consent of
Certificateholders . . . . . . . . . . . . . . . . 50
9.03. Documents Affecting Immunity or Indemnity. . . . . 52
9.04. Execution of Supplemental Agreements . . . . . . . 52
9.05. Effect of Supplemental Agreements. . . . . . . . . 52
9.06. Conformity with Trust Indenture Act. . . . . . . . 52
9.07. Reference in Certificates to Supplemental
Agreements . . . . . . . . . . . . . . . . . . . . 52
ARTICLE X
AMENDMENTS TO INDENTURES AND REFUNDING DOCUMENTS
10.01. Amendments and Supplements to Indentures and
Other Refunding Documents . . . . . . . . . . . . 52
ARTICLE XI
TERMINATION OF TRUST
11.01. Termination of the Trust. . . . . . . . . . . . . 53
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01. Limitation on Rights of Certificateholders. . . . 54
12.02. Certificates Nonassessable and Fully Paid . . . . 54
12.03. Notices . . . . . . . . . . . . . . . . . . . . . 55
12.04. Governing Law . . . . . . . . . . . . . . . . . . 56
12.05. Severability of Provisions. . . . . . . . . . . . 56
12.06. Trust Indenture Act Controls. . . . . . . . . . . 56
12.07. Effect of Headings and Table of Contents. . . . . 56
12.08. Successors and Assigns. . . . . . . . . . . . . . 56
12.09. Benefits of Agreement . . . . . . . . . . . . . . 56
12.10. Legal Holidays. . . . . . . . . . . . . . . . . . 57
12.11. Counterparts. . . . . . . . . . . . . . . . . . . 57
12.12. Intention of Parties. . . . . . . . . . . . . . . 57
Schedule 1 - Indentures
Schedule 2 - Refunding Agreements
Exhibit A - Form of Certificate
Exhibit B - Form of Certificate for Unlegended Certificates
Exhibit C - Form of Certificate to Be Delivered in Connection
with Transfers Pursuant to Regulation S
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of
January 31, 1996, between CONTINENTAL AIRLINES, INC., a Delaware
corporation, and WILMINGTON TRUST COMPANY, as Trustee, is made
with respect to the formation of Continental Airlines 1996-B Pass
Through Trust and the issuance of 7.82% Continental Airlines
1996-B Pass Through Certificates representing fractional
undivided interests in the Trust.
WITNESSETH:
WHEREAS, the Company, the Owner Trustees and the Owner
Participants (as such terms and certain other capitalized terms
used herein are defined below) have previously entered into
eighteen separate leveraged lease transactions in connection with
the purchase of nine Boeing 737-524 aircraft and nine
Boeing 757-224 aircraft (collectively, the "Aircraft") from the
manufacturer;
WHEREAS, each Owner Trustee, acting on behalf of the
corresponding Owner Participant, will issue pursuant to an
Indenture, on a non-recourse basis, four series of Equipment
Notes, among other things, to refinance the current indebtedness
of such Owner Trustee originally incurred to finance the purchase
price of the related Aircraft;
WHEREAS, the Trustee, upon execution and delivery of
this Agreement, hereby declares the creation of the Trust for the
benefit of the Certificateholders, and the initial
Certificateholders, as the grantors of the Trust, by their
respective acceptances of the Certificates, join in the creation
of this Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Trust
will evidence fractional undivided interests in the Trust and
will convey no rights, benefits or interests in respect of any
property other than the Trust Property;
WHEREAS, pursuant to the terms and conditions of this
Agreement and each of the Refunding Agreements to be entered into
by the Trustee simultaneously with the execution and delivery of
this Agreement, the Trustee on behalf of the 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 Certificates issued hereunder
and shall hold such Equipment Notes in trust for the benefit of
the Certificateholders;
WHEREAS, to facilitate the sale of Equipment Notes to,
and the purchase of Equipment Notes by, the Trustee on behalf of
the Trust, the Company has duly authorized the execution and
delivery of this Agreement 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 pursuant hereto and
as the "obligor", as such term is defined in and solely for
purposes of the Trust Indenture Act of 1939, as amended, with
respect to all such Certificates and is undertaking to perform
certain administrative and ministerial duties hereunder and is
also undertaking to pay the ongoing fees and expenses of the
Trustee;
WHEREAS, all of the conditions and requirements
necessary to make this Agreement, when duly executed and
delivered, a valid, binding and legal instrument, enforceable in
accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and
delivery of this Agreement in the form and with the terms hereof
have been in all respects duly authorized; and
WHEREAS, upon issuance of the Exchange Certificates, if
any, or the effectiveness of the Registration Statement, this
Agreement, as amended or supplemented from time to time, will be
subject to the provisions of the Trust Indenture Act of 1939, 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
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 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 Agreement to designated
"Articles", "Sections", "Subsections" and other subdivisions
are to the designated Articles, Sections, Subsections and
other subdivisions of this Agreement;
(4) 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,
Subsection or other subdivision; and
(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".
Affiliate: Means, with respect to any Person, any
other Person directly or indirectly controlling or
controlled by or under 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 purposes of this definition, "control" 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.
Agent Members: Has the meaning specified in Section
3.05.
Aircraft: Has the meaning specified in the first
recital to this Agreement.
Authorized Agent: Means any Paying Agent or Registrar
for the Certificates.
Avoidable Tax: Means a state or local tax (i) upon
(w) the Trust, (x) the Trust Property,
(y) Certificateholders or (z) the Trustee for which the
Trustee is entitled to seek reimbursement from the Trust
Property, and (ii) which would be avoided if the Trustee
were located in another state, or jurisdiction within a
state, within the United States. A tax shall not be an
Avoidable Tax if the Company or any Owner Trustee shall
agree to pay, and shall pay, such tax.
Business Day: Means any day other than a Saturday, a
Sunday or a day on which commercial banks are required or
authorized to close in Houston, Texas, New York, New York,
or, so long as any Certificate is outstanding, the city and
state in which the Trustee or any Loan Trustee maintains its
Corporate Trust Office or receives and disburses funds.
Cedel: Means Cedel Bank societe anonyme.
Certificate: Means any one of the Initial Certificates
or Exchange Certificates and any such Certificates issued in
exchange therefor or replacement thereof pursuant to this
Agreement.
Certificate Account: Means the account or accounts
created and maintained pursuant to Section 4.01(a).
Certificateholder or Holder: Means the Person in whose
name a Certificate is registered in the Register.
Company: Means Continental Airlines, Inc., a Delaware
corporation, or its successor in interest pursuant to
Section 5.02, or any other obligor (within the meaning of
the Trust Indenture Act) with respect to the Certificates.
Controlling Party: Has the meaning specified in the
Intercreditor Agreement.
Corporate Trust Office: With respect to the Trustee or
any Loan Trustee, means the office of such trustee in the
city at which at any particular time its corporate trust
business shall be principally administered.
Cut-off Date: Means March 31, 1996.
Depositary: Means the Depository Trust Company, its
nominees and their respective successors.
Direction: Has the meaning specified in
Section 1.04(a).
Distribution Date: Means any Regular Distribution Date
or Special Distribution Date.
Equipment Notes: Means the equipment notes issued
under the Indentures.
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 specified in
Section 2.01(b).
Escrowed Funds: Has the meaning specified in
Section 2.01(b).
Euroclear: Means the Euroclear System.
Event of Default: Means an Indenture Default under any
Indenture pursuant to which Equipment Notes held by the
Trust were issued.
Exchange Certificates: Means the certificates
substantially in the form of Exhibit A hereto issued in
exchange for the Initial Certificates pursuant to the
Registration Rights Agreement and authenticated hereunder.
Exchange Offer Registration Statement: Means the
Exchange Offer Registration Statement defined in the
Registration Rights Agreement.
Fractional Undivided Interest: Means the fractional
undivided interest in the Trust that is evidenced by a
Certificate.
Global Certificates: Has the meaning assigned to such
term in Section 3.01.
Indentures: Means each of the eighteen separate
Amended and Restated Trust Indentures and Mortgages listed
on Schedule 1 hereto, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
Indenture Default: With respect to any Indenture,
means any Event of Default (as such term is defined in such
Indenture).
Initial Certificates: Means the certificates issued
and authenticated hereunder substantially in the form of
Exhibit A hereto other than the Exchange Certificates.
Initial Purchasers: Means, collectively, CS First
Boston Corporation, Morgan Stanley & Co. Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman
Brothers Inc. and Fieldstone FPCG Services, L.P.
Initial Regular Distribution Date: Means the first
Regular Distribution Date on which a Scheduled Payment is to
be made.
Institutional Accredited Investor: Means an
institutional investor that is an "accredited investor"
within the meaning set forth in Rule 501(a)(1), (2), (3)
or (7) of Regulation D under the Securities Act.
Intercreditor Agreement: Means the Intercreditor
Agreement dated the date hereof among the Trustee, the Other
Trustees, the Liquidity Provider, the liquidity provider, if
any, relating to the Certificates issued under (and as
defined in) each of the Other Pass Through Trust Agreements,
and Wilmington Trust Company, as Subordination Agent
thereunder, as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
Issuance Date: Means the date of the issuance of the
Initial Certificates.
Lease: Means the lease between an Owner Trustee, as
the lessor, and the Company, as the lessee, referred to in
the related Indenture, as each such lease may be amended,
supplemented or otherwise modified in accordance with its
terms.
Liquidity Facility: Means the Revolving Credit
Agreement dated the date hereof relating to the
Certificates, between the Liquidity Provider and the
Subordination Agent, as amended, replaced, supplemented or
otherwise modified from time to time in accordance with its
terms and the terms of the Intercreditor Agreement.
Liquidity Provider: Means, initially, Credit Suisse,
acting through its New York Branch, together with any
replacement or successor therefor appointed in accordance
with the Liquidity Facility and the Intercreditor Agreement.
Loan Trustee: With respect to any Equipment Note or
the Indenture applicable thereto, means the bank or trust
company designated as indenture trustee under such
Indenture, together with any successor to such Loan Trustee
appointed pursuant thereto.
Non-U.S. Person: Means a Person that is not a "U.S.
person", as defined in Regulation S.
Officer's Certificate: Means a certificate signed,
(a) in the case of the Company, by (i) the Chairman or Vice
Chairman of the Board of Directors, the President, any
Executive Vice President, any Senior Vice President or the
Treasurer of the Company, signing alone or (ii) any Vice
President of the Company signing together with the
Secretary, the Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company or, (b) in the case of an
Owner Trustee or a Loan Trustee, a Responsible Officer of
such Owner Trustee or such Loan Trustee, as the case may be.
Offshore Certificates Exchange Date: Has the meaning
specified in Section 3.01.
Offshore Global Certificates: Has the meaning assigned
to such term in Section 3.01.
Offshore Physical Certificates: Has the meaning
assigned to such term in Section 3.01.
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) Cleary, Gottlieb, Steen & Hamilton, (iii) Hughes
Hubbard & Reed, or (iv) such other counsel designated by the
Company and reasonably acceptable to the Trustee and (b) in
the case of counsel for 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 Pass Through Trust Agreements: Means each of the
three other Continental Airlines 1996 Pass Through Trust
Agreements relating to Continental Airlines 1996-A Pass
Through Trust, Continental Airlines 1996-C Pass Through
Trust and Continental Airlines 1996-D Pass Through Trust,
dated the date hereof.
Other Trustees: Means the trustee under the Other Pass
Through Trust Agreements, and any successor or other trustee
appointed as provided therein.
Outstanding: When used with respect to Certificates,
means, as of the date of determination, all Certificates
theretofore authenticated and delivered under this
Agreement, except:
(i) Certificates theretofore cancelled by the
Registrar or delivered to the Trustee or the Registrar
for cancellation;
(ii) Certificates for which money in the full
amount required to make the final distribution with
respect to such Certificates pursuant to Section 11.01
hereof has been theretofore deposited with the Trustee
in trust for the Holders of such Certificates as
provided in Section 4.01 pending distribution of such
money to such Certificateholders pursuant to payment of
such final distribution; and
(iii) Certificates in exchange for or in lieu of
which other Certificates have been authenticated and
delivered pursuant to this Agreement.
Owner Participant: With respect to any Equipment Note,
means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued
and any permitted successor or assign of such Owner
Participant; and Owner Participants at any time of
determination means all of the Owner Participants thus
referred to in the Indentures.
Owner Trustee: With respect to any Equipment Note,
means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and Owner
Trustees means all of the Owner Trustees party to any of the
Indentures.
Participation Agreement: With respect to any Aircraft,
means the Participation Agreement referred to in the related
Indenture.
Paying Agent: Means the paying agent maintained and
appointed for the Certificates pursuant to Section 7.12.
Permanent Offshore Global Certificates: Has the
meaning specified in Section 3.01.
Permanent Offshore Physical Certificates: Has the
meaning specified in Section 3.01.
Permitted Investments: Means obligations of the United
States of America or agencies or instrumentalities thereof
the payment of which is backed by the full faith and credit
of the United States of America and which mature 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, partnership, joint venture, association, joint-
stock company, trust, trustee, unincorporated organization,
or government or any agency or political subdivision
thereof.
Physical Certificates: Has the meaning specified in
Section 3.01.
Plan Transferee: Means any Plan or any entity that is
using the assets of any Plan to purchase or hold its
interest in a Certificate. For purposes of this definition,
a "Plan" means any employee benefit plan subject to ERISA as
well as any plan that is not subject to ERISA but which is
subject to Section 4975 of the Internal Revenue Code of
1986, as amended.
Pool Balance: Means, as of any date, (i) the original
aggregate face amount of the Certificates less (ii) the
aggregate amount of all payments made in respect of 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 such Trust and the
distribution thereof to be made on such Distribution Date.
Pool Factor: Means, as of any date, the quotient
(rounded to the seventh decimal place) computed by dividing
(i) the Pool Balance as at such date by (ii) the original
aggregate face amount of the Certificates. 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 and the distribution thereof
to be made on such Distribution Date.
Postponed Notes: Means the Equipment Notes to be held
in the Trust as to which a Postponement Notice shall have
been delivered pursuant to Section 2.01(b).
Postponement Notice: Means an Officer's Certificate of
the Company (1) requesting that the Trustee temporarily
postpone the purchase pursuant to one or more of the
Refunding Agreements of certain of the Equipment Notes to a
date which is later than the Issuance Date, (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, 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.
Private Placement Legend: Has the meaning specified in
Section 3.02.
PTC Event of Default: Means any failure to pay within
10 Business Days of the due date thereof: (i) the
outstanding Pool Balance on April 15, 2015 or (ii) interest
due on the Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing (as
defined in the Intercreditor Agreement) with respect thereto
in an amount sufficient to pay such interest and shall have
distributed such amount to the Certificateholders).
QIB: Means a qualified institutional buyer as defined
in Rule 144A.
Record Date: Means (i) for Scheduled Payments to be
distributed on any Regular Distribution Date, other than the
final distribution, 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, the
15th day (whether or not a Business Day) preceding such
Special Distribution Date.
Refunding Agreements: Means each of the eighteen
separate Refunding Agreements dated the date hereof, listed
on Schedule 2 hereto, providing for, among other things, the
purchase of Equipment Notes by the Trustee on behalf of the
Trust, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
Refunding Documents: With respect to any Equipment
Note, means the related Indenture, Refunding Agreement,
Lease and Participation Agreement.
Register and Registrar: Mean the register maintained
and the registrar appointed pursuant to Sections 3.04
and 7.12.
Registration Rights Agreement: Means the Registration
Rights Agreement dated January 31, 1996, among the Initial
Purchasers, the Trustee, the Other Trustees and the Company,
as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
Registration Statement: Means the Registration
Statement defined in the Registration Rights Agreement.
Regular Distribution Date: With respect to
distributions of Scheduled Payments in respect of the
Certificates, means each date designated as a Regular
Distribution Date in this Agreement, until payment of all
the Scheduled Payments to be made under the Equipment Notes
held in the Trust have been made; 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.
Regulation S: Means Regulation S under the Securities
Act or any successor regulation thereto.
Responsible Officer: With respect to the Trustee, any
Loan Trustee and any Owner Trustee, means any officer in the
Corporate Trust Office 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.
Rule 144A: Means Rule 144A under the Securities Act
and any successor rule thereto.
Scheduled Payment: With respect to any Equipment Note,
means (i) any payment of principal and interest on such
Equipment Note (other than any such payment which is not in
fact received by the Subordination Agent within five days of
the date on which such payment is scheduled to be made) due
from the obligor thereon or (ii) any payment of interest on
the Certificates with funds drawn under the 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, 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.
Securities Act: Means the United States Securities Act
of 1933, as amended from time to time, or any successor
thereto.
Special Distribution Date: Means each date on which a
Special Payment is to be distributed as specified in this
Agreement; 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.
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 2.01(b) or
(iii) the amounts required to be distributed pursuant to the
penultimate paragraph of Section 2.01(b).
Special Payments Account: Means the account or
accounts created and maintained pursuant to Section 4.01(b).
Specified Investments: Means (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 Group,
(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 short-term deposit rating of P1 by
Moody's Investors Service, Inc. or its equivalent by
Standard & Poor's Ratings Group; 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 respect to any of the obligations described in
clauses (i) through (iv) above as collateral; provided
further that if all of the above investments are
unavailable, all 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 in the
Intercreditor Agreement.
Temporary Offshore Global Certificates: Has the
meaning specified in Section 3.01.
Transfer Date: Has the meaning assigned to the term
"Refunding Date" in each Refunding Agreement.
Triggering Event: Has the meaning assigned to such
term in the Intercreditor Agreement.
Trust: Means the trust created by this Agreement, the
estate of which consists of the Trust Property.
Trust Indenture Act: Except as otherwise provided in
Section 9.06, means the United States Trust Indenture Act of
1939 as in force at the date hereof.
Trust Property: Means (i) the Equipment Notes held as
the property of the Trust and 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 Escrow
Account, the Certificate Account and the Special Payments
Account, and (iii) all rights of the Trust and the Trustee,
on behalf of the Trust, under the Intercreditor Agreement
and the Liquidity Facility, including, without limitation,
all rights to receive certain payments thereunder, and all
monies paid to the Trustee on behalf of the Trust pursuant
to the Intercreditor Agreement or the Liquidity Facility.
Trustee: Means Wilmington Trust Company, or its
successor in interest, and any successor or other trustee
appointed as provided herein.
Trustee's Lien: Has the meaning specified in Section
7.17.
U.S. Global Certificate: Has the meaning specified in
Section 3.01.
U.S. Physical Certificates: Has the meaning specified
in Section 3.01.
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 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 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 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 Agreement
(other than a certificate provided pursuant to Section 8.04(d))
shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions in 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 Agreement
or, in respect of the Certificates, 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 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, where it is hereby expressly required pursuant to this
Agreement, to the Company or any Loan Trustee. 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
Agreement and conclusive in favor of the Trustee, the Company and
any Loan Trustee, if made in the manner provided in this Section.
(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
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 Outstanding, such
Certificates shall not be so disregarded, and (ii) if any amount
of Certificates 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 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 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 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 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 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 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.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01. Issuance of Certificates; Acquisition of
Equipment Notes. (a) The Trustee is hereby directed to execute
and deliver the Intercreditor Agreement, the Registration Rights
Agreement and each of the Refunding Agreements on or prior to the
Issuance Date, each in the form delivered to the Trustee by the
Company. Upon request of the Company and the satisfaction of the
closing conditions specified in each of the Refunding Agreements,
the Trustee shall execute, deliver and authenticate Certificates
equalling in the aggregate the aggregate principal amount of the
Equipment Notes to be purchased by the Trustee pursuant to each
of the Refunding Agreements on the Transfer Date, and evidencing
the entire ownership interest in the Trust. The Trustee shall
issue and sell such Certificates, in authorized denominations and
in such Fractional Undivided Interests, so as to result in the
receipt by the Trustee of consideration in an amount equal to the
aggregate principal amount of such Equipment Notes and,
concurrently therewith, the Trustee shall purchase, pursuant to
the terms and conditions of the Refunding Agreements, the
Equipment Notes at a purchase price equal to the amount of such
consideration so received. Except as provided in Sections 3.04
and 3.07 hereof, the Trustee shall not execute, authenticate or
deliver Certificates 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, the Company
shall deliver to the Trustee a Postponement Notice relating to
one or more Postponed Notes (which Postponement Notice may be
given by the Company only if one or more conditions to the
purchase of such Postponed Notes by the Trustee shall not have
been satisfied or waived pursuant to the related Refunding
Agreement), the Trustee shall postpone the purchase of such
Postponed Notes from the consideration received from the sale of
Certificates and shall promptly deposit funds in an amount equal
to the purchase price of such Postponed Notes (the "Escrowed
Funds") into an escrow account (the "Escrow Account") with the
Trustee to be maintained as a part of the Trust. The Escrowed
Funds so deposited shall be invested by the Trustee at the
direction and risk of, and for the benefit of, the Company in
Specified Investments (i) maturing no later than any scheduled
Transfer Date relating to the Certificates 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
any Postponed Notes will not be issued, with respect to the
portion of the Escrowed Funds relating to such Postponed Notes,
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 of the closing conditions
specified in the applicable Refunding 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 direction and risk of, and for the benefit of, the
Company 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
Company. The Company shall pay to the Trustee for deposit to the
Escrow Account an amount equal to any losses on such Specified
Investments as incurred. On the Initial Regular Distribution
Date, the Company will pay (in immediately available funds) to
the Trustee an amount equal to the interest that would have
accrued on any Postponed Notes 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 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 occurring more than 20 days following the date
of such notice (i) the Company shall pay to the Trustee for
deposit in the 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 the 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 plus the amount
paid by the Company pursuant to the immediately preceding
clause (i) to the Special Payments Account for distribution as a
Special Payment in accordance with the provisions hereof.
If, on the 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 Special Distribution Date occurring
more than 20 days following the Cut-off Date (i) the Company
shall pay to the Trustee for deposit in the Special Payments
Account, in immediately available funds, an amount equal to the
interest that would have accrued on Postponed Notes originally
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 the 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 Company pursuant to the immediately
preceding clause (i) to the Special Payments Account for
distribution as a Special Payment in accordance with the
provisions hereof.
Section 2.02. Acceptance by Trustee. The Trustee,
upon the execution and delivery of this Agreement, acknowledges
its acceptance of all right, title and interest in and to the
Equipment Notes acquired pursuant to Section 2.01 hereof and the
Refunding Agreements and declares that the Trustee holds and will
hold such right, title and interest, together with all other
property constituting the Trust Property, for the benefit of all
then present and future Certificateholders, upon the trusts
herein set forth. Subject to Section 7.14, the Trustee shall
take all actions reasonably necessary to effect the registration
of all such Equipment Notes in the name of the Subordination
Agent. By its payment for and acceptance of each Certificate
issued to it under this Agreement, each initial Certificateholder
as grantor of the Trust thereby joins in the creation and
declaration of the Trust.
Section 2.03. Limitation of Powers. The Trust is
constituted solely for the purpose of making the investment in
the Equipment Notes, 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. Title, Form, Denomination and Execution
of Certificates. (a) The Initial Certificates shall be known as
the "7.82% 1996-B Initial Pass Through Certificates" and the
Exchange Certificates shall be known as the "7.82% 1996-B
Exchange Pass Through Certificates", in each case, of the Trust.
Each Certificate will represent a fractional undivided interest
in the Trust and shall be substantially in the form set forth as
Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or 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 or as may, consistently herewith, be
determined by the officers executing such Certificates, as
evidenced by their execution of the Certificates. Any portion of
the text of any Certificate may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the
Certificate.
(b) The Initial Certificates shall be issued only in
fully registered form without coupons and only in denominations
of $100,000 or integral multiples of $1,000 in excess thereof,
except that one Certificate may be issued in a denomination of
less than $100,000. The Exchange Certificates will be issued in
denominations of $1,000 or integral multiples thereof. Each
Certificate shall be dated the date of its authentication. The
aggregate Fractional Undivided Interest of Certificates shall not
at any time exceed $94,332,000.
(c) Initial Certificates offered and sold in reliance
on Rule 144A shall be issued initially in the form of a single
permanent global Certificate in registered form, substantially in
the form set forth as Exhibit A hereto (the "U.S. Global
Certificate"), duly executed and authenticated by the Trustee as
hereinafter provided. The U.S. Global Certificate will be
registered in the name of a nominee for the Depositary and
deposited with the Trustee, as custodian for the Depositary. The
aggregate principal amount of the U.S. Global Certificate may
from time to time be increased or decreased by adjustments made
on the records of the Depositary or its nominee, or of the
Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
(d) Initial Certificates offered and sold in offshore
transactions in reliance on Regulation S shall be issued
initially in the form of a single temporary global Certificate in
registered form, substantially in the form set forth as Exhibit A
hereto (the "Temporary Offshore Global Certificate") duly
executed and authenticated by the Trustee as hereinafter
provided. The Temporary Offshore Global Certificates will be
registered in the name of a nominee of the Depositary for credit
to the account of the Agent Members acting as depositaries for
Euroclear and Cedel and deposited with the Trustee as custodian
for the Depositary. At any time following March 11, 1996 (the
"Offshore Certificates Exchange Date"), upon receipt by the
Trustee of a certificate substantially in the form of Exhibit B
hereto, a single permanent global Certificate in registered form
substantially in the form set forth in Exhibit A (the "Permanent
Offshore Global Certificate"; and together with the Temporary
Offshore Global Certificate, the "Offshore Global Certificates"),
duly executed and authenticated by the Trustee as hereinafter
provided, shall be registered in the name of a nominee for the
Depositary and deposited with the Trustee, as custodian for the
Depositary, and the Registrar shall reflect on its books and
records the date of such transfer and a decrease in the principal
amount of any Temporary Offshore Global Certificate in an amount
equal to the principal amount of the beneficial interest in such
Temporary Offshore Global Certificate transferred. The U.S.
Global Certificate and the Offshore Global Certificates are
sometimes referred to as the "Global Certificates".
(e) Initial Certificates offered and sold to
Institutional Accredited Investors shall be issued in the form of
permanent certificated Certificates in registered form in
substantially the form set forth as Exhibit A hereto (the "U.S.
Physical Certificates"). Certificates issued pursuant to Section
3.05(b) in exchange for interests in any Offshore Global
Certificate shall be in the form of permanent certificated
Certificates in registered form substantially in the form set
forth in Exhibit A (the "Offshore Physical Certificates"). The
Offshore Physical Certificates and U.S. Physical Certificates are
sometimes collectively herein referred to as the "Physical
Certificates".
(f) The definitive Certificates shall be in registered
form and shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced
in any other manner, all as determined by the officers executing
such Certificates, as evidenced by their execution of such
Certificates.
Section 3.02. Restrictive Legends. (a) Subject to
Section 3.06, unless and until (i) an Initial Certificate is sold
under an effective Registration Statement or (ii) an Initial
Certificate is exchanged for an Exchange Certificate pursuant to
an effective Exchange Offer Registration Statement, in each case
as provided for in the Registration Rights Agreement, each Global
Certificate (other than the Permanent Offshore Global
Certificate) and each U.S. Physical Certificate shall bear the
following legend (the "Private Placement Legend") on the face
thereof:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS
HELD BY CONTINENTAL AIRLINES, INC., THE TRUSTEE OR ANY
AFFILIATE OF ANY OF SUCH PERSONS RESELL OR OTHERWISE
TRANSFER THIS CERTIFICATE EXCEPT (A) TO CONTINENTAL
AIRLINES, INC., (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS CERTIFICATE WITHIN THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THIS CERTIFICATE OR THE
LAST DATE ON WHICH THIS CERTIFICATE WAS HELD BY CONTINENTAL
AIRLINES, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH
PERSONS THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT
(A) IT IS NOT A PLAN TRANSFEREE (AS DEFINED IN THE PASS
THROUGH TRUST AGREEMENT) OR (B) IT IS AN INSURANCE COMPANY
USING THE ASSETS OF ITS GENERAL ACCOUNT TO ACQUIRE THIS
CERTIFICATE, AND THE CONDITIONS OF PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ISSUED BY THE U.S. DEPARTMENT OF LABOR
HAVE BEEN AND WILL CONTINUE TO BE SATISFIED IN CONNECTION
WITH ITS PURCHASE AND HOLDING OF THIS CERTIFICATE. THE PASS
THROUGH TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) Each Global Certificate shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE 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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.05 AND 3.06 OF THE PASS
THROUGH TRUST AGREEMENT REFERRED TO HEREIN.
Section 3.03. Authentication of Certificates. (a)
The Trustee shall duly execute, authenticate and deliver
Certificates in authorized denominations equalling in the
aggregate the aggregate principal amount of the Equipment Notes
to be purchased by the Trustee pursuant to the Refunding
Agreements and evidencing the entire ownership of the Trust.
(b) No Certificate shall be entitled to any benefit
under this Agreement or be valid or obligatory for any purpose,
unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Certificate
shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder.
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 of this
Agreement a register (the "Register") for the Certificates in
which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of the
Certificates and of transfers and exchanges of the Certificates
as herein provided. The Trustee shall initially be the registrar
(the "Registrar") for the purpose of registering the Certificates
and transfers and exchanges of the Certificates as herein
provided. A Certificateholder may transfer a Certificate by
written application to the Registrar stating the name of the
proposed transferee and otherwise complying with the terms of
this Agreement, including providing a written certificate or
other evidence of compliance with any restrictions on transfer.
No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Certificateholder only upon,
final acceptance and registration of the transfer by the
Registrar in the Register. Prior to the registration of any
transfer by a Certificateholder as provided herein, the Trustee
shall treat the person in whose name the Certificate is
registered as the owner thereof for all purposes, and the Trustee
shall not be affected by notice to the contrary. Furthermore,
the Depositary shall, by acceptance of a Global Certificate,
agree that transfers of beneficial interests in such Global
Certificate may be effected only through a book-entry system
maintained by the Depositary (or its agent), and that ownership
of a beneficial interest in the Certificate shall be required to
be reflected in a book entry. When Certificates are presented to
the Registrar with a request to register the transfer or to
exchange them for an equal face amount of Certificates of other
authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if its requirements
for such transactions are met. To permit registrations of
transfers and exchanges in accordance with the terms, conditions
and restrictions hereof, the Trustee shall execute and
authenticate Certificates at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange
of the Certificates, but the Trustee may require payment by the
transferor of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental
charges payable upon exchanges pursuant to Section 3.10 or 9.07).
Section 3.05. Book-Entry Provisions for U.S. Global
Certificate and Offshore Global Certificates. (a) Members of,
or participants in, the Depositary ("Agent Members") shall have
no rights under this Agreement with respect to any Global
Certificate held on their behalf by the Depositary, or the
Trustee as its custodian, and the Depositary may be treated by
the Trustee and any agent of the Trustee as the absolute owner of
such Global Certificate for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Trustee or any agent of the Trustee from giving effect to any
written certification, proxy or other authorization furnished by
the Depositary or shall impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Certificate. Upon the
issuance of any Global Certificate, the Registrar or its duly
appointed agent shall record a nominee of the Depositary as the
registered holder of such Global Certificate.
(b) Transfers of any Global Certificate shall be
limited to transfers of such Global Certificate or Offshore
Global Certificate in whole, but not in part, to nominees of the
Depositary, its successor or such successor's nominees.
Beneficial interests in the U.S. Global Certificate and any
Offshore Global Certificate may be transferred in accordance with
the rules and procedures of the Depositary and the provisions of
Section 3.06. Beneficial interests in the U.S. Global
Certificate or an Offshore Global Certificate shall be delivered
to all beneficial owners in the form of U.S. Physical
Certificates or Offshore Physical Certificates, as the case may
be, if (i) the Depositary notifies the Trustee that it is
unwilling or unable to continue as Depositary for the U.S. Global
Certificate or such Offshore Global Certificate, as the case may
be, and a successor depositary is not appointed by the Trustee
within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a
request from the Depositary to issue Physical Certificates.
(c) Any beneficial interest in one of the Global
Certificates that is transferred to a Person who takes delivery
in the form of an interest in the other Global Certificate will,
upon such transfer, cease to be an interest in such Global
Certificate and become an interest in the other Global
Certificate and, accordingly, will thereafter be subject to all
transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Certificate for as long
as it remains such an interest.
(d) [Intentionally omitted.]
(e) In connection with the transfer of the entire U.S.
Global Certificate or an entire Offshore Global Certificate to
the beneficial owners thereof pursuant to paragraph (b) of this
Section 3.05, such U.S. Global Certificate or Offshore Global
Certificate, as the case may be, shall be deemed to be
surrendered to the Trustee for cancellation, and the Trustee
shall execute, authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial
interest in such U.S. Global Certificate or Offshore Global
Certificate, as the case may be, an equal aggregate principal
amount of U.S. Physical Certificates or Offshore Physical
Certificates, as the case may be, of authorized denominations.
(f) Any U.S. Physical Certificate delivered in
exchange for an interest in the U.S. Global Certificate pursuant
to paragraph (b) of this Section 3.05 shall, except as otherwise
provided by paragraph (f) of Section 3.06, bear the Private
Placement Legend.
(g) Any Offshore Physical Certificate delivered in
exchange for an interest in an Offshore Global Certificate
pursuant to paragraph (b) of this Section shall, except as
otherwise provided by paragraph (f) of Section 3.06, bear the
applicable legend regarding transfer restrictions set forth in
Section 3.02(a).
(h) The registered holder of the U.S. Global
Certificate or any Offshore Global Certificate may grant proxies
and otherwise authorize any Person, including Agent Members and
Persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this
Agreement or the Certificates.
Section 3.06. Special Transfer Provisions. Unless and
until (i) an Initial Certificate is sold under an effective
Registration Statement, or (ii) an Initial Certificate is
exchanged for an Exchange Certificate pursuant to an effective
Exchange Offer Registration Statement, in each case pursuant to
the Registration Rights Agreement, the following provisions shall
apply to such Initial Certificates:
(a) [intentionally omitted.]
(b) Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed
transfer of an Initial Certificate to a QIB (excluding
Non-U.S. Persons):
(i) If the Certificate to be transferred consists
of U.S. Physical Certificates or an interest in any
Temporary Offshore Global Certificate, the Registrar
shall register the transfer if such transfer is being
made by a proposed transferor who has checked the box
provided for on the form of Initial Certificate
stating, or has otherwise advised the Trustee and the
Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided
for on the form of Initial Certificate stating, or has
otherwise advised the Trustee and the Registrar in
writing, that it is purchasing the Initial Certificate
for its own account or an account with respect to which
it exercises sole investment discretion and that it, or
the Person on whose behalf it is acting with respect to
any such account, is a QIB within the meaning of
Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Trust
and/or the Company as it has requested pursuant to
Rule 144A or has determined not to request such
information and that it is aware that the transferor is
relying upon its foregoing representations in order to
claim the exemption from registration provided by
Rule 144A.
(ii) Upon receipt by the Registrar of the
documents referred to in clause (i) above and
instructions given in accordance with the Depositary's
and the Registrar's procedures therefor, the Registrar
shall reflect on its books and records the date of such
transfer and an increase in the principal amount of the
U.S. Global Certificate in an amount equal to the
principal amount of the U.S. Physical Certificates or
interests in the Temporary Offshore Global Certificate,
as the case may be, being transferred, and the Trustee
shall cancel such Physical Certificates or decrease the
amount of such Temporary Offshore Global Certificate so
transferred.
(c) [intentionally omitted.]
(d) Transfers of Interests in the Permanent Offshore
Global Certificate or Offshore Physical Certificates. The
Registrar shall register any transfer of interests in the
Permanent Offshore Global Certificate or Offshore Physical
Certificates without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The
following provisions shall apply with respect to any
registration of any transfer of an Initial Certificate to a
Non-U.S. Person:
(i) Prior to the Offshore Certificates Exchange
Date, the Registrar shall register any proposed
transfer of an Initial Certificate to a Non-U.S. Person
upon receipt of a certificate substantially in the form
set forth as Exhibit C hereto from the proposed
transferor.
(ii) On and after the Offshore Certificates
Exchange Date, the Registrar shall register any
proposed transfer to any Non-U.S. Person if the
Certificate to be transferred is a U.S. Physical
Certificate or an interest in the U.S. Global
Certificate, upon receipt of a certificate
substantially in the form of Exhibit C from the
proposed transferor. The Registrar shall promptly send
a copy of such certificate to the Company.
(iii) Upon receipt by the Registrar of (x) the
documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and
the Registrar's procedures, the Registrar shall reflect
on its books and records the date of such transfer and
a decrease in the principal amount of such U.S. Global
Certificate in an amount equal to the principal amount
of the beneficial interest in such U.S. Global
Certificate to be transferred, and (B) upon receipt by
the Registrar of instructions given in accordance with
the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the
date and an increase in the principal amount of the
Offshore Global Certificate in an amount equal to the
principal amount of the U.S. Physical Certificate or
the U.S. Global Certificate, as the case may be, to be
transferred, and the Trustee shall cancel the Physical
Certificate, if any, so transferred or decrease the
amount of such U.S. Global Certificate.
(f) Private Placement Legend. Upon the transfer,
exchange or replacement of Certificates not bearing the
Private Placement Legend, the Registrar shall deliver
Certificates that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Certificates
bearing the Private Placement Legend, the Registrar shall
deliver only Certificates that bear the Private Placement
Legend unless either (i) the circumstances contemplated by
paragraph (a)(i)(x) or (e)(ii) of this Section 3.06 exist or
(ii) there is delivered to the Registrar an Opinion of
Counsel to the effect that neither such legend nor the
related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities
Act.
(g) General. By its acceptance of any Certificate
bearing the Private Placement Legend, each Holder of such a
Certificate acknowledges the restrictions on transfer of
such Certificate set forth in this Agreement and agrees that
it will transfer such Certificate only as provided in this
Agreement. The Registrar shall not register a transfer of
any Certificate unless such transfer complies with the
restrictions on transfer of such Certificate set forth in
this Agreement. In connection with any transfer of
Certificates, each Certificateholder agrees by its
acceptance of the Certificates to furnish the Registrar or
the Trustee such certifications, legal opinions or other
information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the
registration requirements of the Securities Act; provided
that the Registrar shall not be required to determine the
sufficiency of any such certifications, legal opinions or
other information.
Until such time as no Certificates remain Outstanding,
the Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.05 or
this Section 3.06. The Trustee, if not the Registrar at such
time, shall have the right to inspect and make copies of all such
letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to
the Registrar.
Section 3.07. 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 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, 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 3.07, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee and the
Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this
Section 3.07 shall constitute conclusive evidence of the
appropriate Fractional Undivided Interest in the 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 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 3.08. 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 3.09. 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, 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 3.10. Temporary Certificates. Until
definitive Certificates are ready for delivery, the Trustee shall
authenticate temporary Certificates. Temporary Certificates
shall be substantially in the form of definitive Certificates but
may have insertions, substitutions, omissions and other
variations determined to be appropriate by the officers executing
the temporary Certificates, as evidenced by their execution of
such temporary Certificates. If temporary Certificates are
issued, the Trustee will cause definitive Certificates to be
prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the
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 authorized
denominations. Until so exchanged, the temporary Certificates
shall be entitled to the same benefits under this Agreement as
definitive Certificates.
Section 3.11. Limitation of Liability for Payments.
All payments and distributions made to Certificateholders 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 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 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.
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 a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold the
Certificate Account in trust for the benefit of the
Certificateholders, 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 the Intercreditor
Agreement, the Trustee upon receipt thereof shall immediately
deposit the aggregate amount of such Scheduled Payment in the
Certificate Account.
(b) The Trustee shall establish and maintain on behalf
of the Certificateholders 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 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, the Trustee, upon
receipt thereof, shall immediately deposit the aggregate amount
of such Special Payments in the Special Payments Account.
(c) The Trustee shall 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 or as soon thereafter as the Trustee has confirmed receipt
of the payment of all or any part of the Scheduled Payments due
on such date, the Trustee shall distribute out of the Certificate
Account the entire amount deposited therein pursuant to
Section 4.01(a). There shall be so distributed to each
Certificateholder of record 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 Certificate
Account, except that, with respect to Certificates registered on
the Record Date in the name of the nominee of the Depositary
(initially, such nominee to be Cede & Co.), such distribution
shall be made by wire transfer in immediately available funds to
the account designated by such nominee.
(b) On each Special Distribution Date with respect to
any Special Payment or as soon thereafter as the Trustee has
confirmed receipt of any Special Payments, the Trustee shall
distribute out of the Special Payments Account the entire amount
of such Special Payment deposited therein pursuant to
Section 4.01(b). There shall be so distributed to each
Certificateholder of record 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 Trust held by such
Certificateholder) of the total amount in the Special Payments
Account on account of such Special Payment, except that, with
respect to Certificates registered on the Record Date in the name
of the nominee of the Depositary (initially, such nominee to be
Cede & Co.), such distribution shall be made by wire transfer in
immediately available funds to the account designated by such
nominee.
(c) The Trustee shall, at the expense of the Company,
cause notice of each Special Payment to be mailed to each
Certificateholder at his address as it appears in the Register.
In the event of redemption or purchase of Equipment Notes held in
the Trust, such notice shall be mailed not less than 20 days
prior to the Special Distribution Date for the Special Payment
resulting from such redemption or purchase, which Special
Distribution Date shall be the date of such redemption or
purchase. In the case of any other Special Payments, such notice
shall be mailed as soon as practicable after the Trustee has
confirmed that it has received funds for such Special Payment,
stating the Special Distribution Date for such Special Payment
which shall occur not less than 20 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 for each $1,000
face amount Certificate (taking into account any payment to
be made by the Company pursuant to Section 2.01(b)) and the
amount thereof constituting principal, premium, if any, and
interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date
as a Regular Distribution Date, the total amount to be
received on such date for each $1,000 face amount
Certificate.
If the amount of premium, if any, payable upon the redemption or
purchase of an Equipment Note has not been calculated at the time
that the Trustee mails notice of a Special Payment, it shall be
sufficient if the notice sets forth the other amounts to be
distributed and states that any premium received will also be
distributed.
If any redemption of the Equipment Notes held in the
Trust is cancelled, the Trustee, as soon as possible after
learning thereof, shall cause notice thereof to be mailed to each
Certificateholder at its address as it appears on the Register.
Section 4.03. Statements to Certificateholders. (a)
On each Distribution Date, the Trustee will include with each
distribution to Certificateholders of a Scheduled Payment or
Special Payment, as the case may be, a statement setting forth
the following information (per $1,000 face amount Certificate as
to (i) and (ii) below):
(i) the amount of such distribution allocable to
principal and the amount allocable to premium, if any;
(ii) the amount of such distribution allocable to
interest; and
(iii) the Pool Balance and the Pool Factor.
With respect to the Certificates registered in the name
of Cede & Co., as nominee for the Depositary, on the Record Date
prior to each Distribution Date, the Trustee will request from
the Depositary a Securities Position Listing setting forth the
names of all Agent Members reflected on the Depositary's books as
holding interests in the Certificates on such Record Date. On
each Distribution Date, the Trustee will mail to each such Agent
Member the statement described above and will make available
additional copies as requested by such Agent Member 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
Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar
year, for such portion of such year, and such other items as are
readily available to the Trustee and which a Certificateholder
shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax
returns. Such statement and such other items shall be prepared
on the basis of information supplied to the Trustee by the Agent
Members and shall be delivered by the Trustee to such Agent
Members to be available for forwarding by such Agent Members 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 to be promptly
distributed 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. 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.
Section 1110), with respect to the Leases;
(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 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
this Agreement, the Other Pass Through Trust Agreements, the
Refunding Agreements, and each other Refunding Document 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 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 Refunding
Document 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 Default under any Indenture, the Trustee may, to the
extent it is the Controlling Party at such time (as determined
pursuant to the Intercreditor Agreement), direct the exercise of
remedies as provided in the Intercreditor Agreement.
(b) Purchase Rights of Certificateholders. (i) At
any time after the occurrence and during the continuation of a
Triggering Event, each Certificateholder shall have the right to
purchase all, but not less than all, of the Class A Certificates
upon ten days' written notice to the Class A Trustee and each
other Certificateholder, provided that (A) if prior to the end of
such ten-day period any other Certificateholder notifies such
purchasing Certificateholder that such other Certificateholder
wants to participate in such purchase, then such other
Certificateholder may join with the purchasing Certificateholder
to purchase all, but not less than all, of the Class A
Certificates pro rata based on the outstanding principal amount
of the Certificates held by each such Certificateholder and
(B) if prior to the end of such ten-day period any other
Certificateholder fails to notify the purchasing
Certificateholder of such other Certificateholder's desire to
participate in such a purchase, then such other Certificateholder
shall lose its right to purchase the Class A Certificates
pursuant to this Section 6.01(b)(i).
(ii) By acceptance of its Certificate, each
Certificateholder agrees that at any time after the occurrence
and during the continuation of a Triggering Event,
(1) each Class C Certificateholder shall have the
right (which shall not expire upon any purchase of the Class
A Certificates pursuant to paragraph (i) above) to purchase
all, but not less than all, of the Class A Certificates and
the Certificates upon ten days' written notice to the Class
A Trustee, the 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 Class A Certificates and
the 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 Certificates pursuant
to this Section 6.01(b); and
(2) each Class D Certificateholder shall have the
right (which shall not expire upon any purchase of the Class
A Certificates pursuant to paragraph (i) above or the
purchase of the Class A Certificates and the Certificates
pursuant to clause (ii)(1) above) to purchase all, but not
less than all, of the Class A Certificates, the Certificates
and the Class C Certificates upon ten days' written notice
to the Class A Trustee, the Trustee, the Class C Trustee and
each other Class D Certificateholder, provided that (A) if
prior to the end of such ten-day period any other Class D
Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder
wants to participate in such purchase, then such other Class
D Certificateholder may join with the purchasing
Certificateholder to purchase all, but not less than all, of
the Class A Certificates, the Certificates and the Class C
Certificates pro rata based on the Fractional Undivided
Interest in the Class D Trust held by each such Class D
Certificateholder and (B) if prior to the end of such ten
day period any other Class D Certificateholder fails to
notify the purchasing Class D Certificateholder of such
other Class D Certificateholder's desire to participate in
such a purchase, then such other Class D Certificateholder
shall lose its right to purchase the Class A Certificates,
the Certificates and the Class C Certificates pursuant to
this Section 6.01(b).
The purchase price with respect to the Certificates
shall be equal to the Pool Balance of the Certificates, together
with accrued and unpaid interest thereon to the date of such
purchase, without premium, but including any other amounts then
due and payable to the Certificateholders under this Agreement,
the Intercreditor Agreement or any other Refunding Document or on
or in respect of the Certificates; provided, however, that no
such purchase of Certificates shall be effective unless the
purchaser shall certify to the Trustee that contemporaneously
with such purchase, such purchaser is purchasing, pursuant to the
terms of this Agreement and the Other Pass Through Trust
Agreements, the Class A Certificates, the Certificates and the
Class C Certificates which are senior to the securities held by
such purchaser. Each payment of the purchase price of the
Certificates referred to in the first sentence hereof shall be
made to an account or accounts designated by the Trustee and each
such purchase shall be subject to the terms of this Section
6.01(b). Each Certificateholder agrees by its acceptance of its
Certificate that it will, subject to Section 3.04 hereof, upon
payment from such Class C Certificateholder(s) or Class D
Certificateholder(s), as the case may be, of the purchase price
set forth in the first sentence of this paragraph, forthwith
sell, assign, transfer and convey to the purchaser thereof
(without recourse, representation or warranty of any kind except
for its own acts), all of the right, title, interest and
obligation of such Certificateholder in, this Agreement, the
Intercreditor Agreement, the Liquidity Facility, the Refunding
Documents and all Certificates held by such Certificateholder
(excluding all right, title and interest under any of the
foregoing to the extent such right, title or interest is with
respect to an obligation not then due and payable as respects any
action or inaction or state of affairs occurring prior to such
sale) and the purchaser shall assume all of such
Certificateholder's obligations under this Agreement, the
Intercreditor Agreement, the Liquidity Facility and the Refunding
Documents. The Certificates will be deemed to be purchased on
the date payment of the purchase price is made notwithstanding
the failure of the Certificateholders to deliver any Certificates
(whether in the form of Physical Certificates or beneficial
interests in Global Certificates) and, upon such a purchase, (i)
the only rights of the Certificateholders will be to deliver the
Certificates to the purchaser and receive the purchase price for
such Certificates and (ii) if the purchaser shall so request,
such Certificateholder will comply with all the provisions of
Section 3.04 hereof to enable new Certificates to be issued to
the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the purchaser thereof.
As used in this Section 6.01(b), the terms
"Certificateholder", "Class", "Class A Certificate", "Class A
Trustee", "Class C Certificate", "Class C Certificateholder",
"Class C Trust", "Class C Trustee", "Class D Certificate", "Class
D Certificateholder", "Class D Trust" and "Class D Trustee",
shall have the respective meanings assigned to such terms in the
Intercreditor Agreement.
Section 6.02. [Intentionally omitted.].
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, 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 the
Intercreditor Agreement and the Refunding Documents (subject to
the rights of the applicable Owner Trustee or Owner Participant
to cure any such failure in accordance with Section 4.03 of 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 the Intercreditor Agreement, the
Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in
interest in the 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 the Trust or pursuant to
the terms of the Intercreditor Agreement, or exercising any trust
or power conferred on the Trustee under this Agreement or the
Intercreditor Agreement, including any right of the Trustee as
Controlling Party under the Intercreditor Agreement or as holder
of the Equipment Notes, provided that
(1) such Direction shall not 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 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 the
Intercreditor Agreement, the Certificateholders holding
Certificates 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
Default under any 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, or
(2) in the payment of the principal of (premium, if
any) or interest on the Equipment Notes, or
(3) in respect of a covenant or provision hereof
which under Article X cannot be modified or amended without
the consent of each Certificateholder holding an Outstanding
Certificate affected thereby.
Upon any such waiver, such default shall cease to exist
with respect to the Certificates 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 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 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 the Intercreditor Agreement,
the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.02 hereof on the
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 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 evidencing
Fractional Undivided Interests aggregating not less than 25%
of the 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 such an 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
evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust.
It is understood and intended that no one or more of
the Certificateholders shall have any right in any manner
whatsoever hereunder or under the Certificates to (i) surrender,
impair, waive, affect, disturb or prejudice any property in the
Trust Property or the lien of any Indenture on any property
subject thereto, or the rights of the Certificateholders or the
holders of the Equipment Notes, (ii) obtain or seek to obtain
priority over or preference with respect to any other such
Certificateholder 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
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
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.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default, the
Trustee undertakes to perform such duties 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 has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, 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 its 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 wilful
misconduct, except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section; 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 Trust 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.
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, the Trustee shall transmit by mail to the Company, the
Owner Trustees, the Owner Participants, the Loan Trustees and the
Certificateholders 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 on 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 determine that
the withholding of such notice is in the interests of the
Certificateholders. For the purpose of this Section, the term
"default" means any event that is, or after notice or lapse of
time or both would become, an Event of Default.
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 written
description of the subject matter thereof accompanied by an
Officer's Certificate and an Opinion of Counsel as provided
in Section 1.02 of this Agreement;
(c) whenever in the administration of this 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 Owner Trustee or any 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 at the Direction of any of the Certificateholders
pursuant to this 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 perform any duties under this
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;
(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 evidencing Fractional Undivided
Interests aggregating not less than a majority in interest
in the 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; 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, 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 Agreement, any Refunding
Agreement, any Equipment Notes, the Certificates or any other
Refunding Document, except that the Trustee hereby represents and
warrants that this Agreement has been, and the Intercreditor
Agreement, the Registration Rights Agreement, each Refunding
Agreement and each Certificate will be, executed, authenticated
and delivered by one of its officers who is duly authorized to
execute, authenticate 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, the 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 hereunder 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);
(2) except as otherwise expressly provided herein, 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 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 the Trustee pursuant to Section 10.1
of the Participation Agreements (as amended by the
Amendments No. 2 thereto dated as of the date hereof) (as
defined in the Intercreditor Agreement).
The Trustee shall be entitled to reimbursement from,
and shall have a lien prior to the Certificates upon, the Trust
Property 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. 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
circumstances thereof to all Certificateholders as their names
and addresses appear in the Register.
Section 7.08. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder 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, the Trustee shall resign immediately as
Trustee 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 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 by
giving prior written notice thereof to the Company, the
Authorized Agents, the Owner Trustees and the Loan Trustees. If
an instrument of acceptance by a successor Trustee shall not have
been delivered to the Company, the Authorized Agents, the Owner
Trustees, the Loan 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 holding Certificates
evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the Trust delivered to the Trustee
and to the Company, the Owner Trustees and the Loan Trustees.
(d) If at any time:
(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, with the consent of the
Owner Participants, which consent may not be unreasonably
withheld, remove the Trustee or (ii) any Certificateholder 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.
(e) If a Responsible Officer of the Trustee shall
obtain actual knowledge of an Avoidable Tax 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
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 in a
jurisdiction where there are no Avoidable Taxes.
(f) If the Trustee shall resign, be removed or become
incapable of acting or if a vacancy shall occur in the office of
the Trustee for any cause, the Company shall promptly appoint a
successor Trustee. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a
successor Trustee shall be appointed by Direction of the
Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in
interest in the Trust delivered to the Company, the Owner
Trustees, the Loan Trustees and the retiring Trustee, and the
Company approves such appointment, which approval shall not be
unreasonably withheld, then the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede the successor Trustee
appointed as provided above. If no successor Trustee shall have
been so appointed as provided above and accepted appointment in
the manner hereinafter provided, any Certificateholder who has
been a bona fide Certificateholder 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.
(g) The successor Trustee 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 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, the Authorized Agents, the Owner Trustees
and the Loan Trustees and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee 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 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.
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 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) There
shall at all times be maintained an office or agency in the
location set forth in Section 12.03 where Certificates 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 (e.g., the Certificates shall be represented by
Physical 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, the Owner Trustees, the Loan Trustees (in the case of
any Owner Trustee or Loan Trustee, at its address specified in
the Refunding Agreements or such other address as may be notified
to the Trustee) and the Certificateholders. 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. 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, if the Trustee shall be acting as
the Registrar or Paying Agent hereunder, 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. 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
hereunder, if such successor corporation is otherwise eligible
under this Section, 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,
the Owner Trustees and the 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 (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. The Company shall give written notice of any such
appointment made by it to the Trustee, the Owner Trustees and the
Loan Trustees; and in each case the Trustee shall mail notice of
such appointment to all Certificateholders as their names and
addresses appear on the Register.
(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.
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 Name
of Subordination Agent. The Trustee agrees that all Equipment
Notes to be purchased by the Trust shall be issued in the name of
the Subordination Agent or its nominee and held by the
Subordination Agent in trust for the benefit of the
Certificateholders, or, if not so held, the 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 7.15. Representations and Warranties of
Trustee. 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, the
Intercreditor Agreement, the Registration Rights Agreement
and the Refunding Agreements and has taken all necessary
action to authorize the execution, delivery, and performance
by it of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding Agreements;
(c) the execution, delivery and performance by the
Trustee of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding Agreements
(i) will not violate any provision of 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, or (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, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding 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, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding 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 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. The Trustee, as trustee of the 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
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, to withhold such
amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Certificateholders, 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 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 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 which is attributable to the
Trustee either (i) in its individual capacity and which is
unrelated to the transactions contemplated by this Agreement, the
Intercreditor Agreement, the Refunding Agreements or the
Refunding 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.
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, 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, 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 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 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 the Certificates, the Trustee shall
transmit to the Certificateholders, 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 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;
(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 or her 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 any time
and from time to time, enter into one or more agreements
supplemental hereto or, if applicable, to the Intercreditor
Agreement or the Liquidity Facility, in form satisfactory to the
Trustee, for any of the following purposes:
(1) 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
(2) to add to the covenants of the Company for the
benefit of the Certificateholders, or to surrender any right
or power in this Agreement conferred upon the Company; or
(3) to correct or supplement any provision in this
Agreement, the Intercreditor Agreement or the Liquidity
Facility which may be defective or inconsistent with any
other provision herein or to cure any ambiguity or correct
any mistake or to modify any other provision with respect to
matters or questions arising under this Agreement, the
Intercreditor Agreement or the Liquidity Facility, provided
that any such action shall not materially adversely affect
the interests of the Certificateholders; or
(4) to modify, eliminate or add to the provisions of
this Agreement to such extent as shall be necessary to
continue the qualification of this Agreement (including any
supplemental agreement) under the Trust Indenture Act or
under any similar Federal statute hereafter enacted, and to
add to this Agreement 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 instrument was executed or any corresponding provision
in any similar Federal statute hereafter enacted; or
(5) to evidence and provide for the acceptance of
appointment under this Agreement by the Trustee of a
successor Trustee and to add to or change any of the
provisions of this Agreement as shall be necessary to
provide for or facilitate the administration of the Trust,
pursuant to the requirements of Section 7.10; or
(6) to provide the information required under
Section 7.12 and Section 12.03 as to the Trustee; or
(7) to modify or eliminate provisions relating to the
transfer or exchange of Exchange Certificates or the Initial
Certificates upon consummation of the Exchange Offer (as
defined in the Registration Rights Agreement) or
effectiveness of the Registration Statement.
Section 9.02. Supplemental Agreements with Consent of
Certificateholders. With the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the 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, which consent shall not be unreasonably
withheld), and the Trustee (subject to Section 9.03) shall, enter
into an agreement or agreements for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, the Intercreditor Agreement, the
Liquidity Facility, the Registration Rights Agreement or any
Refunding Agreement to the extent applicable to such
Certificateholders or of modifying in any manner the rights and
obligations of such Certificateholders under this Agreement, the
Intercreditor Agreement, the Liquidity Facility, the Registration
Rights Agreement or any Refunding Agreement; 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 the Trust or distributions that are
required to be made herein on any Certificate, or change any
date of payment on any Certificate, or change the place of
payment where, or the coin or currency in which, any
Certificate 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 except as permitted by this
Agreement, or otherwise deprive such Certificateholder of
the benefit of the ownership of the Equipment Notes in the
Trust; or
(3) reduce the percentage of the aggregate Fractional
Undivided Interests of the Trust which is required for any
such supplemental agreement, or reduce such 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
(4) waive, amend or modify Section 2.4, 3.2 or 3.3 of
the Intercreditor Agreement in a manner adverse to the
Certificateholders; 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 affected thereby.
It shall not be necessary for any Direction of
Certificateholders under this Section 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 Agreement, 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
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 Agreement shall be modified in
accordance therewith, and such supplemental agreement shall form
a part of this Agreement for all purposes; and every Holder of a
Certificate theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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 authenticated and
delivered after the execution of any supplemental agreement
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 after proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND REFUNDING DOCUMENTS
Section 10.01. Amendments and Supplements to
Indentures and Other Refunding Documents. In the event that the
Trustee, as holder of any Equipment Note in trust for the benefit
of the Certificateholders or as Controlling Party under the
Intercreditor Agreement, receives a request for a consent to any
amendment, modification, waiver or supplement under any Indenture
or other Refunding Document, the Trustee shall forthwith send a
notice of such proposed amendment, modification, waiver or
supplement to each Certificateholder registered on the Register
as of the date of such notice. The Trustee shall request from
the Certificateholders a Direction as to (a) whether or not to
take or refrain from taking any action which a holder of such
Equipment Note has the option to direct, (b) whether or not to
give or execute any waivers, consents, amendments, modifications
or supplements as a holder of such Equipment Note and (c) how to
vote any Equipment 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, the Trustee shall vote for or give consent to any
such action with respect to such Equipment Note in the same
proportion as that of (i) 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 (ii) the
aggregate face amount of all Outstanding Certificates. 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 two Business
Days before the Trustee directs such action or casts such vote or
gives such consent. Notwithstanding the foregoing, but subject
to Section 6.04 and the Intercreditor Agreement, the Trustee may,
in its own discretion and at its own direction, consent and
notify the relevant Loan Trustee of such consent to any
amendment, modification, waiver or supplement under the relevant
Indenture or any other Refunding Document, if an Event of Default
hereunder shall have occurred and be continuing, or if such
amendment, modification or waiver will not adversely affect the
interests of the Certificateholders.
ARTICLE XI
TERMINATION OF TRUST
Section 11.01. Termination of the Trust. The
respective obligations and responsibilities of the Company and
the Trustee with respect to the Trust shall terminate upon the
distribution to all Holders of Certificates and the Trustee of
all amounts required to be distributed to them pursuant to this
Agreement and the disposition of all property held as part of the
Trust Property; provided, however, that in no event shall the
Trust continue beyond one hundred ten (110) years following the
date of the earliest execution of this Trust Agreement.
Notice of any termination, specifying the Regular
Distribution Date (or Special Distribution Date, as the case may
be) upon which the Certificateholders may surrender their
Certificates to the Trustee for payment of the final Distribution
Date and cancellation, shall be mailed promptly by the Trustee to
Certificateholders not earlier than the 60th day and not later
than the 20th day next preceding such final Distribution Date
specifying (A) the Regular Distribution Date (or Special
Distribution Date, as the case may be) upon which the proposed
final payment of the Certificates will be made upon presentation
and surrender of Certificates at the office or agency of the
Trustee therein specified, (B) the amount of any such proposed
final payment, and (C) that the Record Date otherwise applicable
to such 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 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. Upon presentation and surrender of
the Certificates in accordance with such notice, the Trustee
shall cause to be distributed to Certificateholders such final
payments.
In the event that all of the Certificateholders 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 to surrender their Certificates for
cancellation and receive the final distribution with respect
thereto. No additional interest shall accrue on the Certificates
after the Regular Distribution Date (or Special Distribution
Date, as the case may be) specified in the first written notice.
In the event that any money held by the Trustee for the payment
of distributions on the Certificates shall remain unclaimed for
two years (or such lesser time as the Trustee shall be satisfied,
after sixty days' notice from the Company, is one month prior to
the escheat period provided under applicable law) after the final
distribution date with respect thereto, the Trustee shall pay to
each Loan Trustee the appropriate amount of money relating to
such Loan Trustee and shall give written notice thereof to the
related Owner Trustees, the Owner Participants and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of
Certificateholders. The death or incapacity of any
Certificateholder shall not operate to terminate this Agreement
or the 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. Certificates Nonassessable and Fully
Paid. Except as set forth in the last sentence of this Section
12.02, Certificateholders shall not be personally liable for
obligations of the Trust, the Fractional Undivided Interests
represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and
Certificates, upon authentication thereof by the Trustee pursuant
to Section 3.03, are and shall be deemed fully paid. No
Certificateholder shall have any right (except as expressly
provided herein) to vote or in any manner otherwise control the
operation and management of the Trust Property, the Trust, or the
obligations of the parties hereto, nor shall anything set forth
herein, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to
time as partners or members of an association. Neither the
existence of the Trust nor any provision herein 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. Notices. (a) Unless otherwise
specifically provided herein, all notices required under the
terms and provisions of this Agreement 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, to:
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Attention: Chief Financial Officer and
General Counsel
Facsimile: (713) 523-2831
if to the Trustee, to:
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
shall be mailed by first-class mail to the addresses for
Certificateholders shown on the Register kept by the Registrar.
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.
(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, it shall mail a copy to the Trustee and
to the Paying Agent 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 12.04. Governing Law. THIS AGREEMENT HAS BEEN
DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT AND THE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS-OF-LAW PRINCIPLES.
Section 12.05. 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 Trust, or of the Certificates or the rights of the
Certificateholders thereof.
Section 12.06. 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.
Section 12.07. 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 12.08. 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 12.09. Benefits of Agreement. Nothing in this
Agreement or in the Certificates, express or implied, shall give
to any Person, other than the parties hereto and their successors
hereunder, and the Certificateholders, any benefit or any legal
or equitable right, remedy or claim under this Agreement.
Section 12.10. Legal Holidays. In any case where any
Regular Distribution Date or Special Distribution Date relating
to any Certificate shall not be a Business Day, 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 12.11. 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 12.12. Intention of Parties. The parties
hereto intend that the 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
REGISTERED
No. ______________
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS
HELD BY CONTINENTAL AIRLINES, INC., THE TRUSTEE OR ANY
AFFILIATE OF ANY OF SUCH PERSONS RESELL OR OTHERWISE
TRANSFER THIS CERTIFICATE EXCEPT (A) TO CONTINENTAL
AIRLINES, INC., (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS CERTIFICATE WITHIN THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THIS CERTIFICATE OR THE
LAST DATE ON WHICH THIS CERTIFICATE WAS HELD BY CONTINENTAL
AIRLINES, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH
PERSONS THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.]*
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT
IS NOT A PLAN TRANSFEREE (AS DEFINED IN THE PASS THROUGH
TRUST AGREEMENT) OR (B) IT IS AN INSURANCE COMPANY USING THE
ASSETS OF ITS GENERAL ACCOUNT TO ACQUIRE THIS CERTIFICATE,
AND THE CONDITIONS OF PROHIBITED TRANSACTION CLASS EXEMPTION
95-60 ISSUED BY THE U.S. DEPARTMENT OF LABOR HAVE BEEN AND
WILL CONTINUE TO BE SATISFIED IN CONNECTION WITH ITS
PURCHASE AND HOLDING OF THIS CERTIFICATE. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE 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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.05 AND 3.06 OF THE PASS
THROUGH TRUST AGREEMENT REFERRED TO HEREIN.]**
_______________
* Not to be included on the face of the Permanent Offshore
Global Certificate.
** To be included on the face of each Global Certificate.
[GLOBAL CERTIFICATE]
CONTINENTAL AIRLINES 1996-B PASS THROUGH TRUST
7.82% Continental Airlines [Initial] [Exchange]
Pass Through Certificate
Series 1996-B
Final Distribution Date: October 15, 2013
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes each secured
by an Aircraft leased to Continental Airlines, Inc.
$__________ 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 1996-B
Pass Through Trust (the "Trust") created pursuant to a Pass
Through Trust Agreement, dated as of January 31, 1996 (the
"Agreement"), between Wilmington Trust Company (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 "7.82% Continental Airlines [Initial] [Exchange] Pass Through
Certificates Series 1996-B" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms,
provisions, and conditions of the Agreement. By virtue of its
acceptance hereof the Certificateholder of this Certificate
assents to and agrees to be bound by the provisions of the
Agreement and the Intercreditor Agreement. The property of the
Trust includes certain Equipment Notes and all rights of the
Trust to receive payments under the Intercreditor Agreement and
the Liquidity Facilities (the "Trust Property"). Each issue of
the Equipment Notes is secured by, among other things, a security
interest in the 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 assets or property
other than the Trust Property.
Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, from and to the extent
of funds then available to the Trustee, there will be distributed
on each January 15, April 15, July 15 and October 15 (a "Regular
Distribution Date"), commencing on April 15, 1996, 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.
[The Holder of this Certificate is entitled to the
benefits of the Registration Rights Agreement, dated as of
January 31, 1996, among the Company, the Trustee and the Initial
Purchasers named therein (the "Registration Rights Agreement").
In the event that either (a) (x) the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement) is
not filed with the SEC on or prior to the 120th calendar day
following the date of the Agreement, or (y) the Exchange Offer
Registration Statement has not been declared effective on or
prior to the 60th calendar day following the filing thereof with
the SEC or (z) the Exchange Offer (as defined in the Registration
Rights Agreement) is not consummated on or prior to the 30th
calendar day following the effectiveness of the Exchange Offer
Registration Statement (in each case other than under certain
circumstances described in the Registration Rights Agreement) or
(b) a Shelf Registration Statement (as defined in the
Registration Rights Agreement) is required to be filed with the
SEC pursuant to the Registration Rights Agreement, and such Shelf
Registration Statement is not declared effective on or prior to
the 210th calendar day following the date of the Agreement (each,
a "Registration Default"), the interest rate per annum borne by
the Equipment Notes shall be increased by (1) 0.25% from and
including the day following such Registration Default to but
excluding the 90th day following such Registration Default and
(2) 0.50% thereafter; provided, however, that such increase shall
cease to be in effect from and including the date on which such
Registration Default has been cured. In the event that the Shelf
Registration Statement ceases to be effective at any time during
the period specified by the Registration Rights Agreement for
more than 60 days, whether or not consecutive, during any 12-
month period, the interest rate per annum borne by the Equipment
Notes shall be increased by 0.50% from the 61st day of the
applicable 12-month period such Shelf Registration Statement
ceases to be effective until such time as the Shelf Registration
Statement again becomes effective.]
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 AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
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.
Dated: CONTINENTAL AIRLINES
1996-B PASS THROUGH TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
Attest: By: _____________________________
Name:
Title:
__________________________
Authorized Signature
_________________
* To be included on the face of each Global Certificate.
** To be included only on each Initial Certificate.
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: ___________________________
Authorized Officer
[REVERSE OF CERTIFICATE]
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 of their affiliates. The
Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under
the Agreement shall be made only from the Trust Property and only
to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof,
agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to
such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and
duties evidenced hereby. A copy of the Agreement may be examined
during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Certificateholders under the Agreement at any time by the Company
and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and
upon all future Certificateholders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein 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, in the Borough of Manhattan, the City of New
York, 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
[$100,000]* [$1,000]** Fractional Undivided Interest and integral
multiples of $1,000 in excess thereof [except that one
Certificate may be in a denomination of less than $100,000]*. 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 by the Holder 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.
________________
* To be included only on each Initial Certificate.
** To be included only on each Exchange Certificate.
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
_______________________
_______________________
please print or typewrite name and address including zip code of
assignee
_______________________
the within Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
_______________________
attorney to transfer said Certificate on the books of the Trustee
with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT PERMANENT OFFSHORE GLOBAL AND
OFFSHORE PHYSICAL CERTIFICATES]
In connection with any transfer of this Certificate
occurring prior to the date that is the earlier of the date of an
effective Registration Statement or __________, 1999, the
undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[ ] (a) this Certificate is being transferred in
compliance with the exemption from registration under
the Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
or
[ ] (b) this Certificate is being transferred other than
in accordance with (a) above and documents are being
furnished that comply with the conditions of transfer
set forth in this Certificate and the Agreement.
If neither of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this
Certificate in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 3.06 of the
Agreement shall have been satisfied.
Date: [Name of Transferor]
-----------------------------------
NOTE: The signature must
correspond with the name as written
upon the face of the within-
mentioned instrument in every
particular, without alteration or
any change whatsoever.
Signature Guarantee: _____________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is
purchasing this Certificate for its own account or an account
with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933,
as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ________________________________
NOTE: To be executed by an
executive officer.
EXHIBIT B
FORM OF CERTIFICATE FOR UNLEGENDED CERTIFICATES
[Date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996 Pass Through Trust,
Class B Pass Through Trust Certificates
(the "Certificates")
Dear Sirs:
This letter relates to U.S. $__________ Fractional
Undivided Interest of Certificates represented by a Certificate
(the "Legended Certificate") which bears a legend outlining
restrictions upon transfer of such Legended Certificate.
Pursuant to Section 3.01 of the Pass Through Trust Agreement
relating to the Certificates dated as of January 31, 1996 (the
"Trust Agreement"), between Continental Airlines, Inc.
("Continental") and you, we hereby certify that we are (or we
will hold such securities on behalf of) a person outside the
United States to whom the Certificates could be transferred in
accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are
hereby requested to exchange the legended certificate for an
unlegended certificate representing an identical principal amount
of Certificates, all in the manner provided for in the Trust
Agreement.
You and Continental are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters
covered hereby. Terms used in this certificate have the meanings
set forth in Regulation S.
Very truly yours,
[Name of Certificateholder]
By:____________________________
Authorized Signature
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
[date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996-B Pass Through
Trust (the "Trust"), 7.82% Continental
Airlines Pass Through Certificates
Series 1996-B (the "Certificates")
Sirs:
In connection with our proposed sale of $_______
Fractional Undivided Interest of the Certificates, we confirm
that such sale has been effected pursuant to and in accordance
with Regulation S under the Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Certificates was not made to a
person in the United States;
(2) either (a) at the time the buy order was
originated, the transferee was outside the United States or
we and any person acting on our behalf reasonably believed
that the transferee was outside the United States or (b) the
transaction was executed in, on or through the facilities of
a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction
has been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted
period and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of
Regulation S are applicable thereto, we confirm that such sale
has been made in accordance with the applicable provisions of
Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You and Continental Airlines, Inc. are entitled to rely
upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_______________________
Authorized Signature
Exhibit 4.7
- -----------------------------------------------------------------
PASS THROUGH TRUST AGREEMENT
Dated as of January 31, 1996
among
CONTINENTAL AIRLINES, INC.
and
WILMINGTON TRUST COMPANY,
as Trustee
Continental Airlines 1996-C Pass Through Trust
9.50% 1996-C Initial Pass Through Certificates
9.50% 1996-C Exchange Pass Through Certificates
- -----------------------------------------------------------------
Reconciliation and tie between Continental Airlines 1996-C Pass
Through Trust Agreement, dated as of January 31, 1996, 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) 7.08
(a)(2) 7.08
312(a) 3.05; 8.01; 8.02
313(a) 8.03
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) 1.04(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) 12.06
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01. Definitions . . . . . . . . . . . . . . . . . . . . 2
1.02. Compliance Certificates and Opinions. . . . . . . . 12
1.03. Form of Documents Delivered to Trustee. . . . . . . 13
1.04. Directions of Certificateholders. . . . . . . . . . 14
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
2.01. Issuance of Certificates; Acquisition of
Equipment Notes . . . . . . . . . . . . . . . . . . 15
2.02. Acceptance by Trustee . . . . . . . . . . . . . . . 17
2.03. Limitation of Powers. . . . . . . . . . . . . . . . 17
ARTICLE III
THE CERTIFICATES
3.01. Title, Form, Denomination and Execution of
Certificates. . . . . . . . . . . . . . . . . . . . 18
3.02. Restrictive Legends . . . . . . . . . . . . . . . . 19
3.03. Authentication of Certificates. . . . . . . . . . . 21
3.04. Transfer and Exchange . . . . . . . . . . . . . . . 22
3.05. Book-Entry Provisions for U.S. Global Certificate
and Offshore Global Certificates. . . . . . . . . . 22
3.06. Special Transfer Provisions . . . . . . . . . . . . 24
3.07. Mutilated, Destroyed, Lost or Stolen Certificates . 26
3.08. Persons Deemed Owners . . . . . . . . . . . . . . . 27
3.09. Cancellation. . . . . . . . . . . . . . . . . . . . 27
3.10. Temporary Certificates. . . . . . . . . . . . . . . 27
3.11. Limitation of Liability for Payments. . . . . . . . 28
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
4.01. Certificate Account and Special Payments Account. . 28
4.02. Distributions from Certificate Account and
Special Payments Account. . . . . . . . . . . . . . 29
4.03. Statements to Certificateholders. . . . . . . . . . 30
4.04. Investment of Special Payment Moneys. . . . . . . . 31
ARTICLE V
THE COMPANY
5.01. Maintenance of Corporate Existence. . . . . . . . . 31
5.02. Consolidation, Merger, etc. . . . . . . . . . . . . 32
ARTICLE VI
DEFAULT
6.01. Events of Default . . . . . . . . . . . . . . . . . 33
6.02. [Intentionally omitted.]. . . . . . . . . . . . . . 35
6.03. Judicial Proceedings Instituted by Trustee;
Trustee May Bring Suit. . . . . . . . . . . . . . . 35
6.04. Control by Certificateholders . . . . . . . . . . . 35
6.05. Waiver of Past Defaults . . . . . . . . . . . . . . 35
6.06. Right of Certificateholders to Receive Payments
Not to Be Impaired. . . . . . . . . . . . . . . . . 36
6.07. Certificateholders May Not Bring Suit Except
Under Certain Conditions. . . . . . . . . . . . . . 36
6.08. Remedies Cumulative . . . . . . . . . . . . . . . . 37
ARTICLE VII
THE TRUSTEE
7.01. Certain Duties and Responsibilities . . . . . . . . 37
7.02. Notice of Defaults. . . . . . . . . . . . . . . . . 38
7.03. Certain Rights of Trustee . . . . . . . . . . . . . 38
7.04. Not Responsible for Recitals or Issuance of
Certificates. . . . . . . . . . . . . . . . . . . . 40
7.05. May Hold Certificates . . . . . . . . . . . . . . . 40
7.06. Money Held in Trust . . . . . . . . . . . . . . . . 40
7.07. Compensation and Reimbursement. . . . . . . . . . . 40
7.08. Corporate Trustee Required; Eligibility . . . . . . 41
7.09. Resignation and Removal; Appointment of Successor . 41
7.10. Acceptance of Appointment by Successor. . . . . . . 43
7.11. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . 43
7.12. Maintenance of Agencies . . . . . . . . . . . . . . 44
7.13. Money for Certificate Payments to Be Held in Trust. 45
7.14. Registration of Equipment Notes in Name of
Subordination Agent . . . . . . . . . . . . . . . . 45
7.15. Representations and Warranties of Trustee . . . . . 45
7.16. Withholding Taxes; Information Reporting. . . . . . 47
7.17. Trustee's Liens . . . . . . . . . . . . . . . . . . 47
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders . . . . . . . . . . 47
8.02. Preservation of Information; Communications to
Certificateholders. . . . . . . . . . . . . . . . . 48
8.03. Reports by Trustee. . . . . . . . . . . . . . . . . 48
8.04. Reports by the Company. . . . . . . . . . . . . . . 48
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
9.01. Supplemental Agreements Without Consent of
Certificateholders. . . . . . . . . . . . . . . . . 49
9.02. Supplemental Agreements with Consent of
Certificateholders. . . . . . . . . . . . . . . . . 50
9.03. Documents Affecting Immunity or Indemnity . . . . . 51
9.04. Execution of Supplemental Agreements. . . . . . . . 51
9.05. Effect of Supplemental Agreements . . . . . . . . . 51
9.06. Conformity with Trust Indenture Act . . . . . . . . 51
9.07. Reference in Certificates to Supplemental
Agreements. . . . . . . . . . . . . . . . . . . . . 52
ARTICLE X
AMENDMENTS TO INDENTURES AND REFUNDING DOCUMENTS
10.01. Amendments and Supplements to Indentures and
Other Refunding Documents. . . . . . . . . . . . . 52
ARTICLE XI
TERMINATION OF TRUST
11.01. Termination of the Trust . . . . . . . . . . . . . 53
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01. Limitation on Rights of Certificateholders . . . . 54
12.02. Certificates Nonassessable and Fully Paid. . . . . 54
12.03. Notices. . . . . . . . . . . . . . . . . . . . . . 54
12.04. Governing Law. . . . . . . . . . . . . . . . . . . 55
12.05. Severability of Provisions . . . . . . . . . . . . 55
12.06. Trust Indenture Act Controls . . . . . . . . . . . 56
12.07. Effect of Headings and Table of Contents . . . . . 56
12.08. Successors and Assigns . . . . . . . . . . . . . . 56
12.09. Benefits of Agreement. . . . . . . . . . . . . . . 56
12.10. Legal Holidays . . . . . . . . . . . . . . . . . . 56
12.11. Counterparts . . . . . . . . . . . . . . . . . . . 56
12.12. Intention of Parties . . . . . . . . . . . . . . . 57
Schedule 1 - Indentures
Schedule 2 - Refunding Agreements
Exhibit A - Form of Certificate
Exhibit B - Form of Certificate for Unlegended Certificates
Exhibit C - Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to
Regulation S
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of
January 31, 1996, between CONTINENTAL AIRLINES, INC., a Delaware
corporation, and WILMINGTON TRUST COMPANY, as Trustee, is made
with respect to the formation of Continental Airlines 1996-C Pass
Through Trust and the issuance of 9.50% Continental Airlines
1996-C Pass Through Certificates representing fractional
undivided interests in the Trust.
WITNESSETH:
WHEREAS, the Company, the Owner Trustees and the Owner
Participants (as such terms and certain other capitalized terms
used herein are defined below) have previously entered into
eighteen separate leveraged lease transactions in connection with
the purchase of nine Boeing 737-524 aircraft and nine
Boeing 757-224 aircraft (collectively, the "Aircraft") from the
manufacturer;
WHEREAS, each Owner Trustee, acting on behalf of the
corresponding Owner Participant, will issue pursuant to an
Indenture, on a non-recourse basis, four series of Equipment
Notes, among other things, to refinance the current indebtedness
of such Owner Trustee originally incurred to finance the purchase
price of the related Aircraft;
WHEREAS, the Trustee, upon execution and delivery of
this Agreement, hereby declares the creation of the Trust for the
benefit of the Certificateholders, and the initial
Certificateholders, as the grantors of the Trust, by their
respective acceptances of the Certificates, join in the creation
of this Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Trust
will evidence fractional undivided interests in the Trust and
will convey no rights, benefits or interests in respect of any
property other than the Trust Property;
WHEREAS, pursuant to the terms and conditions of this
Agreement and each of the Refunding Agreements to be entered into
by the Trustee simultaneously with the execution and delivery of
this Agreement, the Trustee on behalf of the 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 Certificates issued hereunder
and shall hold such Equipment Notes in trust for the benefit of
the Certificateholders;
WHEREAS, to facilitate the sale of Equipment Notes to,
and the purchase of Equipment Notes by, the Trustee on behalf of
the Trust, the Company has duly authorized the execution and
delivery of this Agreement 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 pursuant hereto and
as the "obligor", as such term is defined in and solely for
purposes of the Trust Indenture Act of 1939, as amended, with
respect to all such Certificates and is undertaking to perform
certain administrative and ministerial duties hereunder and is
also undertaking to pay the ongoing fees and expenses of the
Trustee;
WHEREAS, all of the conditions and requirements
necessary to make this Agreement, when duly executed and
delivered, a valid, binding and legal instrument, enforceable in
accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and
delivery of this Agreement in the form and with the terms hereof
have been in all respects duly authorized; and
WHEREAS, upon issuance of the Exchange Certificates, if
any, or the effectiveness of the Registration Statement, this
Agreement, as amended or supplemented from time to time, will be
subject to the provisions of the Trust Indenture Act of 1939, 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
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 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 Agreement to designated
"Articles", "Sections", "Subsections" and other subdivisions
are to the designated Articles, Sections, Subsections and
other subdivisions of this Agreement;
(4) 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,
Subsection or other subdivision; and
(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".
Affiliate: Means, with respect to any Person, any
other Person directly or indirectly controlling or
controlled by or under 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 purposes of this definition, "control" 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.
Agent Members: Has the meaning specified in Section
3.05.
Aircraft: Has the meaning specified in the first
recital to this Agreement.
Authorized Agent: Means any Paying Agent or Registrar
for the Certificates.
Avoidable Tax: Means a state or local tax (i) upon
(w) the Trust, (x) the Trust Property,
(y) Certificateholders or (z) the Trustee for which the
Trustee is entitled to seek reimbursement from the Trust
Property, and (ii) which would be avoided if the Trustee
were located in another state, or jurisdiction within a
state, within the United States. A tax shall not be an
Avoidable Tax if the Company or any Owner Trustee shall
agree to pay, and shall pay, such tax.
Business Day: Means any day other than a Saturday, a
Sunday or a day on which commercial banks are required or
authorized to close in Houston, Texas, New York, New York,
or, so long as any Certificate is outstanding, the city and
state in which the Trustee or any Loan Trustee maintains its
Corporate Trust Office or receives and disburses funds.
Cedel: Means Cedel Bank societe anonyme.
Certificate: Means any one of the Initial Certificates
or Exchange Certificates and any such Certificates issued in
exchange therefor or replacement thereof pursuant to this
Agreement.
Certificate Account: Means the account or accounts
created and maintained pursuant to Section 4.01(a).
Certificateholder or Holder: Means the Person in whose
name a Certificate is registered in the Register.
Company: Means Continental Airlines, Inc., a Delaware
corporation, or its successor in interest pursuant to
Section 5.02, or any other obligor (within the meaning of
the Trust Indenture Act) with respect to the Certificates.
Controlling Party: Has the meaning specified in the
Intercreditor Agreement.
Corporate Trust Office: With respect to the Trustee or
any Loan Trustee, means the office of such trustee in the
city at which at any particular time its corporate trust
business shall be principally administered.
Cut-off Date: Means March 31, 1996.
Depositary: Means the Depository Trust Company, its
nominees and their respective successors.
Direction: Has the meaning specified in
Section 1.04(a).
Distribution Date: Means any Regular Distribution Date
or Special Distribution Date.
Equipment Notes: Means the equipment notes issued
under the Indentures.
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 specified in
Section 2.01(b).
Escrowed Funds: Has the meaning specified in
Section 2.01(b).
Euroclear: Means the Euroclear System.
Event of Default: Means an Indenture Default under any
Indenture pursuant to which Equipment Notes held by the
Trust were issued.
Exchange Certificates: Means the certificates
substantially in the form of Exhibit A hereto issued in
exchange for the Initial Certificates pursuant to the
Registration Rights Agreement and authenticated hereunder.
Exchange Offer Registration Statement: Means the
Exchange Offer Registration Statement defined in the
Registration Rights Agreement.
Fractional Undivided Interest: Means the fractional
undivided interest in the Trust that is evidenced by a
Certificate.
Global Certificates: Has the meaning assigned to such
term in Section 3.01.
Indentures: Means each of the eighteen separate
Amended and Restated Trust Indentures and Mortgages listed
on Schedule 1 hereto, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
Indenture Default: With respect to any Indenture,
means any Event of Default (as such term is defined in such
Indenture).
Initial Certificates: Means the certificates issued
and authenticated hereunder substantially in the form of
Exhibit A hereto other than the Exchange Certificates.
Initial Purchasers: Means, collectively, CS First
Boston Corporation, Morgan Stanley & Co. Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman
Brothers Inc. and Fieldstone FPCG Services, L.P.
Initial Regular Distribution Date: Means the first
Regular Distribution Date on which a Scheduled Payment is to
be made.
Institutional Accredited Investor: Means an
institutional investor that is an "accredited investor"
within the meaning set forth in Rule 501(a)(1), (2), (3)
or (7) of Regulation D under the Securities Act.
Intercreditor Agreement: Means the Intercreditor
Agreement dated the date hereof among the Trustee, the Other
Trustees, the Liquidity Provider, the liquidity provider, if
any, relating to the Certificates issued under (and as
defined in) each of the Other Pass Through Trust Agreements,
and Wilmington Trust Company, as Subordination Agent
thereunder, as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
Issuance Date: Means the date of the issuance of the
Initial Certificates.
Lease: Means the lease between an Owner Trustee, as
the lessor, and the Company, as the lessee, referred to in
the related Indenture, as each such lease may be amended,
supplemented or otherwise modified in accordance with its
terms.
Liquidity Facility: Means the Revolving Credit
Agreement dated the date hereof relating to the
Certificates, between the Liquidity Provider and the
Subordination Agent, as amended, replaced, supplemented or
otherwise modified from time to time in accordance with its
terms and the terms of the Intercreditor Agreement.
Liquidity Provider: Means, initially, Credit Suisse,
acting through its New York Branch, together with any
replacement or successor therefor appointed in accordance
with the Liquidity Facility and the Intercreditor Agreement.
Loan Trustee: With respect to any Equipment Note or
the Indenture applicable thereto, means the bank or trust
company designated as indenture trustee under such
Indenture, together with any successor to such Loan Trustee
appointed pursuant thereto.
Non-U.S. Person: Means a Person that is not a "U.S.
person", as defined in Regulation S.
Officer's Certificate: Means a certificate signed,
(a) in the case of the Company, by (i) the Chairman or Vice
Chairman of the Board of Directors, the President, any
Executive Vice President, any Senior Vice President or the
Treasurer of the Company, signing alone or (ii) any Vice
President of the Company signing together with the
Secretary, the Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company or, (b) in the case of an
Owner Trustee or a Loan Trustee, a Responsible Officer of
such Owner Trustee or such Loan Trustee, as the case may be.
Offshore Certificates Exchange Date: Has the meaning
specified in Section 3.01.
Offshore Global Certificates: Has the meaning assigned
to such term in Section 3.01.
Offshore Physical Certificates: Has the meaning
assigned to such term in Section 3.01.
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) Cleary, Gottlieb, Steen & Hamilton, (iii) Hughes
Hubbard & Reed, or (iv) such other counsel designated by the
Company and reasonably acceptable to the Trustee and (b) in
the case of counsel for 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 Pass Through Trust Agreements: Means each of the
three other Continental Airlines 1996 Pass Through Trust
Agreements relating to Continental Airlines 1996-A Pass
Through Trust, Continental Airlines 1996-B Pass Through
Trust and Continental Airlines 1996-D Pass Through Trust,
dated the date hereof.
Other Trustees: Means the trustee under the Other Pass
Through Trust Agreements, and any successor or other trustee
appointed as provided therein.
Outstanding: When used with respect to Certificates,
means, as of the date of determination, all Certificates
theretofore authenticated and delivered under this
Agreement, except:
(i) Certificates theretofore cancelled by the
Registrar or delivered to the Trustee or the Registrar
for cancellation;
(ii) Certificates for which money in the full
amount required to make the final distribution with
respect to such Certificates pursuant to Section 11.01
hereof has been theretofore deposited with the Trustee
in trust for the Holders of such Certificates as
provided in Section 4.01 pending distribution of such
money to such Certificateholders pursuant to payment of
such final distribution; and
(iii) Certificates in exchange for or in lieu of
which other Certificates have been authenticated and
delivered pursuant to this Agreement.
Owner Participant: With respect to any Equipment Note,
means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued
and any permitted successor or assign of such Owner
Participant; and Owner Participants at any time of
determination means all of the Owner Participants thus
referred to in the Indentures.
Owner Trustee: With respect to any Equipment Note,
means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and Owner
Trustees means all of the Owner Trustees party to any of the
Indentures.
Participation Agreement: With respect to any Aircraft,
means the Participation Agreement referred to in the related
Indenture.
Paying Agent: Means the paying agent maintained and
appointed for the Certificates pursuant to Section 7.12.
Permanent Offshore Global Certificates: Has the
meaning specified in Section 3.01.
Permanent Offshore Physical Certificates: Has the
meaning specified in Section 3.01.
Permitted Investments: Means obligations of the United
States of America or agencies or instrumentalities thereof
the payment of which is backed by the full faith and credit
of the United States of America and which mature 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, partnership, joint venture, association, joint-
stock company, trust, trustee, unincorporated organization,
or government or any agency or political subdivision
thereof.
Physical Certificates: Has the meaning specified in
Section 3.01.
Plan Transferee: Means any Plan or any entity that is
using the assets of any Plan to purchase or hold its
interest in a Certificate. For purposes of this definition,
a "Plan" means any employee benefit plan subject to ERISA as
well as any plan that is not subject to ERISA but which is
subject to Section 4975 of the Internal Revenue Code of
1986, as amended.
Pool Balance: Means, as of any date, (i) the original
aggregate face amount of the Certificates less (ii) the
aggregate amount of all payments made in respect of 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 such Trust and the
distribution thereof to be made on such Distribution Date.
Pool Factor: Means, as of any date, the quotient
(rounded to the seventh decimal place) computed by dividing
(i) the Pool Balance as at such date by (ii) the original
aggregate face amount of the Certificates. 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 and the distribution thereof
to be made on such Distribution Date.
Postponed Notes: Means the Equipment Notes to be held
in the Trust as to which a Postponement Notice shall have
been delivered pursuant to Section 2.01(b).
Postponement Notice: Means an Officer's Certificate of
the Company (1) requesting that the Trustee temporarily
postpone the purchase pursuant to one or more of the
Refunding Agreements of certain of the Equipment Notes to a
date which is later than the Issuance Date, (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, 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.
Private Placement Legend: Has the meaning specified in
Section 3.02.
PTC Event of Default: Means any failure to pay within
10 Business Days of the due date thereof: (i) the
outstanding Pool Balance on April 15, 2015 or (ii) interest
due on the Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing (as
defined in the Intercreditor Agreement) with respect thereto
in an amount sufficient to pay such interest and shall have
distributed such amount to the Certificateholders).
QIB: Means a qualified institutional buyer as defined
in Rule 144A.
Record Date: Means (i) for Scheduled Payments to be
distributed on any Regular Distribution Date, other than the
final distribution, 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, the
15th day (whether or not a Business Day) preceding such
Special Distribution Date.
Refunding Agreements: Means each of the eighteen
separate Refunding Agreements dated the date hereof, listed
on Schedule 2 hereto, providing for, among other things, the
purchase of Equipment Notes by the Trustee on behalf of the
Trust, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
Refunding Documents: With respect to any Equipment
Note, means the related Indenture, Refunding Agreement,
Lease and Participation Agreement.
Register and Registrar: Mean the register maintained
and the registrar appointed pursuant to Sections 3.04
and 7.12.
Registration Rights Agreement: Means the Registration
Rights Agreement dated January 31, 1996, among the Initial
Purchasers, the Trustee, the Other Trustees and the Company,
as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
Registration Statement: Means the Registration
Statement defined in the Registration Rights Agreement.
Regular Distribution Date: With respect to
distributions of Scheduled Payments in respect of the
Certificates, means each date designated as a Regular
Distribution Date in this Agreement, until payment of all
the Scheduled Payments to be made under the Equipment Notes
held in the Trust have been made; 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.
Regulation S: Means Regulation S under the Securities
Act or any successor regulation thereto.
Responsible Officer: With respect to the Trustee, any
Loan Trustee and any Owner Trustee, means any officer in the
Corporate Trust Office 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.
Rule 144A: Means Rule 144A under the Securities Act
and any successor rule thereto.
Scheduled Payment: With respect to any Equipment Note,
means (i) any payment of principal and interest on such
Equipment Note (other than any such payment which is not in
fact received by the Subordination Agent within five days of
the date on which such payment is scheduled to be made) due
from the obligor thereon or (ii) any payment of interest on
the Certificates with funds drawn under the 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, 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.
Securities Act: Means the United States Securities Act
of 1933, as amended from time to time, or any successor
thereto.
Special Distribution Date: Means each date on which a
Special Payment is to be distributed as specified in this
Agreement; 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.
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 2.01(b) or
(iii) the amounts required to be distributed pursuant to the
penultimate paragraph of Section 2.01(b).
Special Payments Account: Means the account or
accounts created and maintained pursuant to Section 4.01(b).
Specified Investments: Means (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 Group,
(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 short-term deposit rating of P1 by
Moody's Investors Service, Inc. or its equivalent by
Standard & Poor's Ratings Group; 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 respect to any of the obligations described in
clauses (i) through (iv) above as collateral; provided
further that if all of the above investments are
unavailable, all 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 in the
Intercreditor Agreement.
Temporary Offshore Global Certificates: Has the
meaning specified in Section 3.01.
Transfer Date: Has the meaning assigned to the term
"Refunding Date" in each Refunding Agreement.
Triggering Event: Has the meaning assigned to such
term in the Intercreditor Agreement.
Trust: Means the trust created by this Agreement, the
estate of which consists of the Trust Property.
Trust Indenture Act: Except as otherwise provided in
Section 9.06, means the United States Trust Indenture Act of
1939 as in force at the date hereof.
Trust Property: Means (i) the Equipment Notes held as
the property of the Trust and 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 Escrow
Account, the Certificate Account and the Special Payments
Account, and (iii) all rights of the Trust and the Trustee,
on behalf of the Trust, under the Intercreditor Agreement
and the Liquidity Facility, including, without limitation,
all rights to receive certain payments thereunder, and all
monies paid to the Trustee on behalf of the Trust pursuant
to the Intercreditor Agreement or the Liquidity Facility.
Trustee: Means Wilmington Trust Company, or its
successor in interest, and any successor or other trustee
appointed as provided herein.
Trustee's Lien: Has the meaning specified in Section
7.17.
U.S. Global Certificate: Has the meaning specified in
Section 3.01.
U.S. Physical Certificates: Has the meaning specified
in Section 3.01.
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 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 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 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 Agreement
(other than a certificate provided pursuant to Section 8.04(d))
shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions in 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 Agreement
or, in respect of the Certificates, 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 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, where it is hereby expressly required pursuant to this
Agreement, to the Company or any Loan Trustee. 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
Agreement and conclusive in favor of the Trustee, the Company and
any Loan Trustee, if made in the manner provided in this Section.
(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
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 Outstanding, such
Certificates shall not be so disregarded, and (ii) if any amount
of Certificates 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 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 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 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 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 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 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.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01. Issuance of Certificates; Acquisition of
Equipment Notes. (a) The Trustee is hereby directed to execute
and deliver the Intercreditor Agreement, the Registration Rights
Agreement and each of the Refunding Agreements on or prior to the
Issuance Date, each in the form delivered to the Trustee by the
Company. Upon request of the Company and the satisfaction of the
closing conditions specified in each of the Refunding Agreements,
the Trustee shall execute, deliver and authenticate Certificates
equalling in the aggregate the aggregate principal amount of the
Equipment Notes to be purchased by the Trustee pursuant to each
of the Refunding Agreements on the Transfer Date, and evidencing
the entire ownership interest in the Trust. The Trustee shall
issue and sell such Certificates, in authorized denominations and
in such Fractional Undivided Interests, so as to result in the
receipt by the Trustee of consideration in an amount equal to the
aggregate principal amount of such Equipment Notes and,
concurrently therewith, the Trustee shall purchase, pursuant to
the terms and conditions of the Refunding Agreements, the
Equipment Notes at a purchase price equal to the amount of such
consideration so received. Except as provided in Sections 3.04
and 3.07 hereof, the Trustee shall not execute, authenticate or
deliver Certificates 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, the Company
shall deliver to the Trustee a Postponement Notice relating to
one or more Postponed Notes (which Postponement Notice may be
given by the Company only if one or more conditions to the
purchase of such Postponed Notes by the Trustee shall not have
been satisfied or waived pursuant to the related Refunding
Agreement), the Trustee shall postpone the purchase of such
Postponed Notes from the consideration received from the sale of
Certificates and shall promptly deposit funds in an amount equal
to the purchase price of such Postponed Notes (the "Escrowed
Funds") into an escrow account (the "Escrow Account") with the
Trustee to be maintained as a part of the Trust. The Escrowed
Funds so deposited shall be invested by the Trustee at the
direction and risk of, and for the benefit of, the Company in
Specified Investments (i) maturing no later than any scheduled
Transfer Date relating to the Certificates 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
any Postponed Notes will not be issued, with respect to the
portion of the Escrowed Funds relating to such Postponed Notes,
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 of the closing conditions
specified in the applicable Refunding 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 direction and risk of, and for the benefit of, the
Company 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
Company. The Company shall pay to the Trustee for deposit to the
Escrow Account an amount equal to any losses on such Specified
Investments as incurred. On the Initial Regular Distribution
Date, the Company will pay (in immediately available funds) to
the Trustee an amount equal to the interest that would have
accrued on any Postponed Notes 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 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 occurring more than 20 days following the date
of such notice (i) the Company shall pay to the Trustee for
deposit in the 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 the 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 plus the amount
paid by the Company pursuant to the immediately preceding
clause (i) to the Special Payments Account for distribution as a
Special Payment in accordance with the provisions hereof.
If, on the 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 Special Distribution Date occurring
more than 20 days following the Cut-off Date (i) the Company
shall pay to the Trustee for deposit in the Special Payments
Account, in immediately available funds, an amount equal to the
interest that would have accrued on Postponed Notes originally
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 the 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 Company pursuant to the immediately
preceding clause (i) to the Special Payments Account for
distribution as a Special Payment in accordance with the
provisions hereof.
Section 2.02. Acceptance by Trustee. The Trustee,
upon the execution and delivery of this Agreement, acknowledges
its acceptance of all right, title and interest in and to the
Equipment Notes acquired pursuant to Section 2.01 hereof and the
Refunding Agreements and declares that the Trustee holds and will
hold such right, title and interest, together with all other
property constituting the Trust Property, for the benefit of all
then present and future Certificateholders, upon the trusts
herein set forth. Subject to Section 7.14, the Trustee shall
take all actions reasonably necessary to effect the registration
of all such Equipment Notes in the name of the Subordination
Agent. By its payment for and acceptance of each Certificate
issued to it under this Agreement, each initial Certificateholder
as grantor of the Trust thereby joins in the creation and
declaration of the Trust.
Section 2.03. Limitation of Powers. The Trust is
constituted solely for the purpose of making the investment in
the Equipment Notes, 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. Title, Form, Denomination and Execution
of Certificates. (a) The Initial Certificates shall be known as
the "9.50% 1996-C Initial Pass Through Certificates" and the
Exchange Certificates shall be known as the "9.50% 1996-C
Exchange Pass Through Certificates", in each case, of the Trust.
Each Certificate will represent a fractional undivided interest
in the Trust and shall be substantially in the form set forth as
Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or 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 or as may, consistently herewith, be
determined by the officers executing such Certificates, as
evidenced by their execution of the Certificates. Any portion of
the text of any Certificate may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the
Certificate.
(b) The Initial Certificates shall be issued only in
fully registered form without coupons and only in denominations
of $100,000 or integral multiples of $1,000 in excess thereof,
except that one Certificate may be issued in a denomination of
less than $100,000. The Exchange Certificates will be issued in
denominations of $1,000 or integral multiples thereof. Each
Certificate shall be dated the date of its authentication. The
aggregate Fractional Undivided Interest of Certificates shall not
at any time exceed $74,117,000.
(c) Initial Certificates offered and sold in reliance
on Rule 144A shall be issued initially in the form of a single
permanent global Certificate in registered form, substantially in
the form set forth as Exhibit A hereto (the "U.S. Global
Certificate"), duly executed and authenticated by the Trustee as
hereinafter provided. The U.S. Global Certificate will be
registered in the name of a nominee for the Depositary and
deposited with the Trustee, as custodian for the Depositary. The
aggregate principal amount of the U.S. Global Certificate may
from time to time be increased or decreased by adjustments made
on the records of the Depositary or its nominee, or of the
Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
(d) Initial Certificates offered and sold in offshore
transactions in reliance on Regulation S shall be issued
initially in the form of a single temporary global Certificate in
registered form, substantially in the form set forth as Exhibit A
hereto (the "Temporary Offshore Global Certificate") duly
executed and authenticated by the Trustee as hereinafter
provided. The Temporary Offshore Global Certificates will be
registered in the name of a nominee of the Depositary for credit
to the account of the Agent Members acting as depositaries for
Euroclear and Cedel and deposited with the Trustee as custodian
for the Depositary. At any time following March 11, 1996 (the
"Offshore Certificates Exchange Date"), upon receipt by the
Trustee of a certificate substantially in the form of Exhibit B
hereto, a single permanent global Certificate in registered form
substantially in the form set forth in Exhibit A (the "Permanent
Offshore Global Certificate"; and together with the Temporary
Offshore Global Certificate, the "Offshore Global Certificates"),
duly executed and authenticated by the Trustee as hereinafter
provided, shall be registered in the name of a nominee for the
Depositary and deposited with the Trustee, as custodian for the
Depositary, and the Registrar shall reflect on its books and
records the date of such transfer and a decrease in the principal
amount of any Temporary Offshore Global Certificate in an amount
equal to the principal amount of the beneficial interest in such
Temporary Offshore Global Certificate transferred. The U.S.
Global Certificate and the Offshore Global Certificates are
sometimes referred to as the "Global Certificates".
(e) Initial Certificates offered and sold to
Institutional Accredited Investors shall be issued in the form of
permanent certificated Certificates in registered form in
substantially the form set forth as Exhibit A hereto (the "U.S.
Physical Certificates"). Certificates issued pursuant to Section
3.05(b) in exchange for interests in any Offshore Global
Certificate shall be in the form of permanent certificated
Certificates in registered form substantially in the form set
forth in Exhibit A (the "Offshore Physical Certificates"). The
Offshore Physical Certificates and U.S. Physical Certificates are
sometimes collectively herein referred to as the "Physical
Certificates".
(f) The definitive Certificates shall be in registered
form and shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced
in any other manner, all as determined by the officers executing
such Certificates, as evidenced by their execution of such
Certificates.
Section 3.02. Restrictive Legends. (a) Subject to
Section 3.06, unless and until (i) an Initial Certificate is sold
under an effective Registration Statement or (ii) an Initial
Certificate is exchanged for an Exchange Certificate pursuant to
an effective Exchange Offer Registration Statement, in each case
as provided for in the Registration Rights Agreement, each Global
Certificate (other than the Permanent Offshore Global
Certificate) and each U.S. Physical Certificate shall bear the
following legend (the "Private Placement Legend") on the face
thereof:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS
HELD BY CONTINENTAL AIRLINES, INC., THE TRUSTEE OR ANY
AFFILIATE OF ANY OF SUCH PERSONS RESELL OR OTHERWISE
TRANSFER THIS CERTIFICATE EXCEPT (A) TO CONTINENTAL
AIRLINES, INC., (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS CERTIFICATE WITHIN THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THIS CERTIFICATE OR THE
LAST DATE ON WHICH THIS CERTIFICATE WAS HELD BY CONTINENTAL
AIRLINES, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH
PERSONS THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT
IS NOT A PLAN TRANSFEREE (AS DEFINED IN THE PASS THROUGH
TRUST AGREEMENT) OR (B) IT IS AN INSURANCE COMPANY USING THE
ASSETS OF ITS GENERAL ACCOUNT TO ACQUIRE THIS CERTIFICATE,
AND THE CONDITIONS OF PROHIBITED TRANSACTION CLASS EXEMPTION
95-60 ISSUED BY THE U.S. DEPARTMENT OF LABOR HAVE BEEN AND
WILL CONTINUE TO BE SATISFIED IN CONNECTION WITH ITS
PURCHASE AND HOLDING OF THIS CERTIFICATE. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
(b) Each Global Certificate shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE 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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL CERTIFICATE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 3.05 AND 3.06 OF THE PASS
THROUGH TRUST AGREEMENT REFERRED TO HEREIN.
Section 3.03. Authentication of Certificates. (a)
The Trustee shall duly execute, authenticate and deliver
Certificates in authorized denominations equalling in the
aggregate the aggregate principal amount of the Equipment Notes
to be purchased by the Trustee pursuant to the Refunding
Agreements and evidencing the entire ownership of the Trust.
(b) No Certificate shall be entitled to any benefit
under this Agreement or be valid or obligatory for any purpose,
unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Certificate
shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder.
Section 3.04. Transfer and Exchange. (a) 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 of this
Agreement a register (the "Register") for the Certificates in
which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of the
Certificates and of transfers and exchanges of the Certificates
as herein provided. The Trustee shall initially be the registrar
(the "Registrar") for the purpose of registering the Certificates
and transfers and exchanges of the Certificates as herein
provided. A Certificateholder may transfer a Certificate by
written application to the Registrar stating the name of the
proposed transferee and otherwise complying with the terms of
this Agreement, including providing a written certificate or
other evidence of compliance with any restrictions on transfer.
No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Certificateholder only upon,
final acceptance and registration of the transfer by the
Registrar in the Register. Prior to the registration of any
transfer by a Certificateholder as provided herein, the Trustee
shall treat the person in whose name the Certificate is
registered as the owner thereof for all purposes, and the Trustee
shall not be affected by notice to the contrary. Furthermore,
the Depositary shall, by acceptance of a Global Certificate,
agree that transfers of beneficial interests in such Global
Certificate may be effected only through a book-entry system
maintained by the Depositary (or its agent), and that ownership
of a beneficial interest in the Certificate shall be required to
be reflected in a book entry. When Certificates are presented to
the Registrar with a request to register the transfer or to
exchange them for an equal face amount of Certificates of other
authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if its requirements
for such transactions are met. To permit registrations of
transfers and exchanges in accordance with the terms, conditions
and restrictions hereof, the Trustee shall execute and
authenticate Certificates at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange
of the Certificates, but the Trustee may require payment by the
transferor of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental
charges payable upon exchanges pursuant to Section 3.10 or 9.07).
Section 3.05. Book-Entry Provisions for U.S. Global
Certificate and Offshore Global Certificates. (a) Members of,
or participants in, the Depositary ("Agent Members") shall have
no rights under this Agreement with respect to any Global
Certificate held on their behalf by the Depositary, or the
Trustee as its custodian, and the Depositary may be treated by
the Trustee and any agent of the Trustee as the absolute owner of
such Global Certificate for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Trustee or any agent of the Trustee from giving effect to any
written certification, proxy or other authorization furnished by
the Depositary or shall impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Certificate. Upon the
issuance of any Global Certificate, the Registrar or its duly
appointed agent shall record a nominee of the Depositary as the
registered holder of such Global Certificate.
(b) Transfers of any Global Certificate shall be
limited to transfers of such Global Certificate or Offshore
Global Certificate in whole, but not in part, to nominees of the
Depositary, its successor or such successor's nominees.
Beneficial interests in the U.S. Global Certificate and any
Offshore Global Certificate may be transferred in accordance with
the rules and procedures of the Depositary and the provisions of
Section 3.06. Beneficial interests in the U.S. Global
Certificate or an Offshore Global Certificate shall be delivered
to all beneficial owners in the form of U.S. Physical
Certificates or Offshore Physical Certificates, as the case may
be, if (i) the Depositary notifies the Trustee that it is
unwilling or unable to continue as Depositary for the U.S. Global
Certificate or such Offshore Global Certificate, as the case may
be, and a successor depositary is not appointed by the Trustee
within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a
request from the Depositary to issue Physical Certificates.
(c) Any beneficial interest in one of the Global
Certificates that is transferred to a Person who takes delivery
in the form of an interest in the other Global Certificate will,
upon such transfer, cease to be an interest in such Global
Certificate and become an interest in the other Global
Certificate and, accordingly, will thereafter be subject to all
transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Certificate for as long
as it remains such an interest.
(d) [Intentionally omitted.]
(e) In connection with the transfer of the entire U.S.
Global Certificate or an entire Offshore Global Certificate to
the beneficial owners thereof pursuant to paragraph (b) of this
Section 3.05, such U.S. Global Certificate or Offshore Global
Certificate, as the case may be, shall be deemed to be
surrendered to the Trustee for cancellation, and the Trustee
shall execute, authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial
interest in such U.S. Global Certificate or Offshore Global
Certificate, as the case may be, an equal aggregate principal
amount of U.S. Physical Certificates or Offshore Physical
Certificates, as the case may be, of authorized denominations.
(f) Any U.S. Physical Certificate delivered in
exchange for an interest in the U.S. Global Certificate pursuant
to paragraph (b) of this Section 3.05 shall, except as otherwise
provided by paragraph (f) of Section 3.06, bear the Private
Placement Legend.
(g) Any Offshore Physical Certificate delivered in
exchange for an interest in an Offshore Global Certificate
pursuant to paragraph (b) of this Section shall, except as
otherwise provided by paragraph (f) of Section 3.06, bear the
applicable legend regarding transfer restrictions set forth in
Section 3.02(a).
(h) The registered holder of the U.S. Global
Certificate or any Offshore Global Certificate may grant proxies
and otherwise authorize any Person, including Agent Members and
Persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this
Agreement or the Certificates.
Section 3.06. Special Transfer Provisions. Unless and
until (i) an Initial Certificate is sold under an effective
Registration Statement, or (ii) an Initial Certificate is
exchanged for an Exchange Certificate pursuant to an effective
Exchange Offer Registration Statement, in each case pursuant to
the Registration Rights Agreement, the following provisions shall
apply to such Initial Certificates:
(a) [intentionally omitted.]
(b) Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed transfer
of an Initial Certificate to a QIB (excluding Non-U.S. Persons):
(i) If the Certificate to be transferred consists of
U.S. Physical Certificates or an interest in any Temporary
Offshore Global Certificate, the Registrar shall register
the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form
of Initial Certificate stating, or has otherwise advised the
Trustee and the Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on
the form of Initial Certificate stating, or has otherwise
advised the Trustee and the Registrar in writing, that it is
purchasing the Initial Certificate for its own account or an
account with respect to which it exercises sole investment
discretion and that it, or the Person on whose behalf it is
acting with respect to any such account, is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Trust and/or the
Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is
aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) Upon receipt by the Registrar of the documents
referred to in clause (i) above and instructions given in
accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its
books and records the date of such transfer and an increase
in the principal amount of the U.S. Global Certificate in an
amount equal to the principal amount of the U.S. Physical
Certificates or interests in the Temporary Offshore Global
Certificate, as the case may be, being transferred, and the
Trustee shall cancel such Physical Certificates or decrease
the amount of such Temporary Offshore Global Certificate so
transferred.
(c) [intentionally omitted.]
(d) Transfers of Interests in the Permanent Offshore
Global Certificate or Offshore Physical Certificates. The
Registrar shall register any transfer of interests in the
Permanent Offshore Global Certificate or Offshore Physical
Certificates without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The
following provisions shall apply with respect to any registration
of any transfer of an Initial Certificate to a Non-U.S. Person:
(i) Prior to the Offshore Certificates Exchange Date,
the Registrar shall register any proposed transfer of an
Initial Certificate to a Non-U.S. Person upon receipt of a
certificate substantially in the form set forth as Exhibit C
hereto from the proposed transferor.
(ii) On and after the Offshore Certificates Exchange
Date, the Registrar shall register any proposed transfer to
any Non-U.S. Person if the Certificate to be transferred is
a U.S. Physical Certificate or an interest in the U.S.
Global Certificate, upon receipt of a certificate
substantially in the form of Exhibit C from the proposed
transferor. The Registrar shall promptly send a copy of
such certificate to the Company.
(iii) Upon receipt by the Registrar of (x) the
documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its
books and records the date of such transfer and a decrease
in the principal amount of such U.S. Global Certificate in
an amount equal to the principal amount of the beneficial
interest in such U.S. Global Certificate to be transferred,
and (B) upon receipt by the Registrar of instructions given
in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of
the Offshore Global Certificate in an amount equal to the
principal amount of the U.S. Physical Certificate or the
U.S. Global Certificate, as the case may be, to be
transferred, and the Trustee shall cancel the Physical
Certificate, if any, so transferred or decrease the amount
of such U.S. Global Certificate.
(f) Private Placement Legend. Upon the transfer,
exchange or replacement of Certificates not bearing the Private
Placement Legend, the Registrar shall deliver Certificates that
do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Certificates bearing the Private
Placement Legend, the Registrar shall deliver only Certificates
that bear the Private Placement Legend unless either (i) the
circumstances contemplated by paragraph (a)(i)(x) or (e)(ii) of
this Section 3.06 exist or (ii) there is delivered to the
Registrar an Opinion of Counsel to the effect that neither such
legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the
Securities Act.
(g) General. By its acceptance of any Certificate
bearing the Private Placement Legend, each Holder of such a
Certificate acknowledges the restrictions on transfer of such
Certificate set forth in this Agreement and agrees that it will
transfer such Certificate only as provided in this Agreement.
The Registrar shall not register a transfer of any Certificate
unless such transfer complies with the restrictions on transfer
of such Certificate set forth in this Agreement. In connection
with any transfer of Certificates, each Certificateholder agrees
by its acceptance of the Certificates to furnish the Registrar or
the Trustee such certifications, legal opinions or other
information as either of them may reasonably require to confirm
that such transfer is being made pursuant to an exemption from,
or a transaction not subject to, the registration requirements of
the Securities Act; provided that the Registrar shall not be
required to determine the sufficiency of any such certifications,
legal opinions or other information.
Until such time as no Certificates remain Outstanding,
the Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.05 or
this Section 3.06. The Trustee, if not the Registrar at such
time, shall have the right to inspect and make copies of all such
letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to
the Registrar.
Section 3.07. 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 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, 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 3.07, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee and the
Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this
Section 3.07 shall constitute conclusive evidence of the
appropriate Fractional Undivided Interest in the 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 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 3.08. 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 3.09. 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, 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 3.10. Temporary Certificates. Until
definitive Certificates are ready for delivery, the Trustee shall
authenticate temporary Certificates. Temporary Certificates
shall be substantially in the form of definitive Certificates but
may have insertions, substitutions, omissions and other
variations determined to be appropriate by the officers executing
the temporary Certificates, as evidenced by their execution of
such temporary Certificates. If temporary Certificates are
issued, the Trustee will cause definitive Certificates to be
prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the
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 authorized
denominations. Until so exchanged, the temporary Certificates
shall be entitled to the same benefits under this Agreement as
definitive Certificates.
Section 3.11. Limitation of Liability for Payments.
All payments and distributions made to Certificateholders 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 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 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.
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 a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold the
Certificate Account in trust for the benefit of the
Certificateholders, 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 the Intercreditor
Agreement, the Trustee upon receipt thereof shall immediately
deposit the aggregate amount of such Scheduled Payment in the
Certificate Account.
(b) The Trustee shall establish and maintain on
behalf of the Certificateholders 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 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, the Trustee, upon
receipt thereof, shall immediately deposit the aggregate amount
of such Special Payments in the Special Payments Account.
(c) The Trustee shall 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 or as soon thereafter as the Trustee has confirmed receipt
of the payment of all or any part of the Scheduled Payments due
on such date, the Trustee shall distribute out of the Certificate
Account the entire amount deposited therein pursuant to
Section 4.01(a). There shall be so distributed to each
Certificateholder of record 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 Certificate
Account, except that, with respect to Certificates registered on
the Record Date in the name of the nominee of the Depositary
(initially, such nominee to be Cede & Co.), such distribution
shall be made by wire transfer in immediately available funds to
the account designated by such nominee.
(b) On each Special Distribution Date with respect to
any Special Payment or as soon thereafter as the Trustee has
confirmed receipt of any Special Payments, the Trustee shall
distribute out of the Special Payments Account the entire amount
of such Special Payment deposited therein pursuant to
Section 4.01(b). There shall be so distributed to each
Certificateholder of record 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 Trust held by such
Certificateholder) of the total amount in the Special Payments
Account on account of such Special Payment, except that, with
respect to Certificates registered on the Record Date in the name
of the nominee of the Depositary (initially, such nominee to be
Cede & Co.), such distribution shall be made by wire transfer in
immediately available funds to the account designated by such
nominee.
(c) The Trustee shall, at the expense of the Company,
cause notice of each Special Payment to be mailed to each
Certificateholder at his address as it appears in the Register.
In the event of redemption or purchase of Equipment Notes held in
the Trust, such notice shall be mailed not less than 20 days
prior to the Special Distribution Date for the Special Payment
resulting from such redemption or purchase, which Special
Distribution Date shall be the date of such redemption or
purchase. In the case of any other Special Payments, such notice
shall be mailed as soon as practicable after the Trustee has
confirmed that it has received funds for such Special Payment,
stating the Special Distribution Date for such Special Payment
which shall occur not less than 20 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 for each $1,000
face amount Certificate (taking into account any payment to
be made by the Company pursuant to Section 2.01(b)) and the
amount thereof constituting principal, premium, if any, and
interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date
as a Regular Distribution Date, the total amount to be
received on such date for each $1,000 face amount
Certificate.
If the amount of premium, if any, payable upon the redemption or
purchase of an Equipment Note has not been calculated at the time
that the Trustee mails notice of a Special Payment, it shall be
sufficient if the notice sets forth the other amounts to be
distributed and states that any premium received will also be
distributed.
If any redemption of the Equipment Notes held in the
Trust is cancelled, the Trustee, as soon as possible after
learning thereof, shall cause notice thereof to be mailed to each
Certificateholder at its address as it appears on the Register.
Section 4.03. Statements to Certificateholders. (a)
On each Distribution Date, the Trustee will include with each
distribution to Certificateholders of a Scheduled Payment or
Special Payment, as the case may be, a statement setting forth
the following information (per $1,000 face amount Certificate as
to (i) and (ii) below):
(i) the amount of such distribution allocable to
principal and the amount allocable to premium, if any;
(ii) the amount of such distribution allocable to
interest; and
(iii) the Pool Balance and the Pool Factor.
With respect to the Certificates registered in the name
of Cede & Co., as nominee for the Depositary, on the Record Date
prior to each Distribution Date, the Trustee will request from
the Depositary a Securities Position Listing setting forth the
names of all Agent Members reflected on the Depositary's books as
holding interests in the Certificates on such Record Date. On
each Distribution Date, the Trustee will mail to each such Agent
Member the statement described above and will make available
additional copies as requested by such Agent Member 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
Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar
year, for such portion of such year, and such other items as are
readily available to the Trustee and which a Certificateholder
shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax
returns. Such statement and such other items shall be prepared
on the basis of information supplied to the Trustee by the Agent
Members and shall be delivered by the Trustee to such Agent
Members to be available for forwarding by such Agent Members 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 to be promptly
distributed 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. 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.
Section 1110), with respect to the Leases;
(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 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
this Agreement, the Other Pass Through Trust Agreements, the
Refunding Agreements, and each other Refunding Document 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 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 Refunding
Document 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 Default under any Indenture, the Trustee may, to the
extent it is the Controlling Party at such time (as determined
pursuant to the Intercreditor Agreement), direct the exercise of
remedies as provided in the Intercreditor Agreement.
(b) Purchase Rights of Certificateholders. (i) At
any time after the occurrence and during the continuation of a
Triggering Event, each Certificateholder shall have the right
(which shall not expire upon any purchase of the Class A
Certificates pursuant to Section 6.01(b)(i) of the Class B Trust
Agreement) to purchase 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
Certificateholder, provided that (A) if prior to the end of such
ten day period any other Certificateholder notifies such
purchasing Certificateholder that such other Certificateholder
wants to participate in such purchase, then such other
Certificateholder may joint with the purchasing Certificateholder
to purchase all, but not less than all, of the Class A
Certificates and the Class B Certificates pro rata based on the
outstanding principal amount of the Certificates held by each
such Certificateholder and (B) if prior to the end of such ten
day period any other Certificateholder fails to notify the
purchasing Certificateholder of such other Certificateholder's
desire to participate in such a purchase, then such other
Certificateholder shall lost its right to purchase the Class A
Certificates and the Class B Certificates pursuant to this
Section 6.01(b)(i).
(ii) By acceptance of its Certificate, each
Certificateholder agrees that at any time after the
occurrence and during the continuation of a Triggering
Event, each Class D Certificateholder shall have the right
(which shall not expire upon any purchase of the Class A
Certificates pursuant to Section 6.01(b)(i) of the Class B
Trust Agreement or the purchase of the Class A Certificates
and the Class B Certificates pursuant to paragraph (i)
above) to purchase all, but not less than all, of the Class
A Certificates, the Class B Certificates and the
Certificates upon ten days' written notice to the Class A
Trustee, the Class B Trustee, the Trustee and each other
Class D Certificateholder, provided that (A) if prior to the
end of such ten-day period any other Class D
Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder
wants to participate in such purchase, then such other Class
D Certificateholder may join with the purchasing
Certificateholder to purchase all, but not less than all, of
the Class A Certificates, the Class B Certificates and the
Certificates pro rata based on the Fractional Undivided
Interest in the Class D Trust held by each such Class D
Certificateholder and (B) if prior to the end of such ten
day period any other Class D Certificateholder fails to
notify the purchasing Class D Certificateholder of such
other Class D Certificateholder's desire to participate in
such a purchase, then such other Class D Certificateholder
shall lose its right to purchase the Class A Certificates,
the Class B Certificates and the Certificates pursuant to
this Section 6.01(b).
The purchase price with respect to the Certificates
shall be equal to the Pool Balance of the Certificates, together
with accrued and unpaid interest thereon to the date of such
purchase, without premium, but including any other amounts then
due and payable to the Certificateholders under this Agreement,
the Intercreditor Agreement or any other Refunding Document or on
or in respect of the Certificates; provided, however, that no
such purchase of Certificates shall be effective unless the
purchaser shall certify to the Trustee that contemporaneously
with such purchase, such purchaser is purchasing, pursuant to the
terms of this Agreement and the Other Pass Through Trust
Agreements, the Class A Certificates, the Class B Certificates
and the Certificates. Each payment of the purchase price of the
Certificates referred to in the first sentence hereof shall be
made to an account or accounts designated by the Trustee and each
such purchase shall be subject to the terms of this Section
6.01(b). Each Certificateholder agrees by its acceptance of its
Certificate that it will, subject to Section 3.04 hereof, upon
payment from such Class D Certificateholder(s), as the case may
be, of the purchase price set forth in the first sentence of this
paragraph, forthwith sell, assign, transfer and convey to the
purchaser thereof (without recourse, representation or warranty
of any kind except for its own acts), all of the right, title,
interest and obligation of such Certificateholder in, this
Agreement, the Intercreditor Agreement, the Liquidity Facility,
the Refunding Documents and all Certificates held by such
Certificateholder (excluding all right, title and interest under
any of the foregoing to the extent such right, title or interest
is with respect to an obligation not then due and payable as
respects any action or inaction or state of affairs occurring
prior to such sale) and the purchaser shall assume all of such
Certificateholder's obligations under this Agreement, the
Intercreditor Agreement, the Liquidity Facility and the Refunding
Documents. The Certificates will be deemed to be purchased on
the date payment of the purchase price is made notwithstanding
the failure of the Certificateholders to deliver any Certificates
(whether in the form of Physical Certificates or beneficial
interests in Global Certificates) and, upon such a purchase, (i)
the only rights of the Certificateholders will be to deliver the
Certificates to the purchaser and receive the purchase price for
such Certificates and (ii) if the purchaser shall so request,
such Certificateholder will comply with all the provisions of
Section 3.04 hereof to enable new Certificates to be issued to
the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the purchaser thereof.
As used in this Section 6.01(b), the terms
"Certificateholder", "Class", "Class A Certificate", "Class A
Trustee", "Class B Certificate", "Class B Trust Agreement",
"Class B Trustee", "Class D Certificate", "Class D
Certificateholder", "Class D Trust" and "Class D Trustee", shall
have the respective meanings assigned to such terms in the
Intercreditor Agreement.
Section 6.02. [Intentionally omitted.].
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, 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 the
Intercreditor Agreement and the Refunding Documents (subject to
the rights of the applicable Owner Trustee or Owner Participant
to cure any such failure in accordance with Section 4.03 of 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 the Intercreditor Agreement, the
Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in
interest in the 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 the Trust or pursuant to
the terms of the Intercreditor Agreement, or exercising any trust
or power conferred on the Trustee under this Agreement or the
Intercreditor Agreement, including any right of the Trustee as
Controlling Party under the Intercreditor Agreement or as holder
of the Equipment Notes, provided that
(1) such Direction shall not 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 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 the
Intercreditor Agreement, the Certificateholders holding
Certificates 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
Default under any 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, or
(2) in the payment of the principal of (premium, if
any) or interest on the Equipment Notes, or
(3) in respect of a covenant or provision hereof which
under Article X cannot be modified or amended without the
consent of each Certificateholder holding an Outstanding
Certificate affected thereby.
Upon any such waiver, such default shall cease to exist
with respect to the Certificates 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 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 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 the Intercreditor Agreement,
the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.02 hereof on the
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 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 evidencing
Fractional Undivided Interests aggregating not less than 25%
of the 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 such an 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
evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust.
It is understood and intended that no one or more of
the Certificateholders shall have any right in any manner
whatsoever hereunder or under the Certificates to (i) surrender,
impair, waive, affect, disturb or prejudice any property in the
Trust Property or the lien of any Indenture on any property
subject thereto, or the rights of the Certificateholders or the
holders of the Equipment Notes, (ii) obtain or seek to obtain
priority over or preference with respect to any other such
Certificateholder 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
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
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.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default, the
Trustee undertakes to perform such duties 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 has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, 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 its 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 wilful
misconduct, except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section; 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 Trust 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.
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, the Trustee shall transmit by mail to the Company, the
Owner Trustees, the Owner Participants, the Loan Trustees and the
Certificateholders 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 on 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 determine that
the withholding of such notice is in the interests of the
Certificateholders. For the purpose of this Section, the term
"default" means any event that is, or after notice or lapse of
time or both would become, an Event of Default.
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 written
description of the subject matter thereof accompanied by an
Officer's Certificate and an Opinion of Counsel as provided
in Section 1.02 of this Agreement;
(c) whenever in the administration of this 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 Owner Trustee or any 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 at the Direction of any of the Certificateholders
pursuant to this 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 perform any duties under this
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;
(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 evidencing Fractional Undivided
Interests aggregating not less than a majority in interest
in the 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; 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, 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 Agreement, any Refunding
Agreement, any Equipment Notes, the Certificates or any other
Refunding Document, except that the Trustee hereby represents and
warrants that this Agreement has been, and the Intercreditor
Agreement, the Registration Rights Agreement, each Refunding
Agreement and each Certificate will be, executed, authenticated
and delivered by one of its officers who is duly authorized to
execute, authenticate 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, the 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 hereunder 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);
(2) except as otherwise expressly provided herein, 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 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 the Trustee pursuant to Section 10.1
of the Participation Agreements (as amended by the
Amendments No. 2 thereto dated as of the date hereof) (as
defined in the Intercreditor Agreement).
The Trustee shall be entitled to reimbursement from,
and shall have a lien prior to the Certificates upon, the Trust
Property 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. 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
circumstances thereof to all Certificateholders as their names
and addresses appear in the Register.
Section 7.08. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder 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, the Trustee shall resign immediately as
Trustee 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 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 by
giving prior written notice thereof to the Company, the
Authorized Agents, the Owner Trustees and the Loan Trustees. If
an instrument of acceptance by a successor Trustee shall not have
been delivered to the Company, the Authorized Agents, the Owner
Trustees, the Loan 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 holding Certificates
evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the Trust delivered to the Trustee
and to the Company, the Owner Trustees and the Loan Trustees.
(d) If at any time:
(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, with the consent of the
Owner Participants, which consent may not be unreasonably
withheld, remove the Trustee or (ii) any Certificateholder 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.
(e) If a Responsible Officer of the Trustee shall
obtain actual knowledge of an Avoidable Tax 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
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 in a
jurisdiction where there are no Avoidable Taxes.
(f) If the Trustee shall resign, be removed or become
incapable of acting or if a vacancy shall occur in the office of
the Trustee for any cause, the Company shall promptly appoint a
successor Trustee. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a
successor Trustee shall be appointed by Direction of the
Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in
interest in the Trust delivered to the Company, the Owner
Trustees, the Loan Trustees and the retiring Trustee, and the
Company approves such appointment, which approval shall not be
unreasonably withheld, then the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede the successor Trustee
appointed as provided above. If no successor Trustee shall have
been so appointed as provided above and accepted appointment in
the manner hereinafter provided, any Certificateholder who has
been a bona fide Certificateholder 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.
(g) The successor Trustee 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 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, the Authorized Agents, the Owner Trustees
and the Loan Trustees and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee 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 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.
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 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) There
shall at all times be maintained an office or agency in the
location set forth in Section 12.03 where Certificates 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 (e.g., the Certificates shall be represented by
Physical 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, the Owner Trustees, the Loan Trustees (in the case of
any Owner Trustee or Loan Trustee, at its address specified in
the Refunding Agreements or such other address as may be notified
to the Trustee) and the Certificateholders. 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. 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, if the Trustee shall be acting as
the Registrar or Paying Agent hereunder, 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. 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
hereunder, if such successor corporation is otherwise eligible
under this Section, 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,
the Owner Trustees and the 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 (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. The Company shall give written notice of any such
appointment made by it to the Trustee, the Owner Trustees and the
Loan Trustees; and in each case the Trustee shall mail notice of
such appointment to all Certificateholders as their names and
addresses appear on the Register.
(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.
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 Name
of Subordination Agent. The Trustee agrees that all Equipment
Notes to be purchased by the Trust shall be issued in the name of
the Subordination Agent or its nominee and held by the
Subordination Agent in trust for the benefit of the
Certificateholders, or, if not so held, the 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 7.15. Representations and Warranties of
Trustee. 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, the
Intercreditor Agreement, the Registration Rights Agreement
and the Refunding Agreements and has taken all necessary
action to authorize the execution, delivery, and performance
by it of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding Agreements;
(c) the execution, delivery and performance by the
Trustee of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding Agreements
(i) will not violate any provision of 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, or (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, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding 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, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding 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 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. The Trustee, as trustee of the 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
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, to withhold such
amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Certificateholders, 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 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 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 which is attributable to the
Trustee either (i) in its individual capacity and which is
unrelated to the transactions contemplated by this Agreement, the
Intercreditor Agreement, the Refunding Agreements or the
Refunding 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.
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, 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, 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 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 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 the Certificates, the Trustee shall
transmit to the Certificateholders, 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 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;
(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 or her 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 any time
and from time to time, enter into one or more agreements
supplemental hereto or, if applicable, to the Intercreditor
Agreement or the Liquidity Facility, in form satisfactory to the
Trustee, for any of the following purposes:
(1) 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
(2) to add to the covenants of the Company for the
benefit of the Certificateholders, or to surrender any right
or power in this Agreement conferred upon the Company; or
(3) to correct or supplement any provision in this
Agreement, the Intercreditor Agreement or the Liquidity
Facility which may be defective or inconsistent with any
other provision herein or to cure any ambiguity or correct
any mistake or to modify any other provision with respect to
matters or questions arising under this Agreement, the
Intercreditor Agreement or the Liquidity Facility, provided
that any such action shall not materially adversely affect
the interests of the Certificateholders; or
(4) to modify, eliminate or add to the provisions of
this Agreement to such extent as shall be necessary to
continue the qualification of this Agreement (including any
supplemental agreement) under the Trust Indenture Act or
under any similar Federal statute hereafter enacted, and to
add to this Agreement 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 instrument was executed or any corresponding provision
in any similar Federal statute hereafter enacted; or
(5) to evidence and provide for the acceptance of
appointment under this Agreement by the Trustee of a
successor Trustee and to add to or change any of the
provisions of this Agreement as shall be necessary to
provide for or facilitate the administration of the Trust,
pursuant to the requirements of Section 7.10; or
(6) to provide the information required under
Section 7.12 and Section 12.03 as to the Trustee; or
(7) to modify or eliminate provisions relating to the
transfer or exchange of Exchange Certificates or the Initial
Certificates upon consummation of the Exchange Offer (as
defined in the Registration Rights Agreement) or
effectiveness of the Registration Statement.
Section 9.02. Supplemental Agreements with Consent of
Certificateholders. With the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the 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, which consent shall not be unreasonably
withheld), and the Trustee (subject to Section 9.03) shall, enter
into an agreement or agreements for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, the Intercreditor Agreement, the
Liquidity Facility, the Registration Rights Agreement or any
Refunding Agreement to the extent applicable to such
Certificateholders or of modifying in any manner the rights and
obligations of such Certificateholders under this Agreement, the
Intercreditor Agreement, the Liquidity Facility, the Registration
Rights Agreement or any Refunding Agreement; 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 the Trust or distributions that are
required to be made herein on any Certificate, or change any
date of payment on any Certificate, or change the place of
payment where, or the coin or currency in which, any
Certificate 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 except as permitted by this
Agreement, or otherwise deprive such Certificateholder of
the benefit of the ownership of the Equipment Notes in the
Trust; or
(3) reduce the percentage of the aggregate Fractional
Undivided Interests of the Trust which is required for any
such supplemental agreement, or reduce such 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
(4) waive, amend or modify Section 2.4, 3.2 or 3.3 of
the Intercreditor Agreement in a manner adverse to the
Certificateholders; 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 affected thereby.
It shall not be necessary for any Direction of
Certificateholders under this Section 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 Agreement, 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
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 Agreement shall be modified in
accordance therewith, and such supplemental agreement shall form
a part of this Agreement for all purposes; and every Holder of a
Certificate theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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 authenticated and
delivered after the execution of any supplemental agreement
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 after proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND REFUNDING DOCUMENTS
Section 10.01. Amendments and Supplements to
Indentures and Other Refunding Documents. In the event that the
Trustee, as holder of any Equipment Note in trust for the benefit
of the Certificateholders or as Controlling Party under the
Intercreditor Agreement, receives a request for a consent to any
amendment, modification, waiver or supplement under any Indenture
or other Refunding Document, the Trustee shall forthwith send a
notice of such proposed amendment, modification, waiver or
supplement to each Certificateholder registered on the Register
as of the date of such notice. The Trustee shall request from
the Certificateholders a Direction as to (a) whether or not to
take or refrain from taking any action which a holder of such
Equipment Note has the option to direct, (b) whether or not to
give or execute any waivers, consents, amendments, modifications
or supplements as a holder of such Equipment Note and (c) how to
vote any Equipment 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, the Trustee shall vote for or give consent to any
such action with respect to such Equipment Note in the same
proportion as that of (i) 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 (ii) the
aggregate face amount of all Outstanding Certificates. 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 two Business
Days before the Trustee directs such action or casts such vote or
gives such consent. Notwithstanding the foregoing, but subject
to Section 6.04 and the Intercreditor Agreement, the Trustee may,
in its own discretion and at its own direction, consent and
notify the relevant Loan Trustee of such consent to any
amendment, modification, waiver or supplement under the relevant
Indenture or any other Refunding Document, if an Event of Default
hereunder shall have occurred and be continuing, or if such
amendment, modification or waiver will not adversely affect the
interests of the Certificateholders.
ARTICLE XI
TERMINATION OF TRUST
Section 11.01. Termination of the Trust. The
respective obligations and responsibilities of the Company and
the Trustee with respect to the Trust shall terminate upon the
distribution to all Holders of Certificates and the Trustee of
all amounts required to be distributed to them pursuant to this
Agreement and the disposition of all property held as part of the
Trust Property; provided, however, that in no event shall the
Trust continue beyond one hundred ten (110) years following the
date of the earliest execution of this Trust Agreement.
Notice of any termination, specifying the Regular
Distribution Date (or Special Distribution Date, as the case may
be) upon which the Certificateholders may surrender their
Certificates to the Trustee for payment of the final Distribution
Date and cancellation, shall be mailed promptly by the Trustee to
Certificateholders not earlier than the 60th day and not later
than the 20th day next preceding such final Distribution Date
specifying (A) the Regular Distribution Date (or Special
Distribution Date, as the case may be) upon which the proposed
final payment of the Certificates will be made upon presentation
and surrender of Certificates at the office or agency of the
Trustee therein specified, (B) the amount of any such proposed
final payment, and (C) that the Record Date otherwise applicable
to such 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 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. Upon presentation and surrender of
the Certificates in accordance with such notice, the Trustee
shall cause to be distributed to Certificateholders such final
payments.
In the event that all of the Certificateholders 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 to surrender their Certificates for
cancellation and receive the final distribution with respect
thereto. No additional interest shall accrue on the Certificates
after the Regular Distribution Date (or Special Distribution
Date, as the case may be) specified in the first written notice.
In the event that any money held by the Trustee for the payment
of distributions on the Certificates shall remain unclaimed for
two years (or such lesser time as the Trustee shall be satisfied,
after sixty days' notice from the Company, is one month prior to
the escheat period provided under applicable law) after the final
distribution date with respect thereto, the Trustee shall pay to
each Loan Trustee the appropriate amount of money relating to
such Loan Trustee and shall give written notice thereof to the
related Owner Trustees, the Owner Participants and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of
Certificateholders. The death or incapacity of any
Certificateholder shall not operate to terminate this Agreement
or the 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. Certificates Nonassessable and Fully
Paid. Except as set forth in the last sentence of this Section
12.02, Certificateholders shall not be personally liable for
obligations of the Trust, the Fractional Undivided Interests
represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and
Certificates, upon authentication thereof by the Trustee pursuant
to Section 3.03, are and shall be deemed fully paid. No
Certificateholder shall have any right (except as expressly
provided herein) to vote or in any manner otherwise control the
operation and management of the Trust Property, the Trust, or the
obligations of the parties hereto, nor shall anything set forth
herein, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to
time as partners or members of an association. Neither the
existence of the Trust nor any provision herein 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. Notices. (a) Unless otherwise
specifically provided herein, all notices required under the
terms and provisions of this Agreement 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, to:
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Attention: Chief Financial Officer and
General Counsel
Facsimile: (713) 523-2831
if to the Trustee, to:
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
shall be mailed by first-class mail to the addresses for
Certificateholders shown on the Register kept by the Registrar.
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.
(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, it shall mail a copy to the Trustee and
to the Paying Agent 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 12.04. Governing Law. THIS AGREEMENT HAS BEEN
DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT AND THE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS-OF-LAW PRINCIPLES.
Section 12.05. 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 Trust, or of the Certificates or the rights of the
Certificateholders thereof.
Section 12.06. 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.
Section 12.07. 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 12.08. 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 12.09. Benefits of Agreement. Nothing in this
Agreement or in the Certificates, express or implied, shall give
to any Person, other than the parties hereto and their successors
hereunder, and the Certificateholders, any benefit or any legal
or equitable right, remedy or claim under this Agreement.
Section 12.10. Legal Holidays. In any case where any
Regular Distribution Date or Special Distribution Date relating
to any Certificate shall not be a Business Day, 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 12.11. 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 12.12. Intention of Parties. The parties
hereto intend that the 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
REGISTERED
No. ______________
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT
WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS CERTIFICATE OR THE LAST DATE ON WHICH
THIS CERTIFICATE WAS HELD BY CONTINENTAL AIRLINES,
INC., THE TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH
PERSONS RESELL OR OTHERWISE TRANSFER THIS CERTIFICATE
EXCEPT (A) TO CONTINENTAL AIRLINES, INC., (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS CERTIFICATE WITHIN
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF
THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS
CERTIFICATE WAS HELD BY CONTINENTAL AIRLINES, INC., THE
TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH PERSONS THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER
AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT. THE
PASS THROUGH TRUST AGREEMENT CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.]
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT
(A) IT IS NOT A PLAN TRANSFEREE (AS DEFINED IN THE PASS
THROUGH TRUST AGREEMENT) OR (B) IT IS AN INSURANCE
COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT TO
ACQUIRE THIS CERTIFICATE, AND THE CONDITIONS OF
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ISSUED BY
THE U.S. DEPARTMENT OF LABOR HAVE BEEN AND WILL
CONTINUE TO BE SATISFIED IN CONNECTION WITH ITS
PURCHASE AND HOLDING OF THIS CERTIFICATE. THE PASS
THROUGH TRUST AGREEMENT CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE
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 HEREON 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.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED
TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS
3.05 AND 3.06 OF THE PASS THROUGH TRUST AGREEMENT
REFERRED TO HEREIN.]**
___________________
* Not to be included on the face of the Permanent Offshore
Global Certificate.
** To be included on the face of each Global Certificate.
[GLOBAL CERTIFICATE]*
CONTINENTAL AIRLINES 1996-C PASS THROUGH TRUST
9.50% Continental Airlines
[Initial] [Exchange] Pass Through Certificate
Series 1996-C
Final Distribution Date: October 15, 2013
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes each secured
by an Aircraft leased to Continental Airlines, Inc.
$__________ 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 1996-C Pass Through Trust (the "Trust")
created pursuant to a Pass Through Trust Agreement, dated as of
January 31, 1996 (the "Agreement"), between Wilmington Trust
Company (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 "9.50% Continental Airlines [Initial]
[Exchange] Pass Through Certificates Series 1996-C" (herein
called the "Certificates"). This Certificate is issued under and
is subject to the terms, provisions, and conditions of the
Agreement. By virtue of its acceptance hereof the
Certificateholder of this Certificate assents to and agrees to be
bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment
Notes and all rights of the Trust to receive payments under the
Intercreditor Agreement and the Liquidity Facilities (the "Trust
Property"). Each issue of the Equipment Notes is secured by,
among other things, a security interest in the 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 assets or property
other than the Trust Property.
Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, from and to the extent
of funds then available to the Trustee, there will be distributed
on each January 15, April 15, July 15 and October 15 (a "Regular
Distribution Date"), commencing on April 15, 1996, 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.
[The Holder of this Certificate is entitled to the
benefits of the Registration Rights Agreement, dated as of
January 31, 1996, among the Company, the Trustee and the Initial
Purchasers named therein (the "Registration Rights Agreement").
In the event that either (a) (x) the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement) is
not filed with the SEC on or prior to the 120th calendar day
following the date of the Agreement, or (y) the Exchange Offer
Registration Statement has not been declared effective on or
prior to the 60th calendar day following the filing thereof with
the SEC or (z) the Exchange Offer (as defined in the Registration
Rights Agreement) is not consummated on or prior to the 30th
calendar day following the effectiveness of the Exchange Offer
Registration Statement (in each case other than under certain
circumstances described in the Registration Rights Agreement) or
(b) a Shelf Registration Statement (as defined in the
Registration Rights Agreement) is required to be filed with the
SEC pursuant to the Registration Rights Agreement, and such Shelf
Registration Statement is not declared effective on or prior to
the 210th calendar day following the date of the Agreement (each,
a "Registration Default"), the interest rate per annum borne by
the Equipment Notes shall be increased by (1) 0.25% from and
including the day following such Registration Default to but
excluding the 90th day following such Registration Default and
(2) 0.50% thereafter; provided, however, that such increase shall
cease to be in effect from and including the date on which such
Registration Default has been cured. In the event that the Shelf
Registration Statement ceases to be effective at any time during
the period specified by the Registration Rights Agreement for
more than 60 days, whether or not consecutive, during any 12-
month period, the interest rate per annum borne by the Equipment
Notes shall be increased by 0.50% from the 61st day of the
applicable 12-month period such Shelf Registration Statement
ceases to be effective until such time as the Shelf Registration
Statement again becomes effective.]**
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 AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
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.
Dated: CONTINENTAL AIRLINES
1996-C PASS THROUGH TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
Attest: By: _______________________________
Name:
Title:
________________________
Authorized Signature
________________
* To be included on the face of each Global Certificate.
** To be included only on each Initial Certificate.
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee
By: _________________________
Authorized Officer
[REVERSE OF CERTIFICATE]
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 of their affiliates. The
Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under
the Agreement shall be made only from the Trust Property and only
to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof,
agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to
such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and
duties evidenced hereby. A copy of the Agreement may be examined
during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Certificateholders under the Agreement at any time by the Company
and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and
upon all future Certificateholders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein 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, in the Borough of Manhattan, the City of New
York, 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
[$100,000]* [$1,000]** Fractional Undivided Interest and integral
multiples of $1,000 in excess thereof [except that one
Certificate may be in a denomination of less than $100,000]*. 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 by the Holder 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.
______________________
* To be included only on each Initial Certificate.
** To be included only on each Exchange Certificate.
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
________________________________
________________________________
please print or typewrite name and address including zip code of
assignee
________________________________
the within Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________
attorney to transfer said Certificate on the books of the Trustee
with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT PERMANENT OFFSHORE GLOBAL AND
OFFSHORE PHYSICAL CERTIFICATES]
In connection with any transfer of this Certificate
occurring prior to the date that is the earlier of the date of an
effective Registration Statement or __________, 1999, the
undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[ ] (a) this Certificate is being transferred in
compliance with the exemption from registration under
the Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
or
[ ] (b) this Certificate is being transferred other than
in accordance with (a) above and documents are being
furnished that comply with the conditions of transfer
set forth in this Certificate and the Agreement.
If neither of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this
Certificate in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 3.06 of the
Agreement shall have been satisfied.
Date:_______________ [Name of Transferor]
--------------------------------------
NOTE: The signature must
correspond with the name as written
upon the face of the within-
mentioned instrument in every
particular, without alteration or
any change whatsoever.
Signature Guarantee: _____________________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is
purchasing this Certificate for its own account or an account
with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933,
as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ________________ _________________________________
NOTE: To be executed by an
executive officer.
EXHIBIT B
FORM OF CERTIFICATE FOR UNLEGENDED CERTIFICATES
[Date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996 Pass Through Trust,
Class C Pass Through Trust Certificates
(the "Certificates")
Dear Sirs:
This letter relates to U.S. $__________ Fractional
Undivided Interest of Certificates represented by a Certificate
(the "Legended Certificate") which bears a legend outlining
restrictions upon transfer of such Legended Certificate.
Pursuant to Section 3.01 of the Pass Through Trust Agreement
relating to the Certificates dated as of January 31, 1996 (the
"Trust Agreement"), between Continental Airlines, Inc.
("Continental") and you, we hereby certify that we are (or we
will hold such securities on behalf of) a person outside the
United States to whom the Certificates could be transferred in
accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are
hereby requested to exchange the legended certificate for an
unlegended certificate representing an identical principal amount
of Certificates, all in the manner provided for in the Trust
Agreement.
You and Continental are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters
covered hereby. Terms used in this certificate have the meanings
set forth in Regulation S.
Very truly yours,
[Name of Certificateholder]
By:__________________________
Authorized Signature
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
[date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996-C Pass Through Trust
(the "Trust"), 9.50% Continental Airlines Pass
Through Certificates
Series 1996-C (the "Certificates")
Sirs:
In connection with our proposed sale of $_______
Fractional Undivided Interest of the Certificates, we confirm
that such sale has been effected pursuant to and in accordance
with Regulation S under the Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Certificates was not made to a
person in the United States;
(2) either (a) at the time the buy order was
originated, the transferee was outside the United States or
we and any person acting on our behalf reasonably believed
that the transferee was outside the United States or (b) the
transaction was executed in, on or through the facilities of
a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction
has been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted
period and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of
Regulation S are applicable thereto, we confirm that such sale
has been made in accordance with the applicable provisions of
Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You and Continental Airlines, Inc. are entitled to rely
upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_______________________
Authorized Signature
Exhibit 4.8
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of
January 31, 1996, between CONTINENTAL AIRLINES, INC., a Delaware
corporation, and WILMINGTON TRUST COMPANY, as Trustee, is made
with respect to the formation of Continental Airlines 1996-D Pass
Through Trust and the issuance of 12.48% Continental Airlines
1996-D Pass Through Certificates representing fractional
undivided interests in the Trust.
WITNESSETH:
WHEREAS, the Company, the Owner Trustees and the Owner
Participants (as such terms and certain other capitalized terms
used herein are defined below) have previously entered into
eighteen separate leveraged lease transactions in connection with
the purchase of nine Boeing 737-524 aircraft and nine
Boeing 757-224 aircraft (collectively, the "Aircraft") from the
manufacturer;
WHEREAS, each Owner Trustee, acting on behalf of the
corresponding Owner Participant, will issue pursuant to an
Indenture, on a non-recourse basis, four series of Equipment
Notes, among other things, to refinance the current indebtedness
of such Owner Trustee originally incurred to finance the purchase
price of the related Aircraft;
WHEREAS, the Trustee, upon execution and delivery of
this Agreement, hereby declares the creation of the Trust for the
benefit of the Certificateholders, and the initial
Certificateholders, as the grantors of the Trust, by their
respective acceptances of the Certificates, join in the creation
of this Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Trust
will evidence fractional undivided interests in the Trust and
will convey no rights, benefits or interests in respect of any
property other than the Trust Property;
WHEREAS, pursuant to the terms and conditions of this
Agreement and each of the Refunding Agreements to be entered into
by the Trustee simultaneously with the execution and delivery of
this Agreement, the Trustee on behalf of the 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 Certificates issued hereunder
and shall hold such Equipment Notes in trust for the benefit of
the Certificateholders;
WHEREAS, to facilitate the sale of Equipment Notes to,
and the purchase of Equipment Notes by, the Trustee on behalf of
the Trust, the Company has duly authorized the execution and
delivery of this Agreement 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 pursuant hereto and
as the "obligor", as such term is defined in and solely for
purposes of the Trust Indenture Act of 1939, as amended, with
respect to all such Certificates and is undertaking to perform
certain administrative and ministerial duties hereunder and is
also undertaking to pay the ongoing fees and expenses of the
Trustee;
WHEREAS, all of the conditions and requirements
necessary to make this Agreement, when duly executed and
delivered, a valid, binding and legal instrument, enforceable in
accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and
delivery of this Agreement in the form and with the terms hereof
have been in all respects duly authorized; and
WHEREAS, upon issuance of the Exchange Certificates, if
any, or the effectiveness of the Registration Statement, this
Agreement, as amended or supplemented from time to time, will be
subject to the provisions of the Trust Indenture Act of 1939, 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
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 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 Agreement to designated
"Articles", "Sections", "Subsections" and other subdivisions
are to the designated Articles, Sections, Subsections and
other subdivisions of this Agreement;
(4) 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,
Subsection or other subdivision; and
(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".
Affiliate: Means, with respect to any Person, any
other Person directly or indirectly controlling or
controlled by or under 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 purposes of this definition, "control" 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.
Agent Members: Has the meaning specified in Section
3.05.
Aircraft: Has the meaning specified in the first
recital to this Agreement.
Authorized Agent: Means any Paying Agent or Registrar
for the Certificates.
Avoidable Tax: Means a state or local tax (i) upon
(w) the Trust, (x) the Trust Property,
(y) Certificateholders or (z) the Trustee for which the
Trustee is entitled to seek reimbursement from the Trust
Property, and (ii) which would be avoided if the Trustee
were located in another state, or jurisdiction within a
state, within the United States. A tax shall not be an
Avoidable Tax if the Company or any Owner Trustee shall
agree to pay, and shall pay, such tax.
Business Day: Means any day other than a Saturday, a
Sunday or a day on which commercial banks are required or
authorized to close in Houston, Texas, New York, New York,
or, so long as any Certificate is outstanding, the city and
state in which the Trustee or any Loan Trustee maintains its
Corporate Trust Office or receives and disburses funds.
Cedel: Means Cedel Bank societe anonyme.
Certificate: Means any one of the Initial Certificates
or Exchange Certificates and any such Certificates issued in
exchange therefor or replacement thereof pursuant to this
Agreement.
Certificate Account: Means the account or accounts
created and maintained pursuant to Section 4.01(a).
Certificateholder or Holder: Means the Person in whose
name a Certificate is registered in the Register.
Company: Means Continental Airlines, Inc., a Delaware
corporation, or its successor in interest pursuant to
Section 5.02, or any other obligor (within the meaning of
the Trust Indenture Act) with respect to the Certificates.
Controlling Party: Has the meaning specified in the
Intercreditor Agreement.
Corporate Trust Office: With respect to the Trustee or
any Loan Trustee, means the office of such trustee in the
city at which at any particular time its corporate trust
business shall be principally administered.
Cut-off Date: Means March 31, 1996.
Depositary: Means the Depository Trust Company, its
nominees and their respective successors.
Direction: Has the meaning specified in
Section 1.04(a).
Distribution Date: Means any Regular Distribution Date
or Special Distribution Date.
Equipment Notes: Means the equipment notes issued
under the Indentures.
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 specified in
Section 2.01(b).
Escrowed Funds: Has the meaning specified in
Section 2.01(b).
Euroclear: Means the Euroclear System.
Event of Default: Means an Indenture Default under any
Indenture pursuant to which Equipment Notes held by the
Trust were issued.
Exchange Certificates: Means the certificates
substantially in the form of Exhibit A hereto issued in
exchange for the Initial Certificates pursuant to the
Registration Rights Agreement and authenticated hereunder.
Exchange Offer Registration Statement: Means the
Exchange Offer Registration Statement defined in the
Registration Rights Agreement.
Fractional Undivided Interest: Means the fractional
undivided interest in the Trust that is evidenced by a
Certificate.
Indentures: Means each of the eighteen separate
Amended and Restated Trust Indentures and Mortgages listed
on Schedule 1 hereto, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
Indenture Default: With respect to any Indenture,
means any Event of Default (as such term is defined in such
Indenture).
Initial Certificates: Means the certificates issued
and authenticated hereunder substantially in the form of
Exhibit A hereto other than the Exchange Certificates.
Initial Purchasers: Means, collectively, CS First
Boston Corporation, Morgan Stanley & Co. Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman
Brothers Inc. and Fieldstone FPCG Services, L.P.
Initial Regular Distribution Date: Means the first
Regular Distribution Date on which a Scheduled Payment is to
be made.
Institutional Accredited Investor: Means an
institutional investor that is an "accredited investor"
within the meaning set forth in Rule 501(a)(1), (2), (3)
or (7) of Regulation D under the Securities Act.
Intercreditor Agreement: Means the Intercreditor
Agreement dated the date hereof among the Trustee, the Other
Trustees, the liquidity provider, if any, relating to the
Certificates issued under (and as defined in) each of the
Other Pass Through Trust Agreements, and Wilmington Trust
Company, as Subordination Agent thereunder, as amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
Issuance Date: Means the date of the issuance of the
Initial Certificates.
Lease: Means the lease between an Owner Trustee, as
the lessor, and the Company, as the lessee, referred to in
the related Indenture, as each such lease may be amended,
supplemented or otherwise modified in accordance with its
terms.
Loan Trustee: With respect to any Equipment Note or
the Indenture applicable thereto, means the bank or trust
company designated as indenture trustee under such
Indenture, together with any successor to such Loan Trustee
appointed pursuant thereto.
Non-U.S. Person: Means a Person that is not a "U.S.
person", as defined in Regulation S.
Officer's Certificate: Means a certificate signed,
(a) in the case of the Company, by (i) the Chairman or Vice
Chairman of the Board of Directors, the President, any
Executive Vice President, any Senior Vice President or the
Treasurer of the Company, signing alone or (ii) any Vice
President of the Company signing together with the
Secretary, the Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company or, (b) in the case of an
Owner Trustee or a Loan Trustee, a Responsible Officer of
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) Cleary, Gottlieb, Steen & Hamilton, (iii) Hughes
Hubbard & Reed, or (iv) such other counsel designated by the
Company and reasonably acceptable to the Trustee and (b) in
the case of counsel for 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 Pass Through Trust Agreements: Means each of the
three other Continental Airlines 1996 Pass Through Trust
Agreements relating to Continental Airlines 1996-A Pass
Through Trust, Continental Airlines 1996-B Pass Through
Trust and Continental Airlines 1996-C Pass Through Trust,
dated the date hereof.
Other Trustees: Means the trustee under the Other Pass
Through Trust Agreements, and any successor or other trustee
appointed as provided therein.
Outstanding: When used with respect to Certificates,
means, as of the date of determination, all Certificates
theretofore authenticated and delivered under this
Agreement, except:
(i) Certificates theretofore cancelled by the
Registrar or delivered to the Trustee or the Registrar
for cancellation;
(ii) Certificates for which money in the full
amount required to make the final distribution with
respect to such Certificates pursuant to Section 11.01
hereof has been theretofore deposited with the Trustee
in trust for the Holders of such Certificates as
provided in Section 4.01 pending distribution of such
money to such Certificateholders pursuant to payment of
such final distribution; and
(iii) Certificates in exchange for or in lieu
of which other Certificates have been authenticated and
delivered pursuant to this Agreement.
Owner Participant: With respect to any Equipment Note,
means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued
and any permitted successor or assign of such Owner
Participant; and Owner Participants at any time of
determination means all of the Owner Participants thus
referred to in the Indentures.
Owner Trustee: With respect to any Equipment Note,
means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its
individual capacity but solely as trustee; and Owner
Trustees means all of the Owner Trustees party to any of the
Indentures.
Participation Agreement: With respect to any Aircraft,
means the Participation Agreement referred to in the related
Indenture.
Paying Agent: Means the paying agent maintained and
appointed for the Certificates pursuant to Section 7.12.
Permitted Investments: Means obligations of the United
States of America or agencies or instrumentalities thereof
the payment of which is backed by the full faith and credit
of the United States of America and which mature 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, partnership, joint venture, association, joint-
stock company, trust, trustee, unincorporated organization,
or government or any agency or political subdivision
thereof.
Physical Certificates: Has the meaning specified in
Section 3.01.
Plan Transferee: Means any Plan or any entity that is
using the assets of any Plan to purchase or hold its
interest in a Certificate. For purposes of this definition,
a "Plan" means any employee benefit plan subject to ERISA as
well as any plan that is not subject to ERISA but which is
subject to Section 4975 of the Internal Revenue Code of
1986, as amended.
Pool Balance: Means, as of any date, (i) the original
aggregate face amount of the Certificates less (ii) the
aggregate amount of all payments made in respect of 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 such Trust and the
distribution thereof to be made on such Distribution Date.
Pool Factor: Means, as of any date, the quotient
(rounded to the seventh decimal place) computed by dividing
(i) the Pool Balance as at such date by (ii) the original
aggregate face amount of the Certificates. 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 and the distribution thereof
to be made on such Distribution Date.
Postponed Notes: Means the Equipment Notes to be held
in the Trust as to which a Postponement Notice shall have
been delivered pursuant to Section 2.01(b).
Postponement Notice: Means an Officer's Certificate of
the Company (1) requesting that the Trustee temporarily
postpone the purchase pursuant to one or more of the
Refunding Agreements of certain of the Equipment Notes to a
date which is later than the Issuance Date, (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, 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.
Private Placement Legend: Has the meaning specified in
Section 3.02.
PTC Event of Default: Means any failure to pay within
10 Business Days of the due date thereof: (i) the
outstanding Pool Balance on April 15, 2015 or (ii) interest
due on the Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing (as
defined in the Intercreditor Agreement) with respect thereto
in an amount sufficient to pay such interest and shall have
distributed such amount to the Certificateholders).
QIB: Means a qualified institutional buyer as defined
in Rule 144A.
Record Date: Means (i) for Scheduled Payments to be
distributed on any Regular Distribution Date, other than the
final distribution, 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, the
15th day (whether or not a Business Day) preceding such
Special Distribution Date.
Refunding Agreements: Means each of the eighteen
separate Refunding Agreements dated the date hereof, listed
on Schedule 2 hereto, providing for, among other things, the
purchase of Equipment Notes by the Trustee on behalf of the
Trust, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
Refunding Documents: With respect to any Equipment
Note, means the related Indenture, Refunding Agreement,
Lease and Participation Agreement.
Register and Registrar: Mean the register maintained
and the registrar appointed pursuant to Sections 3.04
and 7.12.
Registration Rights Agreement: Means the Registration
Rights Agreement dated January 31, 1996, among the Initial
Purchasers, the Trustee, the Other Trustees and the Company,
as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
Registration Statement: Means the Registration
Statement defined in the Registration Rights Agreement.
Regular Distribution Date: With respect to
distributions of Scheduled Payments in respect of the
Certificates, means each date designated as a Regular
Distribution Date in this Agreement, until payment of all
the Scheduled Payments to be made under the Equipment Notes
held in the Trust have been made; 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.
Regulation S: Means Regulation S under the Securities
Act or any successor regulation thereto.
Responsible Officer: With respect to the Trustee, any
Loan Trustee and any Owner Trustee, means any officer in the
Corporate Trust Office 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.
Rule 144A: Means Rule 144A under the Securities Act
and any successor rule thereto.
Scheduled Payment: With respect to any Equipment Note,
means any payment of principal and interest on such
Equipment Note (other than any such payment which is not in
fact received by the Subordination Agent within five days of
the date on which such payment is scheduled to be made) due
from the obligor thereon, which payment represents the
installment of principal at the stated maturity of such
installment of principal on such Equipment Note, the payment
of regularly scheduled interest accrued on the unpaid
principal amount of such Equipment Note, or both; provided
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.
Securities Act: Means the United States Securities Act
of 1933, as amended from time to time, or any successor
thereto.
Special Distribution Date: Means each date on which a
Special Payment is to be distributed as specified in this
Agreement; 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.
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 2.01(b) or
(iii) the amounts required to be distributed pursuant to the
penultimate paragraph of Section 2.01(b).
Special Payments Account: Means the account or
accounts created and maintained pursuant to Section 4.01(b).
Specified Investments: Means (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 Group,
(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 short-term deposit rating of P1 by
Moody's Investors Service, Inc. or its equivalent by
Standard & Poor's Ratings Group; 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 respect to any of the obligations described in
clauses (i) through (iv) above as collateral; provided
further that if all of the above investments are
unavailable, all 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 in the
Intercreditor Agreement.
Transfer Date: Has the meaning assigned to the term
"Refunding Date" in each Refunding Agreement.
Triggering Event: Has the meaning assigned to such
term in the Intercreditor Agreement.
Trust: Means the trust created by this Agreement, the
estate of which consists of the Trust Property.
Trust Indenture Act: Except as otherwise provided in
Section 9.06, means the United States Trust Indenture Act of
1939 as in force at the date hereof.
Trust Property: Means (i) the Equipment Notes held as
the property of the Trust and 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 Escrow
Account, the Certificate Account and the Special Payments
Account, and (iii) all rights of the Trust and the Trustee,
on behalf of the Trust, under the Intercreditor Agreement
including, without limitation, all rights to receive certain
payments thereunder, and all monies paid to the Trustee on
behalf of the Trust pursuant to the Intercreditor Agreement.
Trustee: Means Wilmington Trust Company, or its
successor in interest, and any successor or other trustee
appointed as provided herein.
Trustee's Lien: Has the meaning specified in Section
7.17.
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 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 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 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 Agreement
(other than a certificate provided pursuant to Section 8.04(d))
shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions in 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 Agreement
or, in respect of the Certificates, 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 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, where it is hereby expressly required pursuant to this
Agreement, to the Company or any Loan Trustee. 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
Agreement and conclusive in favor of the Trustee, the Company and
any Loan Trustee, if made in the manner provided in this Section.
(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
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 Outstanding, such
Certificates shall not be so disregarded, and (ii) if any amount
of Certificates 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 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 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 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 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 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 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.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01. Issuance of Certificates; Acquisition of
Equipment Notes. (a) The Trustee is hereby directed to execute
and deliver the Intercreditor Agreement, the Registration Rights
Agreement and each of the Refunding Agreements on or prior to the
Issuance Date, each in the form delivered to the Trustee by the
Company. Upon request of the Company and the satisfaction of the
closing conditions specified in each of the Refunding Agreements,
the Trustee shall execute, deliver and authenticate Certificates
equalling in the aggregate the aggregate principal amount of the
Equipment Notes to be purchased by the Trustee pursuant to each
of the Refunding Agreements on the Transfer Date, and evidencing
the entire ownership interest in the Trust. The Trustee shall
issue and sell such Certificates, in authorized denominations and
in such Fractional Undivided Interests, so as to result in the
receipt by the Trustee of consideration in an amount equal to the
aggregate principal amount of such Equipment Notes and,
concurrently therewith, the Trustee shall purchase, pursuant to
the terms and conditions of the Refunding Agreements, the
Equipment Notes at a purchase price equal to the amount of such
consideration so received. Except as provided in Sections 3.04
and 3.07 hereof, the Trustee shall not execute, authenticate or
deliver Certificates 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, the Company
shall deliver to the Trustee a Postponement Notice relating to
one or more Postponed Notes (which Postponement Notice may be
given by the Company only if one or more conditions to the
purchase of such Postponed Notes by the Trustee shall not have
been satisfied or waived pursuant to the related Refunding
Agreement), the Trustee shall postpone the purchase of such
Postponed Notes from the consideration received from the sale of
Certificates and shall promptly deposit funds in an amount equal
to the purchase price of such Postponed Notes (the "Escrowed
Funds") into an escrow account (the "Escrow Account") with the
Trustee to be maintained as a part of the Trust. The Escrowed
Funds so deposited shall be invested by the Trustee at the
direction and risk of, and for the benefit of, the Company in
Specified Investments (i) maturing no later than any scheduled
Transfer Date relating to the Certificates 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
any Postponed Notes will not be issued, with respect to the
portion of the Escrowed Funds relating to such Postponed Notes,
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 of the closing conditions
specified in the applicable Refunding 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 direction and risk of, and for the benefit of, the
Company 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
Company. The Company shall pay to the Trustee for deposit to the
Escrow Account an amount equal to any losses on such Specified
Investments as incurred. On the Initial Regular Distribution
Date, the Company will pay (in immediately available funds) to
the Trustee an amount equal to the interest that would have
accrued on any Postponed Notes 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 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 occurring more than 20 days following the date
of such notice (i) the Company shall pay to the Trustee for
deposit in the 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 the 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 plus the amount
paid by the Company pursuant to the immediately preceding
clause (i) to the Special Payments Account for distribution as a
Special Payment in accordance with the provisions hereof.
If, on the 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 Special Distribution Date occurring
more than 20 days following the Cut-off Date (i) the Company
shall pay to the Trustee for deposit in the Special Payments
Account, in immediately available funds, an amount equal to the
interest that would have accrued on Postponed Notes originally
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 the 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 Company pursuant to the immediately
preceding clause (i) to the Special Payments Account for
distribution as a Special Payment in accordance with the
provisions hereof.
Section 2.02. Acceptance by Trustee. The Trustee,
upon the execution and delivery of this Agreement, acknowledges
its acceptance of all right, title and interest in and to the
Equipment Notes acquired pursuant to Section 2.01 hereof and the
Refunding Agreements and declares that the Trustee holds and will
hold such right, title and interest, together with all other
property constituting the Trust Property, for the benefit of all
then present and future Certificateholders, upon the trusts
herein set forth. Subject to Section 7.14, the Trustee shall
take all actions reasonably necessary to effect the registration
of all such Equipment Notes in the name of the Subordination
Agent. By its payment for and acceptance of each Certificate
issued to it under this Agreement, each initial Certificateholder
as grantor of the Trust thereby joins in the creation and
declaration of the Trust.
Section 2.03. Limitation of Powers. The Trust is
constituted solely for the purpose of making the investment in
the Equipment Notes, 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. Title, Form, Denomination and Execution
of Certificates. (a) The Initial Certificates shall be known as
the "12.48% 1996-D Initial Pass Through Certificates" and the
Exchange Certificates shall be known as the "12.48% 1996-D
Exchange Pass Through Certificates", in each case, of the Trust.
Each Certificate will represent a fractional undivided interest
in the Trust and shall be substantially in the form set forth as
Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or 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 or as may, consistently herewith, be
determined by the officers executing such Certificates, as
evidenced by their execution of the Certificates. Any portion of
the text of any Certificate may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the
Certificate.
(b) The Initial Certificates shall be issued only in
fully registered form without coupons and only in denominations
of $100,000 or integral multiples of $1,000 in excess thereof,
except that one Certificate may be issued in a denomination of
less than $100,000. The Exchange Certificates will be issued in
denominations of $1,000 or integral multiples thereof. Each
Certificate shall be dated the date of its authentication. The
aggregate Fractional Undivided Interest of Certificates shall not
at any time exceed $51,300,000.
(c) The definitive Certificates shall be in registered
form and shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced
in any other manner, all as determined by the officers executing
such Certificates, as evidenced by their execution of such
Certificates.
Section 3.02. Restrictive Legends. (a) Subject to
Section 3.06, unless and until (i) an Initial Certificate is sold
under an effective Registration Statement or (ii) an Initial
Certificate is exchanged for an Exchange Certificate pursuant to
an effective Exchange Offer Registration Statement, in each case
as provided for in the Registration Rights Agreement, each
Initial Certificate shall bear the following legend (the "Private
Placement Legend") on the face thereof:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS
HELD BY CONTINENTAL AIRLINES, INC., THE TRUSTEE OR ANY
AFFILIATE OF ANY OF SUCH PERSONS RESELL OR OTHERWISE
TRANSFER THIS CERTIFICATE EXCEPT (A) TO CONTINENTAL
AIRLINES, INC., (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO
AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING $500,000 OR
MORE IN AGGREGATE PRINCIPAL AMOUNT OF CERTIFICATES AND THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS CERTIFICATE
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE),
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS CERTIFICATE WITHIN THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THIS CERTIFICATE OR THE
LAST DATE ON WHICH THIS CERTIFICATE WAS HELD BY CONTINENTAL
AIRLINES, INC., THE TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH
PERSONS THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. THE PASS THROUGH TRUST AGREEMENT
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS CERTIFICATE IN VIOLATION OF
THE FOREGOING RESTRICTIONS.
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT
IS NOT A PLAN TRANSFEREE (AS DEFINED IN THE PASS THROUGH
TRUST AGREEMENT) OR (B) IT IS AN INSURANCE COMPANY USING THE
ASSETS OF ITS GENERAL ACCOUNT TO ACQUIRE THIS CERTIFICATE,
AND THE CONDITIONS OF PROHIBITED TRANSACTION CLASS EXEMPTION
95-60 ISSUED BY THE U.S. DEPARTMENT OF LABOR HAVE BEEN AND
WILL CONTINUE TO BE SATISFIED IN CONNECTION WITH ITS
PURCHASE AND HOLDING OF THIS CERTIFICATE. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
Section 3.03. Authentication of Certificates. (a)
The Trustee shall duly execute, authenticate and deliver
Certificates in authorized denominations equalling in the
aggregate the aggregate principal amount of the Equipment Notes
to be purchased by the Trustee pursuant to the Refunding
Agreements and evidencing the entire ownership of the Trust.
(b) No Certificate shall be entitled to any benefit
under this Agreement or be valid or obligatory for any purpose,
unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Certificate
shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder.
Section 3.04. Transfer and Exchange. (a) 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 of this
Agreement a register (the "Register") for the Certificates in
which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of the
Certificates and of transfers and exchanges of the Certificates
as herein provided. The Trustee shall initially be the registrar
(the "Registrar") for the purpose of registering the Certificates
and transfers and exchanges of the Certificates as herein
provided. A Certificateholder may transfer a Certificate by
written application to the Registrar stating the name of the
proposed transferee and otherwise complying with the terms of
this Agreement, including providing a written certificate or
other evidence of compliance with any restrictions on transfer.
No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Certificateholder only upon,
final acceptance and registration of the transfer by the
Registrar in the Register. Prior to the registration of any
transfer by a Certificateholder as provided herein, the Trustee
shall treat the person in whose name the Certificate is
registered as the owner thereof for all purposes, and the Trustee
shall not be affected by notice to the contrary. When
Certificates are presented to the Registrar with a request to
register the transfer or to exchange them for an equal face
amount of Certificates of other authorized denominations, the
Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met. To
permit registrations of transfers and exchanges in accordance
with the terms, conditions and restrictions hereof, the Trustee
shall execute and authenticate Certificates at the Registrar's
request. No service charge shall be made for any registration of
transfer or exchange of the Certificates, but the Trustee may
require payment by the transferor of a sum sufficient to cover
any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or other
similar governmental charges payable upon exchanges pursuant to
Section 3.10 or 9.07).
Section 3.05. [Intentionally omitted.]
Section 3.06. Special Transfer Provisions. Unless and
until (i) an Initial Certificate is sold under an effective
Registration Statement, or (ii) an Initial Certificate is
exchanged for an Exchange Certificate pursuant to an effective
Exchange Offer Registration Statement, in each case pursuant to
the Registration Rights Agreement, the following provisions shall
apply to such Initial Certificates:
(a) Transfers to Non-QIB Institutional Accredited
Investors. With respect to the registration of any proposed
transfer of a Certificate to any Institutional Accredited
Investor which is not a QIB prior to three years after the later
of the original issuance of the Certificate or the last day on
which the Certificate was held by the Company, the Trustee or any
Affiliate of any such Persons, the Registrar shall register such
transfer (A) if the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit D
hereto and (B) if the aggregate Fractional Undivided Interest of
the Certificates being transferred is greater than $500,000. The
Registrar shall promptly send a copy of such certificate to the
Company. The Trustee shall cancel such Certificates so
transferred and issue new Certificates to the transferee in
accordance with Section 3.04.
(b) Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed transfer
of an Initial Certificate to a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has
checked the box provided for on the form of Initial
Certificate stating, or has otherwise advised the Trustee
and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee
who has signed the certification provided for on the form of
Initial Certificate stating, or has otherwise advised the
Trustee and the Registrar in writing, that it is purchasing
the Initial Certificate for its own account or an account
with respect to which it exercises sole investment
discretion and that it, or the Person on whose behalf it is
acting with respect to any such account, is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Trust and/or the
Company as it has requested pursuant to Rule 144A or has
determined not to request such information and that it is
aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) Upon receipt by the Registrar of the documents
referred to in clause (i) above, the Registrar shall reflect
on its books and records the date of such transfer and the
Trustee shall cancel such Certificates so transferred and
issue new Certificates to the transferee in accordance with
Section 3.04.
(c) [intentionally omitted.]
(d) [intentionally omitted.]
(e) Transfers to Non-U.S. Persons at Any Time. The
following provisions shall apply with respect to any registration
of any transfer of an Initial Certificate to a Non-U.S. Person:
(i) The Registrar shall register any proposed transfer
to any Non-U.S. Person upon receipt of a certificate
substantially in the form of Exhibit C from the proposed
transferor. The Registrar shall promptly send a copy of
such certificate to the Company.
(ii) Upon receipt by the Registrar of the documents, if
any, required by paragraph (i) the Registrar shall reflect
on its books and records the date of such transfer and the
Trustee shall cancel the Certificate so transferred and
issue new Certificates to the transferee in accordance with
Section 3.04.
(f) Private Placement Legend. Upon the transfer,
exchange or replacement of Certificates not bearing the Private
Placement Legend, the Registrar shall deliver Certificates that
do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Certificates bearing the Private
Placement Legend, the Registrar shall deliver only Certificates
that bear the Private Placement Legend unless either (i) the
circumstances contemplated by paragraph (e)(i) of this
Section 3.06 exist or (ii) there is delivered to the Registrar an
Opinion of Counsel to the effect that neither such legend nor the
related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(g) General. By its acceptance of any Certificate
bearing the Private Placement Legend, each Holder of such a
Certificate acknowledges the restrictions on transfer of such
Certificate set forth in this Agreement and agrees that it will
transfer such Certificate only as provided in this Agreement.
The Registrar shall not register a transfer of any Certificate
unless such transfer complies with the restrictions on transfer
of such Certificate set forth in this Agreement. In connection
with any transfer of Certificates, each Certificateholder agrees
by its acceptance of the Certificates to furnish the Registrar or
the Trustee such certifications, legal opinions or other
information as either of them may reasonably require to confirm
that such transfer is being made pursuant to an exemption from,
or a transaction not subject to, the registration requirements of
the Securities Act; provided that the Registrar shall not be
required to determine the sufficiency of any such certifications,
legal opinions or other information.
Until such time as no Certificates remain Outstanding,
the Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.05 or
this Section 3.06. The Trustee, if not the Registrar at such
time, shall have the right to inspect and make copies of all such
letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to
the Registrar.
Section 3.07. 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 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, 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 3.07, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee and the
Registrar) connected therewith.
Any duplicate Certificate issued pursuant to this
Section 3.07 shall constitute conclusive evidence of the
appropriate Fractional Undivided Interest in the 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 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 3.08. 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 3.09. 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, 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 3.10. Temporary Certificates. Until
definitive Certificates are ready for delivery, the Trustee shall
authenticate temporary Certificates. Temporary Certificates
shall be substantially in the form of definitive Certificates but
may have insertions, substitutions, omissions and other
variations determined to be appropriate by the officers executing
the temporary Certificates, as evidenced by their execution of
such temporary Certificates. If temporary Certificates are
issued, the Trustee will cause definitive Certificates to be
prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the
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 authorized
denominations. Until so exchanged, the temporary Certificates
shall be entitled to the same benefits under this Agreement as
definitive Certificates.
Section 3.11. Limitation of Liability for Payments.
All payments and distributions made to Certificateholders 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 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 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.
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 a Certificate Account as one or more
interest-bearing accounts. The Trustee shall hold the
Certificate Account in trust for the benefit of the
Certificateholders, 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 the Intercreditor
Agreement, the Trustee upon receipt thereof shall immediately
deposit the aggregate amount of such Scheduled Payment in the
Certificate Account.
(b) The Trustee shall establish and maintain on
behalf of the Certificateholders a Special Payments Account as
one or more interest-bearing accounts. The Trustee shall hold
the Special Payments Account in trust for the benefit of the
Certificateholders 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, the Trustee, upon
receipt thereof, shall immediately deposit the aggregate amount
of such Special Payments in the Special Payments Account.
(c) The Trustee shall 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 or as soon thereafter as the Trustee has confirmed receipt
of the payment of all or any part of the Scheduled Payments due
on such date, the Trustee shall distribute out of the Certificate
Account the entire amount deposited therein pursuant to
Section 4.01(a), together with interest thereon, if any. There
shall be so distributed to each Certificateholder of record on
the Record Date with respect to such Regular Distribution Date
(other than as provided in Section 11.01 concerning the final
distribution) either by wire transfer, in immediately available
funds, to the account of such Certificateholder at a bank or
other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Registrar
appropriate written instructions at least five Business Days
prior to the applicable Distribution Date and such
Certificateholder's Certificates in the aggregate evidence
Fractional Undivided Interests of not less than $1,000,000, or,
if not, 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
Certificate Account.
(b) On each Special Distribution Date with respect to
any Special Payment or as soon thereafter as the Trustee has
confirmed receipt of any Special Payments, the Trustee shall
distribute out of the Special Payments Account the entire amount
of such Special Payment deposited therein pursuant to
Section 4.01(b), together with interest thereon, if any. There
shall be so distributed to each Certificateholder of record on
the Record Date with respect to such Special Distribution Date
(other than as provided in Section 11.01 concerning the final
distribution) either by wire transfer, in immediately available
funds, to the account of such Certificateholder at a bank or
other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Registrar
appropriate written instructions at least five Business Days
prior to the applicable Distribution Date and such
Certificateholder's Certificates in the aggregate evidence
Fractional Undivided Interests of not less than $1,000,000, or,
if not, 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
Special Payments Account on account of such Special Payment.
(c) The Trustee shall, at the expense of the Company,
cause notice of each Special Payment to be mailed to each
Certificateholder at his address as it appears in the Register.
In the event of redemption or purchase of Equipment Notes held in
the Trust, such notice shall be mailed not less than 20 days
prior to the Special Distribution Date for the Special Payment
resulting from such redemption or purchase, which Special
Distribution Date shall be the date of such redemption or
purchase. In the case of any other Special Payments, such notice
shall be mailed as soon as practicable after the Trustee has
confirmed that it has received funds for such Special Payment,
stating the Special Distribution Date for such Special Payment
which shall occur not less than 20 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 for each $1,000
face amount Certificate (taking into account any payment to
be made by the Company pursuant to Section 2.01(b)) and the
amount thereof constituting principal, premium, if any, and
interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date
as a Regular Distribution Date, the total amount to be
received on such date for each $1,000 face amount
Certificate.
If the amount of premium, if any, payable upon the redemption or
purchase of an Equipment Note has not been calculated at the time
that the Trustee mails notice of a Special Payment, it shall be
sufficient if the notice sets forth the other amounts to be
distributed and states that any premium received will also be
distributed.
If any redemption of the Equipment Notes held in the
Trust is cancelled, the Trustee, as soon as possible after
learning thereof, shall cause notice thereof to be mailed to each
Certificateholder at its address as it appears on the Register.
Section 4.03. Statements to Certificateholders. (a)
On each Distribution Date, the Trustee will include with each
distribution to Certificateholders of a Scheduled Payment or
Special Payment, as the case may be, a statement setting forth
the following information (per $1,000 face amount Certificate as
to (i) and (ii) below):
(i) the amount of such distribution allocable to
principal and the amount allocable to premium, if any;
(ii) the amount of such distribution allocable to
interest; and
(iii) the Pool Balance and the Pool Factor.
With respect to the Certificates registered in the name
of Cede & Co., as nominee for the Depositary, on the Record Date
prior to each Distribution Date, the Trustee will request from
the Depositary a Securities Position Listing setting forth the
names of all Agent Members reflected on the Depositary's books as
holding interests in the Certificates on such Record Date. On
each Distribution Date, the Trustee will mail to each such Agent
Member the statement described above and will make available
additional copies as requested by such Agent Member 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
Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar
year, for such portion of such year, and such other items as are
readily available to the Trustee and which a Certificateholder
shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax
returns. Such statement and such other items shall be prepared
on the basis of information supplied to the Trustee by the Agent
Members and shall be delivered by the Trustee to such Agent
Members to be available for forwarding by such Agent Members 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 to be promptly
distributed 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. 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.
Section 1110), with respect to the Leases;
(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 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
this Agreement, the Other Pass Through Trust Agreements, the
Refunding Agreements, and each other Refunding Document 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 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 Refunding
Document 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 Default under any Indenture, the Trustee may, to the
extent it is the Controlling Party at such time (as determined
pursuant to the Intercreditor Agreement), direct the exercise of
remedies as provided in the Intercreditor Agreement.
(b) Purchase Rights of Certificateholders. At any
time after the occurrence and during the continuation of a
Triggering Event each Certificateholder shall have the right
(which shall not expire upon any purchase of the Class A
Certificates pursuant to Section 6.01(b)(i) of the Class B Trust
Agreement or any purchase of the Class A Certificates and the
Class B Certificates pursuant to Section 6.01(b)(i) of the Class
C Trust Agreement) to purchase all, but not less than all, of the
Class A Certificates, the Class B Certificates and the Class C
Certificates by notifying in writing each of the Other Trustees
and each other Certificateholder of such Certificateholder's
intention to purchase the Class A Certificates, the Class B
Certificates and the Class C Certificates ten days after the date
of such notification, provided that (A) if prior to the end of
such ten-day period any other Certificateholder notifies such
purchasing Certificateholder that such other Certificateholder
wants to participate in such purchase, then such other
Certificateholder may join with the purchasing Certificateholder
to purchase all, but not less than all, of the Class A
Certificates, the Class B Certificates and the Class C
Certificates pro rata based on the principal amount of the
Certificates held by each such Certificateholder and (B) if prior
to the end of such ten- day period any other Certificateholder
fails to notify the purchasing Certificateholder of such other
Certificateholder's desire to participate in such a purchase,
then such other Certificateholder shall lose its right to
purchase the Class A Certificates, the Class B Certificates and
the Class C Certificates pursuant to this Section 6.01(b).
The purchase price with respect to each Class of
Certificates shall be equal to the Pool Balance of such Class of
Certificates, together with accrued and unpaid interest thereon
to the date of such purchase, without premium, but including any
other amounts then due and payable to the Certificateholders of
such Class under the Other Pass Through Trust Agreement for such
Class, the Intercreditor Agreement or any other Refunding
Document or on or in respect of the Certificates of such Class;
provided, however, that no such purchase of Certificates of any
Class shall be effective unless the purchaser shall certify to
the Other Trustee for such Class that contemporaneously with such
purchase, such purchaser is purchasing, pursuant to the terms of
this Agreement and the Other Pass Through Trust Agreements, the
Class A Certificates, the Class B Certificates and the Class C
Certificates. Each payment of the purchase price of the
Certificates of any Class referred to in the first sentence
hereof shall be made to an account or accounts designated by the
Other Trustee for such Class and each such purchase shall be
subject to the terms of this Section 6.01(b). The Class A
Certificates, the Class B Certificates and the Class C
Certificates will be deemed to be purchased on the date payment
of the purchase price is made notwithstanding the failure of the
Certificateholders of any Class to deliver any Certificates of
such Class (whether in the form of Physical Certificates or
beneficial interests in Global Certificates (as defined in the
Other Pass Through Trust Agreement for such Class) and, upon such
a purchase, (i) the only rights of the Certificateholders of such
Class will be to deliver the Certificates of such Class to the
purchaser and receive the purchase price for such Certificates of
such Class and (ii) if the purchaser shall so request, such
Certificateholder will comply with all the provisions of Section
3.04 of the Other Pass Through Trust Agreement for such Class to
enable new Certificates of such Class to be issued to the
purchaser in such denominations as it shall request. All charges
and expenses in connection with the issuance of any such new
Certificates of any Class shall be borne by the purchaser
thereof.
As used in this Section 6.01(b), the terms
"Certificateholder", "Class", "Class A Certificate", "Class B
Certificate" and "Class C Certificate", shall have the respective
meanings assigned to such terms in the Intercreditor Agreement.
Section 6.02. [Intentionally omitted.].
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, 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 the
Intercreditor Agreement and the Refunding Documents (subject to
the rights of the applicable Owner Trustee or Owner Participant
to cure any such failure in accordance with Section 4.03 of 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 the Intercreditor Agreement, the
Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in
interest in the 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 the Trust or pursuant to
the terms of the Intercreditor Agreement, or exercising any trust
or power conferred on the Trustee under this Agreement or the
Intercreditor Agreement, including any right of the Trustee as
Controlling Party under the Intercreditor Agreement or as holder
of the Equipment Notes, provided that
(1) such Direction shall not 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 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 the
Intercreditor Agreement, the Certificateholders holding
Certificates 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
Default under any 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, or
(2) in the payment of the principal of (premium, if
any) or interest on the Equipment Notes, or
(3) in respect of a covenant or provision hereof
which under Article X cannot be modified or amended without
the consent of each Certificateholder holding an Outstanding
Certificate affected thereby.
Upon any such waiver, such default shall cease to exist
with respect to the Certificates 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 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 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 the Intercreditor Agreement,
the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.02 hereof on the
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 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 evidencing
Fractional Undivided Interests aggregating not less than 25%
of the 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 such an 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
evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust.
It is understood and intended that no one or more of
the Certificateholders shall have any right in any manner
whatsoever hereunder or under the Certificates to (i) surrender,
impair, waive, affect, disturb or prejudice any property in the
Trust Property or the lien of any Indenture on any property
subject thereto, or the rights of the Certificateholders or the
holders of the Equipment Notes, (ii) obtain or seek to obtain
priority over or preference with respect to any other such
Certificateholder 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
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
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.
ARTICLE VII
THE TRUSTEE
Section 7.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default, the
Trustee undertakes to perform such duties 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 has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, 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 its 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 wilful
misconduct, except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section; 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 Trust 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.
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, the Trustee shall transmit by mail to the Company, the
Owner Trustees, the Owner Participants, the Loan Trustees and the
Certificateholders 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 on 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 determine that
the withholding of such notice is in the interests of the
Certificateholders. For the purpose of this Section, the term
"default" means any event that is, or after notice or lapse of
time or both would become, an Event of Default.
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 written
description of the subject matter thereof accompanied by an
Officer's Certificate and an Opinion of Counsel as provided
in Section 1.02 of this Agreement;
(c) whenever in the administration of this 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 Owner Trustee or any 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 at the Direction of any of the Certificateholders
pursuant to this 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 perform any duties under this
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;
(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 evidencing Fractional Undivided
Interests aggregating not less than a majority in interest
in the 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; 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, 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 Agreement, any Refunding
Agreement, any Equipment Notes, the Certificates or any other
Refunding Document, except that the Trustee hereby represents and
warrants that this Agreement has been, and the Intercreditor
Agreement, the Registration Rights Agreement, each Refunding
Agreement and each Certificate will be, executed, authenticated
and delivered by one of its officers who is duly authorized to
execute, authenticate 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, the 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 hereunder 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);
(2) except as otherwise expressly provided herein, 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 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 the Trustee pursuant to Section 10.1
of the Participation Agreements (as amended by the
Amendments No. 2 thereto dated as of the date hereof) (as
defined in the Intercreditor Agreement).
The Trustee shall be entitled to reimbursement from,
and shall have a lien prior to the Certificates upon, the Trust
Property 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. 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
circumstances thereof to all Certificateholders as their names
and addresses appear in the Register.
Section 7.08. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder 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, the Trustee shall resign immediately as
Trustee 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 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 by
giving prior written notice thereof to the Company, the
Authorized Agents, the Owner Trustees and the Loan Trustees. If
an instrument of acceptance by a successor Trustee shall not have
been delivered to the Company, the Authorized Agents, the Owner
Trustees, the Loan 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 holding Certificates
evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the Trust delivered to the Trustee
and to the Company, the Owner Trustees and the Loan Trustees.
(d) If at any time:
(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, with the consent of the
Owner Participants, which consent may not be unreasonably
withheld, remove the Trustee or (ii) any Certificateholder 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.
(e) If a Responsible Officer of the Trustee shall
obtain actual knowledge of an Avoidable Tax 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
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 in a
jurisdiction where there are no Avoidable Taxes.
(f) If the Trustee shall resign, be removed or become
incapable of acting or if a vacancy shall occur in the office of
the Trustee for any cause, the Company shall promptly appoint a
successor Trustee. If, within one year after such resignation,
removal or incapability, or other occurrence of such vacancy, a
successor Trustee shall be appointed by Direction of the
Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in
interest in the Trust delivered to the Company, the Owner
Trustees, the Loan Trustees and the retiring Trustee, and the
Company approves such appointment, which approval shall not be
unreasonably withheld, then the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede the successor Trustee
appointed as provided above. If no successor Trustee shall have
been so appointed as provided above and accepted appointment in
the manner hereinafter provided, any Certificateholder who has
been a bona fide Certificateholder 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.
(g) The successor Trustee 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 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, the Authorized Agents, the Owner Trustees
and the Loan Trustees and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee 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 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.
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 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) There
shall at all times be maintained an office or agency in the
location set forth in Section 12.03 where Certificates 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 (e.g., the Certificates shall be represented by
Physical 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, the Owner Trustees, the Loan Trustees (in the case of
any Owner Trustee or Loan Trustee, at its address specified in
the Refunding Agreements or such other address as may be notified
to the Trustee) and the Certificateholders. 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. 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, if the Trustee shall be acting as
the Registrar or Paying Agent hereunder, 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. 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
hereunder, if such successor corporation is otherwise eligible
under this Section, 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,
the Owner Trustees and the 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 (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. The Company shall give written notice of any such
appointment made by it to the Trustee, the Owner Trustees and the
Loan Trustees; and in each case the Trustee shall mail notice of
such appointment to all Certificateholders as their names and
addresses appear on the Register.
(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.
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 Name
of Subordination Agent. The Trustee agrees that all Equipment
Notes to be purchased by the Trust shall be issued in the name of
the Subordination Agent or its nominee and held by the
Subordination Agent in trust for the benefit of the
Certificateholders, or, if not so held, the 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 7.15. Representations and Warranties of
Trustee. 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, the
Intercreditor Agreement, the Registration Rights Agreement
and the Refunding Agreements and has taken all necessary
action to authorize the execution, delivery, and performance
by it of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding Agreements;
(c) the execution, delivery and performance by the
Trustee of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding Agreements
(i) will not violate any provision of 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, or (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, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding 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, the Intercreditor Agreement, the
Registration Rights Agreement and the Refunding 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 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. The Trustee, as trustee of the 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
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, to withhold such
amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Certificateholders, 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 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 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 which is attributable to the
Trustee either (i) in its individual capacity and which is
unrelated to the transactions contemplated by this Agreement, the
Intercreditor Agreement, the Refunding Agreements or the
Refunding 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.
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, 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, 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 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 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 the Certificates, the Trustee shall
transmit to the Certificateholders, 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 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;
(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 or her 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 any time
and from time to time, enter into one or more agreements
supplemental hereto or, if applicable, to the Intercreditor
Agreement, in form satisfactory to the Trustee, for any of the
following purposes:
(1) 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
(2) to add to the covenants of the Company for the
benefit of the Certificateholders, or to surrender any right
or power in this Agreement conferred upon the Company; or
(3) to correct or supplement any provision in this
Agreement or the Intercreditor Agreement which may be
defective or inconsistent with any other provision herein or
to cure any ambiguity or correct any mistake or to modify
any other provision with respect to matters or questions
arising under this Agreement or the Intercreditor Agreement,
provided that any such action shall not materially adversely
affect the interests of the Certificateholders; or
(4) to modify, eliminate or add to the provisions of
this Agreement to such extent as shall be necessary to
continue the qualification of this Agreement (including any
supplemental agreement) under the Trust Indenture Act or
under any similar Federal statute hereafter enacted, and to
add to this Agreement 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 instrument was executed or any corresponding provision
in any similar Federal statute hereafter enacted; or
(5) to evidence and provide for the acceptance of
appointment under this Agreement by the Trustee of a
successor Trustee and to add to or change any of the
provisions of this Agreement as shall be necessary to
provide for or facilitate the administration of the Trust,
pursuant to the requirements of Section 7.10; or
(6) to provide the information required under
Section 7.12 and Section 12.03 as to the Trustee; or
(7) to modify or eliminate provisions relating to the
transfer or exchange of Exchange Certificates or the Initial
Certificates upon consummation of the Exchange Offer (as
defined in the Registration Rights Agreement) or
effectiveness of the Registration Statement.
Section 9.02. Supplemental Agreements with Consent of
Certificateholders. With the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the 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, which consent shall not be unreasonably
withheld), and the Trustee (subject to Section 9.03) shall, enter
into an agreement or agreements for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement or any Refunding Agreement to the
extent applicable to such Certificateholders or of modifying in
any manner the rights and obligations of such Certificateholders
under this Agreement, the Intercreditor Agreement, the
Registration Rights Agreement or any Refunding Agreement;
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 the Trust or distributions that are
required to be made herein on any Certificate, or change any
date of payment on any Certificate, or change the place of
payment where, or the coin or currency in which, any
Certificate 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 except as permitted by this
Agreement, or otherwise deprive such Certificateholder of
the benefit of the ownership of the Equipment Notes in the
Trust; or
(3) reduce the percentage of the aggregate Fractional
Undivided Interests of the Trust which is required for any
such supplemental agreement, or reduce such 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
(4) waive, amend or modify Section 2.4, 3.2 or 3.3 of
the Intercreditor Agreement in a manner adverse to the
Certificateholders; 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 affected thereby.
It shall not be necessary for any Direction of
Certificateholders under this Section 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 Agreement, 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
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 Agreement shall be modified in
accordance therewith, and such supplemental agreement shall form
a part of this Agreement for all purposes; and every Holder of a
Certificate theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
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 authenticated and
delivered after the execution of any supplemental agreement
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 after proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND REFUNDING DOCUMENTS
Section 10.01. Amendments and Supplements to
Indentures and Other Refunding Documents. In the event that the
Trustee, as holder of any Equipment Note in trust for the benefit
of the Certificateholders or as Controlling Party under the
Intercreditor Agreement, receives a request for a consent to any
amendment, modification, waiver or supplement under any Indenture
or other Refunding Document, the Trustee shall forthwith send a
notice of such proposed amendment, modification, waiver or
supplement to each Certificateholder registered on the Register
as of the date of such notice. The Trustee shall request from
the Certificateholders a Direction as to (a) whether or not to
take or refrain from taking any action which a holder of such
Equipment Note has the option to direct, (b) whether or not to
give or execute any waivers, consents, amendments, modifications
or supplements as a holder of such Equipment Note and (c) how to
vote any Equipment 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, the Trustee shall vote for or give consent to any
such action with respect to such Equipment Note in the same
proportion as that of (i) 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 (ii) the
aggregate face amount of all Outstanding Certificates. 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 two Business
Days before the Trustee directs such action or casts such vote or
gives such consent. Notwithstanding the foregoing, but subject
to Section 6.04 and the Intercreditor Agreement, the Trustee may,
in its own discretion and at its own direction, consent and
notify the relevant Loan Trustee of such consent to any
amendment, modification, waiver or supplement under the relevant
Indenture or any other Refunding Document, if an Event of Default
hereunder shall have occurred and be continuing, or if such
amendment, modification or waiver will not adversely affect the
interests of the Certificateholders.
ARTICLE XI
TERMINATION OF TRUST
Section 11.01. Termination of the Trust. The
respective obligations and responsibilities of the Company and
the Trustee with respect to the Trust shall terminate upon the
distribution to all Holders of Certificates and the Trustee of
all amounts required to be distributed to them pursuant to this
Agreement and the disposition of all property held as part of the
Trust Property; provided, however, that in no event shall the
Trust continue beyond one hundred ten (110) years following the
date of the earliest execution of this Trust Agreement.
Notice of any termination, specifying the Regular
Distribution Date (or Special Distribution Date, as the case may
be) upon which the Certificateholders may surrender their
Certificates to the Trustee for payment of the final Distribution
Date and cancellation, shall be mailed promptly by the Trustee to
Certificateholders not earlier than the 60th day and not later
than the 20th day next preceding such final Distribution Date
specifying (A) the Regular Distribution Date (or Special
Distribution Date, as the case may be) upon which the proposed
final payment of the Certificates will be made upon presentation
and surrender of Certificates at the office or agency of the
Trustee therein specified, (B) the amount of any such proposed
final payment, and (C) that the Record Date otherwise applicable
to such 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 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. Upon presentation and surrender of
the Certificates in accordance with such notice, the Trustee
shall cause to be distributed to Certificateholders such final
payments.
In the event that all of the Certificateholders 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 to surrender their Certificates for
cancellation and receive the final distribution with respect
thereto. No additional interest shall accrue on the Certificates
after the Regular Distribution Date (or Special Distribution
Date, as the case may be) specified in the first written notice.
In the event that any money held by the Trustee for the payment
of distributions on the Certificates shall remain unclaimed for
two years (or such lesser time as the Trustee shall be satisfied,
after sixty days' notice from the Company, is one month prior to
the escheat period provided under applicable law) after the final
distribution date with respect thereto, the Trustee shall pay to
each Loan Trustee the appropriate amount of money relating to
such Loan Trustee and shall give written notice thereof to the
related Owner Trustees, the Owner Participants and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of
Certificateholders. The death or incapacity of any
Certificateholder shall not operate to terminate this Agreement
or the 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. Certificates Nonassessable and Fully
Paid. Except as set forth in the last sentence of this Section
12.02, Certificateholders shall not be personally liable for
obligations of the Trust, the Fractional Undivided Interests
represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and
Certificates, upon authentication thereof by the Trustee pursuant
to Section 3.03, are and shall be deemed fully paid. No
Certificateholder shall have any right (except as expressly
provided herein) to vote or in any manner otherwise control the
operation and management of the Trust Property, the Trust, or the
obligations of the parties hereto, nor shall anything set forth
herein, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to
time as partners or members of an association. Neither the
existence of the Trust nor any provision herein 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. Notices. (a) Unless otherwise
specifically provided herein, all notices required under the
terms and provisions of this Agreement 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, to:
Continental Airlines, Inc.
2929 Allen Parkway
Houston, TX 77019
Attention: Chief Financial Officer and
General Counsel
Facsimile: (713) 523-2831
if to the Trustee, to:
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
shall be mailed by first-class mail to the addresses for
Certificateholders shown on the Register kept by the Registrar.
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.
(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, it shall mail a copy to the Trustee and
to the Paying Agent 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 12.04. Governing Law. THIS AGREEMENT HAS BEEN
DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT AND THE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS-OF-LAW PRINCIPLES.
Section 12.05. 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 Trust, or of the Certificates or the rights of the
Certificateholders thereof.
Section 12.06. 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.
Section 12.07. 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 12.08. 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 12.09. Benefits of Agreement. Nothing in this
Agreement or in the Certificates, express or implied, shall give
to any Person, other than the parties hereto and their successors
hereunder, and the Certificateholders, any benefit or any legal
or equitable right, remedy or claim under this Agreement.
Section 12.10. Legal Holidays. In any case where any
Regular Distribution Date or Special Distribution Date relating
to any Certificate shall not be a Business Day, 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 12.11. 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 12.12. Intention of Parties. The parties
hereto intend that the 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
REGISTERED
No. ______________
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, ANY PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS CERTIFICATE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT
WITHIN THREE YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS CERTIFICATE OR THE LAST DATE ON WHICH
THIS CERTIFICATE WAS HELD BY CONTINENTAL AIRLINES,
INC., THE TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH
PERSONS RESELL OR OTHERWISE TRANSFER THIS CERTIFICATE
EXCEPT (A) TO CONTINENTAL AIRLINES, INC., (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL
ACCREDITED INVESTOR PURCHASING $500,000 OR MORE IN
AGGREGATE PRINCIPAL AMOUNT OF CERTIFICATES AND THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS CERTIFICATE (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS CERTIFICATE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS CERTIFICATE WITHIN
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF
THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS
CERTIFICATE WAS HELD BY CONTINENTAL AIRLINES, INC., THE
TRUSTEE OR ANY AFFILIATE OF ANY OF SUCH PERSONS THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER
AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. THE PASS THROUGH TRUST
AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT
IS NOT A PLAN TRANSFEREE (AS DEFINED IN THE PASS THROUGH
TRUST AGREEMENT) OR (B) IT IS AN INSURANCE COMPANY USING THE
ASSETS OF ITS GENERAL ACCOUNT TO ACQUIRE THIS CERTIFICATE,
AND THE CONDITIONS OF PROHIBITED TRANSACTION CLASS EXEMPTION
95-60 ISSUED BY THE U.S. DEPARTMENT OF LABOR HAVE BEEN AND
WILL CONTINUE TO BE SATISFIED IN CONNECTION WITH ITS
PURCHASE AND HOLDING OF THIS CERTIFICATE. THE PASS THROUGH
TRUST AGREEMENT CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
CONTINENTAL AIRLINES 1996-D PASS THROUGH TRUST
12.48% Continental Airlines [Initial] [Exchange]
Pass Through Certificate
Series 1996-D
Final Distribution Date: October 15, 2013
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes each secured
by an Aircraft leased to Continental Airlines, Inc.
$_________ 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 1996-D Pass Through Trust (the "Trust") created pursuant
to a Pass Through Trust Agreement, dated as of January 31, 1996
(the "Agreement"), between Wilmington Trust Company (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 "12.48% Continental Airlines [Initial]
[Exchange] Pass Through Certificates Series 1996-D" (herein
called the "Certificates"). This Certificate is issued under and
is subject to the terms, provisions, and conditions of the
Agreement. By virtue of its acceptance hereof the
Certificateholder of this Certificate assents to and agrees to be
bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment
Notes and all rights of the Trust to receive payments under the
Intercreditor Agreement (the "Trust Property"). Each issue of
the Equipment Notes is secured by, among other things, a security
interest in the 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 assets or property
other than the Trust Property.
Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, from and to the extent
of funds then available to the Trustee, there will be distributed
on each January 15, April 15, July 15 and October 15 (a "Regular
Distribution Date"), commencing on April 15, 1996, 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.
[The Holder of this Certificate is entitled to the
benefits of the Registration Rights Agreement, dated as of
January 31, 1996, among the Company, the Trustee and the Initial
Purchasers named therein (the "Registration Rights Agreement").
In the event that either (a) (x) the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement) is
not filed with the SEC on or prior to the 120th calendar day
following the date of the Agreement, or (y) the Exchange Offer
Registration Statement has not been declared effective on or
prior to the 60th calendar day following the filing thereof with
the SEC or (z) the Exchange Offer (as defined in the Registration
Rights Agreement) is not consummated on or prior to the 30th
calendar day following the effectiveness of the Exchange Offer
Registration Statement (in each case other than under certain
circumstances described in the Registration Rights Agreement) or
(b) a Shelf Registration Statement (as defined in the
Registration Rights Agreement) is required to be filed with the
SEC pursuant to the Registration Rights Agreement, and such Shelf
Registration Statement is not declared effective on or prior to
the 210th calendar day following the date of the Agreement (each,
a "Registration Default"), the interest rate per annum borne by
the Equipment Notes shall be increased by (1) 0.25% from and
including the day following such Registration Default to but
excluding the 90th day following such Registration Default and
(2) 0.50% thereafter; provided, however, that such increase shall
cease to be in effect from and including the date on which such
Registration Default has been cured. In the event that the Shelf
Registration Statement ceases to be effective at any time during
the period specified by the Registration Rights Agreement for
more than 60 days, whether or not consecutive, during any 12-
month period, the interest rate per annum borne by the Equipment
Notes shall be increased by 0.50% from the 61st day of the
applicable 12-month period such Shelf Registration Statement
ceases to be effective until such time as the Shelf Registration
Statement again becomes effective.]
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 AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
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.
Dated: CONTINENTAL AIRLINES
1996-D PASS THROUGH TRUST
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as Trustee
Attest: By: ______________________
Name:
Title:
____________________
Authorized Signature
_____________
* To be included only on each Initial Certificate
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
not in its individual
capacity but
solely as Trustee
By: ___________________
Authorized
Officer
[REVERSE OF CERTIFICATE]
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 of their affiliates. The
Certificates are limited in right or payment, all as more
specifically set forth on the face hereof and in the Agreement.
All payments or distributions made to Certificateholders under
the Agreement shall be made only from the Trust Property and only
to the extent that the Trustee shall have sufficient income or
proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each
Certificateholder of this Certificate, by its acceptance hereof,
agrees that it will look solely to the income and proceeds from
the Trust Property to the extent available for distribution to
such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds, and
duties evidenced hereby. A copy of the Agreement may be examined
during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the
rights and obligations of the Company and the rights of the
Certificateholders under the Agreement at any time by the Company
and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust.
Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and
upon all future Certificateholders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made
upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of
the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein 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, in the Borough of Manhattan, the City of New
York, 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
[$100,000]* [$1,000]** Fractional Undivided Interest and integral
multiples of $1,000 in excess thereof [except that one
Certificate may be in a denomination of less than $100,000]*. 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 by the Holder 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.
_____________________
* To be included only on each Initial Certificate.
** To be included only on each Exchange Certificate.
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder
hereby sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
____________________
____________________
please print or typewrite name and address including zip code of
assignee
____________________
the within Certificate and all rights thereunder, hereby
irrevocably constituting and appointing
____________________
attorney to transfer said Certificate on the books of the Trustee
with full power of substitution in the premises.
In connection with any transfer of this Certificate
occurring prior to the date that is the earlier of the date of an
effective Registration Statement or __________, 1999, the
undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[ ] (a) this Certificate is being transferred in compliance
with the exemption from registration under the
Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
or
[ ] (b) this Certificate is being transferred other than in
accordance with (a) above and documents are being
furnished that comply with the conditions of transfer
set forth in this Certificate and the Agreement.
If neither of the foregoing boxes is checked, the Trustee or
other Registrar shall not be obligated to register this
Certificate in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 3.06 of the
Agreement shall have been satisfied.
Date:____________ [Name of Transferor]
______________________________
NOTE: The signature must
correspond with the name as
written upon the face of the
within-mentioned instrument in
every particular, without
alteration or any change
whatsoever.
Signature Guarantee: _____________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is
purchasing this Certificate for its own account or an account
with respect to which it exercises sole investment discretion and
that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933,
as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: _____________ _____________________________
NOTE: To be executed by an
executive officer.
EXHIBIT B
FORM OF CERTIFICATE FOR UNLEGENDED CERTIFICATES
[Date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996 Pass Through Trust,
Class D Pass Through Trust Certificates
(the "Certificates")
Dear Sirs:
This letter relates to U.S. $__________ Fractional
Undivided Interest of Certificates represented by a Certificate
(the "Legended Certificate") which bears a legend outlining
restrictions upon transfer of such Legended Certificate.
Pursuant to Section 3.01 of the Pass Through Trust Agreement
relating to the Certificates dated as of January 31, 1996 (the
"Trust Agreement"), between Continental Airlines, Inc.
("Continental") and you, we hereby certify that we are (or we
will hold such securities on behalf of) a person outside the
United States to whom the Certificates could be transferred in
accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are
hereby requested to exchange the legended certificate for an
unlegended certificate representing an identical principal amount
of Certificates, all in the manner provided for in the Trust
Agreement.
You and Continental are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters
covered hereby. Terms used in this certificate have the meanings
set forth in Regulation S.
Very truly yours,
[Name of
Certificateholder]
By:______________________
Authorized Signature
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
[date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996-D Pass Through
Trust (the "Trust"), 12.48% Continental
Airlines Pass Through Certificates
Series 1996-D (the "Certificates")
Sirs:
In connection with our proposed sale of $_______
Fractional Undivided Interest of the Certificates, we confirm
that such sale has been effected pursuant to and in accordance
with Regulation S under the Securities Act of 1933, as amended,
and, accordingly, we represent that:
(1) the offer of the Certificates was not made to a
person in the United States;
(2) either (a) at the time the buy order was
originated, the transferee was outside the United States or
we and any person acting on our behalf reasonably believed
that the transferee was outside the United States or (b) the
transaction was executed in, on or through the facilities of
a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction
has been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
and
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted
period and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of
Regulation S are applicable thereto, we confirm that such sale
has been made in accordance with the applicable provisions of
Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You and Continental Airlines, Inc. are entitled to rely
upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_______________________
Authorized Signature
EXHIBIT D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS TO NON-QIB INSTITUTIONAL
ACCREDITED INVESTORS
[date]
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Re: Continental Airlines 1996-D Pass Through
Trust (the "Trust"), 12.48% Continental
Airlines Pass Through Certificates
Series 1996-D (the "Certificates")
Sirs:
In connection with our proposed sale of $_______
Fractional Undivided Interest of the Certificates, we confirm
that:
1. We understand that any subsequent transfer of the
Certificates is subject to certain restrictions and
conditions set forth in the Pass Through Trust Agreement
dated as of January 31, 1996 between Continental Airlines,
Inc. and Wilmington Trust Company the ("Trustee") relating
to the Securities (the "Agreement"), and we agree to be
bound by, and not to resell, pledge or otherwise transfer
the Securities except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended
(the "Securities Act").
2. We understand that the Certificates have not been
registered under the Securities Act, are being sold to us in
a transaction that is exempt from the registration
requirements of the Securities Act and that the Certificates
may not be reoffered or resold except as permitted in the
following sentence. We agree, on our own behalf and on
behalf of any accounts for which we are acting as
hereinafter stated, that, if we should sell any Certificates
within three years after the later of the original issuance
of such Security and the last date on which such Security is
owned by Continental Airlines, Inc., the Trustee or any
affiliate of any of such persons, we will do so only (A) to
Continental Airlines, Inc., (B) in accordance with Rule 144A
under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) purchasing $500,000
or more in Fractional Undivided Interests of Certificates
that, prior to such transfer, furnishes to the Trustee a
signed letter substantially in the form of this Letter,
(D) pursuant to the exemption from registration provided by
Rule 904 of Regulation S under the Securities Act,
(E) pursuant to the exemption from registration provided by
Rule 144 under the Registration Act or (F) pursuant to an
effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any
of the Certificates from us a notice advising such purchaser
that resales of the Certificates are restricted as stated
herein.
(3) We understand that, on any proposed resale of any
Certificates, we will be required to furnish to Continental
Airlines, Inc. and to the Trustee such certifications, legal
opinions and other information as Continental Airlines, Inc.
and the Trustee may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions. We
further understand that the Certificates purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as
defined in Rule 501(a)1, (2) (3) or (7) of Regulation D
under the Securities Act) and have such knowledge and
experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment
in the Certificates and we and any accounts for which we are
acting are each able to bear the economic risks of our or
their investments.
5. We are acquiring the Certificates purchased by us
for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each
of which we exercise sole investment discretion and not with
a view to any distribution of the Certificates, subject,
nevertheless to the understanding that the disposition of
our property shall at all times be and remain within our
control.
You and Continental Airlines, Inc. are entitled to
reply upon this letter and are irrevocably authorized to produce
this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with
respect to the matters covered hereby.
Very truly yours,
By:_______________________
Name
Title:
PASS THROUGH TRUST AGREEMENT
Dated as of January 31, 1996
among
CONTINENTAL AIRLINES, INC.
and
WILMINGTON TRUST COMPANY,
as Trustee
Continental Airlines 1996-D Pass Through Trust
12.48% 1996-D Initial Pass Through Certificates
12.48% 1996-D Exchange Pass Through Certificates
Reconciliation and tie between Continental Airlines 1996-D Pass
Through Trust Agreement, dated as of January 31, 1996, 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) 7.08
(a)(2) 7.08
312(a) 3.05; 8.01; 8.02
313(a) 8.03
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) 1.04(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) 12.06
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01. Definitions. . . . . . . . . . . . . . . . . . . . 2
1.02. Compliance Certificates and Opinions . . . . . . . 12
1.03. Form of Documents Delivered to Trustee . . . . . . 12
1.04. Directions of Certificateholders . . . . . . . . . 13
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
2.01. Issuance of Certificates; Acquisition of
Equipment Notes. . . . . . . . . . . . . . . . . . . 14
2.02. Acceptance by Trustee. . . . . . . . . . . . . . . 16
2.03. Limitation of Powers . . . . . . . . . . . . . . . 17
ARTICLE III
THE CERTIFICATES
3.01. Title, Form, Denomination and Execution of
Certificates . . . . . . . . . . . . . . . . . . . . 17
3.02. Restrictive Legends. . . . . . . . . . . . . . . . 17
3.03. Authentication of Certificates . . . . . . . . . . 19
3.04. Transfer and Exchange. . . . . . . . . . . . . . . 20
3.05. [Intentionally omitted.]
3.06. Special Transfer Provisions. . . . . . . . . . . . 20
3.07. Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . . . . . 22
3.08. Persons Deemed Owners. . . . . . . . . . . . . . . 23
3.09. Cancellation . . . . . . . . . . . . . . . . . . . 23
3.10. Temporary Certificates . . . . . . . . . . . . . . 23
3.11. Limitation of Liability for Payments . . . . . . . 24
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
4.01. Certificate Account and Special Payments
Account. . . . . . . . . . . . . . . . . . . . . . . 24
4.02. Distributions from Certificate Account and
Special Payments Account . . . . . . . . . . . . . . 25
4.03. Statements to Certificateholders . . . . . . . . . 26
4.04. Investment of Special Payment Moneys . . . . . . . 27
ARTICLE V
THE COMPANY
5.01. Maintenance of Corporate Existence . . . . . . . . 28
5.02. Consolidation, Merger, etc.. . . . . . . . . . . . 28
ARTICLE VI
DEFAULT
6.01. Events of Default. . . . . . . . . . . . . . . . . 29
6.02. [Intentionally omitted.] . . . . . . . . . . . . . 30
6.03. Judicial Proceedings Instituted by Trustee;
Trustee May Bring Suit . . . . . . . . . . . . . . . 30
6.04. Control by Certificateholders. . . . . . . . . . . 31
6.05. Waiver of Past Defaults. . . . . . . . . . . . . . 31
6.06. Right of Certificateholders to Receive Payments
Not to Be Impaired . . . . . . . . . . . . . . . . . 32
6.07. Certificateholders May Not Bring Suit Except
Under Certain Conditions . . . . . . . . . . . . . . 32
6.08. Remedies Cumulative. . . . . . . . . . . . . . . . 33
ARTICLE VII
THE TRUSTEE
7.01. Certain Duties and Responsibilities. . . . . . . . 33
7.02. Notice of Defaults . . . . . . . . . . . . . . . . 34
7.03. Certain Rights of Trustee. . . . . . . . . . . . . 34
7.04. Not Responsible for Recitals or Issuance of
Certificates . . . . . . . . . . . . . . . . . . . . 35
7.05. May Hold Certificates. . . . . . . . . . . . . . . 35
7.06. Money Held in Trust. . . . . . . . . . . . . . . . 36
7.07. Compensation and Reimbursement . . . . . . . . . . 36
7.08. Corporate Trustee Required; Eligibility. . . . . . 36
7.09. Resignation and Removal; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . . 37
7.10. Acceptance of Appointment by Successor . . . . . . 38
7.11. Merger, Conversion, Consolidation or Succession
to Business. . . . . . . . . . . . . . . . . . . . . 39
7.12. Maintenance of Agencies. . . . . . . . . . . . . . 39
7.13. Money for Certificate Payments to Be Held in
Trust. . . . . . . . . . . . . . . . . . . . . . . . 41
7.14. Registration of Equipment Notes in Name of
Subordination Agent. . . . . . . . . . . . . . . . . 41
7.15. Representations and Warranties of Trustee. . . . . 41
7.16. Withholding Taxes; Information Reporting . . . . . 42
7.17. Trustee's Liens. . . . . . . . . . . . . . . . . . 42
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders. . . . . . . . . . . 43
8.02. Preservation of Information; Communications to
Certificateholders . . . . . . . . . . . . . . . . . 43
8.03. Reports by Trustee . . . . . . . . . . . . . . . . 43
8.04. Reports by the Company . . . . . . . . . . . . . . 43
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
9.01. Supplemental Agreements Without Consent of
Certificateholders . . . . . . . . . . . . . . . . . 44
9.02. Supplemental Agreements with Consent of
Certificateholders . . . . . . . . . . . . . . . . . 45
9.03. Documents Affecting Immunity or Indemnity. . . . . 47
9.04. Execution of Supplemental Agreements . . . . . . . 47
9.05. Effect of Supplemental Agreements. . . . . . . . . 47
9.06. Conformity with Trust Indenture Act. . . . . . . . 47
9.07. Reference in Certificates to Supplemental
Agreements . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE X
AMENDMENTS TO INDENTURES AND REFUNDING DOCUMENTS
10.01. Amendments and Supplements to Indentures and
Other Refunding Documents. . . . . . . . . . . . . . 47
ARTICLE XI
TERMINATION OF TRUST
11.01. Termination of the Trust. . . . . . . . . . . . . 48
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01. Limitation on Rights of Certificateholders. . . . 49
12.02. Certificates Nonassessable and Fully Paid . . . . 49
12.03. Notices . . . . . . . . . . . . . . . . . . . . . 50
12.04. Governing Law . . . . . . . . . . . . . . . . . . 51
12.05. Severability of Provisions. . . . . . . . . . . . 51
12.06. Trust Indenture Act Controls. . . . . . . . . . . 51
12.07. Effect of Headings and Table of Contents. . . . . 51
12.08. Successors and Assigns. . . . . . . . . . . . . . 51
12.09. Benefits of Agreement . . . . . . . . . . . . . . 51
12.10. Legal Holidays. . . . . . . . . . . . . . . . . . 52
12.11. Counterparts. . . . . . . . . . . . . . . . . . . 52
12.12. Intention of Parties. . . . . . . . . . . . . . . 52
Schedule 1 - Indentures
Schedule 2 - Refunding Agreements
Exhibit A - Form of Certificate
Exhibit B - Form of Certificate for Unlegended Certificates
Exhibit C - Form of Certificate to Be Delivered in Connection
with Transfers Pursuant to Regulation S
Exhibit D - Form of Certificate to Be Delivered in Connection
with Transfers to Non-QIB Institutional Accredited
Investors
Exhibit 4.10
- -----------------------------------------------------------------
REVOLVING CREDIT AGREEMENT
Dated as of January 31, 1996
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines 1996-A Pass Through Trust,
as Borrower
and
CREDIT SUISSE,
acting through its New York Branch
as Liquidity Provider
- -----------------------------------------------------------------
Relating to
Continental Airlines 1996-A Pass Through Trust
6.94% Continental Airlines Pass Through Certificates,
Series 1996-A
TABLE OF CONTENTS Page
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms . . . . . . . . 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. . . . . . . . . . . . . 7
Section 2.02. Making the Advances . . . . . . . . . 7
Section 2.03. Fees. . . . . . . . . . . . . . . . . 9
Section 2.04. Reduction or Termination of
the Commitment. . . . . . . . . . . . . . . . . 9
Section 2.05. Repayments of Interest
Advances or the Final Advance . . . . . . . . . 9
Section 2.06. Repayments of Provider
Advances. . . . . . . . . . . . . . . . . . . . 10
Section 2.07. Payments to the Liquidity
Provider Under the Intercreditor
Agreement . . . . . . . . . . . . . . . . . . . 11
Section 2.08. Book Entries. . . . . . . . . . . . . 11
Section 2.09. Payments from Available Funds
Only. . . . . . . . . . . . . . . . . . . . . . 11
Section 2.10. Extension of the Expiry Date;
Non-Extension Advance . . . . . . . . . . . . . 12
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs . . . . . . . . . . . 12
Section 3.02. Capital Adequacy. . . . . . . . . . . 13
Section 3.03. Payments Free of Deductions . . . . . 14
Section 3.04. Payments. . . . . . . . . . . . . . . 14
Section 3.05. Computations. . . . . . . . . . . . . 14
Section 3.06. Payment on Non-Business Days. . . . . 15
Section 3.07. Interest. . . . . . . . . . . . . . . 15
Section 3.08. Replacement of Borrower . . . . . . . 16
Section 3.09. Funding Loss Indemnification. . . . . 16
Section 3.10. Illegality. . . . . . . . . . . . . . 16
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to
Effectiveness of Section 2.01 . . . . . . . . . 17
Section 4.02. Conditions Precedent to
Borrowing . . . . . . . . . . . . . . . . . . . 19
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the
Borrower. . . . . . . . . . . . . . . . . . . . 20
Section 5.02. Negative Covenants of the
Borrower. . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default . . . . . 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc.. . . . . . . . . . . 21
Section 7.02. Notices, Etc. . . . . . . . . . . . . 21
Section 7.03. No Waiver; Remedies . . . . . . . . . 22
Section 7.04. Further Assurances. . . . . . . . . . 22
Section 7.05. Indemnification; Survival of
Certain Provisions. . . . . . . . . . . . . . . 22
Section 7.06. Liability of the Liquidity
Provider. . . . . . . . . . . . . . . . . . . . 23
Section 7.07. Costs, Expenses and Taxes . . . . . . 23
Section 7.08. Binding Effect;
Participations. . . . . . . . . . . . . . . . . 24
Section 7.09. Severability. . . . . . . . . . . . . 25
Section 7.10. GOVERNING LAW . . . . . . . . . . . . 25
Section 7.11. Submission to Jurisdiction;
Waiver of Jury Trial. . . . . . . . . . . . . . 26
Section 7.12. Execution in Counterparts . . . . . . 26
Section 7.13. Entirety. . . . . . . . . . . . . . . 27
Section 7.14. Headings. . . . . . . . . . . . . . . 27
Section 7.15. LIQUIDITY PROVIDER'S
OBLIGATION TO MAKE ADVANCES . . . . . . . . . . 27
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 January
31, 1996, 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 CREDIT SUISSE, a bank
organized under the laws of Switzerland acting through its New
York branch (the "Liquidity Provider").
W I T N E S S E T H :
WHEREAS, pursuant to the Class A Trust Agreement (such
term and all other capitalized terms used in these recitals
having the meanings set forth or referred to in Section 1.01),
the Class A Trust is issuing the Class A Certificates; and
WHEREAS, the Borrower, in order to support the timely
payment of a portion of the interest on the Class A Certificates
in accordance with their terms, has requested the Liquidity
Provider to enter into this Agreement, providing in part for the
Borrower to request in specified circumstances that Advances be
made hereunder.
NOW, THEREFORE, in consideration of the premises, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms.
(a) Definitions. As used in this Agreement and unless otherwise
expressly indicated, or unless the context clearly requires
otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"Additional Cost" has the meaning assigned to such term
in Section 3.01.
"Advance" means an Interest Advance, a Final Advance, a
Provider Advance, an Applied Provider Advance or an Unpaid
Advance, as the case may be.
"Applicable Liquidity Rate" has the meaning assigned to
such term in Section 3.07(c).
"Applicable Margin" means (w) with respect to any
Unpaid Advance (including an Applied Provider Advance) that
is a LIBOR Advance, 2.00%, (x) with respect to any Unpaid
Advance (including an Applied Provider Advance) that is a
Base Rate Advance, 1.00%, (y) with respect to any Provider
Advance (other than an Applied Provider Advance) that is a
LIBOR Advance, 0.75%, and (z) with respect to any Provider
Advance (other than an Applied Provider Advance) that is a
Base Rate Advance, 0%.
"Applied Provider Advance" has the meaning assigned to
such term in Section 2.06(a).
"Available Commitment" means, at any time of
determination, an amount equal to (i) the Commitment at such
time less (ii) subject to the proviso contained in the third
sentence of Section 2.02(a), the aggregate amount of each
Interest Advance outstanding at such time; provided that
following a Non-Extension Advance, a Downgrade Advance or a
Final Advance, the Available Commitment shall be zero.
"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 the higher of (i) the base commercial
lending rate announced from time to time by Credit Suisse,
New York Branch, or (ii) the rate quoted by Credit Suisse,
New York Branch, at approximately 11:00 A.M., New York City
time, to dealers in the New York Federal funds market for
overnight offering of dollars by Credit Suisse, New York
Branch, for deposit plus one-quarter of one percent (1/4%).
"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
or, so long as any Class A Certificate is outstanding, the
city and state in which the Class A 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.
"Commitment" means, initially, $30,078,208.80, as the
same may be reduced from time to time in accordance with
Section 2.04(a).
"Downgrade Advance" means an Advance made pursuant to
Section 2.02(c).
"Effective Date" has the meaning specified in Section
4.01. The delivery of the certificate of the Liquidity
Provider contemplated by Section 4.01(e) shall be conclusive
evidence that the Effective Date has occurred.
"Excluded Taxes" has the meaning assigned to such term
in Section 3.01.
"Excluded Withholding Taxes" means (i) withholding
taxes imposed under laws in effect on the date hereof by the
United States on payments to a recipient in the jurisdiction
in which the Liquidity Provider's initial Lending Office is
located, and (ii) withholding taxes imposed by the United
States on payments to a recipient in any other jurisdiction
to which such Lending Office is moved if, under the laws in
effect at the time of such move, such laws would require
greater withholding taxes than the laws applicable to the
jurisdiction from which such Lending Office was moved.
"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).
"Expiry Date" means January 29, 1997, initially, or any
date to which the Expiry Date is extended pursuant to
Section 2.10.
"Final Advance" means an Advance made pursuant to
Section 2.02(d).
"Intercreditor Agreement" means the Intercreditor
Agreement dated the date hereof, among the Trustees, the
Liquidity Provider, the liquidity provider under each
Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
"Interest Advance" means an Advance made pursuant to
Section 2.02(a).
"Interest Period" means, with respect to any LIBOR
Advance, each of the following periods:
(i) the period beginning on the third Business
Day following the Liquidity Provider's receipt of the
Notice of Borrowing for such LIBOR Advance and 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 the Borrowing for such Final
Advance (in the case of clause (x) above) or the Regular
Distribution Date following such conversion (in the case of
clause (y) above).
"Lending Office" means the lending office of the
Liquidity Provider, presently located at New York, New York,
or such other lending office as the Liquidity Provider from
time to time shall notify the Borrower as its lending office
hereunder.
"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 Credit Suisse 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) each affiliate of the Liquidity Provider,
(iii) the respective directors, officers, employees, agents
and servants of the Liquidity Provider and its affiliates,
and (iv) the successors and permitted assigns of the persons
described in clauses (i) through (iii), inclusive.
"Liquidity Provider" has the meaning assigned to such
term in the recital of parties to this Agreement.
"Non-Excluded Tax" has the meaning specified in Section
3.03.
"Non-Extension Advance" means an Advance made pursuant
to Section 2.02(b).
"Notice of Borrowing" has the meaning specified in
Section 2.02(e).
"Notice of Replacement Borrower" has the meaning
specified in Section 3.08.
"Offering Circular" means the Offering Circular dated
January 24, 1996 relating to the Certificates, as such
Offering Circular may be amended or supplemented.
"Participation Purchase Agreement" means the
Participation Purchase Agreement dated the date hereof
relating to this Agreement, between the Liquidity Provider
and Continental.
"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.
"Provider Advance" means a Downgrade Advance or a
Non-Extension Advance.
"Provider Advance Amortization Date" has the meaning
assigned to such term in Section 2.06(d).
"Regulatory Change" has the meaning assigned to such
term in Section 3.01.
"Related Indemnitee" means, with respect to any
Liquidity Indemnitee, its director, officer, employee,
agent, affiliate or employer.
"Replenishment Amount" has the meaning assigned to such
term in Section 2.06(b).
"Required Amount" means, for any day, the sum of the
aggregate amount of interest, calculated at the rate per
annum equal to the Stated Interest Rate for the Class A
Certificates, without giving effect to any adjustment
pursuant to the Registration Rights Agreement, plus an
additional margin of 0.50% per annum (provided that such
additional margin shall cease to apply at such time as the
interest rate borne by the Certificates is no longer subject
to increase pursuant to the terms of the Registration Rights
Agreement), 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.
"Termination Date" means the earliest to occur of the
following: (i) the Expiry Date; (ii) the date on which the
Borrower delivers to the Liquidity Provider a certificate,
signed by a Responsible Officer of the Borrower, certifying
that all of the Class A Certificates have been paid in full
(or provision has been made for such payment in accordance
with the Intercreditor Agreement and the Trust Agreements)
or are otherwise no longer entitled to the benefits of this
Agreement; (iii) the date on which the Borrower delivers to
the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a
Replacement Liquidity Facility has been substituted for this
Agreement in full pursuant to Section 3.6(e) of the
Intercreditor Agreement; (iv) the fifth Business Day
following the receipt by the Borrower of a Termination
Notice from the Liquidity Provider pursuant to Section 6.01
hereof; and (v) the date on which no Advance is or may
(including by reason of reinstatement as herein provided)
become available for a Borrowing hereunder.
"Termination Notice" means the Notice of Termination
substantially in the form of Annex V to this Agreement.
"Transferee" has the meaning assigned to such term in
Section 7.08(b).
"Unpaid Advance" has the meaning assigned to such term
in Section 2.05.
(b) Terms Defined in the Intercreditor Agreement. For
all purposes of this Agreement, the following terms shall have
the respective meanings assigned to such terms in the
Intercreditor Agreement:
"Certificates", "Class A Certificates", "Class A
Certificateholders", "Class A Cash Collateral Account",
"Class A Trust", "Class A Trust Agreement", "Class A
Trustee", "Class B Certificates, "Class C Certificates,
"Class D Certificates", "Continental", "Continental
Bankruptcy Event", "Controlling Party", "Corporate Trust
Office", "Distribution Date", "Equipment Notes", "Fee
Letter", "Indenture", "Initial Purchasers", "Liquidity
Facility", "Moody's", "Operative Agreements", "Participation
Agreements", "Performing Equipment Note", "Person", "Pool
Balance", "Purchase Agreement","Rating Agency", "Refunding
Agreement", "Registration Rights Agreement", "Regular
Distribution Date", "Replacement Liquidity Facility",
"Responsible Officer", "Scheduled Payment", "Special
Payment", "Standard & Poor's", "Stated Interest Rate",
"Subordination Agent", "Taxes", "Threshold Rating",
"Triggering Event", "Trust Agreements", "Trustee" and
"Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider
hereby irrevocably agrees, on the terms and conditions
hereinafter set forth, to make Advances to the Borrower from time
to time on any Business Day during the period from the Effective
Date until 12:00 Noon (New York City time) on the Expiry Date
(unless the obligations of the Liquidity Provider shall be
earlier terminated in accordance with the terms of
Section 2.04(b)) in an aggregate amount at any time outstanding
not to exceed the Commitment.
Section 2.02. Making the Advances. (a) Interest
Advances shall be made in one or more Borrowings by delivery to
the Liquidity Provider of one or more written and completed
Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Available Commitment at such time
and shall be used solely for the payment when due of interest on
the Class A Certificates at the Stated Interest Rate therefor in
accordance with Section 3.6(a) of the Intercreditor Agreement.
Each Interest Advance made hereunder shall automatically reduce
the Available Commitment and the amount available to be borrowed
hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full of
the amount of any Interest Advance made pursuant to this Section
2.02(a), together with accrued interest thereon (as provided
herein), the Available Commitment shall be reinstated by the
amount of such repaid Interest Advance; provided, however, that
the Available Commitment shall not be so reinstated at any time
if (i) a Triggering Event shall have occurred and be continuing
and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single
Borrowing if this Agreement is not extended in accordance with
Section 3.6(d) of the Intercreditor Agreement (unless a
Replacement Liquidity Facility shall have been 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 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).
(c) A Downgrade Advance shall be made in a single
Borrowing upon a downgrading of the Liquidity Provider's short-
term unsecured debt rating issued by either Rating Agency below
the Threshold Rating (as provided for in Section 3.6(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility
shall have been 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 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).
(d) A Final Advance shall be made in a single
Borrowing upon the receipt by the Borrower of a Termination
Notice from the Liquidity Provider pursuant to Section 6.01
hereof by delivery to the Liquidity Provider of a written and
completed Notice of Borrowing in substantially the form of
Annex IV attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the 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).
(e) Each Borrowing shall be made on notice in writing
(a "Notice of Borrowing") in substantially the form required by
Section 2.02(a), 2.02(b), 2.02(c) or 2.02(d), as the case may be,
given not later than 12:00 Noon (New York City time) on the
Business Day prior to the day of the proposed Borrowing by the
Borrower to the Liquidity Provider. Upon satisfaction of the
conditions precedent set forth in Section 4.02 with respect to a
requested Borrowing, the Liquidity Provider shall, before
12:00 Noon (New York City time) on the date of such Borrowing or
on such later Business Day specified by the Borrower in such
Notice of Borrowing, make available for the account of its
Lending Office, in U.S. dollars and in immediately available
funds, the amount of such Borrowing to be paid to the Borrower in
accordance with its payment instructions. 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, 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.
(f) Upon the making of any Advance requested pursuant
to a Notice of Borrowing, in accordance with the Borrower's
payment instructions, the Liquidity Provider shall be fully
discharged of its obligation hereunder with respect to such
Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in
respect of such Notice of Borrowing to the Borrower or to any
other person (including the holder of any Class A Certificate or
the Class A Trustee) who makes to the Class A Trustee or the
Borrower a demand for payment with respect to any Class A
Certificate. Following the making of any Advance pursuant to
Section 2.02(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. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the
provisions of this Agreement, the Liquidity Provider makes no
representation as to, and assumes no responsibility for, the
correctness or sufficiency for any purpose of the amount of the
Advances so made and requested.
Section 2.03. Fees. The Borrower agrees to pay to the
Liquidity Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the
Commitment. (a) Automatic Reductions. Promptly following each
date on which the Required Amount is reduced as a result of a
reduction in the Pool Balance of the Class A Certificates or
otherwise, the Commitment shall automatically be reduced to an
amount equal to such reduced Required Amount (as calculated by
the Borrower). The Borrower shall give notice of any such
automatic reduction of the 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 Commitment.
(b) Termination. Upon the making of any Non-Extension
Advance, Downgrade Advance or Final Advance hereunder or the
occurrence of the Termination Date, the obligation of the
Liquidity Provider to make further Advances hereunder shall
automatically and irrevocably terminate, and the Borrower shall
not be entitled to request any further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the
Final Advance. Subject to Sections 2.07 and 2.09 hereof, the
Borrower hereby agrees to pay, or to cause to be paid, to the
Liquidity Provider on each date on which the Liquidity Provider
shall make an Interest Advance or the Final Advance, an amount
equal to (a) the amount of such Advance (any such Advance, until
repaid, is referred to herein as an "Unpaid Advance"), plus (b)
interest on the amount of each such Unpaid Advance as provided in
Section 3.07 hereof. Subject to Sections 2.06, 2.07 and 2.09
hereof, unless otherwise waived by the Liquidity Provider, the
Borrower shall be obligated, without notice of an Advance or
demand for repayment from the Liquidity Provider (which notice
and demand are hereby waived by the Borrower), to repay the
Liquidity Provider for all Advances on the same day as made. The
Borrower and the Liquidity Provider agree that the repayment in
full of each Interest Advance and Final Advance on the date such
Advance is made is intended to be a contemporaneous exchange for
new value given to the Borrower by the Liquidity Provider.
Section 2.06. Repayments of Provider Advances.
(a) Amounts advanced hereunder in respect of a Provider Advance
shall be deposited in the 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 3.07; 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,
an "Applied Provider Advance") shall 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, a Termination Notice is delivered to the Subordination
Agent pursuant hereto, 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. 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 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
3.07 hereof.
(b) 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
"fourth" of Section 3.2 of the Intercreditor Agreement (any such
amount being a "Replenishment Amount") for the purpose of
replenishing the balance thereof up to the Required Amount at
such time, (i) the aggregate outstanding principal amount of all
Applied Provider Advances shall be automatically reduced by the
amount of such Replenishment Amount and (ii) the principal amount
of the outstanding Provider Advance shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity
Facility in replacement of this Agreement in accordance with
Section 3.6(e) of the Intercreditor Agreement, amounts remaining
on deposit in the Class A Cash Collateral Account after giving
effect to any application of funds therefrom to any payment of
interest on the Class A Certificates 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.
(d) Any portion of any Provider Advance made prior to
the tenth anniversary of the date hereof and remaining unrepaid
as of such date (or, if this Agreement has been extended beyond
such tenth anniversary, as of such extended date) (the "Provider
Advance Amortization Date") shall be payable to the Liquidity
Provider in eight quarterly installments on each successive
Regular Distribution Date commencing on the first Regular
Distribution Date following the Provider Advance Amortization
Date. Each such installment shall be in an amount equal to
12.50% of the full outstanding amount of such Provider Advance as
of the Provider Advance Amortization Date, together with accrued
interest thereon as provided in Section 3.07 to but excluding the
date of payment of such installment; provided, however, that the
Borrower shall not be required to make amortization payments
pursuant to this Section 2.06(d) to the extent the Liquidity
Provider has received payments from Continental in respect of the
purchase price for the participation to be acquired by
Continental pursuant to the Participation Purchase Agreement; and
provided further, however, that the final installment payable by
the Borrower, if any, under this Section 2.06(d) shall in any
event be in an amount equal to the lesser of (x) the then
outstanding principal amount of such Provider Advance and (y) the
Liquidity Provider Share (as defined in the Participation
Purchase Agreement) of such Provider Advance, in each case
together with accrued interest due thereon to the date of payment
of such final installment. The foregoing exception to the
Borrower's obligation to make amortization payments pursuant to
this Section 2.06(d) relates to the timing of the Borrower's
repayment obligations in respect of Provider Advances only and in
no event does the foregoing exception relieve the Borrower from
its obligation to make repayments to the Liquidity Provider at
the times and in the amounts otherwise provided for hereunder and
under the Intercreditor Agreement.
Section 2.07. Payments to the Liquidity Provider Under
the Intercreditor Agreement. In order to provide for payment or
repayment to the Liquidity Provider of any amounts hereunder, the
Intercreditor Agreement provides that amounts available and
referred to in Articles II and III of the Intercreditor
Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including,
without limitation, Section 3.6(f) of the Intercreditor
Agreement), shall be paid to the Liquidity Provider in accordance
with the terms thereof. Amounts so paid to the Liquidity
Provider shall be applied by the Liquidity Provider in the order
of priority required by the applicable provisions of Articles II
and III of the Intercreditor Agreement.
Section 2.08. Book Entries. The Liquidity Provider
shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower resulting
from Advances made from time to time and the amounts of principal
and interest payable hereunder and paid from time to time in
respect thereof; provided, however, that the failure by the
Liquidity Provider to maintain such account or accounts shall not
affect the obligations of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All
payments to be made by the Borrower under this Agreement shall be
made only from amounts received by it that constitute Scheduled
Payments, Special Payments or payments under Section 10.1 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 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 prior to the
then effective Expiry Date, 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 30 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 advise the Borrower (and 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 such 25th day to request, and upon such
request the Liquidity Provider shall promptly make, a Non-
Extension Advance in accordance with Section 2.02(b) hereof and
Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. The Borrower shall pay
to the Liquidity Provider from time to time such amounts as may
be necessary to compensate the Liquidity Provider for any 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 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
Withholding Taxes or taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office for any of such
Advances by the jurisdiction where the Liquidity Provider's
principal office or such Lending Office is located; the taxes
referred to in this parenthetical being "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); or (3) imposes any other condition affecting this
Agreement or the Intercreditor Agreement (or any such extensions
of credit or liabilities). 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 amount payable under this Section that
may thereafter accrue and would not, in the reasonable judgement
of the Liquidity Provider, be otherwise disadvantageous to the
Liquidity Provider.
The Liquidity Provider will notify the Borrower of any
event occurring after the date of this Agreement that will
entitle the Liquidity Provider to compensation pursuant to this
Section 3.01 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation
of the amounts owed under this Section. Determinations by the
Liquidity Provider for purposes of this Section 3.01 of the
effect of any Regulatory Change on its costs of making or
maintaining Advances or on amounts receivable by it in respect of
Advances, and of the additional amounts required to compensate
the Liquidity Provider in respect of any Additional Costs, shall
be prima facie evidence of the amount owed under this Section.
Section 3.02. Capital Adequacy. In the event that (1)
compliance with any judicial, administrative, or other
governmental interpretation of any law or regulation or (2)
compliance by the Liquidity Provider or any corporation
controlling the Liquidity Provider with any guideline or request
from any central bank or other governmental authority (whether or
not having the force of law) has the effect of requiring an
increase in the amount of capital required or expected 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 such additional amount 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 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 amount payable under this Section that
may thereafter accrue and would not, in the reasonable judgment
of the Liquidity Provider, be otherwise disadvantageous to the
Liquidity Provider.
The Liquidity Provider will notify the Borrower of any
event occurring after the date of this Agreement that will
entitle the Liquidity Provider to compensation pursuant to this
Section 3.02 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation
of the amounts owed under this Section. Determinations by the
Liquidity Provider for purposes of this Section 3.02 of the
effect of any increase in the amount of capital required to be
maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall
be prima facie evidence of the amounts owed under this Section.
Section 3.03. Payments Free of Deductions. 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 3.04. Payments. The Borrower shall make or
cause to be made each payment to the Liquidity Provider under
this Agreement so as to cause the same to be received by the
Liquidity Provider not later than 1:00 P.M. (New York City time)
on the day when due. The Borrower shall make all such payments
in lawful money of the United States of America, to the Liquidity
Provider in immediately available funds, by wire transfer to
Credit Suisse, New York, Loan Clearing Account No. 904996-02.
Section 3.05. Computations. All computations of
interest based on the Base Rate shall be made on the basis of a
year of 365 or 366 days, as the case may be, and all computations
of interest based on the LIBOR Rate shall be made on the basis of
a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever
any payment to be made hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the
next succeeding Business Day and no additional interest shall be
due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an
Advance is so deferred to the next succeeding Business Day, such
deferral shall not delay the commencement of the next Interest
Period for such Advance (if such Advance is a LIBOR Advance) or
reduce the number of days for which interest will be payable on
such Advance on the next interest payment date for such Advance.
Section 3.07. Interest. (a) The Borrower shall pay,
or shall cause to be paid, 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 and (ii) any other amount due hereunder
(whether fees, commissions, expenses or other amounts or, to the
extent permitted by law, installments of interest on Advances or
any such other amount) which is not paid when due (whether at
stated maturity, by acceleration or otherwise) from and including
the due date thereof to but excluding the date such amount is
paid in full, in each such case, at a fluctuating interest rate
per annum for each day equal to the Applicable Liquidity Rate (as
defined below) for such Advance or such other amount as in effect
for such day, but in no event at a rate per annum greater than
the maximum rate permitted by applicable law; provided, however,
that, if at any time the otherwise applicable interest rate as
set forth in this Section 3.07 shall exceed the maximum rate
permitted by applicable law, then any subsequent reduction in
such interest rate will not reduce the rate of interest payable
pursuant to this Section 3.07 below the maximum rate permitted by
applicable law until the total amount of interest accrued equals
the amount of interest that would have accrued if such otherwise
applicable interest rate as set forth in this Section 3.07 had at
all times been in effect. Nothing contained in this Section 3.07
shall require the Borrower to pay any amount under this Section
3.07 other than to the extent the Borrower shall have funds
available therefor.
(b) 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) may 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.
(c) Each LIBOR Advance shall bear interest during each
Interest Period at 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 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 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) shall bear interest at the Base Rate.
Each change in the Base Rate shall become effective
immediately. The rates of interest specified in this
Section 3.07(c) with respect to any Advance or other amount shall
be referred to as the "Applicable Liquidity Rate".
Section 3.08. Replacement of Borrower. From time to
time, upon the effective date and time specified in a written and
completed Notice of Replacement Borrower in substantially the
form of Annex VI attached hereto (a "Notice of Replacement
Borrower") delivered to the Liquidity Provider by the then
Borrower, the successor Borrower designated therein shall be
substituted for as the Borrower for all purposes hereunder.
Section 3.09. Funding Loss Indemnification. The
Borrower shall pay to the Liquidity Provider, upon the request of
the Liquidity Provider, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Liquidity Provider)
to compensate it for any loss, cost, or expense incurred as a
result of:
(1) Any payment of a LIBOR Advance on a date other
than the last day of the Interest Period for such Advance;
or
(2) Any failure by the Borrower to borrow or convert,
as the case may be, a LIBOR Advance on the date for
borrowing or conversion, as the case may be, specified in
the relevant notice under Section 2.02 or 3.07.
Section 3.10. Illegality. Notwithstanding any other
provision in this Agreement, if any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider
(or its Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank
or comparable agency shall make it unlawful or impossible for the
Liquidity Provider (or its Lending Office) to maintain or fund
its LIBOR Advances, then upon notice to the Borrower by the
Liquidity Provider, the outstanding principal amount of the LIBOR
Advances shall be converted to Base Rate Advances (a) immediately
upon demand of the Liquidity Provider, if such change or
compliance with such request, in the judgment of the Liquidity
Provider, requires immediate repayment; or (b) at the expiration
of the last Interest Period to expire before the effective date
of any such change or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of
Section 2.01. Section 2.01 of this Agreement shall become
effective on and as of the first date (the "Effective Date") on
which the following conditions precedent have been satisfied or
waived:
(a) The Liquidity Provider shall have received on or
before January 31, 1996 each of the following, each dated
such date (except for those documents delivered pursuant to
paragraphs (v) and (vii) of this Section 4.01(a)), and each
in form and substance satisfactory to the Liquidity
Provider:
(i) This Agreement duly executed on behalf of the
Borrower;
(ii) The Participation Purchase Agreement, duly
executed on behalf of Continental, and the
Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Counterparts (or certified copies thereof)
of each of the Operative Agreements (other than this
Agreement and the Intercreditor Agreement) which, when
taken together, bear the signatures of all of the
respective parties thereto and which are in full force
and effect in accordance with their respective terms;
(iv) A copy of the Offering Circular and specimen
copies of the Class A Certificates;
(v) Evidence that, on the Effective Date, the
Class A Certificates, the Class B Certificates, the
Class C Certificates and the Class D Certificates will
receive long-term credit ratings from Moody's of not
lower than A2, Baa1, Ba1 and B1, respectively, and from
S&P of not lower than A+, BBB+, BB+ and B+,
respectively;
(vi) An executed or certified copy of each
document, instrument, certificate and opinion delivered
pursuant to the Class A Trust Agreement, the
Intercreditor Agreement, the Refunding Agreements and
the other Operative Agreements (together with, in the
case of each such opinion, other than the opinion of
counsel for the Initial Purchasers, a letter from the
counsel rendering such opinion to the effect that the
Liquidity Provider is entitled to rely on such opinion
as if it were addressed to the Liquidity Provider);
(vii) 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 and
the Liquidity Provider created by the Operative
Agreements;
(viii) Copies of the appraisals attached as
exhibits to the Offering Circular;
(ix) An agreement from Continental, pursuant to
which (i) Continental agrees to provide certain
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 of the
Leases to the parties thereto, (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 (iii)
Continental confirms the ability of the Liquidity
Provider to enforce the indemnification described in
Section 7.05 hereof, and
(x) Such other documents, instruments, opinions
and approvals (and, if requested by the Liquidity
Provider, certified duplicates or executed copies
thereof) as the Liquidity Provider shall have
reasonably requested.
(b) The following statements shall be true and shall
be deemed to have been represented by each party (other than
clauses (ii) and (iii) below, which shall be deemed to have
been represented only by Continental) to the Refunding
Agreements as being true on and as of the Effective Date:
(i) The representations and warranties of such
Person contained in each Refunding Agreement are true
and correct on and as of the Effective Date as though
made on and as of the Effective Date;
(ii) 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; and
(iii) There has been no material adverse change
in the business, financial condition, operations,
property or prospects of Continental since September
30, 1995.
(c) The Liquidity Provider shall have received payment
in full of all fees and other sums required to be paid to or
for the account of the Liquidity Provider on or prior to the
Effective Date.
(d) All conditions precedent to the issuance of the
Certificates under the Trust Agreements shall have been
satisfied, 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 Initial Purchasers under the Purchase
Agreement shall have been satisfied (unless any of such
conditions precedent under the Purchase Agreement shall have
been waived by the Initial Purchasers).
(e) The Borrower shall have received a certificate,
dated the date hereof, signed by a duly authorized
representative of the Liquidity Provider, certifying that
all conditions precedent to the effectiveness of Section
2.01 hereof have been satisfied or waived (other than this
Section 4.01(e)).
Section 4.02. Conditions Precedent to Borrowing. The
obligation of the Liquidity Provider to make an Advance on the
occasion of each Borrowing shall be subject to the conditions
precedent that the Effective Date shall have occurred and, prior
to the date of such Borrowing, the Borrower shall have delivered
a Notice of Borrowing which conforms to the terms and conditions
of this Agreement and has been completed as may be required by
the relevant form of the Notice of Borrowing for the type of
Advances requested.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower.
So long as any Advance shall remain unpaid or the Liquidity
Provider shall have any Commitment hereunder or the Borrower
shall have any obligation to pay any amount to the Liquidity
Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements.
Punctually pay or cause to be paid all amounts payable by it
under this Agreement and the other Operative Agreements and
observe and perform in all material respects the conditions,
covenants and requirements applicable to it contained in
this Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity
Provider with reasonable promptness, such other information
and data with respect to the transactions contemplated by
the Operative Agreements as from time to time may be
reasonably requested by the Liquidity Provider; and permit
the Liquidity Provider, upon reasonable notice, to inspect
the Borrower's books and records with respect to such
transactions and to meet with officers and employees of the
Borrower to discuss such transactions.
Section 5.02. Negative Covenants of the Borrower. So
long as any Advance shall remain unpaid or the Liquidity Provider
shall have any Commitment hereunder or the Borrower shall have
any obligation to pay any amount to the Liquidity Provider
hereunder, the Borrower will not, without the written consent of
the Liquidity Provider:
(a) Amendments. Modify, amend or supplement, or give
any consent to any modification, amendment or supplement or
make any waiver with respect to, any provision of the Trust
Agreements or the Intercreditor Agreement, except for any
supplemental agreement to the Trust Agreements provided for
in Section 9.01 thereof.
(b) Borrower. Appoint or permit or suffer to be
appointed any successor Borrower without the prior written
approval of the Liquidity Provider (which approval shall not
be unreasonably withheld).
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any
Liquidity Event of Default occurs hereunder and (b) there is a
Performing Note Deficiency, the Liquidity Provider may, in its
discretion, deliver to the Borrower a Termination Notice, the
effect of which shall be to cause (i) this Agreement to expire on
the fifth Business Day after the date on which such Termination
Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final
Advance in accordance with Section 2.02(d) hereof and Section
3.6(i) of the Intercreditor Agreement, (iii) all other
outstanding Advances to be automatically converted into Final
Advances for purposes of determining the Applicable Liquidity
Rate for interest payable thereon, and (iv) subject to Sections
2.07 and 2.09 hereof, all Advances, any accrued interest thereon
and any other amounts outstanding hereunder to become immediately
due and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Liquidity
Provider, and, in the case of an amendment, the Borrower, and
then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 7.02. Notices, Etc. Except as otherwise
expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including telecopier
and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity
Provider: CREDIT SUISSE
12 East 49th Street
New York, NY 10017
Attention: Aircraft Finance Department
Telephone: (212) 238-5335
Telecopy: (212) 238-5331
or, as to each of the foregoing, at such other address as shall
be designated by such Person in a written notice to the others.
All such notices and communications shall be effective (i) if
given by telecopier, when transmitted to the telecopier number
specified above, (ii) if given by mail, when deposited in the
mails addressed as specified above, and (iii) if given by other
means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the
provisions of Articles II and III hereof shall not be effective
until received by the Liquidity Provider. A copy of all notices
delivered hereunder to either party shall in addition be
delivered to each of the parties to the Participation Agreements
at their respective addresses set forth therein.
Section 7.03. No Waiver; Remedies. No failure on the
part of the Liquidity Provider to exercise, and no delay in
exercising, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right under this Agreement preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies
provided by law.
Section 7.04. Further Assurances. The Borrower agrees
to do such further acts and things and to execute and deliver to
the Liquidity Provider such additional assignments, agreements,
powers and instruments as the Liquidity Provider may reasonably
require or deem advisable to carry into effect the purposes of
this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers
and remedies hereunder and under the other Operative Agreements.
Section 7.05. Indemnification; Survival of Certain
Provisions. The Liquidity Provider shall be indemnified
hereunder to the extent and in the manner described in Section
10.1 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, whether
arising before, on or after the date hereof, 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, this Agreement, the Fee Letter, the
Intercreditor Agreement, the Refunding Agreement or the
Participation Purchase 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 (i) to the extent such Expense is
attributable to the gross negligence or willful misconduct of
such Liquidity Indemnitee or any Related Indemnitee, (ii) that is
ordinary and usual operating overhead expense, (iii) to the
extent such Expense is attributable to the failure by such
Liquidity Indemnitee or its Related Indemnitee to perform or
observe any agreement, covenant or condition on its part to be
performed or observed in any Operative Agreement or the
Participation Purchase Agreement. The indemnities contained in
such Section 10.1, and the provisions of Sections 3.01, 3.02,
3.03, 7.05 and 7.07 hereof, shall survive the termination of this
Agreement.
Section 7.06. Liability of the Liquidity Provider.
(a) Neither the Liquidity Provider nor any of its officers or
directors shall be liable or responsible for: (i) the use which
may be made of the Advances or any acts or omissions of the
Borrower or any beneficiary or transferee in connection
therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; or (iii) the making of Advances by the
Liquidity Provider against delivery of a Notice of Borrowing and
other documents which do not comply with the terms hereof;
provided, however, that the Borrower shall have a claim against
the Liquidity Provider, and the Liquidity Provider shall be
liable to the Borrower, to the extent of any damages suffered by
the Borrower which were the result of (A) the Liquidity
Provider's willful misconduct or negligence in determining
whether documents presented hereunder comply with the terms
hereof, or (B) any breach by the Liquidity Provider of any of the
terms of this Agreement, including, but not limited to, the
Liquidity Provider's failure to make lawful payment hereunder
after the delivery to it by the Borrower of a Notice of Borrowing
strictly complying with the terms and conditions hereof.
(b) The Liquidity Provider shall not be liable or
responsible in any respect for (i) any error, omission,
interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with
this Agreement or any Notice of Borrowing delivered hereunder, or
(ii) any action, inaction or omission which may be taken by it in
good faith, absent willful misconduct or negligence (in which
event the extent of the Liquidity Provider's potential liability
to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any
Notice of Borrowing.
Section 7.07. Costs, Expenses and Taxes. The Borrower
agrees to pay, or cause to be paid (A) on the Effective Date and
on such later date or dates on which the Liquidity Provider shall
make demand, all reasonable out-of-pocket costs and expenses 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,
including, without limitation, the reasonable fees and expenses
of outside counsel for the Liquidity Provider and (B) on demand,
all reasonable costs and expenses of the Liquidity Provider
(including reasonable counsel fees and expenses) in connection
with (i) the enforcement of this Agreement, the Participation
Purchase Agreement or any other Operative Agreement, (ii) the
modification or amendment of, or supplement to, this Agreement,
the Participation Purchase 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 Participation Purchase Agreement, the
Intercreditor Agreement or any other Operative Document 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 7.08. Binding Effect; Participations. (a)
This Agreement shall be binding upon and inure to the benefit of
the Borrower and the Liquidity Provider and their respective
successors and assigns, except that neither the Liquidity
Provider (except as otherwise provided in this Section 7.08) nor
the Borrower shall have the right to assign its rights hereunder
or any interest herein without the prior written consent of the
other party, subject to the requirement of Section 7.08(b). The
Liquidity Provider may grant participations herein or in any of
its rights or security hereunder and under the other Operative
Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirement of Section
7.08(b). No such participation by the Liquidity Provider,
however, will relieve the Liquidity Provider of its obligations
hereunder. In connection with any participation or any proposed
participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the
Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges
and agrees that the Liquidity Provider's source of funds may
derive in part from its participants (other than Continental).
Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy
requirements, increased costs, reduced receipts and the like as
they pertain to the Liquidity Provider shall be deemed also to
include those of each of its participants (subject, in each case,
to the maximum amount that would have been incurred by or
attributable to the Liquidity Provider directly if the Liquidity
Provider, rather than the participant, had held the interest
participated).
(b) If, pursuant to subsection (a) above, the
Liquidity Provider sells any participation or transfers any
interest in this Agreement to any bank or other entity (each, a
"Transferee"), then, concurrently with the effectiveness of such
transfer, 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 by the
Borrower or the Liquidity Provider 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 them
indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes
as required by law from such payments at the applicable statutory
rate.
(c) Notwithstanding the other provisions of this
Section 7.08, the Liquidity Provider may assign and pledge all or
any portion of the Advances owing to it to any Federal Reserve
Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such
assigned Advances made by the Borrower to the Liquidity Provider
in accordance with the terms of this Agreement shall satisfy the
Borrower's obligations hereunder in respect of such assigned
Advance to the extent of such payment. No such assignment shall
release the Liquidity Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of this
Agreement which is prohibited, unenforceable or not authorized in
any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition, unenforceability or non-
authorization without invalidating the remaining provisions
hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
Section 7.11. Submission to Jurisdiction; Waiver of
Jury Trial.
(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 non-
exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from
any thereof;
(ii) consents that any such action or proceeding may
be brought in such courts, and waives any objection that it
may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such
action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any
substantially similar form and mail), postage prepaid, to
each party hereto at its address set forth in Section 7.02
hereof, or at such other address of which the Liquidity
Provider shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted
by law or shall limit the right to sue in any other
jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort
claims, breach of duty claims and all other common law and
statutory claims. The Borrower and the Liquidity Provider each
warrant and represent that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel.
THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY
OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.
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 and the other
Operative Agreements 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 hereto 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 and Trustee,
as Borrower
By:_____________________________
Name:
Title:
CREDIT SUISSE,
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 CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of an Interest Advance by the
Liquidity Provider to be used for the payment of interest on
the Class A Certificates which was payable on ______________
in accordance with the terms and provisions of the Class A
Trust Agreement and the Class A Certificates pursuant to
clause fourth of Section 3.2 of the Intercreditor Agreement
or clause sixth of Section 3.3 of the Intercreditor
Agreement, which Advance is requested to be made on
_________.
(3) The amount of the Interest Advance requested
hereby (i) is $________, to be applied in respect of the
payment of interest which was due and payable on the Class A
Certificates on such 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, the Class C Certificates or the Class D
Certificates, or interest on the Class B Certificates, the
Class C Certificates or the Class D 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
Available Commitment on the date hereof, and (v) has not
been and is not the subject of a prior or contemporaneous
Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will apply the
same in accordance with the terms of Section 3.2 or 3.3 of
the Intercreditor Agreement, as the case may be, (b) no
portion of such amount shall be applied by the Borrower for
any other purpose and (c) no portion of such amount until so
applied shall be commingled with other funds held by the
Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate Advance on the
third Business Day following your receipt of this notice.
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 Available Commitment by an amount equal
to the amount of the Interest Advance requested to be made hereby
as set forth in clause (i) of paragraph (3) of this Certificate
and such reduction shall automatically result in corresponding
reductions in the amounts available to be borrowed pursuant to a
subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and
delivered this Notice of Borrowing as of the _____ day of
__________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Subordination Agent, as Borrower
By___________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance
Notice of Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the
undersigned borrower (the "Borrower"), hereby certifies to CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Non-Extension Advance by the
Liquidity Provider to be used for the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(d) of
the Intercreditor Agreement, which Advance is requested to
be made on ________.
(3) The amount of the Non-Extension Advance requested
hereby (i) is $_________, which equals the 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 principal of, or premium on,
the Class A Certificates, or principal of or interest or
premium on, the Class B Certificates, the Class C
Certificates or the Class D Certificates, (iii) was computed
in accordance with the provisions of the Class A
Certificates, the Class A Trust Agreement and the
Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of
Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the Class A Cash Collateral Account and apply
the same in accordance with the terms of Section 3.6(d) of
the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate Advance on the
third Business Day following your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the
Liquidity Agreement, (A) the making of the Non-Extension Advance
as requested by this Notice of Borrowing shall automatically and
irrevocably terminate the obligation of the Liquidity Provider to
make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances
under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and
delivered this Notice of Borrowing as of the _____ day of
__________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Subordination Agent, as Borrower
By________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the
undersigned subordination agent (the "Borrower"), hereby
certifies to CREDIT SUISSE (the "Liquidity Provider"), with
reference to the Revolving Credit Agreement dated as of January
31, 1996, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Downgrade Advance by the
Liquidity Provider to be used for the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(c) of
the Intercreditor Agreement by reason of the downgrading of
the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold
Rating, which Advance is requested to be made on _________.
(3) The amount of the Downgrade Advance requested
hereby (i) is $__________, which equals the 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, the Class C
Certificates or the Class D Certificates, (iii) was computed
in accordance with the provisions of the Class A
Certificates, the Class A Trust Agreement and the
Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of
Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the 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.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate 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 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 CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Final Advance by the
Liquidity Provider to be used for the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(i) of
the Intercreditor Agreement by reason of the receipt by the
Borrower of a Termination Notice from the Liquidity Provider
with respect to the Liquidity Agreement, which Advance is
requested to be made on ________.
(3) The amount of the Final Advance requested hereby
(i) is $______, which equals the 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 upon receipt
by the Borrower of a Termination Notice from the Liquidity
Provider in respect of the Liquidity 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, the Class C Certificates or the Class D
Certificates, (iii) was computed in accordance with the
provisions of the Class A Certificates, the Class A Trust
Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has
not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the Class A Cash Collateral Account and apply
the same in accordance with the terms of Section 3.6(i) of
the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate 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:
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 January 31,
1996, between Wilmington Trust Company, as
Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust 1996-A, as
Borrower, and Credit Suisse (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01
of the Liquidity Agreement, by reason of the occurrence of a
Liquidity Event of Default and a Performing Note Deficiency (each
as defined therein) or other event specified 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,
CREDIT SUISSE
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 January 31,
1996, between Wilmington Trust Company, as
Subordination Agent, as agent and trustee for the
Continental Airlines 1996-A Pass Through Trust, as
Borrower, and Credit Suisse (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby
irrevocably transfers to:
______________________________
[Name of Transferee]
______________________________
[Address of Transferee]
all rights 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.
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 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 4.11
- -----------------------------------------------------------------
REVOLVING CREDIT AGREEMENT
Dated as of January 31, 1996
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines 1996-B Pass Through Trust,
as Borrower
and
CREDIT SUISSE,
acting through its New York Branch
as Liquidity Provider
- -----------------------------------------------------------------
Relating to
Continental Airlines 1996-B Pass Through Trust
7.82% Continental Airlines Pass Through Certificates,
Series 1996-B
TABLE OF CONTENTS Page
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms . . . . . . . . 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. . . . . . . . . . . . . 7
Section 2.02. Making the Advances . . . . . . . . . 7
Section 2.03. Fees. . . . . . . . . . . . . . . . . 9
Section 2.04. Reduction or Termination of
the Commitment. . . . . . . . . . . . . . . . . 9
Section 2.05. Repayments of Interest
Advances or the Final Advance . . . . . . . . . 9
Section 2.06. Repayments of Provider
Advances. . . . . . . . . . . . . . . . . . . . 10
Section 2.07. Payments to the Liquidity
Provider Under the Intercreditor
Agreement . . . . . . . . . . . . . . . . . . . 11
Section 2.08. Book Entries. . . . . . . . . . . . . 11
Section 2.09. Payments from Available Funds
Only. . . . . . . . . . . . . . . . . . . . . . 11
Section 2.10. Extension of the Expiry Date;
Non-Extension Advance . . . . . . . . . . . . . 12
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs . . . . . . . . . . . 12
Section 3.02. Capital Adequacy. . . . . . . . . . . 13
Section 3.03. Payments Free of Deductions . . . . . 14
Section 3.04. Payments. . . . . . . . . . . . . . . 14
Section 3.05. Computations. . . . . . . . . . . . . 14
Section 3.06. Payment on Non-Business Days. . . . . 15
Section 3.07. Interest. . . . . . . . . . . . . . . 15
Section 3.08. Replacement of Borrower . . . . . . . 16
Section 3.09. Funding Loss Indemnification. . . . . 16
Section 3.10. Illegality. . . . . . . . . . . . . . 16
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to
Effectiveness of Section 2.01 . . . . . . . . . 17
Section 4.02. Conditions Precedent to
Borrowing . . . . . . . . . . . . . . . . . . . 19
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the
Borrower. . . . . . . . . . . . . . . . . . . . 20
Section 5.02. Negative Covenants of the
Borrower. . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default . . . . . 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc.. . . . . . . . . . . 21
Section 7.02. Notices, Etc. . . . . . . . . . . . . 21
Section 7.03. No Waiver; Remedies . . . . . . . . . 22
Section 7.04. Further Assurances. . . . . . . . . . 22
Section 7.05. Indemnification; Survival of
Certain Provisions. . . . . . . . . . . . . . . 22
Section 7.06. Liability of the Liquidity
Provider. . . . . . . . . . . . . . . . . . . . 23
Section 7.07. Costs, Expenses and Taxes . . . . . . 23
Section 7.08. Binding Effect;
Participations. . . . . . . . . . . . . . . . . 24
Section 7.09. Severability. . . . . . . . . . . . . 25
Section 7.10. GOVERNING LAW . . . . . . . . . . . . 25
Section 7.11. Submission to Jurisdiction;
Waiver of Jury Trial. . . . . . . . . . . . . . 26
Section 7.12. Execution in Counterparts . . . . . . 26
Section 7.13. Entirety. . . . . . . . . . . . . . . 27
Section 7.14. Headings. . . . . . . . . . . . . . . 27
Section 7.15. LIQUIDITY PROVIDER'S
OBLIGATION TO MAKE ADVANCES . . . . . . . . . . 27
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
January 31, 1996, 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 CREDIT SUISSE, a bank
organized under the laws of Switzerland acting through its New
York branch (the "Liquidity Provider").
W I T N E S S E T H :
WHEREAS, pursuant to the Class B Trust Agreement
(such term and all other capitalized terms used in these recitals
having the meanings set forth or referred to in Section 1.01),
the Class B Trust is issuing the Class B Certificates; and
WHEREAS, the Borrower, in order to support the
timely payment of a portion of the interest on the Class B
Certificates in accordance with their terms, has requested the
Liquidity Provider to enter into this Agreement, providing in
part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms.
(a) Definitions. As used in this Agreement and unless otherwise
expressly indicated, or unless the context clearly requires
otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"Additional Cost" has the meaning assigned to such
term in Section 3.01.
"Advance" means an Interest Advance, a Final
Advance, a Provider Advance, an Applied Provider
Advance or an Unpaid Advance, as the case may be.
"Applicable Liquidity Rate" has the meaning
assigned to such term in Section 3.07(c).
"Applicable Margin" means (w) with respect to any
Unpaid Advance (including an Applied Provider Advance)
that is a LIBOR Advance, 2.00%, (x) with respect to any
Unpaid Advance (including an Applied Provider Advance)
that is a Base Rate Advance, 1.00%, (y) with respect to
any Provider Advance (other than an Applied Provider
Advance) that is a LIBOR Advance, 0.75%, and (z) with
respect to any Provider Advance (other than an Applied
Provider Advance) that is a Base Rate Advance, 0%.
"Applied Provider Advance" has the meaning
assigned to such term in Section 2.06(a).
"Available Commitment" means, at any time of
determination, an amount equal to (i) the Commitment at
such time less (ii) subject to the proviso contained in
the third sentence of Section 2.02(a), the aggregate
amount of each Interest Advance outstanding at such
time; provided that following a Non-Extension Advance,
a Downgrade Advance or a Final Advance, the Available
Commitment shall be zero.
"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 the higher of (i) the
base commercial lending rate announced from time to
time by Credit Suisse, New York Branch, or (ii) the
rate quoted by Credit Suisse, New York Branch, at
approximately 11:00 A.M., New York City time, to
dealers in the New York Federal funds market for
overnight offering of dollars by Credit Suisse, New
York Branch, for deposit plus one-quarter of one
percent (1/4%).
"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 or, so long as any Class B Certificate
is outstanding, the city and state in which the Class B
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.
"Commitment" means, initially, $11,772,633.60, as
the same may be reduced from time to time in accordance
with Section 2.04(a).
"Downgrade Advance" means an Advance made pursuant
to Section 2.02(c).
"Effective Date" has the meaning specified in
Section 4.01. The delivery of the certificate of the
Liquidity Provider contemplated by Section 4.01(e)
shall be conclusive evidence that the Effective Date
has occurred.
"Excluded Taxes" has the meaning assigned to such
term in Section 3.01.
"Excluded Withholding Taxes" means (i) withholding
taxes imposed under laws in effect on the date hereof
by the United States on payments to a recipient in the
jurisdiction in which the Liquidity Provider's initial
Lending Office is located, and (ii) withholding taxes
imposed by the United States on payments to a recipient
in any other jurisdiction to which such Lending Office
is moved if, under the laws in effect at the time of
such move, such laws would require greater withholding
taxes than the laws applicable to the jurisdiction from
which such Lending Office was moved.
"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).
"Expiry Date" means January 29, 1997, initially,
or any date to which the Expiry Date is extended
pursuant to Section 2.10.
"Final Advance" means an Advance made pursuant to
Section 2.02(d).
"Intercreditor Agreement" means the Intercreditor
Agreement dated the date hereof, among the Trustees,
the Liquidity Provider, the liquidity provider under
each Liquidity Facility (other than this Agreement) and
the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
"Interest Advance" means an Advance made pursuant
to Section 2.02(a).
"Interest Period" means, with respect to any LIBOR
Advance, each of the following periods:
(i) the period beginning on the third Business
Day following the Liquidity Provider's receipt of
the Notice of Borrowing for such LIBOR Advance and
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 the
Borrowing for such Final Advance (in the case of
clause (x) above) or the Regular Distribution Date
following such conversion (in the case of clause (y)
above).
"Lending Office" means the lending office of the
Liquidity Provider, presently located at New York, New
York, or such other lending office as the Liquidity
Provider from time to time shall notify the Borrower as
its lending office hereunder.
"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 Credit Suisse
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) each affiliate of the Liquidity
Provider, (iii) the respective directors, officers,
employees, agents and servants of the Liquidity
Provider and its affiliates, and (iv) the successors
and permitted assigns of the persons described in
clauses (i) through (iii), inclusive.
"Liquidity Provider" has the meaning assigned to
such term in the recital of parties to this Agreement.
"Non-Excluded Tax" has the meaning specified in
Section 3.03.
"Non-Extension Advance" means an Advance made
pursuant to Section 2.02(b).
"Notice of Borrowing" has the meaning specified in
Section 2.02(e).
"Notice of Replacement Borrower" has the meaning
specified in Section 3.08.
"Offering Circular" means the Offering Circular
dated January 24, 1996 relating to the Certificates, as
such Offering Circular may be amended or supplemented.
"Participation Purchase Agreement" means the
Participation Purchase Agreement dated the date hereof
relating to this Agreement, between the Liquidity
Provider and Continental.
"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.
"Provider Advance" means a Downgrade Advance or a
Non-Extension Advance.
"Provider Advance Amortization Date" has the
meaning assigned to such term in Section 2.06(d).
"Regulatory Change" has the meaning assigned to
such term in Section 3.01.
"Related Indemnitee" means, with respect to any
Liquidity Indemnitee, its director, officer, employee,
agent, affiliate or employer.
"Replenishment Amount" has the meaning assigned to
such term in Section 2.06(b).
"Required Amount" means, for any day, the sum of
the aggregate amount of interest, calculated at the
rate per annum equal to the Stated Interest Rate for
the Class B Certificates, without giving effect to any
adjustment pursuant to the Registration Rights
Agreement, plus an additional margin of 0.50% per annum
(provided that such additional margin shall cease to
apply at such time as the interest rate borne by the
Certificates is no longer subject to increase pursuant
to the terms of the Registration Rights Agreement),
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.
"Termination Date" means the earliest to occur of
the following: (i) the Expiry Date; (ii) the date on
which the Borrower delivers to the Liquidity Provider a
certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class B
Certificates have been paid in full (or provision has
been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or
are otherwise no longer entitled to the benefits of
this Agreement; (iii) the date on which the Borrower
delivers to the Liquidity Provider a certificate,
signed by a Responsible Officer of the Borrower,
certifying that a Replacement Liquidity Facility has
been substituted for this Agreement in full pursuant to
Section 3.6(e) of the Intercreditor Agreement; (iv) the
fifth Business Day following the receipt by the
Borrower of a Termination Notice from the Liquidity
Provider pursuant to Section 6.01 hereof; and (v) the
date on which no Advance is or may (including by reason
of reinstatement as herein provided) become available
for a Borrowing hereunder.
"Termination Notice" means the Notice of
Termination substantially in the form of Annex V to
this Agreement.
"Transferee" has the meaning assigned to such term
in Section 7.08(b).
"Unpaid Advance" has the meaning assigned to such
term in Section 2.05.
(b) Terms Defined in the Intercreditor Agreement.
For all purposes of this Agreement, the following terms shall
have the respective meanings assigned to such terms in the
Intercreditor Agreement:
"Certificates", "Class A Certificates", "Class B Cash
Collateral Account", "Class B Certificates", "Class B
Certificateholders", "Class B Trust", "Class B Trust
Agreement", "Class B Trustee", "Class C Certificates,
"Class D Certificates", "Continental", "Continental
Bankruptcy Event", "Controlling Party", "Corporate
Trust Office", "Distribution Date", "Equipment Notes",
"Fee Letter", "Indenture", "Initial Purchasers",
"Liquidity Facility", "Moody's", "Operative
Agreements", "Participation Agreements", "Performing
Equipment Note", "Person", "Pool Balance", "Purchase
Agreement","Rating Agency", "Refunding Agreement",
"Registration Rights Agreement", "Regular Distribution
Date", "Replacement Liquidity Facility", "Responsible
Officer", "Scheduled Payment", "Special Payment",
"Standard & Poor's", "Stated Interest Rate",
"Subordination Agent", "Taxes", "Threshold Rating",
"Triggering Event", "Trust Agreements", "Trustee" and
"Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity
Provider hereby irrevocably agrees, on the terms and conditions
hereinafter set forth, to make Advances to the Borrower from time
to time on any Business Day during the period from the Effective
Date until 12:00 Noon (New York City time) on the Expiry Date
(unless the obligations of the Liquidity Provider shall be
earlier terminated in accordance with the terms of
Section 2.04(b)) in an aggregate amount at any time outstanding
not to exceed the Commitment.
Section 2.02. Making the Advances. (a) Interest
Advances shall be made in one or more Borrowings by delivery to
the Liquidity Provider of one or more written and completed
Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Available Commitment at such time
and shall be used solely for the payment when due of interest on
the Class B Certificates at the Stated Interest Rate therefor in
accordance with Section 3.6(a) of the Intercreditor Agreement.
Each Interest Advance made hereunder shall automatically reduce
the Available Commitment and the amount available to be borrowed
hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full of
the amount of any Interest Advance made pursuant to this Section
2.02(a), together with accrued interest thereon (as provided
herein), the Available Commitment shall be reinstated by the
amount of such repaid Interest Advance; provided, however, that
the Available Commitment shall not be so reinstated at any time
if (i) a Triggering Event shall have occurred and be continuing
and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a
single Borrowing if this Agreement is not extended in accordance
with Section 3.6(d) of the Intercreditor Agreement (unless a
Replacement Liquidity Facility shall have been 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 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).
(c) A Downgrade Advance shall be made in a single
Borrowing upon a downgrading of the Liquidity Provider's short-
term unsecured debt rating issued by either Rating Agency below
the Threshold Rating (as provided for in Section 3.6(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility
shall have been 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 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).
(d) A Final Advance shall be made in a single
Borrowing upon the receipt by the Borrower of a Termination
Notice from the Liquidity Provider pursuant to Section 6.01
hereof by delivery to the Liquidity Provider of a written and
completed Notice of Borrowing in substantially the form of
Annex IV attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the 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).
(e) Each Borrowing shall be made on notice in
writing (a "Notice of Borrowing") in substantially the form
required by Section 2.02(a), 2.02(b), 2.02(c) or 2.02(d), as the
case may be, given not later than 12:00 Noon (New York City time)
on the Business Day prior to the day of the proposed Borrowing by
the Borrower to the Liquidity Provider. Upon satisfaction of the
conditions precedent set forth in Section 4.02 with respect to a
requested Borrowing, the Liquidity Provider shall, before
12:00 Noon (New York City time) on the date of such Borrowing or
on such later Business Day specified by the Borrower in such
Notice of Borrowing, make available for the account of its
Lending Office, in U.S. dollars and in immediately available
funds, the amount of such Borrowing to be paid to the Borrower in
accordance with its payment instructions. 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, 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.
(f) Upon the making of any Advance requested
pursuant to a Notice of Borrowing, in accordance with the
Borrower's payment instructions, the Liquidity Provider shall be
fully discharged of its obligation hereunder with respect to such
Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in
respect of such Notice of Borrowing to the Borrower or to any
other person (including the holder of any Class B Certificate or
the Class B Trustee) who makes to the Class B Trustee or the
Borrower a demand for payment with respect to any Class B
Certificate. Following the making of any Advance pursuant to
Section 2.02(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. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the
provisions of this Agreement, the Liquidity Provider makes no
representation as to, and assumes no responsibility for, the
correctness or sufficiency for any purpose of the amount of the
Advances so made and requested.
Section 2.03. Fees. The Borrower agrees to pay
to the Liquidity Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the
Commitment. (a) Automatic Reductions. Promptly following each
date on which the Required Amount is reduced as a result of a
reduction in the Pool Balance of the Class B Certificates or
otherwise, the Commitment shall automatically be reduced to an
amount equal to such reduced Required Amount (as calculated by
the Borrower). The Borrower shall give notice of any such
automatic reduction of the 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 Commitment.
(b) Termination. Upon the making of any
Non-Extension Advance, Downgrade Advance or Final Advance
hereunder or the occurrence of the Termination Date, the
obligation of the Liquidity Provider to make further Advances
hereunder shall automatically and irrevocably terminate, and the
Borrower shall not be entitled to request any further Borrowing
hereunder.
Section 2.05. Repayments of Interest Advances or
the Final Advance. Subject to Sections 2.07 and 2.09 hereof, the
Borrower hereby agrees to pay, or to cause to be paid, to the
Liquidity Provider on each date on which the Liquidity Provider
shall make an Interest Advance or the Final Advance, an amount
equal to (a) the amount of such Advance (any such Advance, until
repaid, is referred to herein as an "Unpaid Advance"), plus (b)
interest on the amount of each such Unpaid Advance as provided in
Section 3.07 hereof. Subject to Sections 2.06, 2.07 and 2.09
hereof, unless otherwise waived by the Liquidity Provider, the
Borrower shall be obligated, without notice of an Advance or
demand for repayment from the Liquidity Provider (which notice
and demand are hereby waived by the Borrower), to repay the
Liquidity Provider for all Advances on the same day as made. The
Borrower and the Liquidity Provider agree that the repayment in
full of each Interest Advance and Final Advance on the date such
Advance is made is intended to be a contemporaneous exchange for
new value given to the Borrower by the Liquidity Provider.
Section 2.06. Repayments of Provider Advances.
(a) Amounts advanced hereunder in respect of a Provider Advance
shall be deposited in the 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 3.07; 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,
an "Applied Provider Advance") shall 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, a Termination Notice is delivered to the Subordination
Agent pursuant hereto, 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. 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 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
3.07 hereof.
(b) 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
"fourth" of Section 3.2 of the Intercreditor Agreement (any such
amount being a "Replenishment Amount") for the purpose of
replenishing the balance thereof up to the Required Amount at
such time, (i) the aggregate outstanding principal amount of all
Applied Provider Advances shall be automatically reduced by the
amount of such Replenishment Amount and (ii) the principal amount
of the outstanding Provider Advance shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity
Facility in replacement of this Agreement in accordance with
Section 3.6(e) of the Intercreditor Agreement, amounts remaining
on deposit in the Class B Cash Collateral Account after giving
effect to any application of funds therefrom to any payment of
interest on the Class B Certificates 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.
(d) Any portion of any Provider Advance made
prior to the tenth anniversary of the date hereof and remaining
unrepaid as of such date (or, if this Agreement has been extended
beyond such tenth anniversary, as of such extended date) (the
"Provider Advance Amortization Date") shall be payable to the
Liquidity Provider in eight quarterly installments on each
successive Regular Distribution Date commencing on the first
Regular Distribution Date following the Provider Advance
Amortization Date. Each such installment shall be in an amount
equal to 12.50% of the full outstanding amount of such Provider
Advance as of the Provider Advance Amortization Date, together
with accrued interest thereon as provided in Section 3.07 to but
excluding the date of payment of such installment; provided,
however, that the Borrower shall not be required to make
amortization payments pursuant to this Section 2.06(d) to the
extent the Liquidity Provider has received payments from
Continental in respect of the purchase price for the
participation to be acquired by Continental pursuant to the
Participation Purchase Agreement; and provided further, however,
that the final installment payable by the Borrower, if any, under
this Section 2.06(d) shall in any event be in an amount equal to
the lesser of (x) the then outstanding principal amount of such
Provider Advance and (y) the Liquidity Provider Share (as defined
in the Participation Purchase Agreement) of such Provider
Advance, in each case together with accrued interest due thereon
to the date of payment of such final installment. The foregoing
exception to the Borrower's obligation to make amortization
payments pursuant to this Section 2.06(d) relates to the timing
of the Borrower's repayment obligations in respect of Provider
Advances only and in no event does the foregoing exception
relieve the Borrower from its obligation to make repayments to
the Liquidity Provider at the times and in the amounts otherwise
provided for hereunder and under the Intercreditor Agreement.
Section 2.07. Payments to the Liquidity Provider
Under the Intercreditor Agreement. In order to provide for
payment or repayment to the Liquidity Provider of any amounts
hereunder, the Intercreditor Agreement provides that amounts
available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity
Provider pursuant to the terms of the Intercreditor Agreement
(including, without limitation, Section 3.6(f) of the
Intercreditor Agreement), shall be paid to the Liquidity Provider
in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider in
the order of priority required by the applicable provisions of
Articles II and III of the Intercreditor Agreement.
Section 2.08. Book Entries. The Liquidity
Provider shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower
resulting from Advances made from time to time and the amounts of
principal and interest payable hereunder and paid from time to
time in respect thereof; provided, however, that the failure by
the Liquidity Provider to maintain such account or accounts shall
not affect the obligations of the Borrower in respect of
Advances.
Section 2.09. Payments from Available Funds Only.
All payments to be made by the Borrower under this Agreement
shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments or payments under
Section 10.1 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 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 prior to the
then effective Expiry Date, 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 30 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 advise the Borrower (and 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 such 25th day to request, and upon such
request the Liquidity Provider shall promptly make, a Non-
Extension Advance in accordance with Section 2.02(b) hereof and
Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. The Borrower
shall pay to the Liquidity Provider from time to time such
amounts as may be necessary to compensate the Liquidity Provider
for any 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 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
Withholding Taxes or taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office for any of such
Advances by the jurisdiction where the Liquidity Provider's
principal office or such Lending Office is located; the taxes
referred to in this parenthetical being "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); or (3) imposes any other condition affecting this
Agreement or the Intercreditor Agreement (or any such extensions
of credit or liabilities). 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 amount payable under this Section that
may thereafter accrue and would not, in the reasonable judgement
of the Liquidity Provider, be otherwise disadvantageous to the
Liquidity Provider.
The Liquidity Provider will notify the Borrower of
any event occurring after the date of this Agreement that will
entitle the Liquidity Provider to compensation pursuant to this
Section 3.01 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation
of the amounts owed under this Section. Determinations by the
Liquidity Provider for purposes of this Section 3.01 of the
effect of any Regulatory Change on its costs of making or
maintaining Advances or on amounts receivable by it in respect of
Advances, and of the additional amounts required to compensate
the Liquidity Provider in respect of any Additional Costs, shall
be prima facie evidence of the amount owed under this Section.
Section 3.02. Capital Adequacy. In the event
that (1) compliance with any judicial, administrative, or other
governmental interpretation of any law or regulation or (2)
compliance by the Liquidity Provider or any corporation
controlling the Liquidity Provider with any guideline or request
from any central bank or other governmental authority (whether or
not having the force of law) has the effect of requiring an
increase in the amount of capital required or expected 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 such additional amount 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 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 amount payable under this Section that
may thereafter accrue and would not, in the reasonable judgment
of the Liquidity Provider, be otherwise disadvantageous to the
Liquidity Provider.
The Liquidity Provider will notify the Borrower of
any event occurring after the date of this Agreement that will
entitle the Liquidity Provider to compensation pursuant to this
Section 3.02 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation
of the amounts owed under this Section. Determinations by the
Liquidity Provider for purposes of this Section 3.02 of the
effect of any increase in the amount of capital required to be
maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall
be prima facie evidence of the amounts owed under this Section.
Section 3.03. Payments Free of Deductions. 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 3.04. Payments. The Borrower shall make
or cause to be made each payment to the Liquidity Provider under
this Agreement so as to cause the same to be received by the
Liquidity Provider not later than 1:00 P.M. (New York City time)
on the day when due. The Borrower shall make all such payments
in lawful money of the United States of America, to the Liquidity
Provider in immediately available funds, by wire transfer to
Credit Suisse, New York, Loan Clearing Account No. 904996-02.
Section 3.05. Computations. All computations of
interest based on the Base Rate shall be made on the basis of a
year of 365 or 366 days, as the case may be, and all computations
of interest based on the LIBOR Rate shall be made on the basis of
a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days.
Whenever any payment to be made hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be
deemed to have been made when due). If any payment in respect of
interest on an Advance is so deferred to the next succeeding
Business Day, such deferral shall not delay the commencement of
the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest
will be payable on such Advance on the next interest payment date
for such Advance.
Section 3.07. Interest. (a) The Borrower shall
pay, or shall cause to be paid, 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 and (ii) any other
amount due hereunder (whether fees, commissions, expenses or
other amounts or, to the extent permitted by law, installments of
interest on Advances or any such other amount) which is not paid
when due (whether at stated maturity, by acceleration or
otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such
case, at a fluctuating interest rate per annum for each day equal
to the Applicable Liquidity Rate (as defined below) for such
Advance or such other amount as in effect for such day, but in no
event at a rate per annum greater than the maximum rate permitted
by applicable law; provided, however, that, if at any time the
otherwise applicable interest rate as set forth in this Section
3.07 shall exceed the maximum rate permitted by applicable law,
then any subsequent reduction in such interest rate will not
reduce the rate of interest payable pursuant to this Section 3.07
below the maximum rate permitted by applicable law until the
total amount of interest accrued equals the amount of interest
that would have accrued if such otherwise applicable interest
rate as set forth in this Section 3.07 had at all times been in
effect. Nothing contained in this Section 3.07 shall require the
Borrower to pay any amount under this Section 3.07 other than to
the extent the Borrower shall have funds available therefor.
(b) 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) may 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.
(c) Each LIBOR Advance shall bear interest during
each Interest Period at 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 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 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) shall bear interest at the Base Rate.
Each change in the Base Rate shall become
effective immediately. The rates of interest specified in this
Section 3.07(c) with respect to any Advance or other amount shall
be referred to as the "Applicable Liquidity Rate".
Section 3.08. Replacement of Borrower. From time
to time, upon the effective date and time specified in a written
and completed Notice of Replacement Borrower in substantially the
form of Annex VI attached hereto (a "Notice of Replacement
Borrower") delivered to the Liquidity Provider by the then
Borrower, the successor Borrower designated therein shall be
substituted for as the Borrower for all purposes hereunder.
Section 3.09. Funding Loss Indemnification. The
Borrower shall pay to the Liquidity Provider, upon the request of
the Liquidity Provider, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Liquidity Provider)
to compensate it for any loss, cost, or expense incurred as a
result of:
(1) Any payment of a LIBOR Advance on a date
other than the last day of the Interest Period for such
Advance; or
(2) Any failure by the Borrower to borrow or
convert, as the case may be, a LIBOR Advance on the
date for borrowing or conversion, as the case may be,
specified in the relevant notice under Section 2.02 or
3.07.
Section 3.10. Illegality. Notwithstanding any
other provision in this Agreement, if any change in any
applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the
Liquidity Provider (or its Lending Office) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it
unlawful or impossible for the Liquidity Provider (or its Lending
Office) to maintain or fund its LIBOR Advances, then upon notice
to the Borrower by the Liquidity Provider, the outstanding
principal amount of the LIBOR Advances shall be converted to Base
Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the
judgment of the Liquidity Provider, requires immediate repayment;
or (b) at the expiration of the last Interest Period to expire
before the effective date of any such change or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to
Effectiveness of Section 2.01. Section 2.01 of this Agreement
shall become effective on and as of the first date (the
"Effective Date") on which the following conditions precedent
have been satisfied or waived:
(a) The Liquidity Provider shall have received on
or before January 31, 1996 each of the following, each
dated such date (except for those documents delivered
pursuant to paragraphs (v) and (vii) of this Section
4.01(a)), and each in form and substance satisfactory
to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the
Borrower;
(ii) The Participation Purchase Agreement, duly
executed on behalf of Continental, and the
Intercreditor Agreement duly executed on behalf of
each of the parties thereto;
(iii) Counterparts (or certified copies thereof)
of each of the Operative Agreements (other than
this Agreement and the Intercreditor Agreement)
which, when taken together, bear the signatures of
all of the respective parties thereto and which
are in full force and effect in accordance with
their respective terms;
(iv) A copy of the Offering Circular and specimen
copies of the Class B Certificates;
(v) Evidence that, on the Effective Date, the
Class A Certificates, the Class B Certificates,
the Class C Certificates and the Class D
Certificates will receive long-term credit ratings
from Moody's of not lower than A2, Baa1, Ba1 and
B1, respectively, and from S&P of not lower than
A+, BBB+, BB+ and B+, respectively;
(vi) An executed or certified copy of each
document, instrument, certificate and opinion
delivered pursuant to the Class B Trust Agreement,
the Intercreditor Agreement, the Refunding
Agreements and the other Operative Agreements
(together with, in the case of each such opinion,
other than the opinion of counsel for the Initial
Purchasers, a letter from the counsel rendering
such opinion to the effect that the Liquidity
Provider is entitled to rely on such opinion as if
it were addressed to the Liquidity Provider);
(vii) 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 and the
Liquidity Provider created by the Operative
Agreements;
(viii) Copies of the appraisals attached as
exhibits to the Offering Circular;
(ix) An agreement from Continental, pursuant to
which (i) Continental agrees to provide certain
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 of the Leases
to the parties thereto, (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
(iii) Continental confirms the ability of the
Liquidity Provider to enforce the indemnification
described in Section 7.05 hereof, and
(x) Such other documents, instruments, opinions
and approvals (and, if requested by the Liquidity
Provider, certified duplicates or executed copies
thereof) as the Liquidity Provider shall have
reasonably requested.
(b) The following statements shall be true and
shall be deemed to have been represented by each party
(other than clauses (ii) and (iii) below, which shall
be deemed to have been represented only by Continental)
to the Refunding Agreements as being true on and as of
the Effective Date:
(i) The representations and warranties of such
Person contained in each Refunding Agreement are
true and correct on and as of the Effective Date
as though made on and as of the Effective Date;
(ii) 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; and
(iii) There has been no material adverse change
in the business, financial condition, operations,
property or prospects of Continental since
September 30, 1995.
(c) The Liquidity Provider shall have received
payment in full of all fees and other sums required to
be paid to or for the account of the Liquidity Provider
on or prior to the Effective Date.
(d) All conditions precedent to the issuance of
the Certificates under the Trust Agreements shall have
been satisfied, 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 Initial
Purchasers under the Purchase Agreement shall have been
satisfied (unless any of such conditions precedent
under the Purchase Agreement shall have been waived by
the Initial Purchasers).
(e) The Borrower shall have received a
certificate, dated the date hereof, signed by a duly
authorized representative of the Liquidity Provider,
certifying that all conditions precedent to the
effectiveness of Section 2.01 hereof have been
satisfied or waived (other than this Section 4.01(e)).
Section 4.02. Conditions Precedent to Borrowing.
The obligation of the Liquidity Provider to make an Advance on
the occasion of each Borrowing shall be subject to the conditions
precedent that the Effective Date shall have occurred and, prior
to the date of such Borrowing, the Borrower shall have delivered
a Notice of Borrowing which conforms to the terms and conditions
of this Agreement and has been completed as may be required by
the relevant form of the Notice of Borrowing for the type of
Advances requested.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the
Borrower. So long as any Advance shall remain unpaid or the
Liquidity Provider shall have any Commitment hereunder or the
Borrower shall have any obligation to pay any amount to the
Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements.
Punctually pay or cause to be paid all amounts payable
by it under this Agreement and the other Operative
Agreements and observe and perform in all material
respects the conditions, covenants and requirements
applicable to it contained in this Agreement and the
other Operative Agreements.
(b) Reporting Requirements. Furnish to the
Liquidity Provider with reasonable promptness, such
other information and data with respect to the
transactions contemplated by the Operative Agreements
as from time to time may be reasonably requested by the
Liquidity Provider; and permit the Liquidity Provider,
upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to
meet with officers and employees of the Borrower to
discuss such transactions.
Section 5.02. Negative Covenants of the Borrower.
So long as any Advance shall remain unpaid or the Liquidity
Provider shall have any Commitment hereunder or the Borrower
shall have any obligation to pay any amount to the Liquidity
Provider hereunder, the Borrower will not, without the written
consent of the Liquidity Provider:
(a) Amendments. Modify, amend or supplement, or
give any consent to any modification, amendment or
supplement or make any waiver with respect to, any
provision of the Trust Agreements or the Intercreditor
Agreement, except for any supplemental agreement to the
Trust Agreements provided for in Section 9.01 thereof.
(b) Borrower. Appoint or permit or suffer to be
appointed any successor Borrower without the prior
written approval of the Liquidity Provider (which
approval shall not be unreasonably withheld).
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If
(a) any Liquidity Event of Default occurs hereunder and (b) there
is a Performing Note Deficiency, the Liquidity Provider may, in
its discretion, deliver to the Borrower a Termination Notice, the
effect of which shall be to cause (i) this Agreement to expire on
the fifth Business Day after the date on which such Termination
Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final
Advance in accordance with Section 2.02(d) hereof and Section
3.6(i) of the Intercreditor Agreement, (iii) all other
outstanding Advances to be automatically converted into Final
Advances for purposes of determining the Applicable Liquidity
Rate for interest payable thereon, and (iv) subject to Sections
2.07 and 2.09 hereof, all Advances, any accrued interest thereon
and any other amounts outstanding hereunder to become immediately
due and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement, nor consent to any
departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment, the
Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given.
Section 7.02. Notices, Etc. Except as otherwise
expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including telecopier
and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider:CREDIT SUISSE
12 East 49th Street
New York, NY 10017
Attention: Aircraft Finance Department
Telephone: (212) 238-5335
Telecopy: (212) 238-5331
or, as to each of the foregoing, at such other address as shall
be designated by such Person in a written notice to the others.
All such notices and communications shall be effective (i) if
given by telecopier, when transmitted to the telecopier number
specified above, (ii) if given by mail, when deposited in the
mails addressed as specified above, and (iii) if given by other
means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the
provisions of Articles II and III hereof shall not be effective
until received by the Liquidity Provider. A copy of all notices
delivered hereunder to either party shall in addition be
delivered to each of the parties to the Participation Agreements
at their respective addresses set forth therein.
Section 7.03. No Waiver; Remedies. No failure on
the part of the Liquidity Provider to exercise, and no delay in
exercising, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right under this Agreement preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies
provided by law.
Section 7.04. Further Assurances. The Borrower
agrees to do such further acts and things and to execute and
deliver to the Liquidity Provider such additional assignments,
agreements, powers and instruments as the Liquidity Provider may
reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or
to better assure and confirm unto the Liquidity Provider its
rights, powers and remedies hereunder and under the other
Operative Agreements.
Section 7.05. Indemnification; Survival of
Certain Provisions. The Liquidity Provider shall be indemnified
hereunder to the extent and in the manner described in Section
10.1 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, whether
arising before, on or after the date hereof, 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, this Agreement, the Fee Letter, the
Intercreditor Agreement, the Refunding Agreement or the
Participation Purchase 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 (i) to the extent such Expense is
attributable to the gross negligence or willful misconduct of
such Liquidity Indemnitee or any Related Indemnitee, (ii) that is
ordinary and usual operating overhead expense, (iii) to the
extent such Expense is attributable to the failure by such
Liquidity Indemnitee or its Related Indemnitee to perform or
observe any agreement, covenant or condition on its part to be
performed or observed in any Operative Agreement or the
Participation Purchase Agreement. The indemnities contained in
such Section 10.1, and the provisions of Sections 3.01, 3.02,
3.03, 7.05 and 7.07 hereof, shall survive the termination of this
Agreement.
Section 7.06. Liability of the Liquidity
Provider. (a) Neither the Liquidity Provider nor any of its
officers or directors shall be liable or responsible for:
(i) the use which may be made of the Advances or any acts or
omissions of the Borrower or any beneficiary or transferee in
connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; or (iii) the making of
Advances by the Liquidity Provider against delivery of a Notice
of Borrowing and other documents which do not comply with the
terms hereof; provided, however, that the Borrower shall have a
claim against the Liquidity Provider, and the Liquidity Provider
shall be liable to the Borrower, to the extent of any damages
suffered by the Borrower which were the result of (A) the
Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the
terms hereof, or (B) any breach by the Liquidity Provider of any
of the terms of this Agreement, including, but not limited to,
the Liquidity Provider's failure to make lawful payment hereunder
after the delivery to it by the Borrower of a Notice of Borrowing
strictly complying with the terms and conditions hereof.
(b) The Liquidity Provider shall not be liable or
responsible in any respect for (i) any error, omission,
interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with
this Agreement or any Notice of Borrowing delivered hereunder, or
(ii) any action, inaction or omission which may be taken by it in
good faith, absent willful misconduct or negligence (in which
event the extent of the Liquidity Provider's potential liability
to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any
Notice of Borrowing.
Section 7.07. Costs, Expenses and Taxes. The
Borrower agrees to pay, or cause to be paid (A) on the Effective
Date and on such later date or dates on which the Liquidity
Provider shall make demand, all reasonable out-of-pocket costs
and expenses 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, including, without limitation, the reasonable
fees and expenses of outside counsel for the Liquidity Provider
and (B) on demand, all reasonable costs and expenses of the
Liquidity Provider (including reasonable counsel fees and
expenses) in connection with (i) the enforcement of this
Agreement, the Participation Purchase Agreement or any other
Operative Agreement, (ii) the modification or amendment of, or
supplement to, this Agreement, the Participation Purchase
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 Participation Purchase Agreement, the Intercreditor Agreement
or any other Operative Document 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 7.08. Binding Effect; Participations.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower and the Liquidity Provider and their
respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this
Section 7.08) nor the Borrower shall have the right to assign its
rights hereunder or any interest herein without the prior written
consent of the other party, subject to the requirement of Section
7.08(b). The Liquidity Provider may grant participations herein
or in any of its rights or security hereunder and under the other
Operative Agreements to such Persons as the Liquidity Provider
may in its sole discretion select, subject to the requirement of
Section 7.08(b). No such participation by the Liquidity
Provider, however, will relieve the Liquidity Provider of its
obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose
to the participant or the proposed participant any information
that the Borrower is required to deliver or to disclose to the
Liquidity Provider pursuant to this Agreement. The Borrower
acknowledges and agrees that the Liquidity Provider's source of
funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the
other Operative Agreements to determinations, reserve and capital
adequacy requirements, increased costs, reduced receipts and the
like as they pertain to the Liquidity Provider shall be deemed
also to include those of each of its participants (subject, in
each case, to the maximum amount that would have been incurred by
or attributable to the Liquidity Provider directly if the
Liquidity Provider, rather than the participant, had held the
interest participated).
(b) If, pursuant to subsection (a) above, the
Liquidity Provider sells any participation or transfers any
interest in this Agreement to any bank or other entity (each, a
"Transferee"), then, concurrently with the effectiveness of such
transfer, 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 by the
Borrower or the Liquidity Provider 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 them
indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes
as required by law from such payments at the applicable statutory
rate.
(c) Notwithstanding the other provisions of this
Section 7.08, the Liquidity Provider may assign and pledge all or
any portion of the Advances owing to it to any Federal Reserve
Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such
assigned Advances made by the Borrower to the Liquidity Provider
in accordance with the terms of this Agreement shall satisfy the
Borrower's obligations hereunder in respect of such assigned
Advance to the extent of such payment. No such assignment shall
release the Liquidity Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of
this Agreement which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability
or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
Section 7.11. Submission to Jurisdiction; Waiver
of Jury Trial.
(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 non-exclusive general jurisdiction of
the courts of the State of New York, the courts of the
United States of America for the Southern District of
New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding
may be brought in such courts, and waives any objection
that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that
such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such
action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any
substantially similar form and mail), postage prepaid,
to each party hereto at its address set forth in
Section 7.02 hereof, or at such other address of which
the Liquidity Provider shall have been notified
pursuant thereto; and
(iv) agrees that nothing herein shall affect the
right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any
other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort
claims, breach of duty claims and all other common law and
statutory claims. The Borrower and the Liquidity Provider each
warrant and represent that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel.
THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY
OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.
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 and the
other Operative Agreements 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 hereto 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 and Trustee,
as Borrower
By:_____________________________
Name:
Title:
CREDIT SUISSE,
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 CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of an Interest Advance by the
Liquidity Provider to be used for the payment of interest on
the Class B Certificates which was payable on ______________
in accordance with the terms and provisions of the Class B
Trust Agreement and the Class B Certificates pursuant to
clause fourth of Section 3.2 of the Intercreditor Agreement
or clause sixth of Section 3.3 of the Intercreditor
Agreement, which Advance is requested to be made on
__________.
(3) The amount of the Interest Advance requested
hereby (i) is $_________, to be applied in respect of the
payment of interest which was due and payable on the Class B
Certificates on such 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, the Class C Certificates or the Class D
Certificates, or interest on the Class A Certificates, the
Class C Certificates or the Class D 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
Available Commitment on the date hereof, and (v) has not
been and is not the subject of a prior or contemporaneous
Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will apply the
same in accordance with the terms of Section 3.2 or 3.3 of
the Intercreditor Agreement, as the case may be, (b) no
portion of such amount shall be applied by the Borrower for
any other purpose and (c) no portion of such amount until so
applied shall be commingled with other funds held by the
Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate Advance on the
third Business Day following your receipt of this notice.
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 Available Commitment by an amount equal
to the amount of the Interest Advance requested to be made hereby
as set forth in clause (i) of paragraph (3) of this Certificate
and such reduction shall automatically result in corresponding
reductions in the amounts available to be borrowed pursuant to a
subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and
delivered this Notice of Borrowing as of the ______ day of
__________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Subordination Agent, as Borrower
By________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance
Notice of Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the
undersigned borrower (the "Borrower"), hereby certifies to CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Non-Extension Advance by the
Liquidity Provider to be used for the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(d) of
the Intercreditor Agreement, which Advance is requested to
be made on ________.
(3) The amount of the Non-Extension Advance requested
hereby (i) is $_________, which equals the 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 principal of, or premium on,
the Class B Certificates, or principal of or interest or
premium on, the Class A Certificates, the Class C
Certificates or the Class D Certificates, (iii) was computed
in accordance with the provisions of the Class B
Certificates, the Class B Trust Agreement and the
Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of
Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the Class B Cash Collateral Account and apply
the same in accordance with the terms of Section 3.6(d) of
the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate Advance on the
third Business Day following your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the
Liquidity Agreement, (A) the making of the Non-Extension Advance
as requested by this Notice of Borrowing shall automatically and
irrevocably terminate the obligation of the Liquidity Provider to
make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances
under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and
delivered this Notice of Borrowing as of the _______ day of
__________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Subordination Agent, as Borrower
By_______________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the
undersigned subordination agent (the "Borrower"), hereby
certifies to CREDIT SUISSE (the "Liquidity Provider"), with
reference to the Revolving Credit Agreement dated as of January
31, 1996, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Downgrade Advance by the
Liquidity Provider to be used for the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(c) of
the Intercreditor Agreement by reason of the downgrading of
the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold
Rating, which Advance is requested to be made on _________.
(3) The amount of the Downgrade Advance requested
hereby (i) is $_________, which equals the 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, the Class C
Certificates or the Class D Certificates, (iii) was computed
in accordance with the provisions of the Class B
Certificates, the Class B Trust Agreement and the
Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of
Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the 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.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate 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 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 CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Final Advance by the
Liquidity Provider to be used for the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(i) of
the Intercreditor Agreement by reason of the receipt by the
Borrower of a Termination Notice from the Liquidity Provider
with respect to the Liquidity Agreement, which Advance is
requested to be made on ________.
(3) The amount of the Final Advance requested hereby
(i) is $______, which equals the 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 upon receipt
by the Borrower of a Termination Notice from the Liquidity
Provider in respect of the Liquidity 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, the Class C Certificates or the Class D
Certificates, (iii) was computed in accordance with the
provisions of the Class B Certificates, the Class B Trust
Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has
not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the Class B Cash Collateral Account and apply
the same in accordance with the terms of Section 3.6(i) of
the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate 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:
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 January 31,
1996, between Wilmington Trust Company, as
Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust 1996-B, as
Borrower, and Credit Suisse (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01
of the Liquidity Agreement, by reason of the occurrence of a
Liquidity Event of Default and a Performing Note Deficiency (each
as defined therein) or other event specified 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,
CREDIT SUISSE
By
Name:
Title:
cc: Wilmington Trust Company,
as Class B Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of January 31,
1996, between Wilmington Trust Company, as
Subordination Agent, as agent and trustee for the
Continental Airlines 1996-B Pass Through Trust, as
Borrower, and Credit Suisse (the "Liquidity Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby
irrevocably transfers to:
______________________________
[Name of Transferee]
______________________________
[Address of Transferee]
all rights 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.
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 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 4.12
_________________________________________________________________
REVOLVING CREDIT AGREEMENT
Dated as of January 31, 1996
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines 1996-C Pass Through Trust,
as Borrower
and
CREDIT SUISSE,
acting through its New York Branch
as Liquidity Provider
_________________________________________________________________
Relating to
Continental Airlines 1996-C Pass Through Trust
9.50% Continental Airlines Pass Through Certificates,
Series 1996-C
TABLE OF CONTENTS Page
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms . . . . . . . . 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. . . . . . . . . . . . . 7
Section 2.02. Making the Advances . . . . . . . . . 7
Section 2.03. Fees. . . . . . . . . . . . . . . . . 9
Section 2.04. Reduction or Termination of
the Commitment. . . . . . . . . . . . . . . . . 9
Section 2.05. Repayments of Interest
Advances or the Final Advance . . . . . . . . . 9
Section 2.06. Repayments of Provider
Advances. . . . . . . . . . . . . . . . . . . . 10
Section 2.07. Payments to the Liquidity
Provider Under the Intercreditor
Agreement . . . . . . . . . . . . . . . . . . . 11
Section 2.08. Book Entries. . . . . . . . . . . . . 11
Section 2.09. Payments from Available Funds
Only. . . . . . . . . . . . . . . . . . . . . . 11
Section 2.10. Extension of the Expiry Date;
Non-Extension Advance . . . . . . . . . . . . . 12
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs . . . . . . . . . . . 12
Section 3.02. Capital Adequacy. . . . . . . . . . . 13
Section 3.03. Payments Free of Deductions . . . . . 14
Section 3.04. Payments. . . . . . . . . . . . . . . 14
Section 3.05. Computations. . . . . . . . . . . . . 14
Section 3.06. Payment on Non-Business Days. . . . . 15
Section 3.07. Interest. . . . . . . . . . . . . . . 15
Section 3.08. Replacement of Borrower . . . . . . . 16
Section 3.09. Funding Loss Indemnification. . . . . 16
Section 3.10. Illegality. . . . . . . . . . . . . . 16
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to
Effectiveness of Section 2.01 . . . . . . . . . 17
Section 4.02. Conditions Precedent to
Borrowing . . . . . . . . . . . . . . . . . . . 19
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the
Borrower. . . . . . . . . . . . . . . . . . . . 20
Section 5.02. Negative Covenants of the
Borrower. . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default . . . . . 21
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc.. . . . . . . . . . . 21
Section 7.02. Notices, Etc. . . . . . . . . . . . . 21
Section 7.03. No Waiver; Remedies . . . . . . . . . 22
Section 7.04. Further Assurances. . . . . . . . . . 22
Section 7.05. Indemnification; Survival of
Certain Provisions. . . . . . . . . . . . . . . 22
Section 7.06. Liability of the Liquidity
Provider. . . . . . . . . . . . . . . . . . . . 23
Section 7.07. Costs, Expenses and Taxes . . . . . . 23
Section 7.08. Binding Effect;
Participations. . . . . . . . . . . . . . . . . 24
Section 7.09. Severability. . . . . . . . . . . . . 25
Section 7.10. GOVERNING LAW . . . . . . . . . . . . 25
Section 7.11. Submission to Jurisdiction;
Waiver of Jury Trial. . . . . . . . . . . . . . 26
Section 7.12. Execution in Counterparts . . . . . . 26
Section 7.13. Entirety. . . . . . . . . . . . . . . 27
Section 7.14. Headings. . . . . . . . . . . . . . . 27
Section 7.15. LIQUIDITY PROVIDER'S
OBLIGATION TO MAKE ADVANCES . . . . . . . . . . 27
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
January 31, 1996, 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 CREDIT SUISSE, a bank
organized under the laws of Switzerland acting through its New
York branch (the "Liquidity Provider").
W I T N E S S E T H :
WHEREAS, pursuant to the Class C Trust Agreement
(such term and all other capitalized terms used in these recitals
having the meanings set forth or referred to in Section 1.01),
the Class C Trust is issuing the Class C Certificates; and
WHEREAS, the Borrower, in order to support the
timely payment of a portion of the interest on the Class C
Certificates in accordance with their terms, has requested the
Liquidity Provider to enter into this Agreement, providing in
part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms.
(a) Definitions. As used in this Agreement and unless otherwise
expressly indicated, or unless the context clearly requires
otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"Additional Cost" has the meaning assigned to such
term in Section 3.01.
"Advance" means an Interest Advance, a Final
Advance, a Provider Advance, an Applied Provider
Advance or an Unpaid Advance, as the case may be.
"Applicable Liquidity Rate" has the meaning
assigned to such term in Section 3.07(c).
"Applicable Margin" means (w) with respect to any
Unpaid Advance (including an Applied Provider Advance)
that is a LIBOR Advance, 2.00%, (x) with respect to any
Unpaid Advance (including an Applied Provider Advance)
that is a Base Rate Advance, 1.00%, (y) with respect to
any Provider Advance (other than an Applied Provider
Advance) that is a LIBOR Advance, 0.75%, and (z) with
respect to any Provider Advance (other than an Applied
Provider Advance) that is a Base Rate Advance, 0%.
"Applied Provider Advance" has the meaning
assigned to such term in Section 2.06(a).
"Available Commitment" means, at any time of
determination, an amount equal to (i) the Commitment at
such time less (ii) subject to the proviso contained in
the third sentence of Section 2.02(a), the aggregate
amount of each Interest Advance outstanding at such
time; provided that following a Non-Extension Advance,
a Downgrade Advance or a Final Advance, the Available
Commitment shall be zero.
"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 the higher of (i) the
base commercial lending rate announced from time to
time by Credit Suisse, New York Branch, or (ii) the
rate quoted by Credit Suisse, New York Branch, at
approximately 11:00 A.M., New York City time, to
dealers in the New York Federal funds market for
overnight offering of dollars by Credit Suisse, New
York Branch, for deposit plus one-quarter of one
percent (1/4%).
"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 or, so long as any Class C Certificate
is outstanding, the city and state in which the Class C
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.
"Commitment" means, initially, $11,117,550.00, as
the same may be reduced from time to time in accordance
with Section 2.04(a).
"Downgrade Advance" means an Advance made pursuant
to Section 2.02(c).
"Effective Date" has the meaning specified in
Section 4.01. The delivery of the certificate of the
Liquidity Provider contemplated by Section 4.01(e)
shall be conclusive evidence that the Effective Date
has occurred.
"Excluded Taxes" has the meaning assigned to such
term in Section 3.01.
"Excluded Withholding Taxes" means (i) withholding
taxes imposed under laws in effect on the date hereof
by the United States on payments to a recipient in the
jurisdiction in which the Liquidity Provider's initial
Lending Office is located, and (ii) withholding taxes
imposed by the United States on payments to a recipient
in any other jurisdiction to which such Lending Office
is moved if, under the laws in effect at the time of
such move, such laws would require greater withholding
taxes than the laws applicable to the jurisdiction from
which such Lending Office was moved.
"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).
"Expiry Date" means January 29, 1997, initially,
or any date to which the Expiry Date is extended
pursuant to Section 2.10.
"Final Advance" means an Advance made pursuant to
Section 2.02(d).
"Intercreditor Agreement" means the Intercreditor
Agreement dated the date hereof, among the Trustees,
the Liquidity Provider, the liquidity provider under
each Liquidity Facility (other than this Agreement) and
the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
"Interest Advance" means an Advance made pursuant
to Section 2.02(a).
"Interest Period" means, with respect to any LIBOR
Advance, each of the following periods:
(i)the period beginning on the third Business Day
following the Liquidity Provider's receipt of the
Notice of Borrowing for such LIBOR Advance and
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 the
Borrowing for such Final Advance (in the case of
clause (x) above) or the Regular Distribution Date
following such conversion (in the case of clause (y)
above).
"Lending Office" means the lending office of the
Liquidity Provider, presently located at New York, New
York, or such other lending office as the Liquidity
Provider from time to time shall notify the Borrower as
its lending office hereunder.
"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 Credit Suisse
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) each affiliate of the Liquidity
Provider, (iii) the respective directors, officers,
employees, agents and servants of the Liquidity
Provider and its affiliates, and (iv) the successors
and permitted assigns of the persons described in
clauses (i) through (iii), inclusive.
"Liquidity Provider" has the meaning assigned to
such term in the recital of parties to this Agreement.
"Non-Excluded Tax" has the meaning specified in
Section 3.03.
"Non-Extension Advance" means an Advance made
pursuant to Section 2.02(b).
"Notice of Borrowing" has the meaning specified in
Section 2.02(e).
"Notice of Replacement Borrower" has the meaning
specified in Section 3.08.
"Offering Circular" means the Offering Circular
dated January 24, 1996 relating to the Certificates, as
such Offering Circular may be amended or supplemented.
"Participation Purchase Agreement" means the
Participation Purchase Agreement dated the date hereof
relating to this Agreement, between the Liquidity
Provider and Continental.
"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.
"Provider Advance" means a Downgrade Advance or a
Non-Extension Advance.
"Provider Advance Amortization Date" has the
meaning assigned to such term in Section 2.06(d).
"Regulatory Change" has the meaning assigned to
such term in Section 3.01.
"Related Indemnitee" means, with respect to any
Liquidity Indemnitee, its director, officer, employee,
agent, affiliate or employer.
"Replenishment Amount" has the meaning assigned to
such term in Section 2.06(b).
"Required Amount" means, for any day, the sum of
the aggregate amount of interest, calculated at the
rate per annum equal to the Stated Interest Rate for
the Class C Certificates, without giving effect to any
adjustment pursuant to the Registration Rights
Agreement, plus an additional margin of 0.50% per annum
(provided that such additional margin shall cease to
apply at such time as the interest rate borne by the
Certificates is no longer subject to increase pursuant
to the terms of the Registration Rights Agreement),
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.
"Termination Date" means the earliest to occur of
the following: (i) the Expiry Date; (ii) the date on
which the Borrower delivers to the Liquidity Provider a
certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class C
Certificates have been paid in full (or provision has
been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or
are otherwise no longer entitled to the benefits of
this Agreement; (iii) the date on which the Borrower
delivers to the Liquidity Provider a certificate,
signed by a Responsible Officer of the Borrower,
certifying that a Replacement Liquidity Facility has
been substituted for this Agreement in full pursuant to
Section 3.6(e) of the Intercreditor Agreement; (iv) the
fifth Business Day following the receipt by the
Borrower of a Termination Notice from the Liquidity
Provider pursuant to Section 6.01 hereof; and (v) the
date on which no Advance is or may (including by reason
of reinstatement as herein provided) become available
for a Borrowing hereunder.
"Termination Notice" means the Notice of
Termination substantially in the form of Annex V to
this Agreement.
"Transferee" has the meaning assigned to such term
in Section 7.08(b).
"Unpaid Advance" has the meaning assigned to such
term in Section 2.05.
(b) Terms Defined in the Intercreditor Agreement.
For all purposes of this Agreement, the following terms shall
have the respective meanings assigned to such terms in the
Intercreditor Agreement:
"Certificates", "Class A Certificates", "Class B
Certificates", "Class C Cash Collateral Account",
"Class C Certificateholders", "Class C Certificates",
"Class C Trust", "Class C Trust Agreement", "Class C
Trustee", "Class D Certificates", "Continental",
"Continental Bankruptcy Event", "Controlling Party",
"Corporate Trust Office", "Distribution Date",
"Equipment Notes", "Fee Letter", "Indenture", "Initial
Purchasers", "Liquidity Facility", "Moody's",
"Operative Agreements", "Participation Agreements",
"Performing Equipment Note", "Person", "Pool Balance",
"Purchase Agreement","Rating Agency", "Refunding
Agreement", "Registration Rights Agreement", "Regular
Distribution Date", "Replacement Liquidity Facility",
"Responsible Officer", "Scheduled Payment", "Special
Payment", "Standard & Poor's", "Stated Interest Rate",
"Subordination Agent", "Taxes", "Threshold Rating",
"Triggering Event", "Trust Agreements", "Trustee" and
"Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity
Provider hereby irrevocably agrees, on the terms and conditions
hereinafter set forth, to make Advances to the Borrower from time
to time on any Business Day during the period from the Effective
Date until 12:00 Noon (New York City time) on the Expiry Date
(unless the obligations of the Liquidity Provider shall be
earlier terminated in accordance with the terms of
Section 2.04(b)) in an aggregate amount at any time outstanding
not to exceed the Commitment.
Section 2.02. Making the Advances. (a) Interest
Advances shall be made in one or more Borrowings by delivery to
the Liquidity Provider of one or more written and completed
Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Available Commitment at such time
and shall be used solely for the payment when due of interest on
the Class C Certificates at the Stated Interest Rate therefor in
accordance with Section 3.6(a) of the Intercreditor Agreement.
Each Interest Advance made hereunder shall automatically reduce
the Available Commitment and the amount available to be borrowed
hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next
sentence). Upon repayment to the Liquidity Provider in full of
the amount of any Interest Advance made pursuant to this Section
2.02(a), together with accrued interest thereon (as provided
herein), the Available Commitment shall be reinstated by the
amount of such repaid Interest Advance; provided, however, that
the Available Commitment shall not be so reinstated at any time
if (i) a Triggering Event shall have occurred and be continuing
and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a
single Borrowing if this Agreement is not extended in accordance
with Section 3.6(d) of the Intercreditor Agreement (unless a
Replacement Liquidity Facility shall have been 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 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).
(c) A Downgrade Advance shall be made in a single
Borrowing upon a downgrading of the Liquidity Provider's short-
term unsecured debt rating issued by either Rating Agency below
the Threshold Rating (as provided for in Section 3.6(c) of the
Intercreditor Agreement) unless a Replacement Liquidity Facility
shall have been 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 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).
(d) A Final Advance shall be made in a single
Borrowing upon the receipt by the Borrower of a Termination
Notice from the Liquidity Provider pursuant to Section 6.01
hereof by delivery to the Liquidity Provider of a written and
completed Notice of Borrowing in substantially the form of
Annex IV attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the 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).
(e) Each Borrowing shall be made on notice in
writing (a "Notice of Borrowing") in substantially the form
required by Section 2.02(a), 2.02(b), 2.02(c) or 2.02(d), as the
case may be, given not later than 12:00 Noon (New York City time)
on the Business Day prior to the day of the proposed Borrowing by
the Borrower to the Liquidity Provider. Upon satisfaction of the
conditions precedent set forth in Section 4.02 with respect to a
requested Borrowing, the Liquidity Provider shall, before
12:00 Noon (New York City time) on the date of such Borrowing or
on such later Business Day specified by the Borrower in such
Notice of Borrowing, make available for the account of its
Lending Office, in U.S. dollars and in immediately available
funds, the amount of such Borrowing to be paid to the Borrower in
accordance with its payment instructions. 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, 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.
(f) Upon the making of any Advance requested
pursuant to a Notice of Borrowing, in accordance with the
Borrower's payment instructions, the Liquidity Provider shall be
fully discharged of its obligation hereunder with respect to such
Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in
respect of such Notice of Borrowing to the Borrower or to any
other person (including the holder of any Class C Certificate or
the Class C Trustee) who makes to the Class C Trustee or the
Borrower a demand for payment with respect to any Class C
Certificate. Following the making of any Advance pursuant to
Section 2.02(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. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the
provisions of this Agreement, the Liquidity Provider makes no
representation as to, and assumes no responsibility for, the
correctness or sufficiency for any purpose of the amount of the
Advances so made and requested.
Section 2.03. Fees. The Borrower agrees to pay
to the Liquidity Provider the fees set forth in the Fee Letter.
Section 2.04. Reduction or Termination of the
Commitment. (a) Automatic Reductions. Promptly following each
date on which the Required Amount is reduced as a result of a
reduction in the Pool Balance of the Class C Certificates or
otherwise, the Commitment shall automatically be reduced to an
amount equal to such reduced Required Amount (as calculated by
the Borrower). The Borrower shall give notice of any such
automatic reduction of the 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 Commitment.
(b) Termination. Upon the making of any
Non-Extension Advance, Downgrade Advance or Final Advance
hereunder or the occurrence of the Termination Date, the
obligation of the Liquidity Provider to make further Advances
hereunder shall automatically and irrevocably terminate, and the
Borrower shall not be entitled to request any further Borrowing
hereunder.
Section 2.05. Repayments of Interest Advances or
the Final Advance. Subject to Sections 2.07 and 2.09 hereof, the
Borrower hereby agrees to pay, or to cause to be paid, to the
Liquidity Provider on each date on which the Liquidity Provider
shall make an Interest Advance or the Final Advance, an amount
equal to (a) the amount of such Advance (any such Advance, until
repaid, is referred to herein as an "Unpaid Advance"), plus (b)
interest on the amount of each such Unpaid Advance as provided in
Section 3.07 hereof. Subject to Sections 2.06, 2.07 and 2.09
hereof, unless otherwise waived by the Liquidity Provider, the
Borrower shall be obligated, without notice of an Advance or
demand for repayment from the Liquidity Provider (which notice
and demand are hereby waived by the Borrower), to repay the
Liquidity Provider for all Advances on the same day as made. The
Borrower and the Liquidity Provider agree that the repayment in
full of each Interest Advance and Final Advance on the date such
Advance is made is intended to be a contemporaneous exchange for
new value given to the Borrower by the Liquidity Provider.
Section 2.06. Repayments of Provider Advances.
(a) Amounts advanced hereunder in respect of a Provider Advance
shall be deposited in the 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 3.07; 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,
an "Applied Provider Advance") shall 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, a Termination Notice is delivered to the Subordination
Agent pursuant hereto, 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. 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 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
3.07 hereof.
(b) 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
"fourth" of Section 3.2 of the Intercreditor Agreement (any such
amount being a "Replenishment Amount") for the purpose of
replenishing the balance thereof up to the Required Amount at
such time, (i) the aggregate outstanding principal amount of all
Applied Provider Advances shall be automatically reduced by the
amount of such Replenishment Amount and (ii) the principal amount
of the outstanding Provider Advance shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity
Facility in replacement of this Agreement in accordance with
Section 3.6(e) of the Intercreditor Agreement, amounts remaining
on deposit in the Class C Cash Collateral Account after giving
effect to any application of funds therefrom to any payment of
interest on the Class C Certificates 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.
(d) Any portion of any Provider Advance made
prior
to the tenth anniversary of the date hereof and remaining
unrepaid as of such date (or, if this Agreement has been extended
beyond such tenth anniversary, as of such extended date) (the
"Provider Advance Amortization Date") shall be payable to the
Liquidity Provider in eight quarterly installments on each
successive Regular Distribution Date commencing on the first
Regular Distribution Date following the Provider Advance
Amortization Date. Each such installment shall be in an amount
equal to 12.50% of the full outstanding amount of such Provider
Advance as of the Provider Advance Amortization Date, together
with accrued interest thereon as provided in Section 3.07 to but
excluding the date of payment of such installment; provided,
however, that the Borrower shall not be required to make
amortization payments pursuant to this Section 2.06(d) to the
extent the Liquidity Provider has received payments from
Continental in respect of the purchase price for the
participation to be acquired by Continental pursuant to the
Participation Purchase Agreement; and provided further, however,
that the final installment payable by the Borrower, if any, under
this Section 2.06(d) shall in any event be in an amount equal to
the lesser of (x) the then outstanding principal amount of such
Provider Advance and (y) the Liquidity Provider Share (as defined
in the Participation Purchase Agreement) of such Provider
Advance, in each case together with accrued interest due thereon
to the date of payment of such final installment. The foregoing
exception to the Borrower's obligation to make amortization
payments pursuant to this Section 2.06(d) relates to the timing
of the Borrower's repayment obligations in respect of Provider
Advances only and in no event does the foregoing exception
relieve the Borrower from its obligation to make repayments to
the Liquidity Provider at the times and in the amounts otherwise
provided for hereunder and under the Intercreditor Agreement.
Section 2.07. Payments to the Liquidity Provider
Under the Intercreditor Agreement. In order to provide for
payment or repayment to the Liquidity Provider of any amounts
hereunder, the Intercreditor Agreement provides that amounts
available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity
Provider pursuant to the terms of the Intercreditor Agreement
(including, without limitation, Section 3.6(f) of the
Intercreditor Agreement), shall be paid to the Liquidity Provider
in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider in
the order of priority required by the applicable provisions of
Articles II and III of the Intercreditor Agreement.
Section 2.08. Book Entries. The Liquidity
Provider shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower
resulting from Advances made from time to time and the amounts of
principal and interest payable hereunder and paid from time to
time in respect thereof; provided, however, that the failure by
the Liquidity Provider to maintain such account or accounts shall
not affect the obligations of the Borrower in respect of
Advances.
Section 2.09. Payments from Available Funds Only.
All payments to be made by the Borrower under this Agreement
shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments or payments under
Section 10.1 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 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 prior to the
then effective Expiry Date, 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 30 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 advise the Borrower (and 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 such 25th day to request, and upon such
request the Liquidity Provider shall promptly make, a Non-
Extension Advance in accordance with Section 2.02(b) hereof and
Section 3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. The Borrower
shall pay to the Liquidity Provider from time to time such
amounts as may be necessary to compensate the Liquidity Provider
for any 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 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
Withholding Taxes or taxes imposed on the overall net income of
the Liquidity Provider or of its Lending Office for any of such
Advances by the jurisdiction where the Liquidity Provider's
principal office or such Lending Office is located; the taxes
referred to in this parenthetical being "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); or (3) imposes any other condition affecting this
Agreement or the Intercreditor Agreement (or any such extensions
of credit or liabilities). 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 amount payable under this Section that
may thereafter accrue and would not, in the reasonable judgement
of the Liquidity Provider, be otherwise disadvantageous to the
Liquidity Provider.
The Liquidity Provider will notify the Borrower of
any event occurring after the date of this Agreement that will
entitle the Liquidity Provider to compensation pursuant to this
Section 3.01 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation
of the amounts owed under this Section. Determinations by the
Liquidity Provider for purposes of this Section 3.01 of the
effect of any Regulatory Change on its costs of making or
maintaining Advances or on amounts receivable by it in respect of
Advances, and of the additional amounts required to compensate
the Liquidity Provider in respect of any Additional Costs, shall
be prima facie evidence of the amount owed under this Section.
Section 3.02. Capital Adequacy. In the event
that (1) compliance with any judicial, administrative, or other
governmental interpretation of any law or regulation or (2)
compliance by the Liquidity Provider or any corporation
controlling the Liquidity Provider with any guideline or request
from any central bank or other governmental authority (whether or
not having the force of law) has the effect of requiring an
increase in the amount of capital required or expected 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 such additional amount 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 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 amount payable under this Section that
may thereafter accrue and would not, in the reasonable judgment
of the Liquidity Provider, be otherwise disadvantageous to the
Liquidity Provider.
The Liquidity Provider will notify the Borrower of
any event occurring after the date of this Agreement that will
entitle the Liquidity Provider to compensation pursuant to this
Section 3.02 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation,
which notice shall describe in reasonable detail the calculation
of the amounts owed under this Section. Determinations by the
Liquidity Provider for purposes of this Section 3.02 of the
effect of any increase in the amount of capital required to be
maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall
be prima facie evidence of the amounts owed under this Section.
Section 3.03. Payments Free of Deductions. 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 3.04. Payments. The Borrower shall make
or cause to be made each payment to the Liquidity Provider under
this Agreement so as to cause the same to be received by the
Liquidity Provider not later than 1:00 P.M. (New York City time)
on the day when due. The Borrower shall make all such payments
in lawful money of the United States of America, to the Liquidity
Provider in immediately available funds, by wire transfer to
Credit Suisse, New York, Loan Clearing Account No. 904996-02.
Section 3.05. Computations. All computations of
interest based on the Base Rate shall be made on the basis of a
year of 365 or 366 days, as the case may be, and all computations
of interest based on the LIBOR Rate shall be made on the basis of
a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days.
Whenever any payment to be made hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be
deemed to have been made when due). If any payment in respect of
interest on an Advance is so deferred to the next succeeding
Business Day, such deferral shall not delay the commencement of
the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest
will be payable on such Advance on the next interest payment date
for such Advance.
Section 3.07. Interest. (a) The Borrower shall
pay, or shall cause to be paid, 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 and (ii) any other
amount due hereunder (whether fees, commissions, expenses or
other amounts or, to the extent permitted by law, installments of
interest on Advances or any such other amount) which is not paid
when due (whether at stated maturity, by acceleration or
otherwise) from and including the due date thereof to but
excluding the date such amount is paid in full, in each such
case, at a fluctuating interest rate per annum for each day equal
to the Applicable Liquidity Rate (as defined below) for such
Advance or such other amount as in effect for such day, but in no
event at a rate per annum greater than the maximum rate permitted
by applicable law; provided, however, that, if at any time the
otherwise applicable interest rate as set forth in this Section
3.07 shall exceed the maximum rate permitted by applicable law,
then any subsequent reduction in such interest rate will not
reduce the rate of interest payable pursuant to this Section 3.07
below the maximum rate permitted by applicable law until the
total amount of interest accrued equals the amount of interest
that would have accrued if such otherwise applicable interest
rate as set forth in this Section 3.07 had at all times been in
effect. Nothing contained in this Section 3.07 shall require the
Borrower to pay any amount under this Section 3.07 other than to
the extent the Borrower shall have funds available therefor.
(b) 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) may 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.
(c) Each LIBOR Advance shall bear interest during
each Interest Period at 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 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 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) shall bear interest at the Base Rate.
Each change in the Base Rate shall become
effective immediately. The rates of interest specified in this
Section 3.07(c) with respect to any Advance or other amount shall
be referred to as the "Applicable Liquidity Rate".
Section 3.08. Replacement of Borrower. From time
to time, upon the effective date and time specified in a written
and completed Notice of Replacement Borrower in substantially the
form of Annex VI attached hereto (a "Notice of Replacement
Borrower") delivered to the Liquidity Provider by the then
Borrower, the successor Borrower designated therein shall be
substituted for as the Borrower for all purposes hereunder.
Section 3.09. Funding Loss Indemnification. The
Borrower shall pay to the Liquidity Provider, upon the request of
the Liquidity Provider, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Liquidity Provider)
to compensate it for any loss, cost, or expense incurred as a
result of:
(1) Any payment of a LIBOR Advance on a date other
than the last day of the Interest Period for such
Advance; or
(2) Any failure by the Borrower to borrow or
convert, as the case may be, a LIBOR Advance on the
date for borrowing or conversion, as the case may be,
specified in the relevant notice under Section 2.02 or
3.07.
Section 3.10. Illegality. Notwithstanding any
other provision in this Agreement, if any change in any
applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the
Liquidity Provider (or its Lending Office) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it
unlawful or impossible for the Liquidity Provider (or its Lending
Office) to maintain or fund its LIBOR Advances, then upon notice
to the Borrower by the Liquidity Provider, the outstanding
principal amount of the LIBOR Advances shall be converted to Base
Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the
judgment of the Liquidity Provider, requires immediate repayment;
or (b) at the expiration of the last Interest Period to expire
before the effective date of any such change or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to
Effectiveness of Section 2.01. Section 2.01 of this Agreement
shall become effective on and as of the first date (the
"Effective Date") on which the following conditions precedent
have been satisfied or waived:
(a)The Liquidity Provider shall have received on
or before January 31, 1996 each of the following, each
dated such date (except for those documents delivered
pursuant to paragraphs (v) and (vii) of this Section
4.01(a)), and each in form and substance satisfactory
to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the
Borrower;
(ii) The Participation Purchase Agreement, duly
executed on behalf of Continental, and the
Intercreditor Agreement duly executed on behalf of
each of the parties thereto;
(iii) Counterparts (or certified copies thereof)
of
each of the Operative Agreements (other than this
Agreement and the Intercreditor Agreement) which,
when taken together, bear the signatures of all of
the respective parties thereto and which are in
full force and effect in accordance with their
respective terms;
(iv) A copy of the Offering Circular and specimen
copies of the Class C Certificates;
(v) Evidence that, on the Effective Date, the
Class
A Certificates, the Class B Certificates, the
Class C Certificates and the Class D Certificates
will receive long-term credit ratings from Moody's
of not lower than A2, Baa1, Ba1 and B1,
respectively, and from S&P of not lower than A+,
BBB+, BB+ and B+, respectively;
(vi) An executed or certified copy of each
document, instrument, certificate and opinion
delivered pursuant to the Class C Trust Agreement,
the Intercreditor Agreement, the Refunding
Agreements and the other Operative Agreements
(together with, in the case of each such opinion,
other than the opinion of counsel for the Initial
Purchasers, a letter from the counsel rendering
such opinion to the effect that the Liquidity
Provider is entitled to rely on such opinion as if
it were addressed to the Liquidity Provider);
(vii) 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 and the Liquidity
Provider created by the Operative Agreements;
(viii) Copies of the appraisals attached as
exhibits to the Offering Circular;
(ix) An agreement from Continental, pursuant to
which (i) Continental agrees to provide certain
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 of the Leases
to the parties thereto, (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
(iii) Continental confirms the ability of the
Liquidity Provider to enforce the indemnification
described in Section 7.05 hereof, and
(x) Such other documents, instruments, opinions
and
approvals (and, if requested by the Liquidity
Provider, certified duplicates or executed copies
thereof) as the Liquidity Provider shall have
reasonably requested.
(b) The following statements shall be true and
shall be deemed to have been represented by each party
(other than clauses (ii) and (iii) below, which shall
be deemed to have been represented only by Continental)
to the Refunding Agreements as being true on and as of
the Effective Date:
(i) The representations and warranties of such
Person contained in each Refunding Agreement are
true and correct on and as of the Effective Date
as though made on and as of the Effective Date;
(ii) 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; and
(iii) There has been no material adverse change
in
the business, financial condition, operations,
property or prospects of Continental since
September 30, 1995.
(c) The Liquidity Provider shall have received
payment in full of all fees and other sums required to
be paid to or for the account of the Liquidity Provider
on or prior to the Effective Date.
(d) All conditions precedent to the issuance of
the
Certificates under the Trust Agreements shall have been
satisfied, 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 Initial
Purchasers under the Purchase Agreement shall have been
satisfied (unless any of such conditions precedent
under the Purchase Agreement shall have been waived by
the Initial Purchasers).
(e) The Borrower shall have received a
certificate,
dated the date hereof, signed by a duly authorized
representative of the Liquidity Provider, certifying
that all conditions precedent to the effectiveness of
Section 2.01 hereof have been satisfied or waived
(other than this Section 4.01(e)).
Section 4.02. Conditions Precedent to Borrowing.
The obligation of the Liquidity Provider to make an Advance on
the occasion of each Borrowing shall be subject to the conditions
precedent that the Effective Date shall have occurred and, prior
to the date of such Borrowing, the Borrower shall have delivered
a Notice of Borrowing which conforms to the terms and conditions
of this Agreement and has been completed as may be required by
the relevant form of the Notice of Borrowing for the type of
Advances requested.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the
Borrower. So long as any Advance shall remain unpaid or the
Liquidity Provider shall have any Commitment hereunder or the
Borrower shall have any obligation to pay any amount to the
Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements.
Punctually pay or cause to be paid all amounts payable
by it under this Agreement and the other Operative
Agreements and observe and perform in all material
respects the conditions, covenants and requirements
applicable to it contained in this Agreement and the
other Operative Agreements.
(b) Reporting Requirements. Furnish to the
Liquidity Provider with reasonable promptness, such
other information and data with respect to the
transactions contemplated by the Operative Agreements
as from time to time may be reasonably requested by the
Liquidity Provider; and permit the Liquidity Provider,
upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to
meet with officers and employees of the Borrower to
discuss such transactions.
Section 5.02. Negative Covenants of the Borrower.
So long as any Advance shall remain unpaid or the Liquidity
Provider shall have any Commitment hereunder or the Borrower
shall have any obligation to pay any amount to the Liquidity
Provider hereunder, the Borrower will not, without the written
consent of the Liquidity Provider:
(a) Amendments. Modify, amend or supplement, or
give any consent to any modification, amendment or
supplement or make any waiver with respect to, any
provision of the Trust Agreements or the Intercreditor
Agreement, except for any supplemental agreement to the
Trust Agreements provided for in Section 9.01 thereof.
(b) Borrower. Appoint or permit or suffer to be
appointed any successor Borrower without the prior
written approval of the Liquidity Provider (which
approval shall not be unreasonably withheld).
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If
(a) any Liquidity Event of Default occurs hereunder and (b) there
is a Performing Note Deficiency, the Liquidity Provider may, in
its discretion, deliver to the Borrower a Termination Notice, the
effect of which shall be to cause (i) this Agreement to expire on
the fifth Business Day after the date on which such Termination
Notice is received by the Borrower, (ii) the Borrower to promptly
request, and the Liquidity Provider to promptly make, a Final
Advance in accordance with Section 2.02(d) hereof and Section
3.6(i) of the Intercreditor Agreement, (iii) all other
outstanding Advances to be automatically converted into Final
Advances for purposes of determining the Applicable Liquidity
Rate for interest payable thereon, and (iv) subject to Sections
2.07 and 2.09 hereof, all Advances, any accrued interest thereon
and any other amounts outstanding hereunder to become immediately
due and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. No amendment or
waiver of any provision of this Agreement, nor consent to any
departure by the Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment, the
Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which
given.
Section 7.02. Notices, Etc. Except as otherwise
expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including telecopier
and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: CREDIT SUISSE
12 East 49th Street
New York, NY 10017
Attention: Aircraft Finance Department
Telephone: (212) 238-5335
Telecopy: (212) 238-5331
or, as to each of the foregoing, at such other address as shall
be designated by such Person in a written notice to the others.
All such notices and communications shall be effective (i) if
given by telecopier, when transmitted to the telecopier number
specified above, (ii) if given by mail, when deposited in the
mails addressed as specified above, and (iii) if given by other
means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the
provisions of Articles II and III hereof shall not be effective
until received by the Liquidity Provider. A copy of all notices
delivered hereunder to either party shall in addition be
delivered to each of the parties to the Participation Agreements
at their respective addresses set forth therein.
Section 7.03. No Waiver; Remedies. No failure on
the part of the Liquidity Provider to exercise, and no delay in
exercising, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right under this Agreement preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies
provided by law.
Section 7.04. Further Assurances. The Borrower
agrees to do such further acts and things and to execute and
deliver to the Liquidity Provider such additional assignments,
agreements, powers and instruments as the Liquidity Provider may
reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or
to better assure and confirm unto the Liquidity Provider its
rights, powers and remedies hereunder and under the other
Operative Agreements.
Section 7.05. Indemnification; Survival of
Certain Provisions. The Liquidity Provider shall be indemnified
hereunder to the extent and in the manner described in Section
10.1 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, whether
arising before, on or after the date hereof, 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, this Agreement, the Fee Letter, the
Intercreditor Agreement, the Refunding Agreement or the
Participation Purchase 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 (i) to the extent such Expense is
attributable to the gross negligence or willful misconduct of
such Liquidity Indemnitee or any Related Indemnitee, (ii) that is
ordinary and usual operating overhead expense, (iii) to the
extent such Expense is attributable to the failure by such
Liquidity Indemnitee or its Related Indemnitee to perform or
observe any agreement, covenant or condition on its part to be
performed or observed in any Operative Agreement or the
Participation Purchase Agreement. The indemnities contained in
such Section 10.1, and the provisions of Sections 3.01, 3.02,
3.03, 7.05 and 7.07 hereof, shall survive the termination of this
Agreement.
Section 7.06. Liability of the Liquidity
Provider. (a) Neither the Liquidity Provider nor any of its
officers or directors shall be liable or responsible for:
(i) the use which may be made of the Advances or any acts or
omissions of the Borrower or any beneficiary or transferee in
connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; or (iii) the making of
Advances by the Liquidity Provider against delivery of a Notice
of Borrowing and other documents which do not comply with the
terms hereof; provided, however, that the Borrower shall have a
claim against the Liquidity Provider, and the Liquidity Provider
shall be liable to the Borrower, to the extent of any damages
suffered by the Borrower which were the result of (A) the
Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the
terms hereof, or (B) any breach by the Liquidity Provider of any
of the terms of this Agreement, including, but not limited to,
the Liquidity Provider's failure to make lawful payment hereunder
after the delivery to it by the Borrower of a Notice of Borrowing
strictly complying with the terms and conditions hereof.
(b) The Liquidity Provider shall not be liable or
responsible in any respect for (i) any error, omission,
interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with
this Agreement or any Notice of Borrowing delivered hereunder, or
(ii) any action, inaction or omission which may be taken by it in
good faith, absent willful misconduct or negligence (in which
event the extent of the Liquidity Provider's potential liability
to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any
Notice of Borrowing.
Section 7.07. Costs, Expenses and Taxes. The
Borrower agrees to pay, or cause to be paid (A) on the Effective
Date and on such later date or dates on which the Liquidity
Provider shall make demand, all reasonable out-of-pocket costs
and expenses 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, including, without limitation, the reasonable
fees and expenses of outside counsel for the Liquidity Provider
and (B) on demand, all reasonable costs and expenses of the
Liquidity Provider (including reasonable counsel fees and
expenses) in connection with (i) the enforcement of this
Agreement, the Participation Purchase Agreement or any other
Operative Agreement, (ii) the modification or amendment of, or
supplement to, this Agreement, the Participation Purchase
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 Participation Purchase Agreement, the Intercreditor Agreement
or any other Operative Document 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 7.08. Binding Effect; Participations.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower and the Liquidity Provider and their
respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this
Section 7.08) nor the Borrower shall have the right to assign its
rights hereunder or any interest herein without the prior written
consent of the other party, subject to the requirement of Section
7.08(b). The Liquidity Provider may grant participations herein
or in any of its rights or security hereunder and under the other
Operative Agreements to such Persons as the Liquidity Provider
may in its sole discretion select, subject to the requirement of
Section 7.08(b). No such participation by the Liquidity
Provider, however, will relieve the Liquidity Provider of its
obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose
to the participant or the proposed participant any information
that the Borrower is required to deliver or to disclose to the
Liquidity Provider pursuant to this Agreement. The Borrower
acknowledges and agrees that the Liquidity Provider's source of
funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the
other Operative Agreements to determinations, reserve and capital
adequacy requirements, increased costs, reduced receipts and the
like as they pertain to the Liquidity Provider shall be deemed
also to include those of each of its participants (subject, in
each case, to the maximum amount that would have been incurred by
or attributable to the Liquidity Provider directly if the
Liquidity Provider, rather than the participant, had held the
interest participated).
(b) If, pursuant to subsection (a) above, the
Liquidity Provider sells any participation or transfers any
interest in this Agreement to any bank or other entity (each, a
"Transferee"), then, concurrently with the effectiveness of such
transfer, 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 by the
Borrower or the Liquidity Provider 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 them
indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes
as required by law from such payments at the applicable statutory
rate.
(c) Notwithstanding the other provisions of this
Section 7.08, the Liquidity Provider may assign and pledge all or
any portion of the Advances owing to it to any Federal Reserve
Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such
assigned Advances made by the Borrower to the Liquidity Provider
in accordance with the terms of this Agreement shall satisfy the
Borrower's obligations hereunder in respect of such assigned
Advance to the extent of such payment. No such assignment shall
release the Liquidity Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of
this Agreement which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability
or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
Section 7.11. Submission to Jurisdiction; Waiver
of Jury Trial.
(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 non-exclusive general jurisdiction of
the courts of the State of New York, the courts of the
United States of America for the Southern District of
New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding
may be brought in such courts, and waives any objection
that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that
such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such
action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any
substantially similar form and mail), postage prepaid,
to each party hereto at its address set forth in
Section 7.02 hereof, or at such other address of which
the Liquidity Provider shall have been notified
pursuant thereto; and
(iv) agrees that nothing herein shall affect the
right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any
other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort
claims, breach of duty claims and all other common law and
statutory claims. The Borrower and the Liquidity Provider each
warrant and represent that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel.
THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY
OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.
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 and the
other Operative Agreements 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 hereto 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 and Trustee,
as Borrower
By:
_____________________________
Name:
Title:
CREDIT SUISSE,
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 CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of an Interest Advance by the
Liquidity Provider to be used for the payment of interest on
the Class C Certificates which was payable on ______________
in accordance with the terms and provisions of the Class C
Trust Agreement and the Class C Certificates pursuant to
clause fourth of Section 3.2 of the Intercreditor Agreement
or clause sixth of Section 3.3 of the Intercreditor
Agreement, which Advance is requested to be made on
.
(3) The amount of the Interest Advance requested
hereby (i) is $ , to be applied in respect of the
payment of interest which was due and payable on the Class C
Certificates on such 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, the Class C Certificates or the Class D
Certificates, or interest on the Class A Certificates, the
Class B Certificates or the Class D 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
Available Commitment on the date hereof, and (v) has not
been and is not the subject of a prior or contemporaneous
Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will apply the
same in accordance with the terms of Section 3.2 or 3.3 of
the Intercreditor Agreement, as the case may be, (b) no
portion of such amount shall be applied by the Borrower for
any other purpose and (c) no portion of such amount until so
applied shall be commingled with other funds held by the
Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate Advance on the
third Business Day following your receipt of this notice.
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 Available Commitment by an amount equal
to the amount of the Interest Advance requested to be made hereby
as set forth in clause (i) of paragraph (3) of this Certificate
and such reduction shall automatically result in corresponding
reductions in the amounts available to be borrowed pursuant to a
subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and
delivered this Notice of Borrowing as of the _____ day of
_________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Subordination Agent, as Borrower
By_________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance
Notice of Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the
undersigned borrower (the "Borrower"), hereby certifies to CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Non-Extension Advance by the
Liquidity Provider to be used for the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(d) of
the Intercreditor Agreement, which Advance is requested to
be made on ________.
(3) The amount of the Non-Extension Advance requested
hereby (i) is $_________, which equals the 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 principal of, or premium on,
the Class C Certificates, or principal of or interest or
premium on, the Class A Certificates, the Class B
Certificates or the Class D Certificates, (iii) was computed
in accordance with the provisions of the Class C
Certificates, the Class C Trust Agreement and the
Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of
Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the Class C Cash Collateral Account and apply
the same in accordance with the terms of Section 3.6(d) of
the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate Advance on the
third Business Day following your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the
Liquidity Agreement, (A) the making of the Non-Extension Advance
as requested by this Notice of Borrowing shall automatically and
irrevocably terminate the obligation of the Liquidity Provider to
make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the
Borrower shall not be entitled to request any further Advances
under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and
delivered this Notice of Borrowing as of the _____ day of
_________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Subordination Agent, as Borrower
By_________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the
undersigned subordination agent (the "Borrower"), hereby
certifies to CREDIT SUISSE (the "Liquidity Provider"), with
reference to the Revolving Credit Agreement dated as of January
31, 1996, between the Borrower and the Liquidity Provider (the
"Liquidity Agreement"; the terms defined therein and not
otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Downgrade Advance by the
Liquidity Provider to be used for the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(c) of
the Intercreditor Agreement by reason of the downgrading of
the short-term unsecured debt rating of the Liquidity
Provider issued by either Rating Agency below the Threshold
Rating, which Advance is requested to be made on _________.
(3) The amount of the Downgrade Advance requested
hereby (i) is $_________, which equals the 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 A Certificates, the Class B
Certificates or the Class D Certificates, (iii) was computed
in accordance with the provisions of the Class C
Certificates, the Class C Trust Agreement and the
Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is
not the subject of a prior or contemporaneous Notice of
Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the 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.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate 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 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 CREDIT
SUISSE (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of January 31, 1996, between
the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of
Borrowing for the making of the Final Advance by the
Liquidity Provider to be used for the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(i) of
the Intercreditor Agreement by reason of the receipt by the
Borrower of a Termination Notice from the Liquidity Provider
with respect to the Liquidity Agreement, which Advance is
requested to be made on ________.
(3) The amount of the Final Advance requested hereby
(i) is $______, which equals the 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 upon receipt
by the Borrower of a Termination Notice from the Liquidity
Provider in respect of the Liquidity Agreement, (ii) does
not include any amount with respect to the payment of
principal of, or premium on, the Class C Certificates, or
principal of, or interest or premium on, the Class A
Certificates, the Class B Certificates or the Class D
Certificates, (iii) was computed in accordance with the
provisions of the Class C Certificates, the Class C Trust
Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has
not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of
the amount requested hereby, (a) the Borrower will deposit
such amount in the Class C Cash Collateral Account and apply
the same in accordance with the terms of Section 3.6(i) of
the Intercreditor Agreement, (b) no portion of such amount
shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance
requested hereby be a Base Rate Advance and that such Base
Rate Advance be converted into a LIBOR Rate 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:
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 January 31,
1996, between Wilmington Trust Company, as
Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust 1996-C, as
Borrower, and Credit Suisse (the "Liquidity Agreement")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01
of the Liquidity Agreement, by reason of the occurrence of a
Liquidity Event of Default and a Performing Note Deficiency (each
as defined therein) or other event specified 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,
CREDIT SUISSE
By____________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class C Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of January 31,
1996, between Wilmington Trust Company, as
Subordination Agent, as agent and trustee for the
Continental Airlines 1996-C Pass Through Trust, as
Borrower, and Credit Suisse (the "Liquidity
Agreement")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby
irrevocably transfers to:
_______________________________
[Name of Transferee]
_______________________________
[Address of Transferee]
all rights 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.
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 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 4.13
- -----------------------------------------------------------------
INTERCREDITOR AGREEMENT
Dated as of
January 31, 1996
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Continental Airlines Pass Through Trust 1996-A,
Continental Airlines Pass Through Trust 1996-B,
Continental Airlines Pass Through Trust 1996-C
and
Continental Airlines Pass Through Trust 1996-D
CREDIT SUISSE,
acting through its New York Branch,
as Class A Liquidity Provider,
CREDIT SUISSE,
acting through its New York Branch,
as Class B Liquidity Provider,
CREDIT SUISSE,
acting through its New York Branch,
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
- -----------------------------------------------------------------
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 . . . . . . . . . . . . . . . . 21
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 . . . . . . . . . . . . . . . . . 29
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event . . . . . . . . . . . . . . . . . . 30
SECTION 3.4. Other Payments . . . . . . . . . . . . . . . . 34
SECTION 3.5. Payments to the Trustees and the Liquidity
Providers. . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.6. Liquidity Facilities . . . . . . . . . . . . . 34
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party. . . . . 40
SECTION 4.2. Remedies Cumulative. . . . . . . . . . . . . . 42
SECTION 4.3. Discontinuance of Proceedings. . . . . . . . . 42
SECTION 4.4. Right of Certificateholders to Receive
Payments Not to Be Impaired. . . . . . . . . . . . . 42
SECTION 4.5. Undertaking for Costs. . . . . . . . . . . . . 43
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering
Event. . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.2. Indemnification. . . . . . . . . . . . . . . . 44
SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement. . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.4. Notice from the Liquidity Providers and
Trustees . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Acceptance of Trusts and Duties. . . . . . . . 44
SECTION 6.2. Absence of Duties. . . . . . . . . . . . . . . 45
SECTION 6.3. No Representations or Warranties as to
Documents. . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.4. No Segregation of Monies; No Interest. . . . . 45
SECTION 6.5. Reliance; Agents; Advice of Counsel. . . . . . 45
SECTION 6.6. Capacity in Which Acting . . . . . . . . . . . 46
SECTION 6.7. Compensation . . . . . . . . . . . . . . . . . 46
SECTION 6.8. May Become Certificateholder . . . . . . . . . 46
SECTION 6.9. Subordination Agent Required; Eligibility. . . 46
SECTION 6.10. Money to Be Held in Trust . . . . . . . . . . 47
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification . . . . . . . . . . . 47
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent;
Appointment of Successor . . . . . . . . . . . . . . 47
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc.. . . . . . . . . . . 49
SECTION 9.2. Subordination Agent Protected. . . . . . . . . 49
SECTION 9.3. Effect of Supplemental Agreements. . . . . . . 49
SECTION 9.4. Notice to Rating Agencies. . . . . . . . . . . 50
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement. . . . 50
SECTION 10.2. Intercreditor Agreement for Benefit of
Trustees, Liquidity Providers and Subordination
Agent. . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.3. Notices . . . . . . . . . . . . . . . . . . . 50
SECTION 10.4. Severability. . . . . . . . . . . . . . . . . 51
SECTION 10.5. No Oral Modifications or Continuing Waivers . 52
SECTION 10.6. Successors and Assigns. . . . . . . . . . . . 52
SECTION 10.7. Headings. . . . . . . . . . . . . . . . . . . 52
SECTION 10.8. Counterpart Form. . . . . . . . . . . . . . . 52
SECTION 10.9. Subordination . . . . . . . . . . . . . . . . 52
SECTION 10.10. GOVERNING LAW. . . . . . . . . . . . . . . . 53
Schedule 1 Indentures
Schedule 2 Refunding Agreements
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of January 31, 1996,
among WILMINGTON TRUST COMPANY, a Delaware corporation ("WTC"),
not in its individual capacity but solely as Trustee of each
Trust (each as defined below), CREDIT SUISSE, a bank organized
under the laws of Switzerland acting through its New York branch
("Credit Suisse"), as Class A Liquidity Provider, CREDIT SUISSE,
as Class B Liquidity Provider, CREDIT SUISSE, 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 four series of
Equipment Notes to refinance the current indebtedness of such
Owner Trustee originally incurred to finance the purchase of the
Aircraft referred to in such Indenture which has been leased to
Continental pursuant to the related Lease;
WHEREAS, pursuant to the Refunding Agreements, each
Trust will acquire those 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 (i) the Purchase Agreement, the
Initial Purchasers propose to purchase the Certificates issued by
each Trust (other than the Certificates issued by the Class D
Trust) in the aggregate face amount set forth opposite the name
of such Trust on Schedule I thereto and (ii) the Refunding
Agreements, General Electric Company, a New York corporation,
proposes to acquire all of the Class D Certificates from the
Class D Trust, in each case, 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 respective Trustees of
each Trust (other than the Class D Trust), for the benefit of the
Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations
of the Initial Purchasers under the Purchase 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".
"Acceleration" means, with respect to the amounts payable in
respect of the Equipment Notes issued under any Indenture, the
declaration of such amounts to be immediately due and payable.
"Accelerate" and "Accelerated" have meanings correlative to the
foregoing.
"Adjusted Expected Distributions" means, for the
Certificates of any Trust on any Distribution Date, the sum of
(x) accrued and unpaid interest on such Certificates (after
taking into account the distribution of the Performing Equipment
Notes Interest Payment and any funds received in respect of Non-
Performing Equipment Notes on such Distribution Date) plus (y)
the amount (which shall not be less than zero) equal to (A) the
Adjusted Pool Balance of such Trust as of such Distribution Date
minus (B) the Pool Balance of such Trust as of such Distribution
Date, calculated on the basis that all payments on the Equipment
Notes held in such Trust have been paid when due (but without
giving effect to any acceleration of Performing Equipment Notes
held in such Trust) and such payments have been distributed to
the holders of such Certificates.
"Adjusted Pool Balance" means, with respect to any Trust on
any Current Distribution Date, the Pool Balance of such Trust as
of the immediately preceding Distribution Date minus any amounts
received in respect of any Non-Performing Equipment Notes
distributed to the holders of the Certificates of such Trust on
the Current Distribution Date other than in respect of interest
or premium thereon.
"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.
"Aircraft" means, with respect to each Indenture, the
"Aircraft" referred to therein.
"Appraisal" means a fair market value appraisal (which may
be a "desktop" appraisal) performed by any Appraiser or any other
nationally recognized appraiser on the basis of an arm's-length
transaction between an informed and willing purchaser under no
compulsion to buy and an informed and willing seller under no
compulsion to sell and both having knowledge of all relevant
facts.
"Appraised Value" means, at any time with respect to any
Aircraft, the appraised value thereof as set forth in the most
recent Appraisal, provided that, initially, the Appraised Value
of any Aircraft means the lower of the average or median of the
three appraisals provided by the Appraisers for 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, an amount equal to (a) the Stated
Amount of such Liquidity Facility, less (b) the 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 Non-Extension Drawing, a Downgrade Drawing or a Final
Drawing under such Liquidity Facility, the Available Amount of
such Liquidity Facility shall be zero.
"Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to
close in Houston, Texas, New York, New York, or, so long as any
Certificate is outstanding, the city and state in which any
Trustee, the Subordination Agent or any Loan Trustee maintains
its Corporate Trust Office or receives and disburses funds.
"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, a Class C Certificate or a Class D 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 January 31, 1996, between the
Subordination Agent, as agent of 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 Credit Suisse, together
with any Replacement Liquidity Provider which 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 1996-A Pass
Through Trust created and administered pursuant to the Class A
Trust Agreement.
"Class A Trust Agreement" means the Pass Through Trust
Agreement dated January 31, 1996, between Continental and the
Class A Trustee, governing the creation and administration of the
Class A Trust 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 January 31, 1996, between the
Subordination Agent, as agent of 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 Credit Suisse, together
with any Replacement Liquidity Provider which 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 1996-B Pass
Through Trust created and administered pursuant to the Class B
Trust Agreement.
"Class B Trust Agreement" means the Pass Through Trust
Agreement dated as of January 31, 1996, between Continental and
the Class B Trustee, governing the creation and administration of
the Class B Trust 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 January 31, 1996, between the
Subordination Agent, as agent of 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 Credit Suisse, together
with any Replacement Liquidity Provider which 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 1996-C Pass
Through Trust created and administered pursuant to the Class C
Trust Agreement.
"Class C Trust Agreement" means the Pass Through Trust
Agreement dated January 31, 1996, between Continental and the
Class C Trustee, governing the creation and administration of the
Class C Trust and the issuance of the Class C Certificates, as
the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Class C Trustee" means WTC, not in its individual capacity
except as expressly set forth in the Class C Trust Agreement, but
solely as trustee under the Class C Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Class D Certificateholder" means, at any time, any holder
of one or more Class D Certificates.
"Class D Certificates" means the certificates issued by the
Class D Trust, substantially in the form of Exhibit A to the
Class D Trust Agreement, and authenticated by the Class D
Trustee, representing fractional undivided interests in the Class
D Trust, and any certificates issued in exchange therefor or in
replacement thereof pursuant to the terms of the Class D Trust
Agreement.
"Class D Trust" means Continental Airlines 1996-D Pass
Through Trust created and administered pursuant to the Class D
Trust Agreement.
"Class D Trust Agreement" means the Pass Through Trust
Agreement dated as of January 31, 1996, between Continental and
the Class D Trustee, governing the creation and administration of
the Class D Trust and the issuance of the Class D Certificates,
as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"Class D Trustee" means WTC, not in its individual capacity
except as expressly set forth in the Class D Trust Agreement, but
solely as trustee under the Class D Trust Agreement, together
with any successor trustee appointed pursuant thereto.
"Closing Date" means January 31, 1996.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated
thereunder.
"Collection Account" means the Eligible Deposit Account
established by the Subordination Agent pursuant to Section 2.2
which the Subordination Agent shall make deposits in and
withdrawals from in accordance with this Agreement.
"Continental" means Continental Airlines, Inc., a Delaware
corporation, and its successors and assigns.
"Continental Bankruptcy Event" means the occurrence and
continuation of any of the following:
(a) Continental shall consent to the appointment of or
the taking of possession by a receiver, trustee or
liquidator of itself or of a substantial part of its
property, or Continental shall admit in writing its
inability to pay it 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; and
(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.
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee,
the Subordination Agent or any Loan Trustee, the office of such
Person in the city at which, at any particular time, its
corporate trust business shall be principally administered.
"Credit Suisse" has the meaning assigned to such term in the
recital of parties to this Agreement.
"Current Distribution Date" means a Distribution Date
specified as a reference date for calculating the Adjusted Pool
Balance of any Trust or the Expected Distributions with respect
to the Certificates of any Trust as of such Distribution Date.
"Deferral Period" means the period (a) commencing on the
date of the first amendment, waiver, modification, exercise of
remedies or other action of the type described in clauses (i)
through (v) of the second sentence of Section 4.1(c), and (b)
ending on the second anniversary of such date.
"Designated Representatives" means the Trustee
Representatives and the LP Representatives identified under
Section 2.5.
"Distribution Date" means a Regular Distribution Date or a
Special Distribution Date.
"Dollars" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in
Section 3.6(c).
"Downgraded Facility" has the meaning assigned to such term
in Section 3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing, a Non-
Extension Drawing or a Downgrade Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust
account with the corporate trust department of a depository
institution organized under the laws of the United States of
America or any one of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), having corporate
trust powers and acting as trustee for funds deposited in such
account, so long as any of the securities of such depository
institution has a long-term unsecured debt rating from each
Rating Agency of at least A-3 or its equivalent. An Eligible
Deposit Account may be maintained with a Liquidity Provider so
long as such Liquidity Provider is an Eligible Institution;
provided that such Liquidity Provider shall have waived all
rights of set-off and counterclaim with respect to such account;
and provided further that no Cash Collateral Account may be
maintained with a Liquidity Provider at any time Continental
holds any participation in the related Liquidity Facility or is
obligated to hold such a participation 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 or is obligated to hold such a
participation unless written confirmation shall have been
received from each Rating Agency to the effect that such
Liquidity Provider's status as an Eligible Institution will not
result in a withdrawal or downgrading of the ratings of the
Certificates.
"Eligible Investments" means (a) investments in obligations
of, or guaranteed by, the United States Government having
maturities no later than 90 days following the date of such
investment, (b) investments in open market commercial paper of
any corporation incorporated under the laws of the United States
of America or any state thereof with a short-term unsecured debt
rating issued by Moody's and S&P of at least A-1 and P-1,
respectively, having maturities no later than 90 days following
the date of such investment or (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances,
commercial paper or other direct obligations of, or obligations
guaranteed by, commercial banks organized under the laws of the
United States or of any political subdivision thereof (or any
U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days
following the date of such investment; provided, however, that
(x) all Eligible Investments that are bank obligations shall be
denominated in U.S. dollars; and (y) the aggregate amount of
Eligible Investments at any one time that are bank obligations
issued by any one bank shall not be in excess of 5% of such
bank's capital surplus; provided further that (1) any investment
of the types described in clauses (a), (b) and (c) above may be
made through a repurchase agreement in commercially reasonable
form with a bank or other financial institution qualifying as an
Eligible Institution so long as such investment is held by a
third party custodian also qualifying as an Eligible Institution,
and (2) all such investments set forth in (a), (b) and (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 clauses (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 Agreement or is obligated to hold such a
participation 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, the Series C Equipment Notes
and the Series D Equipment Notes, collectively, and in each case,
any Equipment Notes issued in exchange therefor or replacement
thereof pursuant to the terms of the Indentures.
"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 and
(y) the difference between (A) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date
and (B) the Pool Balance of such Certificates as of the Current
Distribution Date, calculated on the basis that the principal of
the Equipment Notes held in such Trust has been paid when due
(whether at stated maturity or upon redemption, prepayment or
acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates. For purposes of
calculating Expected Distributions, any premium paid on the
Equipment Notes held in any 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.
"Fee Letter" means the Fee Letter dated January 31, 1996,
between Credit Suisse and the Subordination Agent with respect to
the Liquidity Facilities.
"Final Drawing" has the meaning assigned to such term in
Section 3.6(i).
"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, any premium paid on the
Equipment Notes held in any 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 Maturity Date" means April 15, 2015.
"Indenture" means each Amended and Restated Trust Indenture
and Mortgage listed on Schedule 1 hereto, 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.
"Initial Purchasers" means CS First Boston Corporation,
Morgan Stanley & Co. Incorporated, Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Fieldstone FPCG
Services, L.P.
"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.
"Lien" means any mortgage, pledge, lien, charge, claim,
disposition of title, encumbrance, lease, sublease, sub-sublease
or security interest of any kind, including, without limitation,
any thereof arising under any conditional sales or other title
retention agreement.
"Liquidity Event of Default," with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity
Facility.
"Liquidity Expenses" means all Liquidity Obligations other
than (i) the principal amount of any Drawings under the Liquidity
Facilities and (ii) any interest accrued on any Liquidity
Obligations.
"Liquidity 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 10.1 of the Participation
Agreements, the Fee Letter and the Refunding Agreements.
"Liquidity Provider" means, at any time, the Class A
Liquidity Provider, the Class B Liquidity Provider or the Class C
Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the
loan trustee thereunder.
"LP Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(b).
"LP Representatives" has the meaning assigned to such term
in Section 2.5(b).
"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 Value of such
Aircraft based upon the most recent Appraisal 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.
"Non-Controlling Party" means, at any time, any Trustee or
Liquidity Provider which is not the Controlling Party at such
time.
"Non-Extension Drawing" has the meaning assigned to such
term in 3.6(d).
"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 Purchase
Agreement, the Refunding Agreements, 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 of 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 Agreements" mean, with respect to each
Indenture, the "Participation Agreement" referred to therein.
"Participation Purchase Agreement" means the Participation
Purchase Agreement dated the date hereof relating to the
Liquidity Facilities, between the Liquidity Providers and
Continental.
"Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture with respect to which no payment default
has occurred and is continuing.
"Performing Equipment Notes Interest Payment" has the
meaning assigned to such term in Section 3.3(b).
"Performing Equipment Notes Principal Payment" has the
meaning assigned to such term in Section 3.3(b).
"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, 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 any
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.
"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 Maturity Date for such Class
or (ii) interest due on such Certificates on any Distribution
Date (unless, in the case of the Class A, Class B or Class C
Certificates, the Subordination Agent shall have made an Interest
Drawing with respect thereto in an amount sufficient to pay such
interest and shall have distributed such amount to the
Certificateholders entitled thereto).
"Purchase Agreement" means the Purchase Agreement dated
January 24, 1996, among the Initial Purchasers and Continental,
relating to the purchase of the Certificates by the Initial
Purchasers, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Rating Agencies" means, collectively, at any time, each
nationally recognized rating agency which shall have been
requested to rate the Certificates and which shall then be rating
the Certificates. The initial Rating Agencies will be Moody's
and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action
proposed to be taken, a written confirmation from each of the
Rating Agencies that such action would not result in (i) a
reduction of the rating for any Class of Certificates below the
then current rating for such Class of Certificates or (ii) a
withdrawal or suspension of the rating of any Class of
Certificates.
"Refunding Agreements" means each of the Refunding
Agreements listed on Schedule 2 hereto, as the same may be
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Registration Rights Agreement" means the Registration
Rights Agreement dated January 31, 1996, among the Initial
Purchasers, the Trustees and Continental, as amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
"Regular Distribution Dates" means, each January 15, April
15, July 15 and October 15, commencing on April 15, 1996;
provided, however, that, if any such day shall not be a Business
Day, the related distribution shall be made on the next
succeeding Business Day without additional interest.
"Replacement Liquidity Facility" means, for any Liquidity
Facility, an irrevocable revolving credit agreement issued by a
Replacement Liquidity Provider in substantially the form of the
replaced Liquidity Facility, including reinstatement provisions,
or in such other form (which may include a letter of credit) as
shall permit the Rating Agencies to confirm in writing their
respective ratings then in effect for each Class of Certificates
(before the downgrading of such rating, if any, as a result of
the downgrading of the Liquidity Provider), in a face amount
equal to the Required Amount for such Liquidity Facility and
issued by a Replacement Liquidity Provider having short-term
unsecured debt ratings issued by each Rating Agency which are
equal to or higher than those of the Liquidity Provider being
replaced.
"Replacement Liquidity Provider" means a Person having
short-term unsecured debt ratings issued by each Rating Agency
which are equal to or higher than the Threshold Rating.
"Required Amount" means, with respect to each Liquidity
Facility, 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, without
giving effect to any adjustment pursuant to the Registration
Rights Agreement, plus an additional margin of 0.50% per annum
(provided that such additional margin shall cease to apply at
such time as the interest rate borne by the Certificates is no
longer subject to increase pursuant to the terms of the
Registration Rights Agreement), 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 familiarly with a particular subject and (ii) with respect to
each Liquidity Provider, an Associate, Member of Senior
Management or other authorized officer of such Liquidity
Provider.
"Scheduled Payment" means, with respect to any Equipment
Note, (i) any payment of principal and interest on such Equipment
Note (other than an Overdue Scheduled Payment) due from the
obligor thereon or (ii) any payment of interest on the
corresponding Class of Certificates with funds drawn under any
Liquidity Facility, which payment represents the installment of
principal at the stated maturity of such installment of principal
on such Equipment Note, the payment of regularly scheduled
interest accrued on the unpaid principal amount of such Equipment
Note, or both; provided that any payment of principal of,
premium, if any, or interest resulting from the redemption or
purchase of any Equipment Note shall not constitute a Scheduled
Payment.
"Scheduled Payment Date" means, with respect to any
Scheduled Payment, the date on which such Scheduled Payment is
scheduled to be made.
"Series A Equipment Notes" means the 6.94% Series A
Equipment Notes issued pursuant to each Indenture by the related
Owner Trustee and authenticated by the Loan Trustee thereunder,
and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Series B Equipment Notes" means the 7.82% Series B
Equipment Notes issued pursuant to each Indenture by the related
Owner Trustee and authenticated by the Loan Trustee thereunder,
and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Series C Equipment Notes" means the 9.50% Series C
Equipment Notes issued pursuant to each Indenture by the related
Owner Trustee and authenticated by the Loan Trustee thereunder,
and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Series D Equipment Notes" means the 12.48% Series D
Equipment Notes issued pursuant to each Indenture by the related
Owner Trustee and authenticated by the Loan Trustee thereunder,
and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"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; 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.
"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 Rating Group, a
division of McGraw-Hill Inc.
"Stated Amount" with respect to any Liquidity Facility,
means the 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, 6.94% per annum, (ii) with respect to the Class B
Certificates, 7.82% per annum, (iii) with respect to the Class C
Certificates, 9.50% per annum, and (iv) with respect to the Class
D Certificates, 12.48% per annum.
"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 or by any state, local or foreign
government (or any subdivision or agency thereof) or other taxing
authority, including, without limitation: taxes or other charges
on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth and similar charges;
taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, taxes on goods and
services, gains taxes, license, registration and documentation
fees, customs duties, tariffs, and similar charges.
"Termination Notice" 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-2 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 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,
the Class C Trust or the Class D 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, Class C Trust Agreement or Class D Trust
Agreement.
"Trustee" means any of the Class A Trustee, the Class B
Trustee, the Class C Trustee or the Class D 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).
"Written Notice" means, from (i) any Trustee or Liquidity
Provider, a written instrument executed by the Designated
Representative of such Person, and (ii) the Subordination Agent,
a written instrument executed by a Person designated in the
Officer's Certificate of the Subordination Agent delivered on the
Closing Date. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing
procedures shall constitute Written Notice under such Section.
"WTC" has the meaning assigned to such term in the recital
of parties to this Agreement.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination;
Payments from Monies Received Only. (a) Each Trustee hereby
acknowledges and agrees to the terms of subordination set forth
in this Agreement in respect of each Class of Certificates and
agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be
applied in accordance with the terms of this Agreement. In
addition, each Trustee hereby agrees to cause the Equipment Notes
purchased by the related Trust to be registered in the name of
the Subordination Agent, as nominee of 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 10.1 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, Loan Trustees, Owner Participants nor
the Subordination Agent is personally liable to any of them for
any amounts payable or any liability under this Agreement, any
Trust Agreement, any Liquidity Facility or such Certificate,
except (in the case of the Subordination Agent) as expressly
provided herein or (in the case of the Trustees) as expressly
provided in each Trust Agreement or (in the case of the Owner
Trustees and the Loan Trustees) as expressly provided in any
Operative Agreement.
SECTION 2.2. Trust Accounts. (a) Upon the execution
of this Agreement, the Subordination Agent shall establish and
maintain in its name (i) the Collection Account as an Eligible
Deposit Account, bearing a designation clearly indicating that
the funds deposited therein are held in trust for the benefit of
the Trustees, the Certificateholders and the Liquidity Providers
and (ii) as a sub-account in the Collection Account, the Special
Payments Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein
are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The
Subordination Agent shall establish and maintain the Cash
Collateral Accounts 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, the Subordination Agent shall invest and reinvest such
amounts at the direction of the Owner Participants (which shall
take such action as directed by Continental unless they have a
bona fide, good faith reason not to; provided that seeking any
concessions from Continental shall not be considered a bona fide,
good faith reason); 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, 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 principal
amount of such investment is 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). 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. 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. Such
Written Notice shall also set the distribution date for such
Special Payment (a "Special Distribution Date"), which shall be a
Business Day which follows the later to occur of (x) the 20th day
after the date of such Written Notice or (y) the date the
Subordination Agent has received or expects to receive such
Special Payment.
(b) 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 or purchase
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 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 Liquidity Obligations owed to each
Liquidity Provider;
third, such amount as shall be required (A) to pay or
reimburse the Liquidity Providers in an amount equal to the
amount of any unreimbursed Interest Drawings under the
Liquidity Facilities shall be distributed to the Liquidity
Providers or (B) if applicable, to replenish the Cash
Collateral Accounts up to their respective Required Amounts
shall be deposited in the Cash Collateral Accounts, in each
such case, pari passu on the basis of the amounts of such
unreimbursed Interest Drawings and/or deficiencies;
fourth, 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;
fifth, 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;
sixth, 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;
seventh, such amount as shall be required to pay in
full Expected Distributions to the holders of Class D
Certificates on such Special Distribution Date shall be
distributed to the Class D 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.
(c) Other Special Payments. 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.
SECTION 2.5. Designated Representatives. (a) 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.
(b) 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 an Associate, a Member of Senior
Management or any other authorized signatory 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 Trustee Representatives,
the "Designated Representatives") authorized to give Written
Notices on behalf of such Liquidity Provider hereunder. Until
the Subordination Agent receives a subsequent LP Incumbency
Certificate, it shall be entitled to rely on the last LP
Incumbency Certificate delivered to it hereunder.
SECTION 2.6. Controlling Party. (a) The Trustees and
the Liquidity Providers hereby agree that, with respect to any
Indenture at any given time, the Loan Trustee thereunder will be
directed (i) in taking, or refraining from taking, any action
with respect to such Indenture or 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), and (ii) after the occurrence and
during the continuation 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 with
respect to such Indenture or 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: (w) the Class A Trustee;
(x) upon payment of Final Distributions to the holders of Class A
Certificates, the Class B Trustee; (y) upon payment of Final
Distributions to the holders of Class B Certificates, the Class C
Trustee; and (z) upon payment of Final Distributions to the
holders of Class C Certificates, the Class D 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.
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, the Liquidity
Provider with the greatest amount of unreimbursed Liquidity
Obligations payable to it under the Liquidity Facilities 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 date which is 18 months from the Acceleration of
the Equipment Notes under such Indenture, if at the time of such
election all Liquidity Obligations owed to such Liquidity
Provider under the Liquidity Facilities have not been paid in
full; provided, however, that no Liquidity Provider may become
the Controlling Party if Continental shall have purchased 100% of
such Liquidity Provider's interest in the related Liquidity
Facility and the Advances made thereunder pursuant to the
Participation Purchase Agreement.
(d) The exercise of remedies by the Controlling Party
under this Agreement shall be expressly limited by Section
4.1(a)(ii) and 4.1(c) 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 Distribution Date, 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 "fourth" of Section 3.2
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 "fifth" of Section 3.2
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 "sixth" of Section 3.2
hereof;
(iv) With respect to the Class D Certificates, the
Class D Trustee shall separately set forth the amounts to be
paid in accordance with clause "seventh" of Section 3.2
hereof;
(v) 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" and "third" of Section 3.2 hereof; and
(vi) 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" (relating to indemnity
payments made by the Class A Certificateholders) and "sixth" of
Section 3.3(a) 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" (relating to
indemnity payments made by the Class B Certificateholders)
and "seventh" of Section 3.3(a) 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" (relating to
indemnity payments made by the Class C Certificateholders)
and "eighth" of Section 3.3(a) hereof;
(iv) With respect to the Class D Certificates, the
Class D Trustee shall separately set forth the amounts to be
paid in accordance with clauses "first" (relating to
indemnity payments made by the Class D Certificateholders)
and "ninth" of Section 3.3(a) hereof;
(v) With respect to each Liquidity Facility, the
Liquidity Provider thereunder shall separately set forth the
amounts to be paid in accordance with clauses "second,
"third" and "fourth" of Section 3.3(a) hereof; and
(vi) Each Trustee shall set forth the amounts to be
paid in accordance with clause "fifth" of Section 3.3(a)
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 paragraphs
(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(a) 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(a)
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 Distribution Date 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) shall be distributed to the Liquidity
Providers pari passu on the basis of the amount of Liquidity
Obligations owed to each Liquidity Provider;
third, such amount as shall be required (A) to pay or
reimburse the Liquidity Providers in an amount equal to the
amount of all Liquidity Obligations then due (other than
amounts payable pursuant to clause "first" or "second" of
this Section 3.2) shall be distributed to the Liquidity
Providers, and (B) if applicable, to replenish the Cash
Collateral Accounts up to their respective Required Amounts
shall be deposited in the Cash Collateral Accounts, in each
such case, pari passu on the basis of the amounts of such
unreimbursed Liquidity Obligations and/or deficiencies;
fourth, 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;
fifth, 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;
sixth, 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;
seventh, such amount as shall be required to pay in
full Expected Distributions to the holders of the Class D
Certificates on such Distribution Date shall be distributed
to the Class D Trustee;
eighth, such amount as shall be required to pay in full
the aggregate unpaid amount of fees and expenses payable as
of such Distribution Date to the Subordination Agent and
each Trustee pursuant to the terms of this Agreement and the
Trust Agreements, as the case may be, shall be distributed
to the Subordination Agent and such Trustee; and
ninth, the balance, if any, of any such payment
remaining thereafter shall be held in the Collection Account
for later distribution in accordance with this Article III
or, if Final Distributions have been made on all Classes of
Certificates and all other amounts due hereunder have been
paid, such balance shall be distributed to the Owner
Trustees pro rata based on the amounts of such funds paid by
such Owner Trustees.
SECTION 3.3. Distribution of Amounts on Deposit
Following a Triggering Event. (a) Except as otherwise provided
in Sections 3.1(f), 3.3(b) 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) to pay in full all Liquidity Obligations, whether or not
then due (other than amounts payable pursuant to clause
"second" or "third" of this Section 3.3(a)) shall be
distributed to each Liquidity Provider, and/or (B) if
applicable, so long as no Performing Note Deficiency exists,
to replenish the Cash Collateral Accounts up to their
respective Required Amounts shall be deposited in the Cash
Collateral Accounts, in each case, pari passu on the basis
of the amount of Liquidity Obligations owed to each
Liquidity Provider and/or such deficiencies;
fifth, 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;
sixth, such amount remaining as shall be required to
pay in full Final Distributions on the Class A Certificates
(reducing the Pool Balance thereof to zero) shall be
distributed to the Class A Trustee;
seventh, such amount remaining as shall be required to
pay in full Final Distributions on the Class B Certificates
(reducing the Pool Balance thereof to zero) shall be
distributed to the Class B Trustee;
eighth, such amount remaining as shall be required to
pay in full Final Distributions on the Class C Certificates
(reducing the Pool Balance thereof to zero) shall be
distributed to the Class C Trustee;
ninth, such amount remaining as shall be required to
pay in full Final Distributions on the Class D Certificates
(reducing the Pool Balance thereof to zero) shall be
distributed to the Class D Trustee; and
tenth, the balance, if any, of such funds remaining
thereafter shall be distributed to the Owner Trustees pro
rata based on the amounts of such funds paid by such Owner
Trustees.
(b) Notwithstanding the provisions of Section 3.3(a),
after the occurrence of a Triggering Event (whether or not
continuing), so long as no PTC Event of Default shall have
occurred and be continuing with respect to the most senior Class
of Certificates outstanding, any Scheduled Payments received by
the Subordination Agent with respect to any Performing Equipment
Notes shall be distributed by the Subordination Agent on the
related Regular Distribution Dates therefor as follows:
(x) interest paid on such Performing Equipment Notes
(the "Performing Equipment Notes Interest Payment") will be
distributed by the Subordination Agent in the following
order:
(1) to the Persons specified in clauses "first"
through "fifth" of Section 3.3(a) in the amounts and in
the order set forth therein;
(2) to the Class A Trustee in such amount as
shall be required to pay in full all accrued and unpaid
interest on the Class A Certificates to such
Distribution Date;
(3) to the Class B Trustee in such amount as
shall be required to pay in full all accrued and unpaid
interest on the Class B Certificates to such
Distribution Date;
(4) to the Class C Trustee in such amount as
shall be required to pay in full all accrued and unpaid
interest on the Class C Certificates to such
Distribution Date; and
(5) to the Class D Trustee;
provided that the provisions of this paragraph (x) will be
given effect before distribution of any amounts received in
respect of any Non-Performing Equipment Notes; and
(y) principal paid in respect of the Performing
Equipment Notes (the "Performing Equipment Notes Principal
Payment") will be distributed in the following order:
(1) to the Persons specified in clauses "first"
through "fifth" of Section 3.3(a) in the amounts and in
the order set forth therein;
(2) to the Class A Trustee in payment of the
greater of (A) the Adjusted Expected Distributions for
the Class A Certificates on such Distribution Date and
(B) the Class A Certificateholders' pro rata portion of
the Performing Equipment Notes Principal Payment based
on the Adjusted Pool Balance of the Class A Trust;
(3) to the Class B Trustee in payment of the
greater of (A) the Adjusted Expected Distributions for
the Class B Certificates on such Distribution Date and
(B) the Class B Certificateholders' pro rata portion of
the Performing Equipment Notes Principal Payment based
on the Adjusted Pool Balance of the Class B Trust;
(4) to the Class C Trustee in payment of the
greater of (A) the Adjusted Expected Distributions for
the Class C Certificates on such Distribution Date and
(B) the Class C Certificateholders' pro rata portion of
the Performing Equipment Notes Principal Payment based
on the Adjusted Pool Balance of the Class C Trust; and
(5) to the Class D Trustee;
provided that the provisions of this paragraph (y) will be
given effect after distributing any amounts received in
respect of any Non-Performing Equipment Notes.
Notwithstanding this Section 3.3(b), if the aggregate amount of
future Scheduled Payments in respect of the Performing Equipment
Notes, together with the Performing Equipment Notes Principal
Payment as of such Distribution Date, will be (assuming the
distribution of such amount as contemplated by paragraphs (x) and
(y) above and that no further payment will be received at any
time from the Non-Performing Equipment Notes) insufficient to pay
interest on any Class of Certificates and reduce the Pool Balance
of such Class of Certificates to zero before the Final Maturity
Date thereof, the amount of distributions to be made to the
holders of such Class of Certificates on such Distribution Date
will be increased by the amount necessary to eliminate such
insufficiency prior to making any distributions to the holders of
any Class of Certificates junior to such Class of Certificates
and such increase shall be taken into account for the purpose of
applying this paragraph to the holders of any such junior Class
of Certificates.
SECTION 3.4. Other Payments. 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(a) 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 following order of priority: first, in the manner provided
in clause "first" of Section 3.3(a) hereof and second, in the
manner provided in clause "tenth" of Section 3.3(a) hereof.
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 the 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 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 may arrange, or Continental may, in
consultation with the Borrower, direct the Owner Participants
(which shall follow such direction unless they have a bona fide,
good faith reason not to; provided that seeking concessions from
Continental shall not be considered a bona fide, good faith
reason) to 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, subject to Section 3.6(d) hereof, 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.
(d) Non-Extension Drawings. If the 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 prior to the
Stated Expiration Date, the Subordination Agent shall request
that the Liquidity Provider extend the Stated Expiration Date for
a period of 364 days after the Stated Expiration Date (unless the
obligations of the Liquidity Provider thereunder are earlier
terminated in accordance with such Liquidity Facility). The
Liquidity Provider shall advise the Borrower, no earlier than 30
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 to advise the Borrower, the Subordination Agent shall, on
such 25th day, in accordance with and to the extent permitted by
the terms of the expiring Liquidity 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. At
any time, Continental may, at its option, in consultation with
the Borrower, direct the Owner Participants (which shall follow
such direction unless they have a bona fide, good faith reason
not to; provided that seeking any concessions from Continental
shall not be considered a bona fide, good faith reason) to
arrange for a Replacement Liquidity Facility to replace the
Liquidity Facility for any Class of Certificates. If such
Replacement Liquidity Facility is provided at any time after a
Provider Advance has been made, all funds on deposit in the
relevant Cash Collateral Account will be returned to the
Liquidity Provider being replaced. No such Replacement Liquidity
Facility executed in connection therewith shall become effective
and no such Replacement Liquidity Facility shall be deemed a
"Liquidity Facility" under the Operative Agreements, unless and
until (i) the Liquidity Provider being replaced shall have
satisfied each of the conditions referred to in the immediately
following paragraph and (ii) 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.
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 the ratings 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 may be made as provided in
clause (vii) of Section 3.6(f) hereof pursuant to a drawing under
the Replacement Liquidity Facility, or otherwise) 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. Upon satisfaction of the
conditions set forth in this Section 3.6(e), (i) the replaced
Liquidity Facility shall terminate and (ii) such Replacement
Liquidity Provider shall be deemed to be a Liquidity Provider
with the rights and obligations of a Liquidity Provider hereunder
and under the other Operative Agreements and such Replacement
Liquidity Facility shall be deemed to be a Liquidity Facility
hereunder and under the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals;
Investments. In the event the Subordination Agent shall draw all
available amounts under the Class A Liquidity Facility, the
Class B Liquidity Facility or the Class C Liquidity Facility
pursuant to Section 3.6(c), 3.6(d) or 3.6(i) hereof, amounts so
drawn 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.
Amounts so deposited shall be invested in Eligible Investments in
accordance with Section 2.2(b) hereof. Investment Earnings on
amounts on deposit in the Cash Collateral Accounts after any
drawings under Section 3.6(c), 3.6(d) or 3.6(i) hereof 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 drawing. The
Subordination Agent shall deliver a written statement to the
Lessee 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 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 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 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 an amount equal to the
excess, if any, of the amount on deposit in such account
over the Required Amount (with respect to the Class A
Liquidity Facility) and shall first, pay such amount to the
Class A Liquidity Provider until the Liquidity Obligations
(with respect to the Class A Certificates) 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 an amount equal to the
excess, if any, of the amount on deposit in such account
over the Required Amount (with respect to the Class B
Liquidity Facility) and shall first, pay such amount to the
Class B Liquidity Provider until the Liquidity Obligations
(with respect to the Class B Certificates) 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 of
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 an amount equal to the
excess, if any, of the amount on deposit in such account
over the Required Amount (with respect to the Class C
Liquidity Facility) and shall first, pay such amount to the
Class C Liquidity Provider until the Liquidity Obligations
(with respect to the Class C Certificates) 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 (other than the
Class D 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 so
reimbursed to the applicable Liquidity Provider; provided,
however, that such Liquidity Facility shall not be so reinstated
in part or in full at any time if (i) a Triggering Event shall
have occurred and be continuing and (ii) a Performing Note
Deficiency exists. In the event that at any time prior to both
the occurrence of a Triggering Event and the existence of a
Performing Note Deficiency funds are withdrawn from any Cash
Collateral Account pursuant to clauses (i), (ii) or (iii) of
Section 3.6(f) hereof, then funds received by the Subordination
Agent prior to both the occurrence of a Triggering Event and the
existence of a Performing Note Deficiency shall be deposited in
such Cash Collateral Account as provided in clause "third" of
Section 3.2 or clause "fourth" of Section 3.3(a), 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 Termination Notice. 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 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 Loan Trustee under such Indenture in the
exercise of remedies available to the holders of the Equipment
Notes issued pursuant to such Indenture, including, without
limitation, the ability to vote all such Equipment Notes in favor
of declaring all of the unpaid principal amount of such Equipment
Notes and accrued interest thereon to be due and payable under,
and in accordance with, the provisions of such Indenture.
Subject to the Owner Trustees' and the Owner Participants' rights
set forth in the Indentures to purchase the Equipment Notes, 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 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.
The Subordination Agent may from time to time during
the continuance of an Indenture Default commission an Appraisal
with respect to the related Aircraft at the request of the
Controlling Party.
(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 instruct the Loan Trustee
under such Indenture to foreclose on the Lien on the related
Aircraft.
(c) So long as any Liquidity Obligations remain
outstanding, the powers of the Controlling Party shall be
restricted as provided in this Section 4.1(c).
If the Controlling Party is not an Owner Participant or
an Affiliate thereof, the Controlling Party shall not agree to
amend, waive or otherwise modify any provision of any Operative
Agreement, direct the exercise of any remedy under any Operative
Agreement or direct the taking of any other actions under any
Operative Agreement, for the following purposes (without the
consent of each Liquidity Provider, which consent shall not be
unreasonably withheld or delayed) if the effect thereof would be
to impair the ability of the Subordination Agent to cause all
Liquidity Obligations to be paid in full within one year of the
date when due:
(i) to reduce in any manner the amount of any payment
on the Equipment Notes or the Leases or to require that any
such payment on the Equipment Notes be made other than to
the Subordination Agent;
(ii) to delay the timing of any payment on the
Equipment Notes or the Leases if such delay (taken together
with all other delays of payment on the Equipment Notes or
the Leases on a cumulative basis) would extend beyond the
Deferral Period;
(iii) impair the right to institute suit for the
enforcement of any payment obligation under the Equipment
Notes or the Leases, subject to deferrals permitted under
clause (ii) above;
(iv) enter into any lease or similar contract with
respect to any Aircraft unless the lessee (or comparable
party) is required to commence paying rent or comparable
payments at market rates for such Aircraft no later than the
end of the Deferral Period; or
(v) sell or otherwise dispose of any Equipment Note,
Lease or Aircraft (except as contemplated by clause (iv)
above) unless the market value of such Equipment Note, Lease
or Aircraft is paid on or before the end of the Deferral
Period.
If the Controlling Party is an Owner Participant or an
Affiliate thereof, the Controlling Party shall not agree to
amend, waive or otherwise modify any provision of any Operative
Agreement, direct the exercise of any remedy under any Operative
Agreement, or direct the taking of any other actions under any
Operative Agreement, for the following purposes (without the
consent of each Liquidity Provider, which consent shall not be
unreasonably withheld or delayed) if the effect thereof would be
to delay or otherwise impair the payment of amounts due to such
Liquidity Provider on a current basis:
(i) to reduce in any manner the amount of, or delay
the timing of, any payment on the Equipment Notes or the
Leases or to require that any such payment on the Equipment
Notes be made other than to the Subordination Agent, or to
impair the right to institute suit for enforcement of any
such payment; or
(ii) to permit the disposition of any Equipment Note,
Lease or Aircraft.
SECTION 4.2. Remedies Cumulative. Each and every
right, power and remedy given to the Trustees, 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, 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, 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 Proceedings 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 proceedings, be restored to its former
position and rights hereunder, and all rights, remedies and
powers of such party shall continue as if no such Proceedings 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 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 suit for
the enforcement of any right or remedy under this Agreement or in
any suit 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 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. Acceptance of Trusts and Duties. 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, (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 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, 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 10.1 of the Participation
Agreements. The indemnities contained in such Section 10.1 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 may remove the Subordination
Agent for cause by so notifying the Subordination Agent and may
appoint a successor Subordination Agent. The Controlling Party
shall remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with
Section 6.9 hereof;
(2) the Subordination Agent is adjudged bankrupt or
insolvent;
(3) a receiver or other public officer takes charge of
the Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes
incapable of acting.
If the Subordination Agent resigns or is removed or if
a vacancy exists in the office of Subordination Agent for any
reason (the Subordination Agent in such event being referred to
herein as the retiring Subordination Agent), the Controlling
Party shall promptly appoint a successor Subordination Agent.
A successor Subordination Agent shall deliver a written
acceptance of its appointment as Subordination Agent hereunder to
the retiring Subordination Agent, 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 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), 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 or amendment cures an ambiguity or inconsistency or
does not materially adversely affect such Trustee or the holders
of the related Class of Certificates. 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.
(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 Lease, Participation Agreement or other
related document, (i) if no Indenture Default shall have occurred
and be continuing, the Subordination Agent shall request
instructions from the applicable Certificateholders and shall
vote or consent in accordance with the vote of such
Certificateholders and (ii) if any Indenture Default (which has
not been cured by the applicable Owner Trustee or the applicable
Owner Participant 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.
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 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. 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:
CREDIT SUISSE
12 East 49th Street
New York, NY 10017
Attention: Aircraft Finance Department
Telecopy: (212) 238-5331
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, if such
notice is received, if such notice is mailed by certified mail,
postage prepaid or by courier service or is sent by confirmed
telecopy addressed as provided above. Any party hereto may
change the address to which notices to such party will be sent by
giving notice of such change to the other parties to this
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.
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 Documents 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 are not 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.
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.
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:
CREDIT SUISSE,
as Class A Liquidity
Provider,
By__________________________
Name:
Title:
By_________________________
Name:
Title:
CREDIT SUISSE,
as Class B Liquidity
Provider,
By____________________________
Name:
Title:
By____________________________
Name:
Title:
CREDIT SUISSE,
as 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 1 TO
INTERCREDITOR AGREEMENT
Indentures
1. Amended and Restated Trust Indenture and Mortgage 104, dated
as of December 22, 1995, between Wilmington Trust Company,
as Loan Trustee (the "Loan Trustee"), and First Security
Bank of Utah, National Association, as Owner Trustee (the
"Owner Trustee").
2. Amended and Restated Trust Indenture and Mortgage 105, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
3. Amended and Restated Trust Indenture and Mortgage 106, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
4. Amended and Restated Trust Indenture and Mortgage 107, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
5. Amended and Restated Trust Indenture and Mortgage 108, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
6. Amended and Restated Trust Indenture and Mortgage 109, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
7. Amended and Restated Trust Indenture and Mortgage 110, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
8. Amended and Restated Trust Indenture and Mortgage 112, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
9. Amended and Restated Trust Indenture and Mortgage 113, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
10. Amended and Restated Trust Indenture and Mortgage 620, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
11. Amended and Restated Trust Indenture and Mortgage 623, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
12. Amended and Restated Trust Indenture and Mortgage 624, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
13. Amended and Restated Trust Indenture and Mortgage 625, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
14. Amended and Restated Trust Indenture and Mortgage 626, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
15. Amended and Restated Trust Indenture and Mortgage 627, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
16. Amended and Restated Trust Indenture and Mortgage 631, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
17. Amended and Restated Trust Indenture and Mortgage 632, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
18. Amended and Restated Trust Indenture and Mortgage 633, dated
as of December 22, 1995, between the Loan Trustee and the
Owner Trustee.
SCHEDULE 2 TO
INTERCREDITOR AGREEMENT
Refunding Agreements
1. Refunding Agreement 104, dated as of January 31, 1996, among
Continental Airlines, Inc. ("Continental"), General Electric
Company, as Owner Participant and Loan Participant ("GE"),
First Security Bank of Utah, National Association ("FSB"),
the Boeing Company, as Initial Loan Participant ("Boeing"),
and Wilmington Trust Company, as Pass Through Trustee,
Subordination Agent and Loan Trustee ("Wilmington").
2. Refunding Agreement 105, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
3. Refunding Agreement 106, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
4 Refunding Agreement 107, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
5. Refunding Agreement 108, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
6. Refunding Agreement 109, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
7. Refunding Agreement 110, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
8 Refunding Agreement 112, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
9. Refunding Agreement 113, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
10. Refunding Agreement 620, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
11. Refunding Agreement 623, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
12 Refunding Agreement 624, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
13. Refunding Agreement 625, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
14. Refunding Agreement 626, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
15. Refunding Agreement 627 dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
16 Refunding Agreement 631, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
17. Refunding Agreement 632, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
18. Refunding Agreement 633, dated as of January 31, 1996, among
Continental, GE, FSB, Boeing and Wilmington.
Exhibit 4.14
- -----------------------------------------------------------------
Registration Rights Agreement
Dated as of January 31, 1996
among
Continental Airlines, Inc.
Wilmington Trust Company
as Trustee under
Continental Airlines
Pass Through Trust 1996-A
Continental Airlines
Pass Through Trust 1996-B
Continental Airlines
Pass Through Trust 1996-C
Continental Airlines
Pass Through Trust 1996-D
and
CS First Boston Corporation,
Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.
Merrill Lynch, Pierce Fenner & Smith Incorporated
and
Fieldstone FPCG Services, L.P.
- -----------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
made and entered into as of January 31, 1996, among Continental
Airlines, Inc., a Delaware corporation (the "Company"),
Wilmington Trust Company, as trustee under each of the Trusts (as
defined below) and CS First Boston Corporation, Morgan Stanley &
Co. Incorporated, Lehman Brothers Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, and Fieldstone FPCG Services, L.P.
(collectively, the "Purchasers").
This Agreement is made pursuant to the Purchase
Agreement dated January 24, 1996 among the Company and the
Purchasers (the "Purchase Agreement"), which provides that the
Trustee will issue and sell $269,518,000 principal amount of the
pass through certificates of the Class A Trust, $94,332,000
principal amount of the pass through certificates of the Class B
Trust and $74,117,000 principal amount of the pass through
certificates of the Class C Trust. In addition, the Trustee will
issue and sell to General Electric Company ("GE") $51,300,000
principal amount of the pass through certificates of the Class D
Trust (the certificates of the Class A Trust, Class B Trust,
Class C Trust and Class D Trust collectively, the "Initial
Certificates"). In order to induce the Purchasers to enter into
the Purchase Agreement and to induce GE to enter into the
Refunding Agreements, the Company has agreed to provide to the
Purchasers and GE and their successors, assigns and direct and
indirect transferees the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto
agree as follows:
1. Definitions. As used in this Agreement, the
following capitalized defined terms shall have the following
meanings:
"1933 Act" shall mean the Securities Act of 1933, as
amended from time to time.
"1934 Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
"Class A Trust" shall mean the Continental Airlines
Pass Through Trust 1996-A.
"Class B Trust" shall mean the Continental Airlines
Pass Through Trust 1996-B.
"Class C Trust" shall mean the Continental Airlines
Pass Through Trust 1996-C.
"Class D Trust" shall mean the Continental Airlines
Pass Through Trust 1996-D.
"Closing Date" shall mean the Closing Date as defined
in the Purchase Agreement.
"Company" shall have the meaning set forth in the
preamble of this Agreement and shall include the Company's
successors.
"Depositary" shall mean the Depository Trust Company,
or any other depositary appointed by the Company; provided,
however, that any such depositary must have an address in
the Borough of Manhattan, in the City of New York.
"Equipment Notes" shall mean the equipment notes that
are the property of the Trusts.
"Exchange Certificates" shall mean the pass through
certificates issued by the Trusts under the Pass Through
Trust Agreements containing terms identical to the Initial
Certificates (except that, with respect to the Exchange
Certificates of each Trust, (i) interest thereon shall
accrue from the last date on which interest was paid on the
Initial Certificates of such Trust or, if no such interest
has been paid, from the Closing Date, (ii) the transfer
restrictions thereon shall be eliminated and (iii) certain
provisions relating to an increase in the stated rate of
interest thereon shall be eliminated) to be offered to
Holders of Initial Certificates in exchange for Initial
Certificates pursuant to the Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the
Company of Exchange Certificates for Registrable
Certificates pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration
under the 1933 Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an
exchange offer registration statement on Form S-4 (or, if
applicable, on another appropriate form), and all amendments
and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Holders" shall mean each of the Purchasers and GE, for
so long as they own any Registrable Certificates, and each
of their successors, assigns and direct and indirect
transferees who become registered owners of Registrable
Certificates under the Pass Through Trust Agreements.
"Initial Certificates" has the meaning set forth in the
preamble of this Agreement.
"Majority Holders" shall mean the Holders of a majority
of the aggregate principal amount of outstanding Registrable
Certificates; provided that whenever the consent or approval
of Holders of a specified percentage of Registrable
Certificates is required hereunder, Registrable Certificates
held by the Company or any of its affiliates (as such term
is defined in Rule 405 under the 1933 Act) (other than the
Purchasers, GE or subsequent holders of Registrable
Certificates if such subsequent holders are deemed to be
affiliates solely by reason of their holding of such
Registrable Certificates) shall be disregarded in
determining whether such consent or approval was given by
the Holders of such required percentage or amount.
"Pass Through Trust Agreements" shall mean each of the
Pass Through Trust Agreements relating to the Initial
Certificates and the Exchange Certificates dated as of
January 31, 1996 between the Company and each Trustee, as
may be amended from time to time in accordance with the
terms thereof.
"Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary
prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Certificates
covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-
effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth
in the preamble of this Agreement.
"Purchasers" shall have the meaning set forth in the
preamble of this Agreement.
"Refunding Agreements" shall mean each of the Refunding
Agreements relating to the Equipment Notes dated as of
January 31, 1996, as may be amended from time to time in
accordance with the terms thereof.
"Registrable Certificates" shall mean the Initial
Certificates; provided, however, that the Initial
Certificates shall cease to be Registrable Certificates when
(i) a Shelf Registration Statement with respect to such
Initial Certificates shall have been declared effective
under the 1933 Act and such Initial Certificates shall have
been disposed of pursuant to such Shelf Registration
Statement, (ii) such Initial Certificates shall have been
sold to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the 1933
Act, (iii) such Initial Certificates shall have ceased to be
outstanding or (iv) such Initial Certificates have been
exchanged for Exchange Certificates upon consummation of the
Exchange Offer.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance by the Company and
the Trustees with this Agreement, including without
limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. ("NASD")
registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state or other
securities or blue sky laws and compliance with the rules of
the NASD (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with
state or other securities or blue sky qualification of any
of the Exchange Certificates or Registrable Certificates),
(iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities
sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) all fees and expenses incurred in
connection with the listing, if any, of any of the
Registrable Certificates on any securities exchange or
exchanges, (vi) all fees and disbursements relating to the
qualification of the Pass Through Trust Agreements under
applicable securities laws, (vii) the fees and disbursements
of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any
special audits or "cold comfort" letters required by or
incident to such performance and compliance, (viii) the fees
and expenses of the Trustees, including their counsel, and
any escrow agent or custodian, and (ix) any reasonable fees
and disbursements of the underwriters, if any, and the
reasonable fees and expenses of any special experts retained
by the Company in connection with any Registration
Statement, in each case as are customarily required to be
paid by issuers or sellers of securities, but excluding fees
of counsel to the underwriters or the Holders and
underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of Registrable
Certificates by a Holder.
"Registration Statement" shall mean any registration
statement of the Company which covers any of the Exchange
Certificates or Registrable Certificates pursuant to the
provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including
post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange
Commission.
"Shelf Registration" shall mean a registration under
the 1933 Act effected pursuant to Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the
provisions of Section 2(b) of this Agreement which covers
some or all of the Registrable Certificates on an
appropriate form under Rule 415 under the 1933 Act, or any
similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement,
including post-effective amendments, in each case including
the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Trustees" shall mean the trustees with respect to the
Initial Certificates and the Exchange Certificates of the
Trusts under the Pass Through Trust Agreements.
"Trusts" shall mean the Class A Trust, the Class B
Trust, the Class C Trust and the Class D Trust.
2. Registration Under the 1933 Act. (a) Exchange
Offer Registration. To the extent not prohibited by any
applicable law or applicable interpretation of the Staff of the
SEC, the Company shall use its best efforts (A) to file with the
SEC within 120 days after the Closing Date an Exchange Offer
Registration Statement covering the offer by the Company to the
Holders to exchange all of the Registrable Certificates for
Exchange Certificates, (B) to cause such Exchange Offer
Registration Statement to be declared effective by the SEC within
60 days after the date of filing of such Exchange Offer
Registration Statement, (C) to cause such Registration Statement
to remain effective until the closing of the Exchange Offer and
(D) to consummate the Exchange Offer within 30 days after the
date such Exchange Offer Registration Statement is declared
effective. Upon the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to
enable each Holder (other than Participating Broker-Dealers (as
defined in Section 3(f) hereof)) eligible and electing to
exchange Registrable Certificates for Exchange Certificates
(assuming that such Holder is not an affiliate of the Company
within the meaning of Rule 405 under the 1933 Act, acquires the
Exchange Certificates in the ordinary course of such Holder's
business and has no arrangements or understandings with any
person to participate in the Exchange Offer for the purpose of
distributing the Exchange Certificates) to trade such Exchange
Certificates from and after their receipt without any limitations
or restrictions under the 1933 Act and without material
restrictions under the securities laws of a substantial
proportion of the several states of the United States.
In connection with the Exchange Offer, the Company
shall or shall cause the Trustees to:
(i) mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and
related documents;
(ii) keep the Exchange Offer open for not less than 30
days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law);
(iii) use the services of the Depositary for the
Exchange Offer with respect to Initial Certificates
evidenced by global certificates;
(iv) permit Holders to withdraw tendered Registrable
Certificates at any time prior to the close of business, New
York City time, on the last business day on which the
Exchange Offer shall remain open, by sending to the
institution specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of
such Holder, the principal amount of Registrable
Certificates delivered for exchange, and a statement that
such Holder is withdrawing his election to have such
Registrable Certificates exchanged; and
(v) use its best efforts to ensure that (i) any
Exchange Offer Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with
the 1933 Act and the rules and regulations thereunder, (ii)
any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any
Prospectus forming part of any Exchange Offer Registration
Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements, in
light of the circumstances under which they were made, not
misleading.
(vi) otherwise comply in all respects with all
applicable laws relating to the Exchange Offer.
As soon as practicable after the close of the Exchange
Offer, the Company shall or shall cause the Trustees to:
(i) accept for exchange Registrable Certificates duly
tendered and not validly withdrawn pursuant to the Exchange
Offer in accordance with the terms of the Exchange Offer
Registration Statement and the letter of transmittal which
is an exhibit thereto;
(ii) cancel or cause to be cancelled all Registrable
Certificates so accepted for exchange by the Company; and
(iii) promptly cause to be authenticated and delivered
Exchange Certificates to each Holder of Registrable
Certificates equal in amount to the Registrable Certificates
of such Holder so accepted for exchange.
Interest on each Exchange Certificate will accrue from
the last date on which interest was paid on the Registrable
Certificates surrendered in exchange therefor or, if no interest
has been paid on the Registrable Certificates, from the Closing
Date. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer, or the making of any exchange
by a Holder, does not violate applicable law or any applicable
interpretation of the Staff of the SEC. Each Holder of
Registrable Certificates (other than Participating Broker-
Dealers, as hereinafter defined) who wishes to exchange such
Registrable Certificates for Exchange Certificates in the
Exchange Offer shall represent that (i) it is not an affiliate of
the Company within the meaning of Rule 405 under the 1933 Act,
(ii) any Exchange Certificates to be received by it were acquired
in the ordinary course of business and (iii) it has no
arrangement with any Person to participate in the distribution
(within the meaning of the 1933 Act) of the Exchange
Certificates.
(b) Shelf Registration. (i) If, because of any
change in law or applicable interpretations thereof by the Staff
of the SEC, the Company is not permitted to effect the Exchange
Offer as contemplated by Section 2(a) hereof, or (ii) if for any
other reason the Exchange Offer Registration Statement is not
declared effective within 60 days following the date such
Exchange Offer Registration Statement is filed or the Exchange
Offer is not consummated within 30 days following the date such
Exchange Offer Registration Statement is declared effective, or
(iii) if any Holder (other than a Purchaser) is not eligible to
participate in the Exchange Offer or (iv) upon the request of any
Purchaser (with respect to any Registrable Certificates which it
acquired directly from the Company) following the consummation of
the Exchange Offer if such Purchaser shall hold Registrable
Certificates which it acquired directly from the Company and if
such Purchaser is not permitted, in the opinion of counsel to
such Purchaser, pursuant to applicable law or applicable
interpretation of the Staff of the SEC to participate in the
Exchange Offer, the Company shall, at its cost:
(A) as promptly as practicable, file with the SEC a
Shelf Registration Statement relating to the offer and sale
of the Registrable Certificates by the Holders from time to
time in accordance with the methods of distribution elected
by the Majority Holders of such Registrable Certificates and
set forth in such Shelf Registration Statement, and use its
best efforts to cause such Shelf Registration Statement to
be declared effective by the SEC by the 210th day after the
Closing Date (or promptly in the event of a request by any
Holder pursuant to clause (iii) above or any Purchaser
pursuant to clause (iv) above). In the event that the
Company is required to file a Shelf Registration Statement
upon the request of any Holder (other than a Purchaser) not
eligible to participate in the Exchange Offer pursuant to
clause (iii) above or upon the request of any Purchaser
pursuant to clause (iv) above, the Company shall file and
have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect
to all Registrable Certificates and a Shelf Registration
Statement (which may be a combined Registration Statement
with the Exchange Offer Registration Statement) with respect
to offers and sales of Registrable Certificates held by such
Holder or such Purchaser after completion of the Exchange
Offer. If the Company files a Shelf Registration Statement
pursuant to Section 2(b)(ii) hereof, the Company will no
longer be required to effect the Exchange Offer;
(B) use its best efforts to keep the Shelf
Registration Statement continuously effective, in order to
permit the Prospectus forming part thereof to be usable by
Holders, until the end of the period referred to in Rule
144(k) (or one year from the Closing Date if such Shelf
Registration Statement is filed upon the request of any
Purchaser pursuant to clause (iv) above) or such shorter
period as shall end when all of the Registrable Certificates
covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement; and
(C) notwithstanding any other provisions hereof, use
its best efforts to ensure that (i) any Shelf Registration
Statement and any amendment thereto and any Prospectus
forming part thereof and any supplement thereto complies in
all material respects with the 1933 Act and the rules and
regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading and (iii) any Prospectus forming part of any
Shelf Registration Statement, and any supplement to such
Prospectus (as amended or supplemented from time to time),
does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements, in light of the circumstances under which they
were made, not misleading.
The Company further agrees, if necessary, to supplement
or amend the Shelf Registration Statement if reasonably requested
by the Majority Holders with respect to information relating to
the Holders and otherwise as required by Section 3(b) below, to
use all reasonable efforts to cause any such amendment to become
effective and such Shelf Registration to become usable as soon as
practicable thereafter and to furnish to the Holders of
Registrable Certificates copies of any such supplement or
amendment promptly after its being used or filed with the SEC.
The Company shall be allowed a period of five days,
beginning on the first day a Registration Default (as hereinafter
defined) referred to in Section 2(b)(ii) occurs, to cure such
Registration Default before the Company will be required to
comply with the requirements of Section 2(b).
(c) Expenses. The Company shall pay all Registration
Expenses in connection with the registration pursuant to Section
2(a) or 2(b) and, in the case of any Shelf Registration
Statement, will reimburse the Holders or Purchasers for the
reasonable fees and disbursements of one firm or counsel
designated in writing by the Majority Holders to act as counsel
for the Holders of the Registrable Certificates in connection
therewith. Each Holder shall pay all expenses of its counsel,
other than as set forth in the preceding sentence, underwriting
discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Certificates
pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. (i) The
Company will be deemed not to have used its best efforts to cause
the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to
remain, effective during the requisite period if the Company
voluntarily takes any action that would result in any such
Registration Statement not being declared effective or in the
Holders of Registrable Certificates covered thereby not being
able to exchange or offer and sell such Registrable Certificates
during that period unless (A) such action is required by
applicable law or (B) such action is taken by the Company in good
faith and for valid business reasons (not including avoidance of
the Company's obligations hereunder), including, without
limitation, the acquisition or divestiture of assets, so long as
the Company promptly complies with the requirements of Section
3(j) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant
to Section 2(a) hereof or a Shelf Registration Statement pursuant
to Section 2(b) hereof will not be deemed to have become
effective unless it has been declared effective by the SEC;
provided, however, that if, after it has been declared effective,
the offering of Registrable Certificates pursuant to a
Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such
interference, until the offering of Registrable Certificates
pursuant to such Registration Statement may legally resume.
(e) Increase in Interest Rate. In the event that
either (i) (x) the Exchange Offer Registration Statement is not
filed with the SEC on or prior to the 120th calendar day
following the Closing Date, or (y) the Exchange Offer
Registration Statement has not been declared effective on or
prior to the 60th calendar day following the filing thereof with
the SEC or (z) the Exchange Offer is not consummated on or prior
to the 30th calendar day following the effectiveness of the
Exchange Offer Registration Statement or (ii) a Shelf
registration Statement is required to be filed with the SEC
pursuant to this Agreement and such Shelf Registration Statement
is not declared effective on or prior to the 210th calendar day
following the Closing Date (each a "Registration Default"), the
interest rate borne by the Initial Certificates shall be
increased by (1) 0.25% per annum from and including the day
following such Registration Default to but excluding the 90th day
following such Registration Default and (2) 0.50% per annum
thereafter, provided, however that such increase shall cease to
be in effect from and including the date on which the Exchange
Offer Registration Statement is filed with the SEC, in the case
of clause (i)(x) above, the date on which the Exchange Offer
Registration Statement is declared effective by the SEC, in the
case of clause (i)(y) above, the date on which the Exchange Offer
is consummated, in the case of clause (i)(z) above and the date
the Shelf Registration Statement is declared effective in the
case of clause (ii) above; and provided further, however, that
the filing of a Shelf Registration Statement with the SEC shall
constitute a cure of any Registration Default under clauses
(i)(x) and (y) above, and the declaration by the SEC that such
Shelf Registration Statement is effective shall constitute a cure
of any Registration Default under clause (i)(z) above. In the
event that the Shelf Registration Statement ceases to be
effective at any time during the period specified by Section 2(b)
hereof for more than 60 days, whether or not consecutive, during
any 12-month period, the interest rate borne by the Equipment
Notes shall be increased by 0.50% per annum from the 61st day of
the applicable 12-month period such Shelf Registration Statement
ceases to be effective until such time as the Shelf Registration
Statement again becomes effective.
3. Registration Procedures. In connection with the
obligations of the Company with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Company
shall:
(a) prepare and file with the SEC a Registration
Statement, within the time period specified in Section 2, on
the appropriate form under the 1933 Act, which form (i)
shall be selected by the Company, (ii) shall, in the case of
a Shelf Registration, be available for the sale of the
Registrable Certificates by the selling Holders thereof and
(iii) shall comply as to form in all material respects with
the requirements of the applicable form;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as
may be necessary under applicable law to keep such
Registration Statement effective for the applicable period;
cause each Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the 1933 Act;
(c) in the case of a Shelf Registration, (i) notify
each Holder of Registrable Certificates when a Shelf
Registration Statement with respect to the Registrable
Certificates has been filed and advise such Holders that the
distribution of Registrable Certificates will be made in
accordance with the method elected by the Majority Holders;
(ii) furnish to each Holder of Registrable Certificates
included within the coverage of the Shelf Registration
Statement at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the
Holder so requests in writing, all reports, other documents
and exhibits (including those incorporated by reference) at
the expense of the Company, (iii) furnish to each Holder of
Registrable Certificates included within the coverage of the
Shelf Registration Statement, to counsel for the Holders and
to each underwriter of an underwritten offering of
Registrable Certificates, if any, without charge, as many
copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto as such
Holder or underwriter may reasonably request in order to
facilitate the public sale or other disposition of the
Registrable Certificates; and (iv) subject to the last
paragraph of Section 3, consent to the use of the Prospectus
or any amendment or supplement thereto by each of the
selling Holders of Registrable Certificates included in the
Shelf Registration Statement in connection with the offering
and sale of the Registrable Certificates covered by the
Prospectus or any amendment or supplement thereto;
(d) use its best efforts to register or qualify the
Registrable Certificates or cooperate with the Holders of
Registrable Certificates and their counsel in the
registration or qualification of such Registrable
Certificates under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder of Registrable
Certificates covered by a Registration Statement and each
underwriter of an underwritten offering of Registrable
Certificates shall reasonably request in writing to
cooperate with the Holders in connection with any filings
required to be made with the NASD, and do any and all other
acts and things which may be reasonably necessary or
advisable to enable such Holders to consummate the
disposition in each such jurisdiction of such Registrable
Certificates owned by such Holders; provided, however, that
in no event shall the Company be required to (i) qualify as
a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d) or (ii) take any action
which would subject it to general service of process or
taxation in any such jurisdiction if it is not then so
subject;
(e) in the case of a Shelf Registration, notify each
Holder of Registrable Certificates promptly and, if
requested by such Holder or counsel, confirm such advice in
writing promptly (i) when a Shelf Registration Statement has
become effective and when any post-effective amendments and
supplements thereto become effective, (ii) of any request by
the SEC or any state securities authority for post-effective
amendments and supplements to a Shelf Registration Statement
and Prospectus or for additional information after the Shelf
Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any
stop order suspending the effectiveness of a Shelf
Registration Statement or the initiation of any proceedings
for that purpose, (iv) at the closing of any sale of
Registrable Certificates if, between the effective date of a
Shelf Registration Statement and such closing, the
representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or
other similar agreement, if any, relating to such offering
cease to be true and correct in all material respects,
(v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the
Registrable Certificates for sale in any jurisdiction or the
initiation or threatening of any proceeding for such
purpose, (vi) of the happening of any material event or the
discovery of any material facts during the period a Shelf
Registration Statement is effective which makes any
statement made in such Registration Statement or the related
Prospectus untrue or which requires the making of any
changes in such Registration Statement or Prospectus in
order to make the statements therein (in the case of the
Prospectus in light of the circumstances under which they
were made) not misleading and (vii) of any determination by
the Company that a post-effective amendment to a
Registration Statement would be appropriate;
(f) (A) in the case of the Exchange Offer, (i)
include in the Exchange Offer Registration Statement a "Plan
of Distribution" section covering the use of the Prospectus
included in the Exchange Offer Registration Statement by
broker-dealers who have exchanged their Registrable
Certificates for Exchange Certificates for the resale of
such Exchange Certificates, (ii) furnish to each broker-
dealer who desires to participate in the Exchange Offer,
without charge, as many copies of each Prospectus included
in the Exchange Offer Registration Statement, including any
preliminary prospectus, and any amendment or supplement
thereto, as such broker-dealer may reasonably request, (iii)
include in the Exchange Offer Registration Statement a
statement that any broker-dealer who holds Registrable
Certificates acquired for its own account as a result of
market-making activities or other trading activities (a
"Participating Broker-Dealer"), and who receives Exchange
Certificates for Registrable Certificates pursuant to the
Exchange Offer, may be a statutory underwriter and must
deliver a prospectus meeting the requirements of the 1933
Act in connection with any resale of such Exchange
Certificates, (iv) subject to the last paragraph of Section
3, hereby consent to the use of the Prospectus forming part
of the Exchange Offer Registration Statement or any
amendment or supplement thereto, by any broker-dealer in
connection with the sale or transfer of the Exchange
Certificates covered by the Prospectus or any amendment or
supplement thereto, and (v) include in the transmittal
letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"If the undersigned is not a broker-dealer, the
undersigned represents that it is not engaged in, and
does not intend to engage in, a distribution of
Exchange Certificates. If the undersigned is a broker-
dealer that will receive Exchange Certificates for its
own account in exchange for Registrable Certificates,
it represents that the Registrable Certificates to be
exchanged for Exchange Certificates were acquired by it
as a result of market-making activities or other
trading activities and acknowledges that it will
deliver a prospectus meeting the requirements of the
1933 Act in connection with any resale of such Exchange
Certificates pursuant to the Exchange Offer; however,
by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act"; and
(y) a statement to the effect that by a broker-dealer making
the acknowledgment described in subclause (x) and by
delivering a Prospectus in connection with the exchange of
Registrable Certificates, the broker-dealer will not be
deemed to admit that it is an underwriter within the
meaning of the 1933 Act; and
(B) to the extent any Participating Broker-Dealer
participates in the Exchange Offer, use its best efforts to
cause to be delivered at the request of an entity
representing the Participating Broker-Dealers (which entity
shall be one of the Purchasers, unless it elects not to act
as such representative) only one, if any, "cold comfort"
letter with respect to the Prospectus in the form existing
on the last date for which exchanges are accepted pursuant
to the Exchange Offer and with respect to each subsequent
amendment or supplement, if any, effected during the period
specified in clause (C) below; and
(C) to the extent any Participating Broker-Dealer
participates in the Exchange Offer, use its best efforts to
maintain the effectiveness of the Exchange Offer
Registration Statement for the 180 day period specified in
clause (D) below; and
(D) not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration
Statement as would otherwise be contemplated by
Section 3(b), or take any other action as a result of this
Section 3(f), for a period exceeding 180 days after the last
date for which exchanges are accepted pursuant to the
Exchange Offer (as such period may be extended by the
Company) and Participating Broker-Dealers shall not be
authorized by the Company to, and shall not, deliver such
Prospectus after such period in connection with resales
contemplated by this Section 3;
(g) (A) in the case of an Exchange Offer, furnish
counsel for the Purchasers and (B) in the case of a Shelf
Registration, furnish counsel for the Holders of Registrable
Certificates copies of any request by the SEC or any state
securities authority for amendments or supplements to a
Registration Statement and Prospectus or for additional
information;
(h) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a
Registration Statement as soon as practicable and provide
immediate notice to each Holder of the withdrawal of any
such order;
(i) unless any Registrable Certificates are in book
entry form only, in the case of a Shelf Registration, cause
the Trustees to cooperate with the selling Holders of
Registrable Certificates to facilitate the timely
preparation and delivery of certificates representing
Registrable Certificates to be sold free from any
restrictive legends; and cause such Registrable Certificates
to be in such denominations (consistent with the provisions
of the Pass Through Trust Agreements) and registered in such
names as the selling Holders or the underwriters, if any,
may reasonably request at least one business day prior to
the closing of any sale of Registrable Certificates;
(j) in the case of a Shelf Registration, upon the
occurrence of any event or the discovery of any facts, each
as contemplated by Sections 2(d)(i)(B) or 3(e)(ii)-(vi)
hereof, use its best efforts to prepare a post-effective
amendment to a Registration Statement or an amendment or
supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to the
purchasers of the Registrable Certificates, such Prospectus
will not contain at the time of such delivery any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading. The Company agrees to notify each Holder to
suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and each Holder
hereby agrees to suspend use of the Prospectus as promptly
as practicable upon receipt of such notice until the Company
has amended or supplemented the Prospectus to correct such
misstatement or omission, provided that the Company shall
cause such suspension not to last more than 30 days per
occurrence or more than 60 days in aggregate in a calendar
year. At such time as such public disclosure is otherwise
made or the Company determines that such disclosure is not
necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, the
Company agrees promptly to notify each Holder of such
determination and to furnish each Holder such numbers of
copies of the Prospectus, as amended or supplemented, as
such Holder may reasonably request;
(k) obtain a CUSIP number for all Exchange
Certificates, or Registrable Certificates, as the case may
be, of each Trust not later than the effective date of an
Exchange Offer Registration Statement or Shelf Registration
Statement, as the case may be, and provide the Trustees with
printed certificates evidencing the Exchange Certificates or
the Registrable Certificates, as the case may be, held in
book entry form, in a form eligible for deposit with the
Depositary;
(l) (i) cause the Pass Through Trust Agreements to
be qualified under the Trust Indenture Act of 1939, as
amended (the "TIA"), in connection with the registration of
the Exchange Certificates, or Registrable Certificates, as
the case may be, (ii) cooperate with the Trustees and the
Holders to effect such changes to the Pass Through Trust
Agreements as may be required for the Pass Through Trust
Agreements to be so qualified in accordance with the terms
of the TIA and (iii) execute, and use its best efforts to
cause the Trustees to execute, all documents as may be
required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable the
Pass Through Trust Agreements to be so qualified in a timely
manner;
(m) in the case of a Shelf Registration, enter into
such customary agreements (including underwriting agreements
in customary form) and take all other customary and
appropriate actions (including those reasonably requested by
the Holders of a majority in principal amount of Registrable
Certificates being sold) in order to expedite or facilitate
the disposition of such Registrable Certificates and in such
connection whether or not an underwriting agreement is
entered into and whether or not the registration is an
underwritten registration:
(i) make such representations and warranties to
the Holders of such Registrable Certificates and the
underwriters, if any, in form, substance and scope as
are customarily made by the Company to underwriters in
similar underwritten offerings as may be reasonably
requested by them;
(ii) obtain opinions of counsel to the Company
(who may be the general counsel of the Company) and
updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory
to the managing underwriters, if any, or if there are
no such managing underwriters, to the Holders of a
majority in principal amount of the Registrable
Certificates being sold) addressed to each selling
Holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in
sales of securities or underwritten offerings and such
other matters as may be reasonably requested by such
Holders and underwriters;
(iii) obtain a "cold comfort" letter and updates
thereof from the Company's independent certified public
accountants addressed to the underwriters, if any, and
will use its best efforts to have such letter addressed
to the selling Holders of Registrable Certificates,
such letter to be in customary form and covering such
matters of the type customarily covered in "cold
comfort" letters in connection with similar
underwritten offerings as the Holders of a majority in
principal amount of the Registration Certificates being
sold shall request;
(iv) enter into a securities sales agreement with
the Holders and an agent of the Holders providing for,
among other things, the appointment of such agent for
the selling Holders for the purpose of soliciting
purchases of Registrable Certificates, which agreement
shall be in form, substance and scope customary for
similar offerings;
(v) if an underwriting agreement is entered into,
cause the same to set forth indemnification provisions
and procedures substantially equivalent to the
indemnification provisions and procedures set forth in
Section 5 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(vi) deliver such other documents and
certificates as may be reasonably requested by Holders
of a majority in principal amount of Registrable
Certificates being sold, and as are customarily
delivered in similar offerings.
The above shall be done at (i) the effectiveness of such
Registration Statement (and, if appropriate, each post-
effective amendment thereto) if appropriate in connection
with any particular disposition of Registrable Certificates
and (ii) each closing under any underwriting or similar
agreement as and to the extent required thereunder. In the
case of any underwritten offering, the Company shall provide
written notice to the Holders of all Registrable
Certificates of such underwritten offering at least 30 days
prior to the filing of a prospectus supplement for such
underwritten offering. Such notice shall (x) offer each
such Holder the right to participate in such underwritten
offering, (y) specify a date, which shall be no earlier than
10 days following the date of such notice, by which such
Holder must inform the Company of its intent to participate
in such underwritten offering and (z) include the
instructions such Holder must follow in order to participate
in such underwritten offering;
(n) in the case of a Shelf Registration, make
available for inspection by representatives of the Holders
of the Registrable Certificates and any underwriters
participating in any disposition pursuant to a Shelf
Registration Statement and any counsel or accountant
retained by such Holders or underwriters, all financial and
other records, pertinent corporate documents and properties
of the Company reasonably requested by it, and cause the
respective officers, directors, employees, and any other
agents of the Company to make reasonably available all
relevant information reasonably requested by any such
representative, underwriter, counsel or accountant in
connection with a Registration Statement, in each case as is
customary for similar due diligence examinations; provided,
however, that any information that is designated in writing
by the Company, in good faith, as confidential at the time
of delivery of such information shall be kept confidential
by such representatives, underwriters, counsel or
accountant, unless such disclosure is made in connection
with a court proceeding or required by law, or such
information becomes available to the public generally or
through a third party without an accompanying, obligation of
confidentiality; and provided further that the foregoing
inspection and information gathering shall, to the extent
reasonably possible, be coordinated on behalf of the Holders
and the other parties entitled thereto by one counsel
designated by and on behalf of such Holders and other
parties;
(o) (i) a reasonable time prior to the filing of any
Exchange Offer Registration Statement, any Prospectus
forming a part thereof, any amendment to an Exchange Offer
Registration Statement or amendment or supplement to a
Prospectus, provide copies of such document to the
Purchasers, and use its best efforts to reflect in any such
document when filed such comments as any of the Purchasers
or their counsel may reasonably request; (ii) in the case of
a Shelf Registration, a reasonable time prior to filing any
Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement
or amendment or supplement to such Prospectus, provide
copies of such document to the Holders of Registrable
Certificates, to the Purchasers, to counsel on behalf of the
Holders and to the underwriter or underwriters of an
underwritten offering of Registrable Certificates, if any,
and use its best efforts to reflect such comments in any
such document when filed as the Holders of Registrable
Certificates, their counsel and any underwriter may
reasonably request; and (iii) cause the representatives of
the Company to be available for discussion of such document
as shall be reasonably requested by the Holders of
Registrable Certificates, the Purchasers on behalf of such
Holders or any underwriter and shall not at any time make
any filing of any such document of which such Holders, the
Purchasers on behalf of such Holders, their counsel or any
underwriter shall not have previously been advised and
furnished a copy or to which such Holders, the Purchasers on
behalf of such Holders, their counsel or any underwriter
shall reasonably object;
(p) in the case of a Shelf Registration, use its best
efforts to cause the Registrable Certificates to be rated
with the appropriate rating agencies at the time of
effectiveness of such Shelf Registration Statement, unless
the Registrable Certificates are already so rated; and
(q) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make
generally available to its security holders, as soon as
reasonably practicable after the effective date of a
Registration Statement, an earnings statement which shall
satisfy the provisions of Section 11(a) of the 1933 Act and
Rule 158 thereunder.
In the case of a Shelf Registration Statement, the
Company may (as a condition to such Holder's participation in the
Shelf Registration) require each Holder of Registrable
Certificates to furnish to the Company such information regarding
such Holder and the proposed distribution by such Holder of such
Registrable Certificates as the Company may from time to time
reasonably request and the Company may exclude from such
registration the Registrable Certificates of any Holder that
fails to furnish such information within a reasonable time after
receiving such request.
In the case of a Shelf Registration Statement, each
Holder agrees that, upon receipt of any notice from the Company
of the happening of any event or the discovery of any facts, each
of the kind described in Sections 2(d)(i)(B) or 3(e)(ii)-(vi)
hereof, such Holder will forthwith discontinue disposition of
Registrable Certificates pursuant to such Shelf Registration
Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(j)
hereof, and, if so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies in
its possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable
Certificates current at the time of receipt of such notice. If
the Company shall give any such notice to suspend the disposition
of Registrable Certificates pursuant to a Shelf Registration
Statement as a result of the happening of any event or the
discovery of any facts, each of the kind described in Sections
2(d)(i)(B) or 3(e)(ii)-(vi) hereof, the Company shall be deemed
to have used its best efforts to keep the Shelf Registration
Statement effective during such period of suspension provided
that the Company shall use its best efforts to file and have
declared effective (if an amendment) as soon as practicable an
amendment or supplement to the Shelf Registration Statement and
shall extend the period during which the Registration Statement
shall be maintained effective pursuant to this Agreement by the
number of days during the period from and including the date of
the giving of such notice to and including the date when the
Holders shall have received copies of the supplemented or amended
Prospectus necessary to resume such dispositions.
4. Underwritten Offering. The Holders of Registrable
Certificates covered by a Shelf Registration Statement who desire
to do so may sell such Registrable Certificates in an
underwritten offering. In any such underwritten offering, the
investment banker or bankers and manager or managers that will
administer the offering will be selected by, and the underwriting
arrangements with respect thereto will be approved by, the
Holders of a majority of the Registrable Securities to be
included in such offering; provided however, that (i) such
investment bankers and managers and underwriting arrangements
must be reasonably satisfactory to the Company and (ii) the
Company shall not be obligated to arrange for more than one
underwritten offering during the period such Shelf Registration
Statement is required to be effective pursuant to
Section 2(b)(i)(B) hereof. No Holder may participate in any
underwritten offering contemplated hereby unless such Holder
(a) agrees to sell such Holder's Registrable Certificates in
accordance with any approved underwriting arrangements, (b)
completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters
and other documents required under the terms of such approved
underwriting arrangements and (c) at least 20% of the outstanding
Registrable Certificates are included in such underwritten
offering. The Holders participating in any underwritten offering
shall be responsible for any expenses customarily borne by
selling securityholders, including underwriting discounts and
commissions and fees and expenses of counsel to the selling
securityholders.
5. Indemnification and Contribution. (a) The
Company will indemnify and hold harmless each Holder, including
Participating Broker Dealers, each underwriter who participates
in an offering of Registrable Certificates and their respective
directors, officers, employees, agents and each Person, if any,
who controls any of such parties within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any losses,
claims, damages or liabilities, joint or several, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement (or any amendment) pursuant to which
Exchange Certificates or Registrable Certificates were registered
under the 1933 Act, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
necessary in order to make the statements therein not misleading,
or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, and will reimburse each
Holder, including Participating Broker Dealers, each underwriter
who participates in an offering of Registrable Certificates,
their respective affiliates, and their respective directors,
officers, employees, agents and each Person, if any, who controls
any of such parties within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act for any legal or other expenses
reasonably incurred by such party as such expenses are incurred
in connection with investigating or defending against any
litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any
claim whatsoever arising out of or based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid
pursuant to clause (i) of this Section 5(a); provided, however,
that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of
such documents in reliance upon and in conformity with written
information furnished to the Company by any Purchaser, any
Holder, including Participating Broker-Dealers or any underwriter
specifically for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or
supplement thereto) or contained in any preliminary prospectus if
the Purchasers, such Holder, including a Participating Broker-
Dealer, or such underwriter from whom the Person asserting any
such losses, claims, damages or liabilities purchased the
securities concerned to the extent that a prospectus relating to
such securities was required to be delivered by such Purchaser,
Holder, Participating Dealer or underwriter and such Purchaser,
Holder, Participating Broker-Dealer or underwriter failed to send
or deliver a copy of the Prospectus (or any amendment or
supplement thereto) to the Person asserting such losses, claims,
damages or labilities on or prior to the delivery of written
confirmation of any sale of securities covered thereby to such
Person in any case where such Prospectus (or any amendment or
supplement thereto) corrected such untrue statement or omission
if the Company had previously furnished copies of thereof to such
Purchaser, Holder, Participating Broker-Dealer or underwriter.
Any amounts advanced by the Company to an indemnified party
pursuant to this Section 5 as a result of such losses shall be
returned to the Company if it shall be finally determined by such
a court in a judgment not subject to appeal of final review that
such indemnified party was not entitled to indemnification by the
Company.
(b) In the case of a Shelf Registration Statement,
each Holder will severally and not jointly indemnify and hold
harmless the Company, each Purchaser, each underwriter who
participates in an offering of Registrable Certificates and the
other selling Holders and each of their respective directors,
officers (including each officer of the Company who signed the
Registration Statement), employees and agents and each Person, if
any, who controls the Company, any Purchaser, any underwriter or
selling Holder within the meaning of Section 15 of the 1933 Act,
against any losses, claims, damages or liabilities described in
the indemnity contained in Section 5(a) hereof, as incurred but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the
Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the
Company by such Holder specifically for use in the Registration
Statement (or any amendment thereto), or the Prospectus (or any
amendment or supplement thereto), and will reimburse any legal or
other expenses reasonably incurred by the Company, each
Purchaser, each underwriter who participates in an offering of
Registrable Certificates and the other selling Holders and each
of their respective directors and officers (including each
officer of the Company who signed the Registration Statement) and
each Person, if any, who controls the Company, any Purchaser, any
underwriter or selling Holder within the meaning of Section 15 of
the 1933 Act in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses
are incurred, provided, however, that no such Holder shall be
liable for any claims hereunder in excess of the amount of net
proceeds received by such Holder for the sale of Registrable
Certificates pursuant to such Shelf Registration Statement. Any
amounts advanced by any Holder to an indemnified party pursuant
to this Section 5 as a result of such losses shall be returned to
such Holder if it shall be finally determined by such a court in
a judgment not subject to appeal of final review that such
indemnified party was not entitled to indemnification by such
Holder.
(c) Promptly after receipt by an indemnified party
under this Section 5 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under subsection (a) or
(b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any
indemnified party otherwise than under subsection (a) or (b)
above, except to the extent that such indemnifying party is
materially prejudiced by such failure to give notice. In case
any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and,
to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section 5 for any
legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than
reasonable costs of investigation provided that if any such
indemnified party reasonably determines that there may be legal
defenses available to such indemnified party which are different
from or in addition to those available to such indemnifying party
or that representation of such indemnifying party and any
indemnified party by the same counsel would present a conflict of
interest, then such indemnifying party or parties shall not be
entitled to assume such defense. If an indemnifying party is not
entitled to assume the defense of such action as a result of the
proviso to the preceding sentence, counsel for such indemnifying
party shall be entitled to conduct the defense of such
indemnifying party and counsel for each indemnified party or
parties shall be entitled to conduct the defense of such
indemnified party or parties. If an indemnifying party assumes
the defense of an action in accordance with and as permitted by
the provisions of this paragraph, such indemnifying party shall
not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such
action, except as provided for in the immediately preceding
sentence. In no event shall the indemnifying party or parties be
liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from its own counsel for
all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such
action.
(d) If the indemnification provided for in this
Section is unavailable to an indemnified party under subsection
(a) or (b) above, then each indemnifying party in lieu of
indemnification such indemnified party shall contribute to the
aggregate losses, claims, damages, liabilities or expenses
incurred by such indemnified party referred to in subsection (a)
or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, the Purchasers and
the Holders from the offering of the Exchange Certificates or
Registrable Certificates included in such offering or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company, the Purchasers and
the Holders in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations, provided that no
Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any Person that was not guilty of such
fraudulent misrepresentation. The relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Purchasers or a Holder
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement or omission. The Company, the Purchasers and the
Holders agree that it would not be just and equitable if
contribution pursuant to this Section 5 were to be determined by
pro rata allocation or by any other method of allocation that
does not take into account the relevant equitable considerations.
For purposes of this Section 5(d), each director, officer,
employee, agent and Person, if any, who controls a Purchaser or
Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to
contribution as such Purchaser or Holder, and each director,
officer, employee and agent of the Company, and each Person, if
any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. No party shall be liable
for contribution with respect to any action, suit, proceeding or
claim settled without its written consent. The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection
(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions
of this Section 5, no Purchaser, Holder or Participating Broker
Dealer shall be required to contribute or indemnify any amount in
excess of the amount by which the total price at which
Registrable Certificates were sold by such Purchaser, Holder or
Participating Broker Dealer exceeds the amount of any damages
that such Purchaser, Holder or Participating Broker Dealer has
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The
Purchasers' obligations in this subsection (d) to contribute are
several in proportion to their respective purchase obligations
and not joint.
(e) The obligations of the Company under this Section
shall be in addition to any liability which the Company may
otherwise have.
6. Miscellaneous. (a) Rule 144 and Rule 144A. For
so long as the Company is subject to the reporting requirements
of Section 13 or 15 of the 1934 Act, the Company covenants that
it will file the reports required to be filed by it under
Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder, that if it ceases to
be so required to file such reports, it will upon the request of
any Holder of Registrable Certificates (i) make publicly
available such information as is necessary to permit sales
pursuant to Rule 144 under the 1933 Act, (ii) deliver such
information to a prospective purchaser as is necessary to permit
sales pursuant to Rule 144A under the 1933 Act and it will take
such further action as any Holder of Registrable Certificates may
reasonably request, and (iii) take such further action that is
reasonable in the circumstances, in each case, to the extent
required from time to time to enable such Holder to sell its
Registrable Certificates without registration under the 1933 Act
within the limitation of the exemptions provided by (x) Rule 144
under the 1933 Act, as such Rule may be amended from time to
time, (y) Rule 144A under the 1933 Act, as such Rule may be
amended from time to time, or (z) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of
any Holder of Registrable Certificates, the Company will deliver
to such Holder a written statement as to whether it has complied
with such requirements.
(b) Other Registration Rights. The Company may grant
registration rights that would permit any Person the right to
piggy-back on any Shelf Registration Statement, provided that if
the managing underwriter, if any, of an offering pursuant to such
Shelf Registration Statement delivers an opinion of the selling
Holders that the total amount of securities which they and the
holders of such piggy-back rights intend to include in any Shelf
Registration Statement materially adversely affects the success
of such offering (including the price at which such securities
can be sold), then the amount, number or kind of securities to be
offered for the account of holders of such piggy-back rights will
be reduced to the extent necessary to reduce the total amount of
securities to be included in such offering to the amount, number
or kind recommended by such managing underwriter; and provided
further that such piggy-back registration rights shall in no
event materially adversely affect the interests of any Holder.
(c) Trustees. The Trustees shall take such action as
may be reasonably requested by the Company in connection with the
Company satisfying its obligations arising under this Agreement.
(d) No Inconsistent Agreements. The Company has not
entered into nor will the Company on or after the date of this
Agreement enter into any agreement which is inconsistent with the
rights granted to the Holders of Registrable Certificates in this
Agreement or otherwise conflicts with the provisions hereof.
(e) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of at least a
majority in aggregate principal amount of the outstanding
Registrable Certificates affected by such amendment,
modification, supplement, waiver or departure; provided, however,
that no amendment, modification, supplement or waiver or consent
to any departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Certificates
unless consented to in writing by such Holder.
(f) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, telecopier, or
any courier guaranteeing overnight delivery (i) if to a Holder,
at the most current address given by such Holder to the Company
by means of a notice given in accordance with the provisions of
this Section 6(e), which address initially is, with respect to
the Purchasers, the address set forth in the Purchase Agreement;
and (ii) if to the Company, initially at the Company's address
set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the
provisions of this Section 6(e).
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if
personally delivered; five business days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the
next business day if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other
communications shall be concurrently delivered by the person
giving the same to the Trustees, at the address specified in the
Pass Through Trust Agreements.
(g) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors,
assigns and transferees of each of the parties, including,
without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein
shall be deemed to permit any assignment, transfer or other
disposition of Registrable Certificates in violation of the terms
hereof or of the Purchase Agreement or the Pass Through Trust
Agreements. If any transferee of any Holder shall acquire
Registrable Certificates, in any manner, whether by operation of
law or otherwise, such Registrable Certificates shall be held
subject to all of the terms of this Agreement, and by taking and
holding such Registrable Certificates, such Person shall be
conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the
restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such Person shall be
entitled to receive the benefits hereof.
(h) Third Party, Beneficiary. The Holders shall be
third party beneficiaries to the agreements made hereunder and to
the obligations of the Company hereunder and shall have the right
to enforce such agreements and obligations directly to the extent
any such Holder deems such enforcement necessary or advisable to
protect its rights hereunder.
(i) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(j) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(k) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
(l) Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
CONTINENTAL AIRLINES, INC.
By____________________________________
Name:
Title:
WILMINGTON TRUST COMPANY
as Trustee under each of the Trusts
By____________________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
CS FIRST BOSTON CORPORATION
MORGAN STANLEY & CO. INCORPORATED
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
FIELDSTONE FPCG SERVICES, L.P.
By: CS FIRST BOSTON CORPORATION
By: ____________________________
Name:
Title:
Exhibit 4.15
_________________________________________________________________
REFUNDING AGREEMENT 104
Dated as of January 31, 1996
Among
CONTINENTAL AIRLINES, INC.,
as Lessee
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
as Owner Trustee
WILMINGTON TRUST COMPANY,
as Pass Through Trustee under each of the
Continental Airlines 1996 Pass Through Trust Agreements
THE BOEING COMPANY,
as Initial Loan Participant
GENERAL ELECTRIC COMPANY,
as Owner Participant and Loan Participant
WILMINGTON TRUST COMPANY,
as Subordination Agent
and
WILMINGTON TRUST COMPANY,
as Loan Trustee
__________
One Boeing 757-224 Aircraft
MSN 27294
Leased to Continental Airlines, Inc.
_________________________________________________________________
INDEX TO REFUNDING AGREEMENT 104
Page
SECTION 1. Purchase of Refunding Notes; Refunding 4
SECTION 2. Refunding Notes 7
SECTION 3. Conditions Precedent 7
SECTION 4. Certain Conditions Precedent to the
Obligations of the Lessee; Conditions
Precedent with Respect to the Pass
Through Trustee 11
SECTION 5. Amendment of the First Amended Indenture 12
SECTION 6. Amendment of the First Amended Lease 12
SECTION 7. Amendment of the Participation Agreement 12
SECTION 8. [Intentionally omitted] 13
SECTION 9. Lessee's Representations and Warranties 13
SECTION 10. Representations Warranties and Covenants 16
SECTION 11. Notices 27
SECTION 12. Expenses 27
SECTION 13. Reliance of Liquidity Provider 28
SECTION 14. Miscellaneous 28
SECTION 15. Governing Law 29
Schedules
Schedule I Pass Through Trust Agreements
Schedule II Refunding Notes, Purchasers and Purchase Price
REFUNDING AGREEMENT 104
This REFUNDING AGREEMENT, dated as of January, 31,
1996, among (i) CONTINENTAL AIRLINES, INC., a Delaware
corporation (the "Lessee"), (ii) GENERAL ELECTRIC COMPANY, a New
York corporation ("GE" or the "Owner Participant"), (iii) FIRST
SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity except as otherwise
expressly provided herein, but solely as trustee (the "Owner
Trustee") under the Trust Agreement (as defined below), (iv)
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in
its individual capacity except as otherwise expressly provided
herein, but solely as trustee (in such capacity, the "Pass
Through Trustee") under each of the four separate Pass Through
Trust Agreements (as defined below), (v) THE BOEING COMPANY, a
Delaware corporation ("Boeing" or the "Initial Loan
Participant"), (vi) GENERAL ELECTRIC COMPANY (the "Loan
Participant" and, together with the Initial Loan Participant, the
"Loan Participants"), (vii) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity, but solely
as subordination agent and trustee (in such capacity, the
"Subordination Agent") under the Intercreditor Agreement (as
defined below), and (viii) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, not in its individual capacity, but solely
as Loan Trustee (the "Loan Trustee") under the First Amended
Indenture and the Indenture (each as defined below).
W I T N E S S E T H :
WHEREAS, the Lessee, Gaucho-2 Inc., a Delaware
corporation, as original owner participant (the "Original Owner
Participant"), the Owner Trustee, the Initial Loan Participant
and the Loan Trustee entered into the Participation Agreement
104, dated as of July 15, 1994 (the "Original Participation
Agreement"), providing for the sale and lease of one Boeing 757-
224 aircraft (the "Aircraft");
WHEREAS, concurrently with the execution and delivery
of the Original Participation Agreement, the Owner Trustee and
Wilmington Trust Company, as mortgagee, entered into the Trust
Indenture and Mortgage 104, dated as of July 15, 1994 (as
Supplemented by the Trust Indenture and Mortgage 104 Supplement
No. 1, dated July 29, 1994, the "Original Indenture"), pursuant
to which the Owner Trustee issued to the Initial Loan Participant
loan certificates substantially in the form set forth in Article
II thereof (the "Loan Certificates") as evidence of the loan then
being made by the Initial Loan Participant in participating in
the payment of the Lessor's Cost (as such term and other
capitalized terms used herein without definition are defined in
the Participation Agreement (as defined below) or, if not defined
therein, as defined in the Lease (as defined below)) for the
Aircraft;
WHEREAS, concurrently with the execution and delivery
of the Original Participation Agreement, the Owner Trustee and
the Lessee entered into the Lease Agreement 104 relating to the
Aircraft, dated as of July 15, 1994 (such Lease Agreement, as
supplemented by Lease Supplement No. 1, dated July 29, 1994, the
"Original Lease"), whereby, subject to the terms and conditions
set forth therein, the Owner Trustee agreed to lease to the
Lessee, and the Lessee agreed to lease from such Owner Trustee,
the Aircraft on its Delivery Date;
WHEREAS, concurrently with the execution and delivery
of the Original Participation Agreement, the Original Owner
Participant and the Owner Trustee entered into the Trust
Agreement 104, dated as of July 15, 1994 (the "Original Trust
Agreement"), pursuant to which the Owner Trustee agreed, among
other things, to hold the Trust Estate defined in Section 1
thereof for the benefit of the Owner Participant thereunder;
WHEREAS, pursuant to the Purchase, Assignment and
Assumption Agreement (Continental 104, 105, 106, 107, 108,
109,110, 112, 113), dated as of December 22, 1995 (the "Equity
Purchase Agreement"), between the Original Owner Participant and
GE, GE purchased and assumed from the Original Owner Participant
all of the Original Owner Participant's right, title and interest
in, to and under the Trust Estate, the Original Trust Agreement,
the Original Participation Agreement and certain of the other
Operative Agreements;
WHEREAS, concurrently with the execution and delivery
of the Equity Purchase Agreement, (i) the Original Owner
Participant and GE entered into the Assignment and Assumption
Agreement (FAA) relating to the Aircraft, dated December 29, 1995
(the "Assumption Agreement (FAA)"); (ii) the parties to the
Original Participation Agreement entered into the Waiver, Consent
and Amendment to Participation Agreement 104, dated as of
December 22, 1995 (the "PA Amendment No. 1"; the Original
Participation Agreement, as amended by the PA Amendment No. 1,
the "First Amended PA"), pursuant to which, among other things,
the Original Trust Agreement was amended to the extent necessary
to recognize GE as the Owner Participant and GE acknowledged the
appointment of the Owner Trustee as trustee (the Original Trust
Agreement, as so amended, the "Trust Agreement"); and (iii) the
Lessee and GE entered into a Tax Indemnity Agreement 104 relating
to the Aircraft, dated as of December 22, 1995 (the "GE Tax
Indemnity Agreement");
WHEREAS, pursuant to the Refinancing Agreement, dated
as of December 22, 1995, among the Lessee, the Owner Participant,
the Original Owner Participant, Gaucho-1 Inc., a Delaware
corporation, the Owner Trustee, the Initial Loan Participant and
the Loan Trustee (the "Refinancing Agreement"), (i) a portion of
the outstanding Loan Certificates were redeemed by the Owner
Trustee with the proceeds of the Initial Series D Notes (as
defined in the Refinancing Agreement) issued to GE pursuant to
First Amended Indenture; and (ii) the remaining Loan Certificates
were exchanged by the Initial Loan Participant for the Initial
Series A Notes, the Initial Series B Notes and the Initial Series
C Notes (each as defined in the Refinancing Agreement and,
collectively, the Initial LP Notes" and, together with the
Initial Series D Notes, the "Initial Notes") issued to the
Initial Loan Participant pursuant to the First Amended Indenture;
WHEREAS, concurrently with the execution and delivery
of the Refinancing Agreement, (i) the Owner Trustee and the Loan
Trustee amended and restated the Original Indenture as the
Amended and Restated Trust Indenture and Mortgage 104, dated as
of December 22, 1995 (the "First Amended Indenture"), for the
benefit of the holder or holders of the Initial Notes and (ii)
the Owner Trustee and the Lessee entered into Lease Agreement 104
Amendment No. 1, dated as of December 22, 1995 (the "Lease
Amendment No. 1"; the Original Lease, as amended by Lease
Amendment No. 1, the "First Amended Lease");
WHEREAS, pursuant to the Refinancing Agreement, the
Lessee has requested that the parties hereto enter into the
refinancing transaction described herein (the "Refinancing
Transaction"), pursuant to which, among other things, (i) new
equipment notes (the "Refunding Notes") shall be issued to the
Pass Through Trustees (other than the Class D Trustee (as defined
below)) pursuant to the Indenture; (ii) the Initial LP Notes
shall be deemed for cash; (iii) the Initial Series D Notes shall
be tendered to the Loan Trustee by GE in exchange for an equal
aggregate principal amount of Series D Refunding Notes (as
defined below); and (iv) such Series D Refunding Notes shall be
contributed by GE to the Cass D Trust in exchange for Class D
Certificates (each as defined below);
WHEREAS, concurrently with the execution and delivery
of this Agreement, the Owner Trustee and the Loan Trustee have
entered into the Amended and Restated Trust Indenture and
Mortgage 104 Amendment No. 1, dated as of January 31, 1996 (the
"Indenture Amendment No. 1"; the First Amended Indenture, as
amended by the Indenture Amendment No. 1, the "Indenture");
WHEREAS, concurrently with the execution and delivery
of this Agreement, the Owner Trustee and the Lessee have entered
into the Lease Agreement 104 Amendment No. 2, dated as of January
31, 1996 (the "Lease Amendment No. 2"; the First Amended Lease as
amended by the Lease, Amendment No. 2, the "Lease"), containing
amendments, modifications and additions necessary to give effect
to the transactions described herein;
WHEREAS, concurrently with the execution and delivery
of this Agreement, the Lessee, the Owner Trustee, the Owner
Participant, the Loan Trustee and the Subordination Agent have
entered into the Participation Agreement 104 Amendment No. 2,
dated as of January 31, 1996 (the "PA Amendment No. 2"; the First
Amended PA, as amended by the PA Amendment No. 2, the
"Participation Agreement");
WHEREAS, concurrently with the execution and delivery
of this Agreement, the Owner Participant and the Lessee have
entered into the Tax Indemnity Agreement 104 Amendment No. 1,
dated as of January 31, 1996, amending the GE Tax Indemnity
Agreement (the "TIA Amendment" the GE Tax Indemnity Agreement, as
amended by the TIA Amendment, the "Tax Indemnity Agreement");
WHEREAS, pursuant to each of the Pass Through Trust
Agreements set forth in Schedule 1 hereto (the "Pass Through
Trust Agreements"), on the Refunding Date (as defined in
Section 1 below), a separate grantor trust (collectively, the
"Pass Through Trusts" and, individually, a "Pass Through Trust")
will be created to facilitate certain of the transactions
contemplated hereby, including, without limitation, the issuance
and sale of pass through certificates pursuant thereto
(collectively, the "Certificates");
WHEREAS, other than with respect to the Certificates
(the "Class D Certificates") to be issued by the Continental
Airlines 1996-D Pass Through Trust (the "Class D Trust"), the
proceeds from the issuance and sale of the Certificates will be
applied by the Pass Through Trustee to purchase from the Owner
Trustee, on behalf of each Pass Through Trust (other than the
Class D Trust), all of the Refunding Notes bearing the same
interest rate as the Certificates issued by such Pass Through
Trust;
WHEREAS, concurrently with the execution and delivery
of this Agreement, (i) Credit Suisse, a bank organized under the
laws of Switzerland acting through its New York branch (the
"Liquidity Provider"), entered into three revolving credit
agreements (each, a "Liquidity Facility") for the benefit of the
Certificateholders of each Pass Through Trust (other than the
Class D Trust), with the Subordination Agent, as agent for the
Pass Through Trustee on behalf of each such Pass Through Trust;
(ii) the Liquidity Provider and the Lessee entered into a
Participation Purchase Agreement (a "Participation Purchase
Agreement") in respect of the Liquidity Facilities; and (iii) the
Pass Through Trustee, the Liquidity Provider and the
Subordination Agent entered into the Intercreditor Agreement,
dated as of January 31, 1996 (the "Intercreditor Agreement"); and
WHEREAS, the notice requirements of Section 2.12 of the
First Amended Indenture shall not be applicable to the
Refinancing Agreement.
NOW, THEREFORE, in consideration of the foregoing
premises and the mutual agreements herein contained and other
good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Purchase of Refunding Notes; Refunding.
(a) Subject to the satisfaction or waiver of the conditions set
forth herein, on January 31, 1996 or on such other date agreed to
by the parties hereto (the "Refunding Date"):
(i) immediately prior to the Closing (as hereinafter
defined), the Lessee shall pay to the Owner Trustee, as a special
payment of Basic Rent under the Lease, an amount equal to the
unpaid interest on the Initial LP Notes accrued up to but not
including the Refunding Date;
(ii) the Pass Through Trustee for each Pass Through
Trust (other than the Class D Trust) shall pay to the Owner
Trustee the aggregate purchase price of the Refunding Notes being
issued to such Pass Through Trustee as set forth in clause (xi)
below;
(iii) the Owner Trustee shall pay to the Loan Trustee
for the benefit of the Initial Loan Participant an amount equal
to the aggregate principal amount of Initial LP Notes outstanding
on the Refunding Date, together with accrued and unpaid interest
on the Initial LP Notes up to but not including the Refunding
Date, and all other amounts payable to the Initial Loan
Participant under the First Amended Indenture and the First
Amended PA (but excluding any Make-Whole Amount);
(iv) the Loan Trustee shall disburse to the Initial
Loan Participant the amounts of principal and interest, and other
amounts, if any, described in clause (iii) above, owing to it on
the Refunding Date with respect to the Initial LP Notes as a
prepayment of the Initial LP Notes;
(v) the Initial Loan Participant shall, against
receipt of payment for the Initial LP Notes, deliver to the Loan
Trustee the Initial LP Notes for cancellation;
(vi) promptly following the prepayment of the Initial
LP Notes, the Owner Trustee and the Loan Trustee shall enter into
the Indenture Amendment No. 1;
(vii) the Owner Trustee shall issue to GE, pursuant to
Article II of the Indenture, the Refunding Notes of the maturity,
principal amount and bearing the interest rate set forth on
Schedule II hereto opposite the name of GE (the "Series D
Refunding Notes"), which Refunding Notes include interest accrued
from January 15, 1996;
(viii) GE shall, against receipt of the Series D
Refunding Notes pursuant to clause (vii) above, tender to the
Loan Trustee the Initial Series D Notes for cancellation;
(ix) GE shall deliver to the Subordination Agent, as
agent for the Pass Through Trustee of the Class D Trust (the
"Class D Trustee"), all of the Series D Refunding Notes held by
it as a contribution to the Class D Trust;
(x) against receipt of the Series D Refunding Notes by
the Subordination Agent on behalf of the Class D Trustee, the
Class D Trustee shall issue and deliver to GE an aggregate
principal amount of Class D Certificates (which Certificates
include interest accrued from January 15, 1996) equal to the
outstanding principal amount of the Series D Refunding Notes
contributed by GE to the Class D Trust; and
(xi) the Owner Trustee shall issue, pursuant to Article
II of the Indenture, to the Subordination Agent on behalf of the
Pass Through Trustee for each of the Pass Through Trusts (other
than the Class D Trust), Refunding Notes of the maturity and
aggregate principal amount and bearing the interest rate set
forth on Schedule II hereto opposite the name of such Pass
Through Trust.
(b) The Owner Participant, by its execution and
delivery hereof, requests and directs the Owner Trustee to
execute and deliver this Agreement and, subject to the terms
hereof, to take the actions contemplated herein.
(c) In case any Pass Through Trustee shall for any
reason fail to purchase the Refunding Notes pursuant to
Section 1(a) above on or prior to March 31, 1996, the written
notice given by the Lessee pursuant to Section 4.1 of the
Refinancing Agreement shall be deemed never to have been given,
neither the Owner Trustee nor the Lessee shall have any
obligation to pay to the Initial Loan Participant any amount in
respect of the prepayment of the Initial LP Notes and the Initial
Notes shall remain outstanding and in full force and effect, and
the actions contemplated by Sections 5, 6, 7 and 8 hereof shall
not take place.
(d) The closing (the "Closing") of the transactions
described in this Agreement shall take place at the offices of
Shearman & Sterling, 599 Lexington Avenue, New York, New York
10022, on the Refunding Date, or at such other place as the
parties hereto may agree.
(e) All payments pursuant to this Section 1 shall be
made in immediately available funds to such accounts and at such
banks as the parties hereto shall designate in writing not less
than one Business Day prior to the Refunding Date.
(f) In order to facilitate the transactions
contemplated hereby, the Lessee has entered into the Purchase
Agreement, dated as of January 24, 1996, among the Lessee and the
several purchasers (the "Initial Purchasers") named therein (the
"Purchase Agreement"), and, subject to the terms and conditions
hereof, the Lessee will enter into each of the Pass Through Trust
Agreements and will undertake to perform certain administrative
and ministerial duties under such Pass Through Trust Agreements.
SECTION 2. Refunding Notes. The Refunding Notes shall
be payable as to principal in accordance with the terms of the
Indenture, and the Refunding Notes shall provide for a fixed rate
of interest per annum (subject to certain adjustments
contemplated thereby) and shall contain the terms and provisions
provided for the Refunding Notes in the Indenture. The Owner
Trustee shall execute, and the Loan Trustee shall authenticate
and deliver to the Pass Through Trustee for each Pass Through
Trust, a principal amount of Refunding Notes bearing the interest
rate set forth opposite the name of such Pass Through Trust on
Schedule II hereto, which Refunding Notes in the aggregate shall
be in the principal amounts set forth on Schedule II hereto.
Subject to the terms hereof, of the Pass Through Agreements and
of the other Operative Agreements, all such Refunding Notes shall
be dated and authenticated as of the Refunding Date and shall
bear interest therefrom, shall be registered in such names as
shall be specified by the Subordination Agent and shall be paid
in the manner and at such places as are set forth in the
Indenture.
SECTION 3. Conditions Precedent. The obligation of
the Pass Through Trustee to make the payment described in Section
1(a)(ii) and the obligations of the Owner Trustee and the Owner
Participant to participate in the transactions contemplated by
this Agreement on the Refunding Date are subject to the
fulfillment, prior to or on the Refunding Date, of the following
conditions precedent (except that paragraphs (a), (f) and (j)
shall not be conditions precedent to the obligations of the Owner
Trustee hereunder and paragraphs (g) and (1) shall not be
conditions precedent to the obligations of the Owner Participant
hereunder):
(a) The Owner Trustee shall have tendered the
Refunding Notes to the Loan Trustee for authentication, and the
Loan Trustee shall have authenticated such Refunding Notes and
shall have tendered the Refunding Notes to the Subordination
Agent on behalf of the Pass Through Trustee in accordance with
Section 1.
(b) The Pass Through Trustee, the Owner Trustee and
the Owner Participant each shall have received executed
counterparts or conformed copies of the following documents:
(1) this Agreement;
(2) the Lease Amendment No. 2;
(3) the Indenture Amendment No. 1;
(4) the PA Amendment No. 2;
(5) each of the Pass Through Trust Agreements;
(6) the TIA Amendment (for the Owner Participant
only);
(7) the Intercreditor Agreement;
(8) the Liquidity Facility for each of the Class A,
Class B and Class C Trusts; and
(9) the Registration Rights Agreement, dated the date
hereof, among the Lessee, the Pass Through Trustee and each
of the Initial Purchasers, with respect to the Certificates
(the "Registration Rights Agreement") (for the Owner
Participant only).
(c) The Pass Through Trustee, the Owner Trustee and
the Owner Participant each shall have received the following:
(1) an incumbency certificate of the Lessee as to the
person or persons authorized to execute and deliver this
Agreement, the Lease Amendment No. 2, the PA Amendment
No. 2, the TIA Amendment, the Pass Through Trust Agreements,
the Registration Rights Agreement, the Participation
Purchase Agreement and any other documents to be executed on
behalf of the Lessee in connection with the transactions
contemplated hereby and the signatures of such person or
persons;
(2) a copy of the resolutions of the board of
directors of the Lessee or the executive committee thereof,
certified by the Secretary or an Assistant Secretary of the
Lessee, duly authorizing the transactions contemplated
hereby and the execution and delivery of each of the
documents required to be executed and delivered on behalf of
the Lessee in connection with the transactions contemplated
hereby; and
(3) a copy of the certificate of incorporation of the
Lessee, certified by the Secretary of State of the State of
Delaware, a copy of the by-laws of the Lessee, certified by
the Secretary or Assistant Secretary of the Lessee, and a
certificate or other evidence from the Secretary of State of
the State of Delaware, dated as of a date reasonably near
the date of this Agreement, as to the due incorporation and
good standing of the Lessee in such state.
(d) The Pass Through Trustee, the Owner Trustee and
the Owner Participant each shall have received a certificate
signed by an authorized officer of the Lessee, dated the
Refunding Date, certifying that:
(1) the Aircraft has been duly certified by the FAA as
to type and airworthiness in accordance with the terms of
the First Amended Lease and has a current, valid certificate
of airworthiness:
(2) the FAA Bill of Sale, the Original Lease, the
Lease Amendment No. 1 and the First Amended Indenture have
been duly recorded, and the Trust Agreement has been duly
filed, with the FAA pursuant to the Federal Aviation Act of
1958, as amended (the "Federal Aviation Act");
(3) the Aircraft has been registered with the FAA in
the name of the Owner Trustee and the Lessee has authority
to operate the Aircraft;
(4) the representations and warranties contained
herein of the Lessee are correct as though made on and as of
the Refunding Date, except to the extent that such
representations and warranties relate solely to an earlier
date (in which case such representations and warranties are
correct on and as of such earlier date);
(5) there has been no material adverse change in the
financial condition of the Lessee since September 30, 1995;
and
(6) no event has occurred and is continuing which
constitutes an Indenture Event of Default or would
constitute an Indenture Event of Default but for the
requirement that notice be given or time elapse or both, and
no event has occurred and is continuing which constitutes an
Event of Loss or would constitute an Event of Loss with the
lapse of time.
(e) The Pass Through Trustee, the Owner Trustee and
the Owner Participant each shall have received a certificate
signed by an authorized officer of the Loan Trustee, dated the
Refunding Date, certifying that the representations and
warranties contained herein of the Loan Trustee are correct as
though made on and as of the Refunding Date, except to the extent
that such representations and warranties relate solely to an
earlier date (in which case such representations and warranties
are correct on and as of such earlier date).
(f) The Pass Through Trustee and the Owner Participant
each shall have received a certificate signed by an authorized
officer of the Owner Trustee, dated the Refunding Date,
certifying that the representations and warranties contained
herein of the Owner Trustee are correct as though made on and as
of the Refunding Date, except to the extent that such
representations and warranties relate solely to an earlier date
(in which case such representations and warranties are correct on
and as of such earlier date).
(g) The Pass Through Trustee and the Owner Trustee
each shall have received a certificate signed by an authorized
officer of the Owner Participant, dated the Refunding Date,
certifying that the representations and warranties contained
herein of the Owner Participant are correct as though made on and
as of the Refunding Date, except to the extent that such
representations and warranties relate solely to an earlier date
(in which case such representations and warranties are correct on
and as of such earlier date).
(h) The Pass Through Trustee, the Owner Trustee and
the Owner Participant each shall have received an independent
insurance broker's report, together with certificates of
insurance from such broker, as to the due compliance with the
terms of Section 11 of the Lease relating to insurance with
respect to the Aircraft.
(i) The Pass Through Trustee, the Initial Loan
Participant, the Owner Trustee and the Owner Participant each
shall have received an opinion addressed to it from Cleary,
Gottlieb, Steen & Hamilton, counsel for the Lessee, an opinion
addressed to it from Hughes Hubbard & Reed, counsel for the
Lessee, and an opinion addressed to it from the Lessee's legal
department, in each case in form and substance satisfactory to
each of them.
(j) The Pass Through Trustee, the Initial Loan
Participant and the Owner Participant each shall have received an
opinion addressed to it from Ray, Quinney & Nebeker, special
counsel for the Owner Trustee, in form and substance satisfactory
to each of them.
(k) The Pass Through Trustee, the Owner Trustee, the
Initial Loan Participant and the Owner Participant each shall
have received an opinion addressed to it from Richards, Layton &
Finger, special counsel for the Loan Trustee, in form and
substance satisfactory to each of them.
(l) The Pass Through Trustee and the Owner Trustee
each shall have received an opinion addressed to it from Weil,
Gotshal & Manges, counsel for the Owner Participant, and an
opinion addressed to it from corporate counsel to the Owner
Participant, in each case in form and substance satisfactory to
each of them.
(m) The Pass Through Trustee shall have received an
opinion of Mayer, Brown & Platt, United States counsel to the
Liquidity Provider, and internal counsel to the Liquidity
Provider, in each case in form and substance satisfactory to the
Pass Through Trustee.
(n) The Pass Through Trustee, the Owner Trustee and
the Owner Participant each shall have received an opinion
addressed to it from Lytle, Soule & Curlee, special counsel in
Oklahoma City, Oklahoma, in form and substance satisfactory to
each of them.
(o) The Lessee shall have entered into the Purchase
Agreement and each of the Pass Through Trust Agreements, the
Certificates (other than the Class D Certificates) shall have
been issued and sold pursuant to the Purchase Agreement and the
Pass Through Trust Agreements, and the Initial Purchasers shall
have transferred to the Pass Through Trustees (other than the
Class D Trustee) in immediately available funds an amount equal
to the aggregate purchase price of the Refunding Notes to be
purchased from the Owner Trustee.
(p) No change shall have occurred after the date of
this Agreement in applicable law or regulations thereunder or
interpretations thereof by appropriate regulatory authorities or
any court that would make it illegal for the Pass Through
Trustees to make the payments described in Section 1(a)(ii) or
for the Owner Trustee or the Owner Participant to participate in
the transactions contemplated by this Agreement on the Refunding
Date.
(q) All approvals and consents of any trustee or
holder of any indebtedness or obligations of the Lessee which are
required in connection with the Pass Through Trustee's making of
the payments described in Section 1(a)(ii) or the Owner Trustee's
or the Owner Participant's participation in the transactions
contemplated by this Agreement on the Refunding Date shall have
been duly obtained.
Promptly following the recording of the Lease Amendment
No. 2 and the Indenture pursuant to the Federal Aviation Act and
the filing of the Trust Amendment No. 1 pursuant to such Act, the
Lessee will cause Lytle, Soule & Curlee, special counsel in
Oklahoma City, Oklahoma, to deliver to the Pass Through Trustee,
the Lessee, the Loan Trustee, the Owner Participant and the Owner
Trustee an opinion as to the due recording of the Lease Amendment
No. 2 and the Indenture Amendment No. 1.
SECTION 4. Certain Conditions Precedent to the
Obligations of the Lessee, Conditions Precedent with Respect to
the Pass Through Trustee. (a) The Lessee's obligation to
participate in the transactions contemplated by this Agreement
and to execute and deliver the Lease Amendment No. 2 and the PA
Amendment No. 2 are subject to the receipt by the Lessee of (i)
each opinion referred to in subsections (j) through (n) of
Section 3, addressed to the Lessee or accompanied by a letter
from counsel rendering such opinion authorizing the Lessee to
rely on such opinion as if it were addressed to the Lessee, and
(ii) such other documents and evidence with respect to each other
party hereto as it may reasonably request in order to establish
the due consummation of the transactions contemplated by this
Agreement, the taking of all necessary corporate action in
connection therewith and compliance with the conditions herein
set forth.
(b) The respective obligations of each of the Lessee,
the Owner Participant, the Owner Trustee, GE, in its capacity as
a Loan Participant, and the Loan Trustee to participate in the
transactions contemplated hereby is subject to the receipt by
each of them of (i) a certificate signed by an authorized officer
of the Pass Through Trustee, dated the Refunding Date, certifying
that the representations and warranties contained herein of the
Pass Through Trustee are correct as though made on and as of the
Refunding Date, except to the extent that such representations
and warranties relate solely to an earlier date (in which case
such representations and warranties are correct on and as of such
earlier date), (ii) an opinion addressed to each of them of
Richards, Layton & Finger, special counsel for the Pass Through
Trustee, in form and substance satisfactory to each of them, and
(iii) such other documents and evidence with respect to the Pass
Through Trustee as it may reasonably request in order to
establish the due consummation of the transactions contemplated
by this Agreement, the taking of all necessary corporate action
in connection therewith and compliance with the conditions herein
set forth.
SECTION 5. Amendment of the First Amended Indenture.
GE, in its capacities as Loan Participant and Owner Participant,
respectively, by execution and delivery hereof, requests,
authorizes and directs the Owner Trustee and the Loan Trustee to
execute and deliver the Indenture Amendment No. 1, and the Owner
Trustee and the Loan Trustee, by execution and delivery hereof,
agree to execute and deliver the Indenture Amendment No. 1. The
Lessee, by execution and delivery hereof, consents to such
execution and delivery of the Indenture Amendment No. 1. The
Indenture Amendment No. 1 shall be effective as of the Refunding
Date.
SECTION 6. Amendment of the First Amended Lease. The
Loan Trustee and the Owner Participant, by execution and delivery
hereof, request and instruct the Owner Trustee to execute and
deliver the Lease Amendment No. 2, and the Owner Trustee and the
Lessee agree, by execution and delivery hereof, to execute and
deliver the Lease Amendment No. 2. The Lease Amendment No. 2
shall be effective as of the Refunding Date.
SECTION 7. Amendment of the Participation Agreement.
GE, in its capacities as Loan Participant and Owner Participant,
respectively, by execution and delivery hereof, request,
authorize and direct the Owner Trustee and the Loan Trustee to
execute and deliver the PA Amendment No. 2, and the Owner Trustee
and the Loan Trustee, by execution and delivery hereof, agree to
execute and deliver the PA Amendment No. 2. Upon the execution
and delivery of the PA Amendment No. 2 by each of the parties
thereto, the First Amended PA shall be amended as set forth in
the PA Amendment No. 2, and the Subordination Agent shall be a
party thereto from and after the Refunding Date to the extent set
forth in such PA Amendment No. 2. The PA Amendment No. 2 shall
be effective as of the Refunding Date.
SECTION 8. [Intentionally omitted]
SECTION 9. Lessee's Representations and Warranties.
The Lessee represents and warrants to the Pass Through Trustee,
the Owner Participant, the Owner Trustee, the Loan Participants,
the Liquidity Provider and the Loan Trustee that:
(a) the Lessee is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, is
an "air carrier" within the meaning of 49 U.S.C. Section
40102(a), holds a certificate of public convenience and necessity
in accordance with 49 U.S.C. Section 41102, and an air carrier
operating certificate issued by the Secretary of Transportation
pursuant to Chapter 447 of Title 49 of United States Code for
aircraft capable of carrying 10 or more individuals or 6,000
pounds or more of cargo, is a "citizen of the United States" as
defined in 49 U.S.C. Section 40102, has the corporate power and
authority to own or hold under lease its properties has, or had
on the respective dates of execution thereof, the corporate power
and authority to enter into and perform its obligations under
this Agreement, the TlA Amendment, the Lease Amendment No. 2, the
PA Amendment No. 2, the Pass Through Trust Agreements, the
Registration Rights Agreement, the Participation Purchase
Agreement, the Purchase Agreement and the other Operative
Agreements to which it is a party, and is duly qualified to do
business as a foreign corporation in good standing in each state
in which it has a principal office or a major overhaul facility
and in which such qualification is required, except where the
failure to so qualify would not be reasonably likely to have a
material adverse effect on the condition (financial or
otherwise), business, properties or results of operations of the
Lessee, and its chief executive office (as such term is used in
Article 9 of the Uniform Commercial Code in effect in the State
of Texas) is located at 2929 Allen Parkway, Houston, Texas 77019;
(b) the execution and delivery by the Lessee of this
Agreement, the TIA Amendment, the Lease Amendment No. 2, the PA
Amendment No. 2, the Pass Through Trust Agreements, the
Registration Rights Agreement, the Participation Purchase
Agreement, the Purchase Agreement and each other Operative
Agreement to which it is a party, and the performance of its
obligations under this Agreement, the Participation Agreement,
the Tax Indemnity Agreement, the Lease, the Pass Through Trust
Agreements, the Registration Rights Agreement, the Participation
Purchase Agreement, the Purchase Agreement and each other
Operative Agreement to which it is a party, have been duly
authorized by all necessary corporate action on the part of the
Lessee, do not require any stockholder approval, or approval or
consent of any trustee or holder of any material indebtedness or
material obligations of the Lessee, except such as have been duly
obtained and are in full force and effect, and do not contravene
any law, governmental rule, regulation or order binding on the
Lessee or the certificate of incorporation or by-laws of the
Lessee, or contravene the provisions of, or constitute a default
under, or result in the creation of any Lien (other than
Permitted Liens) upon the property of the Lessee under, any
indenture, mortgage contract or other agreement to which the
Lessee is a party or by which it may be bound or affected which
contravention, default or Lien, individually or in the aggregate,
would be reasonably likely to have a material adverse effect on
the condition (financial or otherwise), business, properties or
results of operations of the Lessee;
(c) neither the execution and delivery by the Lessee
of this Agreement, the TIA Amendment, the Lease Amendment No. 2,
the PA Amendment No. 2, the Pass Through Trust Agreements, the
Registration Rights Agreement, the Participation Purchase
Agreement, the Purchase Agreement or any other Operative
Agreement to which it is a party, nor the performance of its
obligations hereunder or under the Participation Agreement, the
Tax Indemnity Agreement, the Lease, the Pass Through Trust
Agreements, the Registration Rights Agreement, the Participation
Purchase Agreement, the Purchase Agreement or the other Operative
Agreements to which it is a party, nor the consummation by the
Lessee of any of the transactions contemplated hereby or thereby,
requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect
of, the Department of Transportation, the FAA, or any other
federal, state or foreign governmental authority having
jurisdiction, other than (i) the registration of the Exchange
Certificates (as defined in each Pass Through Trust Agreement),
if any, pursuant to the provisions of the Pass Through Trust
Agreements, under the Securities Act of 1933, as amended, and
under the securities laws of any state in which the Certificates
may be offered, for sale if the laws of such state require such
action, (ii) the qualification of the Pass Through Trust
Agreements under the Trust Indenture Act of 1939, as amended,
which qualification will be duly obtained upon the effectiveness
of any Registration Statement (as defined in the Registration
Rights Agreement) pursuant to an order of the Securities and
Exchange Commission, (iii) the registrations and filings referred
to in Section 9(e) and (iv) authorizations, consents, approvals,
actions, notices and filings required to be obtained, taken,
given or made the failure of which to obtain, take, give or make
would not be reasonably likely to have a material adverse effect
on the condition (financial or otherwise), business, properties
or results of operations of the Lessee;
(d) each of this Agreement, the First Amended PA, the
GE Tax Indemnity Agreement, the First Amended Lease, the Pass
Through Trust Agreements, the Registration Rights Agreement, the
Participation Purchase Agreement and each other Operative
Agreement to which the Lessee is a party constitutes, and each of
the Participation Agreement, the Tax Indemnity Agreement and the
Lease, when the PA Amendment No. 2, the TIA Amendment and the
Lease Amendment No. 2 shall have been executed and delivered by
each of the parties thereto, will constitute, the legal, valid
and binding obligations of the Lessee enforceable against the
Lessee in accordance with their respective terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights
of creditors generally and by general principles of equity,
whether considered in a proceeding at law or in equity, and
except, in the case of the Lease, as limited by applicable laws
which may affect the remedies provided in the Lease, which laws,
however, do not make the remedies provided in the Lease
inadequate for practical realization of the rights and benefits
intended to be afforded thereby;
(e) except for the filing for recording pursuant to
the Federal Aviation Act of the Indenture Amendment No. 1
and the Lease Amendment No. 2, no further filing or
recording of any document (including any financing statement
in respect thereof under Article 9 of the Uniform Commercial
Code of any applicable jurisdiction) is necessary under the
laws of the United States of America or any State thereof in
order to perfect the Owner Trustee's interest in the
Aircraft as against the Lessee and any third parties, or to
perfect the security interest in favor of the Loan Trustee
in the Owner Trustee's interest in the Aircraft or the Lease
(with respect to such portion of the Aircraft as is covered
by the recording system established by the FAA pursuant to
49 U.S.C. Section 44107) in any applicable jurisdiction in
the United States and in the Lease in any applicable
jurisdiction in the United States other than the Loan
Trustee taking possession of the original counterparts of
the Lease, the Lease Amendment No. 1 and the Lease Amendment
No. 2 (to the extent the Lease, the Lease Amendment No. 1
and the Lease Amendment No. 2 constitute chattel paper) and
the filing of continuation statements with respect to the
Uniform Commercial Code financing statements in effect on
the date hereof covering the security interests created by
the Original Indenture or describing the Original Lease as a
lease;
(f) neither the Lessee nor any of its affiliates has
directly or indirectly offered the Pass Through Certificates
for sale to any Person other than in a manner permitted by
the Securities Act of 1933, as amended, and by the rules and
regulations thereunder;
(g) the Lessee is not an "investment company" within
the meaning of the Investment Company Act of 1940, as
amended;
(h) no event has occurred and is continuing which
constitutes an Indenture Event of Default or would
constitute an Indenture Event of Default but for the
requirement that notice be given or time lapse or both; and
(i) no event has occurred and is continuing which
constitutes an Event of Loss or would constitute an Event of
Loss with the lapse of time.
SECTION 10. Representations, Warranties and Covenants.
Each of the parties below represents, warrants and covenants to
each of the other parties to this Agreement and to the Liquidity
Provider as follows:
(a) The Loan Trustee represents, warrants and
covenants that:
(1) the Loan Trustee is duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, is a "citizen of the United States" as defined in
49 U.S.C. Section 40102 and will resign as Loan Trustee
promptly after it obtains actual knowledge that it has
ceased to be such a citizen, an has the full corporate
power, authority and legal right under the laws of the State
of Delaware and the United States pertaining to its banking,
trust and fiduciary powers to execute and deliver each of
this Agreement, the PA Amendment No. 2, the Indenture
Amendment No. 1 and each other Operative Agreement to which
it is a participant to carry out its obligations under this
Agreement, the Participation Agreement, the Indenture and
each other Operative Agreement to which it is a party;
(2) the execution and delivery by the Loan Trustee of
this Agreement, the Indenture Amendment No. 1, the PA
Amendment No. 2 and each other Operative Agreement to which
it is a party and the performance by the Loan Trustee of its
obligations under this Agreement, the Participation
Agreement, the Indenture and each other Operative Agreement
to which it is a party have been duly authorized by the Loan
Trustee and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage,
contract or other agreement to which it is a party or by
which it is bound; and
(3) this Agreement constitutes, and the Participation
Agreement, when the PA Amendment No. 2 has been executed and
delivered by the Loan Trustee, and the Indenture, when the
Indenture Amendment No. 1 has been executed and delivered by
the Loan Trustee, will constitute, the legal, valid and
binding obligations of the Loan Trustee enforceable against
it in accordance with their respective terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of
equity, whether considered in a proceeding at law or in
equity.
(b) The Owner Trustee, in its individual capacity
(except as provided in clauses (3), (4), (8) and (9) below) and
(but only as provided in clauses (3) (4) and, to the extent that
it relates to the Owner Trustee, clauses (8), (10) and (12)
below) as Owner Trustee, represents and warrants that:
(1) the Owner Trustee, in its individual capacity, is
a national banking association duly organized and validly
existing in good standing under the laws of the United
States holding a valid certificate to do business as a
national banking association, has full corporate power and
authority to carry on its business as now conducted, has, or
had on the respective dates of execution thereof, the
corporate power and authority to execute and deliver the
Trust Agreement, has the corporate power and authority to
carry out the terms of the Trust Agreement, and has, or had
on the respective dates of execution thereof (assuming the
authorization, execution and delivery of the Trust Agreement
by the Original Owner Participant), as Owner Trustee, and to
the extent expressly provided herein or therein, in its
individual capacity, the corporate power and authority to
execute and deliver and to carry out the terms of this
Agreement, the First Amended Indenture, the Indenture
Amendment No. 1, the Refunding Notes, the Lease Amendment
No. 2, the PA Amendment No. 2 and each other Operative
Agreement (other than the Trust Agreement) to which it is a
party;
(2) the Owner Trustee in its trust capacity and, to
the extent expressly provided therein, in its individual
capacity, has duly authorized, executed and delivered the
Trust Agreement and (assuming the due authorization,
execution and delivery of the Trust Agreement by the
Original Owner Participant) each of this Agreement, the
First Amended PA, the Trust Agreement, the First Amended
Indenture, the First Amended Lease, the Trust Agreement and
each other Operative Agreement to which it is a party,
constitutes a legal, valid and binding obligation of the
Owner Trustee, in its individual capacity, enforceable
against it in its individual capacity or as Owner Trustee,
as the case may be, in accordance with its terms, except as
the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at
law or in equity;
(3) assuming the due authorization, execution and
delivery of the Trust Agreement by the Original Owner
Participant, each of this Agreement, the First Amended PA,
the First Amended Indenture, the First Amended Lease and
each other Operative Agreement to which it is party
constitutes, and each of the Participation Agreement, when
the PA Amendment No. 2 shall have been entered into, the
Indenture, when the Indenture Amendment No. 1 shall have
been entered into, and the Lease, when the Lease
Amendment No. 2 shall have been entered into, will
constitute, the legal, valid and binding obligation of the
Owner Trustee, in its individual capacity or as Owner
Trustee, as the case may be, enforceable against it in its
individual capacity or as Owner Trustee, as the case may be,
in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of
equity, whether considered in a proceeding at law or in
equity;
(4) assuming the due authorization, execution and
delivery of the Trust Agreement by the Original Owner
Participant, the Owner Trustee has duly authorized, and on
the Refunding Date shall have duly issued, executed and
delivered to the Loan Trustee for authentication, the
Refunding Notes pursuant to the terms and provisions hereof
and of the Indenture, and each Refunding Note on the
Refunding Date will constitute the valid and binding
obligation of the Owner Trustee and will be entitled to the
benefits and security afforded by the Indenture in
accordance with the terms of such Refunding Note and the
Indenture;
(5) neither the execution and delivery by the Owner
Trustee, in its individual capacity or as Owner Trustee, as
the case may be, of this Agreement, the First Amended PA,
the PA Amendment No. 2, the Trust Agreement, the First
Amended Indenture, the Indenture Amendment No. 1, the First
Amended Lease, the Lease Amendment No. 2 or the Refunding
Notes, nor the consummation by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be,
of any of the transactions contemplated hereby or thereby,
nor the compliance by the Owner Trustee, in its individual
capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions hereof and thereof, (A) requires
or will require any approval of its stockholders, or
approval or consent of any trustees or holders of any
indebtedness or obligations of it, or (B) violates or will
violate its articles of association or by-laws, or
contravenes or will contravene any provision of, or
constitutes or will constitute a default under, or results
or will result in any breach of, or results or will result
in the creation of any Lien (other than as permitted under
the Lease) upon its property under, any indenture, mortgage,
chattel mortgage, deed of trust, conditional sale contract,
bank loan or credit agreement, license or other agreement or
instrument to which it is a party or by which it is bound,
or contravenes or will contravene any law, governmental rule
or regulation of the United States of America or the State
of Utah governing the trust powers of the Owner Trustee, or
any judgment or order applicable to or binding on it;
(6) no consent, approval, order or authorization of,
giving of notice to, or registration with, or taking of any
other action in respect of, any Utah state or local
governmental authority or agency or any United States
federal governmental authority or agency regulating the
trust powers of the Owner Trustee in its individual capacity
is required for the execution and delivery of, or the
carrying out by the Owner Trustee, in its individual
capacity or as Owner Trustee, as the case may be, of any of
the transactions contemplated hereby or by the Trust
Agreement, the Participation Agreement, the Indenture, the
Lease or the Refunding Notes, other than any such consent,
approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken or which is
described in Section 9(h);
(7) there exists no Lessor Lien attributable to the
Owner Trustee, in its individual capacity, other than any
Lessor Liens (A) the existence of which poses no material
risk of the sale, forfeiture or loss of the Aircraft,
Airframe or any Engine or any interest therein, (B) the
existence of which does not interfere in any way with the
use or operation of the Aircraft by the Lessee (or any
Permitted Sublessee), (C) the existence of which does not
affect the priority or perfection of, or otherwise
jeopardize, the Lien of the Indenture, (D) which the Owner
Trustee is diligently contesting by appropriate proceedings,
(E) the existence of which does not result in actual
interruption in the receipt and distribution by the Loan
Trustee in accordance with the Indenture of Rent assigned to
the Loan Trustee for the benefit of the Note Holders, and
(F) any property subject to which is not then required to be
conveyed to any other Person pursuant to Section 4.6 of the
Lease;
(8) there exists no Lessor Lien attributable to the
Owner Trustee, as lessor under the Lease, other than any
Lessor Liens (A) the existence of which poses no material
risk of the sale, forfeiture or loss of the Aircraft,
Airframe or any Engine or any interest therein, (B) the
existence of which does not interfere in any way with the
use or operation of the Aircraft by the Lessee (or any
Permitted Sublessee), (C) the existence of which does not
affect the priority or perfection of, or otherwise
jeopardize, the Lien of the Indenture, (D) which the Owner
Trustee is diligently contesting by appropriate proceedings,
(E) the existence of which does not result in actual
interruption in the receipt and distribution by the Loan
Trustee in accordance with the Indenture of Rent assigned to
the Loan Trustee for the benefit of the Note Holders, and
(F) any property subject to which is not then required to be
conveyed to any other Person pursuant to Section 4.6 of the
Lease;
(9) there are no Taxes payable by the Owner Trustee,
either in its individual capacity or as Owner Trustee,
imposed by the State of Utah or any political subdivision
thereof in connection with the redemption of the Initial
Notes or the issuance of the Refunding Notes, and in its
individual capacity or as Owner Trustee, as the case may be,
of any of the instruments referred to in clauses (1), (2),
(4) and (5) above, that, in each case, would not have been
imposed if the Trust Estate had not been created pursuant to
the laws of the State of Utah and First Security Bank of
Utah, National Association, had not (a) had its principal
place of business in, (b) performed (in its individual
capacity or as Owner Trustee) any or all of its duties under
the Operative Agreements in, and (c) engaged in any
activities unrelated to the transactions contemplated by the
Operative Agreements in, the State of Utah;
(10) there are no pending or, to its knowledge,
threatened actions or proceedings against the Owner Trustee,
either in its individual capacity or as Owner Trustee,
before any court or administrative agency which, if
determined adversely to it, would materially adversely
affect the ability of the Owner Trustee, in its individual
capacity or as Owner Trustee, as the case may be, to perform
its obligations under any of the instruments referred to in
clauses (1), (2), (4) and (5) above:
(11) both its chief executive office, and the place
where its records concerning the Aircraft and all its
interests in, to and under all documents relating to the
Trust Estate, are located in Salt Lake City, Utah, and the
Owner Trustee, in its individual capacity, agrees to give
the Lessee, the Owner Participant, the Loan Trustee and the
Pass Through Trustee at least 30 days' prior written notice
of any relocation of said chief executive office or said
place from its present location;
(12) the Owner Trustee has not, in its individual
capacity or as Owner Trustee, directly or indirectly offered
any Refunding Note or Certificate or any interest in or to
the Trust Estate, the Trust Agreement or any similar
interest for sale to, or solicited any offer to acquire any
of the same from, anyone other than the Pass Through
Trustee, the Loan Participants and the Owner Participant;
and the Owner Trustee has not authorized anyone to act on
its behalf (it being understood that in arranging and
proposing the refinancing contemplated hereby and agreed to
herein by the Owner Trustee, the Lessee has not acted as
agent of the Owner Trustee) to offer directly or indirectly
any Refunding Note, any Certificate or any interest in and
to the Trust Estate, the Trust Agreement or any similar
interest for sale to, or to solicit any offer to acquire any
of the same from, any person; and
(13) it is a "citizen of the United States" as defined
in 49 U.S.C. Section 40102 (without making use of a voting
trust agreement or voting powers agreement).
(c) The Owner Participant represents and warrants
that:
(1) it is duly incorporated, validly existing and in
good standing under the laws of the State of New York and
has the corporate power and authority to carry on its
present business and operations and to own or lease its
properties, has, or had on the respective dates of execution
thereof or assumption of rights and obligations thereunder,
as the case may be, the corporate power and authority to
enter into and to perform its obligations under this
Agreement, the Equity Purchase Agreement, the First Amended
PA, the GE Tax Indemnity Agreement, the TIA Amendment, the
Trust Agreement and the PA Amendment No. 2; and this
Agreement, the Equity Purchase Agreement and the GE Tax
Indemnity Agreement have been duly authorized, executed and
delivered by it and the execution and delivery of the TIA
Amendment and the PA Amendment No. 2 has been duly
authorized by it; and each of this Agreement, the Equity
Purchase Agreement, the First Amended PA, the GE Tax
Indemnity Agreement and the Trust Agreement constitutes, and
each of the Participation Agreement and the Tax Indemnity
Agreement when the PA Amendment No. 2 and the TIA Amendment
shall have been entered into, will constitute, the legal,
valid and binding obligations of the Owner Participant
enforceable against it in accordance with their respective
terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and
by general principles of equity, whether considered in a
proceeding at law or in equity;
(2) neither (A) the execution and delivery by the
Owner Participant of this Agreement, the TIA Amendment, the
PA Amendment No. 2 or any other Operative Agreement to which
it is a party nor (B) compliance by it with all of the
provisions thereof, (x) will contravene any law or order of
any court or governmental authority or agency applicable to
or binding on the Owner Participant (it being understood
that no representation or warranty is made with respect to
laws, rules or regulations relating to aviation or to the
nature of the equipment owned by the Owner Trustee other
than such laws, rules or regulations relating to the
citizenship requirements of the Owner Participant under
applicable law), or (y) will contravene the provisions of,
or constitutes or has constituted or will constitute a
default under, its certificate of incorporation or by-laws
or any indenture, mortgage, contract or other agreement or
instrument to which the Owner Participant is a party or by
which it or any of its property may be bound or affected;
(3) no authorization or approval or other action by,
and no notice to or filing with, any governmental authority
or regulatory body (other than as required by the Federal
Aviation Act or the regulations promulgated thereunder and
except for routine insurance regulatory filings which have
been or will be made) is or was required, as the case may
be, for the due execution, delivery or performance by it of
this Agreement, the Equity Purchase Agreement, the PA
Amendment No. 2 and the TIA Amendment;
(4) there are no pending or, to its knowledge,
threatened actions or proceedings before any court or
administrative agency or arbitrator which would materially
adversely affect the Owner Participant's ability to perform
its obligations under this Agreement, the Participation
Agreement, the Tax Indemnity Agreement and the Trust
Agreement;
(5) neither the Owner Participant nor anyone
authorized by it to act on its behalf (it being understood
that in proposing, facilitating and otherwise taking any
action in connection with the refinancing contemplated
hereby and agreed to herein by the Owner Participant, the
Lessee has not acted as agent of the Owner Participant) has
directly or indirectly offered any Refunding Note or
Certificate or any interest in and to the Trust Estate, the
Trust Agreement or any similar interest for sale to, or
solicited any offer to acquire any of the same from, any
Person; the Owner Participant's interest in the Trust Estate
and the Trust Agreement was acquired for its own account and
was purchased for investment and not with a view to any
resale or distribution thereof;
(6) on the Refunding Date, the Trust Estate shall be
free of Lessor Liens attributable to the Owner Participant
other than any Lessor Liens (A) the existence of which poses
no material risk of the sale, forfeiture or loss of the
Aircraft, Airframe or any Engine or any interest therein,
(B) the existence of which does not interfere in any way
with the use or operation of the Aircraft by the Lessee (or
any Permitted Sublessee), (C) the existence of which does
not affect the priority or perfection of, or otherwise
jeopardize, the Lien of the Indenture, (D) which the Owner
Participant is diligently contesting by appropriate
proceedings, (E) the existence of which does not result in
actual interruption in the receipt and distribution by the
Loan Trustee in accordance with the Indenture of Rent
assigned to the Loan Trustee for the benefit of the Note
Holders, and (F) any property subject to which is not then
required to be conveyed to any other Person pursuant to
Section 4.6 of the Lease; and
(7) it is a "citizen of the United States" as defined
in 49 U.S.C. Section 40102 (without making use of a voting
trust agreement or a voting powers agreement).
(d) The Pass Through Trustee represents, warrants and
covenants that:
(1) the Pass Through Trustee is duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware, and has the full corporate power,
authority and legal right under the laws of the State of
Delaware and the United States pertaining to its banking,
trust and fiduciary powers to execute and deliver each of
the Pass Through Trust Agreements, the Registration Rights
Agreement, the Intercreditor Agreement and this Agreement
and to perform its obligations under this Agreement, the
Pass Through Trust Agreements, the Registration Rights
Agreement, the Intercreditor Agreement and, when the PA
Amendment No. 1 has been executed and delivered by the
parties thereto, the Participation Agreement:
(2) each of the Pass Through Trust Agreements, the
Registration Rights Agreement, the Intercreditor Agreement
and this Agreement has been duly authorized, executed and
delivered by the Pass Through Trustee; this Agreement and
each of the Pass Through Trust Agreements, the Registration
Rights Agreement, the Intercreditor Agreement and the
Participation Agreement constitute the legal, valid and
binding obligations of the Pass Through Trustee enforceable
against it in accordance with their respective terms, except
as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at
law or in equity;
(3) none of the execution, delivery and performance by
the Pass Through Trustee of any of the Pass Through Trust
Agreements, the Registration Rights Agreement, the
Intercreditor Agreement, this Agreement or the Participation
Agreement, the purchase by the Pass Through Trustee of the
Refunding Notes pursuant to this Agreement, or the issuance
of the Certificates pursuant to the Pass Through Trust
Agreements, contravenes any law, rule or regulation of the
State of Delaware or any United States governmental
authority or agency regulating the Pass Through Trustee's
banking, trust or fiduciary powers or any judgment or order
applicable to or binding on the Pass Through Trustee and
does not contravene or result in any breach of, or
constitute a default under, the Pass Through Trustee's
articles of association or by-laws or any agreement or
instrument to which the Pass Through Trustee is a party or
by which it or any of its properties may be bound;
(4) neither the execution and delivery by the Pass
Through Trustee of any of the Pass Through Trust Agreements,
the Registration Rights Agreement, the Intercreditor
Agreement or this Agreement, nor the consummation by the
Pass Through Trustee of any of the transactions contemplated
hereby or thereby or by the Participation Agreement,
requires the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action
with respect to, any Delaware governmental authority or
agency or any federal governmental authority or agency
regulating the Pass Through Trustee's banking, trust or
fiduciary powers;
(5) there are no Taxes payable by the Pass Through
Trustee imposed by the State of Delaware or any political
subdivision or taxing authority thereof in connection with
the execution, delivery and performance by the Pass Through
Trustee of this Agreement, any of the Pass Through Trust
Agreements, the Registration Rights Agreement, the
Intercreditor Agreement or the Participation Agreement
(other than franchise or other taxes based on or measured by
any fees or compensation received by the Pass Through
Trustee for services rendered in connection with the
transactions contemplated by any of the Pass Through Trust
Agreements), and there are no Taxes payable by the Pass
Through Trustee imposed by the State of Delaware or any
political subdivision thereof in connection with the
acquisition, possession or ownership by the Pass Through
Trustee of any of the Refunding Notes (other than franchise
or other taxes based on or measured by any fees or
compensation received by the Pass Through Trustee for
services rendered in connection with the transactions
contemplated by any of the Pass Through Trust Agreements),
and, assuming that the trusts created by the Pass Through
Trust Agreements will not be taxable as corporations, but,
rather, each will be characterized as a grantor trust under
subpart E, Part I of Subchapter J of the Code, such trusts
will not be subject to any Taxes imposed by the State of
Delaware or any political subdivision thereof;
(6) there are no pending or threatened actions or
proceedings against the Pass Through Trustee before any
court or administrative agency which individually or in the
aggregate, if determined adversely to it, would materially
adversely affect the ability of the Pass Through Trustee to
perform its obligations under this Agreement, the
Participation Agreement, the Registration Rights Agreement,
the Intercreditor Agreement or any Pass Through Trust
Agreement;
(7) except for the issue and sale of the Certificates
contemplated hereby, the Pass Through Trustee has not
directly or indirectly offered any Refunding Note for sale
to any Person or solicited any offer to acquire any
Refunding Notes from any Person, nor has the Pass Through
Trustee authorized anyone to act on its behalf to offer
directly or indirectly any Refunding Note for sale to any
Person, or to solicit any offer to acquire any Refunding
Note from any Person; and the Pass Through Trustee is not in
default under any Pass Through Trust Agreement; and
(8) the Pass Through Trustee is not directly or
indirectly controlling, controlled by or under common
control with the Owner Participant, the Owner Trustee, any
Initial Purchaser or the Lessee.
(e) The Subordination Agent represents, warrants and
covenants that:
(1) the Subordination Agent is duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware, and has the full corporate power,
authority and legal right under the laws of the State of
Delaware and the United States pertaining to its banking,
trust and fiduciary powers to execute and deliver each of
the Liquidity Facilities, the Intercreditor Agreement, the
PA Amendment No. 2 and this Agreement and to perform its
obligations under this Agreement, the Liquidity Facilities
and the Intercreditor Agreement and, when the PA Amendment
No. 2 has been executed and delivered by each of the parties
thereto, the Participation Agreement;
(2) each of the Liquidity Facilities, the
Intercreditor Agreement and this Agreement has been duly
authorized, executed and delivered by the Subordination
Agent; this Agreement, each of the Liquidity Facilities, the
Intercreditor Agreement, the PA Amendment No. 2 and the
Participation Agreement constitute the legal, valid and
binding obligations of the Subordination Agent enforceable
against it in accordance with their respective terms, except
as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity, whether considered in a proceeding at
law or in equity;
(3) none of the execution, delivery and performance by
the Subordination Agent of each of the Liquidity Facilities,
the Intercreditor Agreement, this Agreement or the PA
Amendment No. 2 contravenes any law, rule or regulation of
the State of Delaware or any United States governmental
authority or agency regulating the Subordination Agent's
banking, trust or fiduciary powers or any judgment or order
applicable to or binding on the Subordination Agent and do
not contravene or result in any breach of, or constitute a
default under, the Subordination Agent's articles of
association or by-laws or any agreement or instrument to
which the Subordination Agent is a party or by which it or
any of its properties may be bound;
(4) neither the execution and delivery by the
Subordination Agent of any of the Liquidity Facilities, the
Intercreditor Agreement, the PA Amendment No. 2 or this
Agreement nor the consummation by the Subordination Agent of
any of the transactions contemplated hereby or thereby
requires the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action
with respect to, any Delaware governmental authority or
agency or any federal governmental authority or agency
regulating the Subordination Agent's banking, trust or
fiduciary powers;
(5) there are no Taxes payable by the Subordination
Agent imposed by the State of Delaware or any political
subdivision or taxing authority thereof in connection with
the execution, delivery and performance by the Subordination
Agent of this Agreement, any of the Liquidity Facilities,
the Intercreditor Agreement, the PA Amendment No. 2 or the
Participation Agreement (other than franchise or other taxes
based on or measured by any fees or compensation received by
the Subordination Agent for services rendered in connection
with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities), and there are
no Taxes payable by the Subordination Agent imposed by the
State of Delaware or any political subdivision thereof in
connection with the acquisition, possession or ownership by
the Subordination Agent of any of the Refunding Notes (other
than franchise or other taxes based on or measured by any
fees or compensation received by the Subordination Agent for
services rendered in connection with the transactions
contemplated by the Intercreditor Agreement or any of the
Liquidity Facilities);
(6) there are no pending or threatened actions or
proceedings against the Subordination Agent before any court
or administrative agency which individually or in the
aggregate, if determined adversely to it, would materially
adversely affect the ability of the Subordination Agent to
perform its obligations under this Agreement, the PA
Amendment No. 2, the Participation Agreement, the
Intercreditor Agreement or any Liquidity Facility;
(7) the Subordination Agent has not directly or
indirectly offered any Refunding Note for sale to any Person
or solicited any offer to acquire any Refunding Notes from
any Person, nor has the Subordination Agent authorized
anyone to act on its behalf to offer directly or indirectly
any Refunding Note for sale to any Person, or to solicit any
offer to acquire any Refunding Note from any Person; and the
Subordination Agent is not in default under any Liquidity
Facility; and
(8) the Subordination Agent is not directly or
indirectly controlling, controlled by or under common
control with the Owner Participant, the Owner Trustee, any
Initial Purchaser or the Lessee.
(f) The Initial Loan Participant represents and
warrants that:
(1) as of the Refunding Date, it is the owner of the
Initial LP Notes in the aggregate principal amount of
$437,967,000, free and clear of Liens attributable to it;
and
(2) this Agreement has been duly authorized, executed
and delivered by the Initial Loan Participant and
constitutes the legal, valid and binding obligation of the
Initial Loan Participant, enforceable against the Initial
Loan Participant in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
(g) GE, as the Loan Participant, represents and
warrants that:
(1) as of the Refunding Date, it is the owner of the
Initial Series D Notes in the aggregate principal amount of
$51,300,000, free and clear of Liens attributable to it;
(2) this Agreement and the PA Amendment No. 2 have
been duly authorized, executed and delivered by GE and
constitute the legal, valid and binding obligations of GE,
enforceable against GE in accordance with their respective
terms, except as the same may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws affecting
the rights of creditors generally, and by general principles
of equity, whether considered in a proceeding at law or in
equity; and
(3) the Class D Certificates to be issued to it by the
Class D Trust pursuant to Section 1(a)(x) are being acquired
by it for investment and not with a view to resale or
distribution thereof.
SECTION 11. Notices. Unless otherwise specifically
provided herein, all notices required or permitted by the terms
of this Agreement shall be in English and in writing, and any
such notice shall become effective upon being deposited in the
United States mail, with proper postage for first-class
registered or certified mail prepaid, or when delivered
personally or, if promptly confirmed by mail as provided above,
when dispatched by telegram, telex, facsimile or other written
telecommunication, addressed, if to the Lessee, the Owner
Participant, the Owner Trustee, the Pass Through Trustee, the
Subordination Agent, either Loan Participant or the Loan Trustee,
at their respective addresses or facsimile numbers set forth
below the signatures of such parties at the foot of this
Agreement.
SECTION 12. Expenses. (a) Except as provided in
paragraph (b) below, all of the reasonable out-of-pocket costs,
fees and expenses incurred by the Owner Trustee, the Owner
Participant, the Pass Through Trustee, the Subordination Agent,
the Loan Trustee and the Loan Participants in connection with the
transactions contemplated by this Agreement, the other Operative
Agreements, the Pass Through Trust Agreements, the Registration
Rights Agreement, the Intercreditor Agreement, the Liquidity
Facilities and the Purchase Agreement (except, in each case, as
otherwise provided therein) shall be paid promptly by the Lessee,
including, without limitation:
(1) the reasonable fees, expenses and disbursements
allocable to the Refunding Notes issued under the Indenture
of (A) Richards, Layton & Finger, special counsel for the
Pass Through Trustee and the Loan Trustee, (B) Ray, Quinney
& Nebeker, special counsel for the Owner Trustee, (C) Lytle,
Soule & Curlee, special counsel in Oklahoma City, Oklahoma,
(D) Shearman & Sterling, special counsel for the Initial
Purchasers, in an amount separately agreed, and (E) Perkins
Coie, special counsel to the Initial Loan Participant; and
(2) the reasonable fees, expenses and disbursements of
Weil, Gotshal & Manges, special counsel for the Owner
Participant and GE, as the Loan Participant.
Notwithstanding the foregoing, the Lessee shall pay, in
amounts separately agreed, the fees, expenses and disbursements
of Cleary, Gottlieb, Steen & Hamilton and Hughes Hubbard & Reed,
special counsel for the Lessee.
(b) In the event that the transactions contemplated
by this Section 12 and the agreements referred to herein are not
consummated, the Lessee shall bear and pay all costs, expenses
and fees referred to in this Section 12; provided that if the
transactions fail to be consummated as a result of the failure of
the Owner Participant to act in good faith in consummating the
transactions, or to otherwise comply with the terms hereof, the
Owner Participant shall bear and pay its own fees, costs and
expenses, including, without limitation, the fees and expenses of
its special counsel) and the Lessee shall pay all other
reasonable fees, costs and expenses as aforesaid.
SECTION 13. Reliance of Liquidity Provider. Each of
the parties hereto agrees and acknowledges that the Liquidity
Provider shall be a third party beneficiary of each of the
representations and warranties made herein by such party and that
the Liquidity Provider may rely on such representations and
warranties to the same extent as if such representations and
warranties were made to the Liquidity Provider directly.
SECTION 14. Miscellaneous. (a) Provided that the
transactions contemplated hereby have been consummated, and
except as otherwise provided for herein, the representations,
warranties and agreements herein of the Lessee, the Owner
Trustee, the Loan Trustee, the Owner Participant, the Loan
Participants, the Subordination Agent and the Pass Through
Trustee, and the Lessee's, the Owner Trustee's, the Loan
Trustee's, the Owner Participant's, the Subordination Agent's and
the Pass Through Trustee's obligations under any and all thereof,
shall survive the expiration or other termination of this
Agreement and the other agreements referred to herein.
(b) This Agreement may be executed in any number of
counterparts (and each of the parties hereto shall not be
required to execute the same counterpart). Each counterpart of
this Agreement, including a signature page executed by each of
the parties hereto, shall be an original counterpart of this
Agreement, but all of such counterparts together shall constitute
one instrument. Neither this Agreement nor any of the terms
hereof may be terminated, amended, supplemented, waived or
modified orally, but only by an instrument in writing signed by
the party against which the enforcement of the termination,
amendment, supplement, waiver or modification is sought and no
such termination, amendment, supplement, waiver or modification
shall be effective unless a signed copy thereof shall have been
delivered to the Loan Trustee. The index preceding this
Agreement and the headings of the various Sections of this
Agreement are for convenience of reference only and shall not
modify, define, expand or limit any of the terms or provisions
hereof. The terms of this Agreement shall be binding upon, and
shall inure to the benefit of, the Lessee and, subject to the
terms of the Participation Agreement, its successors and
permitted assigns, the Loan Participants, the Pass Through
Trustee and its successors as Pass Through Trustee (and any
additional trustee appointed) under any of the Pass Through Trust
Agreements, the Loan Trustee and its successors as Loan Trustee
(and any additional Loan Trustee appointed) under the Indenture,
the Subordination Agent and its successors as Subordination Agent
under the Intercreditor Agreement, the Owner Trustee and its
successors as Owner Trustee under the Trust Agreement, and the
Owner Participant, and, subject to the provisions of the
Participation Agreement, its successors and permitted assigns.
No purchaser or holder of any Refunding Notes shall be deemed to
be a successor or assign of either Loan Participant.
SECTION 15. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW. THIS AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above
written.
CONTINENTAL AIRLINES, INC.,
as Lessee
By______________________________
Name:
Title:
Address: 2929 Allen Parkway
Suite 2010
Houston, TX 77019
Attention: Senior Vice President and
Chief Financial Officer
Facsimile: (713) 520-6329
GENERAL ELECTRIC COMPANY,
as Owner Participant and Loan Participant
By___________________________________________
Name:
Title:
Address: c/o GE Capital Aviation
Services, Inc.
263 Tresser Boulevard,
7th Floor
Stamford, CT 06927-4900
Attention: Manager, Portfolio Operations
Facsimile: (203) 357-4585
WILMINGTON TRUST COMPANY,
not in its individual capacity, except as
otherwise provided herein, but solely as
Loan Trustee, Pass Through Trustee and
Subordination Agent
By___________________________________________
Name:
Title:
Address: One Rodney Square
1100 N. Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Facsimile: (302) 651-1576
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
not in its individual capacity, except as
otherwise provided herein, but solely as
Owner Trustee
By___________________________________________
Name:
Title:
Address: 79 South Main Street
Salt Lake City, UT 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
THE BOEING COMPANY,
as Initial Loan Participant
By___________________________________________
Name:
Title:
Address: P.O. Box 3707
Seattle, WA 98124-3707
Attention: Treasurer
Facsimile: (206) 237-8746
SCHEDULE I to
Refunding Agreement
PASS THROUGH TRUST AGREEMENTS
1. Continental Airlines 1996-A Pass Through Trust Agreement.
2. Continental Airlines 1996-B Pass Through Trust Agreement.
3. Continental Airlines 1996-C Pass Through Trust Agreement.
4. Continental Airlines 1996-D Pass Through Trust Agreement.
Schedule II to
Refunding Agreement
104
REFUNDING NOTES, PURCHASERS AND PURCHASE PRICE
Purchaser Interest Rate and Maturity Principal
Amount
Continental Airlines
Pass Through Trust
1996-A 6.94% Refunding Notes due 1/15/2013
$19,342,666.67
1996-B 7.82% Refunding Notes due 1/15/2013 $
6,769,933.33
1996-C 9.50% Refunding Notes due 1/15/2013 $
5,319,233.33
1996-D 12.48% Refunding Notes due 10/15/2013 $
3,400,000.00
Exhibit 4.17
WAIVER, CONSENT AND
AMENDMENT TO PARTICIPATION AGREEMENT 104
WAIVER, CONSENT AND AMENDMENT TO PARTICIPATION
AGREEMENT 104, dated as of December 22, 1995 (this "Amendment")
among (a) CONTINENTAL AIRLINES, INC., a Delaware corporation
("Lessee"), (b) GAUCHO-2 INC., a Delaware corporation ("Owner
Participant"), (c) THE BOEING COMPANY ("Loan Participant"),
(d) FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity, except as
expressly provided herein, but solely as Owner Trustee (in its
capacity as Owner Trustee, "Owner Trustee" or "Lessor," and in
its individual capacity, "First Security") and (e) WILMINGTON
TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity, except as expressly provided herein, but
solely as Mortgagee (in its capacity as Mortgagee, "Mortgagee"
and in its individual capacity, "WTC") (Lessee, Owner
Participant, Loan Participant, Owner Trustee and Mortgagee
collectively referred to herein as the "Transaction
Participants").
W I T N E S S E T H:
WHEREAS, the Transaction Participants are parties to
that certain Participation Agreement 104 dated as of July 15,
1994 relating to that certain Boeing 757-224 aircraft bearing
manufacturer's serial number 27294 and those certain RB211-535E4-
B-37 engines bearing manufacturer's serial numbers 31268 and
31269 (the "Participation Agreement," and capitalized terms
defined in Annex A thereto and not otherwise defined herein being
used herein as defined in such Annex A as such Annex A is amended
hereby);
WHEREAS, it is a condition precedent to the obligations
of General Electric Company ("Transferee") under that certain
Purchase, Assignment and Assumption Agreement, dated as of
December 22, 1995 (the "Purchase Agreement"), by and between
Transferee and Owner Participant that the Lessee, Owner
Participant, Loan Participant, Owner Trustee, First Security,
Mortgagee and WTC enter into this Amendment.
NOW THEREFORE, in consideration of the foregoing
premises and the mutual agreements contained herein, and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. Waiver and Consent. Each of the
Transaction Participants hereby (i) agrees that each of the
conditions to the Transfer by Owner Participant of all its right,
title and interest in the Participation Agreement and the Trust
Estate and the Trust Agreement thereunder to the Transferee that
are set forth in the Operative Agreements, including without
limitation, Section 12.1.1(a) and Section 12.1.1(c) of the
Participation Agreement, have been satisfied or are hereby
waived, (ii) from and after the Effective Time (as defined in the
Purchase Agreement) with respect to such Transfer, agrees to
recognize the Transferee as the "Owner Participant" under each of
the Operative Agreements (as defined in the Purchase Agreement),
and (iii) amends, and to the extent required under the Operative
Agreements consents to the amendment of, each of the Operative
Agreements (including, without limitation, the Trust Agreements)
accordingly.
SECTION 2. Amendments to Participation Agreement.
(a) Annex A to the Participation Agreement is hereby
replaced in its entirety by the revised Annex A attached to this
Amendment as Annex A.
(b) Section 9 of the Participation Agreement is hereby
deleted in its entirety and shall be deemed "Intentionally
Omitted."
(c) Section 13.9.1 of the Participation Agreement is
hereby amended by deleting it in its entirety and substituting
the following new Section 13.9.1 in lieu thereof:
The provisions of Section 13.1 through 13.8 shall not
be applicable to this Section 13.9. This Section 13.9 shall be
of no force or effect upon the consummation of the Refinancing
Transaction.
(d) Section 15.1 of the Participation Agreement is
hereby amended by deleting it in its entirety and substituting
the following new Section 15.1 in lieu thereof:
Lessee, Loan Participant and each Certificate
Holder agree that after the Delivery Date and subject to the
limitations of Section 15.2, for so long as General Electric
Company is the Owner Participant, the Owner Participant
shall have the right to restructure the Transactions using
(a) a "cross-border lease," a tax lease or a head-lease/
sublease structure and (b) any other transaction, which may
involve special structural arrangements, as such Owner
Participant may elect (any such structure described above, a
"Special Structure"). Any Special Structure may result in
additional persons participating in the Transactions, which
persons shall agree to provisions comparable to Sections
8.7.5(a) and 8.7.14. Subject to the provisions of Sections
15.2 and 15.3, Lessee, Loan Participant and each Certificate
Holder agree to cooperate in the implementation of any such
restructuring and take such action as may reasonably be
requested by the Owner Participant to accomplish such
restructuring, including taking such actions as may be
reasonable or customary in the type of Special Structure
selected. In connection with any proposed Special
Structure, Owner Participant shall provide all information
reasonably requested by Lessee, Loan Participant or any
Certificate Holder with respect thereto. The Owner
Participant shall be entitled to retain all of the benefits
of any such transaction.
(e) Section 15.2.1(a) of the Participation Agreement
is hereby amended by deleting it in its entirety and substituting
the following new Section 15.2.1.(a) in lieu thereof:
Notwithstanding Section 15.1 or 15.2.1(b), in no event
shall any such Special Structure (a) change the terms and
conditions of Lessee's rights and obligations, from those which
Lessee would otherwise possess or be subject to in the absence of
any such Special Structure, in a manner which is materially
adverse to Lessee, (b) expose Lessee to any additional risks
(including overall tax risks) beyond those to which Lessee would
be exposed in the absence of any such Special Structure or (c)
change the terms and conditions of Lessee's rights and
obligations, from those which Lessee would otherwise possess or
be subject to in the absence of any Special Structure, in a
manner which is adverse to Lessee, unless, with respect to clause
(b) and clause (c) above, Lessee shall have been indemnified
against such additional risks by Owner Participant, or other
participants in such transaction (so long as such other
participants shall, as to their creditworthiness at the time any
such indemnity is given, be reasonably acceptable to Lessee) in a
manner reasonably satisfactory to Lessee. In no event shall
Lessee be required to provide an indemnity with respect to any
foreign tax benefit of a Special Structure or to indemnify
against the failure of a head lease not to constitute a true
lease for U.S. federal income tax purposes.
(f) Section 15.2.1(b) of the Participation Agreement
is hereby deleted in its entirety and shall be deemed
"Intentionally Omitted."
(g) Section 15.2.2 of the Participation Agreement is
hereby amended by deleting it in its entirety and substituting
the following new Section 15.2.2 in lieu thereof:
Notwithstanding Section 15.1, any such Special
Structure shall not, and prior to the exercise of its rights
thereunder, the Owner Participant shall deliver an officer's
certificate to the Loan Trustee and, after the Refinancing
Transaction is consummated, to the Pass Through Trustee that
provides that any such Special Structure shall not, (a) change
the terms and conditions of Loan Participant's or any Certificate
Holder's rights and obligations under the Operative Agreements or
rights and obligations of holders of Pass Through Certificates
issued in connection with the Refinancing Transaction, from those
which Loan Participant, Certificate Holders and such Pass Through
Certificate holders would otherwise possess or be subject to in
the absence of such Special Structure (including, without
limitation, the amount and timing of any payment of principal,
interest and Make-Whole Amount under the Loan Certificates, the
relative rights of the Note Holders with respect to such payments
and such holder of Pass Through Certificates and the priority of
Mortgagee's Lien on the Trust Indenture Estate under the Trust
Indenture) or (b) expose Loan Participant, any such Certificate
Holder or any such holder of Pass Through Certificates to any
additional risks beyond those to which Loan Participant, such
Certificate Holder or such holder of Pass Through Certificates
would be exposed in the absence of such Special Structure. In
addition, in no event shall any Special Structure be permitted
unless a written confirmation from the Rating Agencies is
obtained prior to the implementation of such Special Structure to
the effect that such Special Structure will not adversely affect
the ratings of the Pass Through Certificates.
(h) Section 15.3 of the Participation Agreement is
hereby amended by deleting it in its entirety and substituting
the following new section 15.3 in lieu thereof:
Whether or not any proposed restructuring transaction
under this Section 15 is consummated, the Owner Participant shall
pay (or cause to be paid) the reasonable costs and expenses
incurred by all parties in connection therewith; provided, that
if any proposed Special Structure is not consummated as a result
of Lessee's failure to act in good faith in connection with any
amendments to any Operative Agreement necessary as a result
thereof, then all such costs and expenses shall be borne by
Lessee.
(i) Section 18 of the Participation Agreement is
hereby amended by adding the following proviso at the end
thereof:
; provided, further, that Schedule 6 to the Participation
Agreement shall in no event be disclosed except as required
by clause (C) above.
(j) Schedule 1 to the Participation Agreement is
hereby amended by adding a reference to, and account and address
information regarding, General Electric Company as Owner
Participant:
Account for Address
Payments for Notices
--------------------- ------------------------
General Bankers Trust Company General Electric Company
Electric New York, New York c/o GE Capital Aviation
Company Account No.: Services, Inc.
50-255-888 263 Tresser Boulevard,
ABA #: 021-011-033 7th Floor
Reference: Continental Stamford, Connecticut
Lease 104 06927-4900
Attn: Manager, Portfolio
Operations
Facsimile: (203) 357-4585
(k) Schedule 4 to the Participation Agreement is
hereby amended by (i) deleting the definition of "Debt Rate"
therefrom and (ii) inserting the following new definition
therein:
Subsequent Lessor's Cost $45,500,000
(l) Schedule 5 to the Participation Agreement is
hereby deemed amended such that the provisions of Schedule 5
shall not be applicable to the Series D Equipment Notes, and such
Schedule 5 shall be of no force or effect upon the consummation
of the Refinancing Transaction.
(m) The Participation Agreement is hereby amended by
adding Schedule 6 thereto in the form attached as Schedule 6
hereto.
(n) The Participation Agreement is hereby amended by
adding the following new Section 21:
SECTION 21. REFINANCING TRANSACTION
Upon consummation of the Refinancing Transaction, (i)
the provisions of Sections 7.4.2, 7,4.3, 7.4.4, 8.5.3 and 20
of the Participation Agreement shall not apply to any Note
Holder so long as any Refinancing Equipment Note is
outstanding and (ii) so long as an appropriate underwriter's
exemption is available, there will not be a prohibition on
the purchase of Pass Through Certificates by an employee
benefit plan and, in the event such an exemption is not
available, the parties hereto intend to agree upon
appropriate limitations, if any, to such purchase. In
addition, the disclosure of certain confidential documents
specified in Section 18 of the Participation Agreement shall
be permitted to the extent necessary or advisable to
consummate the Refinancing Transaction.
SECTION 3. Representations and Warranties.
(a) Lessee hereby represents and warrants to
Transferee that the representations and warranties made by it in
Section 7.1 of the Participation Agreement (other than those in
Sections 7.1.8 and 7.1.15 thereof) are true and correct as of the
date hereof in all material respects; provided, however, that the
representations and warranties set forth in Section 7.1.6 thereof
are qualified and supplemented by the disclosure of claims
contained in the Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q or Current Reports on Form 8-K filed by Lessee prior
to the date hereof.
(b) Owner Participant hereby represents and warrants
to Transferee that (i) the representations and warranties made by
it in Section 7.2 of the Participation Agreement (other than
those in Sections 7.2.1, 7.2.5, 7.2.6, 7.2.7, 7.2.8 and 7.2.11
thereof) are true and correct as of the date hereof and (ii) the
representations and warranties made by it in Section 7.2.8 were
true and correct as of the Delivery Date.
(c) First Security hereby represents and warrants to
Transferee that the representations and warranties made by it in
Section 7.3 of the Participation Agreement are true and correct
as of the date hereof.
(d) Loan Participant hereby represents and warrants to
Transferee that each of the representations and warranties made
by it in Section 7.4 of the Participation Agreement are true and
correct as of the date hereof.
(e) Loan Participant hereby represents and warrants to
Transferee that, in accordance with the terms of, and as set
forth in, the Loan Certificate, Loan Participant is bound by all
the terms of the Trust Indenture including, without limitation,
Section 2.03 thereof.
(f) WTC hereby represents and warrants to Transferee
that each of the representations and warranties made by it in
Section 7.5 of the Participation Agreement are true and correct
as of the date hereof.
(g) First Security hereby represents and warrants to
Transferee that the Owner Trustee has not, with respect to the
Trust, taken any action beyond the scope of the power and
authority granted to it pursuant to the Trust Agreement.
(h) Loan Participant, Owner Trustee and Owner
Participant hereby represent and warrant to Transferee that, as
of the Delivery Date they each intended for the indebtedness
represented by the Loan Certificates issued on such date to be
repaid in accordance with their terms.
SECTION 4. Intended Reliance. The representations and
warranties contained in SECTION 3 hereof are intended to be
relied upon by Transferee, and, accordingly, Transferee is an
intended third party beneficiary of this Amendment.
SECTION 5. GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE.
THIS AMENDMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS. EACH PARTY TO THE AMENDMENT
HEREBY AGREES THAT THE PROVISIONS OF SECTION 19.8 OF THE
PARTICIPATION AGREEMENT ARE HEREBY INCORPORATED HEREIN AND SHALL
GOVERN ALL ISSUES ARISING UNDER OR IN RESPECT OF THIS AMENDMENT
THAT ARE RELATED TO JURISDICTION, VENUE, NOTICE AND ALL OTHER
MATTERS COVERED BY SUCH SECTION 19.8.
SECTION 6. Miscellaneous. (a) Except as specifically
amended herein, the Participation Agreement and all of the other
Operative Agreements shall remain in full force and effect and
are hereby ratified and confirmed.
(b) This Amendment may be executed in any number of
separate counterparts, each of which shall, collectively and
separately, constitute one agreement.
(c) The Section titles contained in this Amendment are
and shall be without substantive meaning or content of any kind
whatsoever and are not part of the agreement among the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
CONTINENTAL AIRLINES, INC.,
Lessee
By: /s/ Gerald Laderman
--------------------------------
Gerald Laderman
Vice President
GAUCHO-2 INC.,
Owner Participant
By: /s/ David A. Edgerton
--------------------------------
Name: David A. Edgerton
Title: Attorney-in-Fact
THE BOEING COMPANY,
Loan Participant
By: /s/ David A. Edgerton
--------------------------------
Name: David A. Edgerton
Title: Attorney-in-Fact
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, not in its
individual capacity, except as
expressly provided herein, but
solely as Owner Trustee,
Owner Trustee
By: /s/ Greg A. Hawley
--------------------------------
Name: Greg A. Hawley
Title: Assistant Vice President
WILMINGTON TRUST COMPANY, not in
its individual capacity, except
as expressly provided herein,
but solely as Mortgagee,
Mortgagee
By: /s/ Bruce L. Bisson
--------------------------------
Name: Bruce L. Bisson
Title: Vice President
For purposes of Section 3 of this Amendment and for purposes of
acknowledging the appointment of the Owner Trustee under the
respective Trust Agreements
GENERAL ELECTRIC COMPANY
By: /s/ Eric M. Dull
------------------------
Name: Eric M. Dull
Title: Attorney-in-Fact
SCHEDULE 6
Methodology and assumptions which form the basis for the pricing
in the ABC File designated as cont-1227-f104a.abc as in effect on
the date hereof.
SCHEDULE 6 TO PARTICIPATION AGREEMENT 104
ANNEX A
DEFINITIONS
GENERAL PROVISIONS
(a) In each Operative Agreement, unless otherwise expressly
provided, a reference to:
(i) each of "Lessee," "Lessor," "Owner Trustee,"
"Owner Participant," "Loan Participant," "Loan Trustee,"
"Note Holder" or any other person includes, without
prejudice to the provisions of any Operative Agreement, any
successor in interest to it and any permitted transferee,
permitted purchaser or permitted assignee of it;
(ii) words importing the plural include the singular
and words importing the singular include the plural;
(iii) any agreement, instrument or document, or any
annex, schedule or exhibit thereto, or any other part
thereof, includes, without prejudice to the provisions of
any Operative Agreement, that agreement, instrument or
document, or annex, schedule or exhibit, or part,
respectively, as amended, modified or supplemented from time
to time in accordance with its terms and in accordance with
the Operative Agreements, and any agreement, instrument or
document entered into in substitution or replacement
therefor;
(iv) any provision of any Law includes any such
provision as amended, modified, supplemented, substituted,
reissued or reenacted prior to the Delivery Date, and
thereafter from time to time;
(v) the words "Agreement," "this Agreement," "hereby,"
"herein," "hereto," "hereof" and "hereunder" and words of
similar import when used in any Operative Agreement refer to
such Operative Agreement as a whole and not to any
particular provision of such Operative Agreement;
(vi) the words "including," "including, without
limitation," "including, but not limited to," and terms or
phrases of similar import when used in any Operative
Agreement, with respect to any matter or thing, mean
including, without limitation, such matter or thing; and
(vii) a "Section," an "Exhibit," an "Annex" or a
"Schedule" in any Operative Agreement, or in any annex
thereto, is a reference to a section of, or an exhibit, an
annex or a schedule to, such Operative Agreement or such
annex, respectively.
(b) Each exhibit, annex and schedule to each Operative
Agreement is incorporated in, and shall be deemed to be a part
of, such Operative Agreement.
(c) Unless otherwise defined or specified in any Operative
Agreement, all accounting terms therein shall be construed and
all accounting determinations thereunder shall be made in
accordance with GAAP.
(d) Headings used in any Operative Agreement are for
convenience only and shall not in any way affect the construction
of, or be taken into consideration in interpreting, such
Operative Agreement.
DEFINED TERMS
"Act" means the Federal Aviation Act of 1958.
"Actual Knowledge" means (a) as it applies to Owner Trustee
or Loan Trustee, as the case may be, actual knowledge of a
responsible officer in the Corporate Trust Department or the
Corporate Trust Office, respectively, and (b) as it applies to
Lessee or Owner Participant, actual knowledge of a Vice President
or more senior officer of Owner Participant or Lessee,
respectively, or any other officer of Owner Participant or
Lessee, respectively, in each case having responsibility for the
transactions contemplated by the Operative Agreements; provided
that each of Lessee, Owner Participant, Owner Trustee and Loan
Trustee shall be deemed to have "Actual Knowledge" of any matter
as to which it has received notice from Lessee, Owner
Participant, any Note Holder, Owner Trustee or Loan Trustee, such
notice having been given pursuant to Section 19.7 of the
Participation Agreement.
"Additional Insured" is defined by reference to Section 11
of the Lease.
"Adverse Change in Tax Law" means (a) for Lessee, a Change
in Tax Law that Lessee regards as one that could adversely affect
the economic consequences of the transactions contemplated by the
Participation Agreement and the other Operative Agreements
anticipated by Lessee or (b) for Owner Participant, any Change in
Tax Law that would adversely affect any of the following tax
assumptions:
(i) For federal income tax purposes, the Lease will be
a "true" lease for purposes of the Code and Owner
Participant will be treated as the owner of the Aircraft and
Lessee will be treated as the lessee thereof;
(ii) For federal income tax purposes, Owner
Participant will be entitled to depreciation or cost
recovery deductions with respect to Lessor's Cost of the
Aircraft; and
(iii) For federal income tax purposes, Owner
Participant will be entitled to deductions for interest
payments on the Equipment Notes.
"Affiliate" means, with respect to any person, any other
person directly or indirectly controlling, controlled by or under
common control with such person. For purposes of this
definition, "control" means the power, directly or indirectly, to
direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities
or by contract or otherwise and "controlling," "controlled by"
and "under common control with" have correlative meanings.
"Aircraft" means, collectively, the Airframe and Engines.
"Aircraft Bill of Sale" means the full warranty bill of sale
covering the Aircraft delivered by Airframe Manufacturer to Owner
Trustee on the Delivery Date.
"Aircraft Documents" means all technical data, manuals and
log books, and all inspection, modification and overhaul records
and other service, repair, maintenance and technical records that
are required by the FAA (or the relevant Aviation Authority), the
Lease or the Maintenance Program to be maintained with respect to
the Aircraft, Airframe, Engines or Parts, or that are of a type
required to be delivered by Lessee upon return of the Aircraft,
Airframe or Engines under Section 5 of the Lease; and such term
shall include all additions, renewals, revisions and replacements
of any such materials from time to time made, or required to be
made, in accordance with the Lease, the Maintenance Program or
such FAA (or other Aviation Authority) regulations, and in each
case in whatever form and by whatever means or medium (including,
without limitation, microfiche, microfilm, paper or computer
disk) such materials may be maintained or retained by or on
behalf of Lessee (provided that all such materials shall be
maintained in the English language); and such term shall include,
without limitation, the documents described in Section N of Annex
B to the Lease.
"Airframe" means (a) the aircraft (excluding Engines or
engines from time to time installed thereon) manufactured by
Airframe Manufacturer and identified by Airframe Manufacturer's
model number, United States registration number and Airframe
Manufacturer's serial number set forth in Lease Supplement No. 1
and any Replacement Airframe and (b) any and all Parts
incorporated or installed in or attached or appurtenant to such
airframe, and any and all Parts removed from such airframe,
unless title to such Parts shall not be vested in Lessor in
accordance with Section 8.1 and Annex C of the Lease. Upon
substitution of a Replacement Airframe under and in accordance
with the Lease, such Replacement Airframe shall become subject to
the Lease and shall be the "Airframe" for all purposes of the
Lease and the other Operative Agreements and thereupon the
Airframe for which the substitution is made shall no longer be
subject to the Lease, and such replaced Airframe shall cease to
be the "Airframe."
"Airframe Manufacturer" means The Boeing Company, a Delaware
corporation, solely in its capacity as manufacturer or seller of
the Aircraft, Airframe, Engines or Parts (other than BFE and
other than any Parts incorporated or installed in or attached or
appurtenant to the Aircraft, Airframe or any Engine after
delivery of the Aircraft, Airframe and Engine to Tramco, Inc.
prior to the Delivery Date) under the Purchase Agreement or any
other contract or other services provided for thereunder or
related thereto.
"Amortization Amount" means, with respect to any Equipment
Note, as of any Payment Date, the amount determined by
multiplying the percentage set forth opposite such Date on the
Amortization Schedule by the Original Amount of such Equipment
Note.
"Amortization Schedule" means, with respect to each
Equipment Note, the amortization schedule for the Equipment Notes
delivered pursuant to Section 2.02 of the Trust Indenture or, if
a revised amortization schedule shall be established pursuant to
Section 13 of the Participation Agreement, the amortization
schedule so established.
"Appraiser" means a firm of internationally recognized,
independent aircraft appraisers.
"APU" means the auxiliary power unit installed on the
Aircraft on the Delivery Date, whether or not installed on the
Aircraft from time to time thereafter, unless title to such APU
shall not be vested in Lessor in accordance with Section 8.1 of
the Lease, and any replacement or substituted auxiliary power
unit installed on the Aircraft in accordance with the Lease.
"Aviation Authority" means the FAA or, if the Aircraft is
permitted to be, and is, registered with any other Government
Entity under and in accordance with Section 7.1.2 of the Lease,
such other Government Entity.
"Bankruptcy Code" means the United States Bankruptcy Code,
11 U.S.C. Sections 102 et seq.
"Base Lease Term" means the period beginning on and
including the Commencement Date and ending on the Scheduled
Expiration Date, or such earlier date on which the Term
terminates in accordance with the provisions of the Lease.
"Basic Rent" means the rent payable for the Aircraft
pursuant to Section 3.2.1(a) of the Lease.
"Beneficial Owner" when used in relation to an Equipment
Note means a Person that, by reason of direct ownership,
contract, share ownership or otherwise, has the right to receive
or participate in receiving, directly or indirectly, payments of
principal, interest or Make-Whole Amount in respect of such
Equipment Note; provided that a Person shall not be deemed to be
a Beneficial Owner of an Equipment Note solely because another
Person in which such a Person owns common stock or other equity
securities is a registered holder or Beneficial Owner of such
Equipment Note unless such Person is an Affiliate of such other
Person.
"BFE" means all appliances, parts, instruments,
appurtenances, accessories, furnishings or other equipment of
whatever nature sold by Lessee to Owner Trustee pursuant to the
BFE Bill of Sale.
"BFE Amount" means the amount paid by Owner Trustee to
Lessee to purchase the BFE, and is designated by Dollar amount in
Schedule 4 to the Participation Agreement.
"BFE Bill of Sale" means the full warranty bill of sale
executed by Lessee in favor of Owner Trustee, dated the Delivery
Date, identifying and covering the BFE.
"Bills of Sale" means the FAA Bill of Sale, the Aircraft
Bill of Sale and the BFE Bill of Sale.
"Business Day" means any day other than a Saturday, Sunday
or other day on which commercial banks are authorized or required
by law to close in New York, New York, Houston, Texas or Salt
Lake City, Utah.
"Cash Equivalents" means the following securities (which
shall mature within 90 days of the date of purchase thereof):
(a) direct obligations of the U.S. Government; (b) obligations
fully guaranteed by the U.S. Government; (c) certificates of
deposit issued by, or bankers' acceptances of, or time deposits
or a deposit account with, Owner Trustee, Loan Trustee or any
bank, trust company or national banking association incorporated
or doing business under the laws of the United States or any
state thereof having a combined capital and surplus and retained
earnings of at least $500,000,000 and having a rate of "C" or
better from the Thomson BankWatch Service; or (d) commercial
paper of any issuer doing business under the laws of the United
States or one of the states thereof and in each case having a
rating assigned to such commercial paper by Standard & Poor's
Corporation or Moody's Investors Service, Inc. equal to A1 or
higher.
"Certificate Holder" means Note Holder.
"Change in Tax Law" means any amendment, modification,
addition or change in or to the provisions of the Code, any other
federal tax statutes, the Treasury Regulations promulgated
thereunder, the Internal Revenue Service Revenue Rulings, Revenue
Procedures or other administrative or judicial interpretations of
the Code or the federal tax statutes that affects the tax
assumptions set forth in the Tax Indemnity Agreement or otherwise
affects Owner Participant's anticipated Net Economic Return
(other than a change in the alternative minimum tax or other
change that results in Owner Participant being subject to
alternative minimum tax or unable to fully utilize tax benefits
because of its particular tax situation).
"Citizen of the United States," unless otherwise defined, is
as defined in Section 102(16) of the Act and in the FAA
Regulations.
"Closing" means the closing of the transactions contemplated
by the Participation Agreement on the Delivery Date.
"Code" means the Internal Revenue Code of 1986, as amended;
provided that, when used in relation to a Plan, "Code" shall mean
the Internal Revenue Code of 1986 and any regulations and rulings
issued thereunder, all as amended and in effect from time to
time.
"Commencement Date" is defined in Schedule 1 to the Lease.
"Commitment" means, for any Participant, the amount of its
participation in the payment of Lessor's Cost.
"Commitment Termination Date" is defined in Schedule 4 to
the Participation Agreement.
"Consent and Agreement" means the Manufacturer Consent and
Agreement 104, dated as of even date with the Participation
Agreement, of Airframe Manufacturer.
"Continuous Stay Period" is defined in Section 4.04(a) of
the Trust Indenture.
"Corporate Trust Department" or "Trust Office" means the
principal corporate trust office of Owner Trustee located from
time to time at Owner Trustee's address for notices under the
Participation Agreement or such other office at which Owner
Trustee's corporate trust business shall be administered which
Owner Trustee shall have specified by notice in writing to
Lessee, Loan Trustee and each Note Holder.
"Corporate Trust Office" means the principal office of Loan
Trustee located at Loan Trustee's address for notices under the
Participation Agreement or such other office at which Loan
Trustee's corporate trust business shall be administered which
Loan Trustee shall have specified by notice in writing to Lessee,
Owner Trustee and each Note Holder.
"CRAF" means the Civil Reserve Air Fleet Program established
pursuant to 10 U.S.C. Section 9511-13 or any similar substitute
program.
"Damage Payment Threshold" is defined in Schedule 1 to the
Lease.
"Debt" means any liability for borrowed money, or any
liability for the payment of money in connection with any letter
of credit transaction or any other liabilities evidenced or to be
evidenced by bonds, debentures, notes or other similar
instruments.
"Debt Rate" means, with respect to any Series, the rate per
annum specified for such Series under the heading "Interest Rate"
in Schedule I to the Trust Indenture, subject to (i) increase
pursuant to Paragraph B of Schedule 5 of the Participation
Agreement, and (ii) redetermination in respect of the second of
the two Funding Periods, in accordance with Schedule 5 of the
Participation Agreement.
"Default" means any event or condition that with the giving
of notice or the lapse of time or both would become an Event of
Default.
"Definitive Purchase Notice" is defined in Section 17.1 of
the Lease.
"Delayed Delivery Date" means a delayed Delivery Date
notified to each Participant, Owner Trustee and Loan Trustee by
Lessee pursuant to Section 5.3.1 of the Participation Agreement,
which delayed Delivery Date shall be a Business Day not later
than the Commitment Termination Date.
"Delivery Date" means the Business Day specified in Lease
Supplement No. 1 as the date on which, among other things, the
Aircraft is delivered to and accepted by Lessee under the Lease
and the Closing occurs.
"Dollars," "United States Dollars" or "$" means the lawful
currency of the United States.
"DOT" means the Department of Transportation of the United
States or any Government Entity succeeding to the functions of
such Department of Transportation.
"Enforcement Date" is defined in Section 4.03 of the Trust
Indenture.
"Engine" means (a) each of the engines manufactured by
Engine Manufacturer and identified by Engine Manufacturer's model
number and Engine Manufacturer's serial number set forth in Lease
Supplement No. 1 and originally installed on the Airframe on
delivery thereof pursuant to the Lease, and any Replacement
Engine, in any case whether or not from time to time installed on
such Airframe or installed on any other airframe or aircraft, and
(b) any and all Parts incorporated or installed in or attached or
appurtenant to such engine, and any and all Parts removed from
such engine, unless title to such Parts shall not be vested in
Lessor in accordance with Section 8.1 and Annex C of the Lease.
Upon substitution of a Replacement Engine under and in accordance
with the Lease, such Replacement Engine shall become subject to
the Lease and shall be an "Engine" for all purposes of the Lease
and the other Operative Agreements and thereupon the Engine for
which the substitution is made shall no longer be subject to the
Lease, and such replaced Engine shall cease to be an "Engine."
"Engine Consent and Agreement" means the Engine Manufacturer
Consent and Agreement 104 dated as of even date with the
Participation Agreement, of Engine Manufacturer.
"Engine Manufacturer" means Rolls-Royce plc, a corporation
organized under the laws of England.
"Equipment Note Register" is defined in Section 2.07 of the
Trust Indenture.
"Equipment Notes" means and includes any equipment notes
issued under the Trust Indenture in the form specified in Section
2.01 thereof (as such form may be varied pursuant to the terms of
the Trust Indenture) and any Equipment Note issued under the
Trust Indenture in exchange for or replacement of any other
Equipment Note.
"ERISA" means the Employee Retirement Income Security Act of
1974 and any regulations and rulings issued thereunder all as
amended and in effect from time to time.
"Event of Default" is defined in Section 4.02 of the Trust
Indenture.
"Event of Loss" means, with respect to the Aircraft,
Airframe or any Engine, any of the following circumstances,
conditions or events with respect to such property, for any
reason whatsoever:
(a) the destruction of such property, damage to such
property beyond practical or economic repair or
rendition of such property permanently unfit for normal
use;
(b) the actual or constructive total loss of such property
or any damage to such property, or requisition of title
or use of such property, which results in an insurance
settlement with respect to such property on the basis
of a total loss or constructive or compromised total
loss;
(c) any loss of such property or loss of use of such
property for a period of 90 days or more as a
consequence of any theft, hijacking or disappearance of
such property;
(d) any seizure, condemnation, confiscation, taking or
requisition of title to such property by any Government
Entity or purported non-U.S. Government Entity;
(e) any seizure, condemnation, confiscation, taking or
requisition of use of such property that continues
until the earliest of (i) the last day of the Term,
(ii) the date upon which the Aircraft is modified,
altered or adapted in such a manner as would render
conversion of such property for use in normal
commercial passenger service impractical or
uneconomical, (iii) the date on which such property is
operated or located in any area excluded from coverage
by any insurance policy required to be maintained in
respect of such property pursuant to the Lease (unless
an indemnity in lieu of insurance is provided to Lessor
and Loan Trustee in accordance with Section 11.4 of the
Lease) or (iv) the date that is 90 days following the
commencement of such loss of use (unless such loss of
use results from action by the U.S. Government, in
which case this clause (iv) shall not apply to such
loss of use); and
(f) as a result of any law, rule, regulation, order or
other action by the Aviation Authority or by any
Government Entity of the government of registry of the
Aircraft or by any Government Entity otherwise having
jurisdiction over the operation or use of the Aircraft,
the use of such property in the normal course of
Lessee's business of passenger air transportation is
prohibited for a period expiring on the earlier to
occur of (i) the last day of the Term or (ii) the date
that is 180 days following commencement of such
prohibition, provided that if Lessee, prior to the
expiration of such 180-day period, shall have
undertaken and shall be diligently carrying forward all
steps which are necessary or desirable to permit the
normal use of such property by Lessee, then the date
that is 360 days following commencement of such
prohibition.
The date of such Event of Loss shall be the date of such loss,
damage, insurance settlement, seizure, condemnation,
confiscation, taking or requisition of title or use or
prohibition, except that, for purposes of clauses (c), (e) and
(f) above, no Event of Loss shall be deemed to have occurred
until the date of expiration of the applicable period referred to
therein.
"Excluded Payments" means (i) indemnity payments paid or
payable by Lessee to or in respect of Owner Participant, or Owner
Trustee in its individual capacity, their respective Affiliates,
successors and permitted assigns and their directors, officers,
employees, servants and agents pursuant to Section 10 of the
Participation Agreement or any corresponding payments under the
Trust Indenture, (ii) proceeds of public liability insurance paid
or payable as a result of insurance claims made, or losses
suffered, by Owner Trustee in its individual capacity or by Owner
Participant, that are payable directly to Owner Trustee in its
individual capacity, or Owner Participant, respectively, for
their own account, (iii) proceeds of insurance maintained with
respect to the Aircraft by Owner Participant or any Affiliate
thereof for its or their own account or benefit (whether directly
or through Owner Trustee) and permitted under Section 11.3 of the
Lease, (iv) all payments required to be made under the Tax
Indemnity Agreement by Lessee whether or not denominated as
Supplemental Rent, (v) all payments, if any, required to be made
from the proceeds of collateral securing any obligation of Lessee
to Owner Participant or any Affiliate thereof (provided that no
such payment shall in any event constitute, or have the effect
of, a release, discharge or satisfaction in whole or in part of
any obligation or liability of Lessee under any of the Operative
Agreements to make any payment or render any performance to or
for the benefit of any other Person (including, without
limitation, Lessor's obligation to pay Rent to the Loan Trustee
in accordance with the Lease and the Trust Indenture)), (vi) any
interest that pursuant to the Operative Agreements may from time
to time accrue in respect of any of the amounts described in
clauses (i) through (v) above, (vii) any right to enforce the
payment of any amount described in clauses (i) through (vi) above
(provided, that the rights referred to in this clause (vii) shall
not be deemed to include the exercise of any remedies provided
for in the Lease other than the right to sue for specific
performance of any covenant to make such payment or to sue for
damages in respect of the breach of any such covenant) and (viii)
any right to exercise any election or option or make any decision
or determination, or to give or receive any notice, consent,
waiver or approval, or to take any other action in respect of,
but in each case, only to the extent relating to, any Excluded
Payments.
"Expenses" means any and all liabilities, obligations,
losses, damages, settlements, penalties, claims (including,
without limitation, claims or liabilities based or asserted upon
(a) negligence, (b) strict or absolute liability, (c) liability
in tort, (d) infringement of patent, trademark or other property
or other right and (e) liabilities arising out of violation of
any Law), actions, suits, costs, expenses and disbursements
(including, without limitation, reasonable fees and disbursements
of legal counsel, accountants, appraisers, inspectors or other
professionals, and costs of investigation), including, without
limitation, all such costs, expenses and disbursements incurred
by any person in asserting or establishing, or in defending any
claims arising out of its assertion of, any rights it may have
under, or its cooperation in connection with any Expenses
indemnified pursuant to, Section 10 of the Participation
Agreement.
"FAA" means the Federal Aviation Administration of the
United States or any Government Entity succeeding to the
functions of such Federal Aviation Administration.
"FAA Bill of Sale" means a bill of sale for the Aircraft on
AC Form 8050-2 (or such other form as may be approved by the FAA)
delivered to Owner Trustee on the Delivery Date by Airframe
Manufacturer.
"FAA Filed Documents" means the Lease, Lease Supplement No.
1, the Trust Indenture, the Trust Agreement, the Trust Indenture
Supplement, the FAA Bill of Sale and an application for
registration of the Aircraft with the FAA in the name of Owner
Trustee.
"FAA Regulations" means the Federal Aviation Regulations
issued or promulgated pursuant to the Act from time to time.
"Fair Market Rental Value" means the fair market rental
value in Dollars for the Aircraft that would apply in an
arm's-length transaction between an informed and willing lessee
under no compulsion to lease, and an informed and willing lessor
under no compulsion to lease, the Aircraft, for the First Renewal
Lease Term or Second Renewal Lease Term, as the case may be,
assuming that (a) the Aircraft has been maintained in accordance
with, and is in the condition required by, the Lease, (b)
payments of rent would be made quarterly, and (c) the Aircraft
would be leased during any such Renewal Term on the same terms
and conditions as are set forth in the Lease with respect to the
Base Lease Term.
"Fair Market Sales Value" means the fair market sales value
in Dollars for the Aircraft that would apply in an arm's-length
transaction between an informed and willing buyer under no
compulsion to buy, and an informed and willing seller under no
compulsion to sell, the Aircraft, in a transaction that would
close on or about the relevant time of determination, assuming
that (a) the Aircraft has been maintained in accordance with, and
is in the condition required by, the Lease and (b) the Aircraft
would be delivered to such informed and willing buyer in the
return condition required by the Lease.
"Financing Statements" means, collectively, UCC-1 (and,
where appropriate, UCC-3) financing statements (a) covering the
Trust Indenture Estate, by Owner Trustee, as debtor, showing Loan
Trustee as secured party, for filing in Utah and each other
jurisdiction that, in the opinion of Loan Trustee, is necessary
to perfect its Lien on the Trust Indenture Estate, (b) covering
the Lease and the Aircraft, as a precautionary matter, by Lessee,
as lessee, showing Owner Trustee as lessor and Loan Trustee as
assignee of Owner Trustee, for filing in Texas and each other
jurisdiction that, in the opinion of Owner Trustee and Loan
Trustee, is reasonably desirable and (c) for purposes of Section
6.1.2 of the Participation Agreement only, terminating the lien
of (i) the Purchase Contract Security Agreement dated December 7,
1993, between Lessee and Engine Manufacturer and (ii) the 757
Purchase Agreement Assignment dated February 7, 1994 between
Lessee and Airframe Manufacturer.
"First Renewal Lease Term" means, if Lessee exercises its
option to renew the Lease at the end of the Base Lease Term
pursuant to and in accordance with Section 17.2 of the Lease, the
period commencing on the first day following the Scheduled
Expiration Date, and ending on the First Renewal Term Expiration
Date or such earlier date on which the Term terminates in
accordance with the provisions of the Lease.
"First Renewal Term Expiration Date" means the first
anniversary of the Scheduled Expiration Date.
"First Security" means First Security Bank of Utah, National
Association, a national banking association, not in its capacity
as Owner Trustee under the Trust Agreement, but in its individual
capacity.
"Funding Period" means, unless otherwise expressed, each of
the two successive periods, the first commencing upon the
Delivery Date and ending on (but excluding) the Payment Date next
preceding the tenth anniversary of the Delivery Date and the
second commencing on such Payment Date and ending on (but
excluding) the final maturity date of the Equipment Notes.
"GAAP" means generally accepted accounting principles as set
forth in the statements of financial accounting standards issued
by the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants, as such principles may
at any time or from time to time be varied by any applicable
financial accounting rules or regulations issued by the SEC and,
with respect to any person, shall mean such principles applied on
a basis consistent with prior periods except as may be disclosed
in such person's financial statements.
"General Electric Company" means General Electric Company, a
New York corporation and any Affiliate thereof.
"Government Entity" means (a) any federal, state, provincial
or similar government, and any body, board, department,
commission, court, tribunal, authority, agency or other
instrumentality of any such government or otherwise exercising
any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other
government entity having jurisdiction over any matter
contemplated by the Operative Agreements or relating to the
observance or performance of the obligations of any of the
parties to the Operative Agreements.
"GTA" means the Purchase Contract reference RR/CAL/DEG 2124
dated December 7, 1993, by and between Engine Manufacturer and
Lessee (including all exhibits thereto, together with all letter
agreements that by their terms constitute part of such Purchase
Contract), to the extent assigned pursuant to the Purchase
Agreement Assignment.
"Inclusion" is defined in the Tax Indemnity Agreement in
which General Electric Company is Owner Participant.
"Inclusion Event" is defined in the Tax Indemnity Agreement
in which Gaucho-2 Inc. is Owner Participant.
"Indemnitee" means (a) First Security and Owner Trustee, (b)
WTC and Loan Trustee, (c) each separate or additional trustee
appointed pursuant to the Trust Agreement or the Trust Indenture,
(d) each Participant, (e) Owner Participant Parent (but only in
its capacity as issuer of the Owner Participant Guaranty), (f)
the Trust Estate and the Trust Indenture Estate, (g) each
Affiliate of the persons described in clauses (a) through (e),
inclusive, (h) the respective directors, officers, employees,
agents and servants of each of the persons described in clauses
(a) through (g), inclusive and (i) the successors and permitted
assigns of the persons described in clauses (a) through (h),
inclusive. If any Indemnitee is Airframe Manufacturer or Engine
Manufacturer or any subcontractor or supplier of either thereof,
such Person shall be an Indemnitee only in its capacity as Owner
Participant, Owner Participant Parent, Loan Participant or
Certificate Holder.
"Indenture Default" means any condition, circumstance, act
or event that, with the giving of notice, the lapse of time or
both, would constitute an Indenture Event of Default.
"Indenture Agreements" means the Participation Agreement,
the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the Engine Consent and
Agreement, the Bills of Sale and any other contract, agreement or
instrument from time to time assigned or pledged under the Trust
Indenture.
"Indenture Event of Default" means any one or more of the
conditions, circumstances, acts or events set forth in Section
4.02 of the Trust Indenture.
"Independent Tax Counsel" means independent tax counsel of
recognized reputation selected by Owner Participant and
reasonably acceptable to Lessee.
"Interim Lease Term" means the period commencing on and
including the Delivery Date, and ending on and including the day
immediately preceding the Commencement Date or such earlier date
on which the Term terminates in accordance with the provisions of
the Lease.
"Interim Term Value Date" is defined in Schedule 1 to the
Lease.
"IRS" means the Internal Revenue Service of the United
States or any Government Entity succeeding to the functions of
such Internal Revenue Service.
"Law" means (a) any constitution, treaty, statute, law,
decree, regulation, order, rule or directive of any Government
Entity, and (b) any judicial or administrative interpretation or
application of, or decision under, any of the foregoing.
"Lease" or "Lease Agreement" means the Lease Agreement 104,
dated as of even date with the Participation Agreement, between
Owner Trustee and Lessee.
"Lease Default" means any condition, circumstance, act or
event that, with the giving of notice, the lapse of time or both,
would constitute a Lease Event of Default.
"Lease Event of Default" means any one or more of the
conditions, circumstances, acts or events set forth in Section 14
of the Lease.
"Lease Supplement" means a supplement to the Lease, in the
form of Exhibit A to the Lease.
"Lease Supplement No. 1" means the initial Lease Supplement,
dated the Delivery Date.
"Lessee" means Continental Airlines, Inc., a Delaware
corporation.
"Lessee Operative Agreements" means the Participation
Agreement, the Lease, Lease Supplement No. 1, the Tax Indemnity
Agreement, the BFE Bill of Sale, the Purchase Agreement
Assignment and each other agreement between Lessee and any other
party to the Participation Agreement, relating to the
Transactions, delivered on the Delivery Date.
"Lessee Person" means Lessee, any sublessee, assignee,
successor or other user or person in possession of the Aircraft,
Airframe or an Engine with or without color of right, or any
Affiliate of any of the foregoing (other than any Indemnitee or
any related Indemnitee with respect thereto, or any person using
or claiming any rights with respect to the Aircraft, Airframe or
an Engine directly by or through any of the persons in this
parenthetical).
"Lessor" means Owner Trustee in its capacity as lessor under
the Lease.
"Lessor Lien" means, with respect to any person and in
respect of any property (including, without limitation, the
Aircraft, Airframe, Engines, Parts or Aircraft Documents), any
Lien on such property which (a) arises from claims against such
person (if such person is a trustee, whether in its individual
capacity or in its capacity as a trustee) not related to or
arising out of, directly or indirectly (i) its ownership of, Lien
on or other interest in the Aircraft, Airframe, Engines, Parts or
Aircraft Documents or all or any other part of the Trust Estate
or Indenture Estate or (ii) any of the transactions contemplated
by the Operative Agreements, (b) results from actions taken by
such person (if such person is a trustee, whether in its
individual capacity or in its capacity as a trustee) (i) in
violation of such person's obligations under any of the terms of
the Operative Agreements, (ii) not participated in or consented
to by Lessee and (iii) not taken in connection with or by reason
of the occurrence of a Lease Default or a Lease Event of Default,
or (c) is imposed as a result of Taxes against such person (if
such person is a trustee, whether in its individual capacity or
in its capacity as a trustee) or any of its Affiliates not
required to be indemnified by Lessee under the Participation
Agreement, the Tax Indemnity Agreement or any other Operative
Agreement; provided that for purposes of Sections 8.2.1 and 8.3.1
of the Participation Agreement, any Lien that is attributable
solely to Owner Participant, First Security or Lessor and would
otherwise constitute a Lessor Lien thereunder shall not
constitute a Lessor Lien thereunder, so long as (A) the existence
of such Lien poses no material risk of the sale, forfeiture or
loss of the Aircraft, Airframe or any Engine or any interest
therein, (B) the existence of such Lien does not interfere in any
way with the use or operation of the Aircraft by Lessee (or any
Permitted Sublessee), (C) the existence of such Lien does not
affect the priority or perfection of, or otherwise jeopardize,
the Lien of the Trust Indenture, (D) First Security, Lessor or
Owner Participant, as the case may be, is diligently contesting
such Lien by appropriate proceedings, (E) the existence of such
Lien does not result in actual interruption in the receipt and
distribution by Loan Trustee in accordance with the Trust
Indenture of Rent assigned to Loan Trustee for the benefit of the
Note Holders, and (F) any property subject to such Lien is not
then required to be conveyed to any other Person pursuant to
Section 4.6 of the Lease.
"Lessor's Cost" (i) in respect of the period in which
Gaucho-2 Inc. is Owner Participant, the aggregate of the amounts
paid by Owner Trustee to Airframe Manufacturer, and, with respect
to BFE, Lessee, to purchase the Aircraft pursuant to the Purchase
Agreement and the Purchase Agreement Assignment, and is
designated by Dollar amount as Lessor's Cost in Schedule 4 to the
Participation Agreement and (ii) in respect of the period in
which General Electric Company or any transferee is Owner
Participant, the amount designated by Dollar amount as Subsequent
Lessor's Cost in Schedule 4 to the Participation Agreement.
"Liability Deductible" is defined in Schedule 1 to the
Lease.
"Lien" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease or security interest affecting the title to or
any interest in property.
"Loan Certificate Register" means the Equipment Note
Register.
"Loan Certificates" means the Equipment Notes.
"Loan Participant" means, on or prior to the Delivery Date,
the Person executing the Participation Agreement as Loan
Participant and thereafter, each Note Holder.
"Loan Participant Agreements" means the Participation
Agreement and each other agreement or document delivered by Loan
Participant under the Participation Agreement or any other
Operative Agreement.
"Loan Participant's Percentage" with respect to the Loan
Participant, means the Percentage of Lessor's Cost allocated to
such Loan Participant in Schedule 3 to the Participation
Agreement.
"Loan Trustee" means Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as
loan trustee under the Trust Indenture.
"Loan Trustee Event" means either (i) the Equipment Notes
shall have become due and payable pursuant to Section 4.04(b) of
the Trust Indenture or (ii) Loan Trustee has taken action or
notified Owner Trustee that it intends to take action to
foreclose the Lien of the Trust Indenture or otherwise commence
the exercise of any significant remedy under the Trust Indenture
or the Lease.
"MACRS Deductions" is defined in the Tax Indemnity
Agreement.
"Maintenance Program" is defined in Annex C to the Lease.
"Majority in Interest of Note Holders" means as of a
particular date of determination, the holders of a majority in
aggregate unpaid Original Amount of all Equipment Notes
outstanding as of such date (excluding any Equipment Notes held
by Owner Trustee, Lessee, Loan Trustee or Owner Participant or
any Affiliate of any such party or any interests of Owner Trustee
or Owner Participant therein by reason of subrogation pursuant to
Section 4.03 of the Trust Indenture (unless all Equipment Notes
then outstanding shall be held by Owner Trustee, Owner
Participant or any Affiliate of any thereof)); provided that for
the purposes of directing any action or casting any vote or
giving any consent, waiver or instruction hereunder, any Note
Holder of an Equipment Note or Equipment Notes may allocate, in
such Note Holder's sole discretion, any fractional portion of the
principal amount of such Equipment Note or Equipment Notes in
favor of or in opposition to any such action, vote, consent,
waiver or instruction.
"Make-Whole Amount" means, with respect to a redemption or
purchase of an Equipment Note, an amount equal to the greater of
(i) zero and (ii) (x) the present value, discounted on a
quarterly compounded basis utilizing an interest factor equal to
the Reinvestment Yield, of the principal payments provided for in
the Amortization Schedule for such Equipment Note (including the
payment at final maturity) and the scheduled interest payments
from the respective dates on which, but for such redemption or
purchase, such principal payments and interest payments would
have been payable on such Equipment Note, minus (y) the principal
amount of such Equipment Note so to be redeemed or purchased plus
accrued but unpaid interest thereon. For purposes of this
definition, "Reinvestment Yield" shall mean the arithmetic mean
of the two most recent weekly average yields to maturity for
actively traded marketable U.S. Treasury fixed interest rate
securities (adjusted to constant maturities equal to the
remaining Weighted Average Life to Maturity of such Equipment
Note as of the date of the proposed prepayment), as published by
the Federal Reserve Board in its Statistical Release H.15(519) or
any successor publication for the two calendar weeks ending on
the Saturday next preceding such date or, if such average is not
published for such period, of such reasonably comparable index as
may be designated in good faith by the holder or holders of at
least 66-2/3% of the unpaid Original Amount of the Loan
Certificates for such period. If no possible maturity exactly
corresponds to such Weighted Average Life to Maturity, yields for
the two most closely corresponding published maturities shall be
calculated pursuant to the immediately preceding sentence and the
Reinvestment Yield shall be interpolated from such yields on a
straight-line basis, rounding each of such relevant periods to
the nearest month.
"Material Adverse Change" means, with respect to any person,
any event, condition or circumstance that materially and
adversely affects such person's business or consolidated
financial condition, or its ability to observe or perform its
obligations, liabilities and agreements under the Operative
Agreements.
"Minimum Liability Insurance Amount" is defined in Schedule
1 to the Lease.
"Minimum Residual Percentage" is defined in Schedule 1 to
the Lease.
"Minimum Value Percentage" is defined in Schedule 1 to the
Lease.
"Mortgaged Property" is defined in Section 3.03 of the Trust
Indenture.
"Mortgagee" means Loan Trustee.
"Mortgagee Agreements" means, collectively, the
Participation Agreement, the Trust Indenture and each other
agreement between Loan Trustee and any other party to the
Participation Agreement, relating to the Transactions, delivered
on the Delivery Date.
"Mortgagee Event" means either (i) the Loan Certificates
shall have become due and payable pursuant to Section 4.04(b) of
the Trust Indenture or (ii) Loan Trustee has taken action or
notified Owner Trustee that it intends to take action to
foreclose the Lien of the Trust Indenture or otherwise commence
the exercise of any significant remedy under the Trust Indenture
or the Lease.
"Net Economic Return" means (i) with respect to Gaucho-2
Inc. as Owner Participant, Owner Participant's net after-tax
yield and aggregate after-tax cash flow computed on the basis of
the same methodology and assumptions as were utilized by Gaucho-2
Inc. in determining Basic Rent, Stipulated Loss Value percentages
and Termination Value percentages as of the Delivery Date, as
such assumptions may be adjusted for events that have been the
basis for adjustments to Basic Rent pursuant to Section 3.2.1(b)
of the Lease or events giving rise to indemnity payments pursuant
to Section 5.1 of the Tax Indemnity Agreement in which Gaucho-2
Inc. is Owner Participant, (ii) with respect to General Electric
Company as Owner Participant, Owner Participant's net after-tax
yield and aggregate after-tax cash flow computed on the basis of
the same methodology and assumptions as were utilized by General
Electric Company as of the effective time of the purchase by
General Electric Company of its interest as Owner Participant
(taking into account both General Electric Company's interest as
Owner Participant and its interest as holder of Series D
Equipment Notes or pass-through certificates representing an
interest therein) in determining Basic Rent, Stipulated Loss
Value percentages and Termination Value percentages in accordance
with Schedule 6 to the Participation Agreement, as such
assumptions may be adjusted for events that have been the basis
for adjustments to Basic Rent pursuant to Section 3.2.1(b) of the
Lease after General Electric Company's becoming Owner Participant
or events giving rise to indemnity payments pursuant to Section
6(a) of the Tax Indemnity Agreement in which General Electric
Company is Owner Participant, and (iii) with respect to any
transferee of General Electric Company as Owner Participant, such
Owner Participant's net after-tax yield and aggregate after-tax
cash flow computed on the basis of the same methodology and
assumptions used by General Electric Company as of the effective
time of the purchase by General Electric Company of its interest
as Owner Participant in determining Basic Rent, Stipulated Loss
Value percentages and Termination Value percentages other than
the maintenance of Termination Value percentages in accordance
with annual January percentages (taking into account both General
Electric Company's interest as Owner Participant and its interest
as holder of Series D Equipment Notes or pass-through
certificates representing an interest therein), as such
assumptions may be adjusted for events that have been the basis
for adjustments to Basic Rent pursuant to section 3.2.1(b) of the
Lease after General Electric Company's becoming Owner Participant
or events giving rise to indemnity payments pursuant to section
6(a) of the Tax Indemnity Agreement in which General Electric
Company is Owner Participant; provided that (x) for purposes of
clauses (ii) and (iii) above, if General Electric Company shall
have transferred its interest as Owner Participant or its
interest in the Series D Equipment Notes, Net Economic Return
shall be calculated as if General Electric Company had retained
all such interests, and (y) with respect to General Electric
Company as Owner Participant, such methodology and assumptions
are more specifically set forth on Schedule 6 to the
Participation Agreement.
"Net Present Value of Rents" means the present value, as of
the date of determination, discounted at ten percent per annum,
compounded quarterly to the date of determination, of all unpaid
Basic Rent payments during the then-remaining portion of the Base
Lease Term, expressed as a percentage of Lessor's Cost.
"Net Worth" means, for any person, the excess of its total
assets over its total liabilities.
"New Debt" means debt securities in an aggregate principal
amount specified in the Refunding Information, which amount shall
be no greater than the aggregate principal amount of all
Equipment Notes outstanding on the Refunding Date.
"Non-U.S. Person" means any Person other than a United
States person, as defined in Section 7701(a)(30) of the Code.
"Note Holder" means at any time each registered holder of
one or more Equipment Notes.
"Officer's Certificate" means, in respect of any party to
the Participation Agreement, a certificate signed by the
Chairman, the President, any Vice President or Assistant Vice
President, the Treasurer or the Secretary of such party.
"Operative Agreements" means, collectively, the
Participation Agreement, the Trust Agreement, the Purchase
Agreement Assignment, the Consent and Agreement, the Engine
Consent and Agreement, the Lease, Lease Supplement No. 1, the
Trust Indenture, the initial Trust Indenture Supplement, the
Bills of Sale, the Tax Indemnity Agreement, the Owner Participant
Guaranty, the Equipment Notes and each other Lessee Operative
Agreement.
"Operative Leases" means each of the lease agreements
between Lessor and Lessee identified on Schedule 1 hereto.
"Original Amount," with respect to an Equipment Note, means
the stated original principal amount of such Equipment Note and,
with respect to all Equipment Notes, means the aggregate stated
original principal amounts of all Equipment Notes.
"Original Indenture" means the Trust Indenture and Mortgage
104, dated as of July 15, 1994, between the Owner Trustee and the
Loan Trustee.
"Owner Participant" means the person executing the
Participation Agreement as "Owner Participant" or, if a second
person becomes an "Owner Participant" pursuant to Section 12.1.1
of the Participation Agreement, both of such persons; provided
that if an Owner Participant Transfers 100% of its interest to a
successor Owner Participant, such transferring Owner Participant
shall thereafter no longer be considered an "Owner Participant."
"Owner Participant Agreements" means, collectively, the
Participation Agreement, the Tax Indemnity Agreement, the Trust
Agreement and each other agreement between Owner Participant and
any other party to the Participation Agreement relating to the
Transactions, delivered on the Delivery Date.
"Owner Participant Guaranty" means the Guaranty by Corporate
Affiliate of Owner Participant 104 dated the Delivery Date from
Owner Participant Parent to the beneficiaries named therein.
"Owner Participant Parent" means the person executing the
Owner Participant Guaranty.
"Owner Participant's Percentage" means the percentage of
Lessor's Cost allocated to the Owner Participant in Schedule 3 to
the Participation Agreement.
"Owner Trustee" means First Security Bank of Utah, National
Association, a national banking association, not in its
individual capacity, except as expressly provided in any
Operative Agreement, but solely as Owner Trustee under the Trust
Agreement.
"Owner Trustee Agreements" means, collectively, the
Participation Agreement, the Lease, Lease Supplement No. 1, the
Trust Agreement, the Trust Indenture, the initial Trust Indenture
Supplement, the Equipment Notes, the Purchase Agreement
Assignment, and each other agreement between Owner Trustee and
any other party to the Participation Agreement, relating to the
Transactions, delivered on the Delivery Date.
"Participants" means, collectively, Owner Participant and
Loan Participant and "Participant" means Owner Participant or
Loan Participant, individually.
"Participation Agreement" means the Participation Agreement
104 dated as of July 15, 1994 among Lessee, Owner Participant,
Loan Participant, Owner Trustee and Loan Trustee.
"Parts" means all appliances, parts, components,
instruments, appurtenances, accessories, furnishings, seats and
other equipment of whatever nature (including, without
limitation, all BFE, avionics, the APU and Passenger Convenience
Equipment, but excluding Engines or engines), that may from time
to time be installed or incorporated in or attached or
appurtenant to the Airframe or any Engine; provided that the term
"Parts" shall not be deemed to include any Passenger Convenience
Equipment if and for so long as such Equipment shall be owned by,
or shall be subject to a security interest, license or other
interest of, another Person (other than any Affiliate of Lessee)
as provided under Section D.3 of Annex C to the Lease.
"Pass Through Certificates" means the pass through
certificates to be issued by the Pass Through Trustees in
connection with the Refinancing Transaction.
"Pass Through Trust Agreement" means each of the four
separate pass through trust agreements to be entered into by and
between the Lessee and the Pass Through Trustee in connection
with the Refinancing Transaction.
"Pass Through Trustee" means Wilmington Trust Company, a
Delaware banking corporation, in its capacity as trustee under
each Pass Through Trust Agreement, and each other person which
may from time to time be acting as successor trustee under any
such Pass Through Trust Agreement.
"Passenger Convenience Equipment" means components or
systems installed on or affixed to the Airframe that are used to
provide individual telecommunications or electronic entertainment
to passengers aboard the Aircraft.
"Payment Date" is defined in Schedule 1 to the Lease.
"Payment Due Rate" is defined in Schedule 1 to the Lease.
"Permitted Air Carrier" means any U.S. Air Carrier or any
air carrier listed on Schedule 5 to the Lease.
"Permitted Institution" means (a) any bank, trust company,
insurance company, pension trust, finance or leasing corporation,
financial institution or other person (other than, without
Lessee's consent, a commercial air carrier or Affiliate thereof
that is in direct competition with Lessee), in each case with a
combined capital and surplus or net worth of at least
$50,000,000, or (b) any Affiliate of any person described in
clause (a) in respect of which such person has provided a written
guarantee of the obligations assumed by such Affiliate under the
Owner Participant Agreements in form and substance reasonably
satisfactory to Lessee, Owner Trustee and Loan Trustee.
"Permitted Lien" means any Lien described in clauses (a)
through (f), inclusive, of Section 6 of the Lease.
"Permitted Sublease" means a sublease permitted under
Section 7.2.7 of the Lease.
"Permitted Sublessee" means the sublessee under a Permitted
Sublease.
"Persons" or "persons" means individuals, firms,
partnerships, joint ventures, trusts, trustees, Government
Entities, organizations, associations, corporations, government
agencies, committees, departments, authorities and other bodies,
corporate or incorporate, whether having distinct legal status or
not, or any member of any of the same.
"Plan" means any employee benefit plan within the meaning of
Section 3(3) of ERISA, and any plan within the meaning of Section
4975(e)(1) of the Code.
"Preliminary Notice" is defined in Section 17.1 of the
Lease.
"Purchase Agreement" means the Purchase Agreement No. 1783,
dated March 18, 1993, between Airframe Manufacturer and Lessee
(including all exhibits thereto, together with all letter
agreements entered into that by their terms constitute part of
such Purchase Agreement), to the extent assigned pursuant to the
Purchase Agreement Assignment.
"Purchase Agreement Assignment" means the Purchase Agreement
and Engine Warranties Assignment 104 dated as of even date with
the Participation Agreement, between Lessee and Owner Trustee.
"Purchase Date" means the last Business Day of any of the
Base Lease Term, First Renewal Lease Term or Second Renewal Lease
Term, as specified in any Purchase Notice.
"Purchase Notice" is defined in Section 17.3.1 of the Lease.
"QIB" is defined in Section 2.08 of the Trust Indenture.
"Refinancing Transaction" means a refinancing transaction
involving, among other things, (i) the redemption of the
Equipment Notes issued on the date of the Trust Indenture and the
concurrent issuance and sale of new Equipment Notes to the Pass
Through Trustees (or their designee) pursuant to the Refunding
Agreement and (ii) the issuance and sale of the Pass Through
Certificates by the Pass Through Trustees to certain initial
purchasers thereof, on the terms and conditions described in the
draft offering circular dated December 22, 1995 (subject to such
changes as may be agreed by the relevant parties) relating to the
offering of Continental Airlines Pass Through Certificates Series
1996.
"Refunding Agreement" means the refunding agreement to be
entered into by and among the Lessee, the Owner Participant, the
Owner Trustee, the Pass Through Trustee under each Pass Through
Trust Agreement and the Loan Trustee, providing for, among other
things, the issuance and sale of the Equipment Notes in
connection with the Refinancing Transaction.
"Refunding Certificate" means a certificate of an authorized
representative of Owner Participant delivered pursuant to Section
13.1.1 of the Participation Agreement, setting forth (a) the
Refunding Date and (b) the following information, subject to the
limitations set forth in Section 13 of the Participation
Agreement: (i) the principal amount of debt to be issued by
Owner Trustee on the Refunding Date and (ii) the proposed revised
schedules of Basic Rent, Stipulated Loss Value percentages and
Termination Value percentages and the proposed Amortization
Schedules.
"Refunding Date" means the proposed date on which the
outstanding Equipment Notes will be redeemed and refinanced
pursuant to Section 13 of the Participation Agreement.
"Refunding Information" means the information set forth in
the Refunding Certificate (other than the Refunding Date) as such
information may have been revised by any verification procedures
demanded by Lessee pursuant to Section 3.2.1(d) of the Lease.
"Registration Rights Agreement" means the registration
rights agreement to be entered into by and among the Lessee and
certain initial purchasers of the Pass Through Certificates to be
issued pursuant to the Refunding Agreement, providing for, among
other things, the exchange offer with respect to such Pass
Through Certificates to be registered under the Securities Act or
the shelf registration of such Pass Through Certificates for a
period to be specified therein.
"Renewal Lease Term" means, collectively, the First Renewal
Lease Term and the Second Renewal Lease Term, in each case, if
any.
"Renewal Notice" is defined in Section 17.2.1 of the Lease.
"Renewal Rent" for the Aircraft means the rent payable
therefor in respect of a Renewal Lease Term determined pursuant
to Section 17.2.2 of the Lease.
"Rent" means, collectively, Basic Rent, Renewal Rent and
Supplemental Rent.
"Replacement Airframe" means any airframe substituted for
the Airframe pursuant to Section 10 of the Lease.
"Replacement Engine" means an engine substituted for an
Engine pursuant to Section 5.3, 7.2, 9 or 10 of the Lease.
"Return Acceptance Supplement" means a Return Acceptance
Supplement, dated as of the date the Aircraft is returned to
Lessor pursuant to Section 5 of the Lease, by Lessor and Lessee
substantially in the form of Exhibit B to the Lease.
"Scheduled Delivery Date" means the expected Delivery Date
notified to each Participant, Owner Trustee and Loan Trustee by
Lessee pursuant to Section 5.1(a) of the Participation Agreement,
which expected Delivery Date shall be a Business Day not later
than the Commitment Termination Date.
"Scheduled Expiration Date" means July 15, 2014.
"SEC" means the Securities and Exchange Commission of the
United States, or any Government Entity succeeding to the
functions of such Securities and Exchange Commission.
"Second Renewal Lease Term" means, if Lessee exercises its
option to renew the Lease at the end of the First Renewal Lease
Term pursuant to and in accordance with Section 17.2 of the
Lease, the period commencing on the first day following the First
Renewal Term Expiration Date, and ending on the second
anniversary of the Scheduled Expiration Date or such earlier date
on which the Term terminates in accordance with the provisions of
the Lease.
"Section 1110" means 11 U.S.C. Section 1110 of the
Bankruptcy Code or any successor or analogous section of the
federal bankruptcy Law in effect from time to time.
"Secured Obligations" is defined in Section 2.06 of the
Trust Indenture.
"Securities Act" means the Securities Act of 1933, as
amended.
"Security" means a "security" as defined in Section 2(1) of
the Securities Act.
"Senior Holder" is defined in Section 2.15(c) of the Trust
Indenture.
"Series" means any of Series A, Series B, Series C or Series
D.
"Series A" or "Series A Equipment Notes" means Equipment
Notes issued under the Trust Indenture and designated as "Series
A" thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under
the heading "Series A."
"Series B" or "Series B Equipment Notes" means Equipment
Notes issued under the Trust Indenture and designated as "Series
B" thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under
the heading "Series B."
"Series C" or "Series C Equipment Notes" means Equipment
Notes issued under the Trust Indenture and designated as "Series
C" thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under
the heading "Series C."
"Series D" or "Series D Equipment Notes" means Equipment
Notes issued under the Trust Indenture and designated as "Series
D" thereunder, in the Original Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture under
the heading "Series D."
"Similar Aircraft" means a Boeing Model 757-200 aircraft
(other than the Aircraft) having a passenger compartment
configuration (of the type used in Block Nos. ND301-325 as
specified in Boeing Detail Specification D924N104-3 dated as of
March 18, 1993, as amended or supplemented) most similar to the
Aircraft.
"SLV Rate" is defined in Schedule 1 to the Lease.
"Stipulated Loss Value" means, with respect to the Aircraft,
unless otherwise specified (a) during the Base Lease Term, the
amount determined by multiplying (i) the percentage set forth in
Schedule 3 to the Lease (as adjusted from time to time in
accordance with Section 3.2.1. of the Lease) opposite the
Stipulated Loss Value Date by (ii) Lessor's Cost and (b) during
any Renewal Term, the amount determined pursuant to Section
17.2.3 of the Lease. Notwithstanding anything to the contrary in
any Operative Agreement, Stipulated Loss Value shall always be
sufficient to pay in full, as of the date of payment thereof
(assuming timely payment of the Loan Certificates prior to such
date), the aggregate unpaid principal amount of all Loan
Certificates outstanding as of such date, together with accrued
and unpaid interest on all such Loan Certificates as of such
date.
"Stipulated Loss Value Date" means the day in such month
specified in Schedule 3 to the Lease or, if such day is not a
Business Day, the immediately succeeding Business Day.
"Supplemental Rent" means all Expenses, Transaction Expenses
and all other amounts, liabilities, indemnities and obligations
(other than Basic Rent or Renewal Rent but including Make-Whole
Amount, if any) that Lessee assumes or becomes obliged to or
agrees to pay under any Lessee Operative Agreement to or on
behalf of Lessor or any other person, including, without
limitation, payments of Stipulated Loss Value, Termination Value
and payments of indemnities under Section 10 of the Participation
Agreement.
"Tax Attribute Period" is defined in the applicable Tax
Indemnity Agreement.
"Tax Indemnitee" means (a) First Security and Owner Trustee,
(b) WTC and Loan Trustee, (c), each separate or additional
trustee appointed pursuant to the Trust Agreement or the Trust
Indenture, (d) each Participant, (e) the Trust Estate and the
Trust Indenture Estate and (f) the respective successors,
assigns, agents and servants of the foregoing. For purposes of
this definition, the term "Owner Participant" shall include any
member of an affiliated group (within the meaning of Section 1504
of the Code) of which Owner Participant is, or may become, a
member if consolidated, joint or combined returns are filed for
such affiliated group for federal, state or local income tax
purposes. If the Tax Indemnitee is the Airframe Manufacturer or
Engine Manufacturer, such Person shall be a Tax Indemnitee only
in its capacity as Owner Participant, Owner Participant Parent,
Loan Participant or Certificate Holder.
"Tax Indemnity Agreement" means, with respect to Gaucho-2
Inc. as Owner Participant, the Tax Indemnity Agreement 104, dated
as of even date with the Participation Agreement, between Lessee
and Gaucho-2 Inc. and, with respect to General Electric Company
or any transferee thereof as Owner Participant, the Tax Indemnity
Agreement 104, dated as of December 22, 1995, between Lessee and
General Electric Company.
"Taxes" means all license, recording, documentary,
registration and other similar fees and all taxes, levies,
imposts, duties, charges, assessments or withholdings of any
nature whatsoever imposed by any Taxing Authority, together with
any penalties, additions to tax, fines or interest thereon or
additions thereto.
"Taxing Authority" means any federal, state or local
government or other taxing authority in the United States, any
foreign government or any political subdivision or taxing
authority thereof, any international taxing authority or any
territory or possession of the United States or any taxing
authority thereof.
"Term" means the term, commencing on the Delivery Date, for
which the Aircraft is leased pursuant to Section 3 of the Lease,
and shall include the Interim Lease Term, the Base Lease Term
and, if applicable, any Renewal Lease Term.
"Termination Date" means any Payment Date occurring after
the tenth anniversary of the Delivery Date and on or before the
date one year prior to the Scheduled Expiration Date on which the
Lease shall terminate in accordance with Section 9 of the Lease.
"Termination Value" means, with respect to the Aircraft, the
amount determined by multiplying (a) the percentage set forth in
Schedule 4 to the Lease (as adjusted from time to time in
accordance with Section 3.2.1. of the Lease) opposite the
Termination Value Date by (b) Lessor's Cost. Notwithstanding
anything to the contrary in any Operative Agreement, Termination
Value shall always be sufficient to pay in full, as of the date
of payment thereof (assuming timely payment of the Equipment
Notes prior to such date), the aggregate unpaid principal amount
of all Equipment Notes outstanding as of such date, together with
accrued and unpaid interest on all such Equipment Notes as of
such date.
"Termination Value Date" means for any month, the day in
such month specified in Schedule 4 to the Lease or, if such day
is not a Business Day, the immediately succeeding Business Day.
"Transaction Expenses" means all costs and expenses incurred
by Owner Participant, Loan Participant, Owner Trustee and Loan
Trustee in connection with (a) the preparation, execution and
delivery of the Operative Agreements and the recording or filing
of any documents, certificates or instruments in accordance with
any Operative Agreement, including, without limitation, the FAA
Filed Documents and the Financing Statements, (b) any sublease or
transfer of possession of the Aircraft or Airframe or any Engine,
any Event of Loss with respect to the Aircraft, any Engine or any
Part, any payment of Stipulated Loss Value or Termination Value
and any replacement of any Engine or Part pursuant to the Lease,
(c) any refunding of the Equipment Notes pursuant to Section 13
of the Participation Agreement or, pursuant to Section 15.3 of
the Participation Agreement, any restructuring of the
transactions in accordance with Section 15 of the Participation
Agreement, (d) any transfer of title to the Aircraft or any
Engine contemplated by Section 4.6 of the Lease, (e) all waivers,
amendments or other agreements in connection with the Operative
Agreements or the transactions contemplated thereby, in each
case, except during the continuation of a Lease Event of Default,
only to the extent requested by Lessee or required by or made
pursuant to the terms of the Operative Agreements (unless such
requirement results from the actions of the party incurring such
costs or expenses not required by or made pursuant to the
Operative Agreements), whether or not any of the same are also
indemnified against by any other person, and (f) with respect to
Owner Trustee and Loan Trustee, otherwise in connection with the
administration of the transactions contemplated by the
Participation Agreement, including, without limitation, in each
such case (a) through (f), (i) the reasonable fees and
disbursements of counsel for each Participant, counsel for Owner
Trustee, counsel for Loan Trustee and special counsel in Oklahoma
City, Oklahoma, in each case, in connection with the Closing,
(ii) all initial and ongoing fees, disbursements and expenses of
Owner Trustee and Loan Trustee, and (iii) except as may be
expressly provided in the Lease the fees, expenses and
disbursements of any Appraiser retained under or as contemplated
by the Participation Agreement or the Lease.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Agreements.
"Transfer" means the transfer, sale, assignment or other
conveyance of all or any interest in any property, right or
interest.
"Transferee" means a person to which any Owner Participant,
Owner Trustee or any Loan Participant or Note Holder purports or
intends to Transfer any or all of its right, title or interest in
the Trust Estate or in its Equipment Note and the Trust Indenture
Estate, respectively, as described in Section 12.1.1(a), 12.1.2
or 12.1.3 (but excluding participants in any participation
referred to in Section 12.1.3), respectively, of the
Participation Agreement.
"Trust" means the trust created by the Trust Agreement.
"Trust Agreement" means the Trust Agreement 104, dated as of
even date with the Participation Agreement, between Owner
Participant and Owner Trustee.
"Trust Estate" means all estate, right, title and interest
of Owner Trustee in and to the Aircraft, the Lease, any Lease
Supplement, the Purchase Agreement and the GTA including, without
limitation, all amounts of Basic Rent and Supplemental Rent
including, without limitation, insurance proceeds (other than
insurance proceeds payable to or for the benefit of Owner
Participant, Loan Participant, Note Holders or WTC) and
requisition, indemnity or other payments of any kind for or with
respect to the Aircraft (except amounts owing to Owner
Participant, Loan Participant, Note Holders or WTC, or to any of
their respective directors, officers, employees, servants and
agents, pursuant to Section 10 of the Participation Agreement).
Notwithstanding the foregoing, "Trust Estate" shall not include
any Excluded Payment.
"Trust Indenture" means the Amended and Restated Trust
Indenture and Mortgage 104, dated as of December 22, 1995,
between Owner Trustee and Loan Trustee, which amends and restates
the Original Indenture.
"Trust Indenture Estate" is defined in the "Granting Clause"
of the Trust Indenture.
"Trust Indenture Supplement" means a Trust Indenture and
Mortgage 104 Supplement, substantially in the form of Exhibit A
to the Trust Indenture, with appropriate modifications to reflect
the purpose for which it is being used.
"UCC" means the Uniform Commercial Code as in effect in any
applicable jurisdiction.
"United States" or "U.S." means the United States of
America; provided that for geographic purposes, "United States"
means, in aggregate, the 50 states and the District of Columbia
of the United States of America.
"U.S. Air Carrier" means any United States air carrier as to
which there is in force a certificate issued pursuant to Section
401 of the Act, and as to which there is in force an air carrier
operating certificate issued pursuant to Part 121 of the
regulations promulgated under the Act, or which may operate as an
air carrier by certification or otherwise under any successor or
substitute provisions therefor or in the absence thereof.
"U.S. Government" means the federal government of the United
States, or any instrumentality or agency thereof the obligations
of which are guaranteed by the full faith and credit of the
federal government of the United States.
"U.S. Person" means any Person described in Section
7701(a)(30) of the Code.
"Weighted Average Life to Maturity" of each Equipment Note
means at the time of the determination thereof the number of
years obtained by dividing the then Remaining Dollar-years of
such Equipment Note by the then outstanding principal amount of
such Equipment Note. The term "Remaining Dollar-years" shall
mean the amount obtained by (1) multiplying the amount of each
then-remaining principal payment on such Equipment Note provided
for in the Amortization Schedule for such Equipment Note by the
number of years (calculated at the nearest one-twelfth) that will
elapse between the date of determination of the Weighted Average
Life to Maturity of such Equipment Note and the date of that
required payment and (2) totaling all the products obtained in
clause (1) above.
"Wet Lease" means any arrangement whereby Lessee agrees to
furnish the Airframe and Engines or engines installed thereon to
a third party pursuant to which the Airframe and such Engines or
engines (i) shall at all times be in the sole possession and
control of Lessee, (ii) shall be operated in all respects solely
by regular employees of Lessee possessing all current
certificates and licenses that are required under the Act or any
FAA Regulations for the possession, use and operation of the
Airframe and such Engines or engines (or, if the Airframe is then
under foreign registration, in accordance with Section 7.1.2 of
the Lease, the foregoing requirement shall apply in respect of
all certificates and licenses required by such government of
registration and the applicable Aviation Authority for the
possession, use and operation of the Airframe and such Engines or
engines), and (iii) shall in all events be maintained, insured
and otherwise used and operated in compliance with the terms and
provisions of the Lease.
"WTC" means Wilmington Trust Company, a Delaware banking
corporation, not in its capacity as Loan Trustee under the Trust
Indenture, but in its individual capacity.
SCHEDULE 1
SCHEDULE 1 TO ANNEX A
OPERATIVE LEASES
1. Lease Agreement 632, dated as of July 1, 1995, between First
Security Bank of Utah, National Association and Continental
Airlines, Inc.
2. Lease Agreement 633, dated as of August 1, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
3. Lease Agreement 624, dated as of February 1, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
4. Lease Agreement 627, dated as of March 1, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
5. Lease Agreement 631, dated as of June 1, 1995, between First
Security Bank of Utah, National Association and Continental
Airlines, Inc.
6. Lease Agreement 620, dated as of February 15, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
7. Lease Agreement 623, dated as of January 15, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
8. Lease Agreement 625, dated as of January 15, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
9. Lease Agreement 626, dated as of March 1, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
10. Lease Agreement 106, dated as of September 15, 1994, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
11. Lease Agreement 107, dated as of October 1, 1994, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
12. Lease Agreement 113, dated as of April 1, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
13. Lease Agreement 110, dated as of December 1, 1994, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
14. Lease Agreement 112, dated as of February 1, 1995, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
15. Lease Agreement 104, dated as of July 15, 1994, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
16. Lease Agreement 105, dated as of August 15, 1994, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
17. Lease Agreement 108, dated as of November 1, 1994, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
18. Lease Agreement 109, dated as of December 1, 1994, between
First Security Bank of Utah, National Association and
Continental Airlines, Inc.
Exhibit 4.22
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
PURSUANT TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY,
THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED
UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
FROM SUCH REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
AS OWNER TRUSTEE UNDER TRUST AGREEMENT 104
DATED AS OF JULY 15, 1994
SERIES A LIMITED RECOURSE EQUIPMENT NOTE DUE JANUARY 15, 2013
ISSUED IN CONNECTION WITH THE BOEING MODEL 757-224 AIRCRAFT
BEARING UNITED STATES REGISTRATION NUMBER N17104.
No. A-2 Date: January 31, 1996
$19,342,666.67
INTEREST RATE MATURITY DATE
------------- -------------
6.94% January 15, 2013
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Owner Trustee (herein in
such capacity called the "Owner Trustee") under that certain
Trust Agreement 104, dated as of July 15, 1994, between the Owner
Participant named therein and First Security Bank of Utah,
National Association (herein as such Trust Agreement may be
supplemented or amended from time to time called the "Trust
Agreement"), hereby promises to pay to Wilmington Trust Company,
as Subordination Agent under the Intercreditor Agreement, or the
registered assignee thereof, the principal sum of $19,342,666.67
(the "Original Amount"), together with interest on the amount of
the Original Amount remaining unpaid from time to time
(calculated on the basis of a year of 360 days comprised of
twelve 30-day months) from the date hereof until paid in full at
a rate per annum equal to the Debt Rate. The Original Amount of
this Equipment Note shall be payable in installments on the dates
set forth in Schedule I hereto equal to the corresponding
percentage of the Original Amount of this Equipment Note set
forth in Schedule I hereto. Accrued but unpaid interest shall be
due and payable in quarterly installments commencing on April 15,
1996, and thereafter on July 15, October 15, January 15 and April
15 of each year, to and including January 15, 2013.
Notwithstanding the foregoing, the final payment made on this
Equipment Note shall be in an amount sufficient to discharge in
full the unpaid Original Amount and all accrued and unpaid
interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein,
if any date on which a payment under this Equipment Note becomes
due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next
succeeding Business Day and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount
of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means
the Amended and Restated Trust Indenture and Mortgage 104, dated
as of December 22, 1995, between the Owner Trustee and Wilmington
Trust Company, as Loan Trustee (the "Loan Trustee"), as the same
may be amended or supplemented from time to time. All other
capitalized terms used in this Equipment Note and not defined
herein shall have the respective meanings assigned in the Trust
Indenture.
This Equipment Note shall bear interest, payable on
demand, at the Payment Due Rate (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) on any
overdue Original Amount, any overdue Make-Whole Amount, if any,
and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are
overdue, in each case for the period the same is overdue.
Amounts shall be overdue if not paid when due (whether at stated
maturity, by acceleration or otherwise).
The interest rate borne by this Equipment Note shall be
subject to adjustments to the extent, and under the
circumstances, specified by the Registration Rights Agreement.
All payments of Original Amount, interest, Make-Whole
Amount, if any, and other amounts, if any, to be made by the
Owner Trustee hereunder and under the Trust Indenture or the
Participation Agreement shall be payable only from the income and
proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from the Trust
Estate to the extent included in the Trust Indenture Estate to
enable the Loan Trustee to make such payments in accordance with
the terms of Section 2.03 and Article III of the Trust Indenture,
and each holder hereof, by its acceptance of this Equipment Note,
agrees that it will look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for
distribution to the holder hereof as above provided and that none
of the Owner Participant, the Owner Trustee and the Loan Trustee
is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof
for any amounts payable or any liability under this Equipment
Note or, except as provided in the Trust Indenture or in the
Participation Agreement, for any liability under the Trust
Indenture or the Participation Agreement; provided, however, that
nothing herein contained shall limit, restrict or impair the
right of the Loan Trustee, subject always to the terms and
provisions of the Trust Indenture, to accelerate the maturity of
this Equipment Note upon occurrence of an Event of Default under
the Trust Indenture in accordance with Section 4.04(b) of the
Trust Indenture, to bring suit and obtain a judgment against the
Owner Trustee on this Equipment Note for purposes of realizing
upon the Trust Indenture Estate and to exercise all rights and
remedies provided under the Trust Indenture or otherwise realize
upon the Trust Indenture Estate.
There shall be maintained an Equipment Note Register
for the purpose of registering transfers and exchanges of
Equipment Notes at the Corporate Trust Office of the Loan Trustee
or at the office of any successor in the manner provided in
Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due
hereunder shall be payable in Dollars in immediately available
funds at the Corporate Trust Office of the Loan Trustee, or as
otherwise provided in the Trust Indenture. Each such payment
shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in
the case of any final payment with respect to this Equipment
Note, the Equipment Note shall be surrendered promptly thereafter
by the Loan Trustee to the Owner Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment
Note, agrees that, except as provided in the Trust Indenture,
each payment received by it hereunder shall be applied, first, to
the payment of accrued interest on this Equipment Note (as well
as any interest on any overdue Original Amount, any overdue
Make-Whole Amount, if any, or, to the extent permitted by Law,
any overdue interest and other amounts hereunder) to the date of
such payment, second, to the payment of the Original Amount of
this Equipment Note then due, third, to the payment of Make-Whole
Amount, if any, and any other amount due hereunder or under the
Trust Indenture, and fourth, the balance, if any, remaining
thereafter, to the payment of Original Amount of this Equipment
Note remaining unpaid in the inverse order of their normal
maturity.
This Equipment Note is one of the Equipment Notes
referred to in the Trust Indenture which have been or are to be
issued by the Owner Trustee pursuant to the terms of the Trust
Indenture. The Trust Indenture Estate is held by the Loan
Trustee as security, in part, for the Equipment Notes. The
provisions of this Equipment Note are subject to the Trust
Indenture. Reference is hereby made to the Trust Indenture for a
complete statement of the rights and obligations of the holder
of, and the nature and extent of the security for, this Equipment
Note and the rights and obligations of the holders of, and the
nature and extent of the security for, any other Equipment Notes
executed and delivered under the Trust Indenture, as well as for
a statement of the terms and conditions of the Trust created by
the Trust Indenture, to all of which terms and conditions in the
Trust Indenture each holder hereof agrees by its acceptance of
this Equipment Note.
As provided in the Trust Indenture and subject to
certain limitations therein set forth, this Equipment Note is
exchangeable for a like aggregate Original Amount of Equipment
Notes of different authorized denominations, as requested by the
holder surrendering the same.
Prior to due presentment for registration of transfer
of this Equipment Note, the Owner Trustee and the Loan Trustee
shall treat the person in whose name this Equipment Note is
registered as the owner hereof for all purposes, whether or not
this Equipment Note be overdue, and neither of the Owner Trustee
nor the Loan Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as
provided in Sections 2.10, 2.11 and 2.12 of the Trust Indenture
but not otherwise. This Equipment Note is also subject to
exchange and to purchase by the Owner Participant or the Owner
Trustee as provided in Section 2.14 or 2.16 of the Trust
Indenture but not otherwise.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Loan Trustee by manual
signature, this Equipment Note shall not be entitled to any
benefit under the Trust Indenture or be valid or obligatory for
any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this
Equipment Note to be executed in its corporate name by its
officer thereunto duly authorized on the date hereof.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
as Owner Trustee
By ________________________________
Name: Val T. Orton
Title: Vice President
LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Trust Indenture.
WILMINGTON TRUST COMPANY,
as Loan Trustee
By ________________________________
Name: W. Chris Sponenberg
Title: Financial Services
Officer
Exhibit 4.23
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
PURSUANT TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY,
THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED
UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
FROM SUCH REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
AS OWNER TRUSTEE UNDER TRUST AGREEMENT 104
DATED AS OF JULY 15, 1994
SERIES B LIMITED RECOURSE EQUIPMENT NOTE DUE JANUARY 15, 2013
ISSUED IN CONNECTION WITH THE BOEING MODEL 757-224 AIRCRAFT
BEARING UNITED STATES REGISTRATION NUMBER N17104.
No. B-2 Date: January 31, 1996
$6,769,933.33
INTEREST RATE MATURITY DATE
------------- -------------
7.82% January 15, 2013
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Owner Trustee (herein in
such capacity called the "Owner Trustee") under that certain
Trust Agreement 104, dated as of July 15, 1994, between the Owner
Participant named therein and First Security Bank of Utah,
National Association (herein as such Trust Agreement may be
supplemented or amended from time to time called the "Trust
Agreement"), hereby promises to pay to Wilmington Trust Company,
as Subordinated Agent under the Intercreditor Agreement, or the
registered assignee thereof, the principal sum of $6,769,933.33
(the "Original Amount"), together with interest on the amount of
the Original Amount remaining unpaid from time to time
(calculated on the basis of a year of 360 days comprised of
twelve 30-day months) from the date hereof until paid in full at
a rate per annum equal to the Debt Rate. The Original Amount of
this Equipment Note shall be payable in installments on the dates
set forth in Schedule I hereto equal to the corresponding
percentage of the Original Amount of this Equipment Note set
forth in Schedule I hereto. Accrued but unpaid interest shall be
due and payable in quarterly installments commencing on April 15,
1996, and thereafter on July 15, October 15, January 15 and April
15 of each year, to and including January 15, 2013.
Notwithstanding the foregoing, the final payment made on this
Equipment Note shall be in an amount sufficient to discharge in
full the unpaid Original Amount and all accrued and unpaid
interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein,
if any date on which a payment under this Equipment Note becomes
due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next
succeeding Business Day and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount
of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means
the Amended and Restated Trust Indenture and Mortgage 104, dated
as of December 22, 1995, between the Owner Trustee and Wilmington
Trust Company, as Loan Trustee (the "Loan Trustee"), as the same
may be amended or supplemented from time to time. All other
capitalized terms used in this Equipment Note and not defined
herein shall have the respective meanings assigned in the Trust
Indenture.
This Equipment Note shall bear interest, payable on
demand, at the Payment Due Rate (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) on any
overdue Original Amount, any overdue Make-Whole Amount, if any,
and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are
overdue, in each case for the period the same is overdue.
Amounts shall be overdue if not paid when due (whether at stated
maturity, by acceleration or otherwise).
The interest rate borne by this Equipment Note shall be
subject to adjustments to the extent, and under the
circumstances, specified by the Registration Rights Agreement.
All payments of Original Amount, interest, Make-Whole
Amount, if any, and other amounts, if any, to be made by the
Owner Trustee hereunder and under the Trust Indenture or the
Participation Agreement shall be payable only from the income and
proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from the Trust
Estate to the extent included in the Trust Indenture Estate to
enable the Loan Trustee to make such payments in accordance with
the terms of Section 2.03 and Article III of the Trust Indenture,
and each holder hereof, by its acceptance of this Equipment Note,
agrees that it will look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for
distribution to the holder hereof as above provided and that none
of the Owner Participant, the Owner Trustee and the Loan Trustee
is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof
for any amounts payable or any liability under this Equipment
Note or, except as provided in the Trust Indenture or in the
Participation Agreement, for any liability under the Trust
Indenture or the Participation Agreement; provided, however, that
nothing herein contained shall limit, restrict or impair the
right of the Loan Trustee, subject always to the terms and
provisions of the Trust Indenture, to accelerate the maturity of
this Equipment Note upon occurrence of an Event of Default under
the Trust Indenture in accordance with Section 4.04(b) of the
Trust Indenture, to bring suit and obtain a judgment against the
Owner Trustee on this Equipment Note for purposes of realizing
upon the Trust Indenture Estate and to exercise all rights and
remedies provided under the Trust Indenture or otherwise realize
upon the Trust Indenture Estate.
There shall be maintained an Equipment Note Register
for the purpose of registering transfers and exchanges of
Equipment Notes at the Corporate Trust Office of the Loan Trustee
or at the office of any successor in the manner provided in
Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due
hereunder shall be payable in Dollars in immediately available
funds at the Corporate Trust Office of the Loan Trustee, or as
otherwise provided in the Trust Indenture. Each such payment
shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in
the case of any final payment with respect to this Equipment
Note, the Equipment Note shall be surrendered promptly thereafter
by the Loan Trustee to the Owner Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment
Note, agrees that, except as provided in the Trust Indenture,
each payment received by it hereunder shall be applied, first, to
the payment of accrued interest on this Equipment Note (as well
as any interest on any overdue Original Amount, any overdue
Make-Whole Amount, if any, or, to the extent permitted by Law,
any overdue interest and other amounts hereunder) to the date of
such payment, second, to the payment of the Original Amount of
this Equipment Note then due, third, to the payment of Make-Whole
Amount, if any, and any other amount due hereunder or under the
Trust Indenture, and fourth, the balance, if any, remaining
thereafter, to the payment of Original Amount of this Equipment
Note remaining unpaid in the inverse order of their normal
maturity.
This Equipment Note is one of the Equipment Notes
referred to in the Trust Indenture which have been or are to be
issued by the Owner Trustee pursuant to the terms of the Trust
Indenture. The Trust Indenture Estate is held by the Loan
Trustee as security, in part, for the Equipment Notes. The
provisions of this Equipment Note are subject to the Trust
Indenture. Reference is hereby made to the Trust Indenture for a
complete statement of the rights and obligations of the holder
of, and the nature and extent of the security for, this Equipment
Note and the rights and obligations of the holders of, and the
nature and extent of the security for, any other Equipment Notes
executed and delivered under the Trust Indenture, as well as for
a statement of the terms and conditions of the Trust created by
the Trust Indenture, to all of which terms and conditions in the
Trust Indenture each holder hereof agrees by its acceptance of
this Equipment Note.
As provided in the Trust Indenture and subject to
certain limitations therein set forth, this Equipment Note is
exchangeable for a like aggregate Original Amount of Equipment
Notes of different authorized denominations, as requested by the
holder surrendering the same.
Prior to due presentment for registration of transfer
of this Equipment Note, the Owner Trustee and the Loan Trustee
shall treat the person in whose name this Equipment Note is
registered as the owner hereof for all purposes, whether or not
this Equipment Note be overdue, and neither of the Owner Trustee
nor the Loan Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as
provided in Sections 2.10, 2.11 and 2.12 of the Trust Indenture
but not otherwise. This Equipment Note is also subject to
exchange and to purchase by the Owner Participant or the Owner
Trustee as provided in Section 2.14 or 2.16 of the Trust
Indenture but not otherwise.
The indebtedness evidenced by this Equipment Note is,
to the extent and in the manner provided in the Trust Indenture,
subordinate and subject in right of payment to the prior payment
in full of the Secured Obligations (as defined in the Trust
Indenture) in respect of Series A Equipment Notes, and this
Equipment Note is issued subject to such provisions. The Note
Holder of this Equipment Note, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and
directs the Loan Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination as
provided in the Trust Indenture and (c) appoints the Loan Trustee
his attorney-in-fact for such purpose.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Loan Trustee by manual
signature, this Equipment Note shall not be entitled to any
benefit under the Trust Indenture or be valid or obligatory for
any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this
Equipment Note to be executed in its corporate name by its
officer thereunto duly authorized on the date hereof.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
as Owner Trustee
By ________________________________
Name: Val T. Orton
Title: Vice President
LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Trust Indenture.
WILMINGTON TRUST COMPANY,
as Loan Trustee
By ________________________________
Name: W. Chris Sponenberg
Title: Financial Services
Officer
Exhibit 4.24
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
PURSUANT TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY,
THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED
UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
FROM SUCH REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
AS OWNER TRUSTEE UNDER TRUST AGREEMENT 104
DATED AS OF JULY 15, 1994
SERIES C LIMITED RECOURSE EQUIPMENT NOTE DUE JANUARY 15, 2013
ISSUED IN CONNECTION WITH THE BOEING MODEL 757-224 AIRCRAFT
BEARING UNITED STATES REGISTRATION NUMBER N17104.
No. C-2 Date: January 31, 1996
$5,319,233.33
INTEREST RATE MATURITY DATE
------------- -------------
9.50% January 15, 2013
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Owner Trustee (herein in
such capacity called the "Owner Trustee") under that certain
Trust Agreement 104, dated as of July 15, 1994, between the Owner
Participant named therein and First Security Bank of Utah,
National Association (herein as such Trust Agreement may be
supplemented or amended from time to time called the "Trust
Agreement"), hereby promises to pay to Wilmington Trust Company,
as Subordination Agent under the Intercreditor Agreement, or the
registered assignee thereof, the principal sum of $5,319,233.33
(the "Original Amount"), together with interest on the amount of
the Original Amount remaining unpaid from time to time
(calculated on the basis of a year of 360 days comprised of
twelve 30-day months) from the date hereof until paid in full at
a rate per annum equal to the Debt Rate. The Original Amount of
this Equipment Note shall be payable in installments on the dates
set forth in Schedule I hereto equal to the corresponding
percentage of the Original Amount of this Equipment Note set
forth in Schedule I hereto. Accrued but unpaid interest shall be
due and payable in quarterly installments commencing on April 15,
1996, and thereafter on July 15, October 15, January 15 and April
15 of each year, to and including January 15, 2013.
Notwithstanding the foregoing, the final payment made on this
Equipment Note shall be in an amount sufficient to discharge in
full the unpaid Original Amount and all accrued and unpaid
interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein,
if any date on which a payment under this Equipment Note becomes
due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next
succeeding Business Day and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount
of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means
the Amended and Restated Trust Indenture and Mortgage 104, dated
as of December 22, 1995, between the Owner Trustee and Wilmington
Trust Company, as Loan Trustee (the "Loan Trustee"), as the same
may be amended or supplemented from time to time. All other
capitalized terms used in this Equipment Note and not defined
herein shall have the respective meanings assigned in the Trust
Indenture.
This Equipment Note shall bear interest, payable on
demand, at the Payment Due Rate (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) on any
overdue Original Amount, any overdue Make-Whole Amount, if any,
and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are
overdue, in each case for the period the same is overdue.
Amounts shall be overdue if not paid when due (whether at stated
maturity, by acceleration or otherwise).
The interest rate borne by this Equipment Note shall be
subject to adjustments to the extent, and under the
circumstances, specified by the Registration Rights Agreement.
All payments of Original Amount, interest, Make-Whole
Amount, if any, and other amounts, if any, to be made by the
Owner Trustee hereunder and under the Trust Indenture or the
Participation Agreement shall be payable only from the income and
proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from the Trust
Estate to the extent included in the Trust Indenture Estate to
enable the Loan Trustee to make such payments in accordance with
the terms of Section 2.03 and Article III of the Trust Indenture,
and each holder hereof, by its acceptance of this Equipment Note,
agrees that it will look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for
distribution to the holder hereof as above provided and that none
of the Owner Participant, the Owner Trustee and the Loan Trustee
is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof
for any amounts payable or any liability under this Equipment
Note or, except as provided in the Trust Indenture or in the
Participation Agreement, for any liability under the Trust
Indenture or the Participation Agreement; provided, however, that
nothing herein contained shall limit, restrict or impair the
right of the Loan Trustee, subject always to the terms and
provisions of the Trust Indenture, to accelerate the maturity of
this Equipment Note upon occurrence of an Event of Default under
the Trust Indenture in accordance with Section 4.04(b) of the
Trust Indenture, to bring suit and obtain a judgment against the
Owner Trustee on this Equipment Note for purposes of realizing
upon the Trust Indenture Estate and to exercise all rights and
remedies provided under the Trust Indenture or otherwise realize
upon the Trust Indenture Estate.
There shall be maintained an Equipment Note Register
for the purpose of registering transfers and exchanges of
Equipment Notes at the Corporate Trust Office of the Loan Trustee
or at the office of any successor in the manner provided in
Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due
hereunder shall be payable in Dollars in immediately available
funds at the Corporate Trust Office of the Loan Trustee, or as
otherwise provided in the Trust Indenture. Each such payment
shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in
the case of any final payment with respect to this Equipment
Note, the Equipment Note shall be surrendered promptly thereafter
by the Loan Trustee to the Owner Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment
Note, agrees that, except as provided in the Trust Indenture,
each payment received by it hereunder shall be applied, first, to
the payment of accrued interest on this Equipment Note (as well
as any interest on any overdue Original Amount, any overdue
Make-Whole Amount, if any, or, to the extent permitted by Law,
any overdue interest and other amounts hereunder) to the date of
such payment, second, to the payment of the Original Amount of
this Equipment Note then due, third, to the payment of Make-Whole
Amount, if any, and any other amount due hereunder or under the
Trust Indenture, and fourth, the balance, if any, remaining
thereafter, to the payment of Original Amount of this Equipment
Note remaining unpaid in the inverse order of their normal
maturity.
This Equipment Note is one of the Equipment Notes
referred to in the Trust Indenture which have been or are to be
issued by the Owner Trustee pursuant to the terms of the Trust
Indenture. The Trust Indenture Estate is held by the Loan
Trustee as security, in part, for the Equipment Notes. The
provisions of this Equipment Note are subject to the Trust
Indenture. Reference is hereby made to the Trust Indenture for a
complete statement of the rights and obligations of the holder
of, and the nature and extent of the security for, this Equipment
Note and the rights and obligations of the holders of, and the
nature and extent of the security for, any other Equipment Notes
executed and delivered under the Trust Indenture, as well as for
a statement of the terms and conditions of the Trust created by
the Trust Indenture, to all of which terms and conditions in the
Trust Indenture each holder hereof agrees by its acceptance of
this Equipment Note.
As provided in the Trust Indenture and subject to
certain limitations therein set forth, this Equipment Note is
exchangeable for a like aggregate Original Amount of Equipment
Notes of different authorized denominations, as requested by the
holder surrendering the same.
Prior to due presentment for registration of transfer
of this Equipment Note, the Owner Trustee and the Loan Trustee
shall treat the person in whose name this Equipment Note is
registered as the owner hereof for all purposes, whether or not
this Equipment Note be overdue, and neither of the Owner Trustee
nor the Loan Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as
provided in Sections 2.10, 2.11 and 2.12 of the Trust Indenture
but not otherwise. This Equipment Note is also subject to
exchange and to purchase by the Owner Participant or the Owner
Trustee as provided in Section 2.14 or 2.16 of the Trust
Indenture but not otherwise.
The indebtedness evidenced by this Equipment Note is,
to the extent and in the manner provided in the Trust Indenture,
subordinate and subject in right of payment to the prior payment
in full of the Secured Obligations (as defined in the Trust
Indenture) in respect of Series A and Series B Equipment Notes,
and this Equipment Note is issued subject to such provisions.
The Note Holder of this Equipment Note, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Loan Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the
subordination as provided in the Trust Indenture and (c) appoints
the Loan Trustee his attorney-in-fact for such purpose.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Loan Trustee by manual
signature, this Equipment Note shall not be entitled to any
benefit under the Trust Indenture or be valid or obligatory for
any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this
Equipment Note to be executed in its corporate name by its
officer thereunto duly authorized on the date hereof.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
as Owner Trustee
By ________________________________
Name: Val T. Orton
Title: Vice President
LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Trust Indenture.
WILMINGTON TRUST COMPANY,
as Loan Trustee
By ________________________________
Name: W. Chris Sponenberg
Title: Financial Services
Officer
Exhibit 4.25
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
PURSUANT TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY,
THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED
UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION
FROM SUCH REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
AS OWNER TRUSTEE UNDER TRUST AGREEMENT 104
DATED AS OF JULY 15, 1994
SERIES D LIMITED RECOURSE EQUIPMENT NOTE DUE JANUARY 15, 2013
ISSUED IN CONNECTION WITH THE BOEING MODEL 757-224 AIRCRAFT
BEARING UNITED STATES REGISTRATION NUMBER N17104.
No. D-2 Date: January 15, 1996
$3,400,000.00
INTEREST RATE MATURITY DATE
------------- -------------
12.48% October 15, 2013
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Owner Trustee (herein in
such capacity called the "Owner Trustee") under that certain
Trust Agreement 104, dated as of July 15, 1994, between the Owner
Participant named therein and First Security Bank of Utah,
National Association (herein as such Trust Agreement may be
supplemented or amended from time to time called the "Trust
Agreement"), hereby promises to pay to Wilmington Trust Company,
as Subordination Agent under the Intercreditor Agreement, or the
registered assignee thereof, the principal sum of $3,400,000.00
(the "Original Amount"), together with interest on the amount of
the Original Amount remaining unpaid from time to time
(calculated on the basis of a year of 360 days comprised of
twelve 30-day months) from the date hereof until paid in full at
a rate per annum equal to the Debt Rate. The Original Amount of
this Equipment Note shall be payable in installments on the dates
set forth in Schedule I hereto equal to the corresponding
percentage of the Original Amount of this Equipment Note set
forth in Schedule I hereto. Accrued but unpaid interest shall be
due and payable in quarterly installments commencing on April 15,
1996, and thereafter on July 15, October 15, January 15 and April
15 of each year, to and including October 15, 2013.
Notwithstanding the foregoing, the final payment made on this
Equipment Note shall be in an amount sufficient to discharge in
full the unpaid Original Amount and all accrued and unpaid
interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein,
if any date on which a payment under this Equipment Note becomes
due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next
succeeding Business Day and if such payment is made on such next
succeeding Business Day, no interest shall accrue on the amount
of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means
the Amended and Restated Trust Indenture and Mortgage 104, dated
as of December 22, 1995, between the Owner Trustee and Wilmington
Trust Company, as Loan Trustee (the "Loan Trustee"), as the same
may be amended or supplemented from time to time. All other
capitalized terms used in this Equipment Note and not defined
herein shall have the respective meanings assigned in the Trust
Indenture.
This Equipment Note shall bear interest, payable on
demand, at the Payment Due Rate (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) on any
overdue Original Amount, any overdue Make-Whole Amount, if any,
and (to the extent permitted by applicable Law) any overdue
interest and any other amounts payable hereunder which are
overdue, in each case for the period the same is overdue.
Amounts shall be overdue if not paid when due (whether at stated
maturity, by acceleration or otherwise).
The interest rate borne by this Equipment Note shall be
subject to adjustments to the extent, and under the
circumstances, specified by the Registration Rights Agreement.
All payments of Original Amount, interest, Make-Whole
Amount, if any, and other amounts, if any, to be made by the
Owner Trustee hereunder and under the Trust Indenture or the
Participation Agreement shall be payable only from the income and
proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner
Trustee shall have sufficient income or proceeds from the Trust
Estate to the extent included in the Trust Indenture Estate to
enable the Loan Trustee to make such payments in accordance with
the terms of Section 2.03 and Article III of the Trust Indenture,
and each holder hereof, by its acceptance of this Equipment Note,
agrees that it will look solely to the income and proceeds from
the Trust Indenture Estate to the extent available for
distribution to the holder hereof as above provided and that none
of the Owner Participant, the Owner Trustee and the Loan Trustee
is personally liable or liable in any manner extending to any
assets other than the Trust Indenture Estate to the holder hereof
for any amounts payable or any liability under this Equipment
Note or, except as provided in the Trust Indenture or in the
Participation Agreement, for any liability under the Trust
Indenture or the Participation Agreement; provided, however, that
nothing herein contained shall limit, restrict or impair the
right of the Loan Trustee, subject always to the terms and
provisions of the Trust Indenture, to accelerate the maturity of
this Equipment Note upon occurrence of an Event of Default under
the Trust Indenture in accordance with Section 4.04(b) of the
Trust Indenture, to bring suit and obtain a judgment against the
Owner Trustee on this Equipment Note for purposes of realizing
upon the Trust Indenture Estate and to exercise all rights and
remedies provided under the Trust Indenture or otherwise realize
upon the Trust Indenture Estate.
There shall be maintained an Equipment Note Register
for the purpose of registering transfers and exchanges of
Equipment Notes at the Corporate Trust Office of the Loan Trustee
or at the office of any successor in the manner provided in
Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due
hereunder shall be payable in Dollars in immediately available
funds at the Corporate Trust Office of the Loan Trustee, or as
otherwise provided in the Trust Indenture. Each such payment
shall be made on the date such payment is due and without any
presentment or surrender of this Equipment Note, except that in
the case of any final payment with respect to this Equipment
Note, the Equipment Note shall be surrendered promptly thereafter
by the Loan Trustee to the Owner Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment
Note, agrees that, except as provided in the Trust Indenture,
each payment received by it hereunder shall be applied, first, to
the payment of accrued interest on this Equipment Note (as well
as any interest on any overdue Original Amount, any overdue
Make-Whole Amount, if any, or, to the extent permitted by Law,
any overdue interest and other amounts hereunder) to the date of
such payment, second, to the payment of the Original Amount of
this Equipment Note then due, third, to the payment of Make-Whole
Amount, if any, and any other amount due hereunder or under the
Trust Indenture, and fourth, the balance, if any, remaining
thereafter, to the payment of Original Amount of this Equipment
Note remaining unpaid in the inverse order of their normal
maturity.
This Equipment Note is one of the Equipment Notes
referred to in the Trust Indenture which have been or are to be
issued by the Owner Trustee pursuant to the terms of the Trust
Indenture. The Trust Indenture Estate is held by the Loan
Trustee as security, in part, for the Equipment Notes. The
provisions of this Equipment Note are subject to the Trust
Indenture. Reference is hereby made to the Trust Indenture for a
complete statement of the rights and obligations of the holder
of, and the nature and extent of the security for, this Equipment
Note and the rights and obligations of the holders of, and the
nature and extent of the security for, any other Equipment Notes
executed and delivered under the Trust Indenture, as well as for
a statement of the terms and conditions of the Trust created by
the Trust Indenture, to all of which terms and conditions in the
Trust Indenture each holder hereof agrees by its acceptance of
this Equipment Note.
As provided in the Trust Indenture and subject to
certain limitations therein set forth, this Equipment Note is
exchangeable for a like aggregate Original Amount of Equipment
Notes of different authorized denominations, as requested by the
holder surrendering the same.
Prior to due presentment for registration of transfer
of this Equipment Note, the Owner Trustee and the Loan Trustee
shall treat the person in whose name this Equipment Note is
registered as the owner hereof for all purposes, whether or not
this Equipment Note be overdue, and neither of the Owner Trustee
nor the Loan Trustee shall be affected by notice to the contrary.
This Equipment Note is subject to redemption as
provided in Sections 2.10, 2.11 and 2.12 of the Trust Indenture
but not otherwise. This Equipment Note is also subject to
exchange and to purchase by the Owner Participant or the Owner
Trustee as provided in Section 2.14 or 2.16 of the Trust
Indenture but not otherwise.
The indebtedness evidenced by this Equipment Note is,
to the extent and in the manner provided in the Trust Indenture,
subordinate and subject in right of payment to the prior payment
in full of the Secured Obligations (as defined in the Trust
Indenture) in respect of Series A, Series B and Series C
Equipment Notes, and this Equipment Note is issued subject to
such provisions. The Note Holder of this Equipment Note, by
accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Loan Trustee on his
behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Trust Indenture
and (c) appoints the Loan Trustee his attorney-in-fact for such
purpose.
Unless the certificate of authentication hereon has
been executed by or on behalf of the Loan Trustee by manual
signature, this Equipment Note shall not be entitled to any
benefit under the Trust Indenture or be valid or obligatory for
any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the Owner Trustee has caused this
Equipment Note to be executed in its corporate name by its
officer thereunto duly authorized on the date hereof.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
as Owner Trustee
By ________________________________
Name: Val T. Orton
Title: Vice President
LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Trust Indenture.
WILMINGTON TRUST COMPANY,
as Loan Trustee
By ________________________________
Name: W. Chris Sponenberg
Title: Financial Services
Officer
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement (Form S-4) and related
Prospectus of Continental Airlines, Inc. for the registration of
the Offer to Exchange its Pass Through Certificates, Series 1996,
totaling $489,267,000 and to the incorporation by reference
therein of our reports dated February 12, 1996, with respect to
the consolidated financial statements and schedules of
Continental Airlines, Inc. included in its Annual Report (Form
10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
Houston, Texas
May 23, 1996
Exhibit 23.5
Continental Airlines, Inc.
2929 Allen Parkway, Suite 2010
Houston, TX 77019
Re: Registration Statement on Form S-4 of
Continental Airlines, Inc.
Ladies and Gentlemen:
We consent to the reference to our name in the text
under the heading "Prospectus Summary - Equipment Notes and
Aircraft" and "Realizable Value of Aircraft" and "Description of
the Aircraft and the Appraisals" of the above - captioned
Registration Statement and to the summary contained in the text
under such headings of the reports prepared by us with respect to
the Aircraft referred to therein.
/s/Fred E. Bearden III
Fred E. Bearden III
President
Aircraft Information Services, Inc.
Date:
Exhibit 23.6
May , 1996
Continental Airlines, Inc.
2929 Allen Parkway, Suite 2010
Houston, TX 77019
Re: Registration Statement on Form S-4 of
Continental Airlines, Inc.
Ladies & Gentlemen:
We consent to the reference to our name in the text
under the heading "Prospectus Summary-Equipment Notes and
Aircraft", "Risk Factors-Risk Factors Relating to the
Certificates-Appraisals" and "Realizable Value of Aircraft" and
"Description of the Aircraft and the Appraisals" of the above-
captioned Registration Statement and to the summary contained in
the text under such headings of the reports prepared by us with
respect to the Aircraft referred to therein.
Sincerely yours,
BK ASSOCIATES, INC.
/s/ John F. Keitz
John F. Keitz
Vice President
ISTAT Certified Senior Appraiser
Exhibit 24.1
POWER OF ATTORNEY
The undersigned officer of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
an officer or director of the Company, and to execute any and all
instruments for the undersigned and in the undersigned's name and
capacity as an officer or director that such person or persons
may deem necessary or advisable to enable the Company to comply
with the Securities Act of 1933, as amended, and any rules,
regulations or requirements of the Securities and Exchange
Commission in connection with that certain Registration Statement
on Form S-4 relating to the Continental Airlines Pass Through
Certificates, Series 1996 (the "Registration Statement"),
including specifically, but not limited to, power and authority
to sign for the undersigned in the capacity as an officer or
director of the Company the Registration Statement, and any and
all amendments thereto, including post-effective amendments, and
the undersigned does hereby ratify and confirm all that such
person or persons shall do or cause to be done by virtue hereof.
/s/Gordon M. Bethune
Printed Name: Gordon M. Bethune
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned officer of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Jeffery A. Smisek and Scott R. Peterson, or either of
them, as the undersigned's true and lawful attorneys in-fact and
agents to do any and all things in the undersigned's name and
behalf in the undersigned's capacity as an officer of the
Company, and to execute any and all instruments for the
undersigned and in the undersigned's name and capacity as an
officer that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as an officer of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Lawrence W. Kellner
Printed Name: Lawrence W. Kellner
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned officer of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Jeffery A. Smisek and Scott R. Peterson, or either of
them, as the undersigned's true and lawful attorneys in-fact and
agents to do any and all things in the undersigned's name and
behalf in the undersigned's capacity as an officer of the
Company, and to execute any and all instruments for the
undersigned and in the undersigned's name and capacity as an
officer that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as an officer or director of the Company the
Registration Statement, and any and all amendments thereto,
including post-effective amendments, and the undersigned does
hereby ratify and confirm all that such person or persons shall
do or cause to be done by virtue hereof.
/s/Michael P. Bonds
Printed Name: Michael P. Bonds
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Thomas J. Barrack, Jr.
Printed Name: Thomas J. Barrack, Jr.
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/David Bonderman
Printed Name: David Bonderman
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Gregory D. Brenneman
Printed Name: Gregory D. Brenneman
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a or director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Joel H. Cowan
Printed Name: Joel H. Cowan
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Patrick Foley
Printed Name: Patrick Foley
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a or director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Rowland C. Frazee
Printed Name: Rowland C. Frazee
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Hollis L. Harris
Printed Name: Hollis L. Harris
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Dean C. Kehler
Printed Name: Dean C. Kehler
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Robert L. Lumpkins
Printed Name: Robert L. Lumpkins
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Douglas H. McCorkindale
Printed Name: Douglas H. McCorkindale
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/David E. Mitchell
Printed Name: David E. Mitchell
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Richard W. Pogue
Printed Name: Richard W. Pogue
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/William S. Price III
Printed Name: William S. Price III
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a that such person or persons may deem necessary or advisable to
enable the Company to comply with the Securities Act of 1933, as
amended, and any rules, regulations or requirements of the
Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Donald L. Sturm
Printed Name: Donald L. Sturm
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Claude I. Taylor
Printed Name: Claude I. Taylor
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Karen Hastie Williams
Printed Name: Karen Hastie Williams
Dated and effective as of April 30, 1996
POWER OF ATTORNEY
The undersigned director of Continental Airlines, Inc., a
Delaware corporation (the "Company"), does hereby constitute and
appoint Lawrence W. Kellner, Jeffery A. Smisek and Scott R.
Peterson, or any of them, as the undersigned's true and lawful
attorneys in-fact and agents to do any and all things in the
undersigned's name and behalf in the undersigned's capacity as a
director of the Company, and to execute any and all instruments
for the undersigned and in the undersigned's name and capacity as
a director that such person or persons may deem necessary or
advisable to enable the Company to comply with the Securities Act
of 1933, as amended, and any rules, regulations or requirements
of the Securities and Exchange Commission in connection with that
certain Registration Statement on Form S-4 relating to the
Continental Airlines Pass Through Certificates, Series 1996 (the
"Registration Statement"), including specifically, but not
limited to, power and authority to sign for the undersigned in
the capacity as a director of the Company the Registration
Statement, and any and all amendments thereto, including post-
effective amendments, and the undersigned does hereby ratify and
confirm all that such person or persons shall do or cause to be
done by virtue hereof.
/s/Charles A. Yamarone
Printed Name: Charles A. Yamarone
Dated and effective as of April 30, 1996
Exhibit 25.1
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO
SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware
51-0055023
(State of incorporation) (I.R.S.
employer
identification
no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CONTINENTAL AIRLINES, INC.
(Exact name of obligor as specified in its charter)
Delaware 74-2099724
(State of incorporation (I.R.S. employer identification
or formation) no.)
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
(Address of principal executive offices) (Zip
Code)
1996-A Pass Through Certificates
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each affiliation:
Based upon an examination of the books and records of
the trustee and upon information furnished by the
obligor, the obligor is not an affiliate of the
trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement
of Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington
Trust Company to commence business and the
authorization of Wilmington Trust Company to exercise
corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, Wilmington Trust Company, a corporation
organized and existing under the laws of Delaware, has duly
caused this Statement of Eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City of
Wilmington and State of Delaware on the 23rd day of May, 1996.
[SEAL] WILMINGTON TRUST COMPANY
Attest: /s/ Sharon M. Brendle By: /s/ Emmett R. Harmon
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act
of the General Assembly of the State of Delaware, entitled "An
Act to Incorporate the Delaware Guarantee and Trust Company",
approved March 2, A.D. 1901, and the name of which company was
changed to "Wilmington Trust Company" by an amendment filed in
the Office of the Secretary of State on March 18, A.D. 1903, and
the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements
pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend
its Charter or Act of Incorporation so that the same as so
altered and amended shall in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust
Company.
Second: - The location of its principal office in the State
of Delaware is at Rodney Square North, in the City of
Wilmington, County of New Castle; the name of its resident
agent is Wilmington Trust Company whose address is Rodney
Square North, in said City. In addition to such principal
office, the said corporation maintains and operates branch
offices in the City of Newark, New Castle County, Delaware,
the Town of Newport, New Castle County, Delaware, at
Claymont, New Castle County, Delaware, at Greenville, New
Castle County Delaware, and at Milford Cross Roads, New
Castle County, Delaware, and shall be empowered to open,
maintain and operate branch offices at Ninth and Shipley
Streets, 418 Delaware Avenue, 2120 Market Street, and 3605
Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the
agency or agencies of the government of the State of
Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on
by this Corporation are to do any or all of the things
herein mentioned as fully and to the same extent as natural
persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any
Court of law or equity and to make and use a common
seal, and alter the seal at pleasure, to hold,
purchase, convey, mortgage or otherwise deal in real
and personal estate and property, and to appoint such
officers and agents as the business of the Corporation
shall require, to make by-laws not inconsistent with
the Constitution or laws of the United States or of
this State, to discount bills, notes or other evidences
of debt, to receive deposits of money, or securities
for money, to buy gold and silver bullion and foreign
coins, to buy and sell bills of exchange, and generally
to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation
which are proper or necessary for the transaction of
the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and
to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and
disposal of property of all descriptions, and to
prepare and execute all papers which may be necessary
or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers
of every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from
executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and
individuals, and from all corporations whether state,
municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking
fund therefor on such terms as may be agreed upon
between the two parties, and in like manner may act as
Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust,
mortgage, bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect
of any contract or agreement, and the fidelity of
persons holding places of responsibility or trust; to
become surety for any person, or persons, for the
faithful performance of any trust, office, duty,
contract or agreement, either by itself or in
conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any
court of record within the State of Delaware or
elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of
Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and
to be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the
State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bank ruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian, bailee,
or in any other trust capacity, it shall not be
required to give bond with surety, but its capital
stock shall be taken and held as security for the
performance of the duties devolving upon it by such
appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds,
mortgages, debentures, shares of capital stock, and
other securities, obligations, contracts and evidences
of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware,
or of the Government of the United States, or of any
state, territory, colony, or possession thereof, or of
any foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures,
notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property, any and all the rights, powers and
privileges of individual owners thereof, including the
right to vote thereon; to invest and deal in and with
any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and
proper, and from time to time to vary or realize such
investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the
whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the
promotion of its said corporate business of investment
and to the extent authorized by law, to lease,
purchase, hold, sell, assign, transfer, pledge,
mortgage and convey real and personal property of any
name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have
the following powers:
(1) To do any or all of the things herein set forth,
to the same extent as natural persons might or could
do, and in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of
the assets and liabilities of any person, firm,
association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to
hold or in any manner to dispose of the whole or any
part of the property so purchased; to conduct in any
lawful manner the whole or any part of any business so
acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of
such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out
contracts of every kind with any person, firm,
association or corporation, and, without limit as to
amount, to draw, make, accept, endorse, discount,
execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other
negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or
any of its operations and businesses, without
restriction to the same extent as natural persons might
or could do, to purchase or otherwise acquire, to hold,
own, to mortgage, sell, convey or otherwise dispose of,
real and personal property, of every class and
description, in any State, District, Territory or
Colony of the United States, and in any foreign country
or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this
paragraph shall (except where otherwise expressed in
said paragraph) be nowise limited or restricted by
reference to or inference from the terms of any other
clause of this or any other paragraph in this charter,
but that the objects, purposes and powers specified in
each of the clauses of this paragraph shall be regarded
as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of
stock which the Corporation shall have authority to issue is
forty-one million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to
time in one or more series as may from time to time be
determined by the Board of Directors each of said series to
be distinctly designated. All shares of any one series of
Preferred Stock shall be alike in every particular, except
that there may be different dates from which dividends, if
any, thereon shall be cumulative, if made cumulative. The
voting powers and the preferences and relative,
participating, optional and other special rights of each
such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any
and all other series at any time outstanding; and, subject
to the provisions of subparagraph 1 of Paragraph (c) of this
Article Fourth, the Board of Directors of the Corporation is
hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a
particular series of Preferred Stock, the voting powers and
the designations, preferences and relative, optional and
other special rights, and the qualifications, limitations
and restrictions of such series, including, but without
limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of
the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to
the dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred
Stock of such series to convert the same into or
exchange the same for, shares of any other class or
classes or of any series of the same or any other class
or classes of stock of the Corporation and the terms
and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series
shall be subject to redemption, and the redemption
price or prices and the time or times at which, and the
terms and conditions on which, Preferred Stock of such
series may be redeemed.
(5) The rights, if any, of the holders of Preferred
Stock of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting
the generality of the foregoing include the right,
voting as a series or by itself or together with other
series of Preferred Stock or all series of Preferred
Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the
payment of dividends on any one or more series of
Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to
preferential dividends on the Preferred Stock (fixed in
accordance with the provisions of section (b) of this
Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements,
if any, with respect to the setting aside of sums as sinking
funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this
Article Fourth), and subject further to any conditions which
may be fixed in accordance with the provisions of section
(b) of this Article Fourth, then and not otherwise the
holders of Common Stock shall be entitled to receive such
dividends as may be declared from time to time by the Board
of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the
provisions of section (b) of this Article Fourth), to
be distributed to the holders of Preferred Stock in the
event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-
up, of the Corporation, the holders of the Common Stock
shall be entitled to receive all of the remaining
assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to
stockholders ratably in proportion to the number of
shares of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by
the provisions of such resolution or resolutions as may
be adopted by the Board of Directors pursuant to
section (b) of this Article Fourth, each holder of
Common Stock shall have one vote in respect of each
share of Common Stock held on all matters voted upon by
the stockholders.
(d) No holder of any of the shares of any class or series
of stock or of options, warrants or other rights to purchase
shares of any class or series of stock or of other
securities of the Corporation shall have any preemptive
right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or
series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures
or other securities convertible into or exchangeable for
stock of the Corporation of any class or series, or carrying
any right to purchase stock of any class or series, but any
such unissued stock, additional authorized issue of shares
of any class or series of stock or securities convertible
into or exchangeable for stock, or carrying any right to
purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms,
corporations or associations, whether such holders or
others, and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each
series of Preferred Stock in relation to the relative
powers, preferences and rights of each other series of
Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section
(b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time
outstanding shall not be required for the issuance by the
Board of Directors of any other series of Preferred Stock
whether or not the powers, preferences and rights of such
other series shall be fixed by the Board of Directors as
senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred
Stock adopted pursuant to section (b) of this Article Fourth
that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the
outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of
Preferred Stock.
(f) Subject to the provisions of section (e), shares of any
series of Preferred Stock may be issued from time to time as
the Board of Directors of the Corporation shall determine
and on such terms and for such consideration as shall be
fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time
as the Board of Directors of the Corporation shall determine
and on such terms and for such consideration as shall be
fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be
increased or decreased from time to time by the affirmative
vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation
shall be conducted and managed by a Board of Directors. The
number of directors constituting the entire Board shall be
not less than five nor more than twenty-five as fixed from
time to time by vote of a majority of the whole Board,
provided, however, that the number of directors shall not be
reduced so as to shorten the term of any director at the
time in office, and provided further, that the number of
directors constituting the whole Board shall be twenty-four
until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three
classes, as nearly equal in number as the then total number
of directors constituting the whole Board permits, with the
term of office of one class expiring each year. At the
annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of
the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and
directors of the third class shall be elected to hold office
for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and
any newly created directorships resulting from any increase
in the directors, may be filled by the Board of Directors,
acting by a majority of the directors then in office,
although less than a quorum, and any directors so chosen
shall hold office until the next annual election of
directors. At such election, the stockholders shall elect a
successor to such director to hold office until the next
election of the class for which such director shall have
been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall
shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or
the By-Laws of the Corporation), any director or the entire
Board of Directors of the Corporation may be removed at any
time without cause, but only by the affirmative vote of the
holders of two-thirds or more of the outstanding shares of
capital stock of the Corporation entitled to vote generally
in the election of directors (considered for this purpose as
one class) cast at a meeting of the stockholders called for
that purpose.
(d) Nominations for the election of directors may be made
by the Board of Directors or by any stockholder entitled to
vote for the election of directors. Such nominations shall
be made by notice in writing, delivered or mailed by first
class United States mail, postage prepaid, to the Secretary
of the Corporation not less than 14 days nor more than 50
days prior to any meeting of the stockholders called for the
election of directors; provided, however, that if less than
21 days' notice of the meeting is given to stockholders,
such written notice shall be delivered or mailed, as
prescribed, to the Secretary of the Corporation not later
than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of
nominations which are proposed by the Board of Directors
shall be given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i)
the name, age, business address and, if known, residence
address of each nominee proposed in such notice, (ii) the
principal occupation or employment of such nominee and (iii)
the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was
not made in accordance with the foregoing procedure, and if
he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at
any annual or special meeting of stockholders of the
Corporation may be taken without a meeting, and the power of
stockholders to consent in writing, without a meeting, to
the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from
time to time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given
the same powers, rights and privileges as may be conferred
upon corporations organized under the Act entitled "An Act
Providing a General Corporation Law", approved March 10,
1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private
Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their
number to constitute an Executive Committee, which
Committee, to the extent provided in said resolution, or in
the By-Laws of the Company, shall have and may exercise all
of the powers of the Board of Directors in the management of
the business and affairs of the Corporation, and shall have
power to authorize the seal of the Corporation to be affixed
to all papers which may require it.
Eleventh: - The private property of the stockholders shall
not be liable for the payment of corporate debts to any
extent whatever.
Twelfth: - The Corporation may transact business in any part
of the world.
Thirteenth: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of
the Corporation by a vote of the majority of the entire
Board. The stockholders may make, alter or repeal any By-
Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election
of directors (considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time
to time designated by the Board, and the Directors may keep
the books of the Company outside of the State of Delaware at
such places as may be from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote
required by law, and except as otherwise expressly provided
in sections (b) and (c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with or into
(i) any Interested Stockholder (as hereinafter defined)
or (ii) any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of related transactions) to or with any
Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation
or any Subsidiary having an aggregate fair market value
of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or
any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for
cash, securities or other property (or a combination
thereof) having an aggregate fair market value of
$1,000,000 or more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder, shall require
the affirmative vote of the holders of at least two-
thirds of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the
election of directors, considered for the purpose of
this Article Fifteenth as one class ("Voting Shares").
Such affirmative vote shall be required notwithstanding
the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any
agreement with any national securities exchange or
otherwise.
(2) The term "business combination" as used in
this Article Fifteenth shall mean any transaction
which is referred to any one or more of clauses
(A) through (E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article
Fifteenth shall not be applicable to any particular
business combination and such business combination
shall require only such affirmative vote as is required
by law and any other provisions of the Charter or Act
of Incorporation of By-Laws if such business
combination has been approved by a majority of the
whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation
or other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation
or any Subsidiary) who or which as of the record date for
the determination of stockholders entitled to notice of and
to vote on such business combination, or immediately prior
to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly,
of more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial
owner, directly or indirectly, of not less than 10% of
the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in
any share of capital stock of the Corporation which
were at any time within two years prior thereto
beneficially owned by any Interested Stockholder, and
such assignment or succession shall have occurred in
the course of a transaction or series of transactions
not involving a public offering within the meaning of
the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting
Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or
indirectly, by any other person with which such first
mentioned person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of
any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
deemed owned through application of paragraph (3) above but
shall not include any other Voting Shares which may be
issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective
meanings given those terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule
3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect in December
31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the
definition of Investment Stockholder set forth in paragraph
(2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
Fifteenth on the basis of information known to them,
(1) the number of Voting Shares beneficially owned by
any person (2) whether a person is an Affiliate or
Associate of another, (3) whether a person has an
agreement, arrangement or understanding with another as
to the matters referred to in paragraph (3) of section
(c), or (4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation,
or any Subsidiary has an aggregate fair market value of
$1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall
be construed to relieve any Interested Stockholder from
any fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this
Charter or Act of Incorporation or the By-Laws of the
Corporation (and in addition to any other vote that may be
required by law, this Charter or Act of Incorporation by the
By-Laws), the affirmative vote of the holders of at least
two-thirds of the outstanding shares of the capital stock of
the Corporation entitled to vote generally in the election
of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this
Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not
be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a Director,
except to the extent such exemption from liability or
limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter
be amended.
(b) Any repeal or modification of the foregoing
paragraph shall not adversely affect any right or
protection of a Director of the Corporation existing
hereunder with respect to any act or omission occurring
prior to the time of such repeal or modification."
I . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . Secretary of Wilmington Trust
Company, do hereby certify that the foregoing is a
true and correct copy of the Charter or Act of
Incorporation of Wilmington Trust Company, as
heretofore amended and changed from time to time,
copies of which, certified by the Secretary of the
State of Delaware, are on file in the office of
Wilmington Trust Company.
Date . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
Secretary
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on February 21, 1991
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held
on the third Thursday in April each year at the principal office
at the Company or at such other date, time, or place as may be
designated by resolution by the Board of Directors.
Section 2. Special meetings of all stockholders may be
called at any time by the Board of Directors, the Chairman of the
Board or the President.
Section 3. Notice of all meetings of the stockholders shall
be given by mailing to each stockholder at least ten (10 days
before said meeting, at his last known address, a written or
printed notice fixing the time and place of such meeting.
Section 4. A majority in the amount of the capital stock of
the Company issued and outstanding on the record date, as herein
determined, shall constitute a quorum at all meetings of
stockholders for the transaction of any business, but the holders
of a small number of shares may adjourn, from time to time,
without further notice, until a quorum is secured. At each
annual or special meeting of stockholders, each stockholder shall
be entitled to one vote, either in person or by proxy, for each
shares of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as
determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of
Directors shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-
two (72) years shall be nominated for election to the Board of
Directors of the Company, provided, however, that this limitation
shall not apply to any person who was serving as director of the
Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold
office for three years or until their successors are elected and
qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall
be held on the third Thursday of each month at the principal
office of the Company, or at such other place and time as may be
designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may
be called at any time by the Chairman of the Board of Directors
or by the President, and shall be called upon the written request
of a majority of the directors.
Section 7. A majority of the directors elected and
qualified shall be necessary to constitute a quorum for the
transaction of business at any meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each
director of any special meeting of the Board of Directors, and of
any change in the time or place of any regular meeting, stating
the time and place of such meeting, which shall be mailed not
less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board
of Directors, although less than a quorum, shall have the right
to elect the successor who shall hold office for the remainder of
the full term of the class of directors in which the vacancy
occurred, and until such director's successor shall have been
duly elected and qualified.
Section 10. The Board of Directors at its first meeting
after its election by the stockholders shall appoint an Executive
Committee, a Trust Committee, an Audit Committee and a
Compensation Committee, and shall elect from its own members a
Chairman of the Board of Directors and a President who may be the
same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person,
may appoint at any time such other committees and elect or
appoint such other officers as it may deem advisable. The Board
of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove,
with or without cause, any member of any Committee appointed by
it or any associate director or officer elected by it and may
appoint or elect his successor.
Section 12. The Board of Directors may designate an officer
to be in charge of such of the departments or division of the
Company as it may deem advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of
not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during
the pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to
transact all business for and in behalf of the Company that may
be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at
least once a week in each week the Board is not regularly
scheduled to meet. A majority of its members shall be necessary
to constitute a quorum for the transaction of business. Special
meetings of the Executive Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors
at its next meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the
Company, and shall direct the disposal of the same, in accordance
with such rules and regulations as the Board of Directors from
time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the
affairs and business of the Company by its directors and officers
as contemplated by these By-Laws any two available members of the
Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company
in accordance with the provisions of Article III of these By-
Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available
for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to
the Trust Committee under Article III Section 2 hereof. In the
event of the unavailability, at such time, of a minimum of two
members of such Executive Committee, any three available
directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company
in accordance with the foregoing provisions of this Section.
This By-Law shall be subject to implementation by Resolutions of
the Board of Directors presently existing or hereafter passed
from time to time for that purpose, and any provisions of these
By-Laws(other than this Section) and any resolutions which are
contrary to the provisions of this Section or to the provisions
of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any
interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other
provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not
more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of
Directors and who shall hold office during the pleasure of the
Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust
funds, in all matters, however, being subject to the approval of
the Board of Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at
least once a month. A majority of its members shall be necessary
to constitute a quorum for the transaction of business. Special
meetings of the Trust Committee may be held at any time when a
quorum is present.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of
Directors.
(E) The Trust Committee shall have the power to
appoint Committees and/or designate officers or employees of the
Company to whom supervision over the investment of trust funds
may be delegated when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its
own members, none of whom shall be an officer of the Company, and
shall hold office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however
subject to the approval of the Board of Directors; it shall
consider all matters brought to its attention by the officer in
charge of the Audit Division, review all reports of examination
of the Company made by any governmental agency or such
independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or
with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper
for the transaction of its business, and a majority of its
Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed
of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of
the Company and who shall hold office during the pleasure of the
Board.
(B) The Compensation Committee shall in general
advise upon all matters of policy concerning the Company brought
to its attention by the management and from time to time review
the management of the Company, major organizational matters,
including salaries and employee benefits and specifically shall
administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee,
the Chairman of the Board of Directors, or the President of the
Company.
Section 5. Associate Directors
(A) Any person who has served as a director may
be elected by the Board of Directors as an associate director, to
serve during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion
of all matters brought to the Board, with the exception that he
would have no right to vote. An associate director will be
eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active
directors.
Section 6. Absence or Disqualification of Any Member of a
Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws
of this Company, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member
of the Board of Directors to act at the meeting in the place of
any such absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall
preside at all meetings of the Board and shall have such further
authority and powers and shall perform such duties as the Board
of Directors may from time to time confer and direct. He shall
also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of
the Company.
Section 2. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed
upon him by statute or assigned to him by the Board of Directors
in the absence of the Chairman of the Board the President shall
have the powers and duties of the Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the
President as designated by the Board of Directors, shall carry
into effect all legal directions of the Executive Committee and
of the Board of Directors, and shall at all times exercise
general supervision over the interest, affairs and operations of
the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents,
however denominated by the Board of Directors, who may at any
time perform all the duties of the Chairman of the Board of
Directors and/or the President and such other powers and duties
as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or
the President and by the officer in charge of the department or
division to which they are assigned.
Section 5. The Secretary shall attend to the giving of
notice of meetings of the stockholders and the Board of
Directors, as well as the Committees thereof, to the keeping of
accurate minutes of all such meetings and to recording the same
in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and
mailed well in advance of the scheduled date of any other
meeting. He shall have custody of the corporate seal and shall
affix the same to any documents requiring such corporate seal and
to attest the same.
Section 6. The Treasurer shall have general supervision
over all assets and liabilities of the Company. He shall be
custodian of and responsible for all monies, funds and valuables
of the Company and for the keeping of proper records of the
evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the
expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the
Company, and perform such other duties as may be assigned to him
from time to time by the Board of Directors of the Executive
Committee.
Section 7. There may be a Controller who shall exercise
general supervision over the internal operations of the Company,
including accounting, and shall render to the Board of Directors
at appropriate times a report relating to the general condition
and internal operations of the Company.
There may be one or more subordinate accounting or
controller officers however denominated, who may perform the
duties of the Controller and such duties as may be prescribed by
the Controller.
Section 8. The officer designated by the Board of Directors
to be in charge of the Audit Division of the Company with such
title as the Board of Directors shall prescribe, shall report to
and be directly responsible only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of
the Auditor and such duties as may be prescribed by the officer
in charge of the Audit Division.
Section 9. There may be one or more officers, subordinate
in rank to all Vice Presidents with such functional titles as
shall be determined from time to time by the Board of Directors,
who shall ex officio hold the office Assistant Secretary of this
Company and who may perform such duties as may be prescribed by
the officer in charge of the department or division to whom they
are assigned.
Section 10. The powers and duties of all other officers of
the Company shall be those usually pertaining to their respective
offices, subject to the direction of the Board of Directors, the
Executive Committee, Chairman of the Board of Directors or the
President and the officer in charge of the department or division
to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the
books of the Company and a transfer book shall be kept in which
all transfers of stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of
the President or any Vice President, however denominated by the
Board of Directors and countersigned by the Secretary or
Treasurer or an Assistant Secretary, and the seal of the
corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only
upon the books of the Company by the holder thereof or his
attorney, upon surrender of the certificate properly endorsed.
Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate
certificates of stock shall be issued only upon giving such
security as may be satisfactory to the Board of Directors or the
Executive Committee.
Section 3. The Board of Directors of the Company is
authorized to fix in advance a record date for the determination
of the stockholders entitled to notice of, and to vote at, any
meeting of stockholders and any adjournment thereof, or entitled
to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change,
conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which
record date shall not be more than 60 nor less than 10 days
proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in
the following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the
calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any
Vice President, however denominated by the Board of Directors,
shall have full power and authority to enter into, make, sign,
execute, acknowledge and/or deliver and the Secretary or any
Assistant Secretary shall have full power and authority to attest
and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds,
notes, mortgages and all other instruments incident to the
business of this Company or in acting as executor, administrator,
guardian, trustee, agent or in any other fiduciary or
representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in
the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of
Directors or the Executive Committee, and any and all such
instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the
Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the
Company, other than salaried officers of the Company, shall be
paid such reasonable honoraria or fees for attending meetings of
the Board of Directors as the Board of Directors may from time to
time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the
Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall
from time to time determine and directors and associate directors
may be employed by the Company for such special services as the
Board of Directors may from time to time determine and shall be
paid for such special services so performed reasonable
compensation as may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was
or is made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding") by
reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent
of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary or agent
of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect
to employee benefit plans, against all liability and loss
suffered and expenses reasonably incurred by such person. The
Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was
authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final
disposition, provided, however, that the payment of expenses
incurred by a Director officer in his capacity as a Director or
officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director
or officer to repay all amounts advanced if it should be
ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety
days after a written claim therefor has been received by the
Corporation the claimant may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden
of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision
of the Charter or Act of Incorporation, these By-Laws, agreement,
vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or
omission occurring prior to the time of such repeal or
modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or
repealed, in whole or in part, and any new By-Law or By-Laws
adopted at any regular or special meeting of the Board of
Directors by a vote of the majority of all the members of the
Board of Directors then in office.
I, . . . . . . . . . . . . . . . . . . . .
Assistant Secretary of Wilmington Trust
Company, do hereby certify that the foregoing
is a true and correct copy of the By-Laws of
the Wilmington Trust Company.
Date . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Assistant Secretary
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of
1939, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District
authorities may be furnished by such authorities to the
Securities Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 23, 1996 By: /s/ Emmett R. Harmon
Name: Emmett R. Harmon
Title: Vice President
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been
approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state publication
requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of
WILMINGTON
Name of Bank City
in the State of DELAWARE , at the close of business on March
31,1996.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coins . . . . . . . . . . . . . . . . . . . 198,158
Interest-bearing balances . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . 536,638
Available-for-sale securities. . . . . . . . . . . . . 862,050
Federal funds sold . . . . . . . . . . . . . . . . . . 82,000
Securities purchased under agreements to resell. . . . 25,000
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . 3,404,372
LESS: Allowance for loan and lease losses. . . . 48,153
LESS: Allocated transfer risk reserve. . . . . . 0
Loans and leases, net of unearned income,
allowance, and reserve. . . . . . . . . . . . . 3,356,219
Assets held in trading accounts. . . . . . . . . . . . 0
Premises and fixed assets (including capitalized
leases). . . . . . . . . . . . . . . . . . . . . . . 76,915
Other real estate owned. . . . . . . . . . . . . . . . 16,314
Investments in unconsolidated subsidiaries and
associated companies . . . . . . . . . . . . . . . . 146
CONTINUED ON NEXT PAGE
Customers' liability to this bank on acceptances
outstanding. . . . . . . . . . . . . . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . 4,403
Other assets . . . . . . . . . . . . . . . . . . . . . 107,240
Total assets . . . . . . . . . . . . . . . . . . . . . 5,265,083
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . 3,450,823
Noninterest-bearing . . . . . . . . . . . . . . . 689,843
Interest-bearing. . . . . . . . . . . . . . . . . 2,760,980
Federal funds purchased. . . . . . . . . . . . . . . . 99,885
Securities sold under agreements to
repurchase . . . . . . . . . . . . . . . . . . . . . 198,506
Demand notes issued to the U.S. Treasury . . . . . . . 38,856
Trading liabilities. . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less. . . . 930,611
With original maturity of more than one year. . . 28,000
Mortgage indebtedness and obligations under
capitalized leases . . . . . . . . . . . . . . . . . . 0
Bank's liability on acceptances executed
and outstanding. . . . . . . . . . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . 0
Other liabilities. . . . . . . . . . . . . . . . . . . 100,832
Total liabilities. . . . . . . . . . . . . . . . . . . 4,847,513
Limited-life preferred stock and related surplus . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . 500
Surplus. . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . 354,791
Net unrealized holding gains (losses) on
available-for-sale securities. . . . . . . . . . . . 161
Total equity capital . . . . . . . . . . . . . . . . . 417,570
Total liabilities, limited-life preferred stock,
and equity capital . . . . . . . . . . . . . . . . . 5,265,083
Exhibit 25.2
Registration No.
- -----------------------------------------------------------------
- -----------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO
SECTION 305(b)(2) X
---
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CONTINENTAL AIRLINES, INC.
(Exact name of obligor as specified in its charter)
Delaware 74-2099724
(State of incorporation (I.R.S. employer identification no.)
or formation)
2929 Allen Parkway,
Suite 2010
Houston, Texas 77019
(Address of principal (Zip Code)
executive offices)
1996-B Pass Through Certificates
(Title of the indenture securities)
- -----------------------------------------------------------------
- --
- ---------------------------------------------------------------
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement
of Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington
Trust Company to commence business and the
authorization
of Wilmington Trust Company to exercise corporate trust
powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, Wilmington Trust Company, a corporation
organized and existing under the laws of Delaware, has duly
caused
this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of
Wilmington and State of Delaware on the 23rd day of May, 1996.
[SEAL] WILMINGTON TRUST COMPANY
Attest:/s/ Sharon M. Brendle By: /s/ Emmett R. Harmon
--------------------- --------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act
of
the General Assembly of the State of Delaware, entitled "An Act
to
Incorporate the Delaware Guarantee and Trust Company", approved
March 2, A.D. 1901, and the name of which company was changed to
"Wilmington Trust Company" by an amendment filed in the Office of
the Secretary of State on March 18, A.D. 1903, and the Charter or
Act of Incorporation of which company has been from time to time
amended and changed by merger agreements pursuant to the
corporation law for state banks and trust companies of the State
of
Delaware, does hereby alter and amend its Charter or Act of
Incorporation so that the same as so altered and amended shall in
its entirety read as follows:
First: - The name of this corporation is Wilmington Trust
Company.
Second: - The location of its principal office in the State
of
Delaware is at Rodney Square North, in the City of
Wilmington,
County of New Castle; the name of its resident agent is
Wilmington Trust Company whose address is Rodney Square
North,
in said City. In addition to such principal office, the
said
corporation maintains and operates branch offices in the
City
of Newark, New Castle County, Delaware, the Town of Newport,
New Castle County, Delaware, at Claymont, New Castle County,
Delaware, at Greenville, New Castle County Delaware, and at
Milford Cross Roads, New Castle County, Delaware, and shall
be
empowered to open, maintain and operate branch offices at
Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of
Wilmington,
New Castle County, Delaware, and such other branch offices
or
places of business as may be authorized from time to time by
the agency or agencies of the government of the State of
Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on
by
this Corporation are to do any or all of the things herein
mentioned as fully and to the same extent as natural persons
might or could do and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any
Court
of law or equity and to make and use a common seal, and
alter the seal at pleasure, to hold, purchase, convey,
mortgage or otherwise deal in real and personal estate
and property, and to appoint such officers and agents
as
the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws
of
the United States or of this State, to discount bills,
notes or other evidences of debt, to receive deposits
of
money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all
the powers, rights, privileges and franchises incident
to
a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and
to
prepare and give certificates of title for any lands or
premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and
disposal
of property of all descriptions, and to prepare and
execute all papers which may be necessary or proper in
such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers
of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from
executors,
administrators, guardians, public officers, courts,
receivers, assignees, trustees, and from all
fiduciaries,
and from all other persons and individuals, and from
all
corporations whether state, municipal, corporate or
private, and to rent boxes, safes, vaults and other
receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking
fund
therefor on such terms as may be agreed upon between
the
two parties, and in like manner may act as Treasurer of
any corporation or municipality.
(7) To act as Trustee under any deed of trust,
mortgage,
bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect
of
any contract or agreement, and the fidelity of persons
holding places of responsibility or trust; to become
surety for any person, or persons, for the faithful
performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations,
or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or
decree to be entered in any court of record within the
State of Delaware or elsewhere, or which may now or
hereafter be required by any law, judge, officer or
court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and
to
be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the
State
of Delaware or elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in
bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held
as
security for the performance of the duties devolving
upon
it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds,
mortgages, debentures, shares of capital stock, and
other
securities, obligations, contracts and evidences of
indebtedness, of any private, public or municipal
corporation within and without the State of Delaware,
or
of the Government of the United States, or of any
state,
territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures,
notes,
shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other
property,
any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the
moneys
of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to
time to vary or realize such investments; to issue
bonds
and secure the same by pledges or deeds of trust or
mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell
and pledge such bonds, as and when the Board of
Directors
shall determine, and in the promotion of its said
corporate business of investment and to the extent
authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate
or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have
the following powers:
(1) To do any or all of the things herein set forth,
to
the same extent as natural persons might or could do,
and
in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of
the
assets and liabilities of any person, firm, association
or corporation, and to pay for the same in cash, stock
of
this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and
to
exercise all the powers necessary or convenient in and
about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out
contracts
of every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw,
make, accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or
any
of its operations and businesses, without restriction
to
the same extent as natural persons might or could do,
to
purchase or otherwise acquire, to hold, own, to
mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and
in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this
paragraph
shall (except where otherwise expressed in said
paragraph) be nowise limited or restricted by reference
to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that
the
objects, purposes and powers specified in each of the
clauses of this paragraph shall be regarded as
independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of
stock which the Corporation shall have authority to issue is
forty-one million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to
time
in one or more series as may from time to time be determined
by the Board of Directors each of said series to be
distinctly
designated. All shares of any one series of Preferred Stock
shall be alike in every particular, except that there may be
different dates from which dividends, if any, thereon shall
be
cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other
special rights of each such series, and the qualifications,
limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding;
and, subject to the provisions of subparagraph 1 of
Paragraph
(c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of
any
shares of a particular series of Preferred Stock, the voting
powers and the designations, preferences and relative,
optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the
following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of
the
Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to
the
dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred
Stock
of such series to convert the same into or exchange the
same for, shares of any other class or classes or of
any
series of the same or any other class or classes of
stock
of the Corporation and the terms and conditions of such
conversion or exchange;
(4) Whether or not Preferred Stock of such series
shall
be subject to redemption, and the redemption price or
prices and the time or times at which, and the terms
and
conditions on which, Preferred Stock of such series may
be redeemed.
(5) The rights, if any, of the holders of Preferred
Stock of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or
sale
of assets, dissolution or winding-up, of the
Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting
the
generality of the foregoing include the right, voting
as
a series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a
class, to elect one or more directors of the
Corporation
if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock
or
under such circumstances and on such conditions as the
Board of Directors may determine.
(c) (1) After the requirements with respect to
preferential
dividends on the Preferred Stock (fixed in accordance with
the
provisions of section (b) of this Article Fourth), if any,
shall have been met and after the Corporation shall have
complied with all the requirements, if any, with respect to
the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions
of
section (b) of this Article Fourth), and subject further to
any conditions which may be fixed in accordance with the
provisions of section (b) of this Article Fourth, then and
not
otherwise the holders of Common Stock shall be entitled to
receive such dividends as may be declared from time to time
by
the Board of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the
provisions
of section (b) of this Article Fourth), to be
distributed
to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation, the holders of the Common Stock shall be
entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held
by them respectively.
(3) Except as may otherwise be required by law or by
the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section
(b)
of this Article Fourth, each holder of Common Stock
shall
have one vote in respect of each share of Common Stock
held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series
of
stock or of options, warrants or other rights to purchase
shares of any class or series of stock or of other
securities
of the Corporation shall have any preemptive right to
purchase
or subscribe for any unissued stock of any class or series
or
any additional shares of any class or series to be issued by
reason of any increase of the authorized capital stock of
the
Corporation of any class or series, or bonds, certificates
of
indebtedness, debentures or other securities convertible
into
or exchangeable for stock of the Corporation of any class or
series, or carrying any right to purchase stock of any class
or series, but any such unissued stock, additional
authorized
issue of shares of any class or series of stock or
securities
convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such
persons, firms, corporations or associations, whether such
holders or others, and upon such terms as may be deemed
advisable by the Board of Directors in the exercise of its
sole discretion.
(e) The relative powers, preferences and rights of each
series of Preferred Stock in relation to the relative
powers,
preferences and rights of each other series of Preferred
Stock
shall, in each case, be as fixed from time to time by the
Board of Directors in the resolution or resolutions adopted
pursuant to authority granted in section (b) of this Article
Fourth and the consent, by class or series vote or
otherwise,
of the holders of such of the series of Preferred Stock as
are
from time to time outstanding shall not be required for the
issuance by the Board of Directors of any other series of
Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of
them; provided, however, that the Board of Directors may
provide in the resolution or resolutions as to any series of
Preferred Stock adopted pursuant to section (b) of this
Article Fourth that the consent of the holders of a majority
(or such greater proportion as shall be therein fixed) of
the
outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of
Preferred Stock.
(f) Subject to the provisions of section (e), shares of any
series of Preferred Stock may be issued from time to time as
the Board of Directors of the Corporation shall determine
and
on such terms and for such consideration as shall be fixed
by
the Board of Directors.
(g) Shares of Common Stock may be issued from time to time
as
the Board of Directors of the Corporation shall determine
and
on such terms and for such consideration as shall be fixed
by
the Board of Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be
increased or decreased from time to time by the affirmative
vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation
shall be conducted and managed by a Board of Directors. The
number of directors constituting the entire Board shall be
not
less than five nor more than twenty-five as fixed from time
to
time by vote of a majority of the whole Board, provided,
however, that the number of directors shall not be reduced
so
as to shorten the term of any director at the time in
office,
and provided further, that the number of directors
constituting the whole Board shall be twenty-four until
otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three
classes, as nearly equal in number as the then total number
of
directors constituting the whole Board permits, with the
term
of office of one class expiring each year. At the annual
meeting of stockholders in 1982, directors of the first
class
shall be elected to hold office for a term expiring at the
next succeeding annual meeting, directors of the second
class
shall be elected to hold office for a term expiring at the
second succeeding annual meeting and directors of the third
class shall be elected to hold office for a term expiring at
the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created
directorships resulting from any increase in the directors,
may be filled by the Board of Directors, acting by a
majority
of the directors then in office, although less than a
quorum,
and any directors so chosen shall hold office until the next
annual election of directors. At such election, the
stockholders shall elect a successor to such director to
hold
office until the next election of the class for which such
director shall have been chosen and until his successor
shall
be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or
the
By-Laws of the Corporation), any director or the entire
Board
of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the
holders
of two-thirds or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that
purpose.
(d) Nominations for the election of directors may be made
by
the Board of Directors or by any stockholder entitled to
vote
for the election of directors. Such nominations shall be
made
by notice in writing, delivered or mailed by first class
United States mail, postage prepaid, to the Secretary of the
Corporation not less than 14 days nor more than 50 days
prior
to any meeting of the stockholders called for the election
of
directors; provided, however, that if less than 21 days'
notice of the meeting is given to stockholders, such written
notice shall be delivered or mailed, as prescribed, to the
Secretary of the Corporation not later than the close of the
seventh day following the day on which notice of the meeting
was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i)
the
name, age, business address and, if known, residence address
of each nominee proposed in such notice, (ii) the principal
occupation or employment of such nominee and (iii) the
number
of shares of stock of the Corporation which are beneficially
owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was
not
made in accordance with the foregoing procedure, and if he
should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at
any annual or special meeting of stockholders of the
Corporation may be taken without a meeting, and the power of
stockholders to consent in writing, without a meeting, to
the
taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from
time to time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given
the
same powers, rights and privileges as may be conferred upon
corporations organized under the Act entitled "An Act
Providing a General Corporation Law", approved March 10,
1899,
as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private
Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their
number
to constitute an Executive Committee, which Committee, to
the
extent provided in said resolution, or in the By-Laws of the
Company, shall have and may exercise all of the powers of
the
Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to
authorize
the seal of the Corporation to be affixed to all papers
which
may require it.
Eleventh: - The private property of the stockholders shall
not
be liable for the payment of corporate debts to any extent
whatever.
Twelfth: - The Corporation may transact business in any part
of the world.
Thirteenth: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of
the Corporation by a vote of the majority of the entire
Board.
The stockholders may make, alter or repeal any By-Law
whether
or not adopted by them, provided however, that any such
additional By-Laws, alterations or repeal may be adopted
only
by the affirmative vote of the holders of two-thirds or more
of the outstanding shares of capital stock of the
Corporation
entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time
to
time designated by the Board, and the Directors may keep the
books of the Company outside of the State of Delaware at
such
places as may be from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote
required
by law, and except as otherwise expressly provided in
sections
(b) and (c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with or into
(i)
any Interested Stockholder (as hereinafter defined) or
(ii) any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of related transactions) to or with any
Interested
Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of
$1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or
any
Subsidiary to any Interested Stockholder or any
Affiliate
of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $1,000,000 or
more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least
two-
thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of
directors, considered for the purpose of this Article Fifteenth
as
one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required,
or
that some lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article Fifteenth shall mean any transaction
which is referred to any one or more of clauses
(A)
through (E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article
Fifteenth shall not be applicable to any particular
business combination and such business combination
shall
require only such affirmative vote as is required by
law
and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination
has
been approved by a majority of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation
or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation
or any Subsidiary) who or which as of the record date for
the
determination of stockholders entitled to notice of and to
vote on such business combination, or immediately prior to
the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly,
of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial
owner,
directly or indirectly, of not less than 10% of the
then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in
any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such
assignment
or succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities
Act
of 1933.
(3) A person shall be the "beneficial owner" of any Voting
Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement,
arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or
indirectly, by any other person with which such first
mentioned person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of
any
shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
deemed
owned through application of paragraph (3) above but shall
not
include any other Voting Shares which may be issuable
pursuant
to any agreement, or upon exercise of conversion rights,
warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective
meanings given those terms in Rule 12b-2 of the General
Rules
and Regulations under the Securities Exchange Act of 1934,
as
in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule
3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect in December
31,
1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition
of
Investment Stockholder set forth in paragraph (2) of this
section (c), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
Fifteenth on the basis of information known to them,
(1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or
Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation,
or
any Subsidiary has an aggregate fair market value of
$1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall
be
construed to relieve any Interested Stockholder from
any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this
Charter or Act of Incorporation or the By-Laws of the
Corporation (and in addition to any other vote that may be
required by law, this Charter or Act of Incorporation by the
By-Laws), the affirmative vote of the holders of at least
two-
thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) shall
be
required to amend, alter or repeal any provision of Articles
Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter or
Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not
be
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a Director, except
to
the extent such exemption from liability or limitation
thereof
is not permitted under the Delaware General Corporation Laws
as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing
paragraph shall not adversely affect any right or
protection of a Director of the Corporation existing
hereunder with respect to any act or omission occurring
prior to the time of such repeal or modification."
I ___________________________________________
_________________ Secretary of Wilmington Trust
Company, do hereby certify that the foregoing is a
true and correct copy of the Charter or Act of
Incorporation of Wilmington Trust Company, as
heretofore amended and changed from time to time,
copies of which, certified by the Secretary of the
State of Delaware, are on file in the office of
Wilmington Trust Company.
Date __________________
_______________________________________
Secretary
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on February 21, 1991
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held
on the third Thursday in April each year at the principal office
at
the Company or at such other date, time, or place as may be
designated by resolution by the Board of Directors.
Section 2. Special meetings of all stockholders may be
called
at any time by the Board of Directors, the Chairman of the Board
or
the President.
Section 3. Notice of all meetings of the stockholders shall
be given by mailing to each stockholder at least ten (10 days
before said meeting, at his last known address, a written or
printed notice fixing the time and place of such meeting.
Section 4. A majority in the amount of the capital stock of
the Company issued and outstanding on the record date, as herein
determined, shall constitute a quorum at all meetings of
stockholders for the transaction of any business, but the holders
of a small number of shares may adjourn, from time to time,
without
further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be
entitled
to one vote, either in person or by proxy, for each shares of
stock
registered in the stockholder's name on the books of the Company
on
the record date for any such meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of
Directors shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of
seventy-two
(72) years shall be nominated for election to the Board of
Directors of the Company, provided, however, that this limitation
shall not apply to any person who was serving as director of the
Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold
office for three years or until their successors are elected and
qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall
be held on the third Thursday of each month at the principal
office
of the Company, or at such other place and time as may be
designated by the Board of Directors, the Chairman of the Board,
or
the President.
Section 6. Special meetings of the Board of Directors may
be
called at any time by the Chairman of the Board of Directors or
by
the President, and shall be called upon the written request of a
majority of the directors.
Section 7. A majority of the directors elected and
qualified
shall be necessary to constitute a quorum for the transaction of
business at any meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each
director of any special meeting of the Board of Directors, and of
any change in the time or place of any regular meeting, stating
the
time and place of such meeting, which shall be mailed not less
than
two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board
of
Directors, although less than a quorum, shall have the right to
elect the successor who shall hold office for the remainder of
the
full term of the class of directors in which the vacancy
occurred,
and until such director's successor shall have been duly elected
and qualified.
Section 10. The Board of Directors at its first meeting
after
its election by the stockholders shall appoint an Executive
Committee, a Trust Committee, an Audit Committee and a
Compensation
Committee, and shall elect from its own members a Chairman of the
Board of Directors and a President who may be the same person.
The
Board of Directors shall also elect at such meeting a Secretary
and
a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as
it may deem advisable. The Board of Directors may also elect at
such meeting one or more Associate Directors.
Section 11. The Board of Directors may at any time remove,
with or without cause, any member of any Committee appointed by
it
or any associate director or officer elected by it and may
appoint
or elect his successor.
Section 12. The Board of Directors may designate an officer
to be in charge of such of the departments or division of the
Company as it may deem advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed
of
not more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during
the
pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to
transact all business for and in behalf of the Company that may
be
brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at
least once a week in each week the Board is not regularly
scheduled
to meet. A majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special
meetings of the Executive Committee may be held at any time when
a
quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors
at
its next meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the
Company, and shall direct the disposal of the same, in accordance
with such rules and regulations as the Board of Directors from
time
to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the
affairs and business of the Company by its directors and officers
as contemplated by these By-Laws any two available members of the
Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company
in accordance with the provisions of Article III of these
By-Laws;
and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available
for the transaction of its business, such Executive Committee
shall
also be empowered to exercise all of the powers reserved to the
Trust Committee under Article III Section 2 hereof. In the event
of the unavailability, at such time, of a minimum of two members
of
such Executive Committee, any three available directors shall
constitute the Executive Committee for the full conduct and
management of the affairs and business of the Company in
accordance
with the foregoing provisions of this Section. This By-Law shall
be subject to implementation by Resolutions of the Board of
Directors presently existing or hereafter passed from time to
time
for that purpose, and any provisions of these By-Laws(other than
this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such
implementary Resolutions shall be suspended during such a
disaster
period until it shall be determined by any interim Executive
Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of
these
By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not
more than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of
Directors and who shall hold office during the pleasure of the
Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust
funds, in all matters, however, being subject to the approval of
the Board of Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at
least once a month. A majority of its members shall be necessary
to constitute a quorum for the transaction of business. Special
meetings of the Trust Committee may be held at any time when a
quorum is present.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of
Directors.
(E) The Trust Committee shall have the power to
appoint Committees and/or designate officers or employees of the
Company to whom supervision over the investment of trust funds
may
be delegated when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five
members who shall be selected by the Board of Directors from its
own members, none of whom shall be an officer of the Company, and
shall hold office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however
subject
to the approval of the Board of Directors; it shall consider all
matters brought to its attention by the officer in charge of the
Audit Division, review all reports of examination of the Company
made by any governmental agency or such independent auditor
employed for that purpose, and make such recommendations to the
Board of Directors with respect thereto or with respect to any
other matters pertaining to auditing the Company as it shall deem
desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper
for
the transaction of its business, and a majority of its Committee
shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed
of not more than five (5) members who shall be selected by the
Board of Directors from its own members who are not officers of
the
Company and who shall hold office during the pleasure of the
Board.
(B) The Compensation Committee shall in general
advise upon all matters of policy concerning the Company brought
to
its attention by the management and from time to time review the
management of the Company, major organizational matters,
including
salaries and employee benefits and specifically shall administer
the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may
be
called at any time by the Chairman of the Compensation Committee,
the Chairman of the Board of Directors, or the President of the
Company.
Section 5. Associate Directors
(A) Any person who has served as a director may
be elected by the Board of Directors as an associate director, to
serve during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion
of
all matters brought to the Board, with the exception that he
would
have no right to vote. An associate director will be eligible
for
appointment to Committees of the Company, with the exception of
the
Executive Committee, Audit Committee and Compensation Committee,
which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a
Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws
of
this Company, the member or members thereof present at any
meeting
and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of
the
Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall
preside at all meetings of the Board and shall have such further
authority and powers and shall perform such duties as the Board
of
Directors may from time to time confer and direct. He shall also
exercise such powers and perform such duties as may from time to
time be agreed upon between himself and the President of the
Company.
Section 2. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed
upon
him by statute or assigned to him by the Board of Directors in
the
absence of the Chairman of the Board the President shall have the
powers and duties of the Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the
President as designated by the Board of Directors, shall carry
into
effect all legal directions of the Executive Committee and of the
Board of Directors, and shall at all times exercise general
supervision over the interest, affairs and operations of the
Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents,
however
denominated by the Board of Directors, who may at any time
perform
all the duties of the Chairman of the Board of Directors and/or
the
President and such other powers and duties as may from time to
time
be assigned to them by the Board of Directors, the Executive
Committee, the Chairman of the Board or the President and by the
officer in charge of the department or division to which they are
assigned.
Section 5. The Secretary shall attend to the giving of
notice
of meetings of the stockholders and the Board of Directors, as
well
as the Committees thereof, to the keeping of accurate minutes of
all such meetings and to recording the same in the minute books
of
the Company. In addition to the other notice requirements of
these
By-Laws and as may be practicable under the circumstances, all
such
notices shall be in writing and mailed well in advance of the
scheduled date of any other meeting. He shall have custody of
the
corporate seal and shall affix the same to any documents
requiring
such corporate seal and to attest the same.
Section 6. The Treasurer shall have general supervision
over
all assets and liabilities of the Company. He shall be custodian
of and responsible for all monies, funds and valuables of the
Company and for the keeping of proper records of the evidence of
property or indebtedness and of all the transactions of the
Company. He shall have general supervision of the expenditures
of
the Company and shall report to the Board of Directors at each
regular meeting of the condition of the Company, and perform such
other duties as may be assigned to him from time to time by the
Board of Directors of the Executive Committee.
Section 7. There may be a Controller who shall exercise
general supervision over the internal operations of the Company,
including accounting, and shall render to the Board of Directors
at
appropriate times a report relating to the general condition and
internal operations of the Company.
There may be one or more subordinate accounting or
controller
officers however denominated, who may perform the duties of the
Controller and such duties as may be prescribed by the
Controller.
Section 8. The officer designated by the Board of Directors
to be in charge of the Audit Division of the Company with such
title as the Board of Directors shall prescribe, shall report to
and be directly responsible only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of
the Auditor and such duties as may be prescribed by the officer
in
charge of the Audit Division.
Section 9. There may be one or more officers, subordinate
in
rank to all Vice Presidents with such functional titles as shall
be
determined from time to time by the Board of Directors, who shall
ex officio hold the office Assistant Secretary of this Company
and
who may perform such duties as may be prescribed by the officer
in
charge of the department or division to whom they are assigned.
Section 10. The powers and duties of all other officers of
the Company shall be those usually pertaining to their respective
offices, subject to the direction of the Board of Directors, the
Executive Committee, Chairman of the Board of Directors or the
President and the officer in charge of the department or division
to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the
books of the Company and a transfer book shall be kept in which
all
transfers of stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of
the President or any Vice President, however denominated by the
Board of Directors and countersigned by the Secretary or
Treasurer
or an Assistant Secretary, and the seal of the corporation shall
be
engraved thereon. Each certificate shall recite that the stock
represented thereby is transferrable only upon the books of the
Company by the holder thereof or his attorney, upon surrender of
the certificate properly endorsed. Any certificate of stock
surrendered to the Company shall be cancelled at the time of
transfer, and before a new certificate or certificates shall be
issued in lieu thereof. Duplicate certificates of stock shall be
issued only upon giving such security as may be satisfactory to
the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is
authorized to fix in advance a record date for the determination
of
the stockholders entitled to notice of, and to vote at, any
meeting
of stockholders and any adjournment thereof, or entitled to
receive
payment of any dividend, or to any allotment or rights, or to
exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the
consent of stockholders for any purpose, which record date shall
not be more than 60 nor less than 10 days proceeding the date of
any meeting of stockholders or the date for the payment of any
dividend, or the date for the allotment of rights, or the date
when
any change or conversion or exchange of capital stock shall go
into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in
the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the
calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any
Vice President, however denominated by the Board of Directors,
shall have full power and authority to enter into, make, sign,
execute, acknowledge and/or deliver and the Secretary or any
Assistant Secretary shall have full power and authority to attest
and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds,
notes, mortgages and all other instruments incident to the
business
of this Company or in acting as executor, administrator,
guardian,
trustee, agent or in any other fiduciary or representative
capacity
by any and every method of appointment or by whatever person,
corporation, court officer or authority in the State of Delaware,
or elsewhere, without any specific authority, ratification,
approval or confirmation by the Board of Directors or the
Executive
Committee, and any and all such instruments shall have the same
force and validity as although expressly authorized by the Board
of
Directors and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the
Company,
other than salaried officers of the Company, shall be paid such
reasonable honoraria or fees for attending meetings of the Board
of
Directors as the Board of Directors may from time to time
determine. Directors and associate directors who serve as
members
of committees, other than salaried employees of the Company,
shall
be paid such reasonable honoraria or fees for services as members
of committees as the Board of Directors shall from time to time
determine and directors and associate directors may be employed
by
the Company for such special services as the Board of Directors
may
from time to time determine and shall be paid for such special
services so performed reasonable compensation as may be
determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was
or
is made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding") by
reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent
of
the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary or agent
of
another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect
to
employee benefit plans, against all liability and loss suffered
and
expenses reasonably incurred by such person. The Corporation
shall
indemnify a person in connection with a proceeding initiated by
such person only if the proceeding was authorized by the Board of
Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final
disposition, provided, however, that the payment of expenses
incurred by a Director officer in his capacity as a Director or
officer in advance of the final disposition of the proceeding
shall
be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately
determined that the Director or officer is not entitled to be
indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of
expenses, under this Article X is not paid in full within ninety
days after a written claim therefor has been received by the
Corporation the claimant may file suit to recover the unpaid
amount
of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In
any
such action the Corporation shall have the burden of proving that
the claimant was not entitled to the requested indemnification of
payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision
of the Charter or Act of Incorporation, these By-Laws, agreement,
vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or
omission occurring prior to the time of such repeal or
modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or
repealed,
in whole or in part, and any new By-Law or By-Laws adopted at any
regular or special meeting of the Board of Directors by a vote of
the majority of all the members of the Board of Directors then in
office.
I, . . . . . . . . . . . . . . . . . . . . .
Assistant Secretary of Wilmington Trust
Company, do hereby certify that the foregoing
is a true and correct copy of the By-Laws of
the Wilmington Trust Company.
Date . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Assistant Secretary
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of
1939,
Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District
authorities
may be furnished by such authorities to the Securities Exchange
Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 23, 1996 By: /s/ Emmett R. Harmon
--------------------
Name: Emmett R. Harmon
Title: Vice President
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been
approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state publication
requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ------------------------ ----------
Name of Bank City
in the State of DELAWARE, at the close of business on March 31,
1996.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . . .198,158
Interest-bearing balances . . . . . . . . . . . . . . . . . . .0
Held-to-maturity securities. . . . . . . . . . . . . . . .536,638
Available-for-sale securities. . . . . . . . . . . . . . .862,050
Federal funds sold . . . . . . . . . . . . . . . . . . . . 82,000
Securities purchased under agreements to resell. . . . . . 25,000
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . .3,404,372
LESS: Allowance for loan and lease losses. . . . . . . . 48,153
LESS: Allocated transfer risk reserve. . . . . . . . . . . . .0
Loans and leases, net of unearned income, allowance, and
reserve. . . . . . . . . . . . . . . . . . . . . . . . .3,356,219
Assets held in trading accounts. . . . . . . . . . . . . . . . .0
Premises and fixed assets (including capitalized leases) . 76,915
Other real estate owned. . . . . . . . . . . . . . . . . . 16,314
Investments in unconsolidated subsidiaries and associated
companies. . . . . . . . . . . . . . . . . . . . . . . . . . .146
Customers' liability to this bank on acceptances outstanding . .0
Intangible assets. . . . . . . . . . . . . . . . . . . . . .4,403
Other assets . . . . . . . . . . . . . . . . . . . . . . .107,240
Total assets . . . . . . . . . . . . . . . . . . . . . .5,265,083
CONTINUED ON NEXT PAGE
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . .3,450,823
Noninterest-bearing . . . . . . . . . . . . . . . . . . .689,843
Interest-bearing. . . . . . . . . . . . . . . . . . . .2,760,980
Federal funds purchased. . . . . . . . . . . . . . . . . . 99,885
Securities sold under agreements to repurchase . . . . . .198,506
Demand notes issued to the U.S. Treasury . . . . . . . . . 38,856
Trading liabilities. . . . . . . . . . . . . . . . . . . . . . .0
Other borrowed money:. . . . . . . . . . . . . . . . . . .///////
With original maturity of one year or less. . . . . . . .930,611
With original maturity of more than one year. . . . . . . 28,000
Mortgage indebtedness and obligations under capitalized leases .0
Bank's liability on acceptances executed and outstanding . . . .0
Subordinated notes and debentures. . . . . . . . . . . . . . . .0
Other liabilities. . . . . . . . . . . . . . . . . . . . 100,832
Total liabilities. . . . . . . . . . . . . . . . . . . .4,847,513
Limited-life preferred stock and related surplus . . . . . . . .0
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . .0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . .500
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . .354,791
Net unrealized holding gains (losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . . . .161
Total equity capital . . . . . . . . . . . . . . . . . . .417,570
Total liabilities, limited-life preferred stock, and equity
capital. . . . . . . . . . . . . . . . . . . . . . . . .5,265,083
Exhibit 25.3
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer
identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CONTINENTAL AIRLINES, INC.
(Exact name of obligor as specified in its charter)
Delaware 74-2099724
(State of incorporation (I.R.S. employer
or formation) identification no.)
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
(Address of principal executive offices) (Zip Code)
1996-C Pass Through Certificates
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Federal Deposit Insurance Co. State Bank
Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this
Statement of Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington
Trust Company to commence business and the
authorization of Wilmington Trust Company to exercise
corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by
Section 321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, Wilmington Trust Company, a corporation
organized and existing under the laws of Delaware, has duly
caused this Statement of Eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City of
Wilmington and State of Delaware on the 23rd day of May, 1996.
[SEAL] WILMINGTON TRUST COMPANY
Attest:/s/ Sharon M. Brendle By: /s/ Emmett R. Harmon
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act
of the General Assembly of the State of Delaware, entitled "An
Act to Incorporate the Delaware Guarantee and Trust Company",
approved March 2, A.D. 1901, and the name of which company was
changed to "Wilmington Trust Company" by an amendment filed in
the Office of the Secretary of State on March 18, A.D. 1903, and
the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements
pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend
its Charter or Act of Incorporation so that the same as so
altered and amended shall in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust
Company.
Second: - The location of its principal office in the State
of Delaware is at Rodney Square North, in the City of
Wilmington, County of New Castle; the name of its resident
agent is Wilmington Trust Company whose address is Rodney
Square North, in said City. In addition to such principal
office, the said corporation maintains and operates branch
offices in the City of Newark, New Castle County, Delaware,
the Town of Newport, New Castle County, Delaware, at
Claymont, New Castle County, Delaware, at Greenville, New
Castle County Delaware, and at Milford Cross Roads, New
Castle County, Delaware, and shall be empowered to open,
maintain and operate branch offices at Ninth and Shipley
Streets, 418 Delaware Avenue, 2120 Market Street, and 3605
Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the
agency or agencies of the government of the State of
Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on
by this Corporation are to do any or all of the things
herein mentioned as fully and to the same extent as natural
persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any
Court of law or equity and to make and use a common
seal, and alter the seal at pleasure, to hold,
purchase, convey, mortgage or otherwise deal in real
and personal estate and property, and to appoint such
officers and agents as the business of the Corporation
shall require, to make by-laws not inconsistent with
the Constitution or laws of the United States or of
this State, to discount bills, notes or other evidences
of debt, to receive deposits of money, or securities
for money, to buy gold and silver bullion and foreign
coins, to buy and sell bills of exchange, and generally
to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation
which are proper or necessary for the transaction of
the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and
to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and
disposal of property of all descriptions, and to
prepare and execute all papers which may be necessary
or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers
of every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from
executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and
individuals, and from all corporations whether state,
municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking
fund therefor on such terms as may be agreed upon
between the two parties, and in like manner may act as
Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust,
mortgage, bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect
of any contract or agreement, and the fidelity of
persons holding places of responsibility or trust; to
become surety for any person, or persons, for the
faithful performance of any trust, office, duty,
contract or agreement, either by itself or in
conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any
court of record within the State of Delaware or
elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of
Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and
to be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the
State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any
other trust capacity, it shall not be required to give
bond with surety, but its capital stock shall be taken
and held as security for the performance of the duties
devolving upon it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds,
mortgages, debentures, shares of capital stock, and
other securities, obligations, contracts and evidences
of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware,
or of the Government of the United States, or of any
state, territory, colony, or possession thereof, or of
any foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures,
notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property, any and all the rights, powers and
privileges of individual owners thereof, including the
right to vote thereon; to invest and deal in and with
any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and
proper, and from time to time to vary or realize such
investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the
whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the
promotion of its said corporate business of investment
and to the extent authorized by law, to lease,
purchase, hold, sell, assign, transfer, pledge,
mortgage and convey real and personal property of any
name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have
the following powers:
(1) To do any or all of the things herein set forth,
to the same extent as natural persons might or could
do, and in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of
the assets and liabilities of any person, firm,
association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to
hold or in any manner to dispose of the whole or any
part of the property so purchased; to conduct in any
lawful manner the whole or any part of any business so
acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of
such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out
contracts of every kind with any person, firm,
association or corporation, and, without limit as to
amount, to draw, make, accept, endorse, discount,
execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other
negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or
any of its operations and businesses, without
restriction to the same extent as natural persons might
or could do, to purchase or otherwise acquire, to hold,
own, to mortgage, sell, convey or otherwise dispose of,
real and personal property, of every class and
description, in any State, District, Territory or
Colony of the United States, and in any foreign country
or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this
paragraph shall (except where otherwise expressed in
said paragraph) be nowise limited or restricted by
reference to or inference from the terms of any other
clause of this or any other paragraph in this charter,
but that the objects, purposes and powers specified in
each of the clauses of this paragraph shall be regarded
as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of
stock which the Corporation shall have authority to issue is
forty-one million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to
time in one or more series as may from time to time be
determined by the Board of Directors each of said series to
be distinctly designated. All shares of any one series of
Preferred Stock shall be alike in every particular, except
that there may be different dates from which dividends, if
any, thereon shall be cumulative, if made cumulative. The
voting powers and the preferences and relative,
participating, optional and other special rights of each
such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any
and all other series at any time outstanding; and, subject
to the provisions of subparagraph 1 of Paragraph (c) of this
Article Fourth, the Board of Directors of the Corporation is
hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a
particular series of Preferred Stock, the voting powers and
the designations, preferences and relative, optional and
other special rights, and the qualifications, limitations
and restrictions of such series, including, but without
limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of
the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to
the dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred
Stock of such series to convert the same into or
exchange the same for, shares of any other class or
classes or of any series of the same or any other class
or classes of stock of the Corporation and the terms
and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series
shall be subject to redemption, and the redemption
price or prices and the time or times at which, and the
terms and conditions on which, Preferred Stock of such
series may be redeemed.
(5) The rights, if any, of the holders of Preferred
Stock of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting
the generality of the foregoing include the right,
voting as a series or by itself or together with other
series of Preferred Stock or all series of Preferred
Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the
payment of dividends on any one or more series of
Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to
preferential dividends on the Preferred Stock (fixed in
accordance with the provisions of section (b) of this
Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements,
if any, with respect to the setting aside of sums as sinking
funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this
Article Fourth), and subject further to any conditions which
may be fixed in accordance with the provisions of section
(b) of this Article Fourth, then and not otherwise the
holders of Common Stock shall be entitled to receive such
dividends as may be declared from time to time by the Board
of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the
provisions of section (b) of this Article Fourth), to
be distributed to the holders of Preferred Stock in the
event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-
up, of the Corporation, the holders of the Common Stock
shall be entitled to receive all of the remaining
assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to
stockholders ratably in proportion to the number of
shares of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by
the provisions of such resolution or resolutions as may
be adopted by the Board of Directors pursuant to
section (b) of this Article Fourth, each holder of
Common Stock shall have one vote in respect of each
share of Common Stock held on all matters voted upon by
the stockholders.
(d) No holder of any of the shares of any class or series
of stock or of options, warrants or other rights to purchase
shares of any class or series of stock or of other
securities of the Corporation shall have any preemptive
right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or
series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures
or other securities convertible into or exchangeable for
stock of the Corporation of any class or series, or carrying
any right to purchase stock of any class or series, but any
such unissued stock, additional authorized issue of shares
of any class or series of stock or securities convertible
into or exchangeable for stock, or carrying any right to
purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms,
corporations or associations, whether such holders or
others, and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each
series of Preferred Stock in relation to the relative
powers, preferences and rights of each other series of
Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section
(b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time
outstanding shall not be required for the issuance by the
Board of Directors of any other series of Preferred Stock
whether or not the powers, preferences and rights of such
other series shall be fixed by the Board of Directors as
senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred
Stock adopted pursuant to section (b) of this Article Fourth
that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the
outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of
Preferred Stock.
(f) Subject to the provisions of section (e), shares of any
series of Preferred Stock may be issued from time to time as
the Board of Directors of the Corporation shall determine
and on such terms and for such consideration as shall be
fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time
as the Board of Directors of the Corporation shall determine
and on such terms and for such consideration as shall be
fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be
increased or decreased from time to time by the affirmative
vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation
shall be conducted and managed by a Board of Directors. The
number of directors constituting the entire Board shall be
not less than five nor more than twenty-five as fixed from
time to time by vote of a majority of the whole Board,
provided, however, that the number of directors shall not be
reduced so as to shorten the term of any director at the
time in office, and provided further, that the number of
directors constituting the whole Board shall be twenty-four
until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three
classes, as nearly equal in number as the then total number
of directors constituting the whole Board permits, with the
term of office of one class expiring each year. At the
annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of
the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and
directors of the third class shall be elected to hold office
for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and
any newly created directorships resulting from any increase
in the directors, may be filled by the Board of Directors,
acting by a majority of the directors then in office,
although less than a quorum, and any directors so chosen
shall hold office until the next annual election of
directors. At such election, the stockholders shall elect a
successor to such director to hold office until the next
election of the class for which such director shall have
been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall
shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or
the By-Laws of the Corporation), any director or the entire
Board of Directors of the Corporation may be removed at any
time without cause, but only by the affirmative vote of the
holders of two-thirds or more of the outstanding shares of
capital stock of the Corporation entitled to vote generally
in the election of directors (considered for this purpose as
one class) cast at a meeting of the stockholders called for
that purpose.
(d) Nominations for the election of directors may be made
by the Board of Directors or by any stockholder entitled to
vote for the election of directors. Such nominations shall
be made by notice in writing, delivered or mailed by first
class United States mail, postage prepaid, to the Secretary
of the Corporation not less than 14 days nor more than 50
days prior to any meeting of the stockholders called for the
election of directors; provided, however, that if less than
21 days' notice of the meeting is given to stockholders,
such written notice shall be delivered or mailed, as
prescribed, to the Secretary of the Corporation not later
than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of
nominations which are proposed by the Board of Directors
shall be given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i)
the name, age, business address and, if known, residence
address of each nominee proposed in such notice, (ii) the
principal occupation or employment of such nominee and (iii)
the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was
not made in accordance with the foregoing procedure, and if
he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at
any annual or special meeting of stockholders of the
Corporation may be taken without a meeting, and the power of
stockholders to consent in writing, without a meeting, to
the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from
time to time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given
the same powers, rights and privileges as may be conferred
upon corporations organized under the Act entitled "An Act
Providing a General Corporation Law", approved March 10,
1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private
Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their
number to constitute an Executive Committee, which
Committee, to the extent provided in said resolution, or in
the By-Laws of the Company, shall have and may exercise all
of the powers of the Board of Directors in the management of
the business and affairs of the Corporation, and shall have
power to authorize the seal of the Corporation to be affixed
to all papers which may require it.
Eleventh: - The private property of the stockholders shall
not be liable for the payment of corporate debts to any
extent whatever.
Twelfth: - The Corporation may transact business in any part
of the world.
Thirteenth: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of
the Corporation by a vote of the majority of the entire
Board. The stockholders may make, alter or repeal any By-
Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election
of directors (considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time
to time designated by the Board, and the Directors may keep
the books of the Company outside of the State of Delaware at
such places as may be from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote
required by law, and except as otherwise expressly provided
in sections (b) and (c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with or into
(i) any Interested Stockholder (as hereinafter defined)
or (ii) any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of related transactions) to or with any
Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation
or any Subsidiary having an aggregate fair market value
of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or
any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for
cash, securities or other property (or a combination
thereof) having an aggregate fair market value of
$1,000,000 or more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of
directors, considered for the purpose of this Article Fifteenth
as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required,
or that some lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article Fifteenth shall mean any transaction
which is referred to any one or more of clauses
(A) through (E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article
Fifteenth shall not be applicable to any particular
business combination and such business combination
shall require only such affirmative vote as is required
by law and any other provisions of the Charter or Act
of Incorporation of By-Laws if such business
combination has been approved by a majority of the
whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation
or other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation
or any Subsidiary) who or which as of the record date for
the determination of stockholders entitled to notice of and
to vote on such business combination, or immediately prior
to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly,
of more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial
owner, directly or indirectly, of not less than 10% of
the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in
any share of capital stock of the Corporation which
were at any time within two years prior thereto
beneficially owned by any Interested Stockholder, and
such assignment or succession shall have occurred in
the course of a transaction or series of transactions
not involving a public offering within the meaning of
the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting
Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or
indirectly, by any other person with which such first
mentioned person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of
any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
deemed owned through application of paragraph (3) above but
shall not include any other Voting Shares which may be
issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective
meanings given those terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule
3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect in December
31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the
definition of Investment Stockholder set forth in paragraph
(2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
Fifteenth on the basis of information known to them,
(1) the number of Voting Shares beneficially owned by
any person (2) whether a person is an Affiliate or
Associate of another, (3) whether a person has an
agreement, arrangement or understanding with another as
to the matters referred to in paragraph (3) of section
(c), or (4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation,
or any Subsidiary has an aggregate fair market value of
$1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall
be construed to relieve any Interested Stockholder from
any fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this
Charter or Act of Incorporation or the By-Laws of the
Corporation (and in addition to any other vote that may be
required by law, this Charter or Act of Incorporation by the
By-Laws), the affirmative vote of the holders of at least
two-thirds of the outstanding shares of the capital stock of
the Corporation entitled to vote generally in the election
of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this
Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not
be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a Director,
except to the extent such exemption from liability or
limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter
be amended.
(b) Any repeal or modification of the foregoing
paragraph shall not adversely affect any right or
protection of a Director of the Corporation existing
hereunder with respect to any act or omission occurring
prior to the time of such repeal or modification."
I . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . Secretary of Wilmington Trust
Company, do hereby certify that the foregoing is a
true and correct copy of the Charter or Act of
Incorporation of Wilmington Trust Company, as
heretofore amended and changed from time to time,
copies of which, certified by the Secretary of the
State of Delaware, are on file in the office of
Wilmington Trust Company.
Date ..................
.......................................
Secretary
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on February 21, 1991
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held
on the third Thursday in April each year at the principal office
at the Company or at such other date, time, or place as may be
designated by resolution by the Board of Directors.
Section 2. Special meetings of all stockholders may be
called at any time by the Board of Directors, the Chairman of the
Board or the President.
Section 3. Notice of all meetings of the stockholders shall
be given by mailing to each stockholder at least ten (10 days
before said meeting, at his last known address, a written or
printed notice fixing the time and place of such meeting.
Section 4. A majority in the amount of the capital stock of
the Company issued and outstanding on the record date, as herein
determined, shall constitute a quorum at all meetings of
stockholders for the transaction of any business, but the holders
of a small number of shares may adjourn, from time to time,
without further notice, until a quorum is secured. At each
annual or special meeting of stockholders, each stockholder shall
be entitled to one vote, either in person or by proxy, for each
shares of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as
determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of
Directors shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-
two (72) years shall be nominated for election to the Board of
Directors of the Company, provided, however, that this limitation
shall not apply to any person who was serving as director of the
Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold
office for three years or until their successors are elected and
qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall
be held on the third Thursday of each month at the principal
office of the Company, or at such other place and time as may be
designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may
be called at any time by the Chairman of the Board of Directors
or by the President, and shall be called upon the written request
of a majority of the directors.
Section 7. A majority of the directors elected and
qualified shall be necessary to constitute a quorum for the
transaction of business at any meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each
director of any special meeting of the Board of Directors, and of
any change in the time or place of any regular meeting, stating
the time and place of such meeting, which shall be mailed not
less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board
of Directors, although less than a quorum, shall have the right
to elect the successor who shall hold office for the remainder of
the full term of the class of directors in which the vacancy
occurred, and until such director's successor shall have been
duly elected and qualified.
Section 10. The Board of Directors at its first meeting
after its election by the stockholders shall appoint an Executive
Committee, a Trust Committee, an Audit Committee and a
Compensation Committee, and shall elect from its own members a
Chairman of the Board of Directors and a President who may be the
same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person,
may appoint at any time such other committees and elect or
appoint such other officers as it may deem advisable. The Board
of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove,
with or without cause, any member of any Committee appointed by
it or any associate director or officer elected by it and may
appoint or elect his successor.
Section 12. The Board of Directors may designate an officer
to be in charge of such of the departments or division of the
Company as it may deem advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of
Directors from its own members and who shall hold office during
the pleasure of the Board.
(B) The Executive Committee shall have all the powers
of the Board of Directors when it is not in session to transact
all business for and in behalf of the Company that may be brought
before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at
least once a week in each week the Board is not regularly
scheduled to meet. A majority of its members shall be necessary
to constitute a quorum for the transaction of business. Special
meetings of the Executive Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the
Company, and shall direct the disposal of the same, in accordance
with such rules and regulations as the Board of Directors from
time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and
business of the Company by its directors and officers as
contemplated by these By-Laws any two available members of the
Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company
in accordance with the provisions of Article III of these By-
Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available
for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to
the Trust Committee under Article III Section 2 hereof. In the
event of the unavailability, at such time, of a minimum of two
members of such Executive Committee, any three available
directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company
in accordance with the foregoing provisions of this Section.
This By-Law shall be subject to implementation by Resolutions of
the Board of Directors presently existing or hereafter passed
from time to time for that purpose, and any provisions of these
By-Laws(other than this Section) and any resolutions which are
contrary to the provisions of this Section or to the provisions
of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any
interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other
provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of
Directors, a majority of whom shall be members of the Board of
Directors and who shall hold office during the pleasure of the
Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in
all matters, however, being subject to the approval of the Board
of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at least
once a month. A majority of its members shall be necessary to
constitute a quorum for the transaction of business. Special
meetings of the Trust Committee may be held at any time when a
quorum is present.
(D) Minutes of each meeting of the Trust Committee
shall be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to
appoint Committees and/or designate officers or employees of the
Company to whom supervision over the investment of trust funds
may be delegated when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its
own members, none of whom shall be an officer of the Company, and
shall hold office at the pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters
brought to its attention by the officer in charge of the Audit
Division, review all reports of examination of the Company made
by any governmental agency or such independent auditor employed
for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other
matters pertaining to auditing the Company as it shall deem
desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper
for the transaction of its business, and a majority of its
Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of
not more than five (5) members who shall be selected by the Board
of Directors from its own members who are not officers of the
Company and who shall hold office during the pleasure of the
Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its
attention by the management and from time to time review the
management of the Company, major organizational matters,
including salaries and employee benefits and specifically shall
administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee,
the Chairman of the Board of Directors, or the President of the
Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to
serve during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion
of all matters brought to the Board, with the exception that he
would have no right to vote. An associate director will be
eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active
directors.
Section 6. Absence or Disqualification of Any Member of a
Committee
(A) In the absence or disqualification of any member
of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any
such absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall
preside at all meetings of the Board and shall have such further
authority and powers and shall perform such duties as the Board
of Directors may from time to time confer and direct. He shall
also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of
the Company.
Section 2. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed
upon him by statute or assigned to him by the Board of Directors
in the absence of the Chairman of the Board the President shall
have the powers and duties of the Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the
President as designated by the Board of Directors, shall carry
into effect all legal directions of the Executive Committee and
of the Board of Directors, and shall at all times exercise
general supervision over the interest, affairs and operations of
the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents,
however denominated by the Board of Directors, who may at any
time perform all the duties of the Chairman of the Board of
Directors and/or the President and such other powers and duties
as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or
the President and by the officer in charge of the department or
division to which they are assigned.
Section 5. The Secretary shall attend to the giving of
notice of meetings of the stockholders and the Board of
Directors, as well as the Committees thereof, to the keeping of
accurate minutes of all such meetings and to recording the same
in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and
mailed well in advance of the scheduled date of any other
meeting. He shall have custody of the corporate seal and shall
affix the same to any documents requiring such corporate seal and
to attest the same.
Section 6. The Treasurer shall have general supervision
over all assets and liabilities of the Company. He shall be
custodian of and responsible for all monies, funds and valuables
of the Company and for the keeping of proper records of the
evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the
expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the
Company, and perform such other duties as may be assigned to him
from time to time by the Board of Directors of the Executive
Committee.
Section 7. There may be a Controller who shall exercise
general supervision over the internal operations of the Company,
including accounting, and shall render to the Board of Directors
at appropriate times a report relating to the general condition
and internal operations of the Company.
There may be one or more subordinate accounting or
controller officers however denominated, who may perform the
duties of the Controller and such duties as may be prescribed by
the Controller.
Section 8. The officer designated by the Board of Directors
to be in charge of the Audit Division of the Company with such
title as the Board of Directors shall prescribe, shall report to
and be directly responsible only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of
the Auditor and such duties as may be prescribed by the officer
in charge of the Audit Division.
Section 9. There may be one or more officers, subordinate
in rank to all Vice Presidents with such functional titles as
shall be determined from time to time by the Board of Directors,
who shall ex officio hold the office Assistant Secretary of this
Company and who may perform such duties as may be prescribed by
the officer in charge of the department or division to whom they
are assigned.
Section 10. The powers and duties of all other officers of
the Company shall be those usually pertaining to their respective
offices, subject to the direction of the Board of Directors, the
Executive Committee, Chairman of the Board of Directors or the
President and the officer in charge of the department or division
to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the
books of the Company and a transfer book shall be kept in which
all transfers of stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of
the President or any Vice President, however denominated by the
Board of Directors and countersigned by the Secretary or
Treasurer or an Assistant Secretary, and the seal of the
corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only
upon the books of the Company by the holder thereof or his
attorney, upon surrender of the certificate properly endorsed.
Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate
certificates of stock shall be issued only upon giving such
security as may be satisfactory to the Board of Directors or the
Executive Committee.
Section 3. The Board of Directors of the Company is
authorized to fix in advance a record date for the determination
of the stockholders entitled to notice of, and to vote at, any
meeting of stockholders and any adjournment thereof, or entitled
to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change,
conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which
record date shall not be more than 60 nor less than 10 days
proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in
the following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the
calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any
Vice President, however denominated by the Board of Directors,
shall have full power and authority to enter into, make, sign,
execute, acknowledge and/or deliver and the Secretary or any
Assistant Secretary shall have full power and authority to attest
and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds,
notes, mortgages and all other instruments incident to the
business of this Company or in acting as executor, administrator,
guardian, trustee, agent or in any other fiduciary or
representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in
the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of
Directors or the Executive Committee, and any and all such
instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the
Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the
Company, other than salaried officers of the Company, shall be
paid such reasonable honoraria or fees for attending meetings of
the Board of Directors as the Board of Directors may from time to
time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the
Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall
from time to time determine and directors and associate directors
may be employed by the Company for such special services as the
Board of Directors may from time to time determine and shall be
paid for such special services so performed reasonable
compensation as may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was
or is made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding") by
reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent
of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary or agent
of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect
to employee benefit plans, against all liability and loss
suffered and expenses reasonably incurred by such person. The
Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was
authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final
disposition, provided, however, that the payment of expenses
incurred by a Director officer in his capacity as a Director or
officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director
or officer to repay all amounts advanced if it should be
ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within
ninety days after a written claim therefor has been received by
the Corporation the claimant may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden
of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision
of the Charter or Act of Incorporation, these By-Laws, agreement,
vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or
omission occurring prior to the time of such repeal or
modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or
repealed, in whole or in part, and any new By-Law or By-Laws
adopted at any regular or special meeting of the Board of
Directors by a vote of the majority of all the members of the
Board of Directors then in office.
I, . . . . . . . . . . . . . . . . . . . . .
Assistant Secretary of Wilmington Trust
Company, do hereby certify that the foregoing
is a true and correct copy of the By-Laws of
the Wilmington Trust Company.
Date . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Assistant Secretary
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of
1939, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District
authorities may be furnished by such authorities to the
Securities Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 23, 1996 By: /s/ Emmett R. Harmon
Name: Emmett R. Harmon
Title: Vice President
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been
approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state publication
requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
Name of Bank City
in the State of DELAWARE, at the close of business on March 31,
1996.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins . 198,158
Interest-bearing balances . . . . . . . . . . . . . . 0
Held-to-maturity securities. . . . . . . . . . . . . . . 536,638
Available-for-sale securities. . . . . . . . . . . . . . 862,050
Federal funds sold . . . . . . . . . . . . . . . . . . . 82,000
Securities purchased under agreements to resell. . . . . 25,000
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . .3,404,372
LESS: Allowance for loan and lease losses. . . . . . 48,153
LESS: Allocated transfer risk reserve. . . . . . . . 0
Loans and leases, net of unearned income,
allowance, and reserve. . . . . . . . . . . . . . .3,356,219
Assets held in trading accounts. . . . . . . . . . . . . 0
Premises and fixed assets (including
capitalized leases) . . . . . . . . . . . . . . . . . . 76,915
Other real estate owned. . . . . . . . . . . . . . . . . 16,314
Investments in unconsolidated subsidiaries
and associated companies. . . . . . . . . . . . . . . 146
Customers' liability to this bank on
acceptances outstanding . . . . . . . . . . . . . . . 0
Intangible assets. . . . . . . . . . . . . . . . . . . . 4,403
Other assets . . . . . . . . . . . . . . . . . . . . . . 107,240
Total assets . . . . . . . . . . . . . . . . . . . . . .5,265,083
CONTINUED ON NEXT PAGE
LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . .3,450,823
Noninterest-bearing . . . . . . . . . . . . . . . . . 689,843
Interest-bearing. . . . . . . . . . . . . . . . . . .2,760,980
Federal funds purchased. . . . . . . . . . . . . . . . . 99,885
Securities sold under agreements to repurchase . . . . . 198,506
Demand notes issued to the U.S. Treasury . . . . . . . . 38,856
Trading liabilities. . . . . . . . . . . . . . . . . . . 0
Other borrowed money:. . . . . . . . . . . . . . . . . . ///////
With original maturity of one year or less. . . . . . 930,611
With original maturity of more than one year. . . . . 28,000
Mortgage indebtedness and obligations under
capitalized leases. . . . . . . . . . . . . . . . . . 0
Bank's liability on acceptances executed and
outstanding . . . . . . . . . . . . . . . . . . . . . 0
Subordinated notes and debentures. . . . . . . . . . . . 0
Other liabilities. . . . . . . . . . . . . . . . . . . . 100,832
Total liabilities. . . . . . . . . . . . . . . . . . . .4,847,513
Limited-life preferred stock and related surplus . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus . . . . . 0
Common Stock. . . . . . . . . . . . . . . . . . . . . . 500
Surplus . . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves. . . . . . . . . 354,791
Net unrealized holding gains (losses) on
available-for-sale securities. . . . . . . . . . . . 161
Total equity capital. . . . . . . . . . . . . . . . . . 417,570
Total liabilities, limited-life preferred
stock, and equity capital. . . . . . . . . . . . . . 5,265,083
Exhibit 25.4
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) X
---
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer
identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CONTINENTAL AIRLINES, INC.
(Exact name of obligor as specified in its charter)
Delaware 74-2099724
(State of incorporation (I.R.S. employer identification
or formation) no.)
2929 Allen Parkway, Suite 2010
Houston, Texas 77019
(Address of principal executive offices) (Zip Code)
1996-D Pass Through Certificates
(Title of the indenture securities)
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe
each affiliation:
Based upon an examination of the books and records of
the trustee and upon information furnished by the
obligor, the obligor is not an affiliate of the
trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement
of Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington
Trust Company to commence business and the
authorization of Wilmington Trust Company to exercise
corporate trustpowers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington
Trust Company.
Pursuant to the requirements of the Trust Indenture Act of
1939, the trustee, Wilmington Trust Company, a corporation
organized and existing under the laws of Delaware, has duly
caused this Statement of Eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City of
Wilmington and State of Delaware on the 23rd day of May, 1996.
[SEAL] WILMINGTON TRUST COMPANY
Attest:/s/ Sharon M. Brendle By: /s/ Emmett R. Harmon
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act
of the General Assembly of the State of Delaware, entitled "An
Act to Incorporate the Delaware Guarantee and Trust Company",
approved March 2, A.D. 1901, and the name of which company was
changed to "Wilmington Trust Company" by an amendment filed in
the Office of the Secretary of State on March 18, A.D. 1903, and
the Charter or Act of Incorporation of which company has been
from time to time amended and changed by merger agreements
pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend
its Charter or Act of Incorporation so that the same as so
altered and amended shall in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust
Company.
Second: - The location of its principal office in the State
of Delaware is at Rodney Square North, in the City of
Wilmington, County of New Castle; the name of its resident
agent is Wilmington Trust Company whose address is Rodney
Square North, in said City. In addition to such principal
office, the said corporation maintains and operates branch
offices in the City of Newark, New Castle County, Delaware,
the Town of Newport, New Castle County, Delaware, at
Claymont, New Castle County, Delaware, at Greenville, New
Castle County Delaware, and at Milford Cross Roads, New
Castle County, Delaware, and shall be empowered to open,
maintain and operate branch offices at Ninth and Shipley
Streets, 418 Delaware Avenue, 2120 Market Street, and 3605
Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the
agency or agencies of the government of the State of
Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and
purposes proposed to be transacted, promoted or carried on
by this Corporation are to do any or all of the things
herein mentioned as fully and to the same extent as natural
persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any
Court of law or equity and to make and use a common
seal, and alter the seal at pleasure, to hold,
purchase, convey, mortgage or otherwise deal in real
and personal estate and property, and to appoint such
officers and agents as the business of the Corporation
shall require, to make by-laws not inconsistent with
the Constitution or laws of the United States or of
this State, to discount bills, notes or other evidences
of debt, to receive deposits of money, or securities
for money, to buy gold and silver bullion and foreign
coins, to buy and sell bills of exchange, and generally
to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation
which are proper or necessary for the transaction of
the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or
any estate or interests therein, and to guarantee the
holder of such property, real or personal, against any
claim or claims, adverse to his interest therein, and
to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management
of funds, and the purchase, sale, management and
disposal of property of all descriptions, and to
prepare and execute all papers which may be necessary
or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers
of every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money,
jewelry, plate, deeds, bonds and any and all other
personal property of every sort and kind, from
executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and
individuals, and from all corporations whether state,
municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking
fund therefor on such terms as may be agreed upon
between the two parties, and in like manner may act as
Treasurer of any corporation or municipality.
(7) To act as Trustee under any deed of trust,
mortgage, bond or other instrument issued by any state,
municipality, body politic, corporation, association or
person, either alone or in conjunction with any other
person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect
of any contract or agreement, and the fidelity of
persons holding places of responsibility or trust; to
become surety for any person, or persons, for the
faithful performance of any trust, office, duty,
contract or agreement, either by itself or in
conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any
court of record within the State of Delaware or
elsewhere, or which may now or hereafter be required by
any law, judge, officer or court in the State of
Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee,
assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and
all estates and property, real, personal or mixed, and
to be appointed as such trustee, trustee in bankruptcy,
receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian or bailee by any persons,
corporations, court, officer, or authority, in the
State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any
other trust capacity, it shall not be required to give
bond with surety, but its capital stock shall be taken
and held as security for the performance of the duties
devolving upon it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake
or be called upon to perform, or for the assumption of
any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds,
mortgages, debentures, shares of capital stock, and
other securities, obligations, contracts and evidences
of indebtedness, of any private, public or municipal
corporation within and without the State of Delaware,
or of the Government of the United States, or of any
state, territory, colony, or possession thereof, or of
any foreign government or country; to receive, collect,
receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in
respect of all such bonds, mortgages, debentures,
notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and
other property, any and all the rights, powers and
privileges of individual owners thereof, including the
right to vote thereon; to invest and deal in and with
any of the moneys of the Corporation upon such
securities and in such manner as it may think fit and
proper, and from time to time to vary or realize such
investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the
whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and
when the Board of Directors shall determine, and in the
promotion of its said corporate business of investment
and to the extent authorized by law, to lease,
purchase, hold, sell, assign, transfer, pledge,
mortgage and convey real and personal property of any
name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have
the following powers:
(1) To do any or all of the things herein set forth,
to the same extent as natural persons might or could
do, and in any part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of
the assets and liabilities of any person, firm,
association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to
hold or in any manner to dispose of the whole or any
part of the property so purchased; to conduct in any
lawful manner the whole or any part of any business so
acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of
such business.
(3) To take, hold, own, deal in, mortgage or otherwise
lien, and to lease, sell, exchange, transfer, or in any
manner whatever dispose of property, real, personal or
mixed, wherever situated.
(4) To enter into, make, perform and carry out
contracts of every kind with any person, firm,
association or corporation, and, without limit as to
amount, to draw, make, accept, endorse, discount,
execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures, and other
negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or
any of its operations and businesses, without
restriction to the same extent as natural persons might
or could do, to purchase or otherwise acquire, to hold,
own, to mortgage, sell, convey or otherwise dispose of,
real and personal property, of every class and
description, in any State, District, Territory or
Colony of the United States, and in any foreign country
or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this
paragraph shall (except where otherwise expressed in
said paragraph) be nowise limited or restricted by
reference to or inference from the terms of any other
clause of this or any other paragraph in this charter,
but that the objects, purposes and powers specified in
each of the clauses of this paragraph shall be regarded
as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of
stock which the Corporation shall have authority to issue is
forty-one million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock,
par value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock,
par value $1.00 per share (hereinafter referred to as
"Common Stock").
(b) Shares of Preferred Stock may be issued from time to
time in one or more series as may from time to time be
determined by the Board of Directors each of said series to
be distinctly designated. All shares of any one series of
Preferred Stock shall be alike in every particular, except
that there may be different dates from which dividends, if
any, thereon shall be cumulative, if made cumulative. The
voting powers and the preferences and relative,
participating, optional and other special rights of each
such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any
and all other series at any time outstanding; and, subject
to the provisions of subparagraph 1 of Paragraph (c) of this
Article Fourth, the Board of Directors of the Corporation is
hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a
particular series of Preferred Stock, the voting powers and
the designations, preferences and relative, optional and
other special rights, and the qualifications, limitations
and restrictions of such series, including, but without
limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of
shares of Preferred Stock which shall constitute such
series, which number may be increased (except where
otherwise provided by the Board of Directors) or
decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of
the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred
Stock of such series shall be paid, the extent of the
preference or relation, if any, of such dividends to
the dividends payable on any other class or classes, or
series of the same or other class of stock and whether
such dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred
Stock of such series to convert the same into or
exchange the same for, shares of any other class or
classes or of any series of the same or any other class
or classes of stock of the Corporation and the terms
and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series
shall be subject to redemption, and the redemption
price or prices and the time or times at which, and the
terms and conditions on which, Preferred Stock of such
series may be redeemed.
(5) The rights, if any, of the holders of Preferred
Stock of such series upon the voluntary or involuntary
liquidation, merger, consolidation, distribution or
sale of assets, dissolution or winding-up, of the
Corporation.
(6) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the
Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such
series of Preferred Stock which may, without limiting
the generality of the foregoing include the right,
voting as a series or by itself or together with other
series of Preferred Stock or all series of Preferred
Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the
payment of dividends on any one or more series of
Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to
preferential dividends on the Preferred Stock (fixed in
accordance with the provisions of section (b) of this
Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements,
if any, with respect to the setting aside of sums as sinking
funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this
Article Fourth), and subject further to any conditions which
may be fixed in accordance with the provisions of section
(b) of this Article Fourth, then and not otherwise the
holders of Common Stock shall be entitled to receive such
dividends as may be declared from time to time by the Board
of Directors.
(2) After distribution in full of the preferential
amount, if any, (fixed in accordance with the
provisions of section (b) of this Article Fourth), to
be distributed to the holders of Preferred Stock in the
event of voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-
up, of the Corporation, the holders of the Common Stock
shall be entitled to receive all of the remaining
assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to
stockholders ratably in proportion to the number of
shares of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by
the provisions of such resolution or resolutions as may
be adopted by the Board of Directors pursuant to
section (b) of this Article Fourth, each holder of
Common Stock shall have one vote in respect of each
share of Common Stock held on all matters voted upon by
the stockholders.
(d) No holder of any of the shares of any class or series
of stock or of options, warrants or other rights to purchase
shares of any class or series of stock or of other
securities of the Corporation shall have any preemptive
right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or
series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or
series, or bonds, certificates of indebtedness, debentures
or other securities convertible into or exchangeable for
stock of the Corporation of any class or series, or carrying
any right to purchase stock of any class or series, but any
such unissued stock, additional authorized issue of shares
of any class or series of stock or securities convertible
into or exchangeable for stock, or carrying any right to
purchase stock, may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms,
corporations or associations, whether such holders or
others, and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole
discretion.
(e) The relative powers, preferences and rights of each
series of Preferred Stock in relation to the relative
powers, preferences and rights of each other series of
Preferred Stock shall, in each case, be as fixed from time
to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section
(b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the
series of Preferred Stock as are from time to time
outstanding shall not be required for the issuance by the
Board of Directors of any other series of Preferred Stock
whether or not the powers, preferences and rights of such
other series shall be fixed by the Board of Directors as
senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the
resolution or resolutions as to any series of Preferred
Stock adopted pursuant to section (b) of this Article Fourth
that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the
outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of
Preferred Stock.
(f) Subject to the provisions of section (e), shares of any
series of Preferred Stock may be issued from time to time as
the Board of Directors of the Corporation shall determine
and on such terms and for such consideration as shall be
fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time
as the Board of Directors of the Corporation shall determine
and on such terms and for such consideration as shall be
fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of
Preferred Stock may, without a class or series vote, be
increased or decreased from time to time by the affirmative
vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation
shall be conducted and managed by a Board of Directors. The
number of directors constituting the entire Board shall be
not less than five nor more than twenty-five as fixed from
time to time by vote of a majority of the whole Board,
provided, however, that the number of directors shall not be
reduced so as to shorten the term of any director at the
time in office, and provided further, that the number of
directors constituting the whole Board shall be twenty-four
until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three
classes, as nearly equal in number as the then total number
of directors constituting the whole Board permits, with the
term of office of one class expiring each year. At the
annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term
expiring at the next succeeding annual meeting, directors of
the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and
directors of the third class shall be elected to hold office
for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and
any newly created directorships resulting from any increase
in the directors, may be filled by the Board of Directors,
acting by a majority of the directors then in office,
although less than a quorum, and any directors so chosen
shall hold office until the next annual election of
directors. At such election, the stockholders shall elect a
successor to such director to hold office until the next
election of the class for which such director shall have
been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall
shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, this Charter or Act of Incorporation or
the By-Laws of the Corporation), any director or the entire
Board of Directors of the Corporation may be removed at any
time without cause, but only by the affirmative vote of the
holders of two-thirds or more of the outstanding shares of
capital stock of the Corporation entitled to vote generally
in the election of directors (considered for this purpose as
one class) cast at a meeting of the stockholders called for
that purpose.
(d) Nominations for the election of directors may be made
by the Board of Directors or by any stockholder entitled to
vote for the election of directors. Such nominations shall
be made by notice in writing, delivered or mailed by first
class United States mail, postage prepaid, to the Secretary
of the Corporation not less than 14 days nor more than 50
days prior to any meeting of the stockholders called for the
election of directors; provided, however, that if less than
21 days' notice of the meeting is given to stockholders,
such written notice shall be delivered or mailed, as
prescribed, to the Secretary of the Corporation not later
than the close of the seventh day following the day on which
notice of the meeting was mailed to stockholders. Notice of
nominations which are proposed by the Board of Directors
shall be given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i)
the name, age, business address and, if known, residence
address of each nominee proposed in such notice, (ii) the
principal occupation or employment of such nominee and (iii)
the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
(f) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was
not made in accordance with the foregoing procedure, and if
he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at
any annual or special meeting of stockholders of the
Corporation may be taken without a meeting, and the power of
stockholders to consent in writing, without a meeting, to
the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from
time to time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given
the same powers, rights and privileges as may be conferred
upon corporations organized under the Act entitled "An Act
Providing a General Corporation Law", approved March 10,
1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private
Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a
majority of the whole Board, may designate any of their
number to constitute an Executive Committee, which
Committee, to the extent provided in said resolution, or in
the By-Laws of the Company, shall have and may exercise all
of the powers of the Board of Directors in the management of
the business and affairs of the Corporation, and shall have
power to authorize the seal of the Corporation to be affixed
to all papers which may require it.
Eleventh: - The private property of the stockholders shall
not be liable for the payment of corporate debts to any
extent whatever.
Twelfth: - The Corporation may transact business in any part
of the world.
Thirteenth: - The Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-Laws of
the Corporation by a vote of the majority of the entire
Board. The stockholders may make, alter or repeal any By-
Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be
adopted only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of
the Corporation entitled to vote generally in the election
of directors (considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time
to time designated by the Board, and the Directors may keep
the books of the Company outside of the State of Delaware at
such places as may be from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote
required by law, and except as otherwise expressly provided
in sections (b) and (c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with or into
(i) any Interested Stockholder (as hereinafter defined)
or (ii) any other corporation (whether or not itself an
Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter
defined) of an Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of related transactions) to or with any
Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation
or any Subsidiary having an aggregate fair market value
of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or
any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for
cash, securities or other property (or a combination
thereof) having an aggregate fair market value of
$1,000,000 or more, or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder, or any
Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of
directors, considered for the purpose of this Article Fifteenth
as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required,
or that some lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
(2) The term "business combination" as used in
this Article Fifteenth shall mean any transaction
which is referred to any one or more of clauses
(A) through (E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article
Fifteenth shall not be applicable to any particular
business combination and such business combination
shall require only such affirmative vote as is required
by law and any other provisions of the Charter or Act
of Incorporation of By-Laws if such business
combination has been approved by a majority of the
whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation
or other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation
or any Subsidiary) who or which as of the record date for
the determination of stockholders entitled to notice of and
to vote on such business combination, or immediately prior
to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly,
of more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial
owner, directly or indirectly, of not less than 10% of
the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in
any share of capital stock of the Corporation which
were at any time within two years prior thereto
beneficially owned by any Interested Stockholder, and
such assignment or succession shall have occurred in
the course of a transaction or series of transactions
not involving a public offering within the meaning of
the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting
Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or
indirectly, by any other person with which such first
mentioned person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of
any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
deemed owned through application of paragraph (3) above but
shall not include any other Voting Shares which may be
issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective
meanings given those terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule
3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect in December
31, 1981) is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the
definition of Investment Stockholder set forth in paragraph
(2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
Fifteenth on the basis of information known to them,
(1) the number of Voting Shares beneficially owned by
any person (2) whether a person is an Affiliate or
Associate of another, (3) whether a person has an
agreement, arrangement or understanding with another as
to the matters referred to in paragraph (3) of section
(c), or (4) whether the assets subject to any business
combination or the consideration received for the
issuance or transfer of securities by the Corporation,
or any Subsidiary has an aggregate fair market value of
$1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall
be construed to relieve any Interested Stockholder from
any fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this
Charter or Act of Incorporation or the By-Laws of the
Corporation (and in addition to any other vote that may be
required by law, this Charter or Act of Incorporation by the
By-Laws), the affirmative vote of the holders of at least
two-thirds of the outstanding shares of the capital stock of
the Corporation entitled to vote generally in the election
of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this
Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not
be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a Director,
except to the extent such exemption from liability or
limitation thereof is not permitted under the Delaware
General Corporation Laws as the same exists or may hereafter
be amended.
(b) Any repeal or modification of the foregoing
paragraph shall not adversely affect any right or
protection of a Director of the Corporation existing
hereunder with respect to any act or omission occurring
prior to the time of such repeal or modification."
I ................................................
.................. Secretary of Wilmington Trust
Company, do hereby certify that the foregoing is a
true and correct copy of the Charter or Act of
Incorporation of Wilmington Trust Company, as
heretofore amended and changed from time to time,
copies of which, certified by the Secretary of the
State of Delaware, are on file in the office of
Wilmington Trust Company.
Date ...................
.......................................
Secretary
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on February 21, 1991
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held
on the third Thursday in April each year at the principal office
at the Company or at such other date, time, or place as may be
designated by resolution by the Board of Directors.
Section 2. Special meetings of all stockholders may be
called at any time by the Board of Directors, the Chairman of the
Board or the President.
Section 3. Notice of all meetings of the stockholders shall
be given by mailing to each stockholder at least ten (10 days
before said meeting, at his last known address, a written or
printed notice fixing the time and place of such meeting.
Section 4. A majority in the amount of the capital stock of
the Company issued and outstanding on the record date, as herein
determined, shall constitute a quorum at all meetings of
stockholders for the transaction of any business, but the holders
of a small number of shares may adjourn, from time to time,
without further notice, until a quorum is secured. At each
annual or special meeting of stockholders, each stockholder shall
be entitled to one vote, either in person or by proxy, for each
shares of stock registered in the stockholder's name on the books
of the Company on the record date for any such meeting as
determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of
Directors shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-
two (72) years shall be nominated for election to the Board of
Directors of the Company, provided, however, that this limitation
shall not apply to any person who was serving as director of the
Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold
office for three years or until their successors are elected and
qualified.
Section 4. The affairs and business of the Company shall be
managed and conducted by the Board of Directors.
Section 5. Regular meetings of the Board of Directors shall
be held on the third Thursday of each month at the principal
office of the Company, or at such other place and time as may be
designated by the Board of Directors, the Chairman of the Board,
or the President.
Section 6. Special meetings of the Board of Directors may
be called at any time by the Chairman of the Board of Directors
or by the President, and shall be called upon the written request
of a majority of the directors.
Section 7. A majority of the directors elected and
qualified shall be necessary to constitute a quorum for the
transaction of business at any meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each
director of any special meeting of the Board of Directors, and of
any change in the time or place of any regular meeting, stating
the time and place of such meeting, which shall be mailed not
less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board
of Directors, although less than a quorum, shall have the right
to elect the successor who shall hold office for the remainder of
the full term of the class of directors in which the vacancy
occurred, and until such director's successor shall have been
duly elected and qualified.
Section 10. The Board of Directors at its first meeting
after its election by the stockholders shall appoint an Executive
Committee, a Trust Committee, an Audit Committee and a
Compensation Committee, and shall elect from its own members a
Chairman of the Board of Directors and a President who may be the
same person. The Board of Directors shall also elect at such
meeting a Secretary and a Treasurer, who may be the same person,
may appoint at any time such other committees and elect or
appoint such other officers as it may deem advisable. The Board
of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove,
with or without cause, any member of any Committee appointed by
it or any associate director or officer elected by it and may
appoint or elect his successor.
Section 12. The Board of Directors may designate an officer
to be in charge of such of the departments or division of the
Company as it may deem advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed
of not more than nine members who shall be selected by the Board
of Directors from its own members and who shall hold office
during the pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to
transact all business for and in behalf of the Company that may
be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at
least once a week in each week the Board is not regularly
scheduled to meet. A majority of its members shall be necessary
to constitute a quorum for the transaction of business. Special
meetings of the Executive Committee may be held at any time when
a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors
at its next meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the
Company, and shall direct the disposal of the same, in accordance
with such rules and regulations as the Board of Directors from
time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the
affairs and business of the Company by its directors and officers
as contemplated by these By-Laws any two available members of the
Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company
in accordance with the provisions of Article III of these By-
Laws; and if less than three members of the Trust Committee is
constituted immediately prior to such disaster shall be available
for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to
the Trust Committee under Article III Section 2 hereof. In the
event of the unavailability, at such time, of a minimum of two
members of such Executive Committee, any three available
directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company
in accordance with the foregoing provisions of this Section.
This By-Law shall be subject to implementation by Resolutions of
the Board of Directors presently existing or hereafter passed
from time to time for that purpose, and any provisions of these
By-Laws(other than this Section) and any resolutions which are
contrary to the provisions of this Section or to the provisions
of any such implementary Resolutions shall be suspended during
such a disaster period until it shall be determined by any
interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other
provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of
not more than thirteen members who shall be selected by the Board
of Directors, a majority of whom shall be members of the Board of
Directors and who shall hold office during the pleasure of the
Board.
(B) The Trust Committee shall have general
supervision over the Trust Department and the investment of trust
funds, in all matters, however, being subject to the approval of
the Board of Directors.
(C) The Trust Committee shall meet at the
principal office of the Company or elsewhere in its discretion at
least once a month. A majority of its members shall be necessary
to constitute a quorum for the transaction of business. Special
meetings of the Trust Committee may be held at any time when a
quorum is present.
(D) Minutes of each meeting of the Trust
Committee shall be kept and promptly submitted to the Board of
Directors.
(E) The Trust Committee shall have the power to
appoint Committees and/or designate officers or employees of the
Company to whom supervision over the investment of trust funds
may be delegated when the Trust Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of
five members who shall be selected by the Board of Directors from
its own members, none of whom shall be an officer of the Company,
and shall hold office at the pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however
subject to the approval of the Board of Directors; it shall
consider all matters brought to its attention by the officer in
charge of the Audit Division, review all reports of examination
of the Company made by any governmental agency or such
independent auditor employed for that purpose, and make such
recommendations to the Board of Directors with respect thereto or
with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper
for the transaction of its business, and a majority of its
Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be
composed of not more than five (5) members who shall be selected
by the Board of Directors from its own members who are not
officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general
advise upon all matters of policy concerning the Company brought
to its attention by the management and from time to time review
the management of the Company, major organizational matters,
including salaries and employee benefits and specifically shall
administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may
be called at any time by the Chairman of the Compensation
Committee, the Chairman of the Board of Directors, or the
President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may
be elected by the Board of Directors as an associate director, to
serve during the pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion
of all matters brought to the Board, with the exception that he
would have no right to vote. An associate director will be
eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active
directors.
Section 6. Absence or Disqualification of Any Member of a
Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws
of this Company, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member
of the Board of Directors to act at the meeting in the place of
any such absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall
preside at all meetings of the Board and shall have such further
authority and powers and shall perform such duties as the Board
of Directors may from time to time confer and direct. He shall
also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of
the Company.
Section 2. The President shall have the powers and duties
pertaining to the office of the President conferred or imposed
upon him by statute or assigned to him by the Board of Directors
in the absence of the Chairman of the Board the President shall
have the powers and duties of the Chairman of the Board.
Section 3. The Chairman of the Board of Directors or the
President as designated by the Board of Directors, shall carry
into effect all legal directions of the Executive Committee and
of the Board of Directors, and shall at all times exercise
general supervision over the interest, affairs and operations of
the Company and perform all duties incident to his office.
Section 4. There may be one or more Vice Presidents,
however denominated by the Board of Directors, who may at any
time perform all the duties of the Chairman of the Board of
Directors and/or the President and such other powers and duties
as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or
the President and by the officer in charge of the department or
division to which they are assigned.
Section 5. The Secretary shall attend to the giving of
notice of meetings of the stockholders and the Board of
Directors, as well as the Committees thereof, to the keeping of
accurate minutes of all such meetings and to recording the same
in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable
under the circumstances, all such notices shall be in writing and
mailed well in advance of the scheduled date of any other
meeting. He shall have custody of the corporate seal and shall
affix the same to any documents requiring such corporate seal and
to attest the same.
Section 6. The Treasurer shall have general supervision
over all assets and liabilities of the Company. He shall be
custodian of and responsible for all monies, funds and valuables
of the Company and for the keeping of proper records of the
evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the
expenditures of the Company and shall report to the Board of
Directors at each regular meeting of the condition of the
Company, and perform such other duties as may be assigned to him
from time to time by the Board of Directors of the Executive
Committee.
Section 7. There may be a Controller who shall exercise
general supervision over the internal operations of the Company,
including accounting, and shall render to the Board of Directors
at appropriate times a report relating to the general condition
and internal operations of the Company.
There may be one or more subordinate accounting or
controller officers however denominated, who may perform the
duties of the Controller and such duties as may be prescribed by
the Controller.
Section 8. The officer designated by the Board of Directors
to be in charge of the Audit Division of the Company with such
title as the Board of Directors shall prescribe, shall report to
and be directly responsible only to the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of
the Auditor and such duties as may be prescribed by the officer
in charge of the Audit Division.
Section 9. There may be one or more officers, subordinate
in rank to all Vice Presidents with such functional titles as
shall be determined from time to time by the Board of Directors,
who shall ex officio hold the office Assistant Secretary of this
Company and who may perform such duties as may be prescribed by
the officer in charge of the department or division to whom they
are assigned.
Section 10. The powers and duties of all other officers of
the Company shall be those usually pertaining to their respective
offices, subject to the direction of the Board of Directors, the
Executive Committee, Chairman of the Board of Directors or the
President and the officer in charge of the department or division
to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the
books of the Company and a transfer book shall be kept in which
all transfers of stock shall be recorded.
Section 2. Certificate of stock shall bear the signature of
the President or any Vice President, however denominated by the
Board of Directors and countersigned by the Secretary or
Treasurer or an Assistant Secretary, and the seal of the
corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only
upon the books of the Company by the holder thereof or his
attorney, upon surrender of the certificate properly endorsed.
Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate
certificates of stock shall be issued only upon giving such
security as may be satisfactory to the Board of Directors or the
Executive Committee.
Section 3. The Board of Directors of the Company is
authorized to fix in advance a record date for the determination
of the stockholders entitled to notice of, and to vote at, any
meeting of stockholders and any adjournment thereof, or entitled
to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change,
conversion or exchange of capital stock, or in connection with
obtaining the consent of stockholders for any purpose, which
record date shall not be more than 60 nor less than 10 days
proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in
the following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the
calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any
Vice President, however denominated by the Board of Directors,
shall have full power and authority to enter into, make, sign,
execute, acknowledge and/or deliver and the Secretary or any
Assistant Secretary shall have full power and authority to attest
and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds,
notes, mortgages and all other instruments incident to the
business of this Company or in acting as executor, administrator,
guardian, trustee, agent or in any other fiduciary or
representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in
the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of
Directors or the Executive Committee, and any and all such
instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the
Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the
Company, other than salaried officers of the Company, shall be
paid such reasonable honoraria or fees for attending meetings of
the Board of Directors as the Board of Directors may from time to
time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the
Company, shall be paid such reasonable honoraria or fees for
services as members of committees as the Board of Directors shall
from time to time determine and directors and associate directors
may be employed by the Company for such special services as the
Board of Directors may from time to time determine and shall be
paid for such special services so performed reasonable
compensation as may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was
or is made or is threatened to be made a party or is otherwise
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "proceeding") by
reason of the fact that he, or a person for whom he is the legal
representative, is or was a director, officer, employee or agent
of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary or agent
of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect
to employee benefit plans, against all liability and loss
suffered and expenses reasonably incurred by such person. The
Corporation shall indemnify a person in connection with a
proceeding initiated by such person only if the proceeding was
authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses
incurred in defending any proceeding in advance of its final
disposition, provided, however, that the payment of expenses
incurred by a Director officer in his capacity as a Director or
officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director
or officer to repay all amounts advanced if it should be
ultimately determined that the Director or officer is not
entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment
of expenses, under this Article X is not paid in full within
ninety days after a written claim therefor has been received by
the Corporation the claimant may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden
of proving that the claimant was not entitled to the requested
indemnification of payment of expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision
of the Charter or Act of Incorporation, these By-Laws, agreement,
vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right
or protection hereunder of any person in respect of any act or
omission occurring prior to the time of such repeal or
modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or
repealed, in whole or in part, and any new By-Law or By-Laws
adopted at any regular or special meeting of the Board of
Directors by a vote of the majority of all the members of the
Board of Directors then in office.
I, . . . . . . . . . . . . . . . . . . . .
Assistant Secretary of Wilmington Trust
Company, do hereby certify that the foregoing
is a true and correct copy of the By-Laws of
the Wilmington Trust Company.
Date . . . . . . . . . . . . . . . . . . . .
Assistant Secretary. . . . . . . . . . . . .
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of
1939, Wilmington Trust Company hereby consents that reports of
examinations by Federal, State, Territorial or District
authorities may be furnished by such authorities to the
Securities Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: May 23, 1996 By: /s/ Emmett R. Harmon
Name: Emmett R. Harmon
Title: Vice President
EXHIBIT "D"
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been
approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state publication
requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
------------------------ ----------
Name of Bank City
in the State of DELAWARE, at the close of business on March 31,
1996.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coins . . . . . . . . . . . . . . . . . . . . . .198,158
Interest-bearing balances . . . . . . . . . . . . . . . . .0
Held-to-maturity securities. . . . . . . . . . . . . . . .536,638
Available-for-sale securities. . . . . . . . . . . . . . .862,050
Federal funds sold . . . . . . . . . . . . . . . . . . . . 82,000
Securities purchased under agreements to resell. . . . . . 25,000
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . .3,404,372
LESS: Allowance for loan and lease losses. . . . . . 48,153
LESS: Allocated transfer risk reserve. . . . . . . . . . .0
Loans and leases, net of unearned income,
allowance, and reserve. . . . . . . . . . . . . . .3,356,219
Assets held in trading account . . . . . . . . . . . . . . . . .0
Premises and fixed assets (including
capitalized leases). . . . . . . . . . . . . . . . . . . . 76,915
Other real estate owned. . . . . . . . . . . . . . . . . . 16,314
Investments in unconsolidated subsidiaries
and associated companies . . . . . . . . . . . . . . . . . . .146
Customers' liability to this bank on acceptance
outstanding . . . . . . . . . . . . . . . . . . . . . . . . .0
Intangible assets. . . . . . . . . . . . . . . . . . . . . .4,403
Other assets . . . . . . . . . . . . . . . . . . . . . . .107,240
Total assets . . . . . . . . . . . . . . . . . . . . . .5,265,083
CONTINUED ON NEXT PAGE LIABILITIES
Deposits:
In domestic offices. . . . . . . . . . . . . . . . . . .3,450,823
Noninterest-bearing . . . . . . . . . . . . . . . . .689,843
Interest-bearing. . . . . . . . . . . . . . . . . .2,760,980
Federal funds purchased. . . . . . . . . . . . . . . . . . 99,885
Securities sold under agreements to repurchase . . . . . .198,506
Demand notes issued to the U.S. Treasury . . . . . . . . . 38,856
Trading liabilities. . . . . . . . . . . . . . . . . . . . . . .0
Other borrowed money:. . . . . . . . . . . . . . . . . . .///////
With original maturity of one year or less. . . . . .930,611
With original maturity of more than one year. . . . . 28,000
Mortgage indebtedness and obligations under
capitalized lease. . . . . . . . . . . . . . . . . . . . . .0
Bank's liability on acceptances executed
and outstanding. . . . . . . . . . . . . . . . . . . . . . .0
Subordinated notes and debentures. . . . . . . . . . . . . . . .0
Other liabilities. . . . . . . . . . . . . . . . . . . . .100,832
Total liabilities. . . . . . . . . . . . . . . . . . . .4,847,513
Limited-life preferred stock and related surplus . . . . . . . .0
EQUITY CAPITAL
Perpetual preferred stock and related surplus. . . . . . . . . .0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . .500
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . 62,118
Undivided profits and capital reserves . . . . . . . . . .354,791
Net unrealized holding gains (losses)
on available-for-sale securities . . . . . . . . . . . . . . .161
Total equity capital . . . . . . . . . . . . . . . . . . .417,570
Total liabilities, limited-life
preferred stock, and equity capital. . . . . . . . . . .5,265,083
Exhibit 99.1
LETTER OF TRANSMITTAL
Continental Airlines, Inc.
Offer to Exchange
Pass Through Certificates, Series 1996,
which have been Registered under the Securities Act of 1933, as
amended,
for any and all Outstanding
Pass Through Certificates, Series 1996
Pursuant to the Prospectus, dated June , 1996.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY
TIME, ON
[________], 1996, UNLESS EXTENDED (THE "EXPIRATION DATE"),
TENDERS MAY
BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON
[________], 1996.
By Mail, Overnight Delivery: By Hand:
Wilmington Trust Company Wilmington Trust
Company
1100 North Market Street 1105 North Market Street,
1st Floor
Wilmington, Delaware 19890-0001 Wilmington, Delaware
19890
Attention: Jill Rylee Attention: Corporate Trust
Operations
Facsimile Transmission:
(302) 651-1079
Confirm by Telephone:
(302) 651-8869
Jill Rylee
Delivery of this instrument to an address other than as
set forth above, or transmission of instructions via facsimile
other than as set forth above, will not constitute a valid
delivery.
The undersigned acknowledges receipt of the Prospectus,
dated June , 1996 (the "Prospectus"), of Continental Airlines,
Inc., a Delaware corporation (the "Company"), and this Letter of
Transmittal (this "Letter"), which together constitute the offer
(the "Exchange Offer") to exchange an aggregate principal amount
of up to $489,267,000 of Pass Through Certificates, Series 1996
(the "New Certificates") for an equal principal amount of the
outstanding Pass Through Certificates, Series 1996 (the "Old
Certificates").
For each Old Certificate accepted for exchange, the
holder of such Old Certificate will receive a New Certificate
having a principal amount at maturity equal to that of the
surrendered Old Certificate. The New Certificates will accrue
interest at the applicable per annum rate for such Trust as set
forth on the cover page of the Prospectus, from the last date on
which interest was paid on the Old Certificates surrendered in
exchange therefor. Interest on the New Certificates is payable
on January 15, April 15, July 15 and October 15 of each year
commencing April 15, 1996, subject to the terms of the
Intercreditor Agreement (as defined in the Prospectus). In the
event that either (i) (x) the Registration Statement was not
filed with the Commission on or prior to the 120th calendar day
following the Issue Date, or (y) the Registration Statement has
not been declared effective on or prior to the 60th calendar day
following the filing thereof with the Commission or (z) the
Exchange Offer is not consummated on or prior to the 30th
calendar day following the effectiveness of the Registration
Statement or (ii) a Shelf Registration Statement is required to
be filed with the Commission pursuant to the Registration Rights
Agreement and such Shelf Registration Statement is not declared
effective on or prior to the 210th calendar day following the
Issue Date (each, a "Registration Default"), the interest rate
per annum borne by the Equipment Notes and passed through to
holders of Old Certificates shall be increased by (1) 0.25% from
and including the day following such Registration Default to but
excluding the 90th day following such Registration Default and
(2) 0.50% thereafter; provided, however, that such increase shall
cease to be in effect from and including the date on which such
Registration Default has been cured. In the event that the Shelf
Registration Statement ceases to be effective at any time, during
the period the Company is required to keep such Shelf
Registration Statement effective, for more than 60 days, whether
or not consecutive, during any 12-month period, the interest rate
per annum borne by the Equipment Notes shall be increased by
0.50% from the 61st day of the applicable 12-month period such
Shelf Registration Statement ceases to be effective until such
time as the Shelf Registration Statement again becomes effective.
The Company reserves the right, at any time or from time to time,
to extend the Exchange Offer at its discretion, in which event
the term "Expiration Date" shall mean the latest time and date to
which the Exchange Offer is extended. The Company shall notify
the holders of the Old Certificates of any extension by means of
a press release or other public announcement prior to 9:00 A.M.,
New York City time, on the next business day after the previously
scheduled Expiration Date.
This Letter is to be completed by a holder of Old
Certificates either if Old Certificates are to be forwarded
herewith or if a tender of Old Certificates, if available, is to
be made by book-entry transfer to the account maintained by the
Exchange Agent at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedure set forth in "The
Exchange Offer" section of the Prospectus. Holders of Old
Certificates whose certificates are not immediately available, or
who are unable to deliver their certificates or confirmation of
the book-entry tender of their Old Certificates into the Exchange
Agent's account at the Book-Entry Transfer Facility (a "Book-
Entry Confirmation") and all other documents required by this
Letter to the Exchange Agent on or prior to the Expiration Date,
must tender their Old Certificates according to the guaranteed
delivery procedures set forth in "The Exchange Offer-Guaranteed
Delivery Procedures" section of the Prospectus. See Instruction
1. Delivery of documents to the Book-Entry Transfer Facility
does not constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes
below and signed this Letter to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
List below the Old Certificates to which this Letter
relates. If
the space provided below is inadequate, the certificate numbers
and
principal amount of Old Certificates should be listed on a
separate signed
schedule affixed hereto.
DESCRIPTION OF OLD 1 2
3
CERTIFICATES
Aggregate
Name(s) and Address(es) Certificate Principal
Principal
of Registered Holder(s) Number(s)* Amount
Amount
(Please fill in, if blank) of Old
Tendered**
- -----------------------------------------------------------------
- ----------
_______________ _______________
________________
_______________ _______________
________________
_____Total_____ _______________
________________
* Need not be completed if Old Certificates are being tendered
by
book-entry transfer.
** Unless otherwise indicated in this column, a holder will be
deemed to
have tendered ALL of the Old Certificates indicated in
column 2. See
Instruction 2. Old Certificates tendered hereby must be in
denominations of principal amount of $1,000 and any integral
multiple
thereof. See Instruction 1.
- -----------------------------------------------------------------
- ----------
_
|_| CHECK HERE IF TENDERED OLD CERTIFICATES ARE BEING DELIVERED
BY BOOK-
ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT
WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution
________________________________________
Account Number _____________________ Transaction Code
Number ________
_
|_| CHECK HERE IF TENDERED OLD CERTIFICATES ARE BEING DELIVERED
PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s)
______________________________________
Window Ticket Number (if any)
________________________________________
Date of Execution of Notice of Guaranteed Delivery
___________________
Name of Institution which guaranteed delivery
________________________
If Delivered by Book-Entry Transfer, Complete the Following:
Account Number _____________________ Transaction Code
Number ________
_
|_| CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:____________________________________________________________
_____
Address:_________________________________________________________
_____
_________________________________________________________________
_
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the
Exchange Offer, the undersigned hereby tenders to the Company the
aggregate principal amount of Old Certificates indicated above.
Subject to, and effective upon, the acceptance for exchange of
the Old Certificates tendered hereby, the undersigned hereby
sells, assigns and transfers to, or upon the order of, the
Company all right, title and interest in and to such Old
Certificates as are being tendered hereby.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign
and transfer the Old Certificates tendered hereby and that the
Company will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, charges and encumbrances
and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that
any New Certificates acquired in exchange for Old Certificates
tendered hereby will have been acquired in the ordinary course of
business of the person receiving such New Certificates, whether
or not such person is the undersigned, that neither the holder of
such Old Certificates nor any such other person is engaged in, or
intends to engage in a distribution of such New Certificates, or
has an arrangement or understanding with any person to
participate in the distribution of such New Certificates, and
that neither the holder of such Old Certificates nor any such
other person is an "affiliate," as defined in Rule 405 under the
Securities Act of 1933, as amended (the "Securities Act"), of the
Company.
The undersigned also acknowledges that this Exchange
Offer is being made based upon the Company's understanding of an
interpretation by the staff of the Securities and Exchange
Commission (the "Commission") as set forth in no-action letters
issued to third parties, including Exxon Capital Holdings
Corporation, SEC No-Action Letter (available April 13, 1989) (the
"Exxon Capital Letter"), Morgan Stanley & Co. Incorporated, SEC
No-Action Letter (available June 5, 1991) (the "Morgan Stanley
Letter") and Shearman & Sterling, SEC No-Action Letter (available
July 2, 1993) (the "Shearman & Sterling Letter"), that the New
Certificates issued in exchange for the Old Certificates pursuant
to the Exchange Offer may be offered for resale, resold and
otherwise transferred by holders thereof (other than a broker-
dealer who acquires such New Certificates directly from the
Company for resale pursuant to Rule 144A under the Securities Act
or any other available exemption under the Securities Act or any
such holder that is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act), without compliance
with the registration and prospectus delivery provisions of the
Securities Act, provided that such New Certificates are acquired
in the ordinary course of such holders' business and such holders
are not engaged in, and do not intend to engage in, a
distribution of such New Certificates and have no arrangement
with any person to participate in the distribution of such New
Certificates. However, the staff of the Commission has not
considered the Exchange Offer in the context of a no-action
letter and there can be no assurance that the staff of the
Commission would make a similar determination with respect to the
Exchange Offer as in other circumstances. If a holder of Old
Certificates is engaged in or intends to engage in a distribution
of the New Certificates or has any arrangement or understanding
with respect to the distribution of the New Certificates to be
acquired pursuant to the Exchange Offer, such holder could not
rely on the applicable interpretations of the staff of the
Commission and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with
any secondary resale transaction. If the undersigned is a
broker-dealer that will receive New Certificates for its own
account in exchange for Old Certificates, it represents that the
Old Certificates to be exchanged for the New Certificates were
acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a
prospectus in connection with any resale of such New
Certificates; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver
any additional documents deemed by the Company to be necessary or
desirable to complete the sale, assignment and transfer of the
Old Certificates tendered hereby. All authority conferred or
agreed to be conferred in this Letter and every obligation of the
undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy
and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the
undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in "The Exchange Offer-Withdrawal
of Tenders" section of the Prospectus.
Unless otherwise indicated herein in the box entitled
"Special Issuance Instructions" below, please deliver the New
Certificates (and, if applicable, substitute certificates
representing Old Certificates for any Old Certificates not
exchanged) in the name of the undersigned or, in the case of a
book-entry delivery of Old Certificates, please credit the
account indicated above maintained at the Book-Entry Transfer
Facility. Similarly, unless otherwise indicated under the box
entitled "Special Delivery Instructions" below, please send the
New Certificates (and, if applicable, substitute certificates
representing Old Certificates for any Old Certificates not
exchanged) to the undersigned at the address shown above in the
box entitled "Description of Old Certificates."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED
"DESCRIPTION OF OLD NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE
DEEMED TO HAVE TENDERED THE OLD CERTIFICATES AS SET FORTH IN SUCH
BOX ABOVE.
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Old Certificates
not exchanged and/or New Certificates are to be issued in the
name of and sent to someone other than the person(s) whose
signature(s) appear(s) on this Letter above, or if Old
Certificates delivered by book-entry transfer which are not
accepted for exchange are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the
account indicated above.
Issue New Certificates and/or Old Certificates to:
Name(s):...................................................
(Please Type or Print)
...........................................................
(Please Type or Print)
Address:...................................................
............................................................
(Including Zip Code)
(Complete accompanying Substitute Form W-9)
Credit unexchanged Old Certificates delivered by book-entry
transfer to the Book-Entry Transfer Facility account set forth
below.
_________________________________________________________________
(Book-Entry Transfer Facility
Account Number, if applicable)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Old Certificates
not exchanged and/or New Certificates are to be sent to someone
other than the person(s) whose signature(s) appear(s) on this
Letter above or to such person(s) at an address other than shown
in the box entitled "Description of Old Certificates" on this
Letter above.
Mail New Certificates and/or Old Certificates to:
Name(s):...................................................
(Please Type or Print)
...........................................................
(Please Type or Print)
Address:...................................................
............................................................
(Including Zip Code)
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE
CERTIFICATES FOR OLD CERTIFICATES OR A BOOK-ENTRY CONFIRMATION
AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED
DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(Complete accompanying Substitute Form W-9 on reverse
side)
Dated:...........................................................
...., 1996
.................................................................
....x
.................................................................
....x
(Signature(s) of Owner)
(Date)
Area Code and Telephone
Number:.......................................
If a holder is tendering any Old Certificates, this
Letter must
be signed by the registered holder(s) as the name(s) appear(s) on
the
certificate(s) for the Old Certificates or by any person(s)
authorized to
become registered holder(s) by endorsements and documents
transmitted
herewith. If signature is by a trustee, executor, administrator,
guardian,
officer or other person acting in a fiduciary or representative
capacity,
please set forth full title. See Instruction 3.
Name(s):.........................................................
.....
.................................................................
.....
(Please Type or Print)
Capacity:........................................................
.....
Address:.........................................................
.....
.................................................................
.....
(Including Zip Code)
SIGNATURE GUARANTEE
(if required by Instruction 3)
Signature(s) Guaranteed by
an Eligible
Institution:..............................................
(Authorized Signature)
.................................................................
.....
(Title)
.................................................................
.....
(Name and Firm)
Dated:...........................................................
...., 1996
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer to Exchange
Pass Through Certificates, Series 1996,
which have been registered under the
Securities Act of 1933, as amended,
for any and all Outstanding Pass Through Certificates,
Series 1996
Continental Airlines, Inc.
1. Delivery of this Letter and Old Certificates; Guaranteed
Delivery Procedures.
This Letter is to be completed by holders of Old
Certificates either if certificates are to be forwarded herewith
or if tenders are to be made pursuant to the procedures for
delivery by book-entry transfer set forth in "The Exchange
Offer - Book-Entry Transfer" section of the Prospectus.
Certificates for all physically tendered Old Certificates, or
Book-Entry Confirmation, as the case may be, as well as a
properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by this
Letter, must be received by the Exchange Agent at the address set
forth herein on or prior to the Expiration Date, or the tendering
holder must comply with the guaranteed delivery procedures set
forth below. Old Certificates tendered hereby must be in
denominations of principal amount of maturity of $1,000 and any
integral multiple thereof.
Holders of Old Certificates whose certificates for Old
Certificates are not immediately available or who cannot deliver
their certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date, or who cannot
complete the procedure for book-entry transfer on a timely basis,
may tender their Old Certificates pursuant to the guaranteed
delivery procedures set forth in "The Exchange Offer-Guaranteed
Delivery Procedures" section of the Prospectus. Pursuant to such
procedures, (i) such tender must be made through an Eligible
Institution (as defined below), (ii) prior to the Expiration
Date, the Exchange Agent must receive from such Eligible
Institution a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery), setting forth the
name and address of the holder of Old Certificates and the amount
of Old Certificates tendered, stating that the tender is being
made thereby and guaranteeing that within three New York Stock
Exchange ("NYSE") trading days after the date of execution of the
Notice of Guaranteed Delivery, the certificates for all
physically tendered Old Certificates, or a Book-Entry
Confirmation, as the case may be, and any other documents
required by this letter will be deposited by the Eligible
Institution with the Exchange Agent, and (iii) the certificates
for all physically tendered Old Certificates, in proper form for
transfer, or Book-Entry Confirmation, as the case may be, and all
other documents required by this Letter, are received by the
Exchange Agent within three NYSE trading days after the date of
execution of the Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Old Certificates and
all other required documents is at the election and risk of the
tendering holders, but the delivery will be deemed made only when
actually received or confirmed by the Exchange Agent. If Old
Certificates are sent by mail, it is suggested that the mailing
be made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date.
See "The Exchange Offer" section of the Prospectus.
2. Partial Tenders (not applicable to holders of Old
Certificates who tender by book-entry transfer).
If less than all of the Old Certificates evidenced by a
submitted certificate are to be tendered, the tendering holder(s)
should fill in the aggregate principal amount of Old Certificates
to be tendered in the box above entitled "Description of Old
Certificates-Principal Amount Tendered." A reissued certificate
representing the balance of nontendered Old Certificates will be
sent to such tendering holder, unless otherwise provided in the
appropriate box on this Letter, promptly after the Expiration
Date. All of the Old Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise
indicated.
3. Signatures of this Letter; Bond Powers and Endorsements;
Guarantee of Signatures.
If this Letter is signed by the registered holder of
the Old Certificates tendered hereby, the signature must
correspond exactly with the name as written on the face of the
certificates without any change whatsoever.
If any tendered Old Certificates are owned of record by
two or more joint owners, all such owners must sign this Letter.
If any tendered Old Certificates are registered in
different names on several certificates, it will be necessary to
complete, sign and submit as many separate copies of this Letter
as there are different registrations of certificates.
When this Letter is signed by the registered holder of
the Old Certificates specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are
required. If, however, the New Certificates are to be issued, or
any untendered Old Certificates are to be reissued, to a person
other than the registered holder, then endorsements of any
certificates transmitted hereby or separate bond powers are
required. Signatures on such certificates must be guaranteed by
an Eligible Institution.
If this Letter is signed by a person other than the
registered holder of any certificates specified herein, such
certificates must be endorsed or accompanied by appropriate bond
powers, in either case signed exactly as the name of the
registered holder appears on the certificates and the signatures
on such certificates must be guaranteed by an Eligible
Institution.
If this Letter or any certificates or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-
fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when
signing, and, unless waived by the Company, proper evidence
satisfactory to the Company of their authority to so act must be
submitted.
Endorsements on certificates for Old Certificates or
signatures on bond powers required by this Instruction 3 must be
guaranteed by a firm which is a member of a registered national
securities exchange or a member of the National Association of
Securities Dealers, Inc., by a commercial bank or trust company
having an office or correspondent in the United States or by an
"eligible guarantor" institution within the meaning of Rule 17Ad-
15 under the Securities Exchange Act of 1934 (an "Eligible
Institution").
Signatures on this Letter need not be guaranteed by an
Eligible Institution, provided the Old Certificates are tendered:
(i) by a registered holder of Old Certificates (which term, for
purposes of the Exchange Offer, includes any participant in the
Book-Entry Transfer Facility system whose name appears on a
security position listing as the holder of such Old Certificates)
tendered who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" on this Letter,
or (ii) for the account of an Eligible Institution.
4. Special Issuance and Delivery Instructions.
Tendering holders of Old Certificates should indicate
in the applicable box the name and address to which New
Certificates issued pursuant to the Exchange Offer and/or
substitute certificates evidencing Old Certificates not exchanged
are to be issued or sent, if different from the name or address
of the person signing this Letter. In the case of issuance in a
different name, the employer identification or social security
number of the person named must also be indicated. A holder of
Old Certificates tendering Old Certificates by book-entry
transfer may request that Old Certificates not exchanged be
credited to such account maintained at the Book-Entry Transfer
Facility as such holder of Old Certificates may designate hereon.
If no such instructions are given, such Old Certificates not
exchanged will be returned to the name or address of the person
signing this Letter.
5. Tax Identification Number.
Federal income tax law generally requires that a
tendering holder whose Old Certificates are accepted for exchange
must provide the Company (as payor) with such Holder's correct
Taxpayer Identification Number ("TIN") on Substitute Form W-9
below, which, in the case of a tendering holder who is an
individual, is his or her social security number. If the Company
is not provided with the current TIN or an adequate basis for an
exemption, such tendering holder may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, delivery
of New Certificates to such tendering holder may be subject to
backup withholding in an amount equal to 31% of all reportable
payments made after the exchange. If withholding results in an
overpayment of taxes, a refund may be obtained.
Exempt holders of Old Certificates (including, among
others, all corporations and certain foreign individuals) are not
subject to these backup withholding and reporting requirements.
See the enclosed Guidelines of Certification of Taxpayer
Identification Number on Substitute Form W-9 (the "W-9
Guidelines") for additional instructions.
To prevent backup withholding, each tendering holder of
Old Certificates must provide its correct TIN by completing the
"Substitute Form W-9" set forth below, certifying that the TIN
provided is correct (or that such holder is awaiting a TIN) and
that (i) the holder is exempt from backup withholding, (ii) the
holder has not been notified by the Internal Revenue Service that
such holder is subject to a backup withholding as a result of a
failure to report all interest or dividends or (iii) the Internal
Revenue Service has notified the holder that such holder is no
longer subject to backup withholding. If the tendering holder of
Old Certificates is a nonresident alien or foreign entity not
subject to backup withholding, such holder must give the Company
a completed Form W-8, Certificate of Foreign Status. These forms
may be obtained from the Exchange Agent. If the Old Certificates
are in more than one name or are not in the name of the actual
owner, such holder should consult the W-9 Guidelines for
information on which TIN to report. If such holder does not have
a TIN, such holder should consult the W-9 Guidelines for
instructions on applying for a TIN, check the box in Part 2 of
the Substitute Form W-9 and write "applied for" in lieu of its
TIN. Note: checking this box and writing "applied for" on the
form means that such holder has already applied for a TIN or that
such holder intends to apply for one in the near future. If such
holder does not provide its TIN to the Company within 60 days,
backup withholding will begin and continue until such holder
furnishes its TIN to the Company.
6. Transfer Taxes.
The Company will pay all transfer taxes, if any,
applicable to the transfer of Old Certificates to it or its order
pursuant to the Exchange Offer. If, however, New Certificates
and/or substitute Old Certificates not exchanged are to be
delivered to, or are to be registered or issued in the name of,
any person other than the registered holder of the Old
Certificates tendered hereby, or if tendered Old Certificates are
registered in the name of any person other than the person
signing this Letter, or if a transfer tax is imposed for any
reason other than the transfer of Old Certificates to the Company
or its order pursuant to the Exchange Offer, the amount of any
such transfer taxes (whether imposed on the registered holder or
any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer
taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it is not
necessary for transfer tax stamps to be affixed to the Old
Certificates specified in this Letter.
7. Waiver of Conditions.
The Company reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the
Prospectus.
8. No Conditional Tenders.
No alternative, conditional, irregular or contingent
tenders will be accepted. All tendering holders of Old
Certificates, by execution of this Letter, shall waive any right
to receive notice of the acceptance of their Old Certificates for
exchange.
Neither the Company, the Exchange Agent nor any other
person is obligated to give notice of any defect or irregularity
with respect to any tender of Old Certificates nor shall any of
them incur any liability for failure to give any such notice.
9. Mutilated, Lost, Stolen or Destroyed Old Certificates.
Any holder whose Old Certificates have been mutilated,
lost, stolen or destroyed should contact the Exchange Agent at
the address indicated above for further instructions.
10. Requests for Assistance or Additional Copies.
Questions relating to the procedure for tendering, as
well as requests for additional copies of the Prospectus and this
Letter, may be directed to the Exchange Agent, at the address and
telephone number indicated above.
TO BE COMPLETED BY ALL TENDERING HOLDERS
(See Instruction 5)
PAYOR'S NAME: CONTINENTAL AIRLINES, INC.
- -----------------------------------------------------------------
- ----------
SUBSTITUTE Part 1 - PLEASE PROVIDE YOUR
Form W-9 TIN IN THE BOX AT RIGHT AND
TIN:__________________________
CERTIFY BY SIGNING AND (Social Security
Number or
DATING BELOW. Employer
Identification
Number)
- ------------------------------------------------------------
Department of Part 2 - TIN Applied For"
the Treasury
- ------------------------------------------------------------
Internal CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I
CERTIFY
Revenue THAT:
Service
Payor's Request (1) the number shown on this form is my
correct
For Taxpayer Taxpayer Identification Number (or I am
Identification waiting for a number to be issued to
me).
Number ("TIN")
and (2) I am not subject to backup withholding
either
Certification because: (a) I am exempt from backup
withholding, or (b) I have not been
notified by
the Internal Revenue Service (the "IRS")
that I
am subject to backup withholding as a
result of a
failure to report all interest or
dividends, or
(c) the IRS has notified me that I am no
longer
subject to backup witholding, and
(3) any other information provided on this
form is
true and correct.
SIGNATURE..............................................
DATE...................................................
- -----------------------------------------------------------------
- ----------
You must cross out item (2) of the above certification if you
have been
notified by the IRS that you are subject to backup withholding
because of
underreporting of interest or dividends on your tax return and
you have not
been notified by the IRS that you are no longer subject to backup
withholding.
- -----------------------------------------------------------------
- ----------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED
THE BOX IN PART 2 OF SUBSTITUTE FORM W-9
- -----------------------------------------------------------------
- ----------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer
identification number
has not been issued to me, and either (a) I have mailed or
delivered an
application to receive a taxpayer identification number to the
appropriate
Internal Revenue Service Center or Social Security Administration
Office or
(b) I intend to mail or deliver an application in the near
future. I
understand that if I do not provide a taxpayer identification
number by the
time of the exchange, 31 percent of all reportable payments made
to me
thereafter will be withheld until I provide a number.
_________________________________________________
________________________
Signature Date
- -----------------------------------------------------------------
- ----------
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY FOR
CONTINENTAL AIRLINES, INC.
This form or one substantially equivalent hereto must
be used to accept the Exchange Offer of Continental Airlines,
Inc. (the "Company") made pursuant to the Prospectus, dated June
__, 1996 (the "Prospectus"), and the enclosed Letter of
Transmittal (the "Letter of Transmittal") if certificates for Old
Certificates are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Company
prior to 5:00 P.M., New York City time, on the Expiration Date of
the Exchange Offer. Such form may be delivered or transmitted by
facsimile transmission, mail or hand delivery to Wilmington Trust
Company (the "Exchange Agent") as set forth below. In addition,
in order to utilize the guaranteed delivery procedure to tender
Old Certificates pursuant to the Exchange Offer, a completed,
signed and dated Letter of Transmittal (or facsimile thereof)
must also be received by the Exchange Agent prior to 5:00 P.M.,
New York City time, on the Expiration Date. Capitalized terms
not defined herein are defined in the Prospectus.
Delivery to: Wilmington Trust Company, Exchange Agent
By Mail, Overnight Delivery: By Hand:
Wilmington Trust Company
Wilmington
Trust Company
1100 North Market Street
1105 North
Market Street, 1st Floor
Wilmington, Delaware 19890-0001 Wilmington, Delaware 19890
Attention: Jill Rylee
Attention:
Corporate Trust Operations
Facsimile Transmission:
(302) 651-1079
Confirm by Telephone:
(302) 651-8869
Jill Rylee
Delivery of this instrument to an address other than as
set forth above, or transmission of instructions via facsimile
other than as set forth above, will not constitute a valid
delivery.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the
Prospectus and the accompanying Letter of Transmittal, the
undersigned hereby tenders to the Company the principal amount of
Old Certificates set forth below, pursuant to the guaranteed
delivery procedure described in "The Exchange Offer - Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Old Certificates Tendered:
If
Old
Certificates will be
$______________________________ delivered by book-entry transfer
to
The
Depositary Trust Company,
provide
account number.
Certificate Nos. (if available):
_______________________________
Total Principal Amount Represented
by Old Certificates Certificate(s):
$_____________ _______________ Account
Number_____________________
Exhibit 99.3
CONTINENTAL AIRLINES, INC.
Offer to Exchange
Pass Through Certificates, Series 1996,
which have been registered under the Securities Act of 1933,
as amended,
for any and all Outstanding
Pass Through Certificates, Series 1996
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Upon and subject to the terms and conditions set forth
in the Prospectus, dated June __, 1996 (the "Prospectus"), and
the enclosed Letter of Transmittal (the "Letter of Transmittal"),
an offer to exchange (the "Exchange Offer") the registered Pass
Through Certificates, Series 1996 (the "New Certificates") for
any and all outstanding Pass Through Certificates, Series 1996
(the "Old Certificates") is being made pursuant to such
Prospectus. The Exchange Offer is being made in order to satisfy
certain obligations of Continental Airlines, Inc. (the "Company")
contained in the Registration Rights Agreement dated as of
January 31, 1996, between the Company and the Initial Purchasers.
We are requesting that you contact your clients for
whom you hold Old Certificates regarding the Exchange Offer. For
your information and for forwarding to your clients for whom you
hold Old Certificates registered in your name or in the name of
your nominee, or who hold Old Certificates registered in their
own names, we are enclosing the following documents:
1. Prospectus dated June __, 1996;
2. The Letter of Transmittal for your use and for the
information of your clients;
3. A Notice of Guaranteed Delivery to be used to
accept the Exchange Offer if certificates for Old Certificates
are not immediately available or time will not permit all
required documents to reach the Exchange Agent prior to the
Expiration Date (as defined below) or if the procedure for book-
entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients
for whose account you hold Old Certificates registered in your
name or the name of your nominee, with space provided for
obtaining such clients' instructions with regard to the Exchange
Offer;
5. Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9; and
6. Return envelopes addressed to Wilmington Trust
Company, the Exchange Agent for the Old Certificates.
Your prompt action is requested. The Exchange Offer
will expire at 5:00 p.m., New York City time, on ________, 1996
(the "Expiration Date") (30 calendar days following the
commencement of the Exchange Offer), unless extended by the
Company. The Old Certificates tendered pursuant to the Exchange
Offer may be withdrawn at any time before the Expiration Date.
To participate in the Exchange Offer, a duly executed
and promptly completed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other
required documents, should be sent to the Exchange Agent and
certificates representing the Old Certificates should be
delivered to the Exchange Agent, all in accordance with the
instructions set forth in the Letter of Transmittal and the
Prospectus.
If holders of Old Certificates wish to tender, but it
is impracticable for them to forward their certificates for Old
Certificates prior to the expiration of the Exchange Offer or to
comply with the book-entry transfer procedures on a timely basis,
a tender may be effected by following the guaranteed delivery
procedures described in the Prospectus under "The Exchange
Offer - Guaranteed Delivery Procedures."
Exhibit 99.4
CONTINENTAL AIRLINES, INC.
Offer to Exchange
Pass Through Certificates, Series 1996,
which have been registered under the Securities Act of 1933,
as amended,
for any and all Outstanding
Pass Through Certificates, Series 1996
To Our Clients:
Enclosed for your consideration is a Prospectus, dated
June __, 1996 (the "Prospectus"), and the enclosed Letter of
Transmittal (the "Letter of Transmittal") relating to the offer
to exchange (the "Exchange Offer") registered Pass Through
Certificates, Series 1996 (the "New Certificates") for any and
all outstanding Pass Through Certificates, Series 1996 (the "Old
Certificates"), upon the terms and subject to the conditions
described in the Prospectus. The Exchange Offer is being made in
order to satisfy certain obligations of Continental Airlines,
Inc. (the "Company") contained in the Registration Rights
Agreement dated as of January 31, 1996, between the Company and
the Initial Purchasers thereto.
This material is being forwarded to you as the
beneficial owner of the Old Certificates carried by us in your
account but not registered in your name. A tender of such Old
Certificates may only be made by us as the holder of record and
pursuant to your instructions.
Accordingly, we request instructions as to whether you
wish us to tender on your behalf the Old Certificates held by us
for your account, pursuant to the terms and conditions set forth
in the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly
as possible in order to permit us to tender the Old Certificates
on your behalf in accordance with the provisions of the Exchange
Offer. The Exchange Offer will expire at 5:00 p.m., New York
City time, on __, 1996 (the "Expiration Date") (30 calendar days
following the commencement of the Exchange Offer), unless
extended by the Company. Any Old Certificates tendered pursuant
to the Exchange Offer may be withdrawn at any time before 5:00
p.m., New York City time on the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Old
Certificates.
2. The Exchange Offer is subject to certain
conditions set forth in the Prospectus in the section captioned
"The Exchange Offer - Conditions."
3. Any transfer taxes incident to the transfer of Old
Certificates from the holder to the Company will be paid by the
Company, except as otherwise provided in the Instructions in the
Letter of Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York
City time, on the Expiration Date unless extended by the Company.
If you wish to have us tender your Old Certificates, please so
instruct us by completing, executing and returning to us the
instruction form on the back of this letter. The Letter of
Transmittal is furnished to you for information only and may not
be used directly by you to tender Old Certificates.
