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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 20, 1998
CONTINENTAL AIRLINES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-09781 74-2099724
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2929 Allen Parkway, Suite 2010, Houston, Texas 77019
(Address of principal executive offices) (Zip Code)
(713) 834-2950
(Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The Exhibit Index is hereby incorporated by reference.
The documents listed on the Exhibit Index are filed as Exhibits with reference
to the Registration Statement on Form S-3 (Registration No. 333-34545) of
Continental Airlines, Inc. The Registration Statement and the Prospectus
Supplement, dated February 11, 1998, to the Prospectus, dated September 4, 1997,
relate to the offering of Continental Airlines, Inc.'s Pass Through
Certificates, Series 1998-1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Continental
Airlines, Inc. has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONTINENTAL AIRLINES, INC.
By /S/ JEFFERY A. SMISEK
---------------------------------
Jeffery A. Smisek
Executive Vice President
and General Counsel
March 6, 1998
EXHIBIT INDEX
4.1 Revolving Credit Agreement (1998-1A), dated February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as Borrower, and AIG
Matched Funding Corp., as Liquidity Provider
4.2 Revolving Credit Agreement (1998-1B), dated February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as Borrower, and AIG
Matched Funding Corp., as Liquidity Provider
4.3 Revolving Credit Agreement (1998-1C), dated February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as Borrower, and AIG
Matched Funding Corp., as Liquidity Provider
4.4 Trust Supplement No. 1998-1A-O, dated February 20, 1998, between
Wilmington Trust Company, as Trustee, and Continental Airlines, Inc.
to Pass Through Trust Agreement, dated September 25, 1997
4.5 Trust Supplement No. 1998-1A-S, dated February 20, 1998, between
Wilmington Trust Company, as Trustee, and Continental Airlines, Inc.
to Pass Through Trust Agreement, dated September 25, 1997
4.6 Trust Supplement No. 1998-1B-O, dated February 20, 1998, between
Wilmington Trust Company, as Trustee, and Continental Airlines, Inc.
to Pass Through Trust Agreement, dated September 25, 1997
4.7 Trust Supplement No. 1998-1B-S, dated February 20, 1998, between
Wilmington Trust Company, as Trustee, and Continental Airlines, Inc.
to Pass Through Trust Agreement, dated September 25, 1997
4.8 Trust Supplement No. 1998-1C-O, dated February 20, 1998, between
Wilmington Trust Company, as Trustee, and Continental Airlines, Inc.
to Pass Through Trust Agreement, dated September 25, 1997
4.9 Trust Supplement No. 1998-1C-S, dated February 20, 1998, between
Wilmington Trust Company, as Trustee, and Continental Airlines, Inc.
to Pass Through Trust Agreement, dated September 25, 1997
4.10 Intercreditor Agreement, dated February 20, 1998, among Wilmington
Trust Company, as Trustee, AIG Matched Funding Corp., as Liquidity
Provider, and Wilmington Trust Company, as Subordination Agent and
Trustee
4.11 Deposit Agreement (Class A), dated February 20, 1998, between First
Security Bank, National Association, as Escrow Agent, and Credit
Suisse First Boston, New York Branch, as Depositary
4.12 Deposit Agreement (Class B), dated February 20, 1998, between First
Security Bank, National Association, as Escrow Agent, and Credit
Suisse First Boston, New York Branch, as Depositary
4.13 Deposit Agreement (Class C), dated February 20, 1998, between First
Security Bank, National Association, as Escrow Agent, and Credit
Suisse First Boston, New York Branch, as Depositary
4.14 Escrow and Paying Agent Agreement (Class A), dated February 20, 1998,
among First Security Bank, National Association, as Escrow Agent,
Credit Suisse First Boston Corporation, Morgan Stanley & Co.
Incorporated and Chase Securities Inc., as Underwriters, Wilmington
Trust Company, as Trustee, and Wilmington Trust Company, as Paying
Agent
4.15 Escrow and Paying Agent Agreement (Class B), dated February 20, 1998,
among First Security Bank, National Association, as Escrow Agent,
Credit Suisse First Boston Corporation, Morgan Stanley & Co.
Incorporated and Chase Securities Inc., as Underwriters, Wilmington
Trust Company, as Trustee, and Wilmington Trust Company, as Paying
Agent
4.16 Escrow and Paying Agent Agreement (Class C), dated February 20, 1998,
among First Security Bank, National Association, as Escrow Agent,
Credit Suisse First Boston Corporation, Morgan Stanley & Co.
Incorporated and Chase Securities Inc., as Underwriters, Wilmington
Trust Company, as Trustee, and Wilmington Trust Company, as Paying
Agent
4.17 Note Purchase Agreement, dated February 20, 1998, among Continental
Airlines, Inc., Wilmington Trust Company, as Trustee, Wilmington Trust
Company, as Subordination Agent, First Security Bank, National
Association, as Escrow Agent, and Wilmington Trust Company, as Paying
Agent
4.18 Form of Leased Aircraft Participation Agreement (Participation
Agreement among Continental Airlines, Inc., Lessee, [______________],
Owner Participant, First Security Bank, National Association, Owner
Trustee, Wilmington Trust Company, Mortgagee and Loan Participant)
(Exhibit A-1 to Note Purchase Agreement)
4.19 Form of Lease (Lease Agreement between First Security Bank, National
Association, Lessor, and Continental Airlines, Inc., Lessee) (Exhibit
A-2 to Note Purchase Agreement)
4.20 Form of Leased Aircraft Indenture (Trust Indenture and Mortgage
between First Security Bank, National Association, Owner Trustee, and
Wilmington Trust Company, Mortgagee) (Exhibit A-3 to Note Purchase
Agreement)
4.21 Form of Leased Aircraft Trust Agreement (Trust Agreement between
[________] and First Security Bank, National Association) (Exhibit A-5
to Note Purchase Agreement)
4.22 Form of Special Indenture (Trust Indenture and Mortgage between First
Security Bank, National Association, Owner Trustee and Wilmington
Trust Company, Mortgagee) (Exhibit A-6 to Note Purchase Agreement)
4.23 Form of Owned Aircraft Participation Agreement (Participation
Agreement among Continental Airlines, Inc., Owner, and Wilmington
Trust Company, as Mortgagee, Subordination Agent and Trustee) (Exhibit
C-1 to Note Purchase Agreement)
4.24 Form of Owned Aircraft Indenture (Trust Indenture and Mortgage between
Continental Airlines, Inc., Owner, and Wilmington Trust Company,
Mortgagee) (Exhibit C-2 to Note Purchase Agreement)
4.25 6.648% Continental Airlines Pass Through Certificate 1998-1A-O,
Certificate No. 1
4.26 6.648% Continental Airlines Pass Through Certificate 1998-1A-O,
Certificate No. 2
4.27 6.648% Continental Airlines Pass Through Certificate 1998-1A-O,
Certificate No. 3
4.28 6.748% Continental Airlines Pass Through Certificate 1998-1B-O,
Certificate No. 1
4.29 6.541% Continental Airlines Pass Through Certificate 1998-1C-O,
Certificate No. 1
23.1 Consent of Aircraft Information Services, Inc., dated February 6, 1998
23.2 Consent of Aircraft Information Services, Inc., dated February 11,
1998
23.3 Consent of BK Associates, Inc., dated February 6, 1998
23.4 Consent of BK Associates, Inc., dated February 11, 1998
23.5 Consent of Morten Beyer and Agnew, Inc., dated February 6, 1998
23.6 Consent of Morten Beyer and Agnew, Inc., dated February 11, 1998
EXECUTION
_________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1998-1A)
Dated as of February 20, 1998
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1998-1A
as Borrower
and
AIG MATCHED FUNDING CORP.
as Liquidity Provider
_________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1998-1A
6.648% Continental Airlines Pass Through Certificates,
Series 1998-1A
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 Maximum
Commitment........................................... 9
Section 2.05. Repayments of Interest Advances or the Final......... 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.............................................. 11
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......................... 14
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
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.................... 18
ARTICLE V - COVENANTS
Section 5.01. Affirmative Covenants of the Borrower................ 19
Section 5.02. Negative Covenants of the Borrower................... 19
ARTICLE VI - LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default.......................... 19
ARTICLE VII - MISCELLANEOUS
Section 7.01. Amendments, Etc...................................... 20
Section 7.02. Notices, Etc......................................... 20
Section 7.03. No Waiver; Remedies.................................. 21
Section 7.04. Further Assurances................................... 21
Section 7.05. Indemnification; Survival of Certain Provisions...... 21
Section 7.06. Liability of the Liquidity Provider.................. 21
Section 7.07. Costs, Expenses and Taxes............................ 22
Section 7.08. Binding Effect; Participations....................... 22
Section 7.09. Severability......................................... 24
Section 7.10. GOVERNING LAW........................................ 24
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity................................... 24
Section 7.12. Execution in Counterparts............................ 25
Section 7.13. Entirety............................................. 25
Section 7.14. Headings............................................. 25
Section 7.15. Transfer............................................. 25
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO
MAKE ADVANCES........................................ 25
TABLE OF CONTENTS
(CONTINUED)
ANNEX I Interest Advance Notice of Borrowing
ANNEX II Non-Extension Advance Notice of Borrowing
ANNEX III Downgrade Advance Notice of Borrowing
ANNEX IV Final Advance Notice of Borrowing
ANNEX V Notice of Termination
ANNEX VI Notice of Replacement Subordination Agent
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of February 20, 1998, 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 AIG MATCHED FUNDING CORP., a corporation organized under
the laws of the State of Delaware, (the "LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class A Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class A Trust is issuing the Class A
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (y) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75%, (z) with respect to any Unapplied Provider
Advance, .35%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1998-1A-O, dated as of the date hereof, relating to the
Class A Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, or, so long as any Class A Certificate is
outstanding, the city and state in which the Class A Trustee, the Borrower
or any Loan Trustee maintains its Corporate Trust Office or receives or
disburses funds, and, if the applicable Business Day relates to any Advance
or other amount bearing interest based on the LIBOR Rate, on which dealings
are carried on in the London interbank market.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated February 20,
1998 between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York Branch, as Depositary, pertaining to
the Class A Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Facility Office by the jurisdiction where
such Liquidity Provider's principal office or such Facility Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except (but only in the case of a successor Liquidity
Provider organized under the laws of a jurisdiction outside the United
States) to the extent that such United States withholding Taxes are imposed
as a result of any change in applicable law (excluding from change in
applicable law for this purpose a change in an applicable treaty or other
change in law affecting the applicability of a treaty) after the date
hereof, or in the case of a successor Liquidity Provider (including a
transferee of an Advance) or Facility Office, after the date on which such
successor Liquidity Provider obtains its interest or on which the Facility
Office is changed, and (ii) any withholding Taxes imposed by the United
States which are imposed or increased as a result of the Liquidity Provider
failing to deliver to the Borrower any certificate or document (which
certificate or document in the good faith judgment of the Liquidity
Provider it is legally entitled to provide) which is reasonably requested
by the Borrower to establish that payments under this Agreement are exempt
from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means February 18, 1999, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FACILITY OFFICE" means the office of the Liquidity Provider presently
located at Westport, Connecticut, or such other office as the Liquidity
Provider from time to time shall notify the Borrower as its "Facility
Office" hereunder; PROVIDED that the Liquidity Provider shall not change
its Facility Office to a Facility Office outside the United States of
America except in accordance with Section 3.01, 3.02 or 3.03 hereof.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following
either (x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance or (y) the withdrawal of funds from the Class A
Cash Collateral Account for the purpose of paying interest on the
Class A Certificates as contemplated by Section 2.06(a) hereof and, in
either case, ending on the next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
PROVIDED, HOWEVER, that if (x) the Final Advance shall have been made, or (y)
other outstanding Advances shall have been converted into the Final Advance,
then the Interest Periods shall be successive periods of one month beginning on
the third Business Day following the Liquidity Provider's receipt of the Notice
of Borrowing for such Final Advance (in the case of clause (x) above) or the
Regular Distribution Date following such conversion (in the case of clause (y)
above).
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period,
(i) the rate per annum appearing on display page 3750 (British
Bankers Association-LIBOR) of the Dow Jones Markets Service (or any
successor or substitute therefor) at approximately 11:00 A.M. (London
time) two Business Days before the first day of such Interest Period,
as the rate for dollar deposits with a maturity comparable to such
Interest Period, or
(ii) if the rate calculated pursuant to clause (i) above is not
available, the average (rounded upwards, if necessary, to the next
1/16 of 1%) of the rates per annum at which deposits in dollars are
offered for the relevant Interest Period by three banks of recognized
standing selected by the Liquidity Provider in the London interbank
market at approximately 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount
approximately equal to the principal amount of the LIBOR Advance to
which such Interest Period is to apply and for a period comparable to
such Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (provided that, with respect to
the period prior to the Delivery Period Expiry Date, such Equipment Notes
have an aggregate outstanding principal balance in excess of $200,000,000)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means initially $48,424,530.60, as the same may
be reduced from time to time in accordance with Section 2.04(a).
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"PERFORMING NOTE DEFICIENCY" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated February
11, 1998 relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest
Rate for the Class A Certificates, that would be payable on the Class A
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class A Certificates on such day and without regard to
expected future payments of principal on the Class A Certificates.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1998-1A-S.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class A Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED NON-EXTENSION ADVANCE" means any Non-Extension Advance
other than an Applied Non-Extension Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"ACCELERATION", "CERTIFICATES", "CLASS A CASH COLLATERAL ACCOUNT",
"CLASS A CERTIFICATES", "CLASS A CERTIFICATEHOLDERS", "CLASS A TRUST",
"CLASS A TRUST AGREEMENT", "CLASS A TRUSTEE", "CLASS B CERTIFICATES",
"CLASS C CERTIFICATES", "CLOSING DATE", "CONTINENTAL", "CONTINENTAL
BANKRUPTCY EVENT", "CONTROLLING PARTY", "CORPORATE TRUST OFFICE",
"DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION DATE", "DOWNGRADED
FACILITY", "EQUIPMENT NOTES", "FINAL LEGAL DISTRIBUTION DATE",
"FINANCING AGREEMENT", "INDENTURE", "INTEREST PAYMENT DATE",
"INVESTMENT EARNINGS", "LIQUIDITY FACILITY", "LIQUIDITY OBLIGATIONS",
"LOAN TRUSTEE", "MOODY'S", "NON-EXTENDED FACILITY", "NOTE PURCHASE
AGREEMENT", "OPERATIVE AGREEMENTS", "PERFORMING EQUIPMENT NOTE",
"PERSON", "POOL BALANCE", "RATING AGENCY", "RATINGS CONFIRMATION",
"REGULAR DISTRIBUTION DATE", "REPLACEMENT LIQUIDITY FACILITY",
"RESPONSIBLE OFFICER", "SCHEDULED PAYMENT", "SPECIAL PAYMENT",
"STANDARD & POOR'S", "STATED INTEREST RATE", "SUBORDINATION AGENT",
"TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST AGREEMENTS",
"TRUSTEE", "UNDERWRITERS", "UNDERWRITING AGREEMENT", and "WRITTEN
NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of interest on the Class A Certificates at the
Stated Interest Rate therefor in accordance with Section 3.6(a) of the
Intercreditor Agreement. Each Interest Advance made hereunder shall
automatically reduce the Maximum Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if
this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement shall have been delivered to the Borrower as contemplated by said
Section 3.6(d) within the time period specified in such Section) by delivery to
the Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex II attached hereto, signed by a Responsible
Officer of the Borrower, in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the Class A Cash Collateral Account in
accordance with said Section 3.6(d) and Section 3.6(f) of the Intercreditor
Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating issued
by either Rating Agency below the applicable Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the Class A Cash Collateral Account in accordance with
said Section 3.6(c) and Section 3.6(f) of the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the Class A Cash Collateral Account (in accordance with Section 3.6(i) of
the Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE OF
BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the Class A Cash
Collateral Account, the Liquidity Provider shall have no interest in or rights
to the Class A Cash Collateral Account, such Advance or any other amounts from
time to time on deposit in the Class A Cash Collateral Account; PROVIDED that
the foregoing shall not affect or impair the obligations of the Subordination
Agent to make the distributions contemplated by Section 3.6(e) or (f) of the
Intercreditor Agreement. By paying to the Borrower proceeds of Advances
requested by the Borrower in accordance with the provisions of this Agreement,
the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. 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 MAXIMUM COMMITMENT.
(a) AUTOMATIC REDUCTION. Promptly following each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of the
Class A Certificates or otherwise, the Maximum Commitment shall automatically be
reduced to an amount equal to such reduced Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic reduction of the
Maximum Commitment to the Liquidity Provider within two Business Days thereof.
The failure by the Borrower to furnish any such notice shall not affect such
automatic reduction of the Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID ADVANCE"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the 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 (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the Class A Cash Collateral
Account on account of a reduction in the Required Amount, the Borrower shall
repay to the Liquidity Provider a portion of the Provider Advances in a
principal amount equal to 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 "THIRD" of Section 2.4(b) of the Intercreditor
Agreement, clause "THIRD" of Section 3.2 of the Intercreditor Agreement or
clause "FOURTH" of Section 3.3 of the Intercreditor Agreement (any such amount
being a "REPLENISHMENT AMOUNT") for the purpose of replenishing or increasing
the balance thereof up to the Required Amount at such time, (i) the aggregate
outstanding principal amount of all Applied Provider Advances (and of Provider
Advances treated as an Interest Advance for purposes of determining the
Applicable Liquidity Rate for interest payable thereon) shall be automatically
reduced by the amount of such Replenishment Amount and (ii) the aggregate
outstanding principal amount of all Unapplied Provider Advances shall be
automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the Class A Cash
Collateral Account after giving effect to any Applied Provider Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but only
to the extent such amounts are necessary to repay in full to the Liquidity
Provider all amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments or payments under Section
8.1 or 9.1, as the case may be, of the Participation Agreements and Section 6 of
the Note Purchase Agreement and only to the extent that the Borrower shall have
sufficient income or proceeds therefrom to enable the Borrower to make payments
in accordance with the terms hereof after giving effect to the priority of
payments provisions set forth in the Intercreditor Agreement. The Liquidity
Provider agrees that it will look solely to such amounts to the extent available
for distribution to it as provided in the Intercreditor Agreement and this
Agreement and that the Borrower, in its individual capacity, is not personally
liable to it for any amounts payable or liability under this Agreement except as
expressly provided in this Agreement, the Intercreditor Agreement or any
Participation Agreement. Amounts on deposit in the Class A Cash Collateral
Account shall be available to the Borrower to make payments under this Agreement
only to the extent and for the purposes expressly contemplated in Section 3.6(f)
of the Intercreditor Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. The
Expiry Date shall be automatically extended, effective on the 25th day prior to
each Expiry Date (unless such Expiry Date is on or after the date that is 15
days after the Final Legal Distribution Date for the Class A Certificates), for
a period of 364 days after such Expiry Date (unless the obligations of the
Liquidity Provider are earlier terminated in accordance with the terms hereof),
without the necessity of any act on the part of the Borrower or the Liquidity
Provider, unless the Liquidity Provider shall advise the Borrower, prior to such
25th day that it does not agree to such extension of such Expiry Date, in which
event (and if the Liquidity Provider shall not have been replaced in accordance
with Section 3(e) of the Interrcreditor Agreement), the Borrower shall be
entitled on and after such 25th day (but prior to such Expiry Date) to request a
Non-Extension Advance in accordance with Section 2.02(b) hereof and Section
3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Facility Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Notwithstanding the preceding two paragraphs, the Liquidity Provider
and the Subordination Agent agree that the initial Liquidity Provider (i.e. AIG
Matched Funding Corp.) shall not be entitled to the benefits of the preceding
two paragraphs, PROVIDED, however, any permitted assignee or participant of the
initial Liquidity Provider which is a bank organized under the laws of the
United States or any State thereof shall be entitled to the benefits of the
preceding two paragraphs (subject, in the case of any permitted participant, to
the limitation set forth in Section 7.08 hereof).
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Facility
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the Liquidity Provider and of the amount allocable
to the Liquidity Provider's obligations to the Borrower hereunder shall be prima
facie evidence of the amounts owed under this Section.
Notwithstanding the preceding two paragraphs, the Liquidity Provider
and the Subordination Agent agree that the initial Liquidity Provider (i.e. AIG
Matched Funding Corp.) shall not be entitled to the benefits of the preceding
two paragraphs, PROVIDED, however, any permitted assignee or participant of the
initial Liquidity Provider which is a bank organized under the laws of the
United States or any State thereof shall be entitled to the benefits of the
preceding two paragraphs (subject, in the case of any permitted participant, to
the limitation set forth in Section 7.08 hereof).
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 Facility 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, if the Liquidity Provider is not organized
under the laws of the United States or any State thereof, 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 Swiss Bank Corp.. Stamford, ABA
# 0260-07993, Account Name: AIG Matched Funding Corp., Account No.
WA-659-886-000, Account Reference: Continental Airlines Liquidity Facility A
1998-1.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of such
Advance (or, in the case of an Applied Provider Advance, from and including the
date on which the amount thereof was withdrawn from the Class A Cash Collateral
Account to pay interest on the Class A Certificates) to but excluding the date
such principal amount shall be paid in full (or, in the case of an Applied
Provider Advance, the date on which the Class A Cash Collateral Account is fully
replenished in respect of such Advance) and (ii) any other amount due hereunder
(whether fees, commissions, expenses or other amounts or, to the extent
permitted by law, installments of interest on Advances or any such other amount)
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) from and including the due date thereof to but excluding the date
such amount is paid in full, in each such case, at a fluctuating interest rate
per annum for each day equal to the Applicable Liquidity Rate (as defined below)
for such Advance or such other amount as in effect for such day, but in no event
at a rate per annum greater than the maximum rate permitted by applicable law;
PROVIDED, HOWEVER, that, if at any time the otherwise applicable interest rate
as set forth in this Section 3.07 shall exceed the maximum rate permitted by
applicable law, then any subsequent reduction in such interest rate will not
reduce the rate of interest payable pursuant to this Section 3.07 below the
maximum rate permitted by applicable law until the total amount of interest
accrued equals the amount of interest that would have accrued if such otherwise
applicable interest rate as set forth in this Section 3.07 had at all times been
in effect.
(b) Except as provided in clause (e) below, each Advance will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount equal to the Investment Earnings on amounts on deposit in the Class A
Cash Collateral Account plus the Applicable Margin for such Unapplied Provider
Advance on the amount of such Unapplied Provider Advance from time to time,
payable in arrears on each Regular Distribution Date.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law, installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Facility
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 Facility Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document delivered
pursuant to paragraphs (i), (ii) and (iii), each in form and substance
satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class A Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class A Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, other than the
opinion of counsel for the Underwriters, either addressed to the
Liquidity Provider or accompanied by a letter from the counsel
rendering such opinion to the effect that the Liquidity Provider is
entitled to rely on such opinion as of its date as if it were
addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider, and
such other information as the Liquidity Provider shall reasonably
request with respect to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section 8.2.1 of the
Leases (related to Leased Aircraft) or the corresponding section of
the Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of Continental;
and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other
Operative Agreements as the Liquidity Provider shall have reasonably
requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the entering
into of this Agreement or the making of any Advance, which constitutes a
Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the Liquidity
Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have been
satisfied or waived, and all conditions precedent to the purchase of the
Certificates by the Underwriters under the Underwriting Agreement shall have
been satisfied (unless any of such conditions precedent shall have been waived
by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity Provider,
certifying that all conditions precedent to the effectiveness of Section 2.01
have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time may
be reasonably requested by the Liquidity Provider; and permit the Liquidity
Provider, upon reasonable notice, to inspect the Borrower's books and records
with respect to such transactions and to meet with officers and employees of the
Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) the
obligation of the Liquidity Provider to make Advances hereunder to expire on the
fifth Business Day after the date on which such Termination Notice is received
by the Borrower, (ii) the Borrower to promptly request, and the Liquidity
Provider to promptly make, a Final Advance in accordance with Section 2.02(d)
hereof and Section 3.6(i) of the Intercreditor Agreement, (iii) all other
outstanding Advances to be automatically converted into Final Advances for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon, and (iv) subject to Sections 2.07 and 2.09 hereof, all Advances
(including, without limitation, any Provider Advance and Applied Provider
Advance), any accrued interest thereon and any other amounts outstanding
hereunder to become immediately due and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: AIG MATCHED FUNDING CORP.
100 Nyala Farm
Westport, CT 06880
Attention: Chief Financial Officer
Telephone: 203-222-4700
Telecopy: 203-222-4780
With a copy to the General Counsel at the
same address and telecopy number
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
Fee Letter (regardless of whether indemnified against pursuant to said Sections
or in such Fee Letter)), that may be imposed, incurred by or asserted against
any Liquidity Indemnitee, in any way relating to, resulting from, or arising out
of or in connection with any action, suit or proceeding by any third party
against such Liquidity Indemnitee and relating to this Agreement, the Fee
Letter, the Intercreditor Agreement or any Financing Agreement; PROVIDED,
however, that the Borrower shall not be required to indemnify, protect, defend
and hold harmless any Liquidity Indemnitee in respect of any Expense of such
Liquidity Indemnitee to the extent such Expense is (i) attributable to the gross
negligence or willful misconduct of such Liquidity Indemnitee or any other
Liquidity Indemnitee, (ii) ordinary and usual operating overhead expense, or
(iii) attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or condition
on its part to be performed or observed in this Agreement, the Intercreditor
Agreement, the Fee Letter or any other Operative Agreement to which it is a
party. The indemnities contained in Section 8.1 or 9.1, as the case may be, of
the Participation Agreements, and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07 hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; PROVIDED, HOWEVER, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
director or affiliates shall be liable or responsible in any respect for (i) any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with this Agreement or
any Notice of Borrowing delivered hereunder, or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class A Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03 and the like as they pertain to the Liquidity Provider shall be deemed also
to include those of each of its participants that are banks (subject, in each
case, if any such participant is not a bank that is (i) organized under the laws
of the United States or any State thereof and (ii) a member bank of the Federal
Reserve System with deposits exceeding $1,000,000,000 (such a bank, a "Reference
Bank"), to the maximum amount that would have been directly incurred by any
Reference Bank organized under the laws of the United States or any State
thereof if such Reference Bank, rather than the participant, had held the
interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF IMMUNITY. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement, or
for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form and mail), postage prepaid, to each
party hereto at its address set forth in Section 7.02 hereof, or at such
other address of which the Liquidity Provider shall have been notified
pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. The Borrower and
the Liquidity Provider each warrant and represent that it has reviewed this
waiver with its legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any State and waives
any immunity any of its properties located in the United States may have from
attachment or execution upon a judgment entered by any such court under the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class A
Trust, as Borrower
By:_____________________________________
Name:
Title:
AIG MATCHED FUNDING CORP.,
as Liquidity Provider
By:_____________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to AIG Matched Funding Corp. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1998-1A) dated as of February 20, 1998, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of interest on the Class A
Certificates which was payable on ____________, ____ (the "DISTRIBUTION
DATE") in accordance with the terms and provisions of the Class A Trust
Agreement and the Class A Certificates, which Advance is requested to be
made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the
interest which was due and payable on the Class A Certificates on the
Distribution Date, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class A Certificates, the Class
B Certificates or the Class C Certificates, or interest on the Class B
Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class A Certificates, the Class A Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), (iv) does not exceed the Maximum Available
Commitment on the date hereof, (v) does not include any amount of interest
which was due and payable on the Class A Certificates on such Distribution
Date but which remains unpaid due to the failure of the Depositary to pay
any amount of accrued interest on the Deposits on such Distribution Date
and (vi) has not been and is not the subject of a prior or contemporaneous
Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of ________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to AIG Matched Funding
Corp. (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1998-1A) dated as of February 20, 1998, 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 Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(d) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of the principal of, or premium on, the Class A Certificates,
or principal of, or interest or premium on, the Class B Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class A Certificates, the Class A Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(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 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 AIG Matched Funding
Corp. (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1998-1A) dated as of February 20, 1998, 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 Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of the principal of, or premium on, the Class A Certificates,
or principal of, or interest or premium on, the Class B Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class A Certificates, the Class A Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(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.
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 AIG Matched Funding Corp. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1998-1A) dated as of February 20, 1998, 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 Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class A
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class A Certificates, or
principal of, or interest or premium on, the Class B Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class A Certificates, the Class A Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class A
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(i) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other
funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.]
________________
Bracketed language may be included at Borrower's option.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of ________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Final Advance Notice of Borrowing]
Annex 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 February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1998-1A-[O/S], as Borrower, and AIG
Matched Funding Corp. (the "LIQUIDITY AGREEMENT")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
AIG MATCHED FUNDING CORP.,
as Liquidity Provider
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class A Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1998-1A-[O/S], as Borrower, and AIG
Matched Funding Corp. (the "LIQUIDITY AGREEMENT")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
______________________________
[Name of Transferee]
______________________________
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
EXECUTION
________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1998-1B)
Dated as of February 20, 1998
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1998-1B
as Borrower
and
AIG MATCHED FUNDING CORP.
as Liquidity Provider
_________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1998-1B
6.748% Continental Airlines Pass Through Certificates,
Series 1998-1B
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 Maximum 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..... 11
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............................ 14
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....................... 18
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower................... 19
Section 5.02. Negative Covenants of the Borrower...................... 19
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default............................. 19
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc......................................... 20
Section 7.02. Notices, Etc............................................ 20
Section 7.03. No Waiver; Remedies..................................... 21
Section 7.04. Further Assurances...................................... 21
Section 7.05. Indemnification; Survival of Certain Provisions......... 21
Section 7.06. Liability of the Liquidity Provider..................... 21
Section 7.07. Costs, Expenses and Taxes............................... 22
Section 7.08. Binding Effect; Participations.......................... 22
Section 7.09. Severability............................................ 24
Section 7.10. GOVERNING LAW........................................... 24
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity...................................... 24
Section 7.12. Execution in Counterparts............................... 25
Section 7.13. Entirety................................................ 25
Section 7.14. Headings................................................ 25
Section 7.15. Transfer................................................ 25
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES........ 25
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 February 20, 1998, 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 AIG MATCHED FUNDING CORP., a corporation organized under
the laws of the State of Delaware, (the "Liquidity Provider").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class B Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class B Trust is issuing the Class B
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class B Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (y) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75%, (z) with respect to any Unapplied Provider
Advance, .35%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1998-1B-O, dated as of the date hereof, relating to the
Class B Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, or, so long as any Class B Certificate is
outstanding, the city and state in which the Class B Trustee, the Borrower
or any Loan Trustee maintains its Corporate Trust Office or receives or
disburses funds, and, if the applicable Business Day relates to any Advance
or other amount bearing interest based on the LIBOR Rate, on which dealings
are carried on in the London interbank market.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated February 20,
1998 between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York Branch, as Depositary, pertaining to
the Class B Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Facility Office by the jurisdiction where
such Liquidity Provider's principal office or such Facility Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except (but only in the case of a successor Liquidity
Provider organized under the laws of a jurisdiction outside the United
States) to the extent that such United States withholding Taxes are imposed
as a result of any change in applicable law (excluding from change in
applicable law for this purpose a change in an applicable treaty or other
change in law affecting the applicability of a treaty) after the date
hereof, or in the case of a successor Liquidity Provider (including a
transferee of an Advance) or Facility Office, after the date on which such
successor Liquidity Provider obtains its interest or on which the Facility
Office is changed, and (ii) any withholding Taxes imposed by the United
States which are imposed or increased as a result of the Liquidity Provider
failing to deliver to the Borrower any certificate or document (which
certificate or document in the good faith judgment of the Liquidity
Provider it is legally entitled to provide) which is reasonably requested
by the Borrower to establish that payments under this Agreement are exempt
from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means February 18, 1999, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FACILITY OFFICE" means the office of the Liquidity Provider presently
located at Westport, Connecticut, or such other office as the Liquidity
Provider from time to time shall notify the Borrower as its "Facility
Office" hereunder; PROVIDED that the Liquidity Provider shall not change
its Facility Office to a Facility Office outside the United States of
America except in accordance with Section 3.01, 3.02 or 3.03 hereof.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following either
(x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance or (y) the withdrawal of funds from the
Class B Cash Collateral Account for the purpose of paying
interest on the Class B Certificates as contemplated by Section
2.06(a) hereof and, in either case, ending on the next Regular
Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date;
PROVIDED, HOWEVER, that if (x) the Final Advance shall have been made, or (y)
other outstanding Advances shall have been converted into the Final Advance,
then the Interest Periods shall be successive periods of one month beginning on
the third Business Day following the Liquidity Provider's receipt of the Notice
of Borrowing for such Final Advance (in the case of clause (x) above) or the
Regular Distribution Date following such conversion (in the case of clause (y)
above).
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period,
(i) the rate per annum appearing on display page 3750 (British
Bankers Association-LIBOR) of the Dow Jones Markets Service (or
any successor or substitute therefor) at approximately 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period, or
(ii) if the rate calculated pursuant to clause (i) above is not
available, the average (rounded upwards, if necessary, to the
next 1/16 of 1%) of the rates per annum at which deposits in
dollars are offered for the relevant Interest Period by three
banks of recognized standing selected by the Liquidity Provider
in the London interbank market at approximately 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period in an amount approximately equal to the principal
amount of the LIBOR Advance to which such Interest Period is to
apply and for a period comparable to such Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (provided that, with respect to
the period prior to the Delivery Period Expiry Date, such Equipment Notes
have an aggregate outstanding principal balance in excess of $200,000,000)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means initially $15,220,552.62, as the same may
be reduced from time to time in accordance with Section 2.04(a).
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"PERFORMING NOTE DEFICIENCY" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated February
11, 1998 relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest
Rate for the Class B Certificates, that would be payable on the Class B
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class B Certificates on such day and without regard to
expected future payments of principal on the Class B Certificates.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1998-1B-S.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class B Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED NON-EXTENSION ADVANCE" means any Non-Extension Advance
other than an Applied Non-Extension Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all purposes of
this Agreement, the following terms shall have the respective meanings assigned
to such terms in the Intercreditor Agreement:
"ACCELERATION", "CERTIFICATES", "CLASS A CERTIFICATES", "CLASS B CASH
COLLATERAL ACCOUNT", "CLASS B CERTIFICATES", "CLASS B
CERTIFICATEHOLDERS", "CLASS B TRUST", "CLASS B TRUST AGREEMENT",
"CLASS B TRUSTEE", "CLASS C CERTIFICATES", "CLOSING Date",
"CONTINENTAL", "CONTINENTAL BANKRUPTCY EVENT", "CONTROLLING PARTY",
"CORPORATE TRUST OFFICE", "DELIVERY PERIOD EXPIRY DATE", "DISTRIBUTION
DATE", "DOWNGRADED FACILITY", "EQUIPMENT NOTES", "FINAL LEGAL
DISTRIBUTION DATE", "FINANCING AGREEMENT", "INDENTURE", "INTEREST
PAYMENT DATE", "INVESTMENT EARNINGS", "LIQUIDITY FACILITY", "LIQUIDITY
OBLIGATIONS", "LOAN TRUSTEE", "MOODY'S", "NON-EXTENDED FACILITY",
"NOTE PURCHASE AGREEMENT", "OPERATIVE AGREEMENTS", "PERFORMING
EQUIPMENT NOTE", "PERSON", "POOL BALANCE", "RATING AGENCY", "RATINGS
CONFIRMATION", "REGULAR DISTRIBUTION DATE", "REPLACEMENT LIQUIDITY
FACILITY", "RESPONSIBLE OFFICER", "SCHEDULED PAYMENT", "SPECIAL
PAYMENT", "STANDARD & POOR'S", "STATED INTEREST RATE", "SUBORDINATION
AGENT", "TAXES", "THRESHOLD RATING", "TRANSFER", "TRUST AGREEMENTS",
"TRUSTEE", "UNDERWRITERS", "UNDERWRITING AGREEMENT", and "WRITTEN
NOTICE".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of interest on the Class B Certificates at the
Stated Interest Rate therefor in accordance with Section 3.6(a) of the
Intercreditor Agreement. Each Interest Advance made hereunder shall
automatically reduce the Maximum Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing if
this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement shall have been delivered to the Borrower as contemplated by said
Section 3.6(d) within the time period specified in such Section) by delivery to
the Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex II attached hereto, signed by a Responsible
Officer of the Borrower, in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the B Cash Collateral Account in
accordance with said Section 3.6(d) and Section 3.6(f) of the Intercreditor
Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-term unsecured debt rating issued
by either Rating Agency below the applicable Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement) unless a Replacement Liquidity
Facility to replace this Agreement shall have been previously delivered to the
Borrower in accordance with said Section 3.6(c), by delivery to the Liquidity
Provider of a written and completed Notice of Borrowing in substantially the
form of Annex III attached hereto, signed by a Responsible Officer of the
Borrower, in an amount equal to the Maximum Available Commitment at such time,
and shall be used to fund the Class B Cash Collateral Account in accordance with
said Section 3.6(c) and Section 3.6(f) of the Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the Class B Cash Collateral Account (in accordance with Section 3.6(i) of
the Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE OF
BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the Class B Cash
Collateral Account, the Liquidity Provider shall have no interest in or rights
to the Class B Cash Collateral Account, such Advance or any other amounts from
time to time on deposit in the Class B Cash Collateral Account; PROVIDED that
the foregoing shall not affect or impair the obligations of the Subordination
Agent to make the distributions contemplated by Section 3.6(e) or (f) of the
Intercreditor Agreement. By paying to the Borrower proceeds of Advances
requested by the Borrower in accordance with the provisions of this Agreement,
the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. 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 MAXIMUM COMMITMENT.
(a) AUTOMATIC REDUCTION. Promptly following each date on which the
Required Amount is reduced as a result of a reduction in the Pool Balance of the
Class B Certificates or otherwise, the Maximum Commitment shall automatically be
reduced to an amount equal to such reduced Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic reduction of the
Maximum Commitment to the Liquidity Provider within two Business Days thereof.
The failure by the Borrower to furnish any such notice shall not affect such
automatic reduction of the Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID ADVANCE"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the 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 (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the Class B Cash Collateral
Account on account of a reduction in the Required Amount, the Borrower shall
repay to the Liquidity Provider a portion of the Provider Advances in a
principal amount equal to 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 "THIRD" of Section 2.4(b) of the Intercreditor
Agreement, clause "THIRD" of Section 3.2 of the Intercreditor Agreement or
clause "FOURTH" of Section 3.3 of the Intercreditor Agreement (any such amount
being a "REPLENISHMENT AMOUNT") for the purpose of replenishing or increasing
the balance thereof up to the Required Amount at such time, (i) the aggregate
outstanding principal amount of all Applied Provider Advances (and of Provider
Advances treated as an Interest Advance for purposes of determining the
Applicable Liquidity Rate for interest payable thereon) shall be automatically
reduced by the amount of such Replenishment Amount and (ii) the aggregate
outstanding principal amount of all Unapplied Provider Advances shall be
automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the Class B Cash
Collateral Account after giving effect to any Applied Provider Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but only
to the extent such amounts are necessary to repay in full to the Liquidity
Provider all amounts owing to it hereunder.
Section 2.07. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments or payments under Section
8.1 or 9.1, as the case may be, of the Participation Agreements and Section 6 of
the Note Purchase Agreement and only to the extent that the Borrower shall have
sufficient income or proceeds therefrom to enable the Borrower to make payments
in accordance with the terms hereof after giving effect to the priority of
payments provisions set forth in the Intercreditor Agreement. The Liquidity
Provider agrees that it will look solely to such amounts to the extent available
for distribution to it as provided in the Intercreditor Agreement and this
Agreement and that the Borrower, in its individual capacity, is not personally
liable to it for any amounts payable or liability under this Agreement except as
expressly provided in this Agreement, the Intercreditor Agreement or any
Participation Agreement. Amounts on deposit in the Class B Cash Collateral
Account shall be available to the Borrower to make payments under this Agreement
only to the extent and for the purposes expressly contemplated in Section 3.6(f)
of the Intercreditor Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. The
Expiry Date shall be automatically extended, effective on the 25th day prior to
each Expiry Date (unless such Expiry Date is on or after the date that is 15
days after the Final Legal Distribution Date for the Class B Certificates), for
a period of 364 days after such Expiry Date (unless the obligations of the
Liquidity Provider are earlier terminated in accordance with the terms hereof),
without the necessity of any act on the part of the Borrower or the Liquidity
Provider, unless the Liquidity Provider shall advise the Borrower, prior to such
25th day that it does not agree to such extension of such Expiry Date, in which
event (and if the Liquidity Provider shall not have been replaced in accordance
with Section 3(e) of the Interrcreditor Agreement), the Borrower shall be
entitled on and after such 25th day (but prior to such Expiry Date) to request a
Non-Extension Advance in accordance with Section 2.02(b) hereof and Section
3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL Costs"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Facility Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Notwithstanding the preceding two paragraphs, the Liquidity Provider
and the Subordination Agent agree that the initial Liquidity Provider (i.e. AIG
Matched Funding Corp.) shall not be entitled to the benefits of the preceding
two paragraphs, PROVIDED, however, any permitted assignee or participant of the
initial Liquidity Provider which is a bank organized under the laws of the
United States or any State thereof shall be entitled to the benefits of the
preceding two paragraphs (subject, in the case of any permitted participant, to
the limitation set forth in Section 7.08 hereof).
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Facility
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the Liquidity Provider and of the amount allocable
to the Liquidity Provider's obligations to the Borrower hereunder shall be prima
facie evidence of the amounts owed under this Section.
Notwithstanding the preceding two paragraphs, the Liquidity Provider
and the Subordination Agent agree that the initial Liquidity Provider (i.e. AIG
Matched Funding Corp.) shall not be entitled to the benefits of the preceding
two paragraphs, PROVIDED, however, any permitted assignee or participant of the
initial Liquidity Provider which is a bank organized under the laws of the
United States or any State thereof shall be entitled to the benefits of the
preceding two paragraphs (subject, in the case of any permitted participant, to
the limitation set forth in Section 7.08 hereof).
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 Facility 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, if the Liquidity Provider is not organized
under the laws of the United States or any State thereof, 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 Swiss Bank Corp.. Stamford, ABA
# 0260-07993, Account Name: AIG Matched Funding Corp., Account No.
WA-659-886-000, Account Reference: Continental Airlines Liquidity Facility B
1998-1.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of such
Advance (or, in the case of an Applied Provider Advance, from and including the
date on which the amount thereof was withdrawn from the Class B Cash Collateral
Account to pay interest on the Class B Certificates) to but excluding the date
such principal amount shall be paid in full (or, in the case of an Applied
Provider Advance, the date on which the Class B Cash Collateral Account is fully
replenished in respect of such Advance) and (ii) any other amount due hereunder
(whether fees, commissions, expenses or other amounts or, to the extent
permitted by law, installments of interest on Advances or any such other amount)
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) from and including the due date thereof to but excluding the date
such amount is paid in full, in each such case, at a fluctuating interest rate
per annum for each day equal to the Applicable Liquidity Rate (as defined below)
for such Advance or such other amount as in effect for such day, but in no event
at a rate per annum greater than the maximum rate permitted by applicable law;
provided, however, that, if at any time the otherwise applicable interest rate
as set forth in this Section 3.07 shall exceed the maximum rate permitted by
applicable law, then any subsequent reduction in such interest rate will not
reduce the rate of interest payable pursuant to this Section 3.07 below the
maximum rate permitted by applicable law until the total amount of interest
accrued equals the amount of interest that would have accrued if such otherwise
applicable interest rate as set forth in this Section 3.07 had at all times been
in effect.
(b) Except as provided in clause (e) below, each Advance will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a rate per annum equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day of
such Interest Period and, in the event of the payment of principal of such LIBOR
Advance on a day other than such last day, on the date of such payment (to the
extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Provider Advance shall bear interest in
an amount equal to the Investment Earnings on amounts on deposit in the Class B
Cash Collateral Account plus the Applicable Margin for such Unapplied Provider
Advance on the amount of such Unapplied Provider Advance from time to time,
payable in arrears on each Regular Distribution Date.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law, installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "APPLICABLE LIQUIDITY RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the last day
of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the date
for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
admininstration thereof, or compliance by the Liquidity Provider (or its
Facility 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 Facility Office) to
maintain or fund its LIBOR Advances, then upon notice to the Borrower by the
Liquidity Provider, the outstanding principal amount of the LIBOR Advances shall
be converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document delivered
pursuant to paragraphs (i), (ii) and (iii), each in form and substance
satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of each
of the parties thereto;
(iii) Fully executed copies of each of the Operative Agreements
executed and delivered on or before the Closing Date (other than this
Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies of
the Class B Certificates;
(v) An executed copy of each document, instrument, certificate
and opinion delivered on or before the Closing Date pursuant to the
Class B Trust Agreement, the Intercreditor Agreement and the other
Operative Agreements (in the case of each such opinion, other than the
opinion of counsel for the Underwriters, either addressed to the
Liquidity Provider or accompanied by a letter from the counsel
rendering such opinion to the effect that the Liquidity Provider is
entitled to rely on such opinion as of its date as if it were
addressed to the Liquidity Provider);
(vi) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order to
establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial statements
and audited annual financial statements to the Liquidity Provider, and
such other information as the Liquidity Provider shall reasonably
request with respect to the transactions contemplated by the Operative
Agreements, in each case, only to the extent that Continental is
obligated to provide such information pursuant to Section 8.2.1 of the
Leases (related to Leased Aircraft) or the corresponding section of
the Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of Continental;
and
(viii) Such other documents, instruments, opinions and approvals
pertaining to the transactions contemplated hereby or by the other
Operative Agreements as the Liquidity Provider shall have reasonably
requested.
(b) The following statement shall be true on and as of the Effective
Date: no event has occurred and is continuing, or would result from the entering
into of this Agreement or the making of any Advance, which constitutes a
Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of all
fees and other sums required to be paid to or for the account of the Liquidity
Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates under
the Trust Agreements shall have been satisfied or waived, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall have been
satisfied or waived, and all conditions precedent to the purchase of the
Certificates by the Underwriters under the Underwriting Agreement shall have
been satisfied (unless any of such conditions precedent shall have been waived
by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity Provider,
certifying that all conditions precedent to the effectiveness of Section 2.01
have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or cause
to be paid all amounts payable by it under this Agreement and the other
Operative Agreements and observe and perform in all material respects the
conditions, covenants and requirements applicable to it contained in this
Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time may
be reasonably requested by the Liquidity Provider; and permit the Liquidity
Provider, upon reasonable notice, to inspect the Borrower's books and records
with respect to such transactions and to meet with officers and employees of the
Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after the
date hereof as from time to time may be reasonably requested by the Liquidity
Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) the
obligation of the Liquidity Provider to make Advances hereunder to expire on the
fifth Business Day after the date on which such Termination Notice is received
by the Borrower, (ii) the Borrower to promptly request, and the Liquidity
Provider to promptly make, a Final Advance in accordance with Section 2.02(d)
hereof and Section 3.6(i) of the Intercreditor Agreement, (iii) all other
outstanding Advances to be automatically converted into Final Advances for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon, and (iv) subject to Sections 2.07 and 2.09 hereof, all Advances
(including, without limitation, any Provider Advance and Applied Provider
Advance), any accrued interest thereon and any other amounts outstanding
hereunder to become immediately due and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: AIG MATCHED FUNDING CORP.
100 Nyala Farm
Westport, CT 06880
Attention: Chief Financial Officer
Telephone: 203-222-4700
Telecopy: 203-222-4780
With a copy to the General Counsel at the
same address and telecopy number
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
Fee Letter (regardless of whether indemnified against pursuant to said Sections
or in such Fee Letter)), that may be imposed, incurred by or asserted against
any Liquidity Indemnitee, in any way relating to, resulting from, or arising out
of or in connection with any action, suit or proceeding by any third party
against such Liquidity Indemnitee and relating to this Agreement, the Fee
Letter, the Intercreditor Agreement or any Financing Agreement; PROVIDED,
HOWEVER, that the Borrower shall not be required to indemnify, protect, defend
and hold harmless any Liquidity Indemnitee in respect of any Expense of such
Liquidity Indemnitee to the extent such Expense is (i) attributable to the gross
negligence or willful misconduct of such Liquidity Indemnitee or any other
Liquidity Indemnitee, (ii) ordinary and usual operating overhead expense, or
(iii) attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or condition
on its part to be performed or observed in this Agreement, the Intercreditor
Agreement, the Fee Letter or any other Operative Agreement to which it is a
party. The indemnities contained in Section 8.1 or 9.1, as the case may be, of
the Participation Agreements, and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07 hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; provided, however, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers, employees,
director or affiliates shall be liable or responsible in any respect for (i) any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with this Agreement or
any Notice of Borrowing delivered hereunder, or (ii) any action, inaction or
omission which may be taken by it in good faith, absent willful misconduct or
negligence (in which event the extent of the Liquidity Provider's potential
liability to the Borrower shall be limited as set forth in the immediately
preceding paragraph), in connection with this Agreement or any Notice of
Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class B Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03 and the like as they pertain to the Liquidity Provider shall be deemed also
to include those of each of its participants that are banks (subject, in each
case, if any such participant is not a bank that is (i) organized under the laws
of the United States or any State thereof and (ii) a member bank of the Federal
Reserve System with deposits exceeding $1,000,000,000 (such a bank, a "Reference
Bank"), to the maximum amount that would have been directly incurred by any
Reference Bank organized under the laws of the United States or any State
thereof if such Reference Bank, rather than the participant, had held the
interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF IMMUNITY. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative
Agreement, or for recognition and enforcement of any judgment in
respect hereof or thereof, to the nonexclusive general jurisdiction of
the courts of the State of New York, the courts of the United States
of America for the Southern District of New York, and the appellate
courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 7.02
hereof, or at such other address of which the Liquidity Provider shall
have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. The Borrower and
the Liquidity Provider each warrant and represent that it has reviewed this
waiver with its legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from
the jurisdiction of the courts of the United States or of any State and waives
any immunity any of its properties located in the United States may have from
attachment or execution upon a judgment entered by any such court under the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class B
Trust, as Borrower
By: ___________________________________
Name:
Title:
AIG MATCHED FUNDING CORP.,
as Liquidity Provider
By: ___________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to AIG Matched Funding Corp. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1998-1B) dated as of February 20, 1998, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the making
of an Interest Advance by the Liquidity Provider to be used, subject to
clause (3)(v) below, for the payment of interest on the Class B
Certificates which was payable on ____________, ____ (the "DISTRIBUTION
DATE") in accordance with the terms and provisions of the Class B Trust
Agreement and the Class B Certificates, which Advance is requested to be
made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the
interest which was due and payable on the Class B Certificates on the
Distribution Date, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class A Certificates, the Class
B Certificates or the Class C Certificates, or interest on the Class A
Certificates or the Class C Certificates, (iii) was computed in accordance
with the provisions of the Class B Certificates, the Class B Trust
Agreement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), (iv) does not exceed the Maximum Available
Commitment on the date hereof, (v) does not include any amount of interest
which was due and payable on the Class B Certificates on such Distribution
Date but which remains unpaid due to the failure of the Depositary to pay
any amount of accrued interest on the Deposits on such Distribution Date
and (vi) has not been and is not the subject of a prior or contemporaneous
Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of ________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By: ___________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to AIG Matched Funding
Corp. (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1998-1B) dated as of February 20, 1998, 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 Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(d) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of the principal of, or premium on, the Class B Certificates,
or principal of, or interest or premium on, the Class A Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class B Certificates, the Class B Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(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 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 AIG Matched Funding
Corp. (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1998-1B) dated as of February 20, 1998, 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 Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of the principal of, or premium on, the Class B Certificates,
or principal of, or interest or premium on, the Class A Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class B Certificates, the Class B Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing under the Liquidity Agreement.
(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.
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 AIG Matched Funding Corp. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1998-1B) dated as of February 20, 1998, 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 Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class B
Cash Collateral Account in accordance with Section 3.6(i) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class B Certificates, or
principal of, or interest or premium on, the Class A Certificates or the
Class C Certificates, (iii) was computed in accordance with the provisions
of the Class B Certificates, the Class B Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), and (iv) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class B
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(i) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other
funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby be
a Base Rate Advance [and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.]
________________
Bracketed language may be included at Borrower's option.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of ________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By: ___________________________________
Name:
Title:
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Final Advance Notice of Borrowing]
Annex 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 February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for
the Continental Airlines Pass Through Trust, 1998-1B-[O/S], as Borrower,
and AIG Matched Funding Corp. (the "LIQUIDITY AGREEMENT")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
AIG MATCHED FUNDING CORP.,
as Liquidity Provider
By: ___________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class B Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for
the Continental Airlines Pass Through Trust, 1998-1B-[O/S], as Borrower,
and AIG Matched Funding Corp. (the "LIQUIDITY AGREEMENT")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
______________________________
[Name of Transferee]
______________________________
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By: ___________________________________
Name:
Title:
EXECUTION
_________________________________________________________________
REVOLVING CREDIT AGREEMENT
(1998-1C)
Dated as of February 20, 1998
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1998-1C
as Borrower
and
AIG MATCHED FUNDING CORP.
as Liquidity Provider
_________________________________________________________________
Relating to
Continental Airlines Pass Through Trust 1998-1C
6.541% Continental Airlines Pass Through Certificates,
Series 1998-1C
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 Maximum
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
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
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........................................... 17
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................ 19
Section 5.02. Negative Covenants of the Borrower................... 19
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default.......................... 20
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc...................................... 20
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
Section 7.02. Notices, Etc......................................... 20
Section 7.03. No Waiver; Remedies.................................. 21
Section 7.04. Further Assurances................................... 21
Section 7.05. Indemnification; Survival of Certain Provisions...... 21
Section 7.06. Liability of the Liquidity Provider.................. 22
Section 7.07. Costs, Expenses and Taxes............................ 22
Section 7.08. Binding Effect; Participations....................... 23
Section 7.09. Severability......................................... 24
Section 7.10. GOVERNING LAW........................................ 24
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity................................... 24
Section 7.12. Execution in Counterparts............................ 25
Section 7.13. Entirety............................................. 25
Section 7.14. Headings............................................. 26
Section 7.15. Transfer............................................. 26
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO
MAKE ADVANCES........................................ 26
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 February 20, 1998, 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 C1 Trust (as defined below)
(the "BORROWER"), and AIG MATCHED FUNDING CORP., a corporation organized under
the laws of the State of Delaware, (the "LIQUIDITY PROVIDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Class C Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class C Trust is issuing the Class C
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class C Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. (a) DEFINITIONS. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"ADDITIONAL COST" has the meaning assigned to such term in Section
3.01.
"ADVANCE" means an Interest Advance, a Final Advance, a Provider
Advance, an Applied Provider Advance or an Unpaid Advance, as the case may
be.
"APPLICABLE LIQUIDITY RATE" has the meaning assigned to such term in
Section 3.07(g).
"APPLICABLE MARGIN" means (y) with respect to any Unpaid Advance or
Applied Provider Advance, 1.75%, (z) with respect to any Unapplied Provider
Advance, .35%.
"APPLIED DOWNGRADE ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"APPLIED NON-EXTENSION ADVANCE" has the meaning assigned to such term
in Section 2.06(a).
"APPLIED PROVIDER ADVANCE" has the meaning assigned to such term in
Section 2.06(a).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption to be entered into between the Borrower and the trustee of the
Successor Trust, substantially in the form of Exhibit C to the Trust
Supplement No. 1998-1C-O, dated as of the date hereof, relating to the
Class C Trust.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to (a) the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by the Liquidity
Provider from three Federal funds brokers of recognized standing selected
by it, plus (b) one quarter of one percent (1/4 of 1%).
"BASE RATE ADVANCE" means an Advance that bears interest at a rate
based upon the Base Rate.
"BORROWER" has the meaning assigned to such term in the recital of
parties to this Agreement.
"BORROWING" means the making of Advances requested by delivery of a
Notice of Borrowing.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, or, so long as any Class C Certificate is
outstanding, the city and state in which the Class C Trustee, the Borrower
or any Loan Trustee maintains its Corporate Trust Office or receives or
disburses funds, and, if the applicable Business Day relates to any Advance
or other amount bearing interest based on the LIBOR Rate, on which dealings
are carried on in the London interbank market.
"DEPOSITS" has the meaning assigned to such terms in the Deposit
Agreement.
"DEPOSITARY" has the meaning assigned to such term in the Deposit
Agreement.
"DEPOSIT AGREEMENT" means the Deposit Agreement dated February 20,
1998 between First Security Bank, National Association, as Escrow Agent and
Credit Suisse First Boston, New York Branch, as Depositary, pertaining to
the Class C Certificates, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"DOWNGRADE ADVANCE" means an Advance made pursuant to Section 2.02(c).
"EFFECTIVE DATE" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"EXCLUDED TAXES" means (i) taxes imposed on the overall net income of
the Liquidity Provider or of its Facility Office by the jurisdiction where
such Liquidity Provider's principal office or such Facility Office is
located, and (ii) Excluded Withholding Taxes.
"EXCLUDED WITHHOLDING TAXES" means (i) withholding Taxes imposed by
the United States except (but only in the case of a successor Liquidity
Provider organized under the laws of a jurisdiction outside the United
States) to the extent that such United States withholding Taxes are imposed
as a result of any change in applicable law (excluding from change in
applicable law for this purpose a change in an applicable treaty or other
change in law affecting the applicability of a treaty) after the date
hereof, or in the case of a successor Liquidity Provider (including a
transferee of an Advance) or Facility Office, after the date on which such
successor Liquidity Provider obtains its interest or on which the Facility
Office is changed, and (ii) any withholding Taxes imposed by the United
States which are imposed or increased as a result of the Liquidity Provider
failing to deliver to the Borrower any certificate or document (which
certificate or document in the good faith judgment of the Liquidity
Provider it is legally entitled to provide) which is reasonably requested
by the Borrower to establish that payments under this Agreement are exempt
from (or entitled to a reduced rate of) withholding Tax.
"EXPENSES" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"EXPIRY DATE" means February 18, 1999, initially, or any date to which
the Expiry Date is extended pursuant to Section 2.10.
"FACILITY OFFICE" means the office of the Liquidity Provider presently
located at Westport, Connecticut, or such other office as the Liquidity
Provider from time to time shall notify the Borrower as its "Facility
Office" hereunder; PROVIDED that the Liquidity Provider shall not change
its Facility Office to a Facility Office outside the United States of
America except in accordance with Section 3.01, 3.02 or 3.03 hereof.
"FINAL ADVANCE" means an Advance made pursuant to Section 2.02(d).
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated the
date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"INTEREST ADVANCE" means an Advance made pursuant to Section 2.02(a).
"INTEREST PERIOD" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following either
(x) the Liquidity Provider's receipt of the Notice of Borrowing
for such LIBOR Advance or (y) the withdrawal of funds from the
Class C Cash Collateral Account for the purpose of paying
interest on the Class C Certificates as contemplated by Section
2.06(a) hereof and, in either case, ending on the next Regular
Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date;
PROVIDED, HOWEVER, that if (x) the Final Advance shall have been made, or (y)
other outstanding Advances shall have been converted into the Final Advance,
then the Interest Periods shall be successive periods of one month beginning on
the third Business Day following the Liquidity Provider's receipt of the Notice
of Borrowing for such Final Advance (in the case of clause (x) above) or the
Regular Distribution Date following such conversion (in the case of clause (y)
above).
"LIBOR ADVANCE" means an Advance bearing interest at a rate based upon
the LIBOR Rate.
"LIBOR RATE" means, with respect to any Interest Period,
(i) the rate per annum appearing on display page 3750 (British
Bankers Association-LIBOR) of the Dow Jones Markets Service (or
any successor or substitute therefor) at approximately 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period, or
(ii) if the rate calculated pursuant to clause (i) above is not
available, the average (rounded upwards, if necessary, to the
next 1/16 of 1%) of the rates per annum at which deposits in
dollars are offered for the relevant Interest Period by three
banks of recognized standing selected by the Liquidity Provider
in the London interbank market at approximately 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period in an amount approximately equal to the principal
amount of the LIBOR Advance to which such Interest Period is to
apply and for a period comparable to such Interest Period.
"LIQUIDITY EVENT OF DEFAULT" means the occurrence of either (a) the
Acceleration of all of the Equipment Notes (provided that, with respect to
the period prior to the Delivery Period Expiry Date, such Equipment Notes
have an aggregate outstanding principal balance in excess of $200,000,000)
or (b) a Continental Bankruptcy Event.
"LIQUIDITY INDEMNITEE" means (i) the Liquidity Provider, (ii) the
directors, officers, employees and agents of the Liquidity Provider, and
(iii) the successors and permitted assigns of the persons described in
clauses (i) and (ii), inclusive.
"LIQUIDITY PROVIDER" has the meaning assigned to such term in the
recital of parties to this Agreement.
"MAXIMUM AVAILABLE COMMITMENT" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time LESS (b) the
aggregate amount of each Interest Advance outstanding at such time;
PROVIDED that following a Provider Advance or a Final Advance, the Maximum
Available Commitment shall be zero.
"MAXIMUM COMMITMENT" means initially $13,396,818.33, as the same may
be reduced from time to time in accordance with Section 2.04(a).
"NON-EXTENSION ADVANCE" means an Advance made pursuant to Section
2.02(b).
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(e).
"NOTICE OF REPLACEMENT SUBORDINATION AGENT" has the meaning specified
in Section 3.08.
"PERFORMING NOTE DEFICIENCY" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated February
11, 1998 relating to the Certificates, as such Prospectus Supplement may be
amended or supplemented.
"PROVIDER ADVANCE" means a Downgrade Advance or a Non-Extension
Advance.
"REGULATORY CHANGE" has the meaning assigned to such term in Section
3.01.
"REPLENISHMENT AMOUNT" has the meaning assigned to such term in
Section 2.06(b).
"REQUIRED AMOUNT" means, for any day, the sum of the aggregate amount
of interest, calculated at the rate per annum equal to the Stated Interest
Rate for the Class C Certificates, that would be payable on the Class C
Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class C Certificates on such day and without regard to
expected future payments of principal on the Class C Certificates.
"SUCCESSOR TRUST" means Continental Airlines Pass Through Trust
1998-1C-S.
"TERMINATION DATE" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class C Certificates have been paid in
full (or provision has been made for such payment in accordance with the
Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full pursuant
to Section 3.6(e) of the Intercreditor Agreement; (iv) the fifth Business
Day following the receipt by the Borrower of a Termination Notice from the
Liquidity Provider pursuant to Section 6.01 hereof; and (v) the date on
which no Advance is or may (including by reason of reinstatement as herein
provided) become available for a Borrowing hereunder.
"TERMINATION NOTICE" means the Notice of Termination substantially in
the form of Annex V to this Agreement.
"TRANSFEREE" has the meaning assigned to such term in Section 7.08(b).
"UNAPPLIED DOWNGRADE ADVANCE" means any Downgrade Advance other than
an Applied Downgrade Advance.
"UNAPPLIED NON-EXTENSION ADVANCE" means any Non-Extension Advance
other than an Applied Non-Extension Advance.
"UNAPPLIED PROVIDER ADVANCE" means any Provider Advance other than an
Applied Provider Advance.
"UNPAID ADVANCE" has the meaning assigned to such term in Section
2.05.
(b) TERMS DEFINED IN THE INTERCREDITOR AGREEMENT. For all
purposes of this Agreement, the following terms shall have the respective
meanings assigned to such terms in the Intercreditor Agreement:
"Acceleration", "Certificates", "Class A Certificates", "Class B
Certificates", "Class C Cash Collateral Account", "Class C
Certificates", "Class C Certificateholders", "Class C Trust", "Class C
Trust Agreement", "Class C Trustee", "Closing Date", "Continental",
"Continental Bankruptcy Event", "Controlling Party", "Corporate Trust
Office", "Delivery Period Expiry Date", "Distribution Date",
"Downgraded Facility", "Equipment Notes", "Final Legal Distribution
Date", "Financing Agreement", "Indenture", "Interest Payment Date",
"Investment Earnings", "Liquidity Facility", "Liquidity Obligations",
"Loan Trustee", "Moody's", "Non-Extended Facility", "Note Purchase
Agreement", "Operative Agreements", "Performing Equipment Note",
"Person", "Pool Balance", "Rating Agency", "Ratings Confirmation",
"Regular Distribution Date", "Replacement Liquidity Facility",
"Responsible Officer", "Scheduled Payment", "Special Payment",
"Standard & Poor's", "Stated Interest Rate", "Subordination Agent",
"Taxes", "Threshold Rating", "Transfer", "Trust Agreements",
"Trustee", "Underwriters", "Underwriting Agreement", and "Written
Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. THE ADVANCES. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date (unless
the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. MAKING THE ADVANCES. (a) Interest Advances shall be made
in one or more Borrowings by delivery to the Liquidity Provider of one or more
written and completed Notices of Borrowing in substantially the form of Annex I
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
not exceeding the Maximum Available Commitment at such time and shall be used
solely for the payment when due of interest on the Class C Certificates at the
Stated Interest Rate therefor in accordance with Section 3.6(a) of the
Intercreditor Agreement. Each Interest Advance made hereunder shall
automatically reduce the Maximum Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; PROVIDED, HOWEVER, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) A Non-Extension Advance shall be made in a single Borrowing
if this Agreement is not extended in accordance with Section 3.6(d) of the
Intercreditor Agreement (unless a Replacement Liquidity Facility to replace this
Agreement shall have been delivered to the Borrower as contemplated by said
Section 3.6(d) within the time period specified in such Section) by delivery to
the Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex II attached hereto, signed by a Responsible
Officer of the Borrower, in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the B Cash Collateral Account in
accordance with said Section 3.6(d) and Section 3.6(f) of the Intercreditor
Agreement.
(c) A Downgrade Advance shall be made in a single Borrowing upon
a downgrading of the Liquidity Provider's short-term unsecured debt rating
issued by either Rating Agency below the applicable Threshold Rating (as
provided for in Section 3.6(c) of the Intercreditor Agreement) unless a
Replacement Liquidity Facility to replace this Agreement shall have been
previously delivered to the Borrower in accordance with said Section 3.6(c), by
delivery to the Liquidity Provider of a written and completed Notice of
Borrowing in substantially the form of Annex III attached hereto, signed by a
Responsible Officer of the Borrower, in an amount equal to the Maximum Available
Commitment at such time, and shall be used to fund the Class C Cash Collateral
Account in accordance with said Section 3.6(c) and Section 3.6(f) of the
Intercreditor Agreement.
(d) A Final Advance shall be made in a single Borrowing upon the
receipt by the Borrower of a Termination Notice from the Liquidity Provider
pursuant to Section 6.01 hereof by delivery to the Liquidity Provider of a
written and completed Notice of Borrowing in substantially the form of Annex IV
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Maximum Available Commitment at such time, and shall be used to
fund the Class C Cash Collateral Account (in accordance with Section 3.6(i) of
the Intercreditor Agreement) and Section 3.6(f) of the Intercreditor Agreement.
(e) Each Borrowing shall be made on notice in writing (a "NOTICE
OF BORROWING") in substantially the form required by Section 2.02(a), 2.02(b),
2.02(c) or 2.02(d), as the case may be, given by the Borrower to the Liquidity
Provider. If a Notice of Borrowing is delivered by the Borrower in respect of
any Borrowing no later than 12:00 Noon (New York City time) on a Business Day,
upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall make available to
the Borrower, in accordance with its payment instructions, the amount of such
Borrowing in U.S. dollars and immediately available funds, before 12:00 Noon
(New York City time) on the first Business Day next following the day of receipt
of such Notice of Borrowing or on such later Business Day specified in such
Notice of Borrowing. If a Notice of Borrowing is delivered by the Borrower in
respect of any Borrowing after 12:00 Noon (New York City time) on a Business
Day, upon satisfaction of the conditions precedent set forth in Section 4.02
with respect to a requested Borrowing, the Liquidity Provider shall make
available to the Borrower, in accordance with its payment instructions, the
amount of such Borrowing in U.S. dollars and immediately available funds, before
12:00 Noon (New York City time) on the second Business Day next following the
day of receipt of such Notice of Borrowing or on such later Business Day
specified by the Borrower in such Notice of Borrowing. Payments of proceeds of a
Borrowing shall be made by wire transfer of immediately available funds to the
Borrower in accordance with such wire transfer instructions as the Borrower
shall furnish from time to time to the Liquidity Provider for such purpose. Each
Notice of Borrowing shall be irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice
of Borrowing, in accordance with the Borrower's payment instructions, the
Liquidity Provider shall be fully discharged of its obligation hereunder with
respect to such Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in respect of
such Notice of Borrowing to the Borrower or to any other Person. Following the
making of any Advance pursuant to Section 2.02(b), (c) or (d) hereof to fund the
Class C Cash Collateral Account, the Liquidity Provider shall have no interest
in or rights to the Class C Cash Collateral Account, such Advance or any other
amounts from time to time on deposit in the Class C Cash Collateral Account;
PROVIDED that the foregoing shall not affect or impair the obligations of the
Subordination Agent to make the distributions contemplated by Section 3.6(e) or
(f) of the Intercreditor Agreement. By paying to the Borrower proceeds of
Advances requested by the Borrower in accordance with the provisions of this
Agreement, the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. 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 MAXIMUM COMMITMENT.
(a) AUTOMATIC REDUCTION. Promptly following each date on
which the Required Amount is reduced as a result of a reduction in the Pool
Balance of the Class C Certificates or otherwise, the Maximum Commitment
shall automatically be reduced to an amount equal to such reduced Required
Amount (as calculated by the Borrower). The Borrower shall give notice of
any such automatic reduction of the Maximum Commitment to the Liquidity
Provider within two Business Days thereof. The failure by the Borrower to
furnish any such notice shall not affect such automatic reduction of the
Maximum Commitment.
(b) TERMINATION. Upon the making of any Provider Advance or
Final Advance hereunder or the occurrence of the Termination Date, the
obligation of the Liquidity Provider to make further Advances hereunder
shall automatically and irrevocably terminate, and the Borrower shall not
be entitled to request any further Borrowing hereunder.
Section 2.05. REPAYMENTS OF INTEREST ADVANCES OR THE FINAL ADVANCE.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "UNPAID ADVANCE"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; PROVIDED that if (i) the
Liquidity Provider shall make a Provider Advance at any time after making one or
more Interest Advances which shall not have been repaid in accordance with this
Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded Facility
or Non-Extended Facility at any time when unreimbursed Interest Advances have
reduced the Maximum Available Commitment to zero, then such Interest Advances
shall cease to constitute Unpaid Advances and shall be deemed to have been
changed into an Applied Downgrade Advance or an Applied Non-Extension Advance,
as the case may be, for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. REPAYMENTS OF PROVIDER ADVANCES. (a) Amounts advanced
hereunder in respect of a Provider Advance shall be deposited in the 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 (y) in the case of a Downgrade Advance, an "APPLIED DOWNGRADE
ADVANCE" and (z) in the case of a Non-Extension Advance, an "APPLIED
NON-EXTENSION ADVANCE" and, together with an Applied Downgrade Advance, an
"APPLIED PROVIDER ADVANCE") shall thereafter (subject to Section 2.06(b)) be
treated as an Interest Advance under this Agreement for purposes of determining
the Applicable Liquidity Rate for interest payable thereon; PROVIDED FURTHER,
HOWEVER, that if, following the making of a Provider Advance, the Liquidity
Provider delivers a Termination Notice to the Borrower pursuant to Section 6.01
hereof, such Provider Advance shall thereafter be treated as a Final Advance
under this Agreement for purposes of determining the Applicable Liquidity Rate
for interest payable thereon. Subject to Sections 2.07 and 2.09 hereof,
immediately upon the withdrawal of any amounts from the Class C Cash Collateral
Account on account of a reduction in the Required Amount, the Borrower shall
repay to the Liquidity Provider a portion of the Provider Advances in a
principal amount equal to 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 "THIRD" of Section 2.4(b) of the Intercreditor
Agreement, clause "THIRD" of Section 3.2 of the Intercreditor Agreement or
clause "FOURTH" of Section 3.3 of the Intercreditor Agreement (any such amount
being a "REPLENISHMENT AMOUNT") for the purpose of replenishing or increasing
the balance thereof up to the Required Amount at such time, (i) the aggregate
outstanding principal amount of all Applied Provider Advances (and of Provider
Advances treated as an Interest Advance for purposes of determining the
Applicable Liquidity Rate for interest payable thereon) shall be automatically
reduced by the amount of such Replenishment Amount and (ii) the aggregate
outstanding principal amount of all Unapplied Provider Advances shall be
automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining on deposit in the Class C Cash
Collateral Account after giving effect to any Applied Provider Advance on the
date of such replacement shall be reimbursed to the Liquidity Provider, but only
to the extent such amounts are necessary to repay in full to the Liquidity
Provider all amounts owing to it hereunder.
Section 2.07. PAYMENTS TO THE LIQUIDITY PROVIDER UNDER THE
INTERCREDITOR AGREEMENT. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider to Liquidity
Obligations then due and payable in accordance with the Intercreditor Agreement
or, if not provided for in the Intercreditor Agreement, then in such manner as
the Liquidity Provider shall deem appropriate.
Section 2.08. BOOK ENTRIES. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; PROVIDED, HOWEVER, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. PAYMENTS FROM AVAILABLE FUNDS ONLY. All payments to be
made by the Borrower under this Agreement shall be made only from the amounts
that constitute Scheduled Payments, Special Payments or payments under Section
8.1 or 9.1, as the case may be, of the Participation Agreements and Section 6 of
the Note Purchase Agreement and only to the extent that the Borrower shall have
sufficient income or proceeds therefrom to enable the Borrower to make payments
in accordance with the terms hereof after giving effect to the priority of
payments provisions set forth in the Intercreditor Agreement. The Liquidity
Provider agrees that it will look solely to such amounts to the extent available
for distribution to it as provided in the Intercreditor Agreement and this
Agreement and that the Borrower, in its individual capacity, is not personally
liable to it for any amounts payable or liability under this Agreement except as
expressly provided in this Agreement, the Intercreditor Agreement or any
Participation Agreement. Amounts on deposit in the Class C Cash Collateral
Account shall be available to the Borrower to make payments under this Agreement
only to the extent and for the purposes expressly contemplated in Section 3.6(f)
of the Intercreditor Agreement.
Section 2.10. EXTENSION OF THE EXPIRY DATE; NON-EXTENSION ADVANCE. The
Expiry Date shall be automatically extended, effective on the 25th day prior to
each Expiry Date (unless such Expiry Date is on or after the date that is 15
days after the Final Legal Distribution Date for the Class C Certificates), for
a period of 364 days after such Expiry Date (unless the obligations of the
Liquidity Provider are earlier terminated in accordance with the terms hereof),
without the necessity of any act on the part of the Borrower or the Liquidity
Provider, unless the Liquidity Provider shall advise the Borrower, prior to such
25th day that it does not agree to such extension of such Expiry Date, in which
event (and if the Liquidity Provider shall not have been replaced in accordance
with Section 3(e) of the Intercreditor Agreement), the Borrower shall be
entitled on and after such 25th day (but prior to such Expiry Date) to request a
Non-Extension Advance in accordance with Section 2.02(b) hereof and Section
3.6(d) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. INCREASED COSTS. The Borrower shall pay to the Liquidity
Provider from time to time such amounts as may be necessary to compensate the
Liquidity Provider for any increased costs incurred by the Liquidity Provider
which are attributable to its making or maintaining any LIBOR Advances hereunder
or its obligation to make any such Advances hereunder, or any reduction in any
amount receivable by the Liquidity Provider under this Agreement or the
Intercreditor Agreement in respect of any such Advances or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Agreement
in U.S. federal, state, municipal, or foreign laws or regulations (including
Regulation D of the Board of Governors of the Federal Reserve System), or the
adoption or making after the date of this Agreement of any interpretations,
directives, or requirements applying to a class of banks including the Liquidity
Provider under any U.S. federal, state, municipal, or any foreign laws or
regulations (whether or not having the force of law) by any court, central bank
or monetary authority charged with the interpretation or administration thereof
(a "REGULATORY CHANGE"), which: (1) changes the basis of taxation of any amounts
payable to the Liquidity Provider under this Agreement in respect of any such
Advances (other than Excluded Taxes); or (2) imposes or modifies any reserve,
special deposit, compulsory loan or similar requirements relating to any
extensions of credit or other assets of, or any deposits with other liabilities
of, the Liquidity Provider (including any such Advances or any deposits referred
to in the definition of LIBOR Rate or related definitions). The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Facility Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise disadvantageous to
the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.01 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.01 of the effect of any Regulatory Change on its costs of making
or maintaining Advances or on amounts receivable by it in respect of Advances,
and of the additional amounts required to compensate the Liquidity Provider in
respect of any Additional Costs, shall be prima facie evidence of the amount
owed under this Section.
Notwithstanding the preceding two paragraphs, the Liquidity Provider
and the Subordination Agent agree that the initial Liquidity Provider (i.e. AIG
Matched Funding Corp.) shall not be entitled to the benefits of the preceding
two paragraphs, PROVIDED, however, any permitted assignee or participant of the
initial Liquidity Provider which is a bank organized under the laws of the
United States or any State thereof shall be entitled to the benefits of the
preceding two paragraphs (subject, in the case of any permitted participant, to
the limitation set forth in Section 7.08 hereof).
Section 3.02. CAPITAL ADEQUACY. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy, (2) any change, after the date hereof, in the interpretation or
administration of any such law, rule or regulation by any central bank or other
governmental authority charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider or any corporation controlling the
Liquidity Provider with any applicable guideline or request of general
applicability, issued after the date hereof, by any central bank or other
governmental authority (whether or not having the force of law) that constitutes
a change of the nature described in clause (2), has the effect of requiring an
increase in the amount of capital required to be maintained by the Liquidity
Provider or any corporation controlling the Liquidity Provider, and such
increase is based upon the Liquidity Provider's obligations hereunder and other
similar obligations, the Borrower shall pay to the Liquidity Provider from time
to time such additional amount or amounts as are necessary to compensate the
Liquidity Provider for such portion of such increase as shall be reasonably
allocable to the Liquidity Provider's obligations to the Borrower hereunder. The
Liquidity Provider agrees to use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to change the jurisdiction of its Facility
Office if making such change would avoid the need for, or reduce the amount of,
any amount payable under this Section that may thereafter accrue and would not,
in the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Liquidity Provider to
compensation pursuant to this Section 3.02 as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, which
notice shall describe in reasonable detail the calculation of the amounts owed
under this Section. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the Liquidity Provider and of the amount allocable
to the Liquidity Provider's obligations to the Borrower hereunder shall be prima
facie evidence of the amounts owed under this Section.
Notwithstanding the preceding two paragraphs, the Liquidity Provider
and the Subordination Agent agree that the initial Liquidity Provider (i.e. AIG
Matched Funding Corp.) shall not be entitled to the benefits of the preceding
two paragraphs, PROVIDED, however, any permitted assignee or participant of the
initial Liquidity Provider which is a bank organized under the laws of the
United States or any State thereof shall be entitled to the benefits of the
preceding two paragraphs (subject, in the case of any permitted participant, to
the limitation set forth in Section 7.08 hereof).
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 Facility 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, if the Liquidity Provider is not organized
under the laws of the United States or any State thereof, 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 Swiss Bank Corp.. Stamford, ABA
# 0260-07993, Account Name: AIG Matched Funding Corp., Account No.
WA-659-886-000, Account Reference: Continental Airlines Liquidity Facility C
1998-1.
Section 3.05. COMPUTATIONS. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the LIBOR Rate shall be made
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable.
Section 3.06. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day and no additional
interest shall be due as a result (and if so made, shall be deemed to have been
made when due). If any payment in respect of interest on an Advance is so
deferred to the next succeeding Business Day, such deferral shall not delay the
commencement of the next Interest Period for such Advance (if such Advance is a
LIBOR Advance) or reduce the number of days for which interest will be payable
on such Advance on the next interest payment date for such Advance.
Section 3.07. INTEREST. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of such
Advance (or, in the case of an Applied Provider Advance, from and including the
date on which the amount thereof was withdrawn from the Class C Cash Collateral
Account to pay interest on the Class C Certificates) to but excluding the date
such principal amount shall be paid in full (or, in the case of an Applied
Provider Advance, the date on which the Class C Cash Collateral Account is fully
replenished in respect of such Advance) and (ii) any other amount due hereunder
(whether fees, commissions, expenses or other amounts or, to the extent
permitted by law, installments of interest on Advances or any such other amount)
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) from and including the due date thereof to but excluding the date
such amount is paid in full, in each such case, at a fluctuating interest rate
per annum for each day equal to the Applicable Liquidity Rate (as defined below)
for such Advance or such other amount as in effect for such day, but in no event
at a rate per annum greater than the maximum rate permitted by applicable law;
PROVIDED, HOWEVER, that, if at any time the otherwise applicable interest rate
as set forth in this Section 3.07 shall exceed the maximum rate permitted by
applicable law, then any subsequent reduction in such interest rate will not
reduce the rate of interest payable pursuant to this Section 3.07 below the
maximum rate permitted by applicable law until the total amount of interest
accrued equals the amount of interest that would have accrued if such otherwise
applicable interest rate as set forth in this Section 3.07 had at all times been
in effect.
(b) Except as provided in clause (e) below, each Advance will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section. Each
such Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter, such
Advance shall be a LIBOR Advance; provided that the Borrower (at the direction
of the Controlling Party, so long as the Liquidity Provider is not the
Controlling Party) may (x) convert the Final Advance into a Base Rate Advance on
the last day of an Interest Period for such Advance by giving the Liquidity
Provider no less than four Business Days' prior written notice of such election
or (y) elect to maintain the Final Advance as a Base Rate Advance by not
requesting a conversion of the Final Advance to a LIBOR Advance under Clause (5)
of the applicable Notice of Borrowing.
(c) Each LIBOR Advance shall bear interest during each Interest
Period at a rate per annum equal to the LIBOR Rate for such Interest Period plus
the Applicable Margin for such LIBOR Advance, payable in arrears on the last day
of such Interest Period and, in the event of the payment of principal of such
LIBOR Advance on a day other than such last day, on the date of such payment (to
the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin for such Base Rate
Advance, payable in arrears on each Regular Distribution Date and, in the event
of the payment of principal of such Base Rate Advance on a day other than a
Regular Distribution Date, on the date of such payment (to the extent of
interest accrued on the amount of principal repaid).
(e) Each outstanding Unapplied Provider Advance shall bear
interest in an amount equal to the Investment Earnings on amounts on deposit in
the Class C Cash Collateral Account plus the Applicable Margin for such
Unapplied Provider Advance on the amount of such Unapplied Provider Advance from
time to time, payable in arrears on each Regular Distribution Date.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law, installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate plus 2.00% until paid.
(g) Each change in the Base Rate shall become effective
immediately. The rates of interest specified in this Section 3.07 with respect
to any Advance or other amount shall be referred to as the "APPLICABLE LIQUIDITY
RATE".
Section 3.08. REPLACEMENT OF BORROWER. From time to time and subject
to the successor Borrower's meeting the eligibility requirements set forth in
Section 6.9 of the Intercreditor Agreement applicable to the Subordination
Agent, upon the effective date and time specified in a written and completed
Notice of Replacement Subordination Agent in substantially the form of Annex VI
attached hereto (a "NOTICE OF REPLACEMENT SUBORDINATION AGENT") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. FUNDING LOSS INDEMNIFICATION. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such amount
or amounts as shall be sufficient (in the reasonable opinion of the Liquidity
Provider) to compensate it for any loss, cost, or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by the
Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss of
anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance on a date other than the
last day of the Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the
date for borrowing specified in the relevant notice under Section
2.02.
Section 3.10. ILLEGALITY. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Facility
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 Facility Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of the LIBOR Advances shall be
converted to Base Rate Advances (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate repayment; or (b) at the expiration of
the last Interest Period to expire before the effective date of any such change
or request.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "EFFECTIVE DATE") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, and in the case of each document
delivered pursuant to paragraphs (i), (ii) and (iii), each in form and
substance satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto;
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing Date
(other than this Agreement and the Intercreditor Agreement);
(iv) A copy of the Prospectus Supplement and specimen copies
of the Class C Certificates;
(v) An executed copy of each document, instrument,
certificate and opinion delivered on or before the Closing Date
pursuant to the Class C Trust Agreement, the Intercreditor
Agreement and the other Operative Agreements (in the case of each
such opinion, other than the opinion of counsel for the
Underwriters, either addressed to the Liquidity Provider or
accompanied by a letter from the counsel rendering such opinion
to the effect that the Liquidity Provider is entitled to rely on
such opinion as of its date as if it were addressed to the
Liquidity Provider);
(vi) Evidence that there shall have been made and shall be
in full force and effect, all filings, recordings and/or
registrations, and there shall have been given or taken any
notice or other similar action as may be reasonably necessary or,
to the extent reasonably requested by the Liquidity Provider,
reasonably advisable, in order to establish, perfect, protect and
preserve the right, title and interest, remedies, powers,
privileges, liens and security interests of, or for the benefit
of, the Trustees, the Borrower and the Liquidity Provider created
by the Operative Agreements executed and delivered on or prior to
the Closing Date;
(vii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial
statements and audited annual financial statements to the
Liquidity Provider, and such other information as the Liquidity
Provider shall reasonably request with respect to the
transactions contemplated by the Operative Agreements, in each
case, only to the extent that Continental is obligated to provide
such information pursuant to Section 8.2.1 of the Leases (related
to Leased Aircraft) or the corresponding section of the
Indentures (related to Owned Aircraft) to the parties thereto and
(ii) Continental agrees to allow the Liquidity Provider to
inspect Continental's books and records regarding such
transactions, and to discuss such transactions with officers and
employees of Continental; and
(viii) Such other documents, instruments, opinions and
approvals pertaining to the transactions contemplated hereby or
by the other Operative Agreements as the Liquidity Provider shall
have reasonably requested.
(b) The following statement shall be true on and as of the
Effective Date: no event has occurred and is continuing, or would result
from the entering into of this Agreement or the making of any Advance,
which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of
all fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates
under the Trust Agreements shall have been satisfied or waived, all
conditions precedent to the effectiveness of the other Liquidity Facilities
shall have been satisfied or waived, and all conditions precedent to the
purchase of the Certificates by the Underwriters under the Underwriting
Agreement shall have been satisfied (unless any of such conditions
precedent shall have been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the
date hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived.
Section 4.02. CONDITIONS PRECEDENT TO BORROWING. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall be
subject to the conditions precedent that the Effective Date shall have occurred
and, prior to the date of such Borrowing, the Borrower shall have delivered a
Notice of Borrowing which conforms to the terms and conditions of this Agreement
and has been completed as may be required by the relevant form of the Notice of
Borrowing for the type of Advances requested.
ARTICLE V
COVENANTS
Section 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) PERFORMANCE OF THIS AND OTHER AGREEMENTS. Punctually pay or
cause to be paid all amounts payable by it under this Agreement and the
other Operative Agreements and observe and perform in all material respects
the conditions, covenants and requirements applicable to it contained in
this Agreement and the other Operative Agreements.
(b) REPORTING REQUIREMENTS. Furnish to the Liquidity Provider
with reasonable promptness, such other information and data with respect to
the transactions contemplated by the Operative Agreements as from time to
time may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's books
and records with respect to such transactions and to meet with officers and
employees of the Borrower to discuss such transactions.
(c) CERTAIN OPERATIVE AGREEMENTS. Furnish to the Liquidity
Provider with reasonable promptness, such Operative Agreements entered into
after the date hereof as from time to time may be reasonably requested by
the Liquidity Provider.
Section 5.02. NEGATIVE COVENANTS OF THE BORROWER. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the prior written consent
of the Liquidity Provider, which consent shall not be unreasonably withheld or
delayed.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. LIQUIDITY EVENTS OF DEFAULT. If (a) any Liquidity Event
of Default has occurred and is continuing and (b) there is a Performing Note
Deficiency, the Liquidity Provider may, in its discretion, deliver to the
Borrower a Termination Notice, the effect of which shall be to cause (i) the
obligation of the Liquidity Provider to make Advances hereunder to expire on the
fifth Business Day after the date on which such Termination Notice is received
by the Borrower, (ii) the Borrower to promptly request, and the Liquidity
Provider to promptly make, a Final Advance in accordance with Section 2.02(d)
hereof and Section 3.6(i) of the Intercreditor Agreement, (iii) all other
outstanding Advances to be automatically converted into Final Advances for
purposes of determining the Applicable Liquidity Rate for interest payable
thereon, and (iv) subject to Sections 2.07 and 2.09 hereof, all Advances
(including, without limitation, any Provider Advance and Applied Provider
Advance), any accrued interest thereon and any other amounts outstanding
hereunder to become immediately due and payable to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Liquidity Provider, and, in the case of an amendment or of a waiver by the
Borrower, the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
Section 7.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
Liquidity Provider: AIG MATCHED FUNDING CORP.
100 Nyala Farm
Westport, CT 06880
Attention: Chief Financial Officer
Telephone: 203-222-4700
Telecopy: 203-222-4780
With a copy to the General Counsel at the
same address and telecopy number
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 7.04. FURTHER ASSURANCES. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. INDEMNIFICATION; SURVIVAL OF CERTAIN PROVISIONS. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 or 9.1, as the case may be, of the Participation
Agreements. In addition, the Borrower agrees to indemnify, protect, defend and
hold harmless the Liquidity Provider from, against and in respect of, and shall
pay on demand, all Expenses of any kind or nature whatsoever (other than any
Expenses of the nature described in Sections 3.01, 3.02 or 7.07 hereof or in the
Fee Letter (regardless of whether indemnified against pursuant to said Sections
or in such Fee Letter)), that may be imposed, incurred by or asserted against
any Liquidity Indemnitee, in any way relating to, resulting from, or arising out
of or in connection with any action, suit or proceeding by any third party
against such Liquidity Indemnitee and relating to this Agreement, the Fee
Letter, the Intercreditor Agreement or any Financing Agreement; PROVIDED,
however, that the Borrower shall not be required to indemnify, protect, defend
and hold harmless any Liquidity Indemnitee in respect of any Expense of such
Liquidity Indemnitee to the extent such Expense is (i) attributable to the gross
negligence or willful misconduct of such Liquidity Indemnitee or any other
Liquidity Indemnitee, (ii) ordinary and usual operating overhead expense, or
(iii) attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or condition
on its part to be performed or observed in this Agreement, the Intercreditor
Agreement, the Fee Letter or any other Operative Agreement to which it is a
party. The indemnities contained in Section 8.1 or 9.1, as the case may be, of
the Participation Agreements, and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07 hereof, shall survive the termination of this Agreement.
Section 7.06. LIABILITY OF THE LIQUIDITY PROVIDER. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; PROVIDED, HOWEVER, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers,
employees, director or affiliates shall be liable or responsible in any respect
for (i) any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with this
Agreement or any Notice of Borrowing delivered hereunder, or (ii) any action,
inaction or omission which may be taken by it in good faith, absent willful
misconduct or negligence (in which event the extent of the Liquidity Provider's
potential liability to the Borrower shall be limited as set forth in the
immediately preceding paragraph), in connection with this Agreement or any
Notice of Borrowing.
Section 7.07. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Class C Cash
Collateral Accounts. In addition, the Borrower shall pay any and all recording,
stamp and other similar taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
any other Operative Agreement and such other documents, and agrees to save the
Liquidity Provider harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
or fees.
Section 7.08. BINDING EFFECT; PARTICIPATIONS. (a) This Agreement shall
be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights hereunder (including, without limitation, funded participations and
participations in rights to receive interest payments hereunder) and under the
other Operative Agreements to such Persons as the Liquidity Provider may in its
sole discretion select, subject to the requirements of Section 7.08(b). No such
participation by the Liquidity Provider, however, will relieve the Liquidity
Provider of its obligations hereunder. In connection with any participation or
any proposed participation, the Liquidity Provider may disclose to the
participant or the proposed participant any information that the Borrower is
required to deliver or to disclose to the Liquidity Provider pursuant to this
Agreement. The Borrower acknowledges and agrees that the Liquidity Provider's
source of funds may derive in part from its participants (other than
Continental). Accordingly, references in this Agreement and the other Operative
Agreements to determinations, reserve and capital adequacy requirements,
increased costs, reduced receipts, additional amounts due pursuant to Section
3.03 and the like as they pertain to the Liquidity Provider shall be deemed also
to include those of each of its participants that are banks (subject, in each
case, if any such participant is not a bank that is (i) organized under the laws
of the United States or any State thereof and (ii) a member bank of the Federal
Reserve System with deposits exceeding $1,000,000,000 (such a bank, a "Reference
Bank"), to the maximum amount that would have been directly incurred by any
Reference Bank organized under the laws of the United States or any State
thereof if such Reference Bank, rather than the participant, had held the
interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider
sells any participation in this Agreement to any bank or other entity (each, a
"TRANSFEREE"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of this
Agreement, (ii) furnish to the Liquidity Provider and the Borrower either (x) a
statement that it is incorporated under the laws of the United States or a state
thereof or (y) if it is not so incorporated, two copies of a properly completed
United States Internal Revenue Service Form 4224 or Form 1001, as appropriate,
or other applicable form, certificate or document prescribed by the Internal
Revenue Service certifying, in each case, such Transferee's entitlement to a
complete exemption from United States federal withholding tax in respect to any
and all payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the date
that any such form expires or becomes obsolete or (B) after the occurrence of
any event requiring a change in the most recent form previously delivered by it
and prior to the immediately following due date of any payment by the Borrower
hereunder, certifying in the case of a Form 1001 or Form 4224 that such
Transferee is entitled to a complete exemption from United States federal
withholding tax on payments under this Agreement. Unless the Borrower has
received forms or other documents reasonably satisfactory to it (and required by
applicable law) indicating that payments hereunder are not subject to United
States federal withholding tax, the Borrower will withhold taxes as required by
law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08,
the Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; WAIVER
OF IMMUNITY. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to this Agreement or any other Operative
Agreement, or for recognition and enforcement of any judgment in
respect hereof or thereof, to the nonexclusive general
jurisdiction of the courts of the State of New York, the courts
of the United States of America for the Southern District of New
York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
and mail), postage prepaid, to each party hereto at its address
set forth in Section 7.02 hereof, or at such other address of
which the Liquidity Provider shall have been notified pursuant
thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS
BEING ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have
from the jurisdiction of the courts of the United States or of any State and
waives any immunity any of its properties located in the United States may have
from attachment or execution upon a judgment entered by any such court under the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
Section 7.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. ENTIRETY. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. HEADINGS. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. TRANSFER. The Liquidity Provider hereby acknowledges and
consents to the Transfer contemplated by the Assignment and Assumption
Agreement.
Section 7.16. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first set forth above.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
agent and trustee for the Class C
Trust, as Borrower
By:_____________________________________
Name:
Title:
AIG MATCHED FUNDING CORP.,
as Liquidity Provider
By:_____________________________________
Name:
Title:
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to AIG Matched Funding Corp. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1998-1C) dated as of February 20, 1998, between the Borrower and the Liquidity
Provider (the "LIQUIDITY AGREEMENT"; the terms defined therein and not otherwise
defined herein being used herein as therein defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of an Interest Advance by the Liquidity Provider to be used,
subject to clause (3)(v) below, for the payment of interest on the
Class C Certificates which was payable on ____________, ____ (the
"DISTRIBUTION DATE") in accordance with the terms and provisions of
the Class C Trust Agreement and the Class C Certificates, which
Advance is requested to be made on ____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the
interest which was due and payable on the Class C Certificates on the
Distribution Date, (ii) does not include any amount with respect to
the payment of principal of, or premium on, the Class A Certificates,
the Class B Certificates or the Class C Certificates, or interest on
the Class A Certificates or the Class B Certificates, (iii) was
computed in accordance with the provisions of the Class C
Certificates, the Class C Trust Agreement and the Intercreditor
Agreement (a copy of which computation is attached hereto as Schedule
I), (iv) does not exceed the Maximum Available Commitment on the date
hereof, (v) does not include any amount of interest which was due and
payable on the Class C Certificates on such Distribution Date but
which remains unpaid due to the failure of the Depositary to pay any
amount of accrued interest on the Deposits on such Distribution Date
and (vi) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance
with the terms of Section 3.6(b) of the Intercreditor Agreement, (b)
no portion of such amount shall be applied by the Borrower for any
other purpose and (c) no portion of such amount until so applied shall
be commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of ________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to
Revolving Credit Agreement
NON-EXTENSION ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to AIG Matched Funding
Corp. (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1998-1C) dated as of February 20, 1998, 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 Maximum Available Commitment
on the date hereof and is to be applied in respect of the funding of
the Class C Cash Collateral Account in accordance with Section 3.6(d)
of the Intercreditor Agreement, (ii) does not include any amount with
respect to the payment of the principal of, or premium on, the Class C
Certificates, or principal of, or interest or premium on, the Class A
Certificates or the Class B Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class
C Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been
and is not the subject of a prior or contemporaneous Notice of
Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class C Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(d) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested
hereby be a Base Rate Advance and that such Base Rate Advance be
converted into a LIBOR Advance on the third Business Day following
your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Non-Extension Advance as requested by this
Notice of Borrowing shall automatically and irrevocably terminate the obligation
of the Liquidity Provider to make further Advances under the Liquidity
Agreement; and (B) following the making by the Liquidity Provider of the
Non-Extension Advance requested by this Notice of Borrowing, the Borrower shall
not be entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of ________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO NON-EXTENSION ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Non-Extension Advance Notice of Borrowing]
Annex III to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "BORROWER"), hereby certifies to AIG Matched Funding
Corp. (the "LIQUIDITY PROVIDER"), with reference to the Revolving Credit
Agreement (1998-1C) dated as of February 20, 1998, 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 Maximum Available Commitment on
the date hereof and is to be applied in respect of the funding of the
Class C Cash Collateral Account in accordance with Section 3.6(c) of
the Intercreditor Agreement, (ii) does not include any amount with
respect to the payment of the principal of, or premium on, the Class C
Certificates, or principal of, or interest or premium on, the Class A
Certificates or the Class B Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class
C Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been
and is not the subject of a prior or contemporaneous Notice of
Borrowing under the Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class C Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(c) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _______, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex IV to
Revolving Credit Agreement
FINAL ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "BORROWER"), hereby certifies to AIG Matched Funding Corp. (the
"LIQUIDITY PROVIDER"), with reference to the Revolving Credit Agreement
(1998-1C) dated as of February 20, 1998, 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 Maximum Available Commitment
on the date hereof and is to be applied in respect of the funding of
the Class C Cash Collateral Account in accordance with Section 3.6(i)
of the Intercreditor Agreement, (ii) does not include any amount with
respect to the payment of principal of, or premium on, the Class C
Certificates, or principal of, or interest or premium on, the Class A
Certificates or the Class B Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class
C Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been
and is not the subject of a prior or contemporaneous Notice of
Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the
Class C Cash Collateral Account and apply the same in accordance with
the terms of Section 3.6(i) of the Intercreditor Agreement, (b) no
portion of such amount shall be applied by the Borrower for any other
purpose and (c) no portion of such amount until so applied shall be
commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested
hereby be a Base Rate Advance [and that such Base Rate Advance be
converted into a LIBOR Advance on the third Business Day following
your receipt of this notice.]
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Final Advance as requested by this Notice of
Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Final Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of ________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
________________
Bracketed language may be included at Borrower's option.
SCHEDULE I TO FINAL ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Final Advance Notice of Borrowing]
Annex V to
Revolving Credit Agreement
NOTICE OF TERMINATION
[Date]
Wilmington Trust Company,
as Subordination Agent, as Borrower
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for
the Continental Airlines Pass Through Trust, 1998-1C-[O/S], as Borrower,
and AIG Matched Funding Corp. (the "LIQUIDITY AGREEMENT")
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 6.01 of the Liquidity
Agreement, by reason of the occurrence of a Liquidity Event of Default and the
existence of a Performing Note Deficiency (each as defined therein), we are
giving this notice to you in order to cause (i) our obligations to make Advances
(as defined therein) under such Liquidity Agreement to terminate on the fifth
Business Day after the date on which you receive this notice and (ii) you to
request a Final Advance under the Liquidity Agreement pursuant to Section 3.6(i)
of the Intercreditor Agreement (as defined in the Liquidity Agreement) as a
consequence of your receipt of this notice.
THIS NOTICE IS THE "NOTICE OF TERMINATION" PROVIDED FOR UNDER THE
LIQUIDITY AGREEMENT. OUR OBLIGATIONS TO MAKE ADVANCES UNDER THE LIQUIDITY
AGREEMENT WILL TERMINATE ON THE FIFTH BUSINESS DAY AFTER THE DATE ON WHICH YOU
RECEIVE THIS NOTICE.
Very truly yours,
AIG MATCHED FUNDING CORP.,
as Liquidity Provider
By:_____________________________________
Name:
Title:
cc: Wilmington Trust Company,
as Class C Trustee
Annex VI to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of February 20, 1998, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for
the Continental Airlines Pass Through Trust, 1998-1C-[O/S], as Borrower,
and AIG Matched Funding Corp. (the "LIQUIDITY AGREEMENT")
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
______________________________
[Name of Transferee]
______________________________
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:_____________________________________
Name:
Title:
TRUST SUPPLEMENT No. 1998-1A-O
Dated February 20, 1998
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$485,605,000
Continental Airlines Pass Through Trust 1998-1A-O
6.648% Continental Airlines
Pass Through Certificates,
Series 1998-1A-O
This Trust Supplement No. 1998-1A-O, dated as of February 20, 1998
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in the
Basic Agreement) which may be issued thereunder, has heretofore been executed
and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which case
the Company will lease such Aircraft (collectively, the "LEASED AIRCRAFT") or
(ii) through separate secured loan transactions, in which case the Company will
own such Aircraft (collectively, the "OWNED AIRCRAFT");
WHEREAS, in the case of each Leased Aircraft, each Owner Trustee,
acting on behalf of the corresponding Owner Participant, will issue pursuant to
an Indenture, on a non-recourse basis, Equipment Notes in order to finance a
portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will issue
pursuant to an Indenture, on a recourse basis, Equipment Notes to finance a
portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this Continental
Airlines Pass Through Trust 1998-1A-O (the "APPLICABLE TRUST") for the benefit
of the Applicable Certificateholders, and the initial Applicable
Certificateholders as the grantors of the Applicable Trust, by their respective
acceptances of the Applicable Certificates, join in the creation of the
Applicable Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will
evidence fractional undivided interests in the Applicable Trust and will convey
no rights, benefits or interests in respect of any property other than the Trust
Property except for those Certificates to which an Escrow Receipt has been
affixed;
WHEREAS, the Escrow Agent and the Underwriters have contemporaneously
herewith entered into an Escrow Agreement with the Escrow Paying Agent pursuant
to which the Underwriters have delivered to the Escrow Agent the proceeds from
the sale of the Applicable Certificates and have irrevocably instructed the
Escrow Agent to withdraw and pay funds from such proceeds upon request and
proper certification by the Trustee to purchase Equipment Notes as the Aircraft
are delivered by Boeing under the Aircraft Purchase Agreement from time to time
prior to the Delivery Period Termination Date;
WHEREAS, the Escrow Agent on behalf of the Applicable
Certificateholders has contemporaneously herewith entered into a Deposit
Agreement with the Depositary under which the Deposits referred to therein will
be made and from which it will withdraw funds to allow the Trustee to purchase
Equipment Notes from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "AGREEMENT") and the Note Purchase
Agreement, upon or shortly following delivery of an Aircraft, the Trustee on
behalf of the Applicable Trust, using funds withdrawn under the Escrow
Agreement, shall purchase one or more Equipment Notes having the same interest
rate as, and final maturity date not later than the final Regular Distribution
Date of, the Applicable Certificates issued hereunder and shall hold such
Equipment Notes in trust for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known as
"6.648% Continental Airlines Pass Through Certificates, Series 1998-1A-O"
(hereinafter defined as the "APPLICABLE CERTIFICATES"). Each Applicable
Certificate represents a fractional undivided interest in the Applicable Trust
created hereby. The Applicable Certificates shall be the only instruments
evidencing a fractional undivided interest in the Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates that
shall be authenticated under the Agreement (except for Applicable Certificates
authenticated and delivered pursuant to Sections 3.03, 3.04 and 3.06 of the
Basic Agreement) is $485,605,000.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means March 15 and September 15 of each year, commencing on
March 15, 1998, until payment of all of the Scheduled Payments to be made under
the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is attached,
each Holder of such an Applicable Certificate acknowledges and accepts the
restrictions on transfer of the Escrow Receipt set forth herein and in the
Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting an Applicable Certificate
or an interest therein will, by such acquisition or acceptance, be deemed to
represent and warrant to and for the benefit of each Owner Participant and the
Company that either (i) the assets of an employee benefit plan subject to Title
I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or of a plan subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), have not been used to purchase Applicable Certificates or
an interest therein or (ii) the purchase and holding of Applicable Certificates
or an interest therein is exempt from the prohibited transaction restrictions of
ERISA and the Code pursuant to one or more prohibited transaction statutory or
administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry
Certificates and shall be subject to the conditions set forth in the Letter
of Representations between the Company and the Clearing Agency attached
hereto as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement, and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the Liquidity
Facility.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement", for
purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section 8.1
(with respect to Owned Aircraft) and Section 9.1 (with respect to Leased
Aircraft) of each Participation Agreement.
(j) The Equipment Notes to be acquired and held in the Applicable
Trust, and the related Aircraft and Note Documents, are described in the Note
Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have the
following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic Agreement shall have the meaning assigned thereto in
this Trust Supplement for purposes of the Basic Agreement as supplemented by
this Trust Supplement):
AGREEMENT: Has the meaning specified in the recitals hereto.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance with
the Note Purchase Agreement.
AIRCRAFT PURCHASE AGREEMENT: Has the meaning specified in the Note
Purchase Agreement.
APPLICABLE CERTIFICATE: Has the meaning specified in Section 1.01 of
this Trust Supplement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE DELIVERY DATE: Has the meaning specified in Section 5.01(b)
of this Trust Supplement.
APPLICABLE PARTICIPATION AGREEMENT: Has the meaning specified in
Section 5.01(b) of this Trust Supplement.
APPLICABLE TRUST: Has the meaning specified in the recitals hereto.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C hereto executed and
delivered in accordance with Section 7.01 of this Trust Supplement.
BASIC AGREEMENT: Has the meaning specified in the first paragraph of
this Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston, Texas,
New York, New York, Salt Lake City, Utah or, so long as any Applicable
Certificate is Outstanding, the city and state in which the Trustee or any Loan
Trustee maintains its Corporate Trust Office or receives and disburses funds.
CLASS D CERTIFICATEHOLDER: Has the meaning specified in Section
4.01(a)(iii) of this Trust Supplement.
COMPANY: Has the meaning specified in the first paragraph of this
Trust Supplement.
CUT-OFF DATE: Means the earlier of (a) the Delivery Period Termination
Date and (b) the date on which a Triggering Event occurs.
DELIVERY DATE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Means the earlier of (a) January 31,
1999, or, if the Equipment Notes relating to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have not been purchased by the Applicable
Trust and the Other Trusts on or prior to such date due to any reason beyond the
control of the Company and not occasioned by the Company's fault or negligence,
June 30, 1999 (PROVIDED that, if a labor strike occurs at Boeing on or prior to
either or both of such dates referred to in this clause (a), such date or dates
on or following the commencement of such strike shall be extended by adding
thereto the number of days that such strike continued in effect) and (b) the
date on which Equipment Notes issued with respect to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Applicable Trust
and the Other Trusts in accordance with the Note Purchase Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of February
20, 1998 relating to the Applicable Certificates between the Depositary and the
Escrow Agent, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in accordance
with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
of February 20, 1998 relating to the Applicable Certificates, among the Escrow
Agent, the Escrow Paying Agent, the Trustee and Underwriters, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under the
Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the funds
held in escrow thereunder.
FINAL MATURITY DATE: Means March 15, 2019.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
FINAL WITHDRAWAL NOTICE: Has the meaning specified in Section 5.02 of
this Trust Supplement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery Notice
delivered pursuant to the Note Purchase Agreement or the related Participation
Agreement, in each case as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
February 20, 1998 among the Trustee, the Other Trustees, the Liquidity
Providers, the liquidity providers relating to the Certificates issued under
(and as defined in) each of the Other Agreements, and Wilmington Trust Company,
as Subordination Agent and as trustee thereunder, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred to in
the related Indenture, as such lease may be amended, supplemented or otherwise
modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LEASED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
dated as of February 20, 1998 relating to the Applicable Certificates, between
the Liquidity Provider and Wilmington Trust Company as Subordination Agent, as
agent and trustee for the Applicable Trust, and, from and after the replacement
of such agreement pursuant to the Intercreditor Agreement, the replacement
liquidity facility therefor, in each case as amended, supplemented or otherwise
modified from time to time in accordance with their respective terms.
LIQUIDITY PROVIDER: Means, initially, AIG Matched Funding Corp., a
Delaware corporation, and any replacements or successors therefor appointed in
accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: Means the Equipment Notes with respect to the
Applicable Certificates and, with respect to any such Equipment Note, (i) the
Indenture and the Participation Agreement relating to such Equipment Note, and
(ii) in the case of any Equipment Note related to a Leased Aircraft, the Lease
relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as of
February 20, 1998 among the Trustee, the Other Trustees, the Company, the Escrow
Agent, the Escrow Paying Agent and the Subordination Agent, providing for, among
other things, the purchase of Equipment Notes by the Trustee on behalf of the
Trust, as the same may be amended, supplemented or otherwise modified from time
to time, in accordance with its terms.
NOTICE OF PURCHASE WITHDRAWAL: Has the meaning specified in the
Deposit Agreement.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1998-1B-O dated the date hereof relating to Continental
Airlines Pass Through Trust 1998-1B-O and (ii) the Basic Agreement as
supplemented by Trust Supplement No. 1998-1C-O dated the date hereof relating to
Continental Airlines Pass Through Trust 1998-1C-O.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1998-1B-O and the Continental Airlines Pass Through Trust 1998-1C-O, each
created on the date hereof.
OWNED AIRCRAFT: Has the meaning specified in the third recital to this
Trust Supplement.
OWNED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the Indenture
pursuant to which such Equipment Note is issued and any permitted successor or
assign of such Owner Participant; and OWNER PARTICIPANTS at any time of
determination means all of the Owner Participants thus referred to in the
Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture pursuant to
which such Equipment Note is issued, not in its individual capacity but solely
as trustee; and OWNER TRUSTEES means all of the Owner Trustees party to any of
the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as the same
may be amended, supplemented or otherwise modified in accordance with its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the Applicable Certificates less (ii) the aggregate amount of all
payments made in respect of such Applicable Certificates or in respect of
Deposits other than payments made in respect of interest or premium thereon or
reimbursement of any costs or expenses incurred in connection therewith. The
Pool Balance as of any Distribution Date shall be computed after giving effect
to any special distribution with respect to unused Deposits, payment of
principal of the Equipment Notes or payment with respect to other Trust Property
and the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by (ii)
the original aggregate face amount of the Applicable Certificates. The Pool
Factor as of any Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, payment of principal of
the Equipment Notes or payments with respect to other Trust Property and the
distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated February
11, 1998 relating to the offering of the Certificates.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1998-1A-S dated the date hereof
relating to the Continental Airlines Pass Through Trust 1998-1A-S and entered
into by the Company and the Trustee, which agreement becomes effective upon the
execution and delivery of the Assignment and Assumption Agreement pursuant to
Section 7.01 of this Trust Supplement.
RELATED TRUST: Means the Continental Pass Through Trust 1998-1A-S, to
be formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL PAYMENT: Means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate (as
defined in each Leased Aircraft Indenture) or Collateral (as defined in each
Owned Aircraft Indenture) or any Special Redemption Premium.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase Agreement.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Has the meaning specified in Section 7.01 of this Trust
Supplement.
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at any
time paid thereon and all monies due and to become due thereunder, (ii) funds
from time to time deposited in the Certificate Account and the Special Payments
Account and, subject to the Intercreditor Agreement, any proceeds from the sale
by the Trustee pursuant to Article VI of the Basic Agreement of any Equipment
Note and (iii) all rights of the Applicable Trust and the Trustee, on behalf of
the Applicable Trust, under the Intercreditor Agreement, the Escrow Agreement,
the Note Purchase Agreement and the Liquidity Facilities, including, without
limitation, all rights to receive certain payments thereunder, and all monies
paid to the Trustee on behalf of the Applicable Trust pursuant to the
Intercreditor Agreement or the Liquidity Facilities, PROVIDED that rights with
respect to the Deposits or under the Escrow Agreement, except for the right to
direct withdrawals for the purchase of Equipment Notes to be held herein, will
not constitute Trust Property.
TRUST SUPPLEMENT: Has the meaning specified in the first paragraph of
this trust supplement.
UNDERWRITERS: Means, collectively, Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated and Chase Securities Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
February 11, 1998 among the Underwriters, the Company and the Depositary, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. AMENDMENTS TO ARTICLE IV OF THE BASIC AGREEMENT. Article
IV of the Basic Agreement shall be amended as follows:
(a) The following sentence shall be inserted in Section 4.02(c) of the
Basic Agreement following the fourth sentence thereof:
In the event of the payment of a Special Redemption Premium by the
Company to the Trustee under the Note Purchase Agreement, the notice
provided for in this Section 4.02(c) shall be mailed, together with
the notice by the Escrow Paying Agent under Section 2.06 of the Escrow
Agreement, not less than 15 days prior to the Special Distribution
Date for such amount, which Special Distribution Date shall be the
Final Withdrawal Date.
(b) The following sentence shall replace in its entirety the last
sentence of the first paragraph of Section 4.02(c) of the Basic Agreement:
If the amount of (i) premium, if any, payable upon the redemption or
purchase of an Equipment Note or (ii) the Special Redemption Premium,
if any, 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.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable to
principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable to
interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to unused Deposits, if any; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of
a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Delivery Period Termination Date, if
there has been any change in the information set forth in clauses (x), (y) and
(z) below from that set forth in page S-52 of the Prospectus Supplement, and
(ii) any early redemption or purchase of, or any default in the payment of
principal or interest in respect of, any of the Equipment Notes held in the
Applicable Trust, or any Final Withdrawal, the Trustee shall furnish to
Applicable Certificateholders of record on such date a statement setting forth
(x) the expected Pool Balances for each subsequent Regular Distribution Date
following the Delivery Period Termination Date, (y) the related Pool Factors for
such Regular Distribution Dates and (z) the expected principal distribution
schedule of the Equipment Notes, in the aggregate, held as Trust Property at the
date of such notice. With respect to the Applicable Certificates registered in
the name of a Clearing Agency, on the Delivery Period Termination Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such date. The Trustee will mail to each such Clearing Agency Participant the
statement described above and will make available additional copies as requested
by such Clearing Agency Participant for forwarding to holders of interests in
the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) By acceptance
of its Applicable Certificate, each Applicable Certificateholder agrees that at
any time after the occurrence and during the continuation of a Triggering Event,
(i) each Class B Certificateholder shall have the right to purchase
all, but not less than all, of the Applicable Certificates upon ten days'
written notice to the Trustee and each other Class B Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class B Certificateholder notifies such purchasing Class B
Certificateholder that such other Class B Certificateholder wants to
participate in such purchase, then such other Class B Certificateholder may
join with the purchasing Class B Certificateholder to purchase all, but not
less than all, of the Applicable Certificates pro rata based on the
Fractional Undivided Interest in the Class B Trust held by each such Class
B Certificateholder and (B) if prior to the end of such ten-day period any
other Class B Certificateholder fails to notify the purchasing Class B
Certificateholder of such other Class B Certificateholder's desire to
participate in such a purchase, then such other Class B Certificateholder
shall lose its right to purchase the Applicable Certificates pursuant to
this Section 4.01(a);
(ii) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Applicable Certificates pursuant to
clause (i) above) to purchase all, but not less than all, of the Applicable
Certificates and the Class B Certificates upon ten days' written notice to
the Trustee, the Class B Trustee and each other Class C Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may
join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Applicable Certificates and the Class B Certificates
pro rata based on the Fractional Undivided Interest in the Class C Trust
held by each such Class C Certificateholder and (B) if prior to the end of
such ten-day period any other Class C Certificateholder fails to notify the
purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(a); and
(iii) each holder of a Class D Certificate (a "CLASS D
CERTIFICATEHOLDER") shall have the right (which shall not expire upon any
purchase of the Applicable Certificates pursuant to clause (i) or (ii)
above) to purchase all, but not less than all, of the Applicable
Certificates, the Class B Certificates and the Class C Certificates upon
ten days' written notice to the Trustee, the Class B Trustee, the Class C
Trustee and each other Class D Certificateholder, PROVIDED that (A) if
prior to the end of such ten-day period any other Class D Certificateholder
notifies such purchasing Class D Certificateholder that such other Class D
Certificateholder wants to participate in such purchase, then such other
Class D Certificateholder may join with the purchasing Class D
Certificateholder to purchase all, but not less than all, of the Applicable
Certificates, the Class B Certificates and the Class C Certificates pro
rata based on the Fractional Undivided Interest in the Class D Trust held
by each such Class D Certificateholder and (B) if prior to the end of such
ten-day period any other Class D Certificateholder fails to notify the
purchasing Class D Certificateholder of such other Class D
Certificateholder's desire to participate in such a purchase, then such
other Class D Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(a).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such record date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed under this Agreement on the related Distribution Date (which
deducted amounts shall remain distributable to, and may be retained by, the
Applicable Certificateholder as of such Record Date); PROVIDED FURTHER that no
such purchase of Applicable Certificates shall be effective unless the
purchaser(s) shall certify to the Trustee that contemporaneously with such
purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Other Agreements, the Applicable Certificates, the Class B
Certificates and the Class C Certificates which are senior to the securities
held by such purchaser(s). Each payment of the purchase price of the Applicable
Certificates referred to in the first sentence hereof shall be made to an
account or accounts designated by the Trustee and each such purchase shall be
subject to the terms of this Section 4.01(a). Each Applicable Certificateholder
agrees by its acceptance of its Applicable Certificate that it will, subject to
Section 3.04 of the Basic Agreement, upon payment from such Class B
Certificateholder(s), Class C Certificateholder(s), or Class D
Certificateholder(s), as the case may be, of the purchase price set forth in the
first sentence of this paragraph, forthwith sell, assign, transfer and convey to
the purchaser(s) thereof (without recourse, representation or warranty of any
kind except for its own acts), all of the right, title, interest and obligation
of such Applicable Certificateholder in this Agreement, the Escrow Agreement,
the Deposit Agreement, the Intercreditor Agreement, the Liquidity Facilities,
the Note Documents and all Applicable Certificates and Escrow Receipts held by
such Applicable Certificateholder (subject to clauses (i) and (ii) in the first
sentence of this paragraph and excluding all right, title and interest under any
of the foregoing to the extent such right, title or interest is with respect to
an obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the purchaser shall assume
all of such Applicable Certificateholder's obligations under this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facilities, the Note Documents and all such Applicable Certificates
and Escrow Receipts. The Applicable Certificates will be deemed to be purchased
on the date payment of the purchase price is made notwithstanding the failure of
the Applicable Certificateholders to deliver any Applicable Certificates and,
upon such a purchase, (i) the only rights of the Applicable Certificateholders
will be to deliver the Applicable Certificates to the purchaser(s) and receive
the purchase price for such Applicable Certificates and (ii) if the purchaser(s)
shall so request, such Applicable Certificateholder will comply with all the
provisions of Section 3.04 of the Basic Agreement to enable new Applicable
Certificates to be issued to the purchaser in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Applicable Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01(a) and elsewhere in this Trust
Supplement, the terms "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" and "Class D Trust",
shall have the respective meanings assigned to such terms in the Intercreditor
Agreement.
(b) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. DELIVERY OF DOCUMENTS; DELIVERY DATES. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor Agreement, the
Escrow Agreement and the Note Purchase Agreement on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii) subject
to the respective terms thereof, to perform its obligations thereunder. Upon
request of the Company and the satisfaction or waiver of the closing conditions
specified in the Underwriting Agreement, the Trustee shall execute, deliver,
authenticate, issue and sell Applicable Certificates in authorized denominations
equaling in the aggregate the amount set forth, with respect to the Applicable
Trust, in Schedule II to the Underwriting Agreement evidencing the entire
ownership interest in the Applicable Trust, which amount equals the maximum
aggregate principal amount of Equipment Notes which may be purchased by the
Trustee pursuant to the Note Purchase Agreement. Except as provided in Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement, the Trustee shall not execute,
authenticate or deliver Applicable Certificates in excess of the aggregate
amount specified in this paragraph.
(b) On or after the Issuance Date, the Company may deliver from time
to time to the Trustee a Delivery Notice relating to one or more Equipment
Notes. After receipt of a Delivery Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery Notice relates
(the "APPLICABLE DELIVERY DATE"), the Trustee shall (as and when specified in
the Delivery Notice) instruct the Escrow Agent to provide a Notice of Purchase
Withdrawal to the Depositary requesting (A) the withdrawal of one or more
Deposits on the Applicable Delivery Date in accordance with and to the extent
permitted by the terms of the Escrow Agreement and the Deposit Agreement and (B)
the payment of all, or a portion, of such Deposit or Deposits in an amount equal
in the aggregate to the purchase price of such Equipment Notes to or on behalf
of the Owner Trustee or the Company, as the case may be, issuing such Equipment
Notes, all as shall be described in the Delivery Notice. The Trustee shall (as
and when specified in such Delivery Notice), subject to the conditions set forth
in Section 2 of the Note Purchase Agreement, enter into and perform its
obligations under the Participation Agreement specified in such Delivery Notice
(the "APPLICABLE PARTICIPATION Agreement") and cause such certificates,
documents and legal opinions relating to the Trustee to be duly delivered as
required by the Applicable Participation Agreement. If at any time prior to the
Applicable Delivery Date, the Trustee receives a notice of postponement pursuant
to Section 1(e) or 1(f) of the Note Purchase Agreement, then the Trustee shall
give the Depositary (with a copy to the Escrow Agent) a notice of cancellation
of such Notice of Purchase Withdrawal relating to such Deposit or Deposits on
such Applicable Delivery Date. Upon satisfaction of the conditions specified in
the Note Purchase Agreement and the Applicable Participation Agreement, the
Trustee shall purchase the applicable Equipment Notes with the proceeds of the
withdrawals of one or more Deposits made on the Applicable Delivery Date in
accordance with the terms of the Deposit Agreement and the Escrow Agreement. The
purchase price of such Equipment Notes shall equal the principal amount of such
Equipment Notes. Amounts withdrawn from such Deposit or Deposits in excess of
the purchase price of the Equipment Notes or to the extent not applied on the
Applicable Delivery Date to the purchase price of the Equipment Notes, shall be
re-deposited by the Trustee with the Depositary on the Applicable Delivery Date
in accordance with the terms of the Deposit Agreement. The provisions of this
Section 5.01(b) supersede and replace the provisions of Section 2.02 of the
Basic Agreement (which are inapplicable to the Trust), and all provisions of the
Basic Agreement relating to Postponed Notes and Section 2.02 of the Basic
Agreement shall not apply to the Applicable Trust.
(c) The Trustee acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 5.01(b)
of this Trust Supplement, the Note Purchase Agreement and each Applicable
Participation Agreement, and declares that it holds and will hold such right,
title and interest for the benefit of all present and future Applicable
Certificateholders, upon the trusts set forth in this Agreement. By its
acceptance of an Applicable Certificate, each initial Applicable
Certificateholder, as a grantor of the Applicable Trust, joins with the Trustee
in the creation of the Applicable Trust. The provisions of this Section 5.01(c)
supersede and replace the provisions of Section 2.03 of the Basic Agreement.
Section 5.02. WITHDRAWAL OF DEPOSITS. If any Deposits remain
outstanding on the Business Day next succeeding the Cut-off Date, (i) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated and
instruct the Escrow Agent to provide a notice of Final Withdrawal to the
Depositary substantially in the form of Exhibit B to the Deposit Agreement (the
"FINAL WITHDRAWAL NOTICE") and (ii) the Trustee will make a demand upon the
Company under the Note Purchase Agreement for an amount equal to the Special
Redemption Premium (if any is payable), such payment to be made on the Final
Withdrawal Date.
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement, the
Note Purchase Agreement or the Escrow Agreement or the due execution hereof or
thereof by the Company or the other parties thereto (other than the Trustee), or
for or in respect of the recitals and statements contained herein or therein,
all of which recitals and statements are made solely by the Company, except that
the Trustee hereby represents and warrants that each of this Trust Supplement,
the Basic Agreement, each Applicable Certificate, the Intercreditor Agreement,
the Note Purchase Agreement and the Escrow Agreement has been executed and
delivered by one of its officers who is duly authorized to execute and deliver
such document on its behalf.
(b) Except as herein otherwise provided and except during the
continuance of an Event of Default in respect of the Applicable Trust created
hereby, no duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the Agreement, and this Trust Supplement is executed and
accepted on behalf of the Trustee, subject to all the terms and conditions set
forth in the Agreement, as fully to all intents as if the same were herein set
forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to execute,
deliver and perform this Trust Supplement, the Escrow Agreement and the Note
Documents to which it is a party and has taken all necessary action to authorize
the execution, delivery and performance by it of this Trust Supplement, the
Escrow Agreement and the Note Documents to which it is a party;
(b) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it is a
party (i) will not violate any provision of any United States federal law or the
law of the state of the United States where it is located governing the banking
and trust powers of the Trustee or any order, writ, judgment, or decree of any
court, arbitrator or governmental authority applicable to the Trustee or any of
its assets, (ii) will not violate any provision of the articles of association
or by-laws of the Trustee, and (iii) will not violate any provision of, or
constitute, with or without notice or lapse of time, a default under, or result
in the creation or imposition of any lien on any properties included in the
Trust Property pursuant to the provisions of any mortgage, indenture, contract,
agreement or other undertaking to which it is a party, which violation, default
or lien could reasonably be expected to have an adverse effect on the Trustee's
performance or ability to perform its duties hereunder or thereunder or on the
transactions contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it is a
party will not require the authorization, consent, or approval of, the giving of
notice to, the filing or registration with, or the taking of any other action in
respect of, any governmental authority or agency of the United States or the
state of the United States where it is located regulating the banking and
corporate trust activities of the Trustee; and
(d) this Trust Supplement, the Escrow Agreement and the Note Documents
to which it is a party have been, or will be, as applicable, duly executed and
delivered by the Trustee and constitute, or will constitute, as applicable, the
legal, valid and binding agreements of the Trustee, enforceable against it in
accordance with their respective terms; PROVIDED, HOWEVER, that enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and (ii)
general principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 6.01. AMENDMENT OF SECTION 5.02 OF THE BASIC AGREEMENT.
Section 5.02 of the Basic Agreement shall be amended by (i) replacing the phrase
"of the Note Documents and of this Agreement" set forth in paragraph (b) thereof
with the phrase "of the Note Documents, of the Note Purchase Agreement and of
this Agreement" and (ii) replacing the phrase "of this Agreement and any Note
Document" set forth in the last paragraph of Section 5.02 with the phrase "of
this Agreement, the Note Purchase Agreement and any Note Document".
Section 6.02. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic Agreement, the Company may (but will not be required to), and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request, at any time and from time to time, (i) enter into one or more
agreements supplemental to the Escrow Agreement, the Note Purchase Agreement or
the Deposit Agreement, for any of the purposes set forth in clauses (1) through
(9) of such Section 9.01, except that (a) clause (2) and (3) of such Section
9.01 shall be deemed to include the Company's obligations under (in the case of
clause (2)), and the Company's rights and powers conferred by (in the case of
clause (3)), the Note Purchase Agreement, (b) clause (4) of such Section 9.01
shall be deemed to include corrections or supplements to provisions of the
Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement which may
be defective or inconsistent with any other provision of this Agreement or
contained in any agreement referred to in such clause (4) and the curing of any
ambiguity or the modification of any other provision with respect to matters or
questions arising under the Escrow Agreement, the Note Purchase Agreement or the
Deposit Agreement and (c) references in clauses (6) and (7) of such Section 9.01
to "any Intercreditor Agreement or any Liquidity Facility" shall be deemed to
refer to "the Intercreditor Agreement, the Liquidity Facility, the Escrow
Agreement, the Note Purchase Agreement or the Deposit Agreement" and (ii) enter
into one or more agreements supplemental to this Agreement to provide for the
formation of a Class D Trust, the issuance of Class D Certificates, the purchase
by the Class D Trust of Equipment Notes and other matters incidental thereto or
otherwise contemplated by Section 2.01(b) of the Basic Agreement.
Section 6.03. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic Agreement shall apply to agreements
or amendments for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement or the Note Purchase Agreement to the extent applicable to the
Applicable Certificateholders approving such agreement or amendment or modifying
in any manner the rights and obligations of such Applicable Certificateholders
under the Escrow Agreement, the Deposit Agreement or the Note Purchase
Agreement; provided that the provisions of Section 9.02(1) of the Basic
Agreement shall be deemed to include reductions in any manner of, or delay in
the timing of, any receipt by the Applicable Certificateholders of payments upon
the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. (a) The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the earlier of (A) the completion of
the assignment, transfer and discharge described in the first sentence of the
immediately following paragraph and (B) distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
execution of this Trust Supplement.
Upon the earlier of (i) the first Business Day following January 31,
1999, or, if later, the fifth Business Day following the Delivery Period
Termination Date and (ii) the fifth Business Day following the date on which a
Triggering Event occurs (such date, the "TRANSFER DATE"), or, if later, the date
on which all of the conditions set forth in the immediately following sentence
have been satisfied, the Trustee is hereby directed (subject only to the
immediately following sentence) to, and the Company shall direct the institution
that will serve as the Related Trustee under the Related Pass Through Trust
Agreement to, execute and deliver the Assignment and Assumption Agreement,
pursuant to which the Trustee shall assign, transfer and deliver all of the
Trustee's right, title and interest to the Trust Property to the Related Trustee
under the Related Pass Through Trust Agreement. The Trustee and the Related
Trustee shall execute and deliver the Assignment and Assumption Agreement upon
the satisfaction of the following conditions:
(i) The Trustee, the Related Trustee and each of the Rating Agencies
then rating the Applicable Certificates shall have received an Officer's
Certificate and an Opinion of Counsel dated the date of the Assignment and
Assumption Agreement and each satisfying the requirements of Section 1.02
of the Basic Agreement, which Opinion of Counsel shall be substantially to
the effect set forth below and may be relied upon by the Beneficiaries (as
defined in the Assignment and Assumption Agreement):
(I) upon the execution and delivery thereof by the parties
thereto in accordance with the terms of this Agreement and the Related
Pass Through Trust Agreement, the Assignment and Assumption Agreement
will constitute the valid and binding obligation of each of the
parties thereto enforceable against each such party in accordance with
its terms;
(II) upon the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, each of the Applicable
Certificates then Outstanding will be entitled to the benefits of the
Related Pass Through Trust Agreement;
(III) the Related Trust is not required to be registered as an
investment company under the Investment Company Act of 1940, as
amended;
(IV) the Related Pass Through Trust Agreement constitutes the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms; and
(V) neither the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, nor the consummation by
the parties thereto of the transactions contemplated to be consummated
thereunder on the date thereof, will violate any law or governmental
rule or regulation of the State of New York or the United States of
America known to such counsel to be applicable to the transactions
contemplated by the Assignment and Assumption Agreement.
(ii) The Trustee and the Company shall have received (x) a copy of the
articles of incorporation and bylaws of the Related Trustee certified as of
the Transfer Date by the Secretary or Assistant Secretary of such
institution and (y) a copy of the filing (including all attachments
thereto) made by the institution serving as the Related Trustee with the
Office of the Superintendent, State of New York Banking Department for the
qualification of the Related Trustee under Section 131(3) of the New York
Banking Law.
Upon the execution of the Assignment and Assumption Agreement by the parties
thereto, the Applicable Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Related Trust in
exchange for their interests in the Applicable Trust equal to their respective
beneficial interests in the Applicable Trust, and the Outstanding Applicable
Certificates representing Fractional Undivided Interests in the Applicable Trust
shall be deemed for all purposes of this Agreement and the Related Pass Through
Trust Agreement, without further signature or action of any party or Applicable
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related Trust and its trust property. By acceptance of its
Applicable Certificate, each Applicable Certificateholder consents to such
assignment, transfer and delivery of the Trust Property to the trustee of the
Related Trust upon the execution and delivery of the Assignment and Assumption
Agreement.
In connection with the occurrence of the event set forth in clause (B)
above, notice of such termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates to
the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Applicable Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding such final
Distribution Date specifying (A) the Distribution Date upon which the proposed
final payment of the Applicable Certificates will be made upon presentation and
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time such
notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
(b) The provisions of this Section 7.01 supersede and replace the
provisions of Section 11.01 of the Basic Agreement in its entirety.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
SECTION 8.02. GOVERNING LAW. THIS AGREEMENT AND, UNTIL THE TRANSFER
DATE, THE APPLICABLE CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. THIS SECTION 8.02 SUPERSEDES
AND REPLACES SECTION 12.05 OF THE BASIC AGREEMENT.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. Each Applicable Certificateholder and Investor, by its
acceptance of its Applicable Certificate or a beneficial interest therein,
agrees to treat the Applicable Trust as a grantor trust for all U.S. federal,
state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name: Gerald Laderman
Title: Vice President
EXHIBIT A
---------
FORM OF CERTIFICATE
Certificate
No. ________
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]*
CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-1A-O
6.648% Continental Airlines Pass Through Certificate,
Series 1998-1A-O
Issuance Date: February 20, 1998
Final Maturity Date: March 15, 2019
Evidencing A Fractional Undivided Interest In The Continental Airlines
Pass Through Trust 1998-1A-O, The Property Of Which Includes Certain
Equipment Notes Each Secured By An Aircraft Leased To Or Owned By
Continental Airlines, Inc.
$__________ Fractional Undivided Interest representing 0.000205929% of
the Trust per $1,000 face amount
THIS CERTIFIES THAT ____________________, for value received, is the
registered owner of a $__________ ( dollars) Fractional Undivided
Interest in the Continental Airlines Pass Through Trust 1998-1A-O (the "TRUST")
created by Wilmington Trust Company, as trustee (the "TRUSTEE"), pursuant to a
Pass Through Trust Agreement, dated as of September 25, 1997 (the "BASIC
AGREEMENT"), between the Trustee and Continental Airlines, Inc., a Delaware
corporation (the "Company"), as supplemented by Trust Supplement No. 1998-1A-O
thereto, dated as of February 20, 1998 (the "Trust Supplement" and, together
with the Basic Agreement, the "AGREEMENT"), between the Trustee and the Company,
____________________
* This legend to appear on Book-Entry Certificates to be deposited with the
Depository Trust 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 "6.648% Continental Airlines Pass
Through Certificates, Series 1998-1A-O" (herein called the "CERTIFICATES"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the holder of
this Certificate (the "CERTIFICATEHOLDER" and, together with all other holders
of Certificates issued by the Trust, the "CERTIFICATEHOLDERS") assents to and
agrees to be bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment Notes and all
rights of the Trust to receive payments under the Intercreditor Agreement and
any Liquidity Facilities (the "TRUST PROPERTY"). Each issue of the Equipment
Notes is secured by, among other things, a security interest in an Aircraft
leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each March 15 and September 15 (a "REGULAR DISTRIBUTION DATE")
commencing March 15, 1998, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a Certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or an interest
herein are exempt from the prohibited transaction restrictions of ERISA and the
Code pursuant to one or more prohibited transaction statutory or administrative
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS THROUGH
TRUST 1998-1A-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:____________________________
Name:
Title:
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
EXHIBIT B
---------
[DTC Letter of Representations]
EXHIBIT C
---------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Continental Airlines Pass Through Trust 1998-1A
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ____________, 199_ (the
"ASSIGNMENT AGREEMENT"), between Wilmington Trust Company, a Delaware banking
corporation ("WTC"), not in its individual capacity except as expressly provided
herein, but solely as trustee under the Pass Through Trust Agreement dated as of
September 25, 1997 (as amended or modified from time to time, the "BASIC
AGREEMENT"), as supplemented by the Trust Supplement No. 1998-1A-O dated
February 20, 1998 (the "TRUST SUPPLEMENT" and together with the Basic Agreement,
the "AGREEMENT") in respect of the Continental Airlines Pass Through Trust
1998-1A-O (the "ASSIGNOR"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity except as expressly provided herein,
but solely as trustee under the Basic Agreement as supplemented by the Trust
Supplement No. 1998-1A-S dated February 20, 1998 (the "NEW SUPPLEMENT", and,
together with the Basic Agreement, the "NEW AGREEMENT") in respect of the
Continental Airlines Pass Through Trust 1998-1A-S (the "ASSIGNEE").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to effect on the date hereof (the
"TRANSFER DATE") (a) the transfer by the Assignor to the Assignee of all of the
right, title and interest of the Assignor in, under and with respect to, among
other things, the Trust Property and each of the documents listed in Schedule I
hereto (the "SCHEDULED DOCUMENTS") and (b) the assumption by the Assignee of the
obligations of the Assignor (i) under the Scheduled Documents and (ii) in
respect of the Applicable Certificates issued under the Agreement; and
WHEREAS, the Scheduled Documents permit such transfer upon
satisfaction of certain conditions heretofore or concurrently herewith being
complied with;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows (capitalized terms used herein without definition having the meaning
ascribed thereto in the Agreement):
1. ASSIGNMENT. The Assignor does hereby sell, assign, convey, transfer
and set over unto the Assignee as of the Transfer Date all of its present and
future right, title and interest in, under and with respect to the Trust
Property and the Scheduled Documents and each other contract, agreement,
document or instrument relating to the Trust Property or the Scheduled Documents
(such other contracts, agreements, documents or instruments, together with the
Scheduled Documents, to be referred to as the "ASSIGNED DOCUMENTS"), and any
proceeds therefrom, together with all documents and instruments evidencing any
of such right, title and interest.
2. ASSUMPTION. The Assignee hereby assumes for the benefit of the
Assignor and each of the parties listed in Schedule II hereto (collectively, the
"BENEFICIARIES") all of the duties and obligations of the Assignor, whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the Assigned Documents to which the Assignor is a
party and shall be bound by all the terms thereof (including the agreements and
obligations of the Assignor set forth therein) as if therein named as the
Assignor. Further, the Assignee hereby assumes for the benefit of the Assignor
and the Beneficiaries all of the duties and obligations of the Assignor under
the Outstanding Applicable Certificates and hereby confirms that the Applicable
Certificates representing Fractional Undivided Interests under the Agreement
shall be deemed for all purposes of the Agreement and the New Agreement to be
certificates representing the same fractional undivided interests under the New
Agreement equal to their respective beneficial interests in the trust created
under the Agreement.
3. EFFECTIVENESS. This Assignment Agreement shall be effective upon
the execution and delivery hereof by the parties hereto, and each Applicable
Certificateholder, by its acceptance of its Applicable Certificate or a
beneficial interest therein, agrees to be bound by the terms of this Assignment
Agreement.
4. PAYMENTS. The Assignor hereby covenants and agrees to pay over to
the Assignee, if and when received following the Transfer Date, any amounts
(including any sums payable as interest in respect thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.
5. FURTHER ASSURANCES. The Assignor shall, at any time and from time
to time, upon the request of the Assignee, promptly and duly execute and deliver
any and all such further instruments and documents and take such further action
as the Assignee may reasonably request to obtain the full benefits of this
Assignment Agreement and of the right and powers herein granted. The Assignor
agrees to deliver any Applicable Certificates, and all Trust Property, if any,
then in the physical possession of the Assignor, to the Assignee.
6. REPRESENTATIONS AND WARRANTIES. (a) The Assignee represents and
warrants to the Assignor and each of the Beneficiaries that:
(i) it has all requisite power and authority and legal right to enter
into and carry out the transactions contemplated hereby and to carry out
and perform the obligations of the "Pass Through Trustee" under the
Assigned Documents;
(ii) on and as of the date hereof, the representations and warranties
of the Assignee set forth in Section 7.15 of the Basic Agreement and
Section 5.04 of the New Supplement are true and correct.
(b) The Assignor represents and warrants to the Assignee that:
(i) it is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the full trust power,
authority and legal right under the laws of the State of Delaware and the
United States pertaining to its trust and fiduciary powers to execute and
deliver this Assignment Agreement;
(ii) the execution and delivery by it of this Assignment Agreement and
the performance by it of its obligations hereunder have been duly
authorized by it and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
(iii) this Assignment Agreement constitutes the legal, valid and
binding obligations of it enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
7. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
8. COUNTERPARTS. This Assignment Agreement may be executed in any
number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by both
parties so long as each party shall sign at least one counterpart.
9. THIRD PARTY BENEFICIARIES. The Assignee hereby agrees, for the
benefit of the Beneficiaries, that its representations, warranties and covenants
contained herein are also intended to be for the benefit of each Beneficiary,
and each Beneficiary shall be deemed to be an express third party beneficiary
with respect thereto, entitled to enforce directly and in its own name any
rights or claims it may have against such party as such beneficiary.
IN WITNESS WHEREOF, the parties hereto, through their respective
officers thereunto duly authorized, have duly executed this Assignment Agreement
as of the day and year first above written.
ASSIGNOR:
WILMINGTON TRUST COMPANY, not in
its individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1998-1A-O
By:________________________________
Title:
ASSIGNEE:
WILMINGTON TRUST COMPANY, not in
its individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1998-1A-S
By:________________________________
Title:
Schedule I
Schedule of Assigned Documents
(1) Intercreditor Agreement dated as of February 20, 1998 among the
Trustee, the Other Trustees, the Liquidity Providers, the liquidity provider, if
any, relating to the Certificates issued under (and as defined in) each of the
Other Agreements and the Subordination Agent.
(2) Escrow and Paying Agent Agreement (Class A) dated as of February
20, 1998 among the Escrow Agent, the Underwriters, the Trustee and the Paying
Agent.
(3) Note Purchase Agreement dated as of February 20, 1998 among the
Company, the Trustee, the Other Trustees, the Depositary, the Escrow Agent, the
Paying Agent and the Subordination Agent.
(4) Deposit Agreement (Class A) dated as of February 20, 1998 between
the Escrow Agent and the Depositary.
(5) Each of the Operative Agreements (as defined in the Participation
Agreement for each Aircraft) in effect as of the Transfer Date.
Schedule II
Schedule of Beneficiaries
Wilmington Trust Company, not in its individual capacity but solely as
Subordination Agent
Wilmington Trust Company, not in its individual capacity but solely as Paying
Agent
AIG Matched Funding Corp., as Liquidity Providers
Continental Airlines, Inc.
Credit Suisse First Boston Corporation, as Underwriter
Morgan Stanley & Co. Incorporated, as Underwriter
Chase Securities Inc., as Underwriter
First Security Bank, National Association, as Escrow Agent
Each of the other parties to the Assigned Documents
TRUST SUPPLEMENT No. 1998-1A-S
Dated February 20, 1998
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$485,605,000
Continental Airlines Pass Through Trust 1998-1A-S
6.648% Continental Airlines
Pass Through Certificates,
Series 1998-1A-S
This Trust Supplement No. 1998-1A-S, dated as of February 20, 1998
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in the
Basic Agreement) which may be issued thereunder, has heretofore been executed
and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, as of the Transfer Date (as defined below), the Company will
have financed the acquisition of all or a portion of such Aircraft either (i)
through separate leveraged lease transactions, in which case the Company leases
such Aircraft (collectively, the "LEASED AIRCRAFT") or (ii) through separate
secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "OWNED AIRCRAFT");
WHEREAS, as of the Transfer Date in the case of each Leased Aircraft,
each Owner Trustee, acting on behalf of the corresponding Owner Participant,
will have issued pursuant to an Indenture, on a non-recourse basis, Equipment
Notes in order to finance a portion of its purchase price of such Leased
Aircraft;
WHEREAS, as of the Transfer Date, in the case of each Owned Aircraft,
the Company will have issued pursuant to an Indenture, on a recourse basis,
Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;
WHEREAS, as of the Transfer Date, the Related Trustee will assign,
transfer and deliver all of such trustee's right, title and interest to the
trust property held by the Related Trustee to the Trustee pursuant to the
Assignment and Assumption Agreement (as defined below);
WHEREAS, the Trustee, effective only, but automatically, upon
execution and delivery of the Assignment and Assumption Agreement, will be
deemed to have declared the creation of the Continental Airlines Pass Through
Trust 1998-1A-S (the "APPLICABLE TRUST") for the benefit of the Applicable
Certificateholders, and each Holder of Applicable Certificates outstanding as of
the Transfer Date, as the grantors of the Applicable Trust, by their respective
acceptances of such Applicable Certificates, will join in the creation of this
Applicable Trust with the Trustee;
WHEREAS, all Applicable Certificates deemed issued by the Applicable
Trust will evidence fractional undivided interests in the Applicable Trust and
will convey no rights, benefits or interests in respect of any property other
than the Trust Property except for those Applicable Certificates to which an
Escrow Receipt (as defined below) has been affixed;
WHEREAS, upon the execution and delivery of the Assignment and
Assumption Agreement, all of the conditions and requirements necessary to make
this Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. The Applicable Certificates shall be
known as "6.648% Continental Airlines Pass Through Certificates, Series
1998-1A-S". Each Applicable Certificate represents a fractional undivided
interest in the Applicable Trust created hereby. The Applicable Certificates
shall be the only instruments evidencing a fractional undivided interest in the
Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates that
shall be initially deemed issued under the Agreement shall be equal to the
aggregate principal amount of "Outstanding" pass through certificates
representing fractional undivided interests in the Related Trust on the
Transfer Date.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means March 15 and September 15 of each year, commencing
on March 15, 1998, until payment of all of the Scheduled Payments to be
made under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the restrictions on transfer of the Escrow Receipt set forth herein
and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached as
Exhibit A to the Related Pass Through Trust Supplement, with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Related Pass Through Trust Agreement or
this Agreement, as the case may be, or as the Trustee may deem appropriate,
to reflect the fact that the Applicable Certificates are being issued under
the Agreement as opposed to under the Related Pass Through Trust Agreement.
Any Person acquiring or accepting an Applicable Certificate, by its
acceptance of such Applicable Certificate or an interest therein will, by
such acquisition or acceptance, be deemed to represent and warrant to and
for the benefit of each Owner Participant and the Company that either (i)
the assets of an employee benefit plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or of a plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), have not been used to purchase Applicable Certificates or an
interest therein or (ii) the purchase and holding of Applicable
Certificates or an interest therein is exempt from the prohibited
transaction restrictions of ERISA and the Code pursuant to one or more
prohibited transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates
and shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached as
Exhibit B to the Related Pass Through Trust Supplement.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement and the Escrow Agreement.
(g) The Applicable Certificates are entitled to the benefits of the
Liquidity Facilities.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement," for
purposes of clause (3) of Section 7.07 of the Basic Agreement are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft) of each Participation Agreement.
(j) The Equipment Notes to be acquired and held in the Applicable
Trust, and the related Aircraft and Note Documents, are described in the
Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have the
following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic Agreement shall have the meaning assigned thereto in
this Trust Supplement for purposes of the Basic Agreement as supplemented by
this Trust Supplement):
AGREEMENT: Means the Basic Agreement, as supplemented by this Trust
Supplement.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
APPLICABLE CERTIFICATE: Means any of the "Applicable Certificates"
issued by the Related Trust and that are "Outstanding" (as defined in the
Related Pass Through Trust Agreement) as of the Transfer Date (the
"TRANSFER DATE CERTIFICATES") and any Applicable Certificates issued in
exchange therefor or replacement thereof pursuant to this Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE TRUST: Has the meaning specified in the recitals hereto.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C to the Related
Pass Through Trust Supplement executed and delivered in accordance with
Section 7.01 of the Related Trust Supplement.
BASIC AGREEMENT: Has the meaning specified in the first paragraph of
this Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is Outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CLASS D CERTIFICATEHOLDERS: Has the meaning specified in Section
4.01(a)(iii) of this Trust Supplement.
COMPANY: Has the meaning specified in the first paragraph of this
Trust Supplement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Has the meaning specified in the
Related Pass Through Trust Supplement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of February
20, 1998 relating to the Applicable Certificates between the Depositary and
the Escrow Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
of February 20, 1998 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Related Trustee (and after the
Transfer Date, the Trustee) and the Underwriters, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under the
Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
FINAL MATURITY DATE: Means March 15, 2019.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
February 20, 1998 among the Related Trustee (and after the Transfer Date,
the Trustee), the Related Other Trustees (and after the Transfer Date, the
Other Trustees), the Liquidity Providers, the liquidity providers relating
to the Certificates issued under (and as defined in) each of the Related
Other Agreements, and Wilmington Trust Company, as Subordination Agent and
as trustee thereunder, as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred
to in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LEASED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
dated as of February 20, 1998 relating to the Applicable Certificates,
between the Liquidity Provider and Wilmington Trust Company, as the
Subordination Agent, as agent and trustee for the Applicable Trust, and,
from and after the replacement of such Agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDER: Means, initially, AIG Matched Funding Corp., a
Delaware corporation, and any replacements or successors therefor appointed
in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: Means the Equipment Notes with respect to the
Applicable Certificates and, with respect to such any Equipment Note, (i)
the Indenture and the Participation Agreement relating to such Equipment
Note, and (ii) in the case of any Equipment Note related to a Leased
Aircraft, the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as of
February 20, 1998 among the Related Trustee (and after the Transfer Date,
the Trustee), the Related Other Trustees (and after the Transfer Date, the
Other Trustees), the Company, the Escrow Agent, the Escrow Paying Agent and
the Subordination Agent, as the same may be amended, supplemented or
otherwise modified from time to time, in accordance with its terms.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1998-1B-S dated the date hereof relating to
Continental Airlines Pass Through Trust 1998-1B-S and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1998-1C-S dated the date
hereof relating to Continental Airlines Pass Through Trust 1998-1C-S.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1998-1B-S and Continental Airlines Pass Through Trust 1998-1C-S, created by
the Other Pass Through Trust Agreements.
OUTSTANDING: When used with respect to Applicable Certificates, means,
as of the date of determination, all Transfer Date Certificates, and all
other Applicable Certificates theretofore authenticated and delivered under
this Agreement, in each case except:
(i) Applicable Certificates theretofore canceled by the Registrar
or delivered to the Trustee or the Registrar for cancellation;
(ii) Applicable Certificates for which money in the full amount
required to make the final distribution with respect to such
Applicable Certificates pursuant to Section 11.01 of the Basic
Agreement has been theretofore deposited with the Trustee in trust for
the Applicable Certificateholders as provided in Section 4.01 of the
Basic Agreement pending distribution of such money to such Applicable
Certificateholders pursuant to payment of such final distribution; and
(iii) Applicable Certificates in exchange for or in lieu of which
other Applicable Certificates have been authenticated and delivered
pursuant to this Agreement.
OWNED AIRCRAFT: Has the meaning specified in the third recital to this
Trust Supplement.
OWNED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and OWNER PARTICIPANTS at
any time of determination means all of the Owner Participants thus referred
to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its individual
capacity but solely as trustee; and OWNER TRUSTEES means all of the Owner
Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with
its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the "Applicable Certificates" as defined in the Related Pass
Through Trust Agreement, less (ii) the aggregate amount of all payments
made in respect of such Certificates or in respect of Deposits other than
payments made in respect of interest or premium thereon or reimbursement of
any costs or expenses incurred in connection therewith. The Pool Balance as
of any Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, payment of principal
on the Equipment Notes or payments with respect to other Trust Property and
the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the "Applicable Certificates" as
defined in the Related Pass Through Trust Agreement. The Pool Factor as of
any Distribution Date shall be computed after giving effect to any special
distribution with respect to unused Deposits, payment of principal on the
Equipment Notes or payments with respect to other Trust Property and the
distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated February
11, 1998 relating to the offering of the Certificates.
RELATED OTHER PASS THROUGH TRUST AGREEMENTS: Means the "Other
Agreements" as defined in the Related Pass Through Trust Agreement.
RELATED OTHER TRUSTEES: Means the "Other Trustees" as defined in the
Related Pass Through Trust Agreement.
RELATED OTHER TRUSTS: Means the "Other Trusts" as defined in the
Related Pass Through Trust Agreement.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1998-1A-O dated the date hereof
(the "RELATED PASS THROUGH TRUST SUPPLEMENT"), relating to the Continental
Airlines Pass Through Trust 1998-1A-O and entered into by the Company and
the Trustee, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
RELATED TRUST: Means the Continental Pass Through Trust 1998-1A-O,
formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL PAYMENT: Means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate
(as defined in each Leased Aircraft Indenture) or Collateral (as defined in
each owned Aircraft Indenture) or any Special Redemption Premium.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase Agreement.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Means the moment of execution and delivery of the
Assignment and Assumption Agreement by each of the parties thereto.
TRANSFER DATE CERTIFICATES: Has the meaning specified in the
definition of "Applicable Certificates".
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the
Special Payments Account and, subject to the Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI of the Basic
Agreement of any Equipment Note and (iii) all rights of the Trust and the
Trustee, on behalf of the Applicable Trust, under the Intercreditor
Agreement, the Escrow Agreement, the Note Purchase Agreement and the
Liquidity Facilities, including, without limitation, all rights to receive
certain payments thereunder, and all monies paid to the Trustee on behalf
of the Applicable Trust pursuant to the Intercreditor Agreement or the
Liquidity Facilities, PROVIDED that rights with respect to the Deposits or
under the Escrow Agreement, will not constitute Trust Property.
TRUST SUPPLEMENT: Has the meaning specified in the first paragraph of
this trust supplement.
UNDERWRITERS: Means, collectively, Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated and Chase Securities Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
February 11, 1998 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. AMENDMENTS TO ARTICLE IV OF THE BASIC AGREEMENT. Article
IV of the Basic Agreement shall be amended as follows:
(a) The following sentence shall be inserted in Section 4.02(c) of the
Basic Agreement following the fourth sentence thereof:
In the event of the payment of a Special Redemption Premium by
the Company to the Trustee under the Note Purchase Agreement, the
notice provided for in this Section 4.02(c) shall be mailed, together
with the notice by the Escrow Paying Agent under Section 2.06 of the
Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date
shall be the Final Withdrawal Date.
(b) The following sentence shall replace in its entirety the last
sentence of the first paragraph of Section 4.02(c) of the Basic Agreement:
If the amount of (i) premium, if any, payable upon the redemption
or purchase of an Equipment Note or (ii) the Special Redemption
Premium, if any, 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.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable to
principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable to
interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to unused Deposits, if any; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of
a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Transfer Date, if there has been any
change in the information set forth in clauses (x), (y) and (z) below from that
set forth in page S-52 of the Prospectus Supplement, and (ii) any early
redemption or purchase of, or any default in the payment of principal or
interest in respect of, any of the Equipment Notes held in the Applicable Trust,
or any Final Withdrawal, the Trustee shall furnish to Certificateholders of
record on such date a statement setting forth (x) the expected Pool Balances for
each subsequent Regular Distribution Date following the Delivery Period
Termination Date, (y) the related Pool Factors for such Regular Distribution
Dates and (z) the expected principal distribution schedule of the Equipment
Notes, in the aggregate, held as Trust Property at the date of such notice. With
respect to the Applicable Certificates registered in the name of a Clearing
Agency, on the Transfer Date, the Trustee will request from such Clearing Agency
a securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests in
the "Applicable Certificates" (as defined in the Related Pass Through Trust
Agreement) on such date. The Trustee will mail to each such Clearing Agency
Participant the statement described above and will make available additional
copies as requested by such Clearing Agency Participant for forwarding to
holders of interests in the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS. (a) By acceptance
of its Applicable Certificate, each Applicable Certificateholder agrees that at
any time after the occurrence and during the continuation of a Triggering Event,
(i) each Class B Certificateholder shall have the right to purchase
all, but not less than all, of the Applicable Certificates upon ten days'
written notice to the Trustee and each other Class B Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class B Certificateholder notifies such purchasing Class B
Certificateholder that such other Class B Certificateholder wants to
participate in such purchase, then such other Class B Certificateholder may
join with the purchasing Class B Certificateholder to purchase all, but not
less than all, of the Applicable Certificates pro rata based on the
Fractional Undivided Interest in the Class B Trust held by each such Class
B Certificateholder and (B) if prior to the end of such ten-day period any
other Class B Certificateholder fails to notify the purchasing Class B
Certificateholder of such other Class B Certificateholder's desire to
participate in such a purchase, then such other Class B Certificateholder
shall lose its right to purchase the Applicable Certificates pursuant to
this Section 4.01(a);
(ii) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Applicable Certificates pursuant to
clause (i) above) to purchase all, but not less than all, of the Applicable
Certificates and the Class B Certificates upon ten days' written notice to
the Trustee, the Class B Trustee and each other Class C Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may
join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Applicable Certificates and the Class B Certificates
pro rata based on the Fractional Undivided Interest in the Class C Trust
held by each such Class C Certificateholder and (B) if prior to the end of
such ten-day period any other Class C Certificateholder fails to notify the
purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(a); and
(iii) each holder of a Class D Certificate (a "CLASS D
CERTIFICATEHOLDER") shall have the right (which shall not expire upon any
purchase of the Applicable Certificates pursuant to clause (i) or (ii)
above) to purchase all, but not less than all, of the Applicable
Certificates, the Class B Certificates and the Class C Certificates upon
ten days' written notice to the Trustee, the Class B Trustee, the Class C
Trustee and each other Class D Certificateholder, PROVIDED that (A) if
prior to the end of such ten-day period any other Class D Certificateholder
notifies such purchasing Class D Certificateholder that such other Class D
Certificateholder wants to participate in such purchase, then such other
Class D Certificateholder may join with the purchasing Class D
Certificateholder to purchase all, but not less than all, of the Applicable
Certificates, the Class B Certificates and the Class C Certificates pro
rata based on the Fractional Undivided Interest in the Class D Trust held
by each such Class D Certificateholder and (B) if prior to the end of such
ten-day period any other Class D Certificateholder fails to notify the
purchasing Class D Certificateholder of such other Class D
Certificateholder's desire to participate in such a purchase, then such
other Class D Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(a).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such record date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed under this Agreement on the related Distribution Date (which
deducted amounts shall remain distributable to, and may be retained by, the
Applicable Certificateholder as of such Record Date); PROVIDED FURTHER that no
such purchase of Applicable Certificates shall be effective unless the
purchaser(s) shall certify to the Trustee that contemporaneously with such
purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Other Agreements, the Applicable Certificates, the Class B
Certificates and the Class C Certificates which are senior to the securities
held by such purchaser(s). Each payment of the purchase price of the Applicable
Certificates referred to in the first sentence hereof shall be made to an
account or accounts designated by the Trustee and each such purchase shall be
subject to the terms of this Section 4.01(a). Each Applicable Certificateholder
agrees by its acceptance of its Applicable Certificate that it will, subject to
Section 3.04 of the Basic Agreement, upon payment from such Class B
Certificateholder(s), Class C Certificateholder(s) or Class D
Certificateholder(s), as the case may be, of the purchase price set forth in the
first sentence of this paragraph, forthwith sell, assign, transfer and convey to
the purchaser(s) thereof (without recourse, representation or warranty of any
kind except for its own acts), all of the right, title, interest and obligation
of such Applicable Certificateholder in this Agreement, the Escrow Agreement,
the Deposit Agreement, the Intercreditor Agreement, the Liquidity Facilities,
the Note Documents and all Applicable Certificates and Escrow Receipts held by
such Applicable Certificateholder (subject to clauses (i) and (ii) in the first
sentence of this paragraph and excluding all right, title and interest under any
of the foregoing to the extent such right, title or interest is with respect to
an obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the purchaser shall assume
all of such Applicable Certificateholder's obligations under this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facilities, the Note Documents and all such Applicable Certificates
and Escrow Receipts. The Applicable Certificates will be deemed to be purchased
on the date payment of the purchase price is made notwithstanding the failure of
the Applicable Certificateholders to deliver any Applicable Certificates and,
upon such a purchase, (i) the only rights of the Applicable Certificateholders
will be to deliver the Applicable Certificates to the purchaser(s) and receive
the purchase price for such Applicable Certificates and (ii) if the purchaser(s)
shall so request, such Applicable Certificateholder will comply with all the
provisions of Section 3.04 of the Basic Agreement to enable new Applicable
Certificates to be issued to the purchaser in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01(a) and elsewhere in this Trust
Supplement, the terms "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" and "Class D Trust",
shall have the respective meanings assigned to such terms in the Intercreditor
Agreement.
(b) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. ACQUISITION OF TRUST PROPERTY. (a) The Trustee is hereby
irrevocably authorized and directed to execute and deliver the Assignment and
Assumption Agreement on the date specified in Section 7.01 of the Related Pass
Through Trust Supplement, subject only to the satisfaction of the conditions set
forth in said Section 7.01. This Agreement (except only for the immediately
preceding sentence hereof, which is effective upon execution and delivery
hereof) shall become effective upon the execution and delivery of the Assignment
and Assumption Agreement by the Trustee and the Related Trustee, automatically
and without any further signature or action on the part of the Company and the
Trustee, and shall thereupon constitute the legal, valid and binding obligation
of the parties hereto enforceable against each of the parties hereto in
accordance with its terms. Upon such execution and delivery of the Assignment
and Assumption Agreement, the Related Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Applicable Trust in
exchange for their interests in the Related Trust equal to their respective
beneficial interests in the Related Trust and the "Outstanding" (as defined in
the Related Pass Through Trust Agreement) pass through certificates representing
fractional undivided interests in the Related Trust shall be deemed for all
purposes of this Agreement, without further signature or action of any party or
Certificateholder, to be Certificates representing the same Fractional Undivided
Interests in the Trust and Trust Property. By acceptance of its Applicable
Certificate, each Applicable Certificateholder consents to and ratifies such
assignment, transfer and delivery of the trust property of the Related Trust to
the Trustee upon the execution and delivery of the Assignment and Assumption
Agreement. The provisions of this Section 5.01(a) supersede and replace the
provisions of Section 2.02 of the Basic Agreement (which are inapplicable to the
Trust), and all provisions of the Basic Agreement relating to Postponed Notes or
Section 2.02 of the Basic Agreement shall not apply to the Applicable Trust.
(b) The Trustee, upon the execution and delivery of the Assignment and
Assumption Agreement, acknowledges its acceptance of all right, title and
interest in and to the Trust Property and declares that the Trustee holds and
will hold such right, title and interest for the benefit of all then present and
future Applicable Certificateholders, upon the trusts herein and in the Basic
Agreement set forth. By the acceptance of each Applicable Certificate issued to
it under the Related Pass Through Trust Agreement and deemed issued under this
Agreement, each Holder of any such Applicable Certificate as grantor of the
Applicable Trust thereby joins in the creation and declaration of the Applicable
Trust. The provisions of this Section 5.01(b) supersede and replace the
provisions of Section 2.03 of the Basic Agreement (which are inapplicable to the
Trust).
(c) The Trustee acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 5.01(b)
of this Trust Supplement, the Note Purchase Agreement and each Applicable
Participation Agreement, and declares that it holds and will hold such right,
title and interest for the benefit of all present and future Applicable
Certificateholders, upon the trusts set forth in this Agreement. By its
acceptance of an Applicable Certificate, each initial Applicable
Certificateholder, as a grantor of the Applicable Trust, joins with the Trustee
in the creation of the Applicable Trust. The provisions of this Section 5.01(c)
supersede and replace the provisions of Section 2.03 of the Basic Agreement.
Section 5.02. [Intentionally Omitted]
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement, the Note Purchase
Agreement or the Escrow Agreement or the due execution hereof or thereof by the
Company or the other parties thereto (other than the Trustee), or for or in
respect of the recitals and statements contained herein or therein, all of which
recitals and statements are made solely by the Company, except that the Trustee
hereby represents and warrants that each of this Trust Supplement, the Basic
Agreement, each Applicable Certificate, the Intercreditor Agreement, the Note
Purchase Agreement and the Escrow Agreement has been executed and delivered by
one of its officers who is duly authorized to execute and deliver such document
on its behalf.
(b) Except as herein otherwise provided and except during the
continuance of an Event of Default in respect of the Applicable Trust created
hereby, no duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the Agreement, and this Trust Supplement is executed and
accepted on behalf of the Trustee, subject to all the terms and conditions set
forth in the Agreement as fully to all intents as if the same were herein set
forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants, on the Transfer Date, that:
(a) the Trustee has full power, authority and legal right to receive
the Trust Property assigned by the Related Trustee, assume the obligations
under, and perform, the Assignment and Assumption Agreement, this Trust
Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
Documents and has taken all necessary action to authorize such receipt,
assumption and performance by it of this Trust Supplement, the
Intercreditor Agreement, the Escrow Agreement and the Note Documents to
which it is a party;
(b) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents (i) will not violate
any provision of any United States federal law or the law of the state of
the United States where it is located governing the banking and trust
powers of the Trustee or any order, writ, judgment, or decree of any court,
arbitrator or governmental authority applicable to the Trustee or any of
its assets, (ii) will not violate any provision of the articles of
association or by-laws of the Trustee, and (iii) will not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to which it
is a party, which violation, default or lien could reasonably be expected
to have an adverse effect on the Trustee's performance or ability to
perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(c) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents will not require the
authorization, consent, or approval of, the giving of notice to, the filing
or registration with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the state of the
United States where it is located regulating the banking and corporate
trust activities of the Trustee; and
(d) The Assignment and Assumption Agreement has been duly executed and
delivered by the Trustee and this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents have been, or will
be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and binding
agreements of the Trustee, enforceable against it in accordance with their
respective terms; PROVIDED, however, that enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and (ii) general
principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 6.01. AMENDMENT OF SECTION 5.02 OF THE BASIC AGREEMENT.
Section 5.02 of the Basic Agreement shall be amended by (i) replacing the phrase
"of the Note Documents and of this Agreement" set forth in paragraph (b) thereof
with the phrase "of the Note Documents, of the Note Purchase Agreement and of
this Agreement" and (ii) replacing the phrase "of this Agreement and any Note
Document" set forth in the last paragraph of Section 5.02 with the phrase "of
this Agreement, the Note Purchase Agreement and any Note Document".
Section 6.02. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic Agreement, the Company may (but will not be required to), and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request, at any time and from time to time, (i) enter into one or more
agreements supplemental to the Escrow Agreement, the Note Purchase Agreement or
the Deposit Agreement, for any of the purposes set forth in clauses (1) through
(9) of such Section 9.01, except that (a) clause (2) and (3) of such Section
9.01 shall be deemed to include the Company's obligations under (in the case of
clause (2)), and the Company's rights and powers conferred by (in the case of
clause (3)), the Note Purchase Agreement, (b) clause (4) of such Section 9.01
shall be deemed to include corrections or supplements to provisions of the
Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement which may
be defective or inconsistent with any other provision of this Agreement or
contained in any agreement referred to in such clause (4) and the curing of any
ambiguity or the modification of any other provision with respect to matters or
questions arising under the Escrow Agreement, the Note Purchase Agreement or the
Deposit Agreement and (c) references in clauses (6) and (7) of such Section 9.01
to "any Intercreditor Agreement or any Liquidity Facility" shall be deemed to
refer to "the Intercreditor Agreement, the Liquidity Facility, the Escrow
Agreement, the Note Purchase Agreement or the Deposit Agreement" and (ii) enter
into one or more agreements supplemental to this Agreement to provide for the
formation of a Class D Trust, the issuance of Class D Certificates, the purchase
by the Class D Trust of the Equipment Notes and other matters incident thereto
or otherwise contemplated by Section 2.01(b) of the Basic Agreement.
Section 6.03. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic Agreement shall apply to agreements
or amendments for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement or the Note Purchase Agreement to the extent applicable to the
Applicable Certificateholders approving such agreement or amendment or modifying
in any manner the rights and obligations of such Applicable Certificateholders
under the Escrow Agreement, the Deposit Agreement or the Note Purchase
Agreement; provided that the provisions of Section 9.02(1) of the Basic
Agreement shall be deemed to include reductions in any manner of, or delay in
the timing of, any receipt by the Applicable Certificateholders of payments upon
the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. (a) The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
earliest execution of this Trust Supplement.
Notice of any termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates to
the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Applicable Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding such final
Distribution Date specifying (A) the Distribution Date upon which the proposed
final payment of the Applicable Certificates will be made upon presentation and
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time such
notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
(b) The provisions of this Section 7.01 supersedes and replaces the
provisions of Section 11.01 of the Basic Agreement in its entirety.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
SECTION 8.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. THIS SECTION 8.02 SUPERSEDES AND REPLACES SECTION 12.05
OF THE BASIC AGREEMENT.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. Each Applicable Certificateholder and Investor, by its
acceptance of its Applicable Certificate or a beneficial interest therein,
agrees to treat the Applicable Trust as a grantor trust for all U.S. federal,
state and local income tax purposes. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to further
such intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
TRUST SUPPLEMENT No. 1998-1B-O
Dated February 20, 1998
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$150,371,000
Continental Airlines Pass Through Trust 1998-1B-O
6.748% Continental Airlines
Pass Through Certificates,
Series 1998-1B-O
This Trust Supplement No. 1998-1B-O, dated as of February 20, 1998
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in the
Basic Agreement) which may be issued thereunder, has heretofore been executed
and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which case
the Company will lease such Aircraft (collectively, the "LEASED AIRCRAFT") or
(ii) through separate secured loan transactions, in which case the Company will
own such Aircraft (collectively, the "OWNED AIRCRAFT");
WHEREAS, in the case of each Leased Aircraft, each Owner Trustee,
acting on behalf of the corresponding Owner Participant, will issue pursuant to
an Indenture, on a non-recourse basis, Equipment Notes in order to finance a
portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will issue
pursuant to an Indenture, on a recourse basis, Equipment Notes to finance a
portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this Continental
Airlines Pass Through Trust 1998-1B-O (the "APPLICABLE TRUST") for the benefit
of the Applicable Certificateholders, and the initial Applicable
Certificateholders as the grantors of the Applicable Trust, by their respective
acceptances of the Applicable Certificates, join in the creation of the
Applicable Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will
evidence fractional undivided interests in the Applicable Trust and will convey
no rights, benefits or interests in respect of any property other than the Trust
Property except for those Certificates to which an Escrow Receipt has been
affixed;
WHEREAS, the Escrow Agent and the Underwriters have contemporaneously
herewith entered into an Escrow Agreement with the Escrow Paying Agent pursuant
to which the Underwriters have delivered to the Escrow Agent the proceeds from
the sale of the Applicable Certificates and have irrevocably instructed the
Escrow Agent to withdraw and pay funds from such proceeds upon request and
proper certification by the Trustee to purchase Equipment Notes as the Aircraft
are delivered by Boeing under the Aircraft Purchase Agreement from time to time
prior to the Delivery Period Termination Date;
WHEREAS, the Escrow Agent on behalf of the Applicable
Certificateholders has contemporaneously herewith entered into a Deposit
Agreement with the Depositary under which the Deposits referred to therein will
be made and from which it will withdraw funds to allow the Trustee to purchase
Equipment Notes from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "AGREEMENT") and the Note Purchase
Agreement, upon or shortly following delivery of an Aircraft, the Trustee on
behalf of the Applicable Trust, using funds withdrawn under the Escrow
Agreement, shall purchase one or more Equipment Notes having the same interest
rate as, and final maturity date not later than the final Regular Distribution
Date of, the Applicable Certificates issued hereunder and shall hold such
Equipment Notes in trust for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known as
"6.748% Continental Airlines Pass Through Certificates, Series 1998-1B-O"
(hereinafter defined as the "APPLICABLE CERTIFICATES"). Each Applicable
Certificate represents a fractional undivided interest in the Applicable Trust
created hereby. The Applicable Certificates shall be the only instruments
evidencing a fractional undivided interest in the Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates that
shall be authenticated under the Agreement (except for Applicable
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04
and 3.06 of the Basic Agreement) is $150,371,000.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means March 15 and September 15 of each year, commencing
on March 15, 1998, until payment of all of the Scheduled Payments to be
made under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the restrictions on transfer of the Escrow Receipt set forth herein
and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting an Applicable
Certificate or an interest therein will, by such acquisition or acceptance,
be deemed to represent and warrant to and for the benefit of each Owner
Participant and the Company that either (i) the assets of an employee
benefit plan subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or of a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "CODE"), have not been
used to purchase Applicable Certificates or an interest therein or (ii) the
purchase and holding of Applicable Certificates or an interest therein is
exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administrative
exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates and
shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached hereto
as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement, and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the Liquidity
Facility.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement", for
purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft) of each Participation Agreement.
(j) The Equipment Notes to be acquired and held in the Applicable
Trust, and the related Aircraft and Note Documents, are described in the
Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have the
following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic Agreement shall have the meaning assigned thereto in
this Trust Supplement for purposes of the Basic Agreement as supplemented by
this Trust Supplement):
AGREEMENT: Has the meaning specified in the recitals hereto.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
AIRCRAFT PURCHASE AGREEMENT: Has the meaning specified in the Note
Purchase Agreement.
APPLICABLE CERTIFICATE: Has the meaning specified in Section 1.01 of
this Trust Supplement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE DELIVERY DATE: Has the meaning specified in Section 5.01(b)
of this Trust Supplement.
APPLICABLE PARTICIPATION AGREEMENT: Has the meaning specified in
Section 5.01(b) of this Trust Supplement.
APPLICABLE TRUST: Has the meaning specified in the recitals hereto.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C hereto executed
and delivered in accordance with Section 7.01 of this Trust Supplement.
BASIC AGREEMENT: Has the meaning specified in the first paragraph of
this Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is Outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CLASS D CERTIFICATEHOLDER: Has the meaning specified in Section
4.01(a)(iii) of this Trust Supplement.
COMPANY: Has the meaning specified in the first paragraph of this
Trust Supplement.
CUT-OFF DATE: Means the earlier of (a) the Delivery Period Termination
Date and (b) the date on which a Triggering Event occurs.
DELIVERY DATE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Means the earlier of (a) January 31,
1999, or, if the Equipment Notes relating to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have not been purchased by the
Applicable Trust and the Other Trusts on or prior to such date due to any
reason beyond the control of the Company and not occasioned by the
Company's fault or negligence, June 30, 1999 (PROVIDED that, if a labor
strike occurs at Boeing on or prior to either or both of such dates
referred to in this clause (a), such date or dates on or following the
commencement of such strike shall be extended by adding thereto the number
of days that such strike continued in effect) and (b) the date on which
Equipment Notes issued with respect to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Applicable
Trust and the Other Trusts in accordance with the Note Purchase Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of February
20, 1998 relating to the Applicable Certificates between the Depositary and
the Escrow Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
of February 20, 1998 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Trustee and Underwriters, as the
same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under the
Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
FINAL MATURITY DATE: Means September 15, 2018.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
FINAL WITHDRAWAL NOTICE: Has the meaning specified in Section 5.02 of
this Trust Supplement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
February 20, 1998 among the Trustee, the Other Trustees, the Liquidity
Providers, the liquidity providers relating to the Certificates issued
under (and as defined in) each of the Other Agreements, and Wilmington
Trust Company, as Subordination Agent and as trustee thereunder, as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred
to in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LEASED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
dated as of February 20, 1998 relating to the Applicable Certificates,
between the Liquidity Provider and Wilmington Trust Company as
Subordination Agent, as agent and trustee for the Applicable Trust, and,
from and after the replacement of such agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDER: Means, initially, AIG Matched Funding Corp., a
Delaware corporation, and any replacements or successors therefor appointed
in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: Means the Equipment Notes with respect to the
Applicable Certificates and, with respect to any such Equipment Note, (i)
the Indenture and the Participation Agreement relating to such Equipment
Note, and (ii) in the case of any Equipment Note related to a Leased
Aircraft, the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as of
February 20, 1998 among the Trustee, the Other Trustees, the Company, the
Escrow Agent, the Escrow Paying Agent and the Subordination Agent,
providing for, among other things, the purchase of Equipment Notes by the
Trustee on behalf of the Trust, as the same may be amended, supplemented or
otherwise modified from time to time, in accordance with its terms.
NOTICE OF PURCHASE WITHDRAWAL: Has the meaning specified in the
Deposit Agreement.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1998-1A-O dated the date hereof relating to
Continental Airlines Pass Through Trust 1998-1A-O and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1998-1C-O dated the date
hereof relating to Continental Airlines Pass Through Trust 1998-1C-O.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1998-1A-O and the Continental Airlines Pass Through Trust 1998-1C-O, each
created on the date hereof.
OWNED AIRCRAFT: Has the meaning specified in the third recital to this
Trust Supplement.
OWNED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and Owner Participants at
any time of determination means all of the OWNER PARTICIPANTS thus referred
to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its individual
capacity but solely as trustee; and OWNER TRUSTEES means all of the Owner
Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with
its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the Applicable Certificates less (ii) the aggregate amount of all
payments made in respect of such Applicable Certificates or in respect of
Deposits other than payments made in respect of interest or premium thereon
or reimbursement of any costs or expenses incurred in connection therewith.
The Pool Balance as of any Distribution Date shall be computed after giving
effect to any special distribution with respect to unused Deposits, payment
of principal of the Equipment Notes or payment with respect to other Trust
Property and the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the Applicable Certificates. The
Pool Factor as of any Distribution Date shall be computed after giving
effect to any special distribution with respect to unused Deposits, payment
of principal of the Equipment Notes or payments with respect to other Trust
Property and the distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated February
11, 1998 relating to the offering of the Certificates.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1998-1B-S dated the date hereof
relating to the Continental Airlines Pass Through Trust 1998-1B-S and
entered into by the Company and the Trustee, which agreement becomes
effective upon the execution and delivery of the Assignment and Assumption
Agreement pursuant to Section 7.01 of this Trust Supplement.
RELATED TRUST: Means the Continental Pass Through Trust 1998-1B-S, to
be formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL PAYMENT: Means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate
(as defined in each Leased Aircraft Indenture) or Collateral (as defined in
each Owned Aircraft Indenture) or any Special Redemption Premium.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase Agreement.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Has the meaning specified in Section 7.01 of this Trust
Supplement.
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the
Special Payments Account and, subject to the Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI of the Basic
Agreement of any Equipment Note and (iii) all rights of the Applicable
Trust and the Trustee, on behalf of the Applicable Trust, under the
Intercreditor Agreement, the Escrow Agreement, the Note Purchase Agreement
and the Liquidity Facilities, including, without limitation, all rights to
receive certain payments thereunder, and all monies paid to the Trustee on
behalf of the Applicable Trust pursuant to the Intercreditor Agreement or
the Liquidity Facilities, PROVIDED that rights with respect to the Deposits
or under the Escrow Agreement, except for the right to direct withdrawals
for the purchase of Equipment Notes to be held herein, will not constitute
Trust Property.
TRUST SUPPLEMENT: Has the meaning specified in the first paragraph of
this trust supplement.
UNDERWRITERS: Means, collectively, Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated and Chase Securities Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
February 11, 1998 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. AMENDMENTS TO ARTICLE IV OF THE BASIC AGREEMENT. Article
IV of the Basic Agreement shall be amended as follows:
(a) The following sentence shall be inserted in Section 4.02(c) of the
Basic Agreement following the fourth sentence thereof:
In the event of the payment of a Special Redemption Premium by the
Company to the Trustee under the Note Purchase Agreement, the notice
provided for in this Section 4.02(c) shall be mailed, together with
the notice by the Escrow Paying Agent under Section 2.06 of the Escrow
Agreement, not less than 15 days prior to the Special Distribution
Date for such amount, which Special Distribution Date shall be the
Final Withdrawal Date.
The following sentence shall replace in its entirety the last sentence
of the first paragraph of Section 4.02(c) of the Basic Agreement:
(b) If the amount of (i) premium, if any, payable upon the redemption
or purchase of an Equipment Note or (ii) the Special Redemption
Premium, if any, 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.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable to
principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable to
interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to unused Deposits, if any; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of
a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Delivery Period Termination Date, if
there has been any change in the information set forth in clauses (x), (y) and
(z) below from that set forth in page S-52 of the Prospectus Supplement, and
(ii) any early redemption or purchase of, or any default in the payment of
principal or interest in respect of, any of the Equipment Notes held in the
Applicable Trust, or any Final Withdrawal, the Trustee shall furnish to
Applicable Certificateholders of record on such date a statement setting forth
(x) the expected Pool Balances for each subsequent Regular Distribution Date
following the Delivery Period Termination Date, (y) the related Pool Factors for
such Regular Distribution Dates and (z) the expected principal distribution
schedule of the Equipment Notes, in the aggregate, held as Trust Property at the
date of such notice. With respect to the Applicable Certificates registered in
the name of a Clearing Agency, on the Delivery Period Termination Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such date. The Trustee will mail to each such Clearing Agency Participant the
statement described above and will make available additional copies as requested
by such Clearing Agency Participant for forwarding to holders of interests in
the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS.
(a) At any time after the occurrence and during the continuance of a
Triggering Event, each Applicable Certificateholder shall have the right to
purchase, for the purchase price set forth in the Class A Trust Agreement, all,
but not less than all, of the Class A Certificates upon ten days' written notice
to the Class A Trustee and each other Applicable Certificateholder, provided
that (i) if prior to the end of such ten-day period any other Applicable
Certificateholder notifies such purchasing Applicable Certificateholder that
such other Applicable Certificateholder wants to participate in such purchase,
then such other Applicable Certificateholder may join with the purchasing
Applicable Certificateholder to purchase all, but not less than all, of the
Class A Certificates pro rata based on the Fractional Undivided Interest in the
Applicable Trust held by each such Applicable Certificateholder and (ii) if
prior to the end of such ten-day period any other Applicable Certificateholder
fails to notify the purchasing Applicable Certificateholder of such other
Applicable Certificateholder's desire to participate in such a purchase, then
such other Applicable Certificateholder shall lose its right to purchase the
Class A Certificates pursuant to this Section 4.01(a); and
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event,
(i) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A Certificates pursuant to clause
(a) above) to purchase all, but not less than all, of the Applicable
Certificates and the Class A Certificates upon ten days' written notice to
the Trustee, the Class A Trustee and each other Class C Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may
join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Applicable Certificates and the Class A Certificates
pro rata based on the Fractional Undivided Interest in the Class C Trust
held by each such Class C Certificateholder and (B) if prior to the end of
such ten-day period any other Class C Certificateholder fails to notify the
purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(b); and
(ii) each holder of a Class D Certificate (a "CLASS D
CERTIFICATEHOLDER") shall have the right (which shall not expire upon any
purchase of the Class A Certificates pursuant to clause (a) above or any
purchase of the Applicable Certificates and the Class A Certificates
pursuant to clause (i) above) to purchase all, but not less than all, of
the Applicable Certificates, the Class A Certificates and the Class C
Certificates upon ten days' written notice to the Trustee, the Class A
Trustee, the Class C Trustee and each other Class D Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class D Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder wants to
participate in such purchase, then such other Class D Certificateholder may
join with the purchasing Class D Certificateholder to purchase all, but not
less than all, of the Applicable Certificates, the Class A Certificates and
the Class C Certificates pro rata based on the Fractional Undivided
Interest in the Class D Trust held by each such Class D Certificateholder
and (B) if prior to the end of such ten-day period any other Class D
Certificateholder fails to notify the purchasing Class D Certificateholder
of such other Class D Certificateholder's desire to participate in such a
purchase, then such other Class D Certificateholder shall lose its right to
purchase the Applicable Certificates pursuant to this Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such record date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed under this Agreement on the related Distribution Date (which
deducted amounts shall remain distributable to, and may be retained by, the
Applicable Certificateholder as of such Record Date); PROVIDED FURTHER that no
such purchase of Applicable Certificates shall be effective unless the
purchaser(s) shall certify to the Trustee that contemporaneously with such
purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Other Agreements, the Applicable Certificates, the Class A
Certificates and the Class C Certificates which are senior to the securities
held by such purchaser(s). Each payment of the purchase price of the Applicable
Certificates referred to in the first sentence hereof shall be made to an
account or accounts designated by the Trustee and each such purchase shall be
subject to the terms of this Section 4.01(b). Each Applicable Certificateholder
agrees by its acceptance of its Applicable Certificate that it will, subject to
Section 3.04 of the Basic Agreement, upon payment from such Class C
Certificateholder(s) or Class D Certificateholder(s), as the case may be, of the
purchase price set forth in the first sentence of this paragraph, forthwith
sell, assign, transfer and convey to the purchaser(s) thereof (without recourse,
representation or warranty of any kind except for its own acts), all of the
right, title, interest and obligation of such Applicable Certificateholder in
this Agreement, the Escrow Agreement, the Deposit Agreement, the Intercreditor
Agreement, the Liquidity Facilities, the Note Documents and all Applicable
Certificates and Escrow Receipts held by such Applicable Certificateholder
(subject to clauses (i) and (ii) in the first sentence of this paragraph and
excluding all right, title and interest under any of the foregoing to the extent
such right, title or interest is with respect to an obligation not then due and
payable as respects any action or inaction or state of affairs occurring prior
to such sale) and the purchaser shall assume all of such Applicable
Certificateholder's obligations under this Agreement, the Escrow Agreement, the
Deposit Agreement, the Intercreditor Agreement, the Liquidity Facilities, the
Note Documents and all such Applicable Certificates and Escrow Receipts. The
Applicable Certificates will be deemed to be purchased on the date payment of
the purchase price is made notwithstanding the failure of the Applicable
Certificateholders to deliver any Applicable Certificates and, upon such a
purchase, (i) the only rights of the Applicable Certificateholders will be to
deliver the Applicable Certificates to the purchaser(s) and receive the purchase
price for such Applicable Certificates and (ii) if the purchaser(s) shall so
request, such Applicable Certificateholder will comply with all the provisions
of Section 3.04 of the Basic Agreement to enable new Applicable Certificates to
be issued to the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new Applicable
Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01 and elsewhere in this Trust Supplement,
the terms "Class A Certificate", "Class A Trust Agreement", "Class A Trustee",
"Class C Certificate", "Class C Certificateholder", "Class C Trust", "Class C
Trustee", "Class D Certificate" and "Class D Trust", shall have the respective
meanings assigned to such terms in the Intercreditor Agreement.
(c) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. DELIVERY OF DOCUMENTS; DELIVERY DATES. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor Agreement, the
Escrow Agreement and the Note Purchase Agreement on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii) subject
to the respective terms thereof, to perform its obligations thereunder. Upon
request of the Company and the satisfaction or waiver of the closing conditions
specified in the Underwriting Agreement, the Trustee shall execute, deliver,
authenticate, issue and sell Applicable Certificates in authorized denominations
equalling in the aggregate the amount set forth, with respect to the Applicable
Trust, in Schedule II to the Underwriting Agreement evidencing the entire
ownership interest in the Applicable Trust, which amount equals the maximum
aggregate principal amount of Equipment Notes which may be purchased by the
Trustee pursuant to the Note Purchase Agreement. Except as provided in Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement, the Trustee shall not execute,
authenticate or deliver Applicable Certificates in excess of the aggregate
amount specified in this paragraph.
(b) On or after the Issuance Date, the Company may deliver from time
to time to the Trustee a Delivery Notice relating to one or more Equipment
Notes. After receipt of a Delivery Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery Notice relates
(the "APPLICABLE DELIVERY DATE"), the Trustee shall (as and when specified in
the Delivery Notice) instruct the Escrow Agent to provide a Notice of Purchase
Withdrawal to the Depositary requesting (A) the withdrawal of one or more
Deposits on the Applicable Delivery Date in accordance with and to the extent
permitted by the terms of the Escrow Agreement and the Deposit Agreement and (B)
the payment of all, or a portion, of such Deposit or Deposits in an amount equal
in the aggregate to the purchase price of such Equipment Notes to or on behalf
of the Owner Trustee or the Company, as the case may be, issuing such Equipment
Notes, all as shall be described in the Delivery Notice. The Trustee shall (as
and when specified in such Delivery Notice), subject to the conditions set forth
in Section 2 of the Note Purchase Agreement, enter into and perform its
obligations under the Participation Agreement specified in such Delivery Notice
(the "APPLICABLE PARTICIPATION Agreement") and cause such certificates,
documents and legal opinions relating to the Trustee to be duly delivered as
required by the Applicable Participation Agreement. If at any time prior to the
Applicable Delivery Date, the Trustee receives a notice of postponement pursuant
to Section 1(e) or 1(f) of the Note Purchase Agreement, then the Trustee shall
give the Depositary (with a copy to the Escrow Agent) a notice of cancellation
of such Notice of Purchase Withdrawal relating to such Deposit or Deposits on
such Applicable Delivery Date. Upon satisfaction of the conditions specified in
the Note Purchase Agreement and the Applicable Participation Agreement, the
Trustee shall purchase the applicable Equipment Notes with the proceeds of the
withdrawals of one or more Deposits made on the Applicable Delivery Date in
accordance with the terms of the Deposit Agreement and the Escrow Agreement. The
purchase price of such Equipment Notes shall equal the principal amount of such
Equipment Notes. Amounts withdrawn from such Deposit or Deposits in excess of
the purchase price of the Equipment Notes or to the extent not applied on the
Applicable Delivery Date to the purchase price of the Equipment Notes, shall be
re-deposited by the Trustee with the Depositary on the Applicable Delivery Date
in accordance with the terms of the Deposit Agreement. The provisions of this
Section 5.01(b) supersede and replace the provisions of Section 2.02 of the
Basic Agreement (which are inapplicable to the Trust), and all provisions of the
Basic Agreement relating to Postponed Notes and Section 2.02 of the Basic
Agreement shall not apply to the Applicable Trust.
(c) The Trustee acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 5.01(b)
of this Trust Supplement, the Note Purchase Agreement and each Applicable
Participation Agreement, and declares that it holds and will hold such right,
title and interest for the benefit of all present and future Applicable
Certificateholders, upon the trusts set forth in this Agreement. By its
acceptance of an Applicable Certificate, each initial Applicable
Certificateholder, as a grantor of the Applicable Trust, joins with the Trustee
in the creation of the Applicable Trust. The provisions of this Section 5.01(c)
supersede and replace the provisions of Section 2.03 of the Basic Agreement.
Section 5.02. WITHDRAWAL OF DEPOSITS. If any Deposits remain
outstanding on the Business Day next succeeding the Cut-off Date, (i) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated and
instruct the Escrow Agent to provide a notice of Final Withdrawal to the
Depositary substantially in the form of Exhibit B to the Deposit Agreement (the
"FINAL WITHDRAWAL NOTICE") and (ii) the Trustee will make a demand upon the
Company under the Note Purchase Agreement for an amount equal to the Special
Redemption Premium (if any is payable), such payment to be made on the Final
Withdrawal Date.
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement, the Note Purchase
Agreement or the Escrow Agreement or the due execution hereof or thereof by the
Company or the other parties thereto (other than the Trustee), or for or in
respect of the recitals and statements contained herein or therein, all of which
recitals and statements are made solely by the Company, except that the Trustee
hereby represents and warrants that each of this Trust Supplement, the Basic
Agreement, each Applicable Certificate, the Intercreditor Agreement, the Note
Purchase Agreement and the Escrow Agreement has been executed and delivered by
one of its officers who is duly authorized to execute and deliver such document
on its behalf.
(b) Except as herein otherwise provided and except during the
continuance of an Event of Default in respect of the Applicable Trust created
hereby, no duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the Agreement, and this Trust Supplement is executed and
accepted on behalf of the Trustee, subject to all the terms and conditions set
forth in the Agreement, as fully to all intents as if the same were herein set
forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to execute,
deliver and perform this Trust Supplement, the Escrow Agreement and the
Note Documents to which it is a party and has taken all necessary action to
authorize the execution, delivery and performance by it of this Trust
Supplement, the Escrow Agreement and the Note Documents to which it is a
party;
(b) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party (i) will not violate any provision of any United States federal
law or the law of the state of the United States where it is located
governing the banking and trust powers of the Trustee or any order, writ,
judgment, or decree of any court, arbitrator or governmental authority
applicable to the Trustee or any of its assets, (ii) will not violate any
provision of the articles of association or by-laws of the Trustee, and
(iii) will not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust Property
pursuant to the provisions of any mortgage, indenture, contract, agreement
or other undertaking to which it is a party, which violation, default or
lien could reasonably be expected to have an adverse effect on the
Trustee's performance or ability to perform its duties hereunder or
thereunder or on the transactions contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party will not require the authorization, consent, or approval of, the
giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency of the
United States or the state of the United States where it is located
regulating the banking and corporate trust activities of the Trustee; and
(d) this Trust Supplement, the Escrow Agreement and the Note Documents
to which it is a party have been, or will be, as applicable, duly executed
and delivered by the Trustee and constitute, or will constitute, as
applicable, the legal, valid and binding agreements of the Trustee,
enforceable against it in accordance with their respective terms; PROVIDED,
HOWEVER, that enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and (ii) general principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 6.01. AMENDMENT OF SECTION 5.02 OF THE BASIC AGREEMENT.
Section 5.02 of the Basic Agreement shall be amended by (i) replacing the phrase
"of the Note Documents and of this Agreement" set forth in paragraph (b) thereof
with the phrase "of the Note Documents, of the Note Purchase Agreement and of
this Agreement" and (ii) replacing the phrase "of this Agreement and any Note
Document" set forth in the last paragraph of Section 5.02 with the phrase "of
this Agreement, the Note Purchase Agreement and any Note Document".
Section 6.02. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic Agreement, the Company may (but will not be required to), and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request, at any time and from time to time, (i) enter into one or more
agreements supplemental to the Escrow Agreement, the Note Purchase Agreement or
the Deposit Agreement, for any of the purposes set forth in clauses (1) through
(9) of such Section 9.01, except that (a) clause (2) and (3) of such Section
9.01 shall be deemed to include the Company's obligations under (in the case of
clause (2)), and the Company's rights and powers conferred by (in the case of
clause (3)), the Note Purchase Agreement, (b) clause (4) of such Section 9.01
shall be deemed to include corrections or supplements to provisions of the
Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement which may
be defective or inconsistent with any other provision of this Agreement or
contained in any agreement referred to in such clause (4) and the curing of any
ambiguity or the modification of any other provision with respect to matters or
questions arising under the Escrow Agreement, the Note Purchase Agreement or the
Deposit Agreement and (c) references in clauses (6) and (7) of such Section 9.01
to "any Intercreditor Agreement or any Liquidity Facility" shall be deemed to
refer to "the Intercreditor Agreement, the Liquidity Facility, the Escrow
Agreement, the Note Purchase Agreement or the Deposit Agreement" and (ii) enter
into one or more agreements supplemental to this Agreement to provide for the
formation of a Class D Trust, the issuance of Class D Certificates, the purchase
by the Class D Trust of Equipment Notes and other matters incidental thereto or
otherwise contemplated by Section 2.01(b) of the Basic Agreement.
Section 6.03. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic Agreement shall apply to agreements
or amendments for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement or the Note Purchase Agreement to the extent applicable to the
Applicable Certificateholders approving such agreement or amendment or modifying
in any manner the rights and obligations of such Applicable Certificateholders
under the Escrow Agreement, the Deposit Agreement or the Note Purchase
Agreement; provided that the provisions of Section 9.02(1) of the Basic
Agreement shall be deemed to include reductions in any manner of, or delay in
the timing of, any receipt by the Applicable Certificateholders of payments upon
the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. (a) The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the earlier of (A) the completion of
the assignment, transfer and discharge described in the first sentence of the
immediately following paragraph and (B) distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
execution of this Trust Supplement.
Upon the earlier of (i) the first Business Day following January 31,
1999, or, if later, the fifth Business Day following the Delivery Period
Termination Date and (ii) the fifth Business Day following the date on which a
Triggering Event occurs (such date, the "TRANSFER DATE"), or, if later, the date
on which all of the conditions set forth in the immediately following sentence
have been satisfied, the Trustee is hereby directed (subject only to the
immediately following sentence) to, and the Company shall direct the institution
that will serve as the Related Trustee under the Related Pass Through Trust
Agreement to, execute and deliver the Assignment and Assumption Agreement,
pursuant to which the Trustee shall assign, transfer and deliver all of the
Trustee's right, title and interest to the Trust Property to the Related Trustee
under the Related Pass Through Trust Agreement. The Trustee and the Related
Trustee shall execute and deliver the Assignment and Assumption Agreement upon
the satisfaction of the following conditions:
(i) The Trustee, the Related Trustee and each of the Rating Agencies
then rating the Applicable Certificates shall have received an Officer's
Certificate and an Opinion of Counsel dated the date of the Assignment and
Assumption Agreement and each satisfying the requirements of Section 1.02
of the Basic Agreement, which Opinion of Counsel shall be substantially to
the effect set forth below and may be relied upon by the Beneficiaries (as
defined in the Assignment and Assumption Agreement):
(I) upon the execution and delivery thereof by the parties
thereto in accordance with the terms of this Agreement and the Related
Pass Through Trust Agreement, the Assignment and Assumption Agreement
will constitute the valid and binding obligation of each of the
parties thereto enforceable against each such party in accordance with
its terms;
(II) upon the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, each of the Applicable
Certificates then Outstanding will be entitled to the benefits of the
Related Pass Through Trust Agreement;
(III) the Related Trust is not required to be registered as an
investment company under the Investment Company Act of 1940, as
amended;
(IV) the Related Pass Through Trust Agreement constitutes the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms; and
(V) neither the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, nor the consummation by
the parties thereto of the transactions contemplated to be consummated
thereunder on the date thereof, will violate any law or governmental
rule or regulation of the State of New York or the United States of
America known to such counsel to be applicable to the transactions
contemplated by the Assignment and Assumption Agreement.
(ii) The Trustee and the Company shall have received (x) a copy of the
articles of incorporation and bylaws of the Related Trustee certified as of
the Transfer Date by the Secretary or Assistant Secretary of such
institution and (y) a copy of the filing (including all attachments
thereto) made by the institution serving as the Related Trustee with the
Office of the Superintendent, State of New York Banking Department for the
qualification of the Related Trustee under Section 131(3) of the New York
Banking Law.
Upon the execution of the Assignment and Assumption Agreement by the parties
thereto, the Applicable Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Related Trust in
exchange for their interests in the Applicable Trust equal to their respective
beneficial interests in the Applicable Trust, and the Outstanding Applicable
Certificates representing Fractional Undivided Interests in the Applicable Trust
shall be deemed for all purposes of this Agreement and the Related Pass Through
Trust Agreement, without further signature or action of any party or Applicable
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related Trust and its trust property. By acceptance of its
Applicable Certificate, each Applicable Certificateholder consents to such
assignment, transfer and delivery of the Trust Property to the trustee of the
Related Trust upon the execution and delivery of the Assignment and Assumption
Agreement.
In connection with the occurrence of the event set forth in clause (B)
above, notice of such termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates to
the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Applicable Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding such final
Distribution Date specifying (A) the Distribution Date upon which the proposed
final payment of the Applicable Certificates will be made upon presentation and
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time such
notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
(b) The provisions of this Section 7.01 supersede and replace the
provisions of Section 11.01 of the Basic Agreement in its entirety.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
SECTION 8.02. GOVERNING LAW. THIS AGREEMENT AND, UNTIL THE TRANSFER
DATE, THE APPLICABLE CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. THIS SECTION 8.02 SUPERSEDES
AND REPLACES SECTION 12.05 OF THE BASIC AGREEMENT.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. Each Applicable Certificateholder and Investor, by its
acceptance of its Applicable Certificate or a beneficial interest therein,
agrees to treat the Applicable Trust as a grantor trust for all U.S. federal,
state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
EXHIBIT A
---------
FORM OF CERTIFICATE
Certificate
No. ______
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]*
CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-1B-O
6.748% Continental Airlines Pass Through Certificate, Series
1998-1B-O
Issuance Date: February 20, 1998
Final Maturity Date: September 15, 2018
Evidencing A Fractional Undivided Interest In The Continental Airlines
Pass Through Trust 1998-1B-O, The Property Of Which Includes Certain
Equipment Notes Each Secured By An Aircraft Leased To Or Owned By
Continental Airlines, Inc.
$ __________ Fractional Undivided Interest representing 0.000665022%
of the Trust per $1,000 face amount
THIS CERTIFIES THAT ____________________ , for value received, is the
registered owner of a $__________ (__________ dollars) Fractional Undivided
Interest in the Continental Airlines Pass Through Trust 1998-1B-O (the "TRUST")
created by Wilmington Trust Company, as trustee (the "TRUSTEE"), pursuant to a
Pass Through Trust Agreement, dated as of September 25, 1997 (the "BASIC
AGREEMENT"), between the Trustee and Continental Airlines, Inc., a Delaware
____________________
* This legend to appear on Book-Entry Certificates to be deposited with the
Depository Trust Company
corporation (the "COMPANY"), as supplemented by Trust Supplement No. 1998-1B-O
thereto, dated as of February 20, 1998 (the "TRUST SUPPLEMENT" and, together
with the Basic Agreement, the "AGREEMENT"), between the Trustee and the Company,
a summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Agreement. This Certificate is one of the
duly authorized Certificates designated as "6.748% Continental Airlines Pass
Through Certificates, Series 1998-1B-O" (herein called the "CERTIFICATES"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the holder of
this Certificate (the "CERTIFICATEHOLDER" and, together with all other holders
of Certificates issued by the Trust, the "CERTIFICATEHOLDERS") assents to and
agrees to be bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment Notes and all
rights of the Trust to receive payments under the Intercreditor Agreement and
any Liquidity Facilities (the "TRUST PROPERTY"). Each issue of the Equipment
Notes is secured by, among other things, a security interest in an Aircraft
leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each March 15 and September 15 (a "REGULAR DISTRIBUTION DATE")
commencing March 15, 1998, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "TRANSFER"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a Certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or an interest
herein are exempt from the prohibited transaction restrictions of ERISA and the
Code pursuant to one or more prohibited transaction statutory or administrative
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS
THROUGH TRUST 1998-1B-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:____________________________
Name:
Title:
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
EXHIBIT B
---------
[DTC Letter of Representations]
EXHIBIT C
---------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Continental Airlines Pass Through Trust 1998-1B
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ____________, 199_ (the
"ASSIGNMENT AGREEMENT"), between Wilmington Trust Company, a Delaware banking
corporation ("WTC"), not in its individual capacity except as expressly provided
herein, but solely as trustee under the Pass Through Trust Agreement dated as of
September 25, 1997 (as amended or modified from time to time, the "BASIC
AGREEMENT"), as supplemented by the Trust Supplement No. 1998-1B-O dated
February 20, 1998 (the "TRUST SUPPLEMENT" and together with the Basic Agreement,
the "AGREEMENT") in respect of the Continental Airlines Pass Through Trust
1998-1B-O (the "ASSIGNOR"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity except as expressly provided herein,
but solely as trustee under the Basic Agreement as supplemented by the Trust
Supplement No. 1998-1B-S dated February 20, 1998 (the "NEW SUPPLEMENT", and,
together with the Basic Agreement, the "NEW AGREEMENT") in respect of the
Continental Airlines Pass Through Trust 1998-1B-S (the "ASSIGNEE").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the parties hereto desire to effect on the date hereof (the
"TRANSFER DATE") (a) the transfer by the Assignor to the Assignee of all of the
right, title and interest of the Assignor in, under and with respect to, among
other things, the Trust Property and each of the documents listed in Schedule I
hereto (the "SCHEDULED DOCUMENTS") and (b) the assumption by the Assignee of the
obligations of the Assignor (i) under the Scheduled Documents and (ii) in
respect of the Applicable Certificates issued under the Agreement; and
WHEREAS, the Scheduled Documents permit such transfer upon
satisfaction of certain conditions heretofore or concurrently herewith being
complied with;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows (capitalized terms used herein without definition having the meaning
ascribed thereto in the Agreement):
1. ASSIGNMENT. The Assignor does hereby sell, assign, convey, transfer
and set over unto the Assignee as of the Transfer Date all of its present and
future right, title and interest in, under and with respect to the Trust
Property and the Scheduled Documents and each other contract, agreement,
document or instrument relating to the Trust Property or the Scheduled Documents
(such other contracts, agreements, documents or instruments, together with the
Scheduled Documents, to be referred to as the "ASSIGNED DOCUMENTS"), and any
proceeds therefrom, together with all documents and instruments evidencing any
of such right, title and interest.
2. ASSUMPTION. The Assignee hereby assumes for the benefit of the
Assignor and each of the parties listed in Schedule II hereto (collectively, the
"BENEFICIARIES") all of the duties and obligations of the Assignor, whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the Assigned Documents to which the Assignor is a
party and shall be bound by all the terms thereof (including the agreements and
obligations of the Assignor set forth therein) as if therein named as the
Assignor. Further, the Assignee hereby assumes for the benefit of the Assignor
and the Beneficiaries all of the duties and obligations of the Assignor under
the Outstanding Applicable Certificates and hereby confirms that the Applicable
Certificates representing Fractional Undivided Interests under the Agreement
shall be deemed for all purposes of the Agreement and the New Agreement to be
certificates representing the same fractional undivided interests under the New
Agreement equal to their respective beneficial interests in the trust created
under the Agreement.
3. EFFECTIVENESS. This Assignment Agreement shall be effective upon
the execution and delivery hereof by the parties hereto, and each Applicable
Certificateholder, by its acceptance of its Applicable Certificate or a
beneficial interest therein, agrees to be bound by the terms of this Assignment
Agreement.
4. PAYMENTS. The Assignor hereby covenants and agrees to pay over to
the Assignee, if and when received following the Transfer Date, any amounts
(including any sums payable as interest in respect thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.
5. FURTHER ASSURANCES. The Assignor shall, at any time and from time
to time, upon the request of the Assignee, promptly and duly execute and deliver
any and all such further instruments and documents and take such further action
as the Assignee may reasonably request to obtain the full benefits of this
Assignment Agreement and of the right and powers herein granted. The Assignor
agrees to deliver any Applicable Certificates, and all Trust Property, if any,
then in the physical possession of the Assignor, to the Assignee.
6. REPRESENTATIONS AND WARRANTIES. (a) The Assignee represents and
warrants to the Assignor and each of the Beneficiaries that:
(i) it has all requisite power and authority and legal right to enter
into and carry out the transactions contemplated hereby and to carry out
and perform the obligations of the "PASS THROUGH TRUSTEE" under the
Assigned Documents;
(ii) on and as of the date hereof, the representations and warranties
of the Assignee set forth in Section 7.15 of the Basic Agreement and
Section 5.04 of the New Supplement are true and correct.
(b) The Assignor represents and warrants to the Assignee that:
(i) it is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the full trust power,
authority and legal right under the laws of the State of Delaware and the
United States pertaining to its trust and fiduciary powers to execute and
deliver this Assignment Agreement;
(ii) the execution and delivery by it of this Assignment Agreement and
the performance by it of its obligations hereunder have been duly
authorized by it and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
(iii) this Assignment Agreement constitutes the legal, valid and
binding obligations of it enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
7. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
8. COUNTERPARTS. This Assignment Agreement may be executed in any
number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by both
parties so long as each party shall sign at least one counterpart.
9. THIRD PARTY BENEFICIARIES. The Assignee hereby agrees, for the
benefit of the Beneficiaries, that its representations, warranties and covenants
contained herein are also intended to be for the benefit of each Beneficiary,
and each Beneficiary shall be deemed to be an express third party beneficiary
with respect thereto, entitled to enforce directly and in its own name any
rights or claims it may have against such party as such beneficiary.
IN WITNESS WHEREOF, the parties hereto, through their respective
officers thereunto duly authorized, have duly executed this Assignment Agreement
as of the day and year first above written.
ASSIGNOR:
WILMINGTON TRUST COMPANY, not in
its individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1998-1B-O
By:________________________________
Title:
ASSIGNEE:
WILMINGTON TRUST COMPANY,
not in its individual capacity
except as expressly provided
herein, but solely as trustee
under the Pass Through Trust
Agreement and Trust Supplement in
respect of the Continental
Airlines Pass Through Trust
1998-1B-S
By:________________________________
Title:
Schedule I
Schedule of Assigned Documents
(1) Intercreditor Agreement dated as of February 20, 1998 among the
Trustee, the Other Trustees, the Liquidity Providers, the liquidity provider, if
any, relating to the Certificates issued under (and as defined in) each of the
Other Agreements and the Subordination Agent.
(2) Escrow and Paying Agent Agreement (Class B) dated as of February
20, 1998 among the Escrow Agent, the Underwriters, the Trustee and the Paying
Agent.
(3) Note Purchase Agreement dated as of February 20, 1998 among the
Company, the Trustee, the Other Trustees, the Depositary, the Escrow Agent, the
Paying Agent and the Subordination Agent.
(4) Deposit Agreement (Class B) dated as of February 20, 1998 between
the Escrow Agent and the Depositary.
(5) Each of the Operative Agreements (as defined in the Participation
Agreement for each Aircraft) in effect as of the Transfer Date.
Schedule II
Schedule of Beneficiaries
Wilmington Trust Company, not in its individual capacity but solely as
Subordination Agent
Wilmington Trust Company, not in its individual capacity but solely as Paying
Agent
AIG Matched Funding Corp., as Liquidity Providers
Continental Airlines, Inc.
Credit Suisse First Boston Corporation, as Underwriter
Morgan Stanley & Co. Incorporated, as Underwriter
Chase Securities Inc., as Underwriter
First Security Bank, National Association, as Escrow Agent
Each of the other parties to the Assigned Documents
TRUST SUPPLEMENT No. 1998-1B-S
Dated February 20, 1998
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$150,371,000
Continental Airlines Pass Through Trust 1998-1B-S
6.748% Continental Airlines
Pass Through Certificates,
Series 1998-1B-S
This Trust Supplement No. 1998-1B-S, dated as of February 20, 1998
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in the
Basic Agreement) which may be issued thereunder, has heretofore been executed
and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, as of the Transfer Date (as defined below), the Company will
have financed the acquisition of all or a portion of such Aircraft either (i)
through separate leveraged lease transactions, in which case the Company leases
such Aircraft (collectively, the "LEASED AIRCRAFT") or (ii) through separate
secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "OWNED AIRCRAFT");
WHEREAS, as of the Transfer Date in the case of each Leased Aircraft,
each Owner Trustee, acting on behalf of the corresponding Owner Participant,
will have issued pursuant to an Indenture, on a non-recourse basis, Equipment
Notes in order to finance a portion of its purchase price of such Leased
Aircraft;
WHEREAS, as of the Transfer Date, in the case of each Owned Aircraft,
the Company will have issued pursuant to an Indenture, on a recourse basis,
Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;
WHEREAS, as of the Transfer Date, the Related Trustee will assign,
transfer and deliver all of such trustee's right, title and interest to the
trust property held by the Related Trustee to the Trustee pursuant to the
Assignment and Assumption Agreement (as defined below);
WHEREAS, the Trustee, effective only, but automatically, upon
execution and delivery of the Assignment and Assumption Agreement, will be
deemed to have declared the creation of the Continental Airlines Pass Through
Trust 1998-1B-S (the "APPLICABLE TRUST") for the benefit of the Applicable
Certificateholders, and each Holder of Applicable Certificates outstanding as of
the Transfer Date, as the grantors of the Applicable Trust, by their respective
acceptances of such Applicable Certificates, will join in the creation of this
Applicable Trust with the Trustee;
WHEREAS, all Applicable Certificates deemed issued by the Applicable
Trust will evidence fractional undivided interests in the Applicable Trust and
will convey no rights, benefits or interests in respect of any property other
than the Trust Property except for those Applicable Certificates to which an
Escrow Receipt (as defined below) has been affixed;
WHEREAS, upon the execution and delivery of the Assignment and
Assumption Agreement, all of the conditions and requirements necessary to make
this Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. The Applicable Certificates shall be
known as "6.748% Continental Airlines Pass Through Certificates, Series
1998-1B-S". Each Applicable Certificate represents a fractional undivided
interest in the Applicable Trust created hereby. The Applicable Certificates
shall be the only instruments evidencing a fractional undivided interest in the
Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates that
shall be initially deemed issued under the Agreement shall be equal to the
aggregate principal amount of "Outstanding" pass through certificates
representing fractional undivided interests in the Related Trust on the
Transfer Date.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means March 15 and September 15 of each year, commencing
on March 15, 1998, until payment of all of the Scheduled Payments to be
made under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the restrictions on transfer of the Escrow Receipt set forth herein
and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached as
Exhibit A to the Related Pass Through Trust Supplement, with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Related Pass Through Trust Agreement or
this Agreement, as the case may be, or as the Trustee may deem appropriate,
to reflect the fact that the Applicable Certificates are being issued under
the Agreement as opposed to under the Related Pass Through Trust Agreement.
Any Person acquiring or accepting an Applicable Certificate, by its
acceptance of such Applicable Certificate or an interest therein will, by
such acquisition or acceptance, be deemed to represent and warrant to and
for the benefit of each Owner Participant and the Company that either (i)
the assets of an employee benefit plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or of a plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), have not been used to purchase Applicable Certificates or an
interest therein or (ii) the purchase and holding of Applicable
Certificates or an interest therein is exempt from the prohibited
transaction restrictions of ERISA and the Code pursuant to one or more
prohibited transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates
and shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached as
Exhibit B to the Related Pass Through Trust Supplement.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement and the Escrow Agreement.
(g) The Applicable Certificates are entitled to the benefits of the
Liquidity Facilities.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement," for
purposes of clause (3) of Section 7.07 of the Basic Agreement are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft) of each Participation Agreement.
(j) The Equipment Notes to be acquired and held in the Applicable
Trust, and the related Aircraft and Note Documents, are described in the
Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have the
following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic Agreement shall have the meaning assigned thereto in
this Trust Supplement for purposes of the Basic Agreement as supplemented by
this Trust Supplement):
AGREEMENT: Means the Basic Agreement, as supplemented by this Trust
Supplement.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
APPLICABLE CERTIFICATE: Means any of the "Applicable Certificates"
issued by the Related Trust and that are "Outstanding" (as defined in the
Related Pass Through Trust Agreement) as of the Transfer Date (the
"TRANSFER DATE CERTIFICATES") and any Applicable Certificates issued in
exchange therefor or replacement thereof pursuant to this Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE TRUST: Has the meaning specified in the recitals hereto.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C to the Related
Pass Through Trust Supplement executed and delivered in accordance with
Section 7.01 of the Related Trust Supplement.
BASIC AGREEMENT: Has the meaning specified in the first paragraph of
this Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is Outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CLASS D CERTIFICATEHOLDERS: Has the meaning specified in Section
4.01(a)(iii) of this Trust Supplement.
COMPANY: Has the meaning specified in the first paragraph of this
Trust Supplement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Has the meaning specified in the
Related Pass Through Trust Supplement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of February
20, 1998 relating to the Applicable Certificates between the Depositary and
the Escrow Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
of February 20, 1998 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Related Trustee (and after the
Transfer Date, the Trustee) and the Underwriters, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under the
Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
FINAL MATURITY DATE: Means September 15, 2018.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
February 20, 1998 among the Related Trustee (and after the Transfer Date,
the Trustee), the Related Other Trustees (and after the Transfer Date, the
Other Trustees), the Liquidity Providers, the liquidity providers relating
to the Certificates issued under (and as defined in) each of the Related
Other Agreements, and Wilmington Trust Company, as Subordination Agent and
as trustee thereunder, as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred
to in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LEASED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
dated as of February 20, 1998 relating to the Applicable Certificates,
between the Liquidity Provider and Wilmington Trust Company, as the
Subordination Agent, as agent and trustee for the Applicable Trust, and,
from and after the replacement of such Agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDER: Means, initially, AIG Matched Funding Corp., a
Delaware corporation, and any replacements or successors therefor appointed
in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: Means the Equipment Notes with respect to the
Applicable Certificates and, with respect to such any Equipment Note, (i)
the Indenture and the Participation Agreement relating to such Equipment
Note, and (ii) in the case of any Equipment Note related to a Leased
Aircraft, the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as of
February 20, 1998 among the Related Trustee (and after the Transfer Date,
the Trustee), the Related Other Trustees (and after the Transfer Date, the
Other Trustees), the Company, the Escrow Agent, the Escrow Paying Agent and
the Subordination Agent, as the same may be amended, supplemented or
otherwise modified from time to time, in accordance with its terms.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1998-1A-S dated the date hereof relating to
Continental Airlines Pass Through Trust 1998-1A-S and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1998-1C-S dated the date
hereof relating to Continental Airlines Pass Through Trust 1998-1C-S.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1998-1A-S and Continental Airlines Pass Through Trust 1998-1C-S, created by
the Other Pass Through Trust Agreements.
OUTSTANDING: When used with respect to Applicable Certificates, means,
as of the date of determination, all Transfer Date Certificates, and all
other Applicable Certificates theretofore authenticated and delivered under
this Agreement, in each case except:
(i) Applicable Certificates theretofore canceled by the Registrar
or delivered to the Trustee or the Registrar for cancellation;
(ii) Applicable Certificates for which money in the full amount
required to make the final distribution with respect to such
Applicable Certificates pursuant to Section 11.01 of the Basic
Agreement has been theretofore deposited with the Trustee in trust for
the Applicable Certificateholders as provided in Section 4.01 of the
Basic Agreement pending distribution of such money to such Applicable
Certificateholders pursuant to payment of such final distribution; and
(iii) Applicable Certificates in exchange for or in lieu of which
other Applicable Certificates have been authenticated and delivered
pursuant to this Agreement.
OWNED AIRCRAFT: Has the meaning specified in the third recital to this
Trust Supplement.
OWNED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and OWNER PARTICIPANTS at
any time of determination means all of the Owner Participants thus referred
to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its individual
capacity but solely as trustee; and OWNER TRUSTEES means all of the Owner
Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with
its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the "Applicable Certificates" as defined in the Related Pass
Through Trust Agreement, less (ii) the aggregate amount of all payments
made in respect of such Certificates or in respect of Deposits other than
payments made in respect of interest or premium thereon or reimbursement of
any costs or expenses incurred in connection therewith. The Pool Balance as
of any Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, payment of principal
on the Equipment Notes or payments with respect to other Trust Property and
the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the "Applicable Certificates" as
defined in the Related Pass Through Trust Agreement. The Pool Factor as of
any Distribution Date shall be computed after giving effect to any special
distribution with respect to unused Deposits, payment of principal on the
Equipment Notes or payments with respect to other Trust Property and the
distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated February
11, 1998 relating to the offering of the Certificates.
RELATED OTHER PASS THROUGH TRUST AGREEMENTS: Means the "Other
Agreements" as defined in the Related Pass Through Trust Agreement.
RELATED OTHER TRUSTEES: Means the "Other Trustees" as defined in the
Related Pass Through Trust Agreement.
RELATED OTHER TRUSTS: Means the "Other Trusts" as defined in the
Related Pass Through Trust Agreement.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1998-1B-O dated the date hereof
(the "RELATED PASS THROUGH TRUST SUPPLEMENT"), relating to the Continental
Airlines Pass Through Trust 1998-1B-O and entered into by the Company and
the Trustee, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
RELATED TRUST: Means the Continental Pass Through Trust 1998-1B-O,
formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL PAYMENT: Means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate
(as defined in each Leased Aircraft Indenture) or Collateral (as defined in
each owned Aircraft Indenture) or any Special Redemption Premium.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase Agreement.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Means the moment of execution and delivery of the
Assignment and Assumption Agreement by each of the parties thereto.
TRANSFER DATE CERTIFICATES: Has the meaning specified in the
definition of "Applicable Certificates".
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the
Special Payments Account and, subject to the Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI of the Basic
Agreement of any Equipment Note and (iii) all rights of the Trust and the
Trustee, on behalf of the Applicable Trust, under the Intercreditor
Agreement, the Escrow Agreement, the Note Purchase Agreement and the
Liquidity Facilities, including, without limitation, all rights to receive
certain payments thereunder, and all monies paid to the Trustee on behalf
of the Applicable Trust pursuant to the Intercreditor Agreement or the
Liquidity Facilities, PROVIDED that rights with respect to the Deposits or
under the Escrow Agreement, will not constitute Trust Property.
TRUST SUPPLEMENT: Has the meaning specified in the first paragraph of
this trust supplement.
UNDERWRITERS: Means, collectively, Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated and Chase Securities Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
February 11, 1998 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. AMENDMENTS TO ARTICLE IV OF THE BASIC AGREEMENT. Article
IV of the Basic Agreement shall be amended as follows:
(a) The following sentence shall be inserted in Section 4.02(c) of the
Basic Agreement following the fourth sentence thereof:
In the event of the payment of a Special Redemption Premium by
the Company to the Trustee under the Note Purchase Agreement, the
notice provided for in this Section 4.02(c) shall be mailed, together
with the notice by the Escrow Paying Agent under Section 2.06 of the
Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date
shall be the Final Withdrawal Date.
(b) The following sentence shall replace in its entirety the last
sentence of the first paragraph of Section 4.02(c) of the Basic Agreement:
If the amount of (i) premium, if any, payable upon the redemption
or purchase of an Equipment Note or (ii) the Special Redemption
Premium, if any, 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.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable to
principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable to
interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to unused Deposits, if any; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of
a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Transfer Date, if there has been any
change in the information set forth in clauses (x), (y) and (z) below from that
set forth in page S-52 of the Prospectus Supplement, and (ii) any early
redemption or purchase of, or any default in the payment of principal or
interest in respect of, any of the Equipment Notes held in the Applicable Trust,
or any Final Withdrawal, the Trustee shall furnish to Certificateholders of
record on such date a statement setting forth (x) the expected Pool Balances for
each subsequent Regular Distribution Date following the Delivery Period
Termination Date, (y) the related Pool Factors for such Regular Distribution
Dates and (z) the expected principal distribution schedule of the Equipment
Notes, in the aggregate, held as Trust Property at the date of such notice. With
respect to the Applicable Certificates registered in the name of a Clearing
Agency, on the Transfer Date, the Trustee will request from such Clearing Agency
a securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests in
the "Applicable Certificates" (as defined in the Related Pass Through Trust
Agreement) on such date. The Trustee will mail to each such Clearing Agency
Participant the statement described above and will make available additional
copies as requested by such Clearing Agency Participant for forwarding to
holders of interests in the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS.
(a) At any time after the occurrence and during the continuance of a
Triggering Event, each Applicable Certificateholder shall have the right to
purchase, for the purchase price set forth in the Class A Trust Agreement, all,
but not less than all, of the Class A Certificates upon ten days' written notice
to the Class A Trustee and each other Applicable Certificateholder, provided
that (i) if prior to the end of such ten-day period any other Applicable
Certificateholder notifies such purchasing Applicable Certificateholder that
such other Applicable Certificateholder wants to participate in such purchase,
then such other Applicable Certificateholder may join with the purchasing
Applicable Certificateholder to purchase all, but not less than all, of the
Class A Certificates pro rata based on the Fractional Undivided Interest in the
Applicable Trust held by each such Applicable Certificateholder and (ii) if
prior to the end of such ten-day period any other Applicable Certificateholder
fails to notify the purchasing Applicable Certificateholder of such other
Applicable Certificateholder's desire to participate in such a purchase, then
such other Applicable Certificateholder shall lose its right to purchase the
Class A Certificates pursuant to this Section 4.01(a); and
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event,
(i) each Class C Certificateholder shall have the right (which shall
not expire upon any purchase of the Class A Certificates pursuant to clause
(a) above) to purchase all, but not less than all, of the Applicable
Certificates and the Class A Certificates upon ten days' written notice to
the Trustee, the Class A Trustee and each other Class C Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class C Certificateholder notifies such purchasing Class C
Certificateholder that such other Class C Certificateholder wants to
participate in such purchase, then such other Class C Certificateholder may
join with the purchasing Class C Certificateholder to purchase all, but not
less than all, of the Applicable Certificates and the Class A Certificates
pro rata based on the Fractional Undivided Interest in the Class C Trust
held by each such Class C Certificateholder and (B) if prior to the end of
such ten-day period any other Class C Certificateholder fails to notify the
purchasing Class C Certificateholder of such other Class C
Certificateholder's desire to participate in such a purchase, then such
other Class C Certificateholder shall lose its right to purchase the
Applicable Certificates pursuant to this Section 4.01(b); and
(ii) each holder of a Class D Certificate (a "CLASS D
CERTIFICATEHOLDER") shall have the right (which shall not expire upon any
purchase of the Class A Certificates pursuant to clause (a) above or any
purchase of the Applicable Certificates and the Class A Certificates
pursuant to clause (i) above) to purchase all, but not less than all, of
the Applicable Certificates, the Class A Certificates and the Class C
Certificates upon ten days' written notice to the Trustee, the Class A
Trustee, the Class C Trustee and each other Class D Certificateholder,
PROVIDED that (A) if prior to the end of such ten-day period any other
Class D Certificateholder notifies such purchasing Class D
Certificateholder that such other Class D Certificateholder wants to
participate in such purchase, then such other Class D Certificateholder may
join with the purchasing Class D Certificateholder to purchase all, but not
less than all, of the Applicable Certificates, the Class A Certificates and
the Class C Certificates pro rata based on the Fractional Undivided
Interest in the Class D Trust held by each such Class D Certificateholder
and (B) if prior to the end of such ten-day period any other Class D
Certificateholder fails to notify the purchasing Class D Certificateholder
of such other Class D Certificateholder's desire to participate in such a
purchase, then such other Class D Certificateholder shall lose its right to
purchase the Applicable Certificates pursuant to this Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such record date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed under this Agreement on the related Distribution Date (which
deducted amounts shall remain distributable to, and may be retained by, the
Applicable Certificateholder as of such Record Date); PROVIDED FURTHER that no
such purchase of Applicable Certificates shall be effective unless the
purchaser(s) shall certify to the Trustee that contemporaneously with such
purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Other Agreements, the Applicable Certificates, the Class A
Certificates and the Class C Certificates which are senior to the securities
held by such purchaser(s). Each payment of the purchase price of the Applicable
Certificates referred to in the first sentence hereof shall be made to an
account or accounts designated by the Trustee and each such purchase shall be
subject to the terms of this Section 4.01(b). Each Applicable Certificateholder
agrees by its acceptance of its Applicable Certificate that it will, subject to
Section 3.04 of the Basic Agreement, upon payment from such Class C
Certificateholder(s) or Class D Certificateholder(s), as the case may be, of the
purchase price set forth in the first sentence of this paragraph, forthwith
sell, assign, transfer and convey to the purchaser(s) thereof (without recourse,
representation or warranty of any kind except for its own acts), all of the
right, title, interest and obligation of such Applicable Certificateholder in
this Agreement, the Escrow Agreement, the Deposit Agreement, the Intercreditor
Agreement, the Liquidity Facilities, the Note Documents and all Applicable
Certificates and Escrow Receipts held by such Applicable Certificateholder
(subject to clauses (i) and (ii) in the first sentence of this paragraph and
excluding all right, title and interest under any of the foregoing to the extent
such right, title or interest is with respect to an obligation not then due and
payable as respects any action or inaction or state of affairs occurring prior
to such sale) and the purchaser shall assume all of such Applicable
Certificateholder's obligations under this Agreement, the Escrow Agreement, the
Deposit Agreement, the Intercreditor Agreement, the Liquidity Facilities, the
Note Documents and all such Applicable Certificates and Escrow Receipts. The
Applicable Certificates will be deemed to be purchased on the date payment of
the purchase price is made notwithstanding the failure of the Applicable
Certificateholders to deliver any Applicable Certificates and, upon such a
purchase, (i) the only rights of the Applicable Certificateholders will be to
deliver the Applicable Certificates to the purchaser(s) and receive the purchase
price for such Applicable Certificates and (ii) if the purchaser(s) shall so
request, such Applicable Certificateholder will comply with all the provisions
of Section 3.04 of the Basic Agreement to enable new Applicable Certificates to
be issued to the purchaser in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new
Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01 and elsewhere in this Trust Supplement,
the terms "Class A Certificate", "Class A Trust Agreement", "Class A Trustee",
"Class C Certificate", "Class C Certificateholder", "Class C Trust", "Class C
Trustee", "Class D Certificate" and "Class D Trust", shall have the respective
meanings assigned to such terms in the Intercreditor Agreement.
(c) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. ACQUISITION OF TRUST PROPERTY. (a) The Trustee is hereby
irrevocably authorized and directed to execute and deliver the Assignment and
Assumption Agreement on the date specified in Section 7.01 of the Related Pass
Through Trust Supplement, subject only to the satisfaction of the conditions set
forth in said Section 7.01. This Agreement (except only for the immediately
preceding sentence hereof, which is effective upon execution and delivery
hereof) shall become effective upon the execution and delivery of the Assignment
and Assumption Agreement by the Trustee and the Related Trustee, automatically
and without any further signature or action on the part of the Company and the
Trustee, and shall thereupon constitute the legal, valid and binding obligation
of the parties hereto enforceable against each of the parties hereto in
accordance with its terms. Upon such execution and delivery of the Assignment
and Assumption Agreement, the Related Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Applicable Trust in
exchange for their interests in the Related Trust equal to their respective
beneficial interests in the Related Trust and the "Outstanding" (as defined in
the Related Pass Through Trust Agreement) pass through certificates representing
fractional undivided interests in the Related Trust shall be deemed for all
purposes of this Agreement, without further signature or action of any party or
Certificateholder, to be Certificates representing the same Fractional Undivided
Interests in the Trust and Trust Property. By acceptance of its Applicable
Certificate, each Applicable Certificateholder consents to and ratifies such
assignment, transfer and delivery of the trust property of the Related Trust to
the Trustee upon the execution and delivery of the Assignment and Assumption
Agreement. The provisions of this Section 5.01(a) supersede and replace the
provisions of Section 2.02 of the Basic Agreement (which are inapplicable to the
Trust), and all provisions of the Basic Agreement relating to Postponed Notes or
Section 2.02 of the Basic Agreement shall not apply to the Applicable Trust.
(b) The Trustee, upon the execution and delivery of the Assignment and
Assumption Agreement, acknowledges its acceptance of all right, title and
interest in and to the Trust Property and declares that the Trustee holds and
will hold such right, title and interest for the benefit of all then present and
future Applicable Certificateholders, upon the trusts herein and in the Basic
Agreement set forth. By the acceptance of each Applicable Certificate issued to
it under the Related Pass Through Trust Agreement and deemed issued under this
Agreement, each Holder of any such Applicable Certificate as grantor of the
Applicable Trust thereby joins in the creation and declaration of the Applicable
Trust. The provisions of this Section 5.01(b) supersede and replace the
provisions of Section 2.03 of the Basic Agreement (which are inapplicable to the
Trust).
(c) The Trustee acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 5.01(b)
of this Trust Supplement, the Note Purchase Agreement and each Applicable
Participation Agreement, and declares that it holds and will hold such right,
title and interest for the benefit of all present and future Applicable
Certificateholders, upon the trusts set forth in this Agreement. By its
acceptance of an Applicable Certificate, each initial Applicable
Certificateholder, as a grantor of the Applicable Trust, joins with the Trustee
in the creation of the Applicable Trust. The provisions of this Section 5.01(c)
supersede and replace the provisions of Section 2.03 of the Basic Agreement.
Section 5.02. [Intentionally Omitted]
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement, the Note Purchase
Agreement or the Escrow Agreement or the due execution hereof or thereof by the
Company or the other parties thereto (other than the Trustee), or for or in
respect of the recitals and statements contained herein or therein, all of which
recitals and statements are made solely by the Company, except that the Trustee
hereby represents and warrants that each of this Trust Supplement, the Basic
Agreement, each Applicable Certificate, the Intercreditor Agreement, the Note
Purchase Agreement and the Escrow Agreement has been executed and delivered by
one of its officers who is duly authorized to execute and deliver such document
on its behalf.
(b) Except as herein otherwise provided and except during the
continuance of an Event of Default in respect of the Applicable Trust created
hereby, no duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the Agreement, and this Trust Supplement is executed and
accepted on behalf of the Trustee, subject to all the terms and conditions set
forth in the Agreement as fully to all intents as if the same were herein set
forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants, on the Transfer Date, that:
(a) the Trustee has full power, authority and legal right to receive
the Trust Property assigned by the Related Trustee, assume the obligations
under, and perform, the Assignment and Assumption Agreement, this Trust
Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
Documents and has taken all necessary action to authorize such receipt,
assumption and performance by it of this Trust Supplement, the
Intercreditor Agreement, the Escrow Agreement and the Note Documents to
which it is a party;
(b) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents (i) will not violate
any provision of any United States federal law or the law of the state of
the United States where it is located governing the banking and trust
powers of the Trustee or any order, writ, judgment, or decree of any court,
arbitrator or governmental authority applicable to the Trustee or any of
its assets, (ii) will not violate any provision of the articles of
association or by-laws of the Trustee, and (iii) will not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to which it
is a party, which violation, default or lien could reasonably be expected
to have an adverse effect on the Trustee's performance or ability to
perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(c) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents will not require the
authorization, consent, or approval of, the giving of notice to, the filing
or registration with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the state of the
United States where it is located regulating the banking and corporate
trust activities of the Trustee; and
(d) The Assignment and Assumption Agreement has been duly executed and
delivered by the Trustee and this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents have been, or will
be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and binding
agreements of the Trustee, enforceable against it in accordance with their
respective terms; PROVIDED, however, that enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and (ii) general
principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 6.01. AMENDMENT OF SECTION 5.02 OF THE BASIC AGREEMENT.
Section 5.02 of the Basic Agreement shall be amended by (i) replacing the phrase
"of the Note Documents and of this Agreement" set forth in paragraph (b) thereof
with the phrase "of the Note Documents, of the Note Purchase Agreement and of
this Agreement" and (ii) replacing the phrase "of this Agreement and any Note
Document" set forth in the last paragraph of Section 5.02 with the phrase "of
this Agreement, the Note Purchase Agreement and any Note Document."
Section 6.02. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic Agreement, the Company may (but will not be required to), and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request, at any time and from time to time, (i) enter into one or more
agreements supplemental to the Escrow Agreement, the Note Purchase Agreement or
the Deposit Agreement, for any of the purposes set forth in clauses (1) through
(9) of such Section 9.01, except that (a) clause (2) and (3) of such Section
9.01 shall be deemed to include the Company's obligations under (in the case of
clause (2)), and the Company's rights and powers conferred by (in the case of
clause (3)), the Note Purchase Agreement, (b) clause (4) of such Section 9.01
shall be deemed to include corrections or supplements to provisions of the
Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement which may
be defective or inconsistent with any other provision of this Agreement or
contained in any agreement referred to in such clause (4) and the curing of any
ambiguity or the modification of any other provision with respect to matters or
questions arising under the Escrow Agreement, the Note Purchase Agreement or the
Deposit Agreement and (c) references in clauses (6) and (7) of such Section 9.01
to "any Intercreditor Agreement or any Liquidity Facility" shall be deemed to
refer to "the Intercreditor Agreement, the Liquidity Facility, the Escrow
Agreement, the Note Purchase Agreement or the Deposit Agreement" and (ii) enter
into one or more agreements supplemental to this Agreement to provide for the
formation of a Class D Trust, the issuance of Class D Certificates, the purchase
by the Class D Trust of the Equipment Notes and other matters incident thereto
or otherwise contemplated by Section 2.01(b) of the Basic Agreement.
Section 6.03. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic Agreement shall apply to agreements
or amendments for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement or the Note Purchase Agreement to the extent applicable to the
Applicable Certificateholders approving such agreement or amendment or modifying
in any manner the rights and obligations of such Applicable Certificateholders
under the Escrow Agreement, the Deposit Agreement or the Note Purchase
Agreement; provided that the provisions of Section 9.02(1) of the Basic
Agreement shall be deemed to include reductions in any manner of, or delay in
the timing of, any receipt by the Applicable Certificateholders of payments upon
the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. (a) The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
earliest execution of this Trust Supplement.
Notice of any termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates to
the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Applicable Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding such final
Distribution Date specifying (A) the Distribution Date upon which the proposed
final payment of the Applicable Certificates will be made upon presentation and
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time such
notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
(b) The provisions of this Section 7.01 supersedes and replaces the
provisions of Section 11.01 of the Basic Agreement in its entirety.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
SECTION 8.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. THIS SECTION 8.02 SUPERSEDES AND REPLACES SECTION 12.05
OF THE BASIC AGREEMENT.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. Each Applicable Certificateholder and Investor, by its
acceptance of its Applicable Certificate or a beneficial interest therein,
agrees to treat the Applicable Trust as a grantor trust for all U.S. federal,
state and local income tax purposes. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to further
such intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
TRUST SUPPLEMENT No. 1998-1C-O
Dated February 20, 1998
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$136,542,000
Continental Airlines Pass Through Trust 1998-1C-O
6.541% Continental Airlines
Pass Through Certificates,
Series 1998-1C-O
This Trust Supplement No. 1998-1C-O, dated as of February 20, 1998
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in the
Basic Agreement) which may be issued thereunder, has heretofore been executed
and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, the Company intends to finance the acquisition of each such
Aircraft either (i) through separate leveraged lease transactions, in which case
the Company will lease such Aircraft (collectively, the "LEASED AIRCRAFT") or
(ii) through separate secured loan transactions, in which case the Company will
own such Aircraft (collectively, the "OWNED AIRCRAFT");
WHEREAS, in the case of each Leased Aircraft, each Owner Trustee,
acting on behalf of the corresponding Owner Participant, will issue pursuant to
an Indenture, on a non-recourse basis, Equipment Notes in order to finance a
portion of its purchase price of such Leased Aircraft;
WHEREAS, in the case of each Owned Aircraft, the Company will issue
pursuant to an Indenture, on a recourse basis, Equipment Notes to finance a
portion of the purchase price of such Owned Aircraft;
WHEREAS, the Trustee hereby declares the creation of this Continental
Airlines Pass Through Trust 1998-1C-O (the "APPLICABLE TRUST") for the benefit
of the Applicable Certificateholders, and the initial Applicable
Certificateholders as the grantors of the Applicable Trust, by their respective
acceptances of the Applicable Certificates, join in the creation of the
Applicable Trust with the Trustee;
WHEREAS, all Certificates to be issued by the Applicable Trust will
evidence fractional undivided interests in the Applicable Trust and will convey
no rights, benefits or interests in respect of any property other than the Trust
Property except for those Certificates to which an Escrow Receipt has been
affixed;
WHEREAS, the Escrow Agent and the Underwriters have contemporaneously
herewith entered into an Escrow Agreement with the Escrow Paying Agent pursuant
to which the Underwriters have delivered to the Escrow Agent the proceeds from
the sale of the Applicable Certificates and have irrevocably instructed the
Escrow Agent to withdraw and pay funds from such proceeds upon request and
proper certification by the Trustee to purchase Equipment Notes as the Aircraft
are delivered by Boeing under the Aircraft Purchase Agreement from time to time
prior to the Delivery Period Termination Date;
WHEREAS, the Escrow Agent on behalf of the Applicable
Certificateholders has contemporaneously herewith entered into a Deposit
Agreement with the Depositary under which the Deposits referred to therein will
be made and from which it will withdraw funds to allow the Trustee to purchase
Equipment Notes from time to time prior to the Delivery Period Termination Date;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "AGREEMENT") and the Note Purchase
Agreement, upon or shortly following delivery of an Aircraft, the Trustee on
behalf of the Applicable Trust, using funds withdrawn under the Escrow
Agreement, shall purchase one or more Equipment Notes having the same interest
rate as, and final maturity date not later than the final Regular Distribution
Date of, the Applicable Certificates issued hereunder and shall hold such
Equipment Notes in trust for the benefit of the Applicable Certificateholders;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. There is hereby created a series of
Certificates to be issued under the Agreement to be distinguished and known as
"6.541% Continental Airlines Pass Through Certificates, Series 1998-1C-O"
(hereinafter defined as the "APPLICABLE CERTIFICATES"). Each Applicable
Certificate represents a fractional undivided interest in the Applicable Trust
created hereby. The Applicable Certificates shall be the only instruments
evidencing a fractional undivided interest in the Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates that
shall be authenticated under the Agreement (except for Applicable
Certificates authenticated and delivered pursuant to Sections 3.03, 3.04
and 3.06 of the Basic Agreement) is $136,542,000.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means March 15 and September 15 of each year, commencing
on March 15, 1998, until payment of all of the Scheduled Payments to be
made under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the restrictions on transfer of the Escrow Receipt set forth herein
and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached
hereto as Exhibit A. Any Person acquiring or accepting an Applicable
Certificate or an interest therein will, by such acquisition or acceptance,
be deemed to represent and warrant to and for the benefit of each Owner
Participant and the Company that either (i) the assets of an employee
benefit plan subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or of a plan subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), have not been
used to purchase Applicable Certificates or an interest therein or (ii) the
purchase and holding of Applicable Certificates or an interest therein is
exempt from the prohibited transaction restrictions of ERISA and the Code
pursuant to one or more prohibited transaction statutory or administrative
exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates and
shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached hereto
as Exhibit B.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement, and the Escrow Agreement.
(g) The Applicable Certificates will have the benefit of the Liquidity
Facility.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement", for
purposes of clause (3) of Section 7.07 of the Basic Agreement, are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft) of each Participation Agreement.
(j) The Equipment Notes to be acquired and held in the Applicable
Trust, and the related Aircraft and Note Documents, are described in the
Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have the
following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic Agreement shall have the meaning assigned thereto in
this Trust Supplement for purposes of the Basic Agreement as supplemented by
this Trust Supplement):
AGREEMENT: Has the meaning specified in the recitals hereto.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
AIRCRAFT PURCHASE AGREEMENT: Has the meaning specified in the Note
Purchase Agreement.
APPLICABLE CERTIFICATE: Has the meaning specified in Section 1.01 of
this Trust Supplement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE DELIVERY DATE: Has the meaning specified in Section 5.01(b)
of this Trust Supplement.
APPLICABLE PARTICIPATION AGREEMENT: Has the meaning specified in
Section 5.01(b) of this Trust Supplement.
APPLICABLE TRUST: Has the meaning specified in the recitals hereto.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C hereto executed
and delivered in accordance with Section 7.01 of this Trust Supplement.
BASIC AGREEMENT: Has the meaning specified in the first paragraph of
this Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is Outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CLASS D CERTIFICATEHOLDER: Has the meaning specified in Section
4.01(a)(iii) of this Trust Supplement.
COMPANY: Has the meaning specified in the first paragraph of this
Trust Supplement.
CUT-OFF DATE: Means the earlier of (a) the Delivery Period Termination
Date and (b) the date on which a Triggering Event occurs.
DELIVERY DATE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Means the earlier of (a) January 31,
1999, or, if the Equipment Notes relating to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have not been purchased by the
Applicable Trust and the Other Trusts on or prior to such date due to any
reason beyond the control of the Company and not occasioned by the
Company's fault or negligence, June 30, 1999 (PROVIDED that, if a labor
strike occurs at Boeing on or prior to either or both of such dates
referred to in this clause (a), such date or dates on or following the
commencement of such strike shall be extended by adding thereto the number
of days that such strike continued in effect) and (b) the date on which
Equipment Notes issued with respect to all of the New Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Applicable
Trust and the Other Trusts in accordance with the Note Purchase Agreement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of February
20, 1998 relating to the Applicable Certificates between the Depositary and
the Escrow Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
of February 20, 1998 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Trustee and Underwriters, as the
same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under the
Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
FINAL MATURITY DATE: Means September 15, 2009.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
FINAL WITHDRAWAL NOTICE: Has the meaning specified in Section 5.02 of
this Trust Supplement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
February 20, 1998 among the Trustee, the Other Trustees, the Liquidity
Providers, the liquidity providers relating to the Certificates issued
under (and as defined in) each of the Other Agreements, and Wilmington
Trust Company, as Subordination Agent and as trustee thereunder, as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred
to in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LEASED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
dated as of February 20, 1998 relating to the Applicable Certificates,
between the Liquidity Provider and Wilmington Trust Company as
Subordination Agent, as agent and trustee for the Applicable Trust, and,
from and after the replacement of such agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDER: Means, initially, AIG Matched Funding Corp., a
Delaware corporation, and any replacements or successors therefor appointed
in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: Means the Equipment Notes with respect to the
Applicable Certificates and, with respect to any such Equipment Note, (i)
the Indenture and the Participation Agreement relating to such Equipment
Note, and (ii) in the case of any Equipment Note related to a Leased
Aircraft, the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as of
February 20, 1998 among the Trustee, the Other Trustees, the Company, the
Escrow Agent, the Escrow Paying Agent and the Subordination Agent,
providing for, among other things, the purchase of Equipment Notes by the
Trustee on behalf of the Trust, as the same may be amended, supplemented or
otherwise modified from time to time, in accordance with its terms.
NOTICE OF PURCHASE WITHDRAWAL: Has the meaning specified in the
Deposit Agreement.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1998-1A-O dated the date hereof relating to
Continental Airlines Pass Through Trust 1998-1A-O and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1998-1B-O dated the date
hereof relating to Continental Airlines Pass Through Trust 1998-1B-O.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1998-1A-O and the Continental Airlines Pass Through Trust 1998-1B-O, each
created on the date hereof.
OWNED AIRCRAFT: Has the meaning specified in the third recital to this
Trust Supplement.
OWNED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and OWNER PARTICIPANTS at
any time of determination means all of the Owner Participants thus referred
to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its individual
capacity but solely as trustee; and OWNER TRUSTEES means all of the Owner
Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with
its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the Applicable Certificates less (ii) the aggregate amount of all
payments made in respect of such Applicable Certificates or in respect of
Deposits other than payments made in respect of interest or premium thereon
or reimbursement of any costs or expenses incurred in connection therewith.
The Pool Balance as of any Distribution Date shall be computed after giving
effect to any special distribution with respect to unused Deposits, payment
of principal of the Equipment Notes or payment with respect to other Trust
Property and the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the Applicable Certificates. The
Pool Factor as of any Distribution Date shall be computed after giving
effect to any special distribution with respect to unused Deposits, payment
of principal of the Equipment Notes or payments with respect to other Trust
Property and the distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated February
11, 1998 relating to the offering of the Certificates.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1998-1C-S dated the date hereof
relating to the Continental Airlines Pass Through Trust 1998-1C-S and
entered into by the Company and the Trustee, which agreement becomes
effective upon the execution and delivery of the Assignment and Assumption
Agreement pursuant to Section 7.01 of this Trust Supplement.
RELATED TRUST: Means the Continental Pass Through Trust 1998-1C-S, to
be formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL PAYMENT: Means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate
(as defined in each Leased Aircraft Indenture) or Collateral (as defined in
each Owned Aircraft Indenture) or any Special Redemption Premium.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase Agreement.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Has the meaning specified in Section 7.01 of this Trust
Supplement.
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the
Special Payments Account and, subject to the Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI of the Basic
Agreement of any Equipment Note and (iii) all rights of the Applicable
Trust and the Trustee, on behalf of the Applicable Trust, under the
Intercreditor Agreement, the Escrow Agreement, the Note Purchase Agreement
and the Liquidity Facilities, including, without limitation, all rights to
receive certain payments thereunder, and all monies paid to the Trustee on
behalf of the Applicable Trust pursuant to the Intercreditor Agreement or
the Liquidity Facilities, PROVIDED that rights with respect to the Deposits
or under the Escrow Agreement, except for the right to direct withdrawals
for the purchase of Equipment Notes to be held herein, will not constitute
Trust Property.
TRUST SUPPLEMENT: Has the meaning specified in the first paragraph of
this trust supplement.
UNDERWRITERS: Means, collectively, Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated and Chase Securities Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
February 11, 1998 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. AMENDMENTS TO ARTICLE IV OF THE BASIC AGREEMENT. Article
IV of the Basic Agreement shall be amended as follows:
(a) The following sentence shall be inserted in Section 4.02(c) of the
Basic Agreement following the fourth sentence thereof:
In the event of the payment of a Special Redemption Premium by the
Company to the Trustee under the Note Purchase Agreement, the notice
provided for in this Section 4.02(c) shall be mailed, together with
the notice by the Escrow Paying Agent under Section 2.06 of the Escrow
Agreement, not less than 15 days prior to the Special Distribution
Date for such amount, which Special Distribution Date shall be the
Final Withdrawal Date.
(b) The following sentence shall replace in its entirety the last
sentence of the first paragraph of Section 4.02(c) of the Basic Agreement:
If the amount of (i) premium, if any, payable upon the redemption or
purchase of an Equipment Note or (ii) the Special Redemption Premium,
if any, 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.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable to
principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable to
interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to unused Deposits, if any; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of
a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of
the amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii),
(a)(iv) and (a)(v) above for such calendar year or, in the event such
Person was an Applicable Certificateholder of record during a portion of
such calendar year, for such portion of such year, and such other items as
are readily available to the Trustee and which an Applicable
Certificateholder shall reasonably request as necessary for the purpose of
such Applicable Certificateholder's preparation of its federal income tax
returns. Such statement and such other items shall be prepared on the basis
of information supplied to the Trustee by the Clearing Agency Participants
and shall be delivered by the Trustee to such Clearing Agency Participants
to be available for forwarding by such Clearing Agency Participants to the
holders of interests in the Applicable Certificates in the manner described
in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Delivery Period Termination Date, if
there has been any change in the information set forth in clauses (x), (y)
and (z) below from that set forth in page S-52 of the Prospectus
Supplement, and (ii) any early redemption or purchase of, or any default in
the payment of principal or interest in respect of, any of the Equipment
Notes held in the Applicable Trust, or any Final Withdrawal, the Trustee
shall furnish to Applicable Certificateholders of record on such date a
statement setting forth (x) the expected Pool Balances for each subsequent
Regular Distribution Date following the Delivery Period Termination Date,
(y) the related Pool Factors for such Regular Distribution Dates and (z)
the expected principal distribution schedule of the Equipment Notes, in the
aggregate, held as Trust Property at the date of such notice. With respect
to the Applicable Certificates registered in the name of a Clearing Agency,
on the Delivery Period Termination Date, the Trustee will request from such
Clearing Agency a securities position listing setting forth the names of
all Clearing Agency Participants reflected on such Clearing Agency's books
as holding interests in the Applicable Certificates on such date. The
Trustee will mail to each such Clearing Agency Participant the statement
described above and will make available additional copies as requested by
such Clearing Agency Participant for forwarding to holders of interests in
the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. Purchase Rights of Certificateholders.
(a) At any time after the occurrence and during the continuance of a
Triggering Event, each Applicable Certificateholder shall have the right (which
shall not expire upon any purchase of the Class A Certificates pursuant to the
Class B Trust Agreement) to purchase, for the purchase prices set forth in the
Class A Trust Agreement and the Class B Trust Agreement, respectively, all, but
not less than all, of the Class A Certificates and the Class B Certificates upon
ten days' written notice to the Class A Trustee, the Class B Trustee and each
other Applicable Certificateholder, provided that (i) if prior to the end of
such ten-day period any other Applicable Certificateholder notifies such
purchasing Applicable Certificateholder that such other Applicable
Certificateholder wants to participate in such purchase, then such other
Applicable Certificateholder may join with the purchasing Applicable
Certificateholder to purchase all, but not less than all, of the Class A
Certificates and the Class B Certificates pro rata based on the Fractional
Undivided Interest in the Applicable Trust held by each such Applicable
Certificateholder and (ii) if prior to the end of such ten-day period any other
Applicable Certificateholder fails to notify the purchasing Applicable
Certificateholder of such other Applicable Certificateholder's desire to
participate in such a purchase, then such other Applicable Certificateholder
shall lose its right to purchase the Class A Certificates and the Class B
Certificates pursuant to this Section 4.01(a); and
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event, each holder of a Class D Certificate (a
"CLASS D CERTIFICATEHOLDER") shall have the right (which shall not expire upon
any purchase of the Class A Certificates pursuant to the Class B Trust Agreement
or any purchase of the Class A Certificates and the Class B Certificates
pursuant to clause (a) above) to purchase all, but not less than all, of the
Applicable Certificates, the Class A Certificates and the Class B Certificates
upon ten days' written notice to the Trustee, the Class A Trustee, the Class B
Trustee and each other Class D Certificateholder, PROVIDED that (A) if prior to
the end of such ten-day period any other Class D Certificateholder notifies such
purchasing Class D Certificateholder that such other Class D Certificateholder
wants to participate in such purchase, then such other Class D Certificateholder
may join with the purchasing Class D Certificateholder to purchase all, but not
less than all, of the Applicable Certificates, the Class A Certificates and the
Class B Certificates pro rata based on the Fractional Undivided Interest in the
Class D Trust held by each such Class D Certificateholder and (B) if prior to
the end of such ten-day period any other Class D Certificateholder fails to
notify the purchasing Class D Certificateholder of such other Class D
Certificateholder's desire to participate in such a purchase, then such other
Class D Certificateholder shall lose its right to purchase the Applicable
Certificates pursuant to this Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such record date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed under this Agreement on the related Distribution Date (which
deducted amounts shall remain distributable to, and may be retained by, the
Applicable Certificateholder as of such Record Date); PROVIDED FURTHER that no
such purchase of Applicable Certificates shall be effective unless the
purchaser(s) shall certify to the Trustee that contemporaneously with such
purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Other Agreements, the Applicable Certificates, the Class A
Certificates and the Class B Certificates which are senior to the securities
held by such purchaser(s). Each payment of the purchase price of the Applicable
Certificates referred to in the first sentence hereof shall be made to an
account or accounts designated by the Trustee and each such purchase shall be
subject to the terms of this Section 4.01(b). Each Applicable Certificateholder
agrees by its acceptance of its Applicable Certificate that it will, subject to
Section 3.04 of the Basic Agreement, upon payment from such Class D
Certificateholder(s) of the purchase price set forth in the first sentence of
this paragraph, forthwith sell, assign, transfer and convey to the purchaser(s)
thereof (without recourse, representation or warranty of any kind except for its
own acts), all of the right, title, interest and obligation of such Applicable
Certificateholder in this Agreement, the Escrow Agreement, the Deposit
Agreement, the Intercreditor Agreement, the Liquidity Facilities, the Note
Documents and all Applicable Certificates and Escrow Receipts held by such
Applicable Certificateholder (subject to clauses (i) and (ii) in the first
sentence of this paragraph and excluding all right, title and interest under any
of the foregoing to the extent such right, title or interest is with respect to
an obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the purchaser shall assume
all of such Applicable Certificateholder's obligations under this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facilities, the Note Documents and all such Applicable Certificates
and Escrow Receipts. The Applicable Certificates will be deemed to be purchased
on the date payment of the purchase price is made notwithstanding the failure of
the Applicable Certificateholders to deliver any Applicable Certificates and,
upon such a purchase, (i) the only rights of the Applicable Certificateholders
will be to deliver the Applicable Certificates to the purchaser(s) and receive
the purchase price for such Applicable Certificates and (ii) if the purchaser(s)
shall so request, such Applicable Certificateholder will comply with all the
provisions of Section 3.04 of the Basic Agreement to enable new Applicable
Certificates to be issued to the purchaser in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Applicable Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01 and elsewhere in this Trust Supplement,
the terms "Class A Certificate", "Class A Trust Agreement", "Class A Trustee",
"Class B Certificate", "Class B Trust", "Class B Trust Agreement", "Class B
Trustee", "Class D Certificate" and "Class D Trust", shall have the respective
meanings assigned to such terms in the Intercreditor Agreement.
(c) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. DELIVERY OF DOCUMENTS; DELIVERY DATES. (a) The Trustee
is hereby directed (i) to execute and deliver the Intercreditor Agreement, the
Escrow Agreement and the Note Purchase Agreement on or prior to the Issuance
Date, each in the form delivered to the Trustee by the Company and (ii) subject
to the respective terms thereof, to perform its obligations thereunder. Upon
request of the Company and the satisfaction or waiver of the closing conditions
specified in the Underwriting Agreement, the Trustee shall execute, deliver,
authenticate, issue and sell Applicable Certificates in authorized denominations
equaling in the aggregate the amount set forth, with respect to the Applicable
Trust, in Schedule II to the Underwriting Agreement evidencing the entire
ownership interest in the Applicable Trust, which amount equals the maximum
aggregate principal amount of Equipment Notes which may be purchased by the
Trustee pursuant to the Note Purchase Agreement. Except as provided in Sections
3.03, 3.04, 3.05 and 3.06 of the Basic Agreement, the Trustee shall not execute,
authenticate or deliver Applicable Certificates in excess of the aggregate
amount specified in this paragraph.
(b) On or after the Issuance Date, the Company may deliver from time
to time to the Trustee a Delivery Notice relating to one or more Equipment
Notes. After receipt of a Delivery Notice and in any case no later than one
Business Day prior to a Delivery Date as to which such Delivery Notice relates
(the "APPLICABLE DELIVERY DATE"), the Trustee shall (as and when specified in
the Delivery Notice) instruct the Escrow Agent to provide a Notice of Purchase
Withdrawal to the Depositary requesting (A) the withdrawal of one or more
Deposits on the Applicable Delivery Date in accordance with and to the extent
permitted by the terms of the Escrow Agreement and the Deposit Agreement and (B)
the payment of all, or a portion, of such Deposit or Deposits in an amount equal
in the aggregate to the purchase price of such Equipment Notes to or on behalf
of the Owner Trustee or the Company, as the case may be, issuing such Equipment
Notes, all as shall be described in the Delivery Notice. The Trustee shall (as
and when specified in such Delivery Notice), subject to the conditions set forth
in Section 2 of the Note Purchase Agreement, enter into and perform its
obligations under the Participation Agreement specified in such Delivery Notice
(the "APPLICABLE PARTICIPATION Agreement") and cause such certificates,
documents and legal opinions relating to the Trustee to be duly delivered as
required by the Applicable Participation Agreement. If at any time prior to the
Applicable Delivery Date, the Trustee receives a notice of postponement pursuant
to Section 1(e) or 1(f) of the Note Purchase Agreement, then the Trustee shall
give the Depositary (with a copy to the Escrow Agent) a notice of cancellation
of such Notice of Purchase Withdrawal relating to such Deposit or Deposits on
such Applicable Delivery Date. Upon satisfaction of the conditions specified in
the Note Purchase Agreement and the Applicable Participation Agreement, the
Trustee shall purchase the applicable Equipment Notes with the proceeds of the
withdrawals of one or more Deposits made on the Applicable Delivery Date in
accordance with the terms of the Deposit Agreement and the Escrow Agreement. The
purchase price of such Equipment Notes shall equal the principal amount of such
Equipment Notes. Amounts withdrawn from such Deposit or Deposits in excess of
the purchase price of the Equipment Notes or to the extent not applied on the
Applicable Delivery Date to the purchase price of the Equipment Notes, shall be
re-deposited by the Trustee with the Depositary on the Applicable Delivery Date
in accordance with the terms of the Deposit Agreement. The provisions of this
Section 5.01(b) supersede and replace the provisions of Section 2.02 of the
Basic Agreement (which are inapplicable to the Trust), and all provisions of the
Basic Agreement relating to Postponed Notes and Section 2.02 of the Basic
Agreement shall not apply to the Applicable Trust.
(c) The Trustee acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 5.01(b)
of this Trust Supplement, the Note Purchase Agreement and each Applicable
Participation Agreement, and declares that it holds and will hold such right,
title and interest for the benefit of all present and future Applicable
Certificateholders, upon the trusts set forth in this Agreement. By its
acceptance of an Applicable Certificate, each initial Applicable
Certificateholder, as a grantor of the Applicable Trust, joins with the Trustee
in the creation of the Applicable Trust. The provisions of this Section 5.01(c)
supersede and replace the provisions of Section 2.03 of the Basic Agreement.
Section 5.02. WITHDRAWAL OF DEPOSITS. If any Deposits remain
outstanding on the Business Day next succeeding the Cut-off Date, (i) the
Trustee shall give the Escrow Agent notice that the Trustee's obligation to
purchase Equipment Notes under the Note Purchase Agreement has terminated and
instruct the Escrow Agent to provide a notice of Final Withdrawal to the
Depositary substantially in the form of Exhibit B to the Deposit Agreement (the
"FINAL WITHDRAWAL NOTICE") and (ii) the Trustee will make a demand upon the
Company under the Note Purchase Agreement for an amount equal to the Special
Redemption Premium (if any is payable), such payment to be made on the Final
Withdrawal Date.
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement, the Note Purchase
Agreement or the Escrow Agreement or the due execution hereof or thereof by the
Company or the other parties thereto (other than the Trustee), or for or in
respect of the recitals and statements contained herein or therein, all of which
recitals and statements are made solely by the Company, except that the Trustee
hereby represents and warrants that each of this Trust Supplement, the Basic
Agreement, each Applicable Certificate, the Intercreditor Agreement, the Note
Purchase Agreement and the Escrow Agreement has been executed and delivered by
one of its officers who is duly authorized to execute and deliver such document
on its behalf.
(b) Except as herein otherwise provided and except during the
continuance of an Event of Default in respect of the Applicable Trust created
hereby, no duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the Agreement, and this Trust Supplement is executed and
accepted on behalf of the Trustee, subject to all the terms and conditions set
forth in the Agreement, as fully to all intents as if the same were herein set
forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants that:
(a) the Trustee has full power, authority and legal right to execute,
deliver and perform this Trust Supplement, the Escrow Agreement and the
Note Documents to which it is a party and has taken all necessary action to
authorize the execution, delivery and performance by it of this Trust
Supplement, the Escrow Agreement and the Note Documents to which it is a
party;
(b) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party (i) will not violate any provision of any United States federal
law or the law of the state of the United States where it is located
governing the banking and trust powers of the Trustee or any order, writ,
judgment, or decree of any court, arbitrator or governmental authority
applicable to the Trustee or any of its assets, (ii) will not violate any
provision of the articles of association or by-laws of the Trustee, and
(iii) will not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust Property
pursuant to the provisions of any mortgage, indenture, contract, agreement
or other undertaking to which it is a party, which violation, default or
lien could reasonably be expected to have an adverse effect on the
Trustee's performance or ability to perform its duties hereunder or
thereunder or on the transactions contemplated herein or therein;
(c) the execution, delivery and performance by the Trustee of this
Trust Supplement, the Escrow Agreement and the Note Documents to which it
is a party will not require the authorization, consent, or approval of, the
giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency of the
United States or the state of the United States where it is located
regulating the banking and corporate trust activities of the Trustee; and
(d) this Trust Supplement, the Escrow Agreement and the Note Documents
to which it is a party have been, or will be, as applicable, duly executed
and delivered by the Trustee and constitute, or will constitute, as
applicable, the legal, valid and binding agreements of the Trustee,
enforceable against it in accordance with their respective terms; PROVIDED,
HOWEVER, that enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and (ii) general principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 6.01. AMENDMENT OF SECTION 5.02 OF THE BASIC AGREEMENT.
Section 5.02 of the Basic Agreement shall be amended by (i) replacing the phrase
"of the Note Documents and of this Agreement" set forth in paragraph (b) thereof
with the phrase "of the Note Documents, of the Note Purchase Agreement and of
this Agreement" and (ii) replacing the phrase "of this Agreement and any Note
Document" set forth in the last paragraph of Section 5.02 with the phrase "of
this Agreement, the Note Purchase Agreement and any Note Document".
Section 6.02. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic Agreement, the Company may (but will not be required to), and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request, at any time and from time to time, enter into one or more agreements
supplemental to the Escrow Agreement, the Note Purchase Agreement or the Deposit
Agreement, for any of the purposes set forth in clauses (1) through (9) of such
Section 9.01, except that (a) clause (2) and (3) of such Section 9.01 shall be
deemed to include the Company's obligations under (in the case of clause (2)),
and the Company's rights and powers conferred by (in the case of clause (3)),
the Note Purchase Agreement, (b) clause (4) of such Section 9.01 shall be deemed
to include corrections or supplements to provisions of the Escrow Agreement, the
Note Purchase Agreement or the Deposit Agreement which may be defective or
inconsistent with any other provision of this Agreement or contained in any
agreement referred to in such clause (4) and the curing of any ambiguity or the
modification of any other provision with respect to matters or questions arising
under the Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement
and (c) references in clauses (6) and (7) of such Section 9.01 to "any
Intercreditor Agreement or any Liquidity Facility" shall be deemed to refer to
"the Intercreditor Agreement, the Liquidity Facility, the Escrow Agreement, the
Note Purchase Agreement or the Deposit Agreement" and (ii) enter into one or
more agreements supplemental to this Agreement to provide for the formation of a
Class D Trust, the issuance of Class D Certificates, the purchase by the Class D
Trust of Equipment Notes and other matters incidental thereto or otherwise
contemplated by Section 2.01(b) of the Basic Agreement.
Section 6.03. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic Agreement shall apply to agreements
or amendments for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement or the Note Purchase Agreement to the extent applicable to the
Applicable Certificateholders approving such agreement or amendment or modifying
in any manner the rights and obligations of such Applicable Certificateholders
under the Escrow Agreement, the Deposit Agreement or the Note Purchase
Agreement; provided that the provisions of Section 9.02(1) of the Basic
Agreement shall be deemed to include reductions in any manner of, or delay in
the timing of, any receipt by the Applicable Certificateholders of payments upon
the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. (a) The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the earlier of (A) the completion of
the assignment, transfer and discharge described in the first sentence of the
immediately following paragraph and (B) distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
execution of this Trust Supplement.
Upon the earlier of (i) the first Business Day following January 31,
1999, or, if later, the fifth Business Day following the Delivery Period
Termination Date and (ii) the fifth Business Day following the date on which a
Triggering Event occurs (such date, the "TRANSFER DATE"), or, if later, the date
on which all of the conditions set forth in the immediately following sentence
have been satisfied, the Trustee is hereby directed (subject only to the
immediately following sentence) to, and the Company shall direct the institution
that will serve as the Related Trustee under the Related Pass Through Trust
Agreement to, execute and deliver the Assignment and Assumption Agreement,
pursuant to which the Trustee shall assign, transfer and deliver all of the
Trustee's right, title and interest to the Trust Property to the Related Trustee
under the Related Pass Through Trust Agreement. The Trustee and the Related
Trustee shall execute and deliver the Assignment and Assumption Agreement upon
the satisfaction of the following conditions:
(i) The Trustee, the Related Trustee and each of the Rating Agencies
then rating the Applicable Certificates shall have received an Officer's
Certificate and an Opinion of Counsel dated the date of the Assignment and
Assumption Agreement and each satisfying the requirements of Section 1.02
of the Basic Agreement, which Opinion of Counsel shall be substantially to
the effect set forth below and may be relied upon by the Beneficiaries (as
defined in the Assignment and Assumption Agreement):
(I) upon the execution and delivery thereof by the parties
thereto in accordance with the terms of this Agreement and the Related
Pass Through Trust Agreement, the Assignment and Assumption Agreement
will constitute the valid and binding obligation of each of the
parties thereto enforceable against each such party in accordance with
its terms;
(II) upon the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, each of the Applicable
Certificates then Outstanding will be entitled to the benefits of the
Related Pass Through Trust Agreement;
(III) the Related Trust is not required to be registered as an
investment company under the Investment Company Act of 1940, as
amended;
(IV) the Related Pass Through Trust Agreement constitutes the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms; and
(V) neither the execution and delivery of the Assignment and
Assumption Agreement in accordance with the terms of this Agreement
and the Related Pass Through Trust Agreement, nor the consummation by
the parties thereto of the transactions contemplated to be consummated
thereunder on the date thereof, will violate any law or governmental
rule or regulation of the State of New York or the United States of
America known to such counsel to be applicable to the transactions
contemplated by the Assignment and Assumption Agreement.
(ii) The Trustee and the Company shall have received (x) a copy of the
articles of incorporation and bylaws of the Related Trustee certified as of
the Transfer Date by the Secretary or Assistant Secretary of such
institution and (y) a copy of the filing (including all attachments
thereto) made by the institution serving as the Related Trustee with the
Office of the Superintendent, State of New York Banking Department for the
qualification of the Related Trustee under Section 131(3) of the New York
Banking Law.
Upon the execution of the Assignment and Assumption Agreement by the parties
thereto, the Applicable Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Related Trust in
exchange for their interests in the Applicable Trust equal to their respective
beneficial interests in the Applicable Trust, and the Outstanding Applicable
Certificates representing Fractional Undivided Interests in the Applicable Trust
shall be deemed for all purposes of this Agreement and the Related Pass Through
Trust Agreement, without further signature or action of any party or Applicable
Certificateholder, to be certificates representing the same fractional undivided
interests in the Related Trust and its trust property. By acceptance of its
Applicable Certificate, each Applicable Certificateholder consents to such
assignment, transfer and delivery of the Trust Property to the trustee of the
Related Trust upon the execution and delivery of the Assignment and Assumption
Agreement.
In connection with the occurrence of the event set forth in clause (B)
above, notice of such termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates to
the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Applicable Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding such final
Distribution Date specifying (A) the Distribution Date upon which the proposed
final payment of the Applicable Certificates will be made upon presentation and
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time such
notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
(b) The provisions of this Section 7.01 supersede and replace the
provisions of Section 11.01 of the Basic Agreement in its entirety.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
SECTION 8.02. GOVERNING LAW. THIS AGREEMENT AND, UNTIL THE TRANSFER
DATE, THE APPLICABLE CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. THIS SECTION 8.02 SUPERSEDES
AND REPLACES SECTION 12.05 OF THE BASIC AGREEMENT.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. Each Applicable Certificateholder and Investor, by its
acceptance of its Applicable Certificate or a beneficial interest therein,
agrees to treat the Applicable Trust as a grantor trust for all U.S. federal,
state and local income tax purposes. The powers granted and obligations
undertaken pursuant to the Agreement shall be so construed so as to further such
intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
EXHIBIT A
FORM OF CERTIFICATE
Certificate
No.
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]1
CONTINENTAL AIRLINES PASS THROUGH TRUST 1998-1C-O
6.541% Continental Airlines Pass Through Certificate, Series
1998-1C-O
Issuance Date: February 20, 1998
Final Maturity Date: September 15, 2009
Evidencing A Fractional Undivided Interest In The Continental Airlines
Pass Through Trust 1998-1C-O, The Property Of Which Includes Certain
Equipment Notes Each Secured By An Aircraft Leased To Or Owned By
Continental Airlines, Inc.
$ __________ Fractional Undivided Interest representing 0.000732375%
of the Trust per $1,000 face amount
THIS CERTIFIES THAT ____________________, for value received, is the
registered owner of a $________ ( dollars) Fractional Undivided Interest
in the Continental Airlines Pass Through Trust 1998-1C-O (the "TRUST") created
by Wilmington Trust Company, as trustee (the "TRUSTEE"), pursuant to a Pass
Through Trust Agreement, dated as of September 25, 1997 (the "BASIC AGREEMENT"),
________________
* This legend to appear on Book-Entry Certificates to be deposited with the
Depository Trust Company.
between the Trustee and Continental Airlines, Inc., a Delaware corporation (the
"Company"), as supplemented by Trust Supplement No. 1998-1C-O thereto, dated as
of February 20, 1998 (the "Trust Supplement" and, together with the Basic
Agreement, the "AGREEMENT"), between the Trustee and the Company, a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is one of the duly
authorized Certificates designated as "6.541% Continental Airlines Pass Through
Certificates, Series 1998-1C-O" (herein called the "CERTIFICATES"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement. By virtue of its acceptance hereof, the holder of
this Certificate (the "CERTIFICATEHOLDER" and, together with all other holders
of Certificates issued by the Trust, the "CERTIFICATEHOLDERS") assents to and
agrees to be bound by the provisions of the Agreement and the Intercreditor
Agreement. The property of the Trust includes certain Equipment Notes and all
rights of the Trust to receive payments under the Intercreditor Agreement and
any Liquidity Facilities (the "TRUST PROPERTY"). Each issue of the Equipment
Notes is secured by, among other things, a security interest in an Aircraft
leased to or owned by the Company.
The Certificates represent Fractional Undivided Interests in the Trust
and the Trust Property and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each March 15 and September 15 (a "REGULAR DISTRIBUTION DATE")
commencing March 15, 1998, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without presentation or surrender of this
Certificate or the making of any notation hereon, except that with respect to
Certificates registered on the Record Date in the name of a Clearing Agency (or
its nominee), such distribution shall be made by wire transfer. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency of the Trustee specified in such
notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
Under certain circumstances set forth in Section 7.01 of the Trust
Supplement, all of the Trustee's right, title and interest to the Trust Property
may be assigned, transferred and delivered to the Related Trustee of the Related
Trust pursuant to the Assignment and Assumption Agreement. Upon the
effectiveness of such Assignment and Assumption Agreement (the "Transfer"), the
Trust shall be terminated, the Certificateholders shall receive beneficial
interests in the Related Trust in exchange for their interests in the Trust
equal to their respective beneficial interests in the Trust, the Certificates
representing Fractional Undivided Interests in the Trust shall be deemed for all
purposes of the Agreement and the Related Pass Through Trust Agreement to be
certificates representing the same fractional undivided interests in the Related
Trust and its trust property. Each Certificateholder, by its acceptance of this
Certificate or a beneficial interest herein, agrees to be bound by the
Assignment and Assumption Agreement and subject to the terms of the Related Pass
Through Trust Agreement as a Certificateholder thereunder. From and after the
Transfer, unless and to the extent the context otherwise requires, references
herein to the Trust, the Agreement and the Trustee shall constitute references
to the Related Trust, the Related Pass Through Trust Agreement and trustee of
the Related Trust, respectively.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or an interest
herein are exempt from the prohibited transaction restrictions of ERISA and the
Code pursuant to one or more prohibited transaction statutory or administrative
exemptions.
THE AGREEMENT AND, UNTIL THE TRANSFER, THIS CERTIFICATE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. THE RELATED PASS THROUGH TRUST
AGREEMENT AND, FROM AND AFTER THE TRANSFER, THIS CERTIFICATE SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
CONTINENTAL AIRLINES PASS THROUGH
TRUST 1998-1C-O
By: WILMINGTON TRUST COMPANY,
as Trustee
By:____________________________
Name:
Title:
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
EXHIBIT B
---------
[DTC Letter of Representations]
EXHIBIT C
---------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Continental Airlines Pass Through Trust 1998-1C
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ____________, 199_ (the
"ASSIGNMENT AGREEMENT"), between Wilmington Trust Company, a Delaware banking
corporation ("WTC"), not in its individual capacity except as expressly provided
herein, but solely as trustee under the Pass Through Trust Agreement dated as of
September 25, 1997 (as amended or modified from time to time, the "BASIC
AGREEMENT"), as supplemented by the Trust Supplement No. 1998-1C-O dated
February 20, 1998 (the "TRUST SUPPLEMENT" and together with the Basic Agreement,
the "AGREEMENT") in respect of the Continental Airlines Pass Through Trust
1998-1C-O (the "ASSIGNOR"), and Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity except as expressly provided herein,
but solely as trustee under the Basic Agreement as supplemented by the Trust
Supplement No. 1998-1C-S dated February 20, 1998 (the "NEW SUPPLEMENT", and,
together with the Basic Agreement, the "NEW AGREEMENT") in respect of the
Continental Airlines Pass Through Trust 1998-1C-S (the "ASSIGNEE").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to effect on the date hereof (the
"TRANSFER DATE") (a) the transfer by the Assignor to the Assignee of all of the
right, title and interest of the Assignor in, under and with respect to, among
other things, the Trust Property and each of the documents listed in Schedule I
hereto (the "SCHEDULED DOCUMENTS") and (b) the assumption by the Assignee of the
obligations of the Assignor (i) under the Scheduled Documents and (ii) in
respect of the Applicable Certificates issued under the Agreement; and
WHEREAS, the Scheduled Documents permit such transfer upon
satisfaction of certain conditions heretofore or concurrently herewith being
complied with;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto do hereby agree as
follows (capitalized terms used herein without definition having the meaning
ascribed thereto in the Agreement):
1. ASSIGNMENT. The Assignor does hereby sell, assign, convey, transfer
and set over unto the Assignee as of the Transfer Date all of its present and
future right, title and interest in, under and with respect to the Trust
Property and the Scheduled Documents and each other contract, agreement,
document or instrument relating to the Trust Property or the Scheduled Documents
(such other contracts, agreements, documents or instruments, together with the
Scheduled Documents, to be referred to as the "ASSIGNED DOCUMENTS"), and any
proceeds therefrom, together with all documents and instruments evidencing any
of such right, title and interest.
2. ASSUMPTION. The Assignee hereby assumes for the benefit of the
Assignor and each of the parties listed in Schedule II hereto (collectively, the
"BENEFICIARIES") all of the duties and obligations of the Assignor, whenever
accrued, pursuant to the Assigned Documents and hereby confirms that it shall be
deemed a party to each of the Assigned Documents to which the Assignor is a
party and shall be bound by all the terms thereof (including the agreements and
obligations of the Assignor set forth therein) as if therein named as the
Assignor. Further, the Assignee hereby assumes for the benefit of the Assignor
and the Beneficiaries all of the duties and obligations of the Assignor under
the Outstanding Applicable Certificates and hereby confirms that the Applicable
Certificates representing Fractional Undivided Interests under the Agreement
shall be deemed for all purposes of the Agreement and the New Agreement to be
certificates representing the same fractional undivided interests under the New
Agreement equal to their respective beneficial interests in the trust created
under the Agreement.
3. EFFECTIVENESS. This Assignment Agreement shall be effective upon
the execution and delivery hereof by the parties hereto, and each Applicable
Certificateholder, by its acceptance of its Applicable Certificate or a
beneficial interest therein, agrees to be bound by the terms of this Assignment
Agreement.
4. PAYMENTS. The Assignor hereby covenants and agrees to pay over to
the Assignee, if and when received following the Transfer Date, any amounts
(including any sums payable as interest in respect thereof) paid to or for the
benefit of the Assignor that, under Section 1 hereof, belong to the Assignee.
5. FURTHER ASSURANCES. The Assignor shall, at any time and from time
to time, upon the request of the Assignee, promptly and duly execute and deliver
any and all such further instruments and documents and take such further action
as the Assignee may reasonably request to obtain the full benefits of this
Assignment Agreement and of the right and powers herein granted. The Assignor
agrees to deliver any Applicable Certificates, and all Trust Property, if any,
then in the physical possession of the Assignor, to the Assignee.
6. REPRESENTATIONS AND WARRANTIES. (a) The Assignee represents and
warrants to the Assignor and each of the Beneficiaries that:
(i) it has all requisite power and authority and legal right to enter
into and carry out the transactions contemplated hereby and to carry out
and perform the obligations of the "Pass Through Trustee" under the
Assigned Documents;
(ii) on and as of the date hereof, the representations and warranties
of the Assignee set forth in Section 7.15 of the Basic Agreement and
Section 5.04 of the New Supplement are true and correct.
(b) The Assignor represents and warrants to the Assignee that:
(i) it is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has the full trust power,
authority and legal right under the laws of the State of Delaware and the
United States pertaining to its trust and fiduciary powers to execute and
deliver this Assignment Agreement;
(ii) the execution and delivery by it of this Assignment Agreement and
the performance by it of its obligations hereunder have been duly
authorized by it and will not violate its articles of association or
by-laws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it is bound; and
(iii) this Assignment Agreement constitutes the legal, valid and
binding obligations of it enforceable against it in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
of creditors generally and by general principles of equity, whether
considered in a proceeding at law or in equity.
7. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
8. COUNTERPARTS. This Assignment Agreement may be executed in any
number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by both
parties so long as each party shall sign at least one counterpart.
9. THIRD PARTY BENEFICIARIES. The Assignee hereby agrees, for the
benefit of the Beneficiaries, that its representations, warranties and covenants
contained herein are also intended to be for the benefit of each Beneficiary,
and each Beneficiary shall be deemed to be an express third party beneficiary
with respect thereto, entitled to enforce directly and in its own name any
rights or claims it may have against such party as such beneficiary.
IN WITNESS WHEREOF, the parties hereto, through their respective
officers thereunto duly authorized, have duly executed this Assignment Agreement
as of the day and year first above written.
ASSIGNOR:
WILMINGTON TRUST COMPANY, not in
its individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1998-1C-O
By:________________________________
Title:
ASSIGNEE:
WILMINGTON TRUST COMPANY, not in
its individual capacity except as
expressly provided herein, but
solely as trustee under the Pass
Through Trust Agreement and Trust
Supplement in respect of the
Continental Airlines Pass Through
Trust 1998-1C-S
By:________________________________
Title:
Schedule I
Schedule of Assigned Documents
(1) Intercreditor Agreement dated as of February 20, 1998 among the
Trustee, the Other Trustees, the Liquidity Providers, the liquidity provider, if
any, relating to the Certificates issued under (and as defined in) each of the
Other Agreements and the Subordination Agent.
(2) Escrow and Paying Agent Agreement (Class C) dated as of February
20, 1998 among the Escrow Agent, the Underwriters, the Trustee and the Paying
Agent.
(3) Note Purchase Agreement dated as of February 20, 1998 among the
Company, the Trustee, the Other Trustees, the Depositary, the Escrow Agent, the
Paying Agent and the Subordination Agent.
(4) Deposit Agreement (Class C) dated as of February 20, 1998 between
the Escrow Agent and the Depositary.
(5) Each of the Operative Agreements (as defined in the Participation
Agreement for each Aircraft) in effect as of the Transfer Date.
Schedule II
Schedule of Beneficiaries
Wilmington Trust Company, not in its individual capacity but solely as
Subordination Agent
Wilmington Trust Company, not in its individual capacity but solely as Paying
Agent
AIG Matched Funding Corp., as Liquidity Providers
Continental Airlines, Inc.
Credit Suisse First Boston Corporation, as Underwriter
Morgan Stanley & Co. Incorporated, as Underwriter
Chase Securities Inc., as Underwriter
First Security Bank, National Association, as Escrow Agent
Each of the other parties to the Assigned Documents
TRUST SUPPLEMENT No. 1998-1C-S
Dated February 20, 1998
between
WILMINGTON TRUST COMPANY
as Trustee,
and
CONTINENTAL AIRLINES, INC.
to
PASS THROUGH TRUST AGREEMENT
Dated as of September 25, 1997
$136,542,000
Continental Airlines Pass Through Trust 1998-1C-S
6.541% Continental Airlines
Pass Through Certificates,
Series 1998-1C-S
This Trust Supplement No. 1998-1C-S, dated as of February 20, 1998
(herein called the "TRUST SUPPLEMENT"), between Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), and Wilmington Trust Company (the
"TRUSTEE"), to the Pass Through Trust Agreement, dated as of September 25, 1997,
between the Company and the Trustee (the "BASIC AGREEMENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified in the
Basic Agreement) which may be issued thereunder, has heretofore been executed
and delivered;
WHEREAS, the Company has obtained commitments from Boeing for the
delivery of certain Aircraft;
WHEREAS, as of the Transfer Date (as defined below), the Company will
have financed the acquisition of all or a portion of such Aircraft either (i)
through separate leveraged lease transactions, in which case the Company leases
such Aircraft (collectively, the "LEASED AIRCRAFT") or (ii) through separate
secured loan transactions, in which case the Company owns such Aircraft
(collectively, the "OWNED AIRCRAFT");
WHEREAS, as of the Transfer Date in the case of each Leased Aircraft,
each Owner Trustee, acting on behalf of the corresponding Owner Participant,
will have issued pursuant to an Indenture, on a non-recourse basis, Equipment
Notes in order to finance a portion of its purchase price of such Leased
Aircraft;
WHEREAS, as of the Transfer Date, in the case of each Owned Aircraft,
the Company will have issued pursuant to an Indenture, on a recourse basis,
Equipment Notes to finance a portion of the purchase price of such Owned
Aircraft;
WHEREAS, as of the Transfer Date, the Related Trustee will assign,
transfer and deliver all of such trustee's right, title and interest to the
trust property held by the Related Trustee to the Trustee pursuant to the
Assignment and Assumption Agreement (as defined below);
WHEREAS, the Trustee, effective only, but automatically, upon
execution and delivery of the Assignment and Assumption Agreement, will be
deemed to have declared the creation of the Continental Airlines Pass Through
Trust 1998-1C-S (the "APPLICABLE TRUST") for the benefit of the Applicable
Certificateholders, and each Holder of Applicable Certificates outstanding as of
the Transfer Date, as the grantors of the Applicable Trust, by their respective
acceptances of such Applicable Certificates, will join in the creation of this
Applicable Trust with the Trustee;
WHEREAS, all Applicable Certificates deemed issued by the Applicable
Trust will evidence fractional undivided interests in the Applicable Trust and
will convey no rights, benefits or interests in respect of any property other
than the Trust Property except for those Applicable Certificates to which an
Escrow Receipt (as defined below) has been affixed;
WHEREAS, upon the execution and delivery of the Assignment and
Assumption Agreement, all of the conditions and requirements necessary to make
this Trust Supplement, when duly executed and delivered, a valid, binding and
legal instrument in accordance with its terms and for the purposes herein
expressed, have been done, performed and fulfilled, and the execution and
delivery of this Trust Supplement in the form and with the terms hereof have
been in all respects duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
ARTICLE I
THE CERTIFICATES
Section 1.01. THE CERTIFICATES. The Applicable Certificates shall be
known as "6.541% Continental Airlines Pass Through Certificates, Series
1998-1C-S". Each Applicable Certificate represents a fractional undivided
interest in the Applicable Trust created hereby. The Applicable Certificates
shall be the only instruments evidencing a fractional undivided interest in the
Applicable Trust.
The terms and conditions applicable to the Applicable Certificates are
as follows:
(a) The aggregate principal amount of the Applicable Certificates that
shall be initially deemed issued under the Agreement shall be equal to the
aggregate principal amount of "Outstanding" pass through certificates
representing fractional undivided interests in the Related Trust on the
Transfer Date.
(b) The Regular Distribution Dates with respect to any payment of
Scheduled Payments means March 15 and September 15 of each year, commencing
on March 15, 1998, until payment of all of the Scheduled Payments to be
made under the Equipment Notes has been made.
(c) The Special Distribution Dates with respect to the Applicable
Certificates means any Business Day on which a Special Payment is to be
distributed pursuant to the Agreement.
(d) At the Escrow Agent's request under the Escrow Agreement, the
Trustee shall affix the corresponding Escrow Receipt to each Applicable
Certificate. In any event, any transfer or exchange of any Applicable
Certificate shall also effect a transfer or exchange of the related Escrow
Receipt. Prior to the Final Withdrawal Date, no transfer or exchange of any
Applicable Certificate shall be permitted unless the corresponding Escrow
Receipt is attached thereto and also is so transferred or exchanged. By
acceptance of any Applicable Certificate to which an Escrow Receipt is
attached, each Holder of such an Applicable Certificate acknowledges and
accepts the restrictions on transfer of the Escrow Receipt set forth herein
and in the Escrow Agreement.
(e) (i) The Applicable Certificates shall be in the form attached as
Exhibit A to the Related Pass Through Trust Supplement, with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Related Pass Through Trust Agreement or
this Agreement, as the case may be, or as the Trustee may deem appropriate,
to reflect the fact that the Applicable Certificates are being issued under
the Agreement as opposed to under the Related Pass Through Trust Agreement.
Any Person acquiring or accepting an Applicable Certificate, by its
acceptance of such Applicable Certificate or an interest therein will, by
such acquisition or acceptance, be deemed to represent and warrant to and
for the benefit of each Owner Participant and the Company that either (i)
the assets of an employee benefit plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or of a plan
subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), have not been used to purchase Applicable Certificates or an
interest therein or (ii) the purchase and holding of Applicable
Certificates or an interest therein is exempt from the prohibited
transaction restrictions of ERISA and the Code pursuant to one or more
prohibited transaction statutory or administrative exemptions.
(ii) The Applicable Certificates shall be Book-Entry Certificates
and shall be subject to the conditions set forth in the Letter of
Representations between the Company and the Clearing Agency attached as
Exhibit B to the Related Pass Through Trust Supplement.
(f) The Applicable Certificates are subject to the Intercreditor
Agreement, the Deposit Agreement and the Escrow Agreement.
(g) The Applicable Certificates are entitled to the benefits of the
Liquidity Facilities.
(h) The Responsible Party is the Company.
(i) The particular "sections of the Note Purchase Agreement," for
purposes of clause (3) of Section 7.07 of the Basic Agreement are Section
8.1 (with respect to Owned Aircraft) and Section 9.1 (with respect to
Leased Aircraft) of each Participation Agreement.
(j) The Equipment Notes to be acquired and held in the Applicable
Trust, and the related Aircraft and Note Documents, are described in the
Note Purchase Agreement.
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS. For all purposes of the Basic Agreement as
supplemented by this Trust Supplement, the following capitalized terms have the
following meanings (any term used herein which is defined in both this Trust
Supplement and the Basic Agreement shall have the meaning assigned thereto in
this Trust Supplement for purposes of the Basic Agreement as supplemented by
this Trust Supplement):
AGREEMENT: Means the Basic Agreement, as supplemented by this Trust
Supplement.
AIRCRAFT: Means each of the New Aircraft or Substitute Aircraft in
respect of which a Participation Agreement is entered into in accordance
with the Note Purchase Agreement.
APPLICABLE CERTIFICATE: Means any of the "Applicable Certificates"
issued by the Related Trust and that are "Outstanding" (as defined in the
Related Pass Through Trust Agreement) as of the Transfer Date (the
"TRANSFER DATE CERTIFICATES") and any Applicable Certificates issued in
exchange therefor or replacement thereof pursuant to this Agreement.
APPLICABLE CERTIFICATEHOLDER: Means the Person in whose name an
Applicable Certificate is registered on the Register for the Applicable
Certificates.
APPLICABLE TRUST: Has the meaning specified in the recitals hereto.
ASSIGNMENT AND ASSUMPTION AGREEMENT: Means the assignment and
assumption agreement substantially in the form of Exhibit C to the Related
Pass Through Trust Supplement executed and delivered in accordance with
Section 7.01 of the Related Trust Supplement.
BASIC AGREEMENT: Has the meaning specified in the first paragraph of
this Trust Supplement.
BOEING: Means The Boeing Company.
BUSINESS DAY: Means any day other than a Saturday, a Sunday or a day
on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, Salt Lake City, Utah or, so long as any
Applicable Certificate is Outstanding, the city and state in which the
Trustee or any Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds.
CLASS D CERTIFICATEHOLDERS: Has the meaning specified in Section
4.01(a)(iii) of this Trust Supplement.
COMPANY: Has the meaning specified in the first paragraph of this
Trust Supplement.
DELIVERY NOTICE: Has the meaning specified in the Note Purchase
Agreement.
DELIVERY PERIOD TERMINATION DATE: Has the meaning specified in the
Related Pass Through Trust Supplement.
DEPOSITS: Has the meaning specified in the Deposit Agreement.
DEPOSIT AGREEMENT: Means the Deposit Agreement dated as of February
20, 1998 relating to the Applicable Certificates between the Depositary and
the Escrow Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
DEPOSITARY: Means Credit Suisse First Boston, a Swiss bank, acting
through its New York branch.
DISTRIBUTION DATE: Means any Regular Distribution Date or Special
Distribution Date as the context requires.
ESCROW AGENT: Means, initially, First Security Bank, National
Association, and any replacement or successor therefor appointed in
accordance with the Escrow Agreement.
ESCROW AGREEMENT: Means the Escrow and Paying Agent Agreement dated as
of February 20, 1998 relating to the Applicable Certificates, among the
Escrow Agent, the Escrow Paying Agent, the Related Trustee (and after the
Transfer Date, the Trustee) and the Underwriters, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
ESCROW PAYING AGENT: Means the Person acting as paying agent under the
Escrow Agreement.
ESCROW RECEIPT: Means the receipt substantially in the form annexed to
the Escrow Agreement representing a fractional undivided interest in the
funds held in escrow thereunder.
FINAL MATURITY DATE: Means September 15, 2009.
FINAL WITHDRAWAL: Has the meaning specified in the Escrow Agreement.
FINAL WITHDRAWAL DATE: Has the meaning specified in the Escrow
Agreement.
INDENTURE: Means each of the separate trust indentures and mortgages
relating to the Aircraft, each as specified or described in a Delivery
Notice delivered pursuant to the Note Purchase Agreement or the related
Participation Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
INTERCREDITOR AGREEMENT: Means the Intercreditor Agreement dated as of
February 20, 1998 among the Related Trustee (and after the Transfer Date,
the Trustee), the Related Other Trustees (and after the Transfer Date, the
Other Trustees), the Liquidity Providers, the liquidity providers relating
to the Certificates issued under (and as defined in) each of the Related
Other Agreements, and Wilmington Trust Company, as Subordination Agent and
as trustee thereunder, as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
INVESTORS: Means the Underwriters together with all subsequent
beneficial owners of the Applicable Certificates.
LEASE: Means, with respect to each Leased Aircraft, the lease between
an Owner Trustee, as the lessor, and the Company, as the lessee, referred
to in the related Indenture, as such lease may be amended, supplemented or
otherwise modified in accordance with its terms.
LEASED AIRCRAFT: Has the meaning specified in the third recital to
this Trust Supplement.
LEASED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
LIQUIDITY FACILITY: Means, initially, the Revolving Credit Agreement
dated as of February 20, 1998 relating to the Applicable Certificates,
between the Liquidity Provider and Wilmington Trust Company, as the
Subordination Agent, as agent and trustee for the Applicable Trust, and,
from and after the replacement of such Agreement pursuant to the
Intercreditor Agreement, the replacement liquidity facility therefor, in
each case as amended, supplemented or otherwise modified from time to time
in accordance with their respective terms.
LIQUIDITY PROVIDER: Means, initially, AIG Matched Funding Corp., a
Delaware corporation, and any replacements or successors therefor appointed
in accordance with the Intercreditor Agreement.
NEW AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
NOTE DOCUMENTS: Means the Equipment Notes with respect to the
Applicable Certificates and, with respect to such any Equipment Note, (i)
the Indenture and the Participation Agreement relating to such Equipment
Note, and (ii) in the case of any Equipment Note related to a Leased
Aircraft, the Lease relating to such Leased Aircraft.
NOTE PURCHASE AGREEMENT: Means the Note Purchase Agreement dated as of
February 20, 1998 among the Related Trustee (and after the Transfer Date,
the Trustee), the Related Other Trustees (and after the Transfer Date, the
Other Trustees), the Company, the Escrow Agent, the Escrow Paying Agent and
the Subordination Agent, as the same may be amended, supplemented or
otherwise modified from time to time, in accordance with its terms.
OTHER AGREEMENTS: Means (i) the Basic Agreement as supplemented by
Trust Supplement No. 1998-1A-S dated the date hereof relating to
Continental Airlines Pass Through Trust 1998-1A-S and (ii) the Basic
Agreement as supplemented by Trust Supplement No. 1998-1B-S dated the date
hereof relating to Continental Airlines Pass Through Trust 1998-1B-S.
OTHER TRUSTEES: Means the trustees under the Other Agreements, and any
successor or other trustee appointed as provided therein.
OTHER TRUSTS: Means the Continental Airlines Pass Through Trust
1998-1A-S and Continental Airlines Pass Through Trust 1998-1B-S, created by
the Other Pass Through Trust Agreements.
OUTSTANDING: When used with respect to Applicable Certificates, means,
as of the date of determination, all Transfer Date Certificates, and all
other Applicable Certificates theretofore authenticated and delivered under
this Agreement, in each case except:
(i) Applicable Certificates theretofore canceled by the Registrar
or delivered to the Trustee or the Registrar for cancellation;
(ii) Applicable Certificates for which money in the full amount
required to make the final distribution with respect to such
Applicable Certificates pursuant to Section 11.01 of the Basic
Agreement has been theretofore deposited with the Trustee in trust for
the Applicable Certificateholders as provided in Section 4.01 of the
Basic Agreement pending distribution of such money to such Applicable
Certificateholders pursuant to payment of such final distribution; and
(iii) Applicable Certificates in exchange for or in lieu of which
other Applicable Certificates have been authenticated and delivered
pursuant to this Agreement.
OWNED AIRCRAFT: Has the meaning specified in the third recital to this
Trust Supplement.
OWNED AIRCRAFT INDENTURE: Has the meaning specified in the
Intercreditor Agreement.
OWNER PARTICIPANT: With respect to any Equipment Note relating to a
Leased Aircraft, means the "Owner Participant" as referred to in the
Indenture pursuant to which such Equipment Note is issued and any permitted
successor or assign of such Owner Participant; and OWNER PARTICIPANTS at
any time of determination means all of the Owner Participants thus referred
to in the Indentures.
OWNER TRUSTEE: With respect to any Equipment Note relating to a Leased
Aircraft, means the "Owner Trustee", as referred to in the Indenture
pursuant to which such Equipment Note is issued, not in its individual
capacity but solely as trustee; and OWNER TRUSTEES means all of the Owner
Trustees party to any of the Indentures.
PARTICIPATION AGREEMENT: Means each Participation Agreement to be
entered into by the Trustee pursuant to the Note Purchase Agreement, as the
same may be amended, supplemented or otherwise modified in accordance with
its terms.
POOL BALANCE: Means, as of any date, (i) the original aggregate face
amount of the "Applicable Certificates" as defined in the Related Pass
Through Trust Agreement, less (ii) the aggregate amount of all payments
made in respect of such Certificates or in respect of Deposits other than
payments made in respect of interest or premium thereon or reimbursement of
any costs or expenses incurred in connection therewith. The Pool Balance as
of any Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, payment of principal
on the Equipment Notes or payments with respect to other Trust Property and
the distribution thereof to be made on that date.
POOL FACTOR: Means, as of any Distribution Date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance by
(ii) the original aggregate face amount of the "Applicable Certificates" as
defined in the Related Pass Through Trust Agreement. The Pool Factor as of
any Distribution Date shall be computed after giving effect to any special
distribution with respect to unused Deposits, payment of principal on the
Equipment Notes or payments with respect to other Trust Property and the
distribution thereof to be made on that date.
PROSPECTUS SUPPLEMENT: Means the Prospectus Supplement dated February
11, 1998 relating to the offering of the Certificates.
RELATED OTHER PASS THROUGH TRUST AGREEMENTS: Means the "Other
Agreements" as defined in the Related Pass Through Trust Agreement.
RELATED OTHER TRUSTEES: Means the "Other Trustees" as defined in the
Related Pass Through Trust Agreement.
RELATED OTHER TRUSTS: Means the "Other Trusts" as defined in the
Related Pass Through Trust Agreement.
RELATED PASS THROUGH TRUST AGREEMENT: Means the Basic Agreement as
supplemented by the Trust Supplement No. 1998-1C-O dated the date hereof
(the "RELATED PASS THROUGH TRUST SUPPLEMENT"), relating to the Continental
Airlines Pass Through Trust 1998-1C-O and entered into by the Company and
the Trustee, as amended, supplemented or otherwise modified from time to
time in accordance with its terms.
RELATED TRUST: Means the Continental Pass Through Trust 1998-1C-O,
formed under the Related Pass Through Trust Agreement.
RELATED TRUSTEE: Means the trustee under the Related Pass Through
Trust Agreement.
SPECIAL PAYMENT: Means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate
(as defined in each Leased Aircraft Indenture) or Collateral (as defined in
each owned Aircraft Indenture) or any Special Redemption Premium.
SPECIAL REDEMPTION PREMIUM: Means the premium payable by the Company
in respect of the Final Withdrawal pursuant to the Note Purchase Agreement.
SUBSTITUTE AIRCRAFT: Has the meaning specified in the Note Purchase
Agreement.
TRANSFER DATE: Means the moment of execution and delivery of the
Assignment and Assumption Agreement by each of the parties thereto.
TRANSFER DATE CERTIFICATES: Has the meaning specified in the
definition of "Applicable Certificates".
TRIGGERING EVENT: Has the meaning assigned to such term in the
Intercreditor Agreement.
TRUST PROPERTY: Means (i) subject to the Intercreditor Agreement, the
Equipment Notes held as the property of the Applicable Trust, all monies at
any time paid thereon and all monies due and to become due thereunder, (ii)
funds from time to time deposited in the Certificate Account and the
Special Payments Account and, subject to the Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI of the Basic
Agreement of any Equipment Note and (iii) all rights of the Trust and the
Trustee, on behalf of the Applicable Trust, under the Intercreditor
Agreement, the Escrow Agreement, the Note Purchase Agreement and the
Liquidity Facilities, including, without limitation, all rights to receive
certain payments thereunder, and all monies paid to the Trustee on behalf
of the Applicable Trust pursuant to the Intercreditor Agreement or the
Liquidity Facilities, PROVIDED that rights with respect to the Deposits or
under the Escrow Agreement, will not constitute Trust Property.
TRUST SUPPLEMENT: Has the meaning specified in the first paragraph of
this trust supplement.
UNDERWRITERS: Means, collectively, Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated and Chase Securities Inc.
UNDERWRITING AGREEMENT: Means the Underwriting Agreement dated
February 11, 1998 among the Underwriters, the Company and the Depositary,
as the same may be amended, supplemented or otherwise modified from time to
time in accordance with its terms.
ARTICLE III
DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS
Section 3.01. AMENDMENTS TO ARTICLE IV OF THE BASIC AGREEMENT. Article
IV of the Basic Agreement shall be amended as follows:
(a) The following sentence shall be inserted in Section 4.02(c) of the
Basic Agreement following the fourth sentence thereof:
In the event of the payment of a Special Redemption Premium by
the Company to the Trustee under the Note Purchase Agreement, the
notice provided for in this Section 4.02(c) shall be mailed, together
with the notice by the Escrow Paying Agent under Section 2.06 of the
Escrow Agreement, not less than 15 days prior to the Special
Distribution Date for such amount, which Special Distribution Date
shall be the Final Withdrawal Date.
(b) The following sentence shall replace in its entirety the last
sentence of the first paragraph of Section 4.02(c) of the Basic Agreement:
If the amount of (i) premium, if any, payable upon the redemption
or purchase of an Equipment Note or (ii) the Special Redemption
Premium, if any, 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.
Section 3.02. STATEMENTS TO APPLICABLE CERTIFICATEHOLDERS. (a) On each
Distribution Date, the Trustee will include with each distribution to Applicable
Certificateholders of a Scheduled Payment or Special Payment, as the case may
be, a statement setting forth the information provided below (in the case of a
Special Payment, including any Special Redemption Premium, reflecting in part
the information provided by the Escrow Paying Agent under the Escrow Agreement).
Such statement shall set forth (per $1,000 face amount Applicable Certificate as
to (ii), (iii), (iv) and (v) below) the following information:
(i) the aggregate amount of funds distributed on such Distribution
Date under the Agreement and under the Escrow Agreement, indicating the
amount allocable to each source;
(ii) the amount of such distribution under the Agreement allocable to
principal and the amount allocable to premium (including the Special
Redemption Premium), if any;
(iii) the amount of such distribution under the Agreement allocable to
interest;
(iv) the amount of such distribution under the Escrow Agreement
allocable to interest;
(v) the amount of such distribution under the Escrow Agreement
allocable to unused Deposits, if any; and
(vi) the Pool Balance and the Pool Factor.
With respect to the Applicable Certificates registered in the name of
a Clearing Agency, on the Record Date prior to each Distribution Date, the
Trustee will request from such Clearing Agency a securities position listing
setting forth the names of all Clearing Agency Participants reflected on such
Clearing Agency's books as holding interests in the Applicable Certificates on
such Record Date. On each Distribution Date, the Trustee will mail to each such
Clearing Agency Participant the statement described above and will make
available additional copies as requested by such Clearing Agency Participant for
forwarding to holders of interests in the Applicable Certificates.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was an
Applicable Certificateholder of record a statement containing the sum of the
amounts determined pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) and
(a)(v) above for such calendar year or, in the event such Person was an
Applicable Certificateholder of record during a portion of such calendar year,
for such portion of such year, and such other items as are readily available to
the Trustee and which an Applicable Certificateholder shall reasonably request
as necessary for the purpose of such Applicable Certificateholder's preparation
of its federal income tax returns. Such statement and such other items shall be
prepared on the basis of information supplied to the Trustee by the Clearing
Agency Participants and shall be delivered by the Trustee to such Clearing
Agency Participants to be available for forwarding by such Clearing Agency
Participants to the holders of interests in the Applicable Certificates in the
manner described in Section 3.02(a) of this Trust Supplement.
(c) Promptly following (i) the Transfer Date, if there has been any
change in the information set forth in clauses (x), (y) and (z) below from that
set forth in page S-52 of the Prospectus Supplement, and (ii) any early
redemption or purchase of, or any default in the payment of principal or
interest in respect of, any of the Equipment Notes held in the Applicable Trust,
or any Final Withdrawal, the Trustee shall furnish to Certificateholders of
record on such date a statement setting forth (x) the expected Pool Balances for
each subsequent Regular Distribution Date following the Delivery Period
Termination Date, (y) the related Pool Factors for such Regular Distribution
Dates and (z) the expected principal distribution schedule of the Equipment
Notes, in the aggregate, held as Trust Property at the date of such notice. With
respect to the Applicable Certificates registered in the name of a Clearing
Agency, on the Transfer Date, the Trustee will request from such Clearing Agency
a securities position listing setting forth the names of all Clearing Agency
Participants reflected on such Clearing Agency's books as holding interests in
the "Applicable Certificates" (as defined in the Related Pass Through Trust
Agreement) on such date. The Trustee will mail to each such Clearing Agency
Participant the statement described above and will make available additional
copies as requested by such Clearing Agency Participant for forwarding to
holders of interests in the Applicable Certificates.
(d) This Section 3.02 supersedes and replaces Section 4.03 of the
Basic Agreement.
ARTICLE IV
DEFAULT
Section 4.01. PURCHASE RIGHTS OF CERTIFICATEHOLDERS.
(a) At any time after the occurrence and during the continuance of a
Triggering Event, each Applicable Certificateholder shall have the right (which
shall not expire upon any purchase of the Class A Certificates pursuant to the
Class B Trust Agreement) to purchase, for the purchase prices set forth in the
Class A Trust Agreement and the Class B Trust Agreement, respectively, all, but
not less than all, of the Class A Certificates and the Class B Certificates upon
ten days' written notice to the Class A Trustee, the Class B Trustee and each
other Applicable Certificateholder, provided that (i) if prior to the end of
such ten-day period any other Applicable Certificateholder notifies such
purchasing Applicable Certificateholder that such other Applicable
Certificateholder wants to participate in such purchase, then such other
Applicable Certificateholder may join with the purchasing Applicable
Certificateholder to purchase all, but not less than all, of the Class A
Certificates and the Class B Certificates pro rata based on the Fractional
Undivided Interest in the Applicable Trust held by each such Applicable
Certificateholder and (ii) if prior to the end of such ten-day period any other
Applicable Certificateholder fails to notify the purchasing Applicable
Certificateholder of such other Applicable Certificateholder's desire to
participate in such a purchase, then such other Applicable Certificateholder
shall lose its right to purchase the Class A Certificates and the Class B
Certificates pursuant to this Section 4.01(a); and
(b) By acceptance of its Applicable Certificate, each Applicable
Certificateholder agrees that at any time after the occurrence and during the
continuation of a Triggering Event, each holder of a Class D Certificate (a
"CLASS D CERTIFICATEHOLDER") shall have the right (which shall not expire upon
any purchase of the Class A Certificates pursuant to the Class B Trust Agreement
or any purchase of the Class A Certificates and the Class B Certificates
pursuant to clause (a) above) to purchase all, but not less than all, of the
Applicable Certificates, the Class A Certificates and the Class B Certificates
upon ten days' written notice to the Trustee, the Class A Trustee, the Class B
Trustee and each other Class D Certificateholder, PROVIDED that (A) if prior to
the end of such ten-day period any other Class D Certificateholder notifies such
purchasing Class D Certificateholder that such other Class D Certificateholder
wants to participate in such purchase, then such other Class D Certificateholder
may join with the purchasing Class D Certificateholder to purchase all, but not
less than all, of the Applicable Certificates, the Class A Certificates and the
Class B Certificates pro rata based on the Fractional Undivided Interest in the
Class D Trust held by each such Class D Certificateholder and (B) if prior to
the end of such ten-day period any other Class D Certificateholder fails to
notify the purchasing Class D Certificateholder of such other Class D
Certificateholder's desire to participate in such a purchase, then such other
Class D Certificateholder shall lose its right to purchase the Applicable
Certificates pursuant to this Section 4.01(b).
The purchase price with respect to the Applicable Certificates shall
be equal to the Pool Balance of the Applicable Certificates, together with
accrued and unpaid interest thereon to the date of such purchase, without
premium, but including any other amounts then due and payable to the Applicable
Certificateholders under this Agreement, the Intercreditor Agreement, the Escrow
Agreement or any Note Document or on or in respect of the Applicable
Certificates; PROVIDED, HOWEVER, that (i) if such purchase occurs after the
record date specified in Section 2.03(b) of the Escrow Agreement relating to the
distribution of unused Deposits and accrued and unpaid interest thereunder, such
purchase price shall be reduced by the aggregate amount of unused Deposits and
interest to be distributed under the Escrow Agreement (which deducted amounts
shall remain distributable to, and may be retained by, the Applicable
Certificateholder as of such record date) and (ii) if such purchase occurs after
a Record Date, such purchase price shall be reduced by the amount to be
distributed under this Agreement on the related Distribution Date (which
deducted amounts shall remain distributable to, and may be retained by, the
Applicable Certificateholder as of such Record Date); PROVIDED FURTHER that no
such purchase of Applicable Certificates shall be effective unless the
purchaser(s) shall certify to the Trustee that contemporaneously with such
purchase, such purchaser(s) is purchasing, pursuant to the terms of this
Agreement and the Other Agreements, the Applicable Certificates, the Class A
Certificates and the Class B Certificates which are senior to the securities
held by such purchaser(s). Each payment of the purchase price of the Applicable
Certificates referred to in the first sentence hereof shall be made to an
account or accounts designated by the Trustee and each such purchase shall be
subject to the terms of this Section 4.01(b). Each Applicable Certificateholder
agrees by its acceptance of its Applicable Certificate that it will, subject to
Section 3.04 of the Basic Agreement, upon payment from such Class D
Certificateholder(s) of the purchase price set forth in the first sentence of
this paragraph, forthwith sell, assign, transfer and convey to the purchaser(s)
thereof (without recourse, representation or warranty of any kind except for its
own acts), all of the right, title, interest and obligation of such Applicable
Certificateholder in this Agreement, the Escrow Agreement, the Deposit
Agreement, the Intercreditor Agreement, the Liquidity Facilities, the Note
Documents and all Applicable Certificates and Escrow Receipts held by such
Applicable Certificateholder (subject to clauses (i) and (ii) in the first
sentence of this paragraph and excluding all right, title and interest under any
of the foregoing to the extent such right, title or interest is with respect to
an obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the purchaser shall assume
all of such Applicable Certificateholder's obligations under this Agreement, the
Escrow Agreement, the Deposit Agreement, the Intercreditor Agreement, the
Liquidity Facilities, the Note Documents and all such Applicable Certificates
and Escrow Receipts. The Applicable Certificates will be deemed to be purchased
on the date payment of the purchase price is made notwithstanding the failure of
the Applicable Certificateholders to deliver any Applicable Certificates and,
upon such a purchase, (i) the only rights of the Applicable Certificateholders
will be to deliver the Applicable Certificates to the purchaser(s) and receive
the purchase price for such Applicable Certificates and (ii) if the purchaser(s)
shall so request, such Applicable Certificateholder will comply with all the
provisions of Section 3.04 of the Basic Agreement to enable new Applicable
Certificates to be issued to the purchaser in such denominations as it shall
request. All charges and expenses in connection with the issuance of any such
new Certificates shall be borne by the purchaser thereof.
As used in this Section 4.01 and elsewhere in this Trust Supplement,
the terms "Class A Certificate", "Class A Trust Agreement", "Class A Trustee",
"Class B Certificate", "Class B Trust", "Class B Trust Agreement", "Class B
Trustee", "Class D Certificate" and "Class D Trust", shall have the respective
meanings assigned to such terms in the Intercreditor Agreement.
(c) This Section 4.01 supersedes and replaces Section 6.01(b) of the
Basic Agreement.
ARTICLE V
THE TRUSTEE
Section 5.01. ACQUISITION OF TRUST PROPERTY. (a) The Trustee is hereby
irrevocably authorized and directed to execute and deliver the Assignment and
Assumption Agreement on the date specified in Section 7.01 of the Related Pass
Through Trust Supplement, subject only to the satisfaction of the conditions set
forth in said Section 7.01. This Agreement (except only for the immediately
preceding sentence hereof, which is effective upon execution and delivery
hereof) shall become effective upon the execution and delivery of the Assignment
and Assumption Agreement by the Trustee and the Related Trustee, automatically
and without any further signature or action on the part of the Company and the
Trustee, and shall thereupon constitute the legal, valid and binding obligation
of the parties hereto enforceable against each of the parties hereto in
accordance with its terms. Upon such execution and delivery of the Assignment
and Assumption Agreement, the Related Trust shall be terminated, the Applicable
Certificateholders shall receive beneficial interests in the Applicable Trust in
exchange for their interests in the Related Trust equal to their respective
beneficial interests in the Related Trust and the "Outstanding" (as defined in
the Related Pass Through Trust Agreement) pass through certificates representing
fractional undivided interests in the Related Trust shall be deemed for all
purposes of this Agreement, without further signature or action of any party or
Certificateholder, to be Certificates representing the same Fractional Undivided
Interests in the Trust and Trust Property. By acceptance of its Applicable
Certificate, each Applicable Certificateholder consents to and ratifies such
assignment, transfer and delivery of the trust property of the Related Trust to
the Trustee upon the execution and delivery of the Assignment and Assumption
Agreement. The provisions of this Section 5.01(a) supersede and replace the
provisions of Section 2.02 of the Basic Agreement (which are inapplicable to the
Trust), and all provisions of the Basic Agreement relating to Postponed Notes or
Section 2.02 of the Basic Agreement shall not apply to the Applicable Trust.
(b) The Trustee, upon the execution and delivery of the Assignment and
Assumption Agreement, acknowledges its acceptance of all right, title and
interest in and to the Trust Property and declares that the Trustee holds and
will hold such right, title and interest for the benefit of all then present and
future Applicable Certificateholders, upon the trusts herein and in the Basic
Agreement set forth. By the acceptance of each Applicable Certificate issued to
it under the Related Pass Through Trust Agreement and deemed issued under this
Agreement, each Holder of any such Applicable Certificate as grantor of the
Applicable Trust thereby joins in the creation and declaration of the Applicable
Trust. The provisions of this Section 5.01(b) supersede and replace the
provisions of Section 2.03 of the Basic Agreement (which are inapplicable to the
Trust).
(c) The Trustee acknowledges its acceptance of all right, title and
interest in and to the Trust Property to be acquired pursuant to Section 5.01(b)
of this Trust Supplement, the Note Purchase Agreement and each Applicable
Participation Agreement, and declares that it holds and will hold such right,
title and interest for the benefit of all present and future Applicable
Certificateholders, upon the trusts set forth in this Agreement. By its
acceptance of an Applicable Certificate, each initial Applicable
Certificateholder, as a grantor of the Applicable Trust, joins with the Trustee
in the creation of the Applicable Trust. The provisions of this Section 5.01(c)
supersede and replace the provisions of Section 2.03 of the Basic Agreement.
Section 5.02. [Intentionally Omitted]
Section 5.03. THE TRUSTEE. (a) Subject to Section 5.04 of this Trust
Supplement and Section 7.15 of the Basic Agreement, the Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Trust Supplement, the Deposit Agreement, the Note Purchase
Agreement or the Escrow Agreement or the due execution hereof or thereof by the
Company or the other parties thereto (other than the Trustee), or for or in
respect of the recitals and statements contained herein or therein, all of which
recitals and statements are made solely by the Company, except that the Trustee
hereby represents and warrants that each of this Trust Supplement, the Basic
Agreement, each Applicable Certificate, the Intercreditor Agreement, the Note
Purchase Agreement and the Escrow Agreement has been executed and delivered by
one of its officers who is duly authorized to execute and deliver such document
on its behalf.
(b) Except as herein otherwise provided and except during the
continuance of an Event of Default in respect of the Applicable Trust created
hereby, no duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this Trust Supplement other
than as set forth in the Agreement, and this Trust Supplement is executed and
accepted on behalf of the Trustee, subject to all the terms and conditions set
forth in the Agreement as fully to all intents as if the same were herein set
forth at length.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants, on the Transfer Date, that:
(a) the Trustee has full power, authority and legal right to receive
the Trust Property assigned by the Related Trustee, assume the obligations
under, and perform, the Assignment and Assumption Agreement, this Trust
Supplement, the Intercreditor Agreement, the Escrow Agreement and the Note
Documents and has taken all necessary action to authorize such receipt,
assumption and performance by it of this Trust Supplement, the
Intercreditor Agreement, the Escrow Agreement and the Note Documents to
which it is a party;
(b) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents (i) will not violate
any provision of any United States federal law or the law of the state of
the United States where it is located governing the banking and trust
powers of the Trustee or any order, writ, judgment, or decree of any court,
arbitrator or governmental authority applicable to the Trustee or any of
its assets, (ii) will not violate any provision of the articles of
association or by-laws of the Trustee, and (iii) will not violate any
provision of, or constitute, with or without notice or lapse of time, a
default under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions of any
mortgage, indenture, contract, agreement or other undertaking to which it
is a party, which violation, default or lien could reasonably be expected
to have an adverse effect on the Trustee's performance or ability to
perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(c) the receipt of the Trust Property under the Assignment and
Assumption Agreement and the performance by the Trustee of the Assignment
and Assumption Agreement, this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents will not require the
authorization, consent, or approval of, the giving of notice to, the filing
or registration with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the state of the
United States where it is located regulating the banking and corporate
trust activities of the Trustee; and
(d) The Assignment and Assumption Agreement has been duly executed and
delivered by the Trustee and this Trust Supplement, the Intercreditor
Agreement, the Escrow Agreement and the Note Documents have been, or will
be, as applicable, duly executed and delivered by the Trustee and
constitute, or will constitute, as applicable, the legal, valid and binding
agreements of the Trustee, enforceable against it in accordance with their
respective terms; PROVIDED, however, that enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and (ii) general
principles of equity.
Section 5.05. TRUSTEE LIENS. The Trustee in its individual capacity
agrees, in addition to the agreements contained in Section 7.17 of the Basic
Agreement, that it will at its own cost and expense promptly take any action as
may be necessary to duly discharge and satisfy in full any Trustee's Liens on or
with respect to the Trust Property which is attributable to the Trustee in its
individual capacity and which is unrelated to the transactions contemplated by
the Intercreditor Agreement or the Note Purchase Agreement.
ARTICLE VI
ADDITIONAL AMENDMENT; SUPPLEMENTAL AGREEMENTS
Section 6.01. AMENDMENT OF SECTION 5.02 OF THE BASIC AGREEMENT.
Section 5.02 of the Basic Agreement shall be amended by (i) replacing the phrase
"of the Note Documents and of this Agreement" set forth in paragraph (b) thereof
with the phrase "of the Note Documents, of the Note Purchase Agreement and of
this Agreement" and (ii) replacing the phrase "of this Agreement and any Note
Document" set forth in the last paragraph of Section 5.02 with the phrase "of
this Agreement, the Note Purchase Agreement and any Note Document."
Section 6.02. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.01 of the Basic Agreement,
under the terms of, and subject to the limitations contained in, Section 9.01 of
the Basic Agreement, the Company may (but will not be required to), and the
Trustee (subject to Section 9.03 of the Basic Agreement) shall, at the Company's
request, at any time and from time to time, enter into one or more agreements
supplemental to the Escrow Agreement, the Note Purchase Agreement or the Deposit
Agreement, for any of the purposes set forth in clauses (1) through (9) of such
Section 9.01, except that clause (2) and (3) of such Section 9.01 shall be
deemed to include the Company's obligations under (in the case of clause (2)),
and the Company's rights and powers conferred by (in the case of clause (3)),
the Note Purchase Agreement, (b) clause (4) of such Section 9.01 shall be deemed
to include corrections or supplements to provisions of the Escrow Agreement, the
Note Purchase Agreement or the Deposit Agreement which may be defective or
inconsistent with any other provision of this Agreement or contained in any
agreement referred to in such clause (4) and the curing of any ambiguity or the
modification of any other provision with respect to matters or questions arising
under the Escrow Agreement, the Note Purchase Agreement or the Deposit Agreement
and (c) references in clauses (6) and (7) of such Section 9.01 to "any
Intercreditor Agreement or any Liquidity Facility" shall be deemed to refer to
"the Intercreditor Agreement, the Liquidity Facility, the Escrow Agreement, the
Note Purchase Agreement or the Deposit Agreement" and (ii) enter into one or
more agreements supplemental to this Agreement to provide for the formation of a
Class D Trust, the issuance of Class D Certificates, the purchase by the Class D
Trust of the Equipment Notes and other matters incident thereto or otherwise
contemplated by Section 2.01(b) of the Basic Agreement.
Section 6.03. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF APPLICABLE
CERTIFICATEHOLDERS. Without limitation of Section 9.02 of the Basic Agreement,
the provisions of Section 9.02 of the Basic Agreement shall apply to agreements
or amendments for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Escrow Agreement, the Deposit
Agreement or the Note Purchase Agreement to the extent applicable to the
Applicable Certificateholders approving such agreement or amendment or modifying
in any manner the rights and obligations of such Applicable Certificateholders
under the Escrow Agreement, the Deposit Agreement or the Note Purchase
Agreement; provided that the provisions of Section 9.02(1) of the Basic
Agreement shall be deemed to include reductions in any manner of, or delay in
the timing of, any receipt by the Applicable Certificateholders of payments upon
the Deposits.
ARTICLE VII
TERMINATION OF TRUST
Section 7.01. TERMINATION OF THE APPLICABLE TRUST. (a) The respective
obligations and responsibilities of the Company and the Trustee with respect to
the Applicable Trust shall terminate upon the distribution to all Applicable
Certificateholders and the Trustee of all amounts required to be distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the Trust Property; PROVIDED, HOWEVER, that in no event shall the Applicable
Trust continue beyond one hundred ten (110) years following the date of the
earliest execution of this Trust Supplement.
Notice of any termination, specifying the Distribution Date upon which
the Applicable Certificateholders may surrender their Applicable Certificates to
the Trustee for payment of the final distribution and cancellation, shall be
mailed promptly by the Trustee to Applicable Certificateholders not earlier than
the 60th day and not later than the 15th day next preceding such final
Distribution Date specifying (A) the Distribution Date upon which the proposed
final payment of the Applicable Certificates will be made upon presentation and
surrender of Applicable Certificates at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Applicable Certificates at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time such
notice is given to Applicable Certificateholders. Upon presentation and
surrender of the Applicable Certificates in accordance with such notice, the
Trustee shall cause to be distributed to Applicable Certificateholders such
final payments.
In the event that all of the Applicable Certificateholders shall not
surrender their Applicable Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Applicable Certificateholders to
surrender their Applicable Certificates for cancellation and receive the final
distribution with respect thereto. No additional interest shall accrue on the
Applicable Certificates after the Distribution Date specified in the first
written notice. In the event that any money held by the Trustee for the payment
of distributions on the Applicable Certificates shall remain unclaimed for two
years (or such lesser time as the Trustee shall be satisfied, after sixty days'
notice from the Company, is one month prior to the escheat period provided under
applicable law) after the final distribution date with respect thereto, the
Trustee shall pay to each Loan Trustee the appropriate amount of money relating
to such Loan Trustee and shall give written notice thereof to the related Owner
Trustees, the Owner Participants and the Company.
(b) The provisions of this Section 7.01 supersede and replace the
provisions of Section 11.01 of the Basic Agreement in its entirety.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. BASIC AGREEMENT RATIFIED. Except and so far as herein
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
SECTION 8.02. GOVERNING LAW. THIS AGREEMENT AND THE APPLICABLE
CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. THIS SECTION 8.02 SUPERSEDES AND REPLACES SECTION 12.05
OF THE BASIC AGREEMENT.
Section 8.03. EXECUTION IN COUNTERPARTS. This Trust Supplement may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 8.04. INTENTION OF PARTIES. The parties hereto intend that the
Applicable Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code of
1986, as amended, and not as a trust or association taxable as a corporation or
as a partnership. Each Applicable Certificateholder and Investor, by its
acceptance of its Applicable Certificate or a beneficial interest therein,
agrees to treat the Applicable Trust as a grantor trust for all U.S. federal,
state and local income tax purposes. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to further
such intent.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
CONTINENTAL AIRLINES, INC.
By:________________________________
Name: Gerald Laderman
Title: Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
EXECUTION
_________________________________________________________________
INTERCREDITOR AGREEMENT
Dated as of
February 20, 1998
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Continental Airlines Pass Through Trust 1998-1A,
Continental Airlines Pass Through Trust 1998-1B
and
Continental Airlines Pass Through Trust 1998-1C
AIG MATCHED FUNDING CORP.
as Class A Liquidity Provider,
as Class B Liquidity Provider
and
as Class C Liquidity Provider,
AND
WILMINGTON TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
_________________________________________________________________
TABLE OF CONTENTS
PAGE
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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................... 25
SECTION 2.2. Trust Accounts....................................... 26
SECTION 2.3. Deposits to the Collection Account
and Special Payments Account......................... 28
SECTION 2.4. Distributions of Special Payments.................... 28
SECTION 2.5. Designated Representatives........................... 31
SECTION 2.6. Controlling Party.................................... 32
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution....................... 34
SECTION 3.2. Distribution of Amounts on Deposit in
the Collection Account............................... 37
SECTION 3.3. Distribution of Amounts on Deposit
Following a Triggering Event......................... 38
SECTION 3.4. Other Payments....................................... 41
SECTION 3.5. Payments to the Trustees and the
Liquidity Providers.................................. 41
SECTION 3.6. Liquidity Facilities................................. 42
ARTICLE IV EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party................ 51
SECTION 4.2. Remedies Cumulative.................................. 52
SECTION 4.3. Discontinuance of Proceedings........................ 53
SECTION 4.4. Right of Certificateholders to Receive
Payments Not to Be Impaired.......................... 53
SECTION 4.5. Undertaking for Costs................................ 53
ARTICLE V DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or
Triggering Event..................................... 54
SECTION 5.2. Indemnification...................................... 54
SECTION 5.3. No Duties Except as Specified in
Intercreditor Agreement.............................. 55
SECTION 5.4. Notice from the Liquidity Providers and
Trustees............................................. 55
TABLE OF CONTENTS
PAGE
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ARTICLE VI THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and
Duties............................................... 55
SECTION 6.2. Absence of Duties.................................... 56
SECTION 6.3. No Representations or Warranties as to
Documents............................................ 56
SECTION 6.4. No Segregation of Monies; No Interest................ 56
SECTION 6.5. Reliance; Agents; Advice of Counsel.................. 56
SECTION 6.6. Capacity in Which Acting............................. 57
SECTION 6.7. Compensation......................................... 57
SECTION 6.8. May Become Certificateholder......................... 57
SECTION 6.9. Subordination Agent Required;
Eligibility.......................................... 58
SECTION 6.10. Money to Be Held in Trust............................ 58
ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification............................. 58
ARTICLE VIII SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent;
Appointment of Successor............................. 59
ARTICLE IX SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc............................. 60
SECTION 9.2. Subordination Agent Protected........................ 62
SECTION 9.3. Effect of Supplemental Agreements.................... 62
SECTION 9.4. Notice to Rating Agencies............................ 63
ARTICLE X MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement............... 63
SECTION 10.2. Intercreditor Agreement for Benefit of
Trustees, Liquidity Providers and
Subordination Agent.................................. 63
SECTION 10.3. Notices.............................................. 63
SECTION 10.4. Severability......................................... 64
SECTION 10.5. No Oral Modifications or Continuing
Waivers.............................................. 65
SECTION 10.6. Successors and Assigns............................... 65
SECTION 10.7. Headings............................................. 65
SECTION 10.8. Counterpart Form..................................... 65
SECTION 10.9. Subordination........................................ 65
SECTION 10.10. Governing Law........................................ 67
SECTION 10.11. Submission to Jurisdiction; Waiver of
Jury Trial; Waiver of Immunity....................... 67
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of February 20, 1998, among
WILMINGTON TRUST COMPANY, a Delaware corporation ("WTC"), not in its individual
capacity but solely as Trustee of each Trust (each as defined below); AIG
MATCHED FUNDING CORP., a corporation organized under the laws of the State of
Delaware, as Class A Liquidity Provider, as Class B Liquidity Provider and as
Class C Liquidity Provider; and WILMINGTON TRUST COMPANY, not in its individual
capacity except as expressly set forth herein, but solely as Subordination Agent
and trustee hereunder (in such capacity, together with any successor appointed
pursuant to Article VIII hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each Aircraft
that is owned by Continental at the time such Indenture is entered into (the
"OWNED AIRCRAFT"), Continental will issue on a recourse basis three series of
Equipment Notes to finance the purchase of such Aircraft, and (ii) in the case
of each Aircraft that is leased to Continental pursuant to a related Lease at
the time such Indenture is entered into (the "LEASED AIRCRAFT"), the related
Owner Trustee will issue on a nonrecourse basis three series of Equipment Notes
to finance the purchase of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust will acquire
Equipment Notes having an interest rate equal to the interest rate applicable to
the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single class of Certificates (a "CLASS") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters
propose to purchase the Certificates issued by each Trust in the aggregate face
amount set forth opposite the name of such Trust on Schedule I thereto on the
terms and subject to the conditions set forth therein;
WHEREAS, the Liquidity Provider proposes to enter into three separate
revolving credit agreements (each, a "LIQUIDITY FACILITY") with the
Subordination Agent, as agent for the Trustee of each Trust, respectively, for
the benefit of the Certificate holders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent, the
Trustees and the Liquidity Provider 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 Provider, by entering into
this Agreement, hereby acknowledge and agree to such terms of subordination and
the other provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"ACCELERATION" means, with respect to the amounts payable in respect
of the Equipment Notes issued under any Indenture, such amounts becoming
immediately due and payable by declaration or otherwise. "ACCELERATE",
"ACCELERATED" and "ACCELERATING" have meanings correlative to the foregoing.
"ADJUSTED EXPECTED DISTRIBUTIONS" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (x)
accrued and unpaid interest on such Certificates (excluding interest, if any,
payable with respect to the Deposits related to such Trust) and (y) the greater
of:
(A) the difference between (x) the Pool Balance of such Certificates
as of the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the original aggregate
face amount of the Certificates of such Trust) and (y) the Pool Balance of
such Certificates as of the Current Distribution Date calculated on the
basis that (i) the principal of the Non-Performing Equipment Notes held in
such Trust has been paid in full and such payments have been distributed to
the holders of such Certificates, (ii) the principal of the Performing
Equipment Notes held in such Trust has been paid when due (but without
giving effect to any Acceleration of Performing Equipment Notes) and such
payments have been distributed to the holders of such Certificates and
(iii) the principal of any Equipment Notes formerly held in such Trust that
have been sold pursuant to the terms hereof has been paid in full and such
payments have been distributed to the holders of such Certificates, but
without giving effect to any reduction in the Pool Balance as a result of
any distribution attributable to Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution Date is the
first Distribution Date, occurring after the initial issuance of the
Certificates of such Trust), and
(B) the amount of the excess, if any, of (i) the Pool Balance of such
Class of Certificates as of the immediately preceding Distribution Date
(or, if the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust), less the
amount of the Deposits for such Class of Certificates as of such preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate amount of the Deposits for such
Class of Certificates) other than any portion of such Deposits thereafter
used to acquire Equipment Notes pursuant to the Note Purchase Agreement,
over (ii) the Aggregate LTV Collateral Amount for such Class of
Certificates for the Current Distribution Date;
PROVIDED that, until the date of the initial LTV Appraisals, clause (B) shall
not apply.
For purposes of calculating Adjusted Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust that has not been distributed to the Certificateholders
of such Trust (other than such premium or a portion thereof applied to the
payment of interest on the Certificates of such Trust or the reduction of the
Pool Balance of such Trust) shall be added to the amount of Adjusted Expected
Distributions.
"ADVANCE", with respect to any Liquidity Facility, means any Advances
as defined in such Liquidity Facility.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For the purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such Person whether through the ownership of voting securities or by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AGGREGATE LTV COLLATERAL AMOUNT" for any Class of Certificates for
any Distribution Date means the sum of the applicable LTV Collateral Amounts for
each Leased Aircraft and Owned Aircraft, minus the Pool Balance for each Class
of Certificates, if any, senior to such Class, after giving effect to any
distribution of principal on such Distribution Date with respect to such senior
Class or Classes.
"AIRCRAFT" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"APPRAISAL" means a fair market value appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"APPRAISED CURRENT MARKET VALUE" of any Leased Aircraft or Owned
Aircraft means the lower of the average and the median of the three most recent
Appraisals of such Aircraft.
"APPRAISERS" means Aircraft Information Services, Inc., BK Associates,
Inc. and Morten Beyer and Agnew, Inc.
"ASSIGNMENT AND ASSUMPTION AGREEMENTS" means each of the Assignment
and Assumption Agreements to be executed among a Trustee and trustee of the
relevant Successor Trust in accordance with the relevant Trust Agreement, as the
same may be amended, modified or supplemented from time to time.
"AVAILABLE AMOUNT" means, with respect to any Liquidity Facility on
any drawing date, subject to the proviso contained in the first sentence of
Section 3.6(g) hereof, an amount equal to (a) the Stated Amount of such
Liquidity Facility at such time, LESS (b) the aggregate amount of each Interest
Drawing honored by the Liquidity Provider under such Liquidity Facility on or
prior to such date which has not been reimbursed or reinstated as of such date;
PROVIDED that, following a Downgrade Drawing, a Non-Extension Drawing or a Final
Drawing under such Liquidity Facility, the Available Amount of such Liquidity
Facility shall be zero.
"BASIC AGREEMENT" means the Pass Through Trust Agreement dated as of
September 25, 1997 between Continental and WTC, not in its individual capacity,
except as otherwise expressly provided therein, but solely as trustee.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Houston, Texas,
New York, New York, or, so long as any Certificate is outstanding, the city and
state in which any Trustee, the Subordination Agent or any Loan Trustee
maintains its Corporate Trust Office or receives and disburses funds, and that,
solely with respect to draws under any Liquidity Facility, also is a "Business
Day" as defined in such Liquidity Facility.
"CASH COLLATERAL ACCOUNT" means the Class A Cash Collateral Account,
the Class B Cash Collateral Account or the Class C Cash Collateral Account, as
applicable.
"CERTIFICATE" means a Class A Certificate, a Class B Certificate or a
Class C Certificate, as applicable.
"CERTIFICATEHOLDER" means any holder of one or more Certificates.
"CLASS" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"CLASS A CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class A Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or
3.6(i) shall be deposited.
"CLASS A CERTIFICATEHOLDER" means, at any time, any holder of one or
more Class A Certificates.
"CLASS A CERTIFICATES" means the certificates issued by the Class A
Trust, substantially in the form of Exhibit A to the Class A Trust Agreement,
and authenticated by the Class A Trustee, representing fractional undivided
interests in the Class A Trust, and any certificates issued in exchange therefor
or replacement thereof pursuant to the terms of the Class A Trust Agreement.
"CLASS A LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as agent
and trustee for the Class A Trustee, and the initial Class A Liquidity Provider,
and, from and after the replacement of either such agreement pursuant hereto,
the Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"CLASS A LIQUIDITY PROVIDER" means AIG Matched Funding Corp., together
with any Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class A Liquidity Facility pursuant to Section 3.6(e).
"CLASS A TRUST" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 1998-1A-O created and administered pursuant to the
Class A Trust Agreement and (ii) after the Transfer, the Continental Airlines
Pass Through Trust 1998-1A-S created and administered pursuant to the Class A
Trust Agreement.
"CLASS A TRUST AGREEMENT" means (i) prior to the Transfer, the Basic
Agreement, as supplemented by the Supplement No. 1998-1A-O thereto dated as of
the date hereof, governing the creation and administration of the Continental
Airlines Pass Through Trust 1998-1A-O and the issuance of the Class A
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms, and (ii) after the Transfer, the
Basic Agreement, as supplemented by the Supplement No. 1998-1A-S thereto,
governing the creation and administration of the Continental Airlines Pass
Through Trust 1998-1A-S and the issuance of the Class A Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS A TRUSTEE" means WTC, not in its individual capacity except as
expressly set forth in the Class A Trust Agreement, but solely as trustee under
the Class A Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"CLASS B CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class B Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or
3.6(i) shall be deposited.
"CLASS B CERTIFICATEHOLDER" means, at any time, any holder of one or
more Class B Certificates.
"CLASS B CERTIFICATES" means the certificates issued by the Class B
Trust, substantially in the form of Exhibit A to the Class B Trust Agreement,
and authenticated by the Class B Trustee, representing fractional undivided
interests in the Class B Trust, and any certificates issued in exchange therefor
or replacement thereof pursuant to the terms of the Class B Trust Agreement.
"CLASS B LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as agent
and trustee for the Class B Trustee, and the initial Class B Liquidity Provider,
and, from and after the replacement of either such Agreement pursuant hereto,
the Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"CLASS B LIQUIDITY PROVIDER" means AIG Matched Funding Corp., together
with any Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class B Liquidity Facility pursuant to Section 3.6(e).
"CLASS B TRUST" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 1998-1B-O created and administered pursuant to the
Class B Trust Agreement and (ii) after the Transfer, the Continental Airlines
Pass Through Trust 1998-1B-S created and administered pursuant to the Class B
Trust Agreement.
"CLASS B TRUST AGREEMENT" means (i) prior to the Transfer, the Basic
Agreement, as supplemented by the Supplement No. 1998-1B-O thereto dated as of
the date hereof, governing the creation and administration of the Continental
Airlines Pass Through Trust 1998-1B-O and the issuance of the Class B
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms, and (ii) after the Transfer, the
Basic Agreement, as supplemented by the Supplement No. 1998-1B-S thereto,
governing the creation and administration of the Continental Airlines Pass
Through Trust 1998-1B-S and the issuance of the Class B Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS B TRUSTEE" means WTC, not in its individual capacity except as
expressly set forth in the Class B Trust Agreement, but solely as trustee under
the Class B Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"CLASS C CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in
the name of the Subordination Agent and maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class C Liquidity Facility pursuant to Section 3.6(c),
3.6(d) or 3.6(i) shall be deposited.
"CLASS C CERTIFICATEHOLDER" means, at any time, any holder of one or
more Class C Certificates.
"CLASS C CERTIFICATES" means the certificates issued by the Class C
Trust, substantially in the form of Exhibit A to the Class C Trust Agreement,
and authenticated by the Class C Trustee, representing fractional undivided
interests in the Class C Trust, and any certificates issued in exchange therefor
or replacement thereof pursuant to the terms of the Class C Trust Agreement.
"CLASS C LIQUIDITY FACILITY" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as agent
and trustee for the Class C Trustee, and the initial Class C Liquidity Provider,
and, from and after the replacement of either such Agreement pursuant hereto,
the Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"CLASS C LIQUIDITY PROVIDER" means AIG Matched Funding Corp., together
with any Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class C Liquidity Facility pursuant to Section 3.6(e).
"CLASS C TRUST" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 1998-1C-O created and administered pursuant to the
Class C Trust Agreement and (ii) after the Transfer, the Continental Airlines
Pass Through Trust 1998-1C-S created and administered pursuant to the Class C
Trust Agreement.
"CLASS C TRUST AGREEMENT" means (i) prior to the Transfer, the Basic
Agreement, as supplemented by the Supplement No. 1998-1C-O thereto dated as of
the date hereof, governing the creation and administration of the Continental
Airlines Pass Through Trust 1998-1C-O and the issuance of the Class C
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms, and (ii) after the Transfer, the
Basic Agreement, as supplemented by the Supplement No. 1998-1C-S thereto,
governing the creation and administration of the Continental Airlines Pass
Through Trust 1998-1C-S and the issuance of the Class C Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS C TRUSTEE" means WTC, not in its individual capacity except as
expressly set forth in the Class C Trust Agreement, but solely as trustee under
the Class C Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"CLASS D CERTIFICATES" means any pass through certificates issued by
the Class D Trust representing fractional undivided interests in the Class D
Trust.
"CLASS D TRUST" means the Continental Airlines Pass Through Trust
1998-1D, if and when established.
"CLOSING DATE" means February 20, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"COLLECTION ACCOUNT" means the Eligible Deposit Account established by
the Subordination Agent pursuant to Section 2.2 which the Subordination Agent
shall make deposits in and withdrawals from in accordance with this Agreement.
"CONTINENTAL" means Continental Airlines, Inc., a Delaware
corporation, and its successors and assigns.
"CONTINENTAL BANKRUPTCY EVENT" means the occurrence and continuation
of any of the following:
(a) Continental shall consent to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a
substantial part of its property, or Continental shall admit in writing its
inability to pay its debts generally as they come due, or does not pay its
debts generally as they become due or shall make a general assignment for
the benefit of creditors, or Continental shall file a voluntary petition in
bankruptcy or a voluntary petition or an answer seeking reorganization,
liquidation or other relief in a case under any bankruptcy laws or other
insolvency laws (as in effect at such time) or an answer admitting the
material allegations of a petition filed against Continental in any such
case, or Continental shall seek relief by voluntary petition, answer or
consent, under the provisions of any other bankruptcy or other similar law
providing for the reorganization or winding-up of corporations (as in
effect at such time) or Continental shall seek an agreement, composition,
extension or adjustment with its creditors under such laws, or
Continental's board of directors shall adopt a resolution authorizing
corporate action in furtherance of any of the foregoing; or
(b) an order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of Continental, a
receiver, trustee or liquidator of Continental or of any substantial part
of its property, or any substantial part of the property of Continental
shall be sequestered, or granting any other relief in respect of
Continental as a debtor under any bankruptcy laws or other insolvency laws
(as in effect at such time), and any such order, judgment or decree of
appointment or sequestration shall remain in force undismissed, unstayed
and unvacated for a period of 60 days after the date of entry thereof; or
(c) a petition against Continental in a case under any bankruptcy laws
or other insolvency laws (as in effect at such time) is filed and not
withdrawn or dismissed within 60 days thereafter, or if, under the
provisions of any law providing for reorganization or winding-up of
corporations which may apply to Continental, any court of competent
jurisdiction assumes jurisdiction, custody or control of Continental or of
any substantial part of its property and such jurisdiction, custody or
control remains in force unrelinquished, unstayed and unterminated for a
period of 60 days.
"CONTINENTAL PROVISIONS" has the meaning specified in Section 9.1(a).
"CONTROLLING PARTY" means the Person entitled to act as such pursuant
to the terms of Section 2.6.
"CORPORATE TRUST OFFICE" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the city
at which, at any particular time, its corporate trust business shall be
principally administered.
"CURRENT DISTRIBUTION DATE" means a Distribution Date specified as a
reference date for calculating the Expected Distributions or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"DELIVERY PERIOD EXPIRY DATE" means the earlier of (a) January 31,
1999, or, if the Equipment Notes relating to all the New Aircraft (or Substitute
Aircraft in lieu thereof) have not been purchased by the Trusts on or prior to
such date due to any reason beyond the control of Continental and not occasioned
by Continental's fault or negligence, June 30, 1999 (PROVIDED that, if a labor
strike occurs at The Boeing Company on or prior to either or both of such dates
referred to in this clause (a), such date or dates on or following the
commencement of such strike shall be extended by adding thereto the number of
days that such strike continued in effect) and (b) the date on which Equipment
Notes with respect to all New Aircraft (or Substitute Aircraft in lieu thereof)
have been purchased by the Trusts in accordance with the Note Purchase
Agreement.
"DEPOSIT AGREEMENT" shall mean, with respect to any Class, the Deposit
Agreement pertaining to such Class dated the date hereof between the Escrow
Agent, and the Depositary, as the same may be amended, modified or supplemented
from time to time in accordance with the terms thereof.
"DEPOSITARY" means Credit Suisse First Boston, New York Branch, as
depositary under each Deposit Agreement.
"DEPOSITS" with respect to any Class, shall have the meaning set forth
in the Deposit Agreement pertaining to such Class.
"DESIGNATED REPRESENTATIVES" means the Subordination Agent
Representatives, the Trustee Representatives and the LP Representatives
identified under Section 2.5.
"DISTRIBUTION DATE" means a Regular Distribution Date or a Special
Distribution Date.
"DOLLARS" means United States dollars.
"DOWNGRADE DRAWING" has the meaning assigned to such term in Section
3.6(c).
"DOWNGRADED FACILITY" has the meaning assigned to such term in Section
3.6(c).
"DRAWING" means an Interest Drawing, a Final Drawing, a Non-Extension
Drawing or a Downgrade Drawing, as the case may be.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), having corporate trust powers
and acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution has a long-term unsecured debt rating
from each Rating Agency of at least A-3 or its equivalent. An Eligible Deposit
Account may be maintained with a Liquidity Provider so long as such Liquidity
Provider is an Eligible Institution; PROVIDED that such Liquidity Provider shall
have waived all rights of set-off and counterclaim with respect to such account;
and PROVIDED FURTHER that no Cash Collateral Account may be maintained with a
Liquidity Provider at any time Continental holds any participation in the
related Liquidity Facility unless written confirmation shall have been received
from each Rating Agency prior to such time to the effect that such maintenance
of the Cash Collateral Account with the Liquidity Provider will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"ELIGIBLE INSTITUTION" means (a) the corporate trust department of the
Subordination Agent or any Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any U.S. branch of a
foreign bank), which has a long-term unsecured debt rating from each Rating
Agency of at least A-3 or its equivalent; PROVIDED that a Liquidity Provider
shall not qualify as an Eligible Institution at any time Continental holds any
participation in the related Liquidity Facility unless written confirmation
shall have been received from each Rating Agency to the effect that such
Liquidity Provider's status as an Eligible Institution will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"ELIGIBLE INVESTMENTS" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than 90
days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt rating
issued by Moody's and S&P of at least A-1 and P-1, respectively, having
maturities no later than 90 days following the date of such investment or (c)
investments in negotiable certificates of deposit, time deposits, banker's
acceptances, commercial paper or other direct obligations of, or obligations
guaranteed by, commercial banks organized under the laws of the United States or
of any political subdivision thereof (or any U.S. branch of a foreign bank) with
issuer ratings of at least B/C by Thomson Bankwatch, having maturities no later
than 90 days following the date of such investment; PROVIDED, HOWEVER, that (x)
all Eligible Investments that are bank obligations shall be denominated in U.S.
dollars; and (y) the aggregate amount of Eligible Investments at any one time
that are bank obligations issued by any one bank shall not be in excess of 5% of
such bank's capital surplus; PROVIDED FURTHER that (1) any investment of the
types described in clauses (a), (b) and (c) above may be made through a
repurchase agreement in commercially reasonable form with a bank or other
financial institution qualifying as an Eligible Institution so long as such
investment is held by a third party custodian also qualifying as an Eligible
Institution, and (2) all such investments set forth in clause (a), (b) or (c)
above mature no later than the Business Day immediately preceding the next
Regular Distribution Date; provided FURTHER, HOWEVER, that in the case of any
Eligible Investment issued by a domestic branch of a foreign bank, the income
from such investment shall be from sources within the United States for purposes
of the Code. Notwithstanding the foregoing, no investment of the types described
in clause (b) or (c) above which is issued or guaranteed by a Liquidity Provider
or Continental or any of their respective Affiliates, and no investment in the
obligations of any one bank in excess of $10,000,000, shall be an Eligible
Investment at any time Continental holds any participation in the related
Liquidity Facility unless written confirmation shall have been received from
each Rating Agency that the making of such investment will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"EQUIPMENT NOTES" means, at any time, the Series A Equipment Notes,
the Series B Equipment Notes and the Series C Equipment Notes, collectively, and
in each case, any Equipment Notes issued in exchange therefor or replacement
thereof pursuant to the terms of the Indentures.
"ESCROW AGENT" means First Security Bank, National Association, as
escrow agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"ESCROW AND PAYING AGENT AGREEMENT" shall mean, with respect to any
Class, the Escrow and Paying Agent Agreement pertaining to such Class dated the
date hereof between the Escrow Agent, the Underwriters, the Trustee for such
Class and the Paying Agent, as the same may be amended, modified or supplemented
from time to time in accordance with the terms thereof.
"EXPECTED DISTRIBUTIONS" means, with respect to the Certificates of
any Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates (excluding interest, if any, payable with respect
to the Deposits related to such Trust) and (y) the difference between (A) the
Pool Balance of such Certificates as of the immediately preceding Distribution
Date (or, if the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust) and (B) the
Pool Balance of such Certificates as of the Current Distribution Date calculated
on the basis that (i) the principal of the Equipment Notes held in such Trust
has been paid when due (whether at stated maturity or upon redemption,
prepayment, purchase or Acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates and (ii) the principal of any
Equipment Notes formerly held in such Trust that have been sold pursuant to the
terms hereof has been paid in full and such payments have been distributed to
the holders of such Certificates, but without giving effect to any reduction in
the Pool Balance as a result of any distribution attributable to Deposits
occurring after the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, occurring after the initial
issuance of the Certificates of such Trust). For purposes of calculating
Expected Distributions with respect to the Certificates of any Trust, any
premium paid on the Equipment Notes held in such Trust which has not been
distributed to the Certificateholders of such Trust (other than such premium or
a portion thereof applied to the payment of interest on the Certificates of such
Trust or the reduction of the Pool Balance of such Trust) shall be added to the
amount of such Expected Distributions.
"EXPIRY DATE" with respect to any Liquidity Facility, shall have the
meaning set forth in such Liquidity Facility.
"FACILITY OFFICE" means, with respect to any Liquidity Facility, the
office of such Liquidity Provider thereunder, presently located at Westport,
Connecticut for AIG Matched Funding Corp., or such other office as such
Liquidity Provider from time to time shall notify the applicable Trustee as its
"Facility Office" under any such Liquidity Facility; PROVIDED that such
Liquidity Provider shall not change its Facility Office to a Facility Office
outside the United States of America except in accordance with Section 3.01,
3.02 or 3.03 of any such Liquidity Facility.
"FEE LETTER" means the Fee Letter dated February 20, 1998 between AIG
Matched Funding Corp. and the Subordination Agent with respect to the initial
Liquidity Facilities and any fee letter entered into between the Subordination
Agent and any Replacement Liquidity Provider.
"FINAL DISTRIBUTIONS" means, with respect to the Certificates of any
Trust on any Distribution Date, the sum of (x) the aggregate amount of all
accrued and unpaid interest on such Certificates (excluding interest, if any,
payable with respect to the Deposits relating to such Trust) and (y) the Pool
Balance of such Certificates as of the immediately preceding Distribution Date
(less the amount of the Deposits for such Class of Certificates as of such
preceding Distribution Date other than any portion of such Deposits thereafter
used to acquire Equipment Notes pursuant to the Note Purchase Agreement). For
purposes of calculating Final Distributions with respect to the Certificates of
any Trust, any premium paid on the Equipment Notes held in such Trust which has
not been distributed to the Certificateholders of such Trust (other than such
premium or a portion thereof applied to the payment of interest on the
Certificates of such Trust or the reduction of the Pool Balance of such Trust)
shall be added to the amount of such Final Distributions.
"FINAL DRAWING" has the meaning assigned to such term in Section
3.6(i).
"FINAL LEGAL DISTRIBUTION DATE" means (i) with respect to the Class A
Certificates, March 15, 2019, (ii) with respect to the Class B Certificates,
September 15, 2018 and (iii) with respect to the Class C Certificates, September
15, 2009.
"FINANCING AGREEMENT" means each of the Participation Agreements and
the Note Purchase Agreement.
"INDENTURE" means each of the Trust Indentures entered into by the
Loan Trustee, and the Owner Trustee or Continental, pursuant to the Note
Purchase Agreement, in each case as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"INDENTURE DEFAULT" means, with respect to any Indenture, any Event of
Default (as such term is defined in such Indenture) thereunder.
"INTEREST DRAWING" has the meaning assigned to such term in Section
3.6(a).
"INTEREST PAYMENT DATE" means, with respect to any Liquidity Facility,
each date on which interest is due and payable under Section 3.07(c), (d) or (e)
of such Liquidity Facility on a Downgrade Drawing, Non-Extension Drawing or
Final Drawing thereunder.
"INVESTMENT EARNINGS" means investment earnings on funds on deposit in
the Trust Accounts net of losses and investment expenses of the Subordination
Agent in making such investments.
"LEASE" means, with respect to each Indenture pertaining to a Leased
Aircraft, the "Lease" referred to therein.
"LEASED AIRCRAFT" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"LEASED AIRCRAFT INDENTURE" means, with respect to each Leased
Aircraft, the Indenture pertaining thereto.
"LIEN" means any mortgage, pledge, lien, charge, claim, disposition of
title, encumbrance, lease, sublease, sub-sublease or security interest of any
kind, including, without limitation, any thereof arising under any conditional
sales or other title retention agreement.
"LIQUIDITY EVENT OF DEFAULT" with respect to any Liquidity Facility,
has the meaning assigned to such term in such Liquidity Facility.
"LIQUIDITY EXPENSES" means all Liquidity Obligations other than (i)
the principal amount of any Drawings under the Liquidity Facilities and (ii) any
interest accrued on any Liquidity Obligations.
"LIQUIDITY FACILITIES" means, at any time, the Class A Liquidity
Facility, the Class B Liquidity Facility or the Class C Liquidity Facility.
"LIQUIDITY OBLIGATIONS" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities, Section
9.1 of the Participation Agreements or the Fee Letter.
"LIQUIDITY PROVIDER" means, at any time, any Class A Liquidity
Provider, any Class B Liquidity Provider or any Class C Liquidity Provider, as
applicable.
"LOAN TRUSTEE" means, with respect to any Indenture, the loan trustee
thereunder.
"LP INCUMBENCY CERTIFICATE" has the meaning assigned to such term in
Section 2.5(b).
"LP REPRESENTATIVES" has the meaning assigned to such term in Section
2.5(b).
"LTV APPRAISALS" has the meaning assigned to such term in Section
4.1(a).
"LTV COLLATERAL AMOUNT" of any Leased Aircraft or Owned Aircraft for
any Class of Certificates means, as of any Distribution Date, the lesser of (i)
the LTV Ratio for such Class of Certificates multiplied by the Appraised Current
Market Value of such Aircraft (or with respect to any such Aircraft which has
suffered an Event of Loss under and as defined in the relevant Lease (in the
case of a Leased Aircraft) or Indenture (in the case of an Owned Aircraft), the
amount of the insurance proceeds paid to the related Loan Trustee in respect
thereof to the extent then held by such Loan Trustee (and/or on deposit in the
Special Payments Account) or payable to such Loan Trustee in respect thereof)
and (ii) the outstanding principal amount of the Equipment Notes secured by such
Aircraft after giving effect to any principal payments of such Equipment Notes
on or before such Distribution Date.
"LTV RATIO" means for the Class A Certificates 40.50%, for the Class B
Certificates 53.75%, and for the Class C Certificates, 68.00%.
"MAJORITY LIQUIDITY PROVIDERS" means, at any time, Liquidity Providers
holding at least 66-2/3% of the aggregate outstanding Liquidity Obligations at
such time.
"MINIMUM SALE PRICE" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such Aircraft, at any time, the lesser of
(a) 75% of the Appraised Current Market Value of such Aircraft and (b) the
aggregate outstanding principal amount of such Equipment Notes, plus accrued and
unpaid interest thereon.
"MOODY'S" means Moody's Investors Service, Inc.
"NEW AIRCRAFT" shall have the meaning set forth in the Note Purchase
Agreement.
"NON-CONTROLLING PARTY" means, at any time, any Trustee or Liquidity
Provider which is not the Controlling Party at such time.
"NON-EXTENDED FACILITY" has the meaning assigned to such term in
Section 3.6(d).
"NON-EXTENSION DRAWING" has the meaning assigned to such term in
Section 3.6(d).
"NON-PERFORMING EQUIPMENT NOTE" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement dated as
of the date hereof, among Continental, each Trustee, the Escrow Agent, the
Subordination Agent and the Paying Agent.
"OFFICER'S CERTIFICATE" of any Person means a certification signed by
a Responsible Officer of such Person.
"OPERATIVE AGREEMENTS" means this Agreement, the Liquidity Facilities,
the Indentures, the Trust Agreements, the Underwriting Agreement, the Financing
Agreements, the Leases, the Fee Letter, the Equipment Notes and the
Certificates, together with all exhibits and schedules included with any of the
foregoing.
"OUTSTANDING" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such Class
theretofore authenticated and delivered under the related Trust Agreement,
except:
(i) Certificates of such Class theretofore canceled by the Registrar
(as defined in such Trust Agreement) or delivered to the Trustee thereunder
or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full amount
required to make the final distribution with respect to such Certificates
pursuant to Section 11.01 of such Trust Agreement has been theretofore
deposited with the related Trustee in trust for the holders of such
Certificates as provided in Section 4.01 of such Trust Agreement pending
distribution of such money to such Certificateholders pursuant to such
final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of which
other Certificates have been authenticated and delivered pursuant to such
Trust Agreement;
PROVIDED, HOWEVER, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any Certificates
owned by Continental or any of its Affiliates shall be disregarded and deemed
not to be Outstanding, except that, in determining whether such Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that such Trustee knows to be so
owned shall be so disregarded. Certificates so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the applicable Trustee the pledgee's right so to act with
respect to such Certificates and that the pledgee is not Continental or any of
its Affiliates.
"OVERDUE SCHEDULED PAYMENT" means any Scheduled Payment which is not
in fact received by the Subordination Agent within five days after the Scheduled
Payment Date relating thereto.
"OWNED AIRCRAFT" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"OWNED AIRCRAFT INDENTURE" means, with respect to each Owned Aircraft,
the Indenture pertaining to such Aircraft.
"OWNER TRUSTEE" means, with respect to any Indenture pertaining to a
Leased Aircraft, the Owner Trustee (as defined therein) not in its individual
capacity but solely as trustee under the related owner trust agreement, together
with any successor trustee appointed pursuant to such owner trust agreement.
"PARTICIPATION AGREEMENT" means, with respect to each Indenture, the
"Participation Agreement" referred to therein.
"PAYEE" has the meaning assigned to such term in Section 2.4(e).
"PAYING AGENT" means Wilmington Trust Company, as paying agent under
each Escrow and Paying Agent Agreement, together with its successors in such
capacity.
"PERFORMING EQUIPMENT NOTE" means an Equipment Note issued pursuant to
an Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration); PROVIDED that in the
event of a bankruptcy proceeding involving Continental under Title 11 of the
United States Code (the "BANKRUPTCY CODE"), (i) any payment default existing
during the 60-day period under Section 1110(a)(1)(A) of the Bankruptcy Code (or
such longer period as may apply under Section 1110(b) of the Bankruptcy Code)
(the "SECTION 1110 PERIOD") shall not be taken into consideration, unless during
the Section 1110 Period the trustee in such proceeding or Continental refuses to
assume or agree to perform its obligations under the Lease related to such
Equipment Note (in the case of a Leased Aircraft) or under the Indenture related
to such Equipment Note (in the case of an Owned Aircraft) and (ii) any payment
default occurring after the date of the order of relief in such proceeding shall
not be taken into consideration if such payment default is cured under Section
1110(a)(1)(B) of the Bankruptcy Code before the later of 30 days after the date
of such default or the expiration of the Section 1110 Period.
"PERFORMING NOTE DEFICIENCY" means any time that less than 65% of the
then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"PERSON" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.
"POOL BALANCE" means, with respect to each Trust or the Certificates
issued by any Trust, as of any date, (i) the original aggregate face amount of
the Certificates of such Trust LESS (ii) the aggregate amount of all payments
made in respect of the Certificates of such Trust or in respect of Deposits
relating to such Trust other than payments made in respect of interest or
premium thereon or reimbursement of any costs and expenses in connection
therewith. The Pool Balance for each Trust or for the Certificates issued by any
Trust as of any Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, payment of principal of
the Equipment Notes or payment with respect to other Trust Property held in such
Trust and the distribution thereof to be made on that date.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PTC EVENT OF DEFAULT" means, with respect to each Trust Agreement,
the failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class or (ii) interest due on such Certificates
on any Distribution Date (unless the Subordination Agent shall have made an
Interest Drawing, or a withdrawal from the Cash Collateral Account, with respect
thereto in an aggregate amount sufficient to pay such interest and shall have
distributed such amount to the Trustee entitled thereto).
"RATING AGENCIES" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. The initial Rating
Agencies will be Moody's and Standard & Poor's.
"RATINGS CONFIRMATION" means, with respect to any action proposed to
be taken, a written confirmation from each of the Rating Agencies that such
action would not result in (i) a reduction of the rating for any Class of
Certificates below the then current rating for such Class of Certificates or
(ii) a withdrawal or suspension of the rating of any Class of Certificates.
"REGULAR DISTRIBUTION DATES" means each March 15 and September 15,
commencing on March 15, 1998; PROVIDED, HOWEVER, that, if any such day shall not
be a Business Day, the related distribution shall be made on the next succeeding
Business Day without additional interest.
"REPLACEMENT LIQUIDITY FACILITY" means, for any Liquidity Facility, an
irrevocable revolving credit agreement in substantially the form of the replaced
Liquidity Facility, including reinstatement provisions, or in such other form
(which may include a letter of credit) as shall permit the Rating Agencies to
confirm in writing their respective ratings then in effect for the Certificates
(before downgrading of such ratings, if any, as a result of the downgrading of
the applicable Liquidity Provider), in a face amount (or in an aggregate face
amount) equal to the amount of interest payable on the Certificates of such
Trust (at the Stated Interest Rate for such Trust, and without regard to
expected future principal payments) on the three Regular Distribution Dates
following the date of replacement of such Liquidity Facility and issued by a
Person (or Persons) having unsecured short-term debt ratings issued by both
Rating Agencies which are equal to or higher than the Threshold Rating. Without
limitation of the form that a Replacement Liquidity Facility otherwise may have
pursuant to the preceding sentence, a Replacement Liquidity Facility for any
Class of Certificates may have a stated expiration date earlier than 15 days
after the Final Legal Distribution Date of such Class of Certificates so long as
such Replacement Liquidity Facility provides for a Non-Extension Drawing as
contemplated by Section 3.6(d) hereof.
"REPLACEMENT LIQUIDITY PROVIDER" means a Person who issues a
Replacement Liquidity Facility.
"REQUIRED AMOUNT" means, with respect to each Liquidity Facility, or
the Cash Collateral Account, for any Class, for any day, the sum of the
aggregate amount of interest, calculated at the rate per annum equal to the
Stated Interest Rate for the related Class of Certificates, that would be
payable on such Class of Certificates on each of the three successive Regular
Distribution Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding two Regular Distribution
Dates, in each case calculated on the basis of the Pool Balance of such Class of
Certificates on such date and without regard to expected future payments of
principal on such Class of Certificates.
"RESPONSIBLE OFFICER" means (i) with respect to the Subordination
Agent and each of the Trustees, any officer in the corporate trust
administration department of the Subordination Agent or such Trustee or any
other officer customarily performing functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject, and (ii) with respect to each Liquidity Provider, any
authorized officer of such Liquidity Provider.
"SCHEDULED PAYMENT" means, with respect to any Equipment Note, (i) any
payment of principal or interest on such Equipment Note (other than an Overdue
Scheduled Payment) due from the obligor thereon or (ii) any payment of interest
on the corresponding Class of Certificates with funds drawn under any Liquidity
Facility, which payment represents the installment of principal at the stated
maturity of such installment of principal on such Equipment Note, the payment of
regularly scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both; PROVIDED that any payment of principal of, premium, if
any, or interest resulting from the redemption or purchase of any Equipment Note
shall not constitute a Scheduled Payment.
"SCHEDULED PAYMENT DATE" means, with respect to any Scheduled Payment,
the date on which such Scheduled Payment is scheduled to be made.
"SERIES A EQUIPMENT NOTES" means the 6.648% Series A Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof pursuant
to the terms of such Indenture.
"SERIES B EQUIPMENT NOTES" means the 6.748% Series B Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof pursuant
to the terms of such Indenture.
"SERIES C EQUIPMENT NOTES" means the 6.541% Series C Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof pursuant
to the terms of such Indenture.
"SPECIAL DISTRIBUTION DATE" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section 2.4(a)
for the distribution of such Special Payment in accordance with this Agreement.
"SPECIAL PAYMENT" means any payment (other than a Scheduled Payment)
in respect of, or any proceeds of, any Equipment Note or Trust Indenture Estate
(as defined in each Leased Aircraft Indenture) or Collateral (as defined in each
Owned Aircraft Indenture).
"SPECIAL PAYMENTS ACCOUNT" means the Eligible Deposit Account created
pursuant to Section 2.2 as a sub-account to the Collection Account.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.
"STATED AMOUNT" with respect to any Liquidity Facility, means the
Maximum Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"STATED EXPIRATION DATE" has the meaning specified in Section 3.6(d).
"STATED INTEREST RATE" means (i) with respect to the Class A
Certificates, 6.648% per annum, (ii) with respect to the Class B Certificates,
6.748% per annum, and (iii) with respect to the Class C Certificates, 6.541% per
annum.
"SUBORDINATION AGENT" has the meaning assigned to it in the
preliminary statements to this Agreement.
"SUBORDINATION AGENT INCUMBENCY CERTIFICATE" has the meaning assigned
to such term in Section 2.5(a).
"SUBORDINATION AGENT REPRESENTATIVES" has the meaning assigned to such
term in Section 2.5(a).
"SUBSTITUTE AIRCRAFT" shall have the meaning set forth in the Note
Purchase Agreement.
"SUCCESSOR TRUSTS" means, collectively, Continental Airlines Pass
Through Trust 1998-1A-S, Continental Airlines Pass Through Trust 1998-1B-S and
Continental Airlines Pass Through Trust 1998-1C-S.
"TAX" and "TAXES" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto) imposed or
otherwise assessed by the United States of America or by any state, local or
foreign government (or any subdivision or agency thereof) or other taxing
authority, including, without limitation: taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth and similar
charges; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, taxes on goods and services, gains taxes,
license, registration and documentation fees, customs duties, tariffs, and
similar charges.
"TERMINATION NOTICE" with respect to any Liquidity Facility has the
meaning assigned to such term in such Liquidity Facility.
"THRESHOLD RATING" means the short-term unsecured debt rating of P-1
by Moody's and A-1+ by Standard & Poor's, in the case of the Class A Liquidity
Provider and the Class B Liquidity Provider, and the short-term unsecured debt
rating of P-1 by Moody's and A-1 by Standard & Poor's, in the case of the Class
C Liquidity Provider.
"TRANSFER" means the transfers contemplated by the Assignment and
Assumption Agreements.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRIGGERING EVENT" means (x) the occurrence of an Indenture Default
under all of the Indentures resulting in a PTC Event of Default with respect to
the most senior Class of Certificates then Outstanding, (y) the Acceleration of
all of the outstanding Equipment Notes (PROVIDED that, with respect to the
period prior to the Delivery Period Expiry Date, the aggregate principal balance
of such Equipment Notes is in excess of $200,000,000) or (z) the occurrence of a
Continental Bankruptcy Event.
"TRUST" means any of the Class A Trust, the Class B Trust or the Class
C Trust.
"TRUST ACCOUNTS" has the meaning assigned to such term in Section
2.2(a).
"TRUST AGREEMENT" means any of the Class A Trust Agreement, the Class
B Trust Agreement or the Class C Trust Agreement.
"TRUST PROPERTY" with respect to any Trust, has the meaning set forth
in the Trust Agreement for such Trust.
"TRUSTEE" means any of the Class A Trustee, the Class B Trustee or the
Class C Trustee.
"TRUSTEE INCUMBENCY CERTIFICATE" has the meaning assigned to such term
in Section 2.5(a).
"TRUSTEE REPRESENTATIVES" has the meaning assigned to such term in
Section 2.5(a).
"UNDERWRITERS" means Credit Suisse First Boston Corporation, Morgan
Stanley & Co. Incorporated and Chase Securities Inc.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated
February 11, 1998 among the Underwriters and Continental, relating to the
purchase of the Certificates by the Underwriters, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"WRITTEN NOTICE" means, from the Subordination Agent, any Trustee or
Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing procedures shall
constitute Written Notice under such Section.
"WTC" has the meaning assigned to such term in the recital of parties
to this Agreement.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. AGREEMENT TO TERMS OF SUBORDINATION; PAYMENTS FROM MONIES
RECEIVED ONLY. (a) Each Trustee hereby acknowledges and agrees to the terms of
subordination set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be applied in
accordance with the terms of this Agreement. In addition, each Trustee hereby
agrees to cause the Equipment Notes purchased by the related Trust to be
registered in the name of the Subordination Agent or its nominee, as agent and
trustee for such Trustee, to be held in trust by the Subordination Agent solely
for the purpose of facilitating the enforcement of the subordination and other
provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1, all payments to be made by the Subordination Agent
hereunder shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments, payments under Section 9.1 of the
Participation Agreements or payments under Sections 6 and 7 of the Note Purchase
Agreement, and only to the extent that the Subordination Agent shall have
received sufficient income or proceeds therefrom to enable it to make such
payments in accordance with the terms hereof. Each of the Trustees and the
Subordination Agent hereby agrees and, as provided in each Trust Agreement, each
Certificateholder, by its acceptance of a Certificate, and each Liquidity
Provider, by entering into the Liquidity Facility to which it is a party, has
agreed to look solely to such amounts to the extent available for distribution
to it as provided in this Agreement and to the relevant Deposits and that none
of the Trustees, Owner Trustees, Loan Trustees, Owner Participants nor the
Subordination Agent is personally liable to any of them for any amounts payable
or any liability under this Agreement, any Trust Agreement, any Liquidity
Facility or such Certificate, except (in the case of the Subordination Agent) as
expressly provided herein or (in the case of the Trustees) as expressly provided
in each Trust Agreement or (in the case of the Owner Trustees and the Loan
Trustees) as expressly provided in any Operative Agreement.
SECTION 2.2. TRUST ACCOUNTS. (a) Upon the execution of this Agreement,
the Subordination Agent shall establish and maintain in its name (i) the
Collection Account as an Eligible Deposit Account, bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Trustees, the Certificateholders and the Liquidity Providers, and (ii) as a
sub-account in the Collection Account, the Special Payments Account as an
Eligible Deposit Account, bearing a designation clearly indicating that the
funds deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof. Upon such establishment and
maintenance under Section 3.6(f) hereof, the Cash Collateral Accounts shall,
together with the Collection Account, constitute the "TRUST ACCOUNTS" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.4 hereof, as the case may be, next following the date of such investment;
PROVIDED, HOWEVER, that following the making of a Downgrade Drawing or a
Non-Extension Drawing under any Liquidity Facility, the Subordination Agent
shall invest and reinvest such amounts in Eligible Investments at the direction
of Continental (or, if and to the extent so specified to the Subordination Agent
by Continental with respect to any Liquidity Facility, the Liquidity Provider
with respect to such Liquidity Facility); PROVIDED FURTHER, HOWEVER, that
following the making of a Downgrade Drawing or Non-Extension Drawing under any
initial Liquidity Facility, the Subordination Agent shall invest and reinvest
the amounts in the Cash Collateral Account with respect to such Liquidity
Facility in Eligible Investments pursuant to the written instructions of the
Liquidity Provider funding such Drawing; PROVIDED FURTHER, HOWEVER, that upon
the occurrence and during the continuation of a Triggering Event, the
Subordination Agent shall invest and reinvest such amounts in accordance with
the written instructions of the Controlling Party. Unless otherwise expressly
provided in this Agreement (including, without limitation, with respect to
Investment Earnings on amounts on deposit in the Cash Collateral Accounts,
Section 3.6(f) hereof), any Investment Earnings shall be deposited in the
Collection Account when received by the Subordination Agent and shall be applied
by the Subordination Agent in the same manner as the other amounts on deposit in
the Collection Account are to be applied and any losses shall be charged against
the principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination Agent
shall not be liable for any loss resulting from any investment, reinvestment or
liquidation required to be made under this Agreement other than by reason of its
willful misconduct or gross negligence. Eligible Investments and any other
investment required to be made hereunder shall be held to their maturities
except that any such investment may be sold (without regard to its maturity) by
the Subordination Agent without instructions whenever such sale is necessary to
make a distribution required under this Agreement. Uninvested funds held
hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (including all income thereon, except as otherwise
expressly provided herein with respect to Investment Earnings). The Trust
Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the Trustees,
the Certificateholders and the Liquidity Providers, as the case may be. If, at
any time, any of the Trust Accounts ceases to be an Eligible Deposit Account,
the Subordination Agent shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, to which each Rating Agency may consent)
establish a new Collection Account, Special Payments Account or Cash Collateral
Account, as the case may be, as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Collection Account, Special Payments
Account or Cash Collateral Account, as the case may be. So long as WTC is an
Eligible Institution, the Trust Accounts shall be maintained with it as Eligible
Deposit Accounts.
SECTION 2.3. DEPOSITS TO THE COLLECTION ACCOUNT AND SPECIAL PAYMENTS
ACCOUNT. (a) The Subordination Agent shall, upon receipt thereof, deposit in the
Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the Equipment
Notes, deposit in the Special Payments Account the aggregate amount of such
Special Payments.
SECTION 2.4. DISTRIBUTIONS OF SPECIAL PAYMENTS. (a) NOTICE OF SPECIAL
PAYMENT. Except as provided in Section 2.4(e) below, upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any notice
of a Special Payment (or, in the absence of any such notice, upon receipt by the
Subordination Agent of a Special Payment), the Subordination Agent shall
promptly give notice thereof to each Trustee and the Liquidity Providers. The
Subordination Agent shall promptly calculate the amount of the redemption or
purchase of Equipment Notes or the amount of any Overdue Scheduled Payment, as
the case may be, comprising such Special Payment under the applicable Indenture
or Indentures and shall promptly send to each Trustee a Written Notice of such
amount and the amount allocable to each Trust. Such Written Notice shall also
set the distribution date for such Special Payment (a "SPECIAL DISTRIBUTION
DATE"), which shall be the Business Day which immediately follows the later to
occur of (x) the 15th day after the date of such Written Notice or (y) the date
the Subordination Agent has received or expects to receive such Special Payment.
Amounts on deposit in the Special Payments Account shall be distributed in
accordance with Sections 2.4(b) and 2.4(c) hereof, as applicable.
(b) REDEMPTIONS AND PURCHASES OF EQUIPMENT NOTES. (i) So long as no
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b) of
amounts on deposit in the Special Payments Account on account of the redemption,
purchase (including, without limitation, a purchase resulting from a sale of the
Equipment Notes permitted by Article IV hereof) or prepayment of all of the
Equipment Notes issued pursuant to an Indenture on the Special Distribution Date
for such Special Payment in the following order of priority:
FIRST, such amount as shall be required to pay (A) all accrued and
unpaid Liquidity Expenses then in arrears plus (B) the product of (x) the
aggregate amount of all accrued and unpaid Liquidity Expenses not in
arrears to such Special Payment Date MULTIPLIED BY (y) a fraction, the
numerator of which is the aggregate outstanding principal amount of
Equipment Notes being redeemed, purchased or prepaid on such Special
Payment Date and the denominator of which is the aggregate outstanding
principal amount of all Equipment Notes, shall be distributed to the
Liquidity Providers pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
SECOND, such amount as shall be required to pay (A) all accrued and
unpaid interest then in arrears on all Liquidity Obligations (including
interest accrued and unpaid on any Interest Drawing or any Applied Provider
Advance (as defined in any Liquidity Facility)) plus (B) the product of (x)
the aggregate amount of all accrued and unpaid interest on all Liquidity
Obligations not in arrears to such Special Payment Date (at the rate
provided in the applicable Liquidity Facility) MULTIPLIED BY (y) a
fraction, the numerator of which is the aggregate outstanding principal
amount of Equipment Notes being redeemed, purchased or prepaid on such
Special Payment Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes, shall be distributed
to the Liquidity Providers pari passu on the basis of the amount of such
Liquidity Obligations owed to each Liquidity Provider;
THIRD, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(f), to fund
such Cash Collateral Account up to its Required Amount shall be deposited
in such Cash Collateral Account, (B) if any Liquidity Facility shall become
a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Available Amount thereunder to zero, to deposit into the related Cash
Collateral Account an amount equal to such Cash Collateral Account's
Required Amount shall be deposited in such Cash Collateral Account, and (C)
if, with respect to any particular Liquidity Facility, neither subclause
(A) nor subclause (B) of this clause "THIRD" are applicable, to pay or
reimburse the Liquidity Provider in respect of such Liquidity Facility in
an amount equal to the amount of any unreimbursed Interest Drawings under
such Liquidity Facility shall be distributed to such Liquidity Provider,
pari passu on the basis of the amounts of all such deficiencies and/or
unreimbursed Interest Drawings;
FOURTH, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "THIRD" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due) under
such Liquidity Facility over (y) the Required Amount for the relevant
Class, pari passu on the basis of such amounts in respect of each Liquidity
Provider;
FIFTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Certificates on such Special
Distribution Date shall be distributed to the Class A Trustee;
SIXTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
SEVENTH, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee; and
EIGHTH, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance with
Section 3.2 hereof.
For the purposes of this Section 2.4(b), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued, due
and unpaid interest on such Certificates together with (without duplication)
accrued and unpaid interest on a portion of such Certificates equal to the
outstanding principal amount of Equipment Notes being redeemed, purchased or
prepaid (immediately prior to such redemption, purchase or prepayment)
(excluding interest, if any, payable with respect to the Deposits related to
such Trust)".
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to
this Section 2.4(b) of amounts on deposit in the Special Payments Account
on account of the redemption or purchase of all of the Equipment Notes
issued pursuant to an Indenture on the Special Distribution Date for such
Special Payment in accordance with Section 3.3 hereof.
(c) OTHER SPECIAL PAYMENTS. Except as provided in clause (e) below,
any amounts on deposit in the Special Payments Account other than in respect of
amounts to be distributed pursuant to Section 2.4(b) shall be distributed on the
Special Distribution Date therefor in accordance with Article III hereof.
(d) INVESTMENT OF AMOUNTS IN SPECIAL PAYMENTS ACCOUNT. Any amounts on
deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b) or (c) shall be invested in accordance with Section
2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.
(e) CERTAIN PAYMENTS. The Subordination Agent will distribute promptly
upon receipt thereof (i) any indemnity payment received by it from the Owner
Participant, the Owner Trustee or Continental in respect of any Trustee, any
Liquidity Provider, any Paying Agent, any Depositary or any Escrow Agent
(collectively, the "PAYEES") and (ii) any compensation (including, without
limitation, any fees payable to any Liquidity Provider under Section 2.03 of any
Liquidity Facility) received by it from the Owner Participant, the Owner Trustee
or Continental under any Operative Agreement in respect of any Payee, directly
to the Payee entitled thereto.
SECTION 2.5. DESIGNATED REPRESENTATIVES. (a) With the delivery of this
Agreement, the Subordination Agent shall furnish to each Liquidity Provider and
each Trustee, and from time to time thereafter may furnish to each Liquidity
Provider and each Trustee, at the Subordination Agent's discretion, or upon any
Liquidity Provider's or Trustee's request (which request shall not be made more
than one time in any 12-month period), a certificate (a "SUBORDINATION AGENT
INCUMBENCY CERTIFICATE") of a Responsible Officer of the Subordination Agent
certifying as to the incumbency and specimen signatures of the officers of the
Subordination Agent and the attorney-in-fact and agents of the Subordination
Agent (the "SUBORDINATION AGENT REPRESENTATIVES") authorized to give Written
Notices on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider and Trustee receives a subsequent Subordination Agent Incumbency
Certificate, it shall be entitled to rely on the last Subordination Agent
Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish to
the Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Trustee's discretion, or upon the Subordination
Agent's request (which request shall not be made more than one time in any
12-month period), a certificate (a "TRUSTEE INCUMBENCY Certificate") of a
Responsible Officer of such Trustee certifying as to the incumbency and specimen
signatures of the officers of such Trustee and the attorney-in-fact and agents
of such Trustee (the "TRUSTEE REPRESENTATIVES") authorized to give Written
Notices on behalf of such Trustee hereunder. Until the Subordination Agent
receives a subsequent Trustee Incumbency Certificate, it shall be entitled to
rely on the last Trustee Incumbency Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Liquidity Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (an "LP INCUMBENCY CERTIFICATE") of
any Responsible Officer of such Liquidity Provider certifying as to the
incumbency and specimen signatures of any officer, attorney-in-fact, agent or
other designated representative of such Liquidity Provider (the "LP
REPRESENTATIVES" and, together with the Subordination Agent Representatives and
the Trustee Representatives, the "DESIGNATED REPRESENTATIVES") authorized to
give Written Notices on behalf of such Liquidity Provider hereunder. Until the
Subordination Agent receives a subsequent LP Incumbency Certificate, it shall be
entitled to rely on the last LP Incumbency Certificate delivered to it
hereunder.
SECTION 2.6. CONTROLLING PARTY. (a) The Trustees and the Liquidity
Providers hereby agree that, with respect to any Indenture at any given time,
the Loan Trustee thereunder will be directed (i) in taking, or refraining from
taking, any action under such Indenture or with respect to the Equipment Notes
issued thereunder, so long as no Indenture Default has occurred and is
continuing thereunder, by the holders of at least a majority of the outstanding
principal amount of such Equipment Notes (provided that, for so long as the
Subordination Agent is the registered holder of the Equipment Notes, the
Subordination Agent shall act with respect to this clause (i) in accordance with
the directions of the Trustees (in the case of each such Trustee, with respect
to the Equipment Notes issued under such Indenture and held as Trust Property of
such Trust) constituting, in the aggregate, directions with respect to such
principal amount of Equipment Notes), and (ii) after the occurrence and during
the continuance of an Indenture Default thereunder (which, in the case of an
Indenture pertaining to a Leased Aircraft, has not been cured by the applicable
Owner Trustee or the applicable Owner Participant, if applicable, pursuant to
Section 4.03 of such Indenture), in taking, or refraining from taking, any
action under such Indenture or with respect to such Equipment Notes, including
exercising remedies thereunder (including Accelerating the Equipment Notes
issued thereunder or foreclosing the Lien on the Aircraft securing such
Equipment Notes), by the Controlling Party.
(b) The Person who shall be the "CONTROLLING PARTY" with respect to
any Indenture shall be: (x) the Class A Trustee; (y) upon payment of Final
Distributions to the holders of Class A Certificates, the Class B Trustee; and
(z) upon payment of Final Distributions to the holders of Class B Certificates,
the Class C Trustee. For purposes of giving effect to the foregoing, the
Trustees (other than the Controlling Party) irrevocably agree (and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes as
directed by the Controlling Party and any vote so exercised shall be binding
upon the Trustees and all Certificateholders.
The Subordination Agent shall give written notice to all of the other
parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not exercise
any of the rights of the Controlling Party at such time as it is not the
Controlling Party hereunder; PROVIDED, HOWEVER, that nothing herein contained
shall prevent or prohibit any Non-Controlling Party from exercising such rights
as shall be specifically granted to such Non-Controlling Party hereunder and
under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from
the earlier to occur of (i) the date on which the entire Available Amount under
any Liquidity Facility shall have been drawn (for any reason other than a
Downgrade Drawing or a Non-Extension Drawing) and remain unreimbursed, (ii) the
date on which the entire amount of any Downgrade Drawing or Non-Extension
Drawing under any Liquidity Facility shall have become and remain "Applied
Downgrade Advances" or "Applied Non-Extension Advances", as the case may be,
under and as defined in such Liquidity Facility and (iii) the date on which all
Equipment Notes shall have been Accelerated (PROVIDED that, with respect to the
period prior to the Delivery Period Expiry Date, such Equipment Notes have an
aggregate outstanding principal balance of in excess of $200,000,000), the
Liquidity Provider with the highest outstanding amount of Liquidity Obligations
shall have the right to elect, by Written Notice to the Subordination Agent and
each of the Trustees, to become the Controlling Party hereunder with respect to
any Indenture at any time from and including the last day of such 18-month
period.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or obligate
any Non-Controlling Party to provide funds necessary to exercise any right or
remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION
OF AMOUNTS RECEIVED
SECTION 3.1. WRITTEN NOTICE OF DISTRIBUTION. (a) No later than 3:00
P.M. (New York City time) on the Business Day immediately preceding each Regular
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with clause
"FIFTH" of Section 3.2 or 2.4(b), as the case may be, hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with clause
"SIXTH" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be paid in accordance with clause
"SEVENTH" of Section 3.2 or 2.4(b), as the case may be, hereof;
(iv) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid in accordance
with clauses "FIRST", "SECOND", "THIRD" and "FOURTH" of Section 3.2 or
2.4(b), as the case may be, hereof; and
(v) Each Trustee shall set forth the amounts to be paid in accordance
with clause "EIGHTH" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a schedule
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document may
state that, unless there has been a prepayment of the Certificates, such
schedule or similar document is to remain in effect until any substitute notice
or amendment shall be given to the Subordination Agent by the party providing
such notice.
(b) Following the occurrence of a Triggering Event, the Subordination
Agent shall request the following information from the following Persons, and
each of the following Persons shall, upon the request of the Subordination
Agent, deliver a Written Notice to the Subordination Agent setting forth for
such Person the following information:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "FIRST" (to reimburse payments made by the Class A
Certificateholders pursuant to subclause (iii) of clause "FIRST" of Section
3.3 hereof) and "SEVENTH" of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "FIRST" (to reimburse payments made by the Class B
Certificateholders pursuant to subclause (iii) of clause "FIRST" of Section
3.3 hereof) and "EIGHTH" of Section 3.3 hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "FIRST" (to reimburse payments made by the Class C
Certificateholders pursuant to subclause (iii) of clause "FIRST" of Section
3.3 hereof) and "NINTH" of Section 3.3 hereof;
(iv) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid to it in
accordance with subclause (iii) of clause "FIRST" of Section 3.3 hereof and
clauses "SECOND", "THIRD", "FOURTH" and "FIFTH" of Section 3.3 hereof; and
(v) Each Trustee shall set forth the amounts to be paid in accordance
with clause "SIXTH" of Section 3.3 hereof.
(c) At such time as a Trustee or a Liquidity Provider shall have
received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Section 2.4, 3.2 or 3.3
hereof, as applicable, and, in the case of a Liquidity Provider, its commitment
under the related Liquidity Facility shall have terminated or expired, such
Person shall, by a Written Notice, so inform the Subordination Agent and each
other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall
be fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee or any Liquidity Provider pursuant to paragraphs
(a) through (c) above and shall have no independent obligation to verify,
calculate or recalculate any amount set forth in any Written Notice delivered in
accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity Provider,
as applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof, if made
prior to 10:00 A.M. (New York City time) shall be effective on the date
delivered (or if delivered later shall be effective as of the next Business
Day). Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; PROVIDED, HOWEVER,
that any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraph (a) or (b) above which is required
to enable the Subordination Agent to make a distribution to such Person pursuant
to Section 3.2 or 3.3 hereof, the Subordination Agent shall request such
information and, failing to receive any such information, the Subordination
Agent shall not make such distribution(s) to such Person. In such event, the
Subordination Agent shall make distributions pursuant to clauses "FIRST" through
"NINTH" of Section 3.2 and clauses "FIRST" through "NINTH" of Section 3.3 to the
extent it shall have sufficient information to enable it to make such
distributions, and shall continue to hold any funds remaining, after making such
distributions, until the Subordination Agent shall receive all necessary
information to enable it to distribute any funds so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Trustee shall request, but in any event automatically
at the end of each calendar quarter, the Subordination Agent shall send to such
party a written statement reflecting all amounts on deposit with the
Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION 3.2. DISTRIBUTION OF AMOUNTS ON DEPOSIT IN THE COLLECTION
ACCOUNT. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments Account)
shall be promptly distributed on each Regular Distribution Date (or, in the case
of any amount described in Section 2.4(c), on the Special Distribution Date
thereof) in the following order of priority and in accordance with the
information provided to the Subordination Agent pursuant to Section 3.1(a)
hereof:
FIRST, such amount as shall be required to pay all accrued and unpaid
Liquidity Expenses owed to each Liquidity Provider shall be distributed to
the Liquidity Providers pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
SECOND, such amount as shall be required to pay in full the aggregate
amount of interest accrued on all Liquidity Obligations (at the rate, or in
the amount, provided in the applicable Liquidity Facility) and unpaid shall
be distributed to the Liquidity Providers pari passu on the basis of the
amount of such Liquidity Obligations owed to each Liquidity Provider;
THIRD, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(f), to fund
such Cash Collateral Account up to its Required Amount shall be deposited
in such Cash Collateral Account, (B) if any Liquidity Facility shall become
a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Available Amount thereunder to zero, to deposit into the related Cash
Collateral Account an amount equal to such Cash Collateral Account's
Required Amount shall be deposited in such Cash Collateral Account, and (C)
if, with respect to any particular Liquidity Facility, neither subclause
(A) nor subclause (B) of this clause "THIRD" is applicable, to pay or
reimburse the Liquidity Provider in respect of such Liquidity Facility in
an amount equal to the amount of all Liquidity Obligations then due under
such Liquidity Facility (other than amounts payable pursuant to clause
"FIRST" or "SECOND" of this Section 3.2) shall be distributed to such
Liquidity Provider, pari passu on the basis of the amounts of all such
deficiencies and/or unreimbursed Liquidity Obligations;
FOURTH, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "THIRD" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due) under
such Liquidity Facility over (y) the Required Amount for the relevant
Class, pari passu on the basis of such amounts in respect of each Liquidity
Provider;
FIFTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Certificates on such
Distribution Date shall be distributed to the Class A Trustee;
SIXTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
SEVENTH, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Certificates on such
Distribution Date shall be distributed to the Class C Trustee;
EIGHTH, such amount as shall be required to pay in full the aggregate
unpaid amount of fees and expenses payable as of such Distribution Date to
the Subordination Agent and each Trustee pursuant to the terms of this
Agreement and the Trust Agreements, as the case may be, shall be
distributed to the Subordination Agent and such Trustee; and
NINTH, the balance, if any, of any such amount remaining thereafter
shall be held in the Collection Account for later distribution in
accordance with this Article III.
SECTION 3.3. DISTRIBUTION OF AMOUNTS ON DEPOSIT FOLLOWING A TRIGGERING
EVENT. (a) Except as otherwise provided in Sections 3.1(f) and 3.6(b) hereof,
upon the occurrence of a Triggering Event and at all times thereafter, all funds
in the Collection Account or the Special Payments Account shall be promptly
distributed by the Subordination Agent in the following order of priority:
FIRST, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the protection
of, or the realization of the value of, the Equipment Notes or any Trust
Indenture Estate, shall be applied by the Subordination Agent in
reimbursement of such costs and expenses, (ii) each Trustee for any amounts
of the nature described in clause (i) above actually incurred by it under
the applicable Trust Agreement (to the extent not previously reimbursed),
shall be distributed to such Trustee, and (iii) any Liquidity Provider or
Certificateholder for payments, if any, made by it to the Subordination
Agent or any Trustee in respect of amounts described in clause (i) above,
shall be distributed to such Liquidity Provider or to the applicable
Trustee for the account of such Certificateholder, in each such case, pari
passu on the basis of all amounts described in clauses (i) through (iii)
above;
SECOND, such amount remaining as shall be required to pay all accrued
and unpaid Liquidity Expenses shall be distributed to each Liquidity
Provider pari passu on the basis of the amount of Liquidity Expenses owed
to each Liquidity Provider;
THIRD, such amount remaining as shall be required to pay accrued and
unpaid interest on the Liquidity Obligations as provided in the Liquidity
Facilities shall be distributed to each Liquidity Provider pari passu on
the basis of the amount of such accrued and unpaid interest owed to each
Liquidity Provider;
FOURTH, such amount remaining as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), unless (i) a Performing Note Deficiency exists and a Liquidity
Event of Default shall have occurred and be continuing with respect to the
relevant Liquidity Facility or (ii) a Final Drawing shall have occurred
with respect to such Liquidity Facility, to fund such Cash Collateral
Account up to its Required Amount (less the amount of any repayments of
Interest Drawings under such Liquidity Facility while subclause (A)(i)
above is applicable) shall be deposited in such Cash Collateral Account,
(B) if any Liquidity Facility shall become a Downgraded Facility or a
Non-Extended Facility at a time when unreimbursed Interest Drawings under
such Liquidity Facility have reduced the Available Amount thereunder to
zero, unless (i) a Performing Note Deficiency exists and a Liquidity Event
of Default shall have occurred and be continuing with respect to the
relevant Liquidity Facility or (ii) a Final Drawing shall have occurred
with respect to such Liquidity Facility, to deposit into the related Cash
Collateral Account an amount equal to such Cash Collateral Account's
Required Amount (less the amount of any repayments of Interest Drawings
under such Liquidity Facility while subclause (B)(i) above is applicable)
shall be deposited in such Cash Collateral Account, and (C) if, with
respect to any particular Liquidity Facility, neither subclause (A) nor
subclause (B) of this clause "fourth" are applicable, to pay in full the
outstanding amount of all Liquidity Obligations then due under such
Liquidity Facility (other than amounts payable pursuant to clause "SECOND"
or "THIRD" of this Section 3.3) shall be distributed to such Liquidity
Provider, pari passu on the basis of the amounts of all such deficiencies
and/or unreimbursed Liquidity Obligations;
FIFTH, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "FOURTH" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due) under
such Liquidity Facility over (y) the Required Amount for the relevant Class
(less the amount of any repayments of Interest Drawings under such
Liquidity Facility while subclause (A)(i) or (B)(i), as the case may be, of
clause "FOURTH" above is applicable), pari passu on the basis of such
amounts in respect of each Liquidity Provider;
SIXTH, such amount as shall be required to reimburse or pay (i) the
Subordination Agent for any Tax (other than Taxes imposed on compensation
paid hereunder), expense, fee, charge or other loss incurred by or any
other amount payable to the Subordination Agent in connection with the
transactions contemplated hereby (to the extent not previously reimbursed),
shall be applied by the Subordination Agent in reimbursement of such
amount, (ii) each Trustee for any Tax (other than Taxes imposed on
compensation paid under the applicable Trust Agreement), expense, fee,
charge, loss or any other amount payable to such Trustee under the
applicable Trust Agreements (to the extent not previously reimbursed),
shall be distributed to such Trustee, and (iii) each Certificateholder for
payments, if any, made by it pursuant to Section 5.2 hereof in respect of
amounts described in clause (i) above, shall be distributed to the
applicable Trustee for the account of such Certificateholder, in each such
case, pari passu on the basis of all amounts described in clauses (i)
through (iii) above;
SEVENTH, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Certificates shall be
distributed to the Class A Trustee;
EIGHTH, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee; and
NINTH, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Certificates shall be
distributed to the Class C Trustee.
SECTION 3.4. OTHER PAYMENTS. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent (i) in the
order of priority specified in Section 3.3 hereof and (ii) to the extent
received or realized at any time after the Final Distributions for each Class of
Certificates have been made, in the manner provided in clause "first" of Section
3.3 hereof.
(b) On any Interest Payment Date under each Liquidity Facility which
is not a Distribution Date, the Subordination Agent shall pay to the Liquidity
Provider under such Liquidity Facility from, and to the extent of, amounts on
deposit in the Collection Account, an amount equal to the amount of interest
then due and payable to such Liquidity Provider under such Liquidity Facility.
(c) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled Payment
Date relating thereto, but prior to such payment becoming an Overdue Scheduled
Payment, then the Subordination Agent shall deposit such Scheduled Payment in
the Collection Account and promptly distribute such Scheduled Payment in
accordance with the priority of distributions set forth in Section 3.2 hereof;
PROVIDED that, for the purposes of this Section 3.4(c) only, each reference in
clause "EIGHTH" of Section 3.2 to "Distribution Date" shall be deemed to mean
the actual date of payment of such Scheduled Payment and each reference in
clause "FIFTH", "SIXTH" or "SEVENTH" of Section 3.2 to "Distribution Date" shall
be deemed to refer to such Scheduled Payment Date.
SECTION 3.5. PAYMENTS TO THE TRUSTEES AND THE LIQUIDITY PROVIDERS. Any
amounts distributed hereunder to any Liquidity Provider shall be paid to such
Liquidity Provider by wire transfer of funds to the address such Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent shall
provide a Written Notice of any such transfer to the applicable Liquidity
Provider, as the case may be, at the time of such transfer. Any amounts
distributed hereunder by the Subordination Agent to any Trustee which shall not
be the same institution as the Subordination Agent shall be paid to such Trustee
by wire transfer funds at the address such Trustee shall provide to the
Subordination Agent.
SECTION 3.6. LIQUIDITY FACILITIES. (a) INTEREST DRAWINGS. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the Class
A Certificates, the Class B Certificates or the Class C Certificates (at the
Stated Interest Rate for such Class of Certificates), then, prior to 12:00 noon
(New York City time) on the Business Day following such Distribution Date, the
Subordination Agent shall request a drawing (each such drawing, an "INTEREST
DRAWING") under 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 applicable Threshold Rating, within 10 days after receiving notice of such
downgrading (but not later than the expiration date of the Liquidity Facility
issued by the downgraded Liquidity Provider (the "DOWNGRADED FACILITY")), such
Liquidity Provider or Continental may arrange for a Replacement Liquidity
Provider to issue and deliver a Replacement Liquidity Facility to the
Subordination Agent. If a Downgraded Facility has not been replaced in
accordance with the terms of this paragraph, the Subordination Agent shall, on
such 10th day (or if such 10th day is not a Business Day, on the next succeeding
Business Day) (or, if earlier, the expiration date of such Downgraded Facility),
request a drawing in accordance with and to the extent permitted by such
Downgraded Facility (such drawing, a "DOWNGRADE DRAWING") of all available and
undrawn amounts thereunder. Amounts drawn pursuant to a Downgrade Drawing shall
be maintained and invested as provided in Section 3.6(f) hereof. The Liquidity
Provider may also arrange for a Replacement Liquidity Provider to issue and
deliver a Replacement Liquidity Facility at any time after such Downgrade
Drawing so long as such Downgrade Drawing has not been reimbursed in full to the
Liquidity Provider.
(d) NON-EXTENSION DRAWINGS. If any Liquidity Facility with respect to
any Class of Certificates is scheduled to expire on a date (the "STATED
EXPIRATION DATE") prior to the date that is 15 days after the Final Legal
Distribution Date for such Class of Certificates, then, no earlier than the 60th
day and no later than the 40th day prior to the then Stated Expiration Date, the
Subordination Agent shall request that such Liquidity Provider extend the Stated
Expiration Date for a period of 364 days after the Stated Expiration Date
(unless the obligations of such Liquidity Provider thereunder are earlier
terminated in accordance with such Liquidity Facility). The Liquidity Provider
shall advise the Borrower, no earlier than 40 days and no later than 25 days
prior to such Stated Expiration Date, whether, in its sole discretion, it agrees
to so extend the Stated Expiration Date. If, on or before such 25th day, such
Liquidity Facility shall not have been so extended or replaced in accordance
with Section 3.6(e), or if the Liquidity Provider fails irrevocably and
unconditionally to advise the Borrower on or before the 25th day prior to the
Stated Expiration Date then in effect that such Stated Expiration Date shall be
so extended, the Subordination Agent shall, on such 25th day (or as soon as
possible thereafter), in accordance with and to the extent permitted by the
terms of the expiring Liquidity Facility (a "NON-EXTENDED FACILITY"), request a
drawing under such expiring Liquidity Facility (such drawing, a "NON-EXTENSION
DRAWING") of all available and undrawn amounts thereunder. Amounts drawn
pursuant to a Non-Extension Drawing shall be maintained and invested in
accordance with Section 3.6(f) hereof. Notwithstanding the immediately preceding
three sentences, so long as AIG Matched Funding Corp. is the Liquidity Provider
for any Facility, the Stated Expiration Date for such Facility shall be
automatically extended, effective on the 25th day prior to such Stated
Expiration Date (unless such Stated Expiration Date is on or after the date that
is 15 days after the Final Legal Distribution Date for the relevant Class of
Certificates), for a period of 364 days after such Stated Expiration Date
(unless the obligations of such Liquidity Provider thereunder are earlier
terminated in accordance with such Liquidity Facility) without the necessity of
any act by the Subordination Agent or the Liquidity Provider, unless such
Liquidity Provider shall advise the Borrower, prior to such 25th day, that it
does not agree to such extension of the Stated Expiration Date, in which event,
the Subordination Agent shall, on such 25th day (or as soon as possible
thereafter), in accordance with and to the extent permitted by the terms of the
Non-Extended Facility, request a Non-Extension Drawing under the Non-Extended
Facility of all available and undrawn amounts thereunder.
(e) ISSUANCE OF REPLACEMENT LIQUIDITY FACILITY. (i) At any time,
Continental may, at its option, with cause or without cause, arrange for a
Replacement Liquidity Facility to replace any Liquidity Facility for any Class
of Certificates (including any Replacement Liquidity Facility provided pursuant
to Section 3.6(e)(ii) hereof); PROVIDED, HOWEVER, that the initial Liquidity
Provider shall not be replaced by Continental as a Liquidity Provider with
respect to any Class of Certificates prior to the fifth anniversary of the
Closing Date unless (A) there shall have become due to the initial Liquidity
Provider, or the initial Liquidity Provider shall have demanded, amounts
pursuant to Section 3.01, 3.02 or 3.03 of any Liquidity Facility and the
replacement of the initial Liquidity Provider would reduce or eliminate the
obligation to pay such amounts or Continental determines in good faith that
there is a substantial likelihood that the initial Liquidity Provider will have
the right to claim any such amounts (unless the initial Liquidity Provider
waives, in writing, any right it may have to claim such amounts), which
determination shall be set forth in a certificate delivered by Continental to
the initial Liquidity Provider setting forth the basis for such determination
and accompanied by an opinion of outside counsel selected by Continental and
reasonably acceptable to the initial Liquidity Provider verifying the legal
conclusions, if any, of such certificate relating to such basis, PROVIDED that,
in the case of any likely claim for such amounts based upon any proposed, or
proposed change in, law, rule, regulation, interpretation, directive,
requirement, request or administrative practice, such opinion may assume the
adoption or promulgation of such proposed matter, (B) it shall become unlawful
or impossible for the initial Liquidity Provider (or its Facility Office) to
maintain or fund its LIBOR Advances as described in Section 3.10 of any
Liquidity Facility, (C) the short-term unsecured debt rating of the initial
Liquidity Provider is downgraded by Standard & Poor's from A-1+ to A-1 and there
is a resulting downgrade in the rating by any Rating Agency of any Class of
Certificates, (D) any Liquidity Facility of the initial Liquidity Provider shall
become a Downgraded Facility or a Non-Extended Facility or a Downgrade Drawing
or a Non-Extension Drawing shall have occurred under any Liquidity Facility of
the initial Liquidity Provider or (E) the initial Liquidity Provider shall have
breached any of its payment (including, without limitation, funding) obligations
under any Liquidity Facility. If such Replacement Liquidity Facility is provided
at any time after a Downgrade Drawing or Non-Extension Drawing has been made,
all funds on deposit in the relevant Cash Collateral Account will be returned to
the Liquidity Provider being replaced.
(ii) If any Liquidity Provider shall determine not to extend any of
its Liquidity Facility in accordance with Section 3.6(d), then such
Liquidity Provider may, at its option, arrange for a Replacement Liquidity
Facility to replace such Liquidity Facility during the period no earlier
than 40 days and no later than 25 days prior to the then effective Stated
Expiration Date of such Liquidity Facility.
(iii) No Replacement Liquidity Facility arranged by Continental or a
Liquidity Provider in accordance with clause (i) or (ii) above or pursuant
to Section 3.6(c), respectively, shall become effective and no such
Replacement Liquidity Facility shall be deemed a "Liquidity Facility" under
the Operative Agreements, unless and until (A) each of the conditions
referred to in sub-clauses (iv)(x) and (z) below shall have been satisfied,
(B) if such Replacement Liquidity Facility shall materially adversely
affect the rights, remedies, interests or obligations of the Class A
Certificateholders, the Class B Certificateholders or the Class C
Certificateholders under any of the Operative Agreements, the applicable
Trustee shall have consented, in writing, to the execution and issuance of
such Replacement Liquidity Facility and (C) in the case of a Replacement
Liquidity Facility arranged by a Liquidity Provider under Section
3.6(e)(ii) or pursuant to Section 3.6(c), such Replacement Liquidity
Facility is acceptable to Continental.
(iv) In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each
Rating Agency that such Replacement Liquidity Facility will not cause a
reduction of any rating then in effect for any Class of Certificates by
such Rating Agency (without regard to any downgrading of any rating of any
Liquidity Provider being replaced pursuant to Section 3.6(c) hereof), (y)
pay all Liquidity Obligations then owing to the replaced Liquidity Provider
(which payment shall be made first from available funds in the Cash
Collateral Account as described in clause (vii) of Section 3.6(f) hereof,
and thereafter from any other available source, including, without
limitation, a drawing under the Replacement Liquidity Facility) and (z)
cause the issuer of the Replacement Liquidity Facility to deliver the
Replacement Liquidity Facility to the Subordination Agent, together with a
legal opinion opining that such Replacement Liquidity Facility is an
enforceable obligation of such Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in clauses (iii) and
(iv) of this Section 3.6(e), (w) the replaced Liquidity Facility shall
terminate, (x) the Subordination Agent shall, if and to the extent so
requested by Continental or the Liquidity Provider being replaced, execute
and deliver any certificate or other instrument required in order to
terminate the replaced Liquidity Facility, shall surrender the replaced
Liquidity Facility to the Liquidity Provider being replaced and shall
execute and deliver the Replacement Liquidity Facility and any associated
Fee Letter, (y) each of the parties hereto shall enter into any amendments
to this Agreement necessary to give effect to (1) the replacement of the
applicable Liquidity Provider with the applicable Replacement Liquidity
Provider and (2) the replacement of the applicable Liquidity Facility with
the applicable Replacement Liquidity Facility and (z) the applicable
Replacement Liquidity Provider shall be deemed to be a Liquidity Provider
with the rights and obligations of a Liquidity Provider hereunder and under
the other Operative Agreements and such Replacement Liquidity Facility
shall be deemed to be a Liquidity Facility hereunder and under the other
Operative Agreements.
(f) CASH COLLATERAL ACCOUNTS; WITHDRAWALS; INVESTMENTS. In the event
the Subordination Agent shall draw all available amounts under the Class A
Liquidity Facility, the Class B Liquidity Facility or the Class C Liquidity
Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i) hereof, or in the event
amounts are to be deposited in the Cash Collateral Account pursuant to subclause
(B) of clause "third" of Section 2.4(b), subclause (B) of clause "third" of
Section 3.2 or subclause (B) of clause "fourth" of Section 3.3, amounts so drawn
or to be deposited, as the case may be, shall be deposited by the Subordination
Agent in the Class A Cash Collateral Account, the Class B Cash Collateral
Account or the Class C Cash Collateral Account, respectively. All amounts on
deposit in each Cash Collateral Account shall be invested and reinvested in
Eligible Investments in accordance with Section 2.2(b) hereof. Investment
Earnings on amounts on deposit in the Cash Collateral Account with respect to
each Liquidity Facility shall be deposited in the Collection Account on each
Interest Payment Date under such Liquidity Facility and applied on such Interest
Payment Date in accordance with Section 3.2, 3.3 or 3.4 (as applicable). The
Subordination Agent shall deliver a written statement to Continental and the
Liquidity Provider one day prior to each Interest Payment Date setting forth the
aggregate amount of Investment Earnings held in the Cash Collateral Accounts as
of such date. In addition, from and after the date funds are so deposited, the
Subordination Agent shall make withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
due and owing on the Class A Certificates (at the Stated Interest Rate for
the Class A Certificates) from any other source, withdraw from the Class A
Cash Collateral Account, and pay to the Class A Trustee, an amount equal to
the lesser of (x) an amount necessary to pay accrued and unpaid interest
(at the Stated Interest Rate for the Class A Certificates) on such Class A
Certificates and (y) the amount on deposit in the Class A Cash Collateral
Account;
(ii) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
due and owing on the Class B Certificates (at the Stated Interest Rate for
the Class B Certificates) from any other source, withdraw from the Class B
Cash Collateral Account, and pay to the Class B Trustee, an amount equal to
the lesser of (x) an amount necessary to pay accrued and unpaid interest
(at the Stated Interest Rate for the Class B Certificates) on such Class B
Certificates and (y) the amount on deposit in the Class B Cash Collateral
Account;
(iii) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
due and owing on the Class C Certificates (at the Stated Interest Rate for
the Class C Certificates) from any other source, withdraw from the Class C
Cash Collateral Account, and pay to the Class C Trustee, an amount equal to
the lesser of (x) an amount necessary to pay accrued and unpaid interest
(at the Stated Interest Rate for the Class C Certificates) on such Class C
Certificates and (y) the amount on deposit in the Class C Cash Collateral
Account;
(iv) on each date on which the Pool Balance of the Class A Trust shall
have been reduced by payments made to the Class A Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant to Section 2.03 of
the Escrow and Paying Agent Agreement for such Class, the Subordination
Agent shall withdraw from the Class A Cash Collateral Account such amount
as is necessary so that, after giving effect to the reduction of the Pool
Balance on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class A Cash Collateral Account on
such date), an amount equal to the sum of the Required Amount (with respect
to the Class A Liquidity Facility) plus Investment Earnings on deposit in
such Cash Collateral Account will be on deposit in the Class A Cash
Collateral Account and shall FIRST, pay such amount to the relevant Class A
Liquidity Provider until the Liquidity Obligations (with respect to the
Class A Certificates) owing to such Liquidity Provider shall have been paid
in full, and SECOND, deposit any remaining amount in the Collection
Account;
(v) on each date on which the Pool Balance of the Class B Trust shall
have been reduced by payments made to the Class B Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant to Section 2.03 of
the Escrow and Paying Agent Agreement of such Class, the Subordination
Agent shall withdraw from the Class B Cash Collateral Account such amount
as is necessary so that, after giving effect to the reduction of the Pool
Balance on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class B Cash Collateral Account on
such date), an amount equal to the sum of the Required Amount (with respect
to the Class B Liquidity Facility) plus Investment Earnings on deposit in
such Cash Collateral Account will be on deposit in the Class B Cash
Collateral Account and shall FIRST, pay such amount to the relevant Class B
Liquidity Provider until the Liquidity Obligations (with respect to the
Class B Certificates) owing to such Liquidity Provider shall have been paid
in full, and SECOND, deposit any remaining amount in the Collection
Account;
(vi) on each date on which the Pool Balance of the Class C Trust shall
have been reduced by payments made to the Class C Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant to Section 2.03 of
the Escrow and Paying Agent Agreement for such Class, the Subordination
Agent shall withdraw from the Class C Cash Collateral Account such amount
as is necessary so that, after giving effect to the reduction of the Pool
Balance on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class C Cash Collateral Account on
such date), an amount equal to the sum of the Required Amount (with respect
to the Class C Liquidity Facility) plus Investment Earnings on deposit in
such Cash Collateral Account will be on deposit in the Class C Cash
Collateral Account and shall FIRST, pay such amount to the relevant Class C
Liquidity Provider until the Liquidity Obligations (with respect to the
Class C Certificates) owing to such Liquidity Provider shall have been paid
in full, and SECOND, deposit any remaining amount in the Collection
Account;
(vii) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following the
date on which funds have been deposited into the Cash Collateral Account
for such Class of Certificates, the Subordination Agent shall withdraw all
amounts on deposit in such Cash Collateral Account and shall pay such
amounts to the replaced Liquidity Provider until all Liquidity Obligations
owed to such Person shall have been paid in full, and shall deposit any
remaining amount in the Collection Account; and
(viii) following the payment of Final Distributions with respect to
any Class of Certificates, on the date on which the Subordination Agent
shall have been notified by the Liquidity Provider for such Class of
Certificates that the Liquidity Obligations owed to such Liquidity Provider
have been paid in full, the Subordination Agent shall withdraw all amounts
on deposit in the Cash Collateral Account in respect of such Class of
Certificates and shall deposit such amount in the Collection Account.
(g) REINSTATEMENT. With respect to any Interest Drawing under the
Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Available Amount of such
Liquidity Facility shall be reinstated by an amount equal to the amount of such
Interest Drawing so reimbursed to the applicable Liquidity Provider but not to
exceed the Stated Amount for such Liquidity Facility; PROVIDED, HOWEVER, that
such Liquidity Facility shall not be so reinstated in part or in full at any
time if (x) both a Performing Note Deficiency exists and a Liquidity Event of
Default shall have occurred and be continuing with respect to the relevant
Liquidity Facility or (y) a Final Drawing shall have occurred with respect to
such Liquidity Facility. In the event that, with respect to any particular
Liquidity Facility, (i) funds are withdrawn from any Cash Collateral Account
pursuant to clause (i), (ii) or (iii) of Section 3.6(f) hereof or (ii) such
Liquidity Facility shall become a Downgraded Facility or a Non-Extended Facility
at a time when unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Available Amount thereunder to zero, then funds received by the
Subordination Agent at any time other than (x) any time when a Liquidity Event
of Default shall have occurred and be continuing with respect to such Liquidity
Facility and a Performing Note Deficiency exists or (y) any time after a Final
Drawing shall have occurred with respect to such Liquidity Facility shall be
deposited in such Cash Collateral Account as and to the extent provided in
clause "THIRD" of Section 2.4(b), clause "THIRD" of Section 3.2 or clause
"FOURTH" of Section 3.3, as applicable, and applied in accordance with Section
3.6(f) hereof.
(h) REIMBURSEMENT. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) FINAL DRAWING. Upon receipt from a Liquidity Provider of a
Termination Notice with respect to any Liquidity Facility, the Subordination
Agent shall, not later than the date specified in such Termination Notice, in
accordance with and to the extent permitted by the terms of such Liquidity
Facility, request a drawing under such Liquidity Facility of all available and
undrawn amounts thereunder (a "Final Drawing"). Amounts drawn pursuant to a
Final Drawing shall be maintained and invested in accordance with Section 3.6(f)
hereof.
(j) REDUCTION OF STATED AMOUNT. Promptly following each date on which
the Required Amount of the Liquidity Facility for a Class of Certificates is
reduced as a result of a reduction in the Pool Balance with respect to such
Certificates, the Subordination Agent shall, if any such Liquidity Facility
provides for reductions of the Stated Amount of such Liquidity Facility and if
such reductions are not automatic, request such Liquidity Provider for such
Class of Certificates to reduce such Stated Amount to an amount equal to the
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.
(l) ASSIGNMENT OF LIQUIDITY FACILITY. The Subordination Agent agrees
not to consent to the assignment by any Liquidity Provider of any of its rights
or obligations under any Liquidity Facility or any interest therein, unless (i)
Continental shall have consented to such assignment and (ii) each Rating Agency
shall have provided a Ratings Confirmation in respect of such assignment.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. DIRECTIONS FROM THE CONTROLLING PARTY. (a) (i) Following
the occurrence and during the continuation of an Indenture Default under any
Indenture, the Controlling Party shall direct the Subordination Agent, which in
turn shall direct the Loan Trustee under such Indenture, in the exercise of
remedies available to the holders of the Equipment Notes issued pursuant to such
Indenture, including, without limitation, the ability to vote all such Equipment
Notes in favor of Accelerating such Equipment Notes in accordance with the
provisions of such Indenture. Subject to the Owner Trustees' and the Owner
Participants' rights, if any, set forth in the Indentures with respect to Leased
Aircraft to purchase the Equipment Notes and the provisions of the next
paragraph, if the Equipment Notes issued pursuant to any Indenture have been
Accelerated following an Indenture Default with respect thereto, the Controlling
Party may sell, assign, contract to sell or otherwise dispose of and deliver all
(but not less than all) of such Equipment Notes to any Person at public or
private sale, at any location at the option of the Controlling Party, all upon
such terms and conditions as it may reasonably deem advisable in accordance with
applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights, if any, set forth in the Indentures with respect to Leased Aircraft
to purchase the Equipment Notes, and notwithstanding the foregoing, so long
as any Certificates remain Outstanding, during the period ending on the
date which is nine months after the earlier of (x) the Acceleration of the
Equipment Notes issued pursuant to any Indenture or (y) the occurrence of a
Continental Bankruptcy Event, without the consent of each Trustee, (A) no
Aircraft subject to the Lien of such Indenture or such Equipment Notes may
be sold if the net proceeds from such sale would be less than the Minimum
Sale Price for such Aircraft or such Equipment Notes, and (B) with respect
to any Leased Aircraft, the amount and payment dates of rentals payable by
Continental under the Lease for such Aircraft may not be adjusted, if, as a
result of such adjustment, the discounted present value of all such rentals
would be less than 75% of the discounted present value of the rentals
payable by Continental under such Lease before giving effect to such
adjustment, in each case, using the weighted average interest rate of the
Equipment Notes issued pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination Agent
may from time to time during the continuance of an Indenture Default (and
before the occurrence of a Triggering Event) commission LTV Appraisals with
respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note becomes a
Non-Performing Equipment Note, the Subordination Agent shall obtain
Appraisals with respect to all of the Aircraft (the "LTV APPRAISALS") as
soon as practicable and additional LTV Appraisals on or prior to each
anniversary of the date of such initial LTV Appraisals; provided that if
the Controlling Party reasonably objects to the appraised value of the
Aircraft shown in such LTV Appraisals, the Controlling Party shall have the
right to obtain or cause to be obtained substitute LTV Appraisals
(including any LTV Appraisals based upon physical inspection of the
Aircraft).
(b) The Controlling Party shall take such actions as it may reasonably
deem most effectual to complete the sale or other disposition of such Aircraft
or Equipment Notes. In addition, in lieu of any sale, assignment, contract to
sell or other disposition, the Controlling Party may maintain possession of such
Equipment Notes and continue to apply monies received in respect of such
Equipment Notes in accordance with Article III hereof. In addition, in lieu of
such sale, assignment, contract to sell or other disposition, or in lieu of such
maintenance of possession, the Controlling Party may, subject to the terms and
conditions of the related Indenture, instruct the Loan Trustee under such
Indenture to foreclose on the Lien on the related Aircraft.
SECTION 4.2. REMEDIES CUMULATIVE. Each and every right, power and
remedy given to the Trustees, the Liquidity Providers, the Controlling Party or
the Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may, subject always to the terms and conditions
hereof, be exercised from time to time and as often and in such order as may be
deemed expedient by any Trustee, any Liquidity Provider, the Controlling Party
or the Subordination Agent, as appropriate, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by any Trustee, any Liquidity Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
SECTION 4.3. DISCONTINUANCE OF PROCEEDINGS. In case any party to this
Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.
SECTION 4.4. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT TO BE
IMPAIRED. Anything in this Agreement to the contrary notwithstanding but subject
to each Trust Agreement, the right of any Certificateholder or any Liquidity
Provider, respectively, to receive payments hereunder (including without
limitation pursuant to Section 2.4, 3.2 or 3.3 hereof) when due, or to institute
suit for the enforcement of any such payment on or after the applicable
Distribution Date, shall not be impaired or affected without the consent of such
Certificateholder or such Liquidity Provider, respectively.
SECTION 4.5. UNDERTAKING FOR COSTS. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any Proceeding
against any Controlling Party or the Subordination Agent for any action taken or
omitted by it as Controlling Party or Subordination Agent, as the case may be, a
court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. The provisions of
this Section do not apply to a suit instituted by the Subordination Agent, a
Liquidity Provider or a Trustee or a suit by Certificateholders holding more
than 10% of the original principal amount of any Class of Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. NOTICE OF INDENTURE DEFAULT OR TRIGGERING EVENT. (a) In
the event the Subordination Agent shall have actual knowledge of the occurrence
of an Indenture Default or a Triggering Event, as promptly as practicable, and
in any event within 10 days after obtaining knowledge thereof, the Subordination
Agent shall transmit by mail or courier to the Rating Agencies, the Liquidity
Providers and the Trustees notice of such Indenture Default or Triggering Event,
unless such Indenture Default or Triggering Event shall have been cured or
waived. For all purposes of this Agreement, in the absence of actual knowledge
on the part of a Responsible Officer, the Subordination Agent shall not be
deemed to have knowledge of any Indenture Default or Triggering Event unless
notified in writing by one or more Trustees, one or more Liquidity Providers or
one or more Certificateholders.
(b) OTHER NOTICES. The Subordination Agent will furnish to each
Liquidity Provider and Trustee, promptly upon receipt thereof, duplicates or
copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Subordination Agent as
registered holder of the Equipment Notes or otherwise in its capacity as
Subordination Agent to the extent the same shall not have been otherwise
directly distributed to such Liquidity Provider or Trustee, as applicable,
pursuant to the express provision of any other Operative Agreement.
SECTION 5.2. INDEMNIFICATION. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the manner
reasonably satisfactory to the Subordination Agent) against any liability, cost
or expense (including counsel fees and expenses) which may be incurred in
connection therewith. The Subordination Agent shall not be under any obligation
to take any action under this Agreement and nothing contained in this Agreement
shall require the Subordination Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. The
Subordination Agent shall not be required to take any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof, nor shall any
other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or is
otherwise contrary to law.
SECTION 5.3. NO DUTIES EXCEPT AS SPECIFIED IN INTERCREDITOR AGREEMENT.
The Subordination Agent shall not have any duty or obligation to take or refrain
from taking any action under, or in connection with, this Agreement, except as
expressly provided by the terms of this Agreement; and no implied duties or
obligations shall be read into this Agreement against the Subordination Agent.
The Subordination Agent agrees that it will, in its individual capacity and at
its own cost and expense (but without any right of indemnity in respect of any
such cost or expense under Section 7.1 hereof) promptly take such action as may
be necessary to duly discharge all Liens on any of the Trust Accounts or any
monies deposited therein which result from claims against it in its individual
capacity not related to its activities hereunder or any other Operative
Agreement.
SECTION 5.4. NOTICE FROM THE LIQUIDITY PROVIDERS AND TRUSTEES. If any
Liquidity Provider or Trustee has notice of an Indenture Default or a Triggering
Event, such Person shall promptly give notice thereof to all other Liquidity
Providers and Trustees and to the Subordination Agent, PROVIDED, HOWEVER, that
no such Person shall have any liability hereunder as a result of its failure to
deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. AUTHORIZATION; ACCEPTANCE OF TRUSTS AND DUTIES. Each of
the Class A Trustee, the Class B Trustee and the Class C Trustee hereby
designates and appoints the Subordination Agent as the agent and trustee of such
Trustee under the applicable Liquidity Facility and authorizes the Subordination
Agent to enter into the applicable Liquidity Facility as agent and trustee for
such Trustee. Each of the Liquidity Providers and the Trustees hereby designates
and appoints the Subordination Agent as the Subordination Agent under this
Agreement. WTC hereby accepts the duties hereby created and applicable to it as
the Subordination Agent and agrees to perform the same but only upon the terms
of this Agreement and agrees to receive and disburse all monies received by it
in accordance with the terms hereof. The Subordination Agent shall not be
answerable or accountable under any circumstances, except (a) for its own
willful misconduct or gross negligence (or ordinary negligence in the handling
of funds), (b) as provided in Section 2.2 hereof and (c) for liabilities that
may result from the material inaccuracy of any representation or warranty of the
Subordination Agent made in its individual capacity in any Operative Agreement.
The Subordination Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Subordination Agent, unless it is
proved that the Subordination Agent was negligent in ascertaining the pertinent
facts.
SECTION 6.2. ABSENCE OF DUTIES. The Subordination Agent shall have no
duty to see to any recording or filing of this Agreement or any other document,
or to see to the maintenance of any such recording or filing.
SECTION 6.3. NO REPRESENTATIONS OR WARRANTIES AS TO DOCUMENTS. The
Subordination Agent in its individual capacity does not make nor shall be deemed
to have made any representation or warranty as to the validity, legality or
enforceability of this Agreement or any other Operative Agreement or as to the
correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
SECTION 6.4. NO SEGREGATION OF MONIES; NO INTEREST. Any monies paid to
or retained by the Subordination Agent pursuant to any provision hereof and not
then required to be distributed to any Trustee or any Liquidity Provider as
provided in Articles II and III hereof or deposited into one or more Trust
Accounts need not be segregated in any manner except to the extent required by
such Articles II and III and by law, and the Subordination Agent shall not
(except as otherwise provided in Section 2.2 hereof) be liable for any interest
thereon; PROVIDED, HOWEVER, that any payments received or applied hereunder by
the Subordination Agent shall be accounted for by the Subordination Agent so
that any portion thereof paid or applied pursuant hereto shall be identifiable
as to the source thereof.
SECTION 6.5. RELIANCE; AGENTS; ADVICE OF COUNSEL. The Subordination
Agent shall not incur liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers or the Trustees the manner of ascertainment of which is not
specifically described herein, the Subordination Agent may for all purposes
hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider or Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Subordination Agent shall assume, and shall be
fully protected in assuming, that each of the Liquidity Providers and each of
the Trustees are authorized to enter into this Agreement and to take all action
to be taken by them pursuant to the provisions hereof, and shall not inquire
into the authorization of each of the Liquidity Providers and each of the
Trustees with respect thereto. In the administration of the trusts hereunder,
the Subordination Agent may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents or attorneys
and may consult with counsel, accountants and other skilled persons to be
selected and retained by it, and the Subordination Agent shall not be liable for
the acts or omissions of any agent appointed with due care or for anything done,
suffered or omitted in good faith by it in accordance with the advice or written
opinion of any such counsel, accountants or other skilled persons.
SECTION 6.6. CAPACITY IN WHICH ACTING. The Subordination Agent acts
hereunder solely as agent and trustee herein and not in its individual capacity,
except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7. COMPENSATION. The Subordination Agent shall be entitled
to reasonable compensation, including expenses and disbursements, for all
services rendered hereunder and shall have a priority claim to the extent set
forth in Article III hereof on all monies collected hereunder for the payment of
such compensation, to the extent that such compensation shall not be paid by
others. The Subordination Agent agrees that it shall have no right against any
Trustee or Liquidity Provider for any fee as compensation for its services as
agent under this Agreement. The provisions of this Section 6.7 shall survive the
termination of this Agreement.
SECTION 6.8. MAY BECOME CERTIFICATEHOLDER. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all rights
and benefits of a Certificateholder to the same extent as if it were not the
institution acting as the Subordination Agent.
SECTION 6.9. SUBORDINATION AGENT REQUIRED; ELIGIBILITY. There shall at
all times be a Subordination Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $100,000,000 (or the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States of America, any
State thereof or of the District of Columbia and having a combined capital and
surplus of at least $100,000,000), if there is such an institution willing and
able to perform the duties of the Subordination Agent hereunder upon reasonable
or customary terms. Such corporation shall be a citizen of the United States and
shall be authorized under the laws of the United States or any State thereof or
of the District of Columbia to exercise corporate trust powers and shall be
subject to supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Subordination Agent shall cease to be eligible
in accordance with the provisions of this Section, the Subordination Agent shall
resign immediately in the manner and with the effect specified in Section 8.1.
SECTION 6.10. MONEY TO BE HELD IN TRUST. All Equipment Notes, monies
and other property deposited with or held by the Subordination Agent pursuant to
this Agreement shall be held in trust for the benefit of the parties entitled to
such Equipment Notes, monies and other property. All such Equipment Notes,
monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. SCOPE OF INDEMNIFICATION. The Subordination Agent shall
be indemnified hereunder to the extent and in the manner described in Section
9.1 of the Participation Agreements and Section 7 of the Note Purchase
Agreement. The indemnities contained in such Sections of such agreements shall
survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. REPLACEMENT OF SUBORDINATION AGENT; APPOINTMENT OF
SUCCESSOR. The Subordination Agent may resign at any time by so notifying the
Trustees and the Liquidity Providers. The Controlling Party may remove the
Subordination Agent for cause by so notifying the Subordination Agent and may
appoint a successor Subordination Agent. The Controlling Party shall remove the
Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9 hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party shall promptly appoint a successor Subordination
Agent.
A successor Subordination Agent shall deliver (x) a written acceptance
of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility to each party hereto, upon which the
resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The successor
Subordination Agent shall mail a notice of its succession to the Liquidity
Providers and the Trustees. The retiring Subordination Agent shall promptly
transfer its rights under each of the Liquidity Facilities and all of the
property held by it as Subordination Agent to the successor Subordination Agent.
If a successor Subordination Agent does not take office within 60 days
after the retiring Subordination Agent resigns or is removed, the retiring
Subordination Agent or one or more of the Trustees may petition any court of
competent jurisdiction for the appointment of a successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof (to
the extent applicable), one or more of the Trustees or one or more of the
Liquidity Providers may petition any court of competent jurisdiction for the
removal of the Subordination Agent and the appointment of a successor
Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. AMENDMENTS, WAIVERS, ETC. (a) This Agreement may not be
supplemented, amended or modified without the consent of each Trustee (acting,
except in the case of any amendment pursuant to Section 3.6(e)(v)(y) hereof,
with the consent of holders of Certificates of the related Class evidencing
interests in the related Trust aggregating not less than a majority in interest
in such Trust or as otherwise authorized pursuant to the relevant Trust
Agreement), the Subordination Agent and each Liquidity Provider; PROVIDED,
HOWEVER, that this Agreement may be supplemented, amended or modified without
the consent of (x) any Trustee if such supplement, amendment or modification (i)
is in accordance with Section 9.1(c) hereof or (ii) cures an ambiguity or
inconsistency or does not materially adversely affect such Trustee or the
holders of the related Class of Certificates and (y) any Liquidity Provider if
such supplement, amendment or modification is in accordance with Section 9.1(c)
hereof; PROVIDED FURTHER, HOWEVER, that, if such supplement, amendment or
modification (A) would (x) directly or indirectly modify or supersede, or
otherwise conflict with, Section 2.2(b), Section 3.6(e), Section 3.6(f)(other
than the last sentence thereof), Section 3.6(l), the last sentence of this
Section 9.1(a), Section 9.1(c), the second sentence of Section 10.6 or this
proviso (collectively, the "CONTINENTAL PROVISIONS") or (y) otherwise adversely
affect the interests of a potential Replacement Liquidity Provider or of
Continental with respect to its ability to replace any Liquidity Facility or
with respect to its payment obligations under any Operative Agreement or (B) is
made pursuant to Section 9.1(c), then such supplement, amendment or modification
shall not be effective without the additional written consent of Continental.
Notwithstanding the foregoing, without the consent of each Certificateholder and
each Liquidity Provider, no supplement, amendment or modification of this
Agreement may (i) reduce the percentage of the interest in any Trust evidenced
by the Certificates issued by such Trust necessary to consent to modify or amend
any provision of this Agreement or to waive compliance therewith or (ii), except
as provided in Section 9.1(c), modify Section 2.4, 3.2 or 3.3 hereof, relating
to the distribution of monies received by the Subordination Agent hereunder from
the Equipment Notes or pursuant to the Liquidity Facilities. Nothing contained
in this Section shall require the consent of a Trustee at any time following the
payment of Final Distributions with respect to the related Class of
Certificates. If the Replacement Liquidity Facility for any Liquidity Facility
in accordance with Section 3.6(e) hereof is to be comprised of more than one
instrument as contemplated by the definition of the term "Replacement Liquidity
Facility", then each of the parties hereto agrees to amend this Agreement to
incorporate appropriate mechanics for multiple Liquidity Facilities for an
individual Trust.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Notes, receives a request for its consent to any
amendment, modification, consent or waiver under such Equipment Notes, the
Indenture pursuant to which such Equipment Notes were issued, or the related
Lease, Participation Agreement or other related document, (i) if no Indenture
Default shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent shall request directions with respect to each Series of
such Equipment Notes from the Trustee of the Trust which holds such Equipment
Notes and shall vote or consent in accordance with the directions of such
Trustee and (ii) if any Indenture Default (which, in the case of any Indenture
pertaining to a Leased Aircraft, has not been cured by the applicable Owner
Trustee or the applicable Owner Participant, if applicable, pursuant to Section
4.03 of such Indenture) shall have occurred and be continuing with respect to
such Indenture, the Subordination Agent will exercise its voting rights as
directed by the Controlling Party, subject to Sections 4.1 and 4.4 hereof;
provided that no such amendment, modification or waiver shall, without the
consent of each Liquidity Provider, reduce the amount of rent, supplemental rent
or stipulated loss values payable by Continental under any Lease or reduce the
amount of principal or interest payable by Continental under any Equipment Note
issued under any Indenture in respect of an Owned Aircraft.
(c) If with respect to any Owned Aircraft Continental issues Class D
Certificates, this Agreement shall be amended by written agreement of
Continental and the Subordination Agent to provide for the subordination of such
Class D Certificates to the Class A Certificates, the Class B Certificates and
the Class C Certificates substantially in the same manner as the Class C
Certificates are subordinated hereunder to the Class B and Class A Certificates.
No such amendment shall materially adversely affect any Trustee. The amendment
to this Agreement to give effect to the issuance of any Class D Certificates
shall include, without limitation:
(i) the trustee of the Class D Trust shall be added as a party to this
Agreement;
(ii) the definitions of "Cash Collateral Account," "Certificate,"
"Class," "Equipment Notes," "Final Legal Distribution Date," "Liquidity
Facilities," "Liquidity Provider," "LTV Ratio," "Stated Interest Rate,"
"Trust," "Trust Agreement," "Controlling Party" shall be revised, as
appropriate, to reflect the issuance of the Class D Certificates (and the
subordination thereof); and
(iii) provisions of this Agreement governing payments with respect to
Certificates and related notices, including, without limitation, Sections
2.4, 3.1, 3.2, 3.3 and 3.6(e), shall be revised to provide for
distributions on the Class D Certificates after payment of all relevant
distributions on Class C Certificates.
SECTION 9.2. SUBORDINATION AGENT PROTECTED. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed pursuant to the terms of Section 9.1 affects
any right, duty, immunity or indemnity with respect to it under this Agreement
or any Liquidity Facility, the Subordination Agent may in its discretion decline
to execute such document.
SECTION 9.3. EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of
any amendment, consent or supplement hereto pursuant to the provisions hereof,
this Agreement shall be and be deemed to be and shall be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Agreement of the parties hereto
and beneficiaries hereof shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental agreement shall be and be
deemed to be and shall be part of the terms and conditions of this Agreement for
any and all purposes. In executing or accepting any supplemental agreement
permitted by this Article IX, the Subordination Agent shall be entitled to
receive, and shall be fully protected in relying upon, an opinion of counsel
stating that the execution of such supplemental agreement is authorized or
permitted by this Agreement.
SECTION 9.4. NOTICE TO RATING AGENCIES. Promptly following its receipt
of each amendment, consent, modification, supplement or waiver contemplated by
this Article IX, the Subordination Agent shall send a copy thereof to each
Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. TERMINATION OF INTERCREDITOR AGREEMENT. Following
payment of Final Distributions with respect to each Class of Certificates and
the payment in full of all Liquidity Obligations to the Liquidity Providers and
PROVIDED that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers and the Subordination
Agent hereunder or under the Trust Agreements, and that the commitment of the
Liquidity Providers under the Liquidity Facilities shall have expired or been
terminated, this Agreement and the trusts created hereby shall terminate and
this Agreement shall be of no further force or effect. Except as aforesaid or
otherwise provided, this Agreement and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.
SECTION 10.2. INTERCREDITOR AGREEMENT FOR BENEFIT OF TRUSTEES,
LIQUIDITY PROVIDERS AND SUBORDINATION AGENT. Subject to the second sentence of
Section 10.6 and the provisions of Section 4.4, nothing in this Agreement,
whether express or implied, shall be construed to give to any Person other than
the Trustees, the Liquidity Providers and the Subordination Agent any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.3. NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed to at its office at:
WILMINGTON TRUST COMPANY
One Rodney Square
1100 N. Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Telecopy: (302) 651-8882
(ii) if to any Trustee, addressed to it at its office at:
WILMINGTON TRUST COMPANY
One Rodney Square
1100 N. Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Trustee Administration
Telecopy: (302) 651-8882
(iii) if to the initial Liquidity Provider, addressed to it at its
office at:
AIG Matched Funding Corp.
100 Nyala Farm
Westport, CT 06880
Attention: Chief Financial Officer
Telephone: (203) 222-4700
Telecopy: (203) 222-478
with a copy to the General Counsel at the same
address and fax number.
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such notice is
received. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this
Agreement.
SECTION 10.4. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.5. NO ORAL MODIFICATIONS OR CONTINUING WAIVERS. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other Person
against whom enforcement of the change, waiver, discharge or termination is
sought and any other party or other Person whose consent is required pursuant to
this Agreement and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
SECTION 10.6. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
parties hereto and the successors and assigns of each, all as herein provided.
In addition, the Continental Provisions shall inure to the benefit of
Continental and its successors and assigns, and (without limitation of the
foregoing) Continental is hereby constituted, and agreed to be, an express third
party beneficiary of the Continental Provisions. Upon the occurrence of the
Transfers contemplated by the Assignment and Assumption Agreements, the Trustee
of each Class shall (without any further act) be deemed to have transferred all
of its rights, title and interest in and to this Agreement to the trustee of the
Successor Trust of the same Class and, thereafter, the trustee of each Successor
Trust shall be deemed to be the "Trustee" of such Successor Trust with the
rights and obligations of a "Trustee" hereunder and under the other Operative
Agreements and each reference to a Trust of any Class herein shall be deemed a
reference to the Successor Trust of such Class.
SECTION 10.7. HEADINGS. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8. COUNTERPART FORM. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9. SUBORDINATION. (a) As between the Liquidity Providers,
on the one hand, and the Trustees