EXECUTION
DEPOSIT AGREEMENT
(Class A-2)
Dated as of November 3, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Escrow Agent
and
CREDIT SUISSE FIRST BOSTON,
New York Branch
as Depositary
DEPOSIT AGREEMENT (Class A-2) dated as of November 3, 1998 (as
amended, modified or supplemented from time to time, this "AGREEMENT") between
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, as
Escrow Agent under the Escrow and Paying Agent Agreement referred to below (in
such capacity, together with its successors in such capacity, the "ESCROW
AGENT"), and CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, a banking institution
organized under the laws of Switzerland acting through its New York branch, as
depositary bank (the "DEPOSITARY").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Continental Airlines, Inc. ("CONTINENTAL") and Wilmington
Trust Company, not in its individual capacity except as otherwise expressly
provided therein, but solely as trustee (in such capacity, together with its
successors in such capacity, the "PASS THROUGH TRUSTEE") have entered into a
Trust Supplement, dated November 3, 1998, to the Pass Through Trust Agreement
dated as of September 25, 1997 (together, as amended, modified or supplemented
from time to time in accordance with the terms thereof, the "PASS THROUGH TRUST
AGREEMENT") relating to Continental Airlines Pass Through Trust 1998-3A-2-O
pursuant to which the Continental Airlines Pass Through Trust, Series
1998-3A-2-O Certificates referred to therein (the "CERTIFICATES") are being
issued;
WHEREAS, Continental, Xxxxxx Xxxxxxx & Co. Incorporated, Credit Suisse
First Boston Corporation, Chase Securities Inc., Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation and Xxxxxxx Xxxxx Barney Inc. (collectively, the
"UNDERWRITERS" and, together with their respective transferees and assigns as
registered owners of the Certificates, the "INVESTORS") have entered into an
Underwriting Agreement dated as of October 21, 1998 pursuant to which the Pass
Through Trustee will issue and sell the Certificates to the Underwriters;
WHEREAS, Continental, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "NOTE
PURCHASE AGREEMENT"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) equipment notes (the "EQUIPMENT
NOTES") issued to finance the acquisition of aircraft by Continental, as lessee
or as owner, utilizing a portion of the proceeds from the sale of the
Certificates (the "NET PROCEEDS");
WHEREAS, the Escrow Agent, the Underwriters, the Pass Through Trustee
and Wilmington Trust Company, as paying agent for the Escrow Agent (in such
capacity, together with its successors in such capacity, the "PAYING AGENT")
concurrently herewith are entering into an Escrow and Paying Agent Agreement,
dated as of the date hereof (as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "ESCROW AND PAYING AGENT
AGREEMENT"); and
WHEREAS, the Underwriters and the Pass Through Trustee intend that the
Net Proceeds be held in escrow by the Escrow Agent on behalf of the Investors
pursuant to the Escrow and Paying Agent Agreement, subject to withdrawal upon
request of and proper certification by the Pass Through Trustee for the purpose
of purchasing Equipment Notes, and that pending such withdrawal the Net Proceeds
be deposited by the Escrow Agent with the Depositary pursuant to this Agreement,
which provides for the Depositary to pay interest for distribution to the
Investors and to establish accounts from which the Escrow Agent shall make
withdrawals upon request of and proper certification by the Pass Through
Trustee.
NOW, THEREFORE, in consideration of the obligations contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1.1 ACCEPTANCE OF DEPOSITARY. The Depositary hereby agrees to
act as depositary bank as provided herein and in connection therewith to accept
all amounts to be delivered to or held by the Depositary pursuant to the terms
of this Agreement. The Depositary further agrees to hold, maintain and safeguard
the Deposits and the Accounts (as defined below) during the term of this
Agreement in accordance with the provisions of this Agreement. The Escrow Agent
shall not have any right to withdraw, assign or otherwise transfer moneys held
in the Accounts except as permitted by this Agreement.
SECTION 1.2 ESTABLISHMENT OF ACCOUNTS. The Escrow Agent hereby
instructs the Depositary, and the Depositary agrees, to establish the separate
deposit accounts listed on Schedule I hereto and to establish such additional
separate deposit accounts as may be required in connection with the deposits
contemplated by Section 2.4 hereof (each, an "ACCOUNT" and collectively, the
"ACCOUNTS"), each in the name of the Escrow Agent and all on the terms and
conditions set forth in this Agreement.
SECTION 2.1 DEPOSITS. The Escrow Agent shall direct the Underwriters
to deposit with the Depositary on the date of this Agreement (the "DEPOSIT
DATE") in Federal (same day) funds by official check or checks or wire or other
transfer to: Credit Suisse First Boston, New York Branch, Reference: Continental
1998-3A-2, and the Depositary shall accept from the Underwriters, on behalf of
the Escrow Agent, the sum of US$ 199,190,000. Upon acceptance of such sum, the
Depositary shall (i) establish each of the deposits specified in Schedule I
hereto maturing on the respective dates set forth therein (including any deposit
made pursuant to Section 2.4 hereof, individually, a "DEPOSIT" and,
collectively, the "DEPOSITS") and (ii) credit each Deposit to the related
Account as set forth therein. No amount shall be deposited in any Account other
than the related Deposit.
SECTION 2.2 INTEREST. Each Deposit shall bear interest from and
including the date of deposit to but excluding the date of withdrawal at the
rate of 6.32% per annum (computed on the basis of a year of twelve 30-day
months) payable to the Paying Agent on behalf of the Escrow Agent semi-annually
in arrears on each May 1 and November 1 commencing on May 1, 1999 (each, an
"INTEREST PAYMENT DATE"), and on the date of the Final Withdrawal (as defined
below), all in accordance with the terms of this Agreement (whether or not any
such Deposit is withdrawn on an Interest Payment Date). Interest accrued on any
Deposit that is withdrawn pursuant to a Notice of Purchase Withdrawal (as
defined below) shall be paid on the next Interest Payment Date, notwithstanding
any intervening Final Withdrawal (as defined below).
SECTION 2.3 WITHDRAWALS. (a) On and after the date seven days after
the establishment of any Deposit, the Escrow Agent may, by providing at least
one Business Day's prior notice of withdrawal to the Depositary in the form of
Exhibit A hereto (a "NOTICE OF PURCHASE WITHDRAWAL"), withdraw not less than the
entire balance of such Deposit, except that at any time prior to the actual
withdrawal of such Deposit, the Escrow Agent or the Pass Through Trustee may, by
notice to the Depositary, cancel such withdrawal (including on the scheduled
date therefor), and thereafter such Deposit shall continue to be maintained by
the Depositary in accordance with the original terms thereof. Following such
withdrawal the balance in the related Account shall be zero and the Depositary
shall close such Account. As used herein, "BUSINESS DAY" means any day, other
than a Saturday, Sunday or other day on which commercial banks are authorized or
required by law to close in New York, New York, Houston, Texas, Wilmington,
Delaware or Salt Lake City, Utah.
(b) The Escrow Agent may, by providing at least 15 days' prior notice
of withdrawal to the Depositary in the form of Exhibit B hereto (a "NOTICE OF
FINAL WITHDRAWAL"), withdraw the entire amount of all of the remaining Deposits
together with the payment by the Depositary of all accrued and unpaid interest
on such Deposits to but excluding the specified date of withdrawal (a "FINAL
WITHDRAWAL"), on such date as shall be specified in such Notice of Final
Withdrawal. If a Notice of Final Withdrawal has not been given to the Depositary
on or before January 7, 2000 (provided that, if a labor strike occurs at The
Boeing Company prior to December 31, 1999 (a "LABOR STRIKE"), such date shall be
extended by adding thereto the number of days that such strike continued in
effect (the "ADDITIONAL DAYS") and there are unwithdrawn Deposits on such date,
the Depositary shall pay the amount of the Final Withdrawal to the Paying Agent
on January 31, 2000 (provided that if a Labor Strike occurs, such date shall be
extended by the Additional Days).
(c) If the Depositary receives a duly completed Notice of Purchase
Withdrawal or Notice of Final Withdrawal complying with the provisions of this
Agreement, it shall make the payments specified therein in accordance with the
provisions of this Agreement.
SECTION 2.4 OTHER ACCOUNTS. On the date of withdrawal of any Deposit,
the Escrow Agent, or the Pass Through Trustee on behalf of the Escrow Agent,
shall be entitled to re-deposit with the Depositary any portion thereof and the
Depositary shall accept the same for deposit hereunder. Any sums so received for
deposit shall be established as a new Deposit and credited to a new Account, all
as more fully provided in Section 2.1 hereof, and thereafter the provisions of
this Agreement shall apply thereto as fully and with the same force and effect
as if such Deposit had been established on the Deposit Date except that (i) such
Deposit may not be withdrawn prior to the date seven days after the
establishment thereof and (ii) such Deposit shall mature on January 31, 2000
(provided that if a Labor Strike occurs, such date shall be extended by the
Additional Days) and bear interest as provided in Section 2.2. The Depositary
shall promptly give notice to the Escrow Agent of receipt of each such
re-deposit and the account number assigned thereto.
SECTION 3. TERMINATION. This Agreement shall terminate on the fifth
Business Day after the later of the date on which (i) all of the Deposits shall
have been withdrawn and paid as provided herein without any re-deposit and (ii)
all accrued and unpaid interest on the Deposits shall have been paid as provided
herein, but in no event prior to the date on which the Depositary shall have
performed in full its obligations hereunder.
SECTION 4. PAYMENTS. All payments (including, without limitation,
those payments made in respect of Taxes (as defined and provided for below))
made by the Depositary hereunder shall be paid in United States Dollars and
immediately available funds by wire transfer (i) in the case of accrued interest
on the Deposits payable under Section 2.2 hereof or any Final Withdrawal,
directly to the Paying Agent at Wilmington Trust Company, Wilmington, DE, ABA#
000000000, Account No. 46643-0, Attention: Xxxxxx Xxxxx, Telephone; No. (302)
000-0000, Reference: Continental 1998-3A-2, or to such other account as the
Paying Agent may direct from time to time in writing to the Depositary and the
Escrow Agent and (ii) in the case of any withdrawal of one or more Deposits
pursuant to a Notice of Purchase Withdrawal, directly to or as directed by the
Pass Through Trustee as specified and in the manner provided in such Notice of
Purchase Withdrawal. The Depositary hereby waives any and all rights of set-off,
combination of accounts, right of retention or similar right (whether arising
under applicable law, contract or otherwise) it may have against the Deposits
howsoever arising. All payments on or in respect of each Deposit shall be made
free and clear of and without reduction for or on account of any and all taxes,
levies or other impositions or charges (collectively, "TAXES"). However, if the
Depositary or the Paying Agent (pursuant to Section 2.04 of the Escrow and
Paying Agent Agreement) shall be required by law to deduct or withhold any Taxes
from or in respect of any sum payable hereunder, the Depositary shall (i) make
such deductions or withholding, (ii) pay the full amount deducted or withheld
(including in respect of such additional amounts) to the competent taxation
authority and (iii) if the Taxes required to be deducted or withheld are imposed
by Switzerland or any political subdivision thereof, pay such additional amounts
as may be necessary in order that the actual amount received by the designated
recipient of such sum under this Agreement or the Escrow and Paying Agent
Agreement after such deduction or withholding equals the sum it would have
received had no such deduction or withholding been required. If the date on
which any payment due on any Deposit would otherwise fall on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day,
and no additional interest shall accrue in respect of such extension.
SECTION 5. REPRESENTATION AND WARRANTIES. The Depositary hereby
represents and warrants to Continental, the Escrow Agent, the Pass Through
Trustee and the Paying Agent that:
(a) it is a bank duly organized and validly existing in good standing
under the laws of its jurisdiction of organization and is duly qualified to
conduct banking business in the State of New York through its New York
Branch;
(b) it has full power, authority and legal right to conduct its
business and operations as currently conducted and to enter into and
perform its obligations under this Agreement;
(c) the execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of it
and do not require any stockholder approval, or approval or consent of any
trustee or holder of any indebtedness or obligations of it, and such
document has been duly executed and delivered by it and constitutes its
legal, valid and binding obligations enforceable against it in accordance
with the terms hereof;
(d) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body is required for the execution,
delivery or performance by it of this Agreement;
(e) neither the execution, delivery or performance by it of this
Agreement, nor compliance with the terms and provisions hereof, conflicts
or will conflict with or results or will result in a breach or violation of
any of the terms, conditions or provisions of, or will require any consent
or approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of it or any similar
instrument binding on it or any order, writ, injunction or decree of any
court or governmental authority against it or by which it or any of its
properties is bound or any indenture, mortgage or contract or other
agreement or instrument to which it is a party or by which it or any of its
properties is bound, or constitutes or will constitute a default thereunder
or results or will result in the imposition of any lien upon any of its
properties; and
(f) there are no pending or, to its knowledge, threatened actions,
suits, investigations or proceedings (whether or not purportedly on behalf
of it) against or affecting it or any of its property before or by any
court or administrative agency which, if adversely determined, (i) would
adversely affect the ability of it to perform its obligations under this
Agreement or (ii) would call into question or challenge the validity of
this Agreement or the enforceability hereof in accordance with the terms
hereof, nor is the Depositary in default with respect to any order of any
court, governmental authority, arbitration board or administrative agency
so as to adversely affect its ability to perform its obligations under this
Agreement.
SECTION 6. TRANSFER. Neither party hereto shall be entitled to assign
or otherwise transfer this Agreement (or any interest herein) other than (in the
case of the Escrow Agent) to a successor escrow agent under the Escrow and
Paying Agent Agreement, and any purported assignment in violation thereof shall
be void. This Agreement shall be binding upon the parties hereto and their
respective successors and (in the case of the Escrow Agent) permitted assigns.
Upon the occurrence of the Transfer (as defined below) contemplated by the
Assignment and Assumption Agreement (as defined below), the Pass Through Trustee
shall (without further act) be deemed to have transferred all of its right,
title and interest in and to this Agreement to the trustee of the Successor
Trust (as defined below) and, thereafter, the trustee of the Successor Trust
shall be deemed to be the "Pass Through Trustee" hereunder with the rights of
the "Pass Through Trustee" hereunder, and each reference herein to "Continental
Airlines Pass Through Trust 1998-3A-2-O" shall be deemed to be a reference to
"Continental Airlines Pass Through Trust 1998-3A-2-S". The Escrow Agent and the
Depositary hereby acknowledge and consent to the Transfer contemplated by the
Assignment and Assumption Agreement. For the purposes of this Section 6,
"TRANSFER" means the transfer contemplated by the Assignment and Assumption
Agreement; "ASSIGNMENT AND ASSUMPTION AGREEMENT" means the Assignment and
Assumption Agreement to be entered into between the Pass Through Trustee and the
trustee of the Successor Trust, substantially in the form of Exhibit C to the
Pass Through Trust Agreement; and "SUCCESSOR TRUST" means the Continental
Airlines Pass Through Trust 1998-3A-2-S.
SECTION 7. AMENDMENT, ETC. This Agreement may not be amended, waived
or otherwise modified except by an instrument in writing signed by the party
against whom the amendment, waiver or other modification is sought to be
enforced and by the Pass Through Trustee.
SECTION 8. NOTICES. Unless otherwise expressly provided herein, any
notice or other communication under this Agreement shall be in writing
(including by facsimile) and shall be deemed to be given and effective upon
receipt thereof. All notices shall be sent to (x) in the case of the Depositary,
Credit Suisse First Boston, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx Xxxxxx and Xxxxxxxx Xxxx (Telecopier: 212-325-8319) or (y) in
the case of the Escrow Agent, First Security Bank, National Association, 00
Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, XX 00000, Attention: Corporate Trust Services
(Telecopier: (000) 000-0000), in each case, with a copy to the Pass Through
Trustee, Wilmington Trust Company, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX
00000, Attention: Corporate Trust Administration (Telecopier: (000) 000-0000)
and to Continental, Continental Airlines, Inc., 0000 Xxxxx Xxxxxx, Xxxx. XXX-XX,
Xxxxxxx, XX 00000, Attention: Vice President - Corporate Finance (Telecopier:
(000) 000-0000) (or at such other address as any such party may specify from
time to time in a written notice to the parties hereto). On or prior to the
execution of this Agreement, the Escrow Agent has delivered to the Depositary a
certificate containing specimen signatures of the representatives of the Escrow
Agent who are authorized to give notices and instructions with respect to this
Agreement. The Depositary may conclusively rely on such certificate until the
Depositary receives written notice from the Escrow Agent to the contrary.
SECTION 9. OBLIGATIONS UNCONDITIONAL. The Depositary hereby
acknowledges and agrees that its obligation to repay each Deposit together with
interest thereon as provided herein is absolute, irrevocable and unconditional
and constitutes a full recourse obligation of the Depositary enforceable against
it to the full extent of all of its assets and properties.
SECTION 10. ENTIRE AGREEMENT. This Agreement (including all
attachments hereto) sets forth all of the promises, covenants, agreements,
conditions and understandings between the Depositary and the Escrow Agent with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.
SECTION 11. GOVERNING LAW. This Agreement, and the rights and
obligations of the Depositary and the Escrow Agent with respect to the Deposits,
shall be governed by, and construed in accordance with, the laws of the State of
New York and subject to the provisions of Regulation D of the Board of Governors
of the Federal Reserve System (or any successor), as the same may be modified
and supplemented and in effect from time to time.
SECTION 12. WAIVER OF JURY TRIAL RIGHT. EACH OF THE DEPOSITARY AND THE
ESCROW AGENT ACKNOWLEDGES AND ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS
RIGHT TO A TRIAL BY JURY.
SECTION 13. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one instrument.
SECTION 14. HEAD OFFICE OBLIGATION. Credit Suisse First Boston hereby
agrees that the obligations of the Depositary hereunder are also the obligations
of Credit Suisse First Boston's Head Office in Zurich, Switzerland. Accordingly,
any beneficiary of this Agreement will be able to proceed directly against
Credit Suisse First Boston's Head Office in Zurich, Switzerland if Credit Suisse
First Boston's New York branch defaults in its obligation to such beneficiary
under this Agreement.
IN WITNESS WHEREOF, the Escrow Agent and the Depositary have caused
this Deposit Agreement to be duly executed as of the day and year first above
written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By _______________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
New York Branch,
as Depositary
By _______________________________
Name:
Title:
By _______________________________
Name:
Title:
Schedule I
SCHEDULE OF DEPOSITS
(Class A-2)
DATE TAIL NO. DEPOSIT AMOUNT ACCOUNT NO. MATURITY DATE
---- -------- -------------- ----------- --------------
12/15/98 N17133 $ 6,010,446 539384 January 31, 2000
12/15/98 N77006 42,755,805 539384 January 31, 2000
1/15/99 N29717 3,910,930 539384 January 31, 2000
1/15/99 N13718 3,910,930 539384 January 31, 2000
1/15/99 N67134 18,701,505 539384 January 31, 2000
2/15/99 N17719 12,579,251 539384 January 31, 2000
2/15/99 N41135 18,726,690 539384 January 31, 2000
2/15/99 N74007 8,160,450 539384 January 31, 2000
3/15/99 N13720 12,579,251 539384 January 31, 2000
3/15/99 N23721 12,579,251 539384 January 31, 2000
3/15/99 N19136 18,750,780 539384 January 31, 2000
4/15/99 N27722 12,687,912 539384 January 31, 2000
4/15/99 N21723 12,687,912 539384 January 31, 2000
4/15/99 N13227 15,148,887 539384 January 31, 2000
------------
$199,190,000
----------
Provided that if a Labor Strike occurs, each date below shall be extended by
the Additional Days.
EXHIBIT A
NOTICE OF PURCHASE WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York Branch
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx and Xxxxxxxx Xxxx
Telecopier: 000-000-0000
Gentlemen:
Reference is made to the Deposit Agreement (Class A-2) dated as of
November 3, 1998 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York Branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(a) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of the Deposit,
$_______, Account No. ____________.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposit to [________________, Account No. _____, Reference: _________] on
_________ __, 199_, upon the telephonic request of a representative of the Pass
Through Trustee.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By_____________________________
Name:
Title:
Dated: _______ __, 199_
EXHIBIT B
NOTICE OF FINAL WITHDRAWAL
CREDIT SUISSE FIRST BOSTON
New York Branch
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx and Xxxxxxxx Xxxx
Telecopier: 000-000-0000
Gentlemen:
Reference is made to the Deposit Agreement (Class A-2) dated as of
November 3, 1998 (the "DEPOSIT AGREEMENT") between First Security Bank, National
Association, as Escrow Agent, and Credit Suisse First Boston, New York Branch,
as Depositary (the "DEPOSITARY").
In accordance with Section 2.3(b) of the Deposit Agreement, the
undersigned hereby requests the withdrawal of the entire amount of all Deposits.
The undersigned hereby directs the Depositary to pay the proceeds of
the Deposits and accrued interest thereon to the Paying Agent at Wilmington
Trust Company, ABA# 000000000, Account No. _____________, Reference: Continental
1998-3.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
as Escrow Agent
By_____________________________
Name:
Title:
Dated: _______ __, 199_
