1
EXHIBIT 10.108
EXECUTION COPY
--------------------------------------------------------------------------------
INTERCREDITOR AGREEMENT
Dated as of
February 9, 1998
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Atlas Air Pass Through Trust 1998-1A,
Atlas Air Pass Through Trust 1998-1B
and
Atlas Air Pass Through Trust 1998-1C,
ABN AMRO BANK N.V.,
Chicago Branch,
as Class A Liquidity Provider,
XXXXXX XXXXXXX CAPITAL SERVICES, INC.,
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
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments from Monies
Received Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.2. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.3. Deposits to the Collection Account and Special Payments Account . . . . . . . . . . . . . . . . . . 27
SECTION 2.4. Distributions of Special Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.5. Designated Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.6. Controlling Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.2. Distribution of Amounts on Deposit in the Collection Account . . . . . . . . . . . . . . . . . . . 35
SECTION 3.3. Distribution of Amounts on Deposit Following a Triggering Event . . . . . . . . . . . . . . . . . . 36
SECTION 3.4. Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.5. Payments to the Trustees and the Liquidity Providers . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.6. Liquidity Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.2. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 4.3. Discontinuance of Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.4. Right of Certificateholders to Receive Payments Not to Be Impaired . . . . . . . . . . . . . . . . 48
SECTION 4.5. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
- i -
3
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering Event . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.2. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.3. No Duties Except as Specified in Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.4. Notice from the Liquidity Providers and Trustees . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.2. Absence of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.3. No Representations or Warranties as to Documents . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.4. No Segregation of Monies; No Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.5. Reliance; Agents; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.6. Capacity in Which Acting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.7. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.8. May Become Certificateholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.9. Subordination Agent Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.10. Money to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment of Successor . . . . . . . . . . . . . . . . . . . 53
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.2. Subordination Agent Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 9.3. Effect of Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 9.4. Notice to Rating Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
- ii -
4
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees, Liquidity Providers
and Subordination Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.4. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.5. No Oral Modifications or Continuing Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.6. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.7. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.8. Counterpart Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.9. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
- iii -
5
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of February 9, 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); ABN AMRO
BANK N.V., a bank organized under the laws of the Netherlands, acting through
its Chicago Branch ("ABN AMRO"), as Class A Liquidity Provider and XXXXXX
XXXXXXX CAPITAL SERVICES, INC. ("MSCS"), a corporation organized under the laws
of Delaware, 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 Atlas at the time such Indenture is entered into (the
"Owned Aircraft"), Atlas 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 Atlas 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 Placement Agreement, the Placement
Agents 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, ABN AMRO (with respect to the Class A Trust) and MSCS
(with respect to the Class B Trust and the Class C Trust) propose to enter into
separate revolving credit agreements (each, a "Liquidity Facility") with the
Subordination Agent, as agent for the Trustee of such Trusts, respectively, for
the benefit of the Certificateholders of such Trusts; and
6
WHEREAS, Xxxxxx Xxxxxxx, Xxxx Xxxxxx, Discover & Co. (the
"Guarantor") will guarantee in full, pursuant to separate Guarantee Agreements
dated as of the date hereof (each, a "Guarantee Agreement"), the obligations of
MSCS under the Class B Liquidity Facility and the Class C Liquidity Facility,
respectively;
WHEREAS, it is a condition precedent to the obligations of the
Placement Agents under the Placement Agreement that the Subordination Agent,
the Trustees and the Liquidity Providers agree to the terms of subordination
set forth in this Agreement in respect of each Class of Certificates, and the
Subordination Agent, the Trustees and the Liquidity Providers, by entering into
this Agreement, hereby acknowledge and agree to such terms of subordination and
the other provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms used herein that are defined in this
Article have the meanings assigned to them in this Article, and
include the plural as well as the singular;
(2) all references in this Agreement to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without
limitation".
"ABN AMRO" has the meaning assigned to such term in the
recital of the parties to this Agreement.
"ABN AMRO Fee Letter" means the Fee Letter dated February 9,
1998 between ABN AMRO and the Subordination Agent with respect to the Class A
Liquidity Facility.
2
7
"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
3
8
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" has the meaning set forth in the Note Purchase
Agreement and, with respect to each Indenture, means the "Aircraft" referred to
therein.
"AISI" means Aircraft Information Services, Inc.
"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 AISI, AvS and MBA.
"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.
"Atlas" means Atlas Air, Inc., a Delaware corporation, and
its successors and assigns.
4
9
"Atlas Bankruptcy Event" means the occurrence and continuation
of any of the following:
(a) Atlas 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 Atlas 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 Atlas 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 Atlas in any such case, or Atlas 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 Atlas
shall seek an agreement, composition, extension or adjustment with its
creditors under such laws, or Atlas' 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
Atlas, a receiver, trustee or liquidator of Atlas or of any
substantial part of its property, or any substantial part of the
property of Atlas shall be sequestered, or granting any other relief
in respect of Atlas 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 Atlas 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 Atlas, any court of
competent jurisdiction assumes jurisdiction, custody or control of
Atlas 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.
"Atlas Provisions" has the meaning specified in Section
9.1(a).
"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 Maximum
Commitment (as defined in such Liquidity Facility) 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
5
10
Downgrade Drawing, a Non-Extension Drawing or a Final Drawing under such
Liquidity Facility, the Available Amount of such Liquidity Facility shall be
zero.
"AvS" means Aviation Solutions Inc.
"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
Denver, Colorado, Chicago, Illinois, 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 ABN AMRO and, from and after
the replacement of such agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
6
11
"Class A Liquidity Provider" means ABN AMRO, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class A Liquidity Facility pursuant to Section 3.6(e).
"Class A Trust" means (i) prior to the Transfer, the Atlas Air
Pass Through Trust 1998-1A-O created and administered pursuant to the Class A
Trust Agreement and (ii) after the Transfer, the Atlas Air 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
Pass Through Trust Agreement dated as of February 9, 1998, between Atlas and
the Class A Trustee, governing the creation and administration of the Atlas Air
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 Pass Through
Trust Agreement between Atlas and the Class A Trustee, governing the creation
and administration of the Atlas Air 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 MSCS and, from and after the
replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
7
12
"Class B Liquidity Provider" means MSCS, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class B Liquidity Facility pursuant to Section 3.6(e).
"Class B Trust" means (i) prior to the Transfer, the Atlas Air
Pass Through Trust 1998-1B-O created and administered pursuant to the Class B
Trust Agreement and (ii) after the Transfer, the Atlas Air 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
Pass Through Trust Agreement dated as of February 9, 1998 between Atlas and the
Class B Trustee, governing the creation and administration of the Atlas Air
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 Pass Through
Trust Agreement between Atlas and the Class B Trustee, governing the creation
and administration of the Atlas Air 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 MSCS, and, from and after the
replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
8
13
"Class C Liquidity Provider means MSCS, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace the Class C Liquidity Facility pursuant to Section 3.6(e).
"Class C Trust" means (i) prior to the Transfer, the Atlas Air
Pass Through Trust 1998-1C-O created and administered pursuant to the Class C
Trust Agreement and (ii) after the Transfer, the Atlas Air 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
Pass Through Trust Agreement dated as of February 9, 1998 between Atlas and the
Class C Trustee, governing the creation and administration of the Atlas Air
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 Pass Through
Trust Agreement between Atlas and the Class C Trustee, governing the creation
and administration of the Atlas Air 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 Atlas Air Pass Through Trust 1998
1D, if and when established.
"Closing Date" means February 9, 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.
"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.
9
14
"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.
"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 ABN AMRO, 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
Atlas holds any participation in the related Liquidity Facility unless written
confirmation shall have been
10
15
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 Atlas 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 Atlas 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 Atlas 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.
11
16
"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 Placement Agents, 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.
"Fee Letter" means, collectively, the ABN AMRO Fee Letter and
the MSCS Fee Letter and any fee letter entered into between the Subordination
Agent and any Replacement Liquidity Provider.
12
17
"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, July 2, 2019, (ii) with respect to the Class B
Certificates, July 2, 2015 and (iii) with respect to the Class C Certificates,
July 2, 2011.
"Financing Agreement" means each of the Participation
Agreements and the Note Purchase Agreement.
"Fitch" means Fitch IBCA, Inc.
"Guarantee Agreement" has the meaning assigned to such term
in the preliminary statements to this Agreement.
"Guarantee Event" has the meaning assigned to such term in
Section 3.6(c).
"Guarantor" has the meaning assigned to such term in the
preliminary statements to this Agreement.
"Indenture" means each of the Trust Indentures entered into by
the Loan Trustee, and the Owner Trustee or Atlas, 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).
13
18
"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 Participation Agreement" means a
participation agreement substantially in the form of Exhibit A-1 to the Note
Purchase Agreement, as the same may be amended, supplemented or otherwise
modified in accordance with its terms.
"Lending Office" means, with respect to any Liquidity
Facility, the lending office of such Liquidity Provider thereunder, presently
located at Chicago, Illinois and New York, New York, for ABN AMRO and MSCS,
respectively, or such other lending office as such Liquidity Provider from time
to time shall notify the applicable Trustee as its lending office under any
such Liquidity Facility; provided that such Liquidity Provider shall not change
its Lending Office to a Lending Office outside the United States of America
except in accordance with Section 3.01, 3.02 or 3.03 of any such Liquidity
Facility.
"Lien" means any mortgage, pledge, lien, charge, claim,
disposition of title, encumbrance, lease, sublease, sub-sublease or security
interest of any kind, including, without limitation, any thereof arising under
any conditional sales or other title retention agreement.
"Liquidity Event of Default" with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other
than (i) the principal amount of any Drawings under the Liquidity Facilities
and (ii) any interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A Liquidity
Facility, the Class B Liquidity Facility or the Class C Liquidity Facility.
"Liquidity Obligations" means all principal, interest, fees
and other amounts owing to the Liquidity Providers under the Liquidity
Facilities, Section 8.1 of the Owned
14
19
Aircraft Participation Agreements, Section 9.1 of the Leased Aircraft
Participation Agreements or the Fee Letters.
"Liquidity Provider" means, at any time, the Class A Liquidity
Provider, the Class B Liquidity Provider or the Class C Liquidity Provider, as
applicable.
"Loan Trustee" means, with respect to any Indenture, the loan
trustee thereunder.
"LP Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(b).
"LP Representatives" has the meaning assigned to such term in
Section 2.5(b).
"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 38.1%, for the
Class B Certificates 52.8%, and for the Class C Certificates, 68.4%.
"Majority Liquidity Providers" means, at any time, Liquidity
Providers holding at least a majority of the aggregate outstanding Liquidity
Obligations at such time.
"MBA" means Xxxxxx Xxxxx & Xxxxx.
"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 Xxxxx'x Investors Service, Inc.
15
20
"MSCS" has the meaning assigned to such term in the recital of
the parties to this Agreement.
"MSCS Fee Letter" means the Fee Letter dated February 9, 1998,
between MSCS and the Subordination Agent with respect to the Class B Liquidity
Facility and the Class C Liquidity Facility.
"MSCS Liquidity Facilities" means the Class B Liquidity
Facility and the Class C Liquidity Facility.
"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 Atlas, 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 Placement Agreement, the
Registration Rights 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
16
21
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 Atlas 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 Atlas 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 Participation Agreement" means a participation
agreement substantially in the form of Exhibit C-1 to the Note Purchase
Agreement, as the same may be amended, supplemented or otherwise modified in
accordance with its terms.
"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, collectively, any Leased
Aircraft Participation Agreement and any Owned Aircraft Participation
Agreement.
"Payee" has the meaning assigned to such term in Section
2.4(e).
"Paying Agent" means WTC, as paying agent under each Escrow
and Paying Agent Agreement, together with its successors in such capacity.
17
22
"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 Atlas 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 Atlas 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.
"Placement Agents" means Xxxxxx Xxxxxxx & Co. Incorporated, BT
Alex. Xxxxx Incorporated, Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
and Xxxxxxx, Sachs & Co.
"Placement Agreement" means the Placement Agreement dated
January 27, 1998 among the Placement Agents and Atlas, relating to the purchase
of the Certificates by the Placement Agents, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"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.
18
23
"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, Standard & Poor's and Fitch.
"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.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the date hereof, among the Placement Agents, the Trustees
and Atlas, as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Regular Distribution Dates" means each January 2 and July 2,
commencing on July 2, 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 the Rating Agencies which are equal to or higher than the Threshold
Rating. Without limitation of the form that a Replacement Liquidity Facility
19
24
otherwise may have pursuant to the preceding sentence, a Replacement Liquidity
Facility for any Class of Certificates may have a stated expiration date
earlier than 15 days after the Final Maturity Date of such Class of
Certificates so long as such Replacement Liquidity Facility provides for a
Non-Extension Drawing as contemplated by Section 3.6(d) hereof.
"Replacement Liquidity Provider" means a Person who issues a
Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity
Facility, or the Cash Collateral Account, for any Class, for any day, the sum
of the aggregate amount of interest, calculated at the rate per annum equal to
the Stated Interest Rate for the related Class of Certificates, that would be
payable on such Class of Certificates on each of the 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 7.38% Series A Equipment
Notes issued pursuant to each Indenture by the related Owner Trustee or Atlas,
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.
20
25
"Series B Equipment Notes" means the 7.68% Series B Equipment
Notes issued pursuant to each Indenture by the related Owner Trustee or Atlas,
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 8.01% Series C Equipment
Notes issued pursuant to each Indenture by the related Owner Trustee or Atlas,
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 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 XxXxxx-Xxxx Companies, Inc.
"Stated Expiration Date" has the meaning specified in Section
3.6(d).
"Stated Interest Rate" means (i) with respect to the Class A
Certificates, 7.38% per annum, (ii) with respect to the Class B Certificates,
7.68% per annum and (iii) with respect to the Class C Certificates, 8.01% per
annum, and in each case, plus an additional margin equal to 0.50% per annum,
from and including August 9, 1998, in the event no Registration Event (as
defined in the Registration Rights Agreement) occurs on or prior to the 180th
day after the Closing Date (provided that any such additional margin shall
cease to be in effect from and including the date on which such Registration
Event occurs); provided that if the Shelf Registration Statement (as defined in
the Registration Rights Agreement) ceases to be effective at any time during
the period specified by Section 2(b) of the Registration Rights Agreement for
more than 60 days, whether or not consecutive, during any 12-month period, the
Stated Interest Rate shall be increased by 0.50% per annum from the 61st day of
the applicable 12-month period such Shelf Registration Statement ceases to be
effective until such time as the Shelf Registration Statement again becomes
effective.
"Subordination Agent" has the meaning assigned to it in the
preliminary statements to this Agreement.
21
26
"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, Atlas Air Pass Through
Trust 1998-1A-S, Atlas Air Pass Through Trust 1998-1B-S and Atlas Air 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.
"Tax Letter" means, collectively, the Tax Letter dated as of
February 9, 1998, between Atlas and ABN AMRO with respect to the Class A
Liquidity Facility and all tax letters entered into between Atlas and any
Replacement Liquidity Provider.
"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 Xxxxx'x; A-1+ by Standard & Poor's, and F1+ by Fitch in the case of
the Class A Liquidity Provider, and the short-term unsecured debt rating of P-1
by Xxxxx'x, A-1 by Standard & Poor's and F1 by Fitch, in the case of the Class
B Liquidity Provider and 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
22
27
proposed or temporary regulations shall include analogous provisions of final
Treasury Regulations or other successor Treasury Regulations.
"Triggering Event" means (x) the occurrence of an Indenture
Default under all of the Indentures resulting in a PTC Event of Default with
respect to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes or (z) the occurrence of
an Atlas 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).
"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.
23
28
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,
24
29
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; (or, in the case of any amount on deposit in the Cash
Collateral Account with respect to any Liquidity Facility (with respect to such
Liquidity Facility, the "Relevant Amount"), (A) in the case of a portion of the
Relevant Amount equal to the amount scheduled to be paid to the Liquidity
Provider with respect to such Liquidity Facility on the Regular Distribution
Date next following the date of such investment in accordance with clause (iv),
(v) or (vi) of Section 3.6(f), the Business Day immediately preceding such
Regular Distribution Date, or (B) in the case of a portion of the Relevant
Amount equal to the Relevant Amount minus the amount described in clause (A)
above, the Business Day immediately preceding the scheduled Interest Payment
Date with respect to such Liquidity Facility 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 Atlas; provided, however, that upon the
occurrence and during the continuation of a Triggering Event, the Subordination
Agent shall invest and reinvest such amounts in accordance with the written
instructions of the Controlling Party. Unless otherwise expressly provided in
this Agreement (including, without limitation, with respect to Investment
Earnings on deposit in the Cash Collateral Accounts, Section 3.6(f) hereof),
any Investment Earnings shall be deposited in the Collection Account when
received by the Subordination Agent and shall be applied by the Subordination
Agent in the same manner as the other amounts on deposit in the Collection
Account are to be applied and any losses shall be charged against the principal
amount invested, in each case net of the Subordination Agent's reasonable fees
and expenses in making such investments. The Subordination Agent shall not be
liable for any loss resulting from any investment, reinvestment or liquidation
required to be made under this Agreement other than by reason of its willful
misconduct or gross negligence. Eligible Investments and any other investment
required to be made hereunder shall be held to their maturities except that any
such investment may be sold (without regard to its maturity) by the
Subordination Agent without instructions whenever such sale is necessary to
make a distribution required under this Agreement. Uninvested funds held
hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right,
title and interest in all funds on deposit from time to time in the Trust
Accounts and in all proceeds thereof (including all income thereon, except as
otherwise 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
25
30
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
26
31
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;
27
32
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 Atlas 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 Atlas under any Operative Agreement in respect of any Payee,
directly to the Payee entitled thereto.
28
33
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
29
34
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,
and (ii) the date on which all Equipment Notes shall have been Accelerated, the
Liquidity Providers with at least two-thirds of unreimbursed 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.
30
35
(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
31
36
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;
32
37
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 Sub-Account
of any Cash Collateral Account had been previously funded as provided
in Section 3.6(f), to fund such Sub-Account up to its Required Amount
shall be deposited in such Sub-Account, (B) if any Liquidity Facility
shall become a Downgraded Facility or a Non-Extended
33
38
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 Sub-Account of the related Cash
Collateral Account an amount equal to such Sub-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
34
39
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
35
40
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.
36
41
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 each Liquidity Facility with respect
to such Class of Certificates in an amount equal to the lesser of (i) of 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
37
42
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 (i) the
short-term unsecured debt rating of the Class A Liquidity Provider (with
respect to the Class A Liquidity Facility) or the Guarantor (with respect to
the MSCS Liquidity Facilities) issued by any Rating Agency is lower than the
applicable Threshold Rating or (ii) (with respect to any MSCS Liquidity
Facility) the related Guarantee Agreement ceases to be in full force and
effect, becomes invalid or unenforceable or the Guarantor denies its liability
thereunder (any such occurrence, a "Guarantee Event"), within 10 days (in the
case of the Class A Liquidity Facility) or 3 days (in the case of the MSCS
Liquidity Facilities) after receiving notice of such downgrading or Guarantee
Event, as the case may be (but not later than the expiration date of the
Liquidity Facility issued by the relevant Liquidity Provider (the "Downgraded
Facility")), such Liquidity Provider or Atlas 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 or 3rd day, as the case may be, (or if such 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 the Class A Liquidity
Facility 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 the
Class A Certificates, then, no earlier than the 60th day and no later than the
40th day prior to the then Stated Expiration Date, the
38
43
Subordination Agent shall request that the Class A Liquidity Provider extend
the Stated Expiration Date for a period of 364 days after the Stated Expiration
Date (unless the obligations of the Class A Liquidity Provider thereunder are
earlier terminated in accordance with the Class A Liquidity Facility). The
Class A 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, the Class A Liquidity Facility shall not have been so
extended or replaced in accordance with Section 3.6(e), or if the Class A
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 Class A Liquidity
Facility (a "Non-Extended Facility"), request a drawing under such expiring
Class A Liquidity Facility (such drawing, a "Non-Extension Drawing") of all
available and undrawn amounts thereunder. Amounts drawn pursuant to a
Non-Extension Drawing shall be maintained and invested in accordance with
Section 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. (i) At
any time, Atlas 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 neither ABN AMRO nor
MSCS shall be replaced by Atlas as a Liquidity Provider with respect to any
Class of Certificates prior to the fourth anniversary of the Closing Date
unless (A) there shall have become due to such Liquidity Provider, or such
Liquidity Provider shall have demanded, amounts pursuant to Section 3.01, 3.02
or 3.03 of any Liquidity Facility or pursuant to the Tax Letter and the
replacement of such Liquidity Provider would reduce or eliminate the obligation
to pay such amounts or Atlas determines in good faith that there is a
substantial likelihood that such Liquidity Provider will have the right to
claim any such amounts (unless such 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 Atlas to such Liquidity Provider setting
forth the basis for such determination and accompanied by an opinion of outside
counsel selected by Atlas and reasonably acceptable to such 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 such Liquidity Provider (or its
Lending Office) to maintain or fund its LIBOR Advances as described in Section
3.10 of any Liquidity Facility, (C) with respect to the Class A Liquidity
Facility, the short- term unsecured debt rating of such Liquidity Provider or,
with respect to the MSCS Liquidity Facilities, the short-term unsecured debt
rating of the Guarantor is downgraded by any Rating Agency and there is a
resulting downgrade in the rating by any Rating Agency of any related Class of
Certificates, (D) a Downgrade Drawing or a Non-Extension Drawing shall have
occurred under any Liquidity Facility, (E) with respect to the MSCS Liquidity
39
44
Facilities, as contemplated by the Letter Agreement dated as of January 23,
1998 between MSCS and Atlas, or (F) such 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 Atlas
or a Liquidity Provider in accordance with clause (i) or (ii) above,
respectively, shall become effective and no such Replacement Liquidity
Facility shall be deemed a "Liquidity Facility" under the Operative
Agreements (in each case other than insofar as necessary to permit the
repayment of amounts owed to the replaced Liquidity Provider), unless
and until (A) each of the conditions referred to in clause (iv) below
shall have been satisfied, (B) if such Replacement Liquidity Facility
shall materially adversely affect the rights, remedies, interests or
obligations of the Class A Certificateholders, the Class B
Certificateholders or the Class C Certificateholders under any of the
Operative Agreements, the applicable Trustee shall have consented, in
writing, to the execution and issuance of such Replacement Liquidity
Facility and (C) in the case of a Replacement Liquidity Facility
arranged by a Liquidity Provider under Section 3.6(e)(ii), such
Replacement Liquidity Facility is acceptable to Atlas.
(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
40
45
Subordination Agent shall, if and to the extent so requested by Atlas
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
Atlas 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
41
46
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 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 Class B
Liquidity Provider until the Liquidity Obligations (with respect to
the Class B Certificates) owing to such Liquidity Provider
42
47
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 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 Maximum Commitment with respect to 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
43
48
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) Relation to Subordination Provisions. Interest
Drawings under the Liquidity Facilities and withdrawals from the Cash
Collateral Accounts, in each case, in respect of interest on the Certificates
of any Class, will be distributed to the Trustee for such Class of
Certificates, notwithstanding Sections 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture Default
under any Indenture, the Controlling Party shall direct the Subordination
Agent, which in turn shall direct the 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
44
49
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 Atlas
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 Atlas 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 Atlas 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 any 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.
45
50
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.
46
51
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
47
52
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
48
53
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.
49
54
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
50
55
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
51
56
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), or the second sentence of Section
10.6 (collectively, together with this proviso and Section 9.1(c), the "Atlas
Provisions") or (y) otherwise adversely affect the interests of a potential
Replacement Liquidity Provider or of Atlas with respect to its ability to
replace any Liquidity Facility or with respect to its payment obligations under
any
52
57
Financing Agreement, Leased or Owned Aircraft Indenture 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 Atlas. Notwithstanding the
foregoing, without the consent of each Certificateholder and the Liquidity
Provider with respect to the applicable Class of Certificates, no supplement,
amendment or modification of this Agreement may (i) reduce the percentage of
the interest in the related 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.
(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 Atlas under any Lease or reduce the
amount of principal or interest payable by Atlas under any Equipment Note
issued under any Indenture in respect of an Owned Aircraft.
(c) If with respect to any Owned Aircraft Atlas issues
Class D Certificates, this Agreement shall be amended by written agreement of
Atlas 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;
53
58
(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" and "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
54
59
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 Xxxxxx Square
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
(ii) if to any Trustee, addressed to it at its office at:
WILMINGTON TRUST COMPANY
One Xxxxxx Square
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
55
60
(iii) if to ABN AMRO as Liquidity Provider, addressed to it at its
offices at:
ABN AMRO BANK N.V., Chicago Branch
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxxxx
Telecopier: 000-000-0000
and
ABN AMRO BANK N.V., Chicago Branch
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attention: Loan Operations
Telecopier: 000-000-0000
(iv) if to MSCS as Liquidity Provider, addressed to it at its
office at:
XXXXXX XXXXXXX CAPITAL SERVICES, INC.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telecopier: 000-000-0000
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 Atlas
56
61
Provisions shall inure to the benefit of Atlas and its successors and assigns,
and (without limitation of the foregoing) Atlas is hereby constituted, and
agreed to be, an express third party beneficiary of the Atlas 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 and the Certificateholders, on the
other hand, this Agreement shall be a subordination agreement for purposes of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, as amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if
prior to the payment in full to the Liquidity Providers of all Liquidity
Obligations then due and payable, any party hereto shall have received any
payment or distribution in respect of Equipment Notes or any other amount under
the Indentures or other Operative Agreements which, had the subordination
provisions of this Agreement been properly applied to such payment,
distribution or other amount, would not have been distributed to such Person,
then such payment, distribution or other amount shall be received and held in
trust by such Person and paid over or delivered to the Subordination Agent for
application as provided herein.
(c) If any Trustee, any Liquidity Provider or the
Subordination Agent receives any payment in respect of any obligations owing
hereunder (or, in the case of the Liquidity Providers, in respect of the
Liquidity Obligations), which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver or
other party, then, to the extent of such payment, such obligations (or, in the
case of the Liquidity Providers, such Liquidity Obligations) intended to be
satisfied shall be revived and continue in full force and effect as if such
payment had not been received.
(d) The Trustees (on behalf of themselves and the holders
of Certificates), the Liquidity Providers and the Subordination Agent confirm
that the payment priorities
57
62
specified in Sections 2.4, 3.2 and 3.3 shall apply in all circumstances,
notwithstanding the fact that the obligations owed to the Trustees and the
holders of Certificates are secured by certain assets and the Liquidity
Obligations may not be so secured. The Trustees expressly agree (on behalf of
themselves and the holders of Certificates) not to assert priority over the
holders of Liquidity Obligations due to their status as secured creditors in
any bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers and the Subordination Agent
may take any of the following actions without impairing its rights under this
Agreement:
(i) obtain a Lien on any property to secure any amounts
owing to it hereunder, including, in the case of the Liquidity
Providers, the Liquidity Obligations,
(ii) obtain the primary or secondary obligation of any
other obligor with respect to any amounts owing to it hereunder,
including, in the case of the Liquidity Providers, any of the
Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any
amounts owing to it hereunder, including, in the case of the Liquidity
Providers, any of the Liquidity Obligations, or release or compromise
any obligation of any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay
in exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a
subordinated party or a surety under applicable law;
provided, however, that the taking of any such actions by any of the Trustees,
the Liquidity Providers or the Subordination Agent shall not prejudice the
rights or adversely affect the obligations of any other party under this
Agreement.
SECTION 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity. (a) Each of the parties hereto hereby irrevocably
and unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any other Operative
Agreement, or for recognition and
58
63
enforcement of any judgment in respect hereof or thereof, to the
nonexclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each of
the parties warrants and represents that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its jury trial
rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.
(c) The Class A Liquidity Provider hereby waives any
immunity it may have from the jurisdiction of the courts of the United States
of America or of any State and waives any immunity any of its properties
located in the United States of America 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.
59
64
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written, and acknowledge that
this Agreement has been made and delivered in the City of New York, and this
Agreement has become effective only upon such execution and delivery.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Trustee for each of the
Trusts
By /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
ABN AMRO BANK N.V.,
Chicago Branch,
as Class A Liquidity Provider
By /s/ XXXXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
By /s/ LUKAS VAN DER HOEF
-------------------------------------
Name: Lukas van der Hoef
Title: Vice President
XXXXXX XXXXXXX CAPITAL
SERVICES, INC.
as Class B Liquidity Provider
and Class C Liquidity Provider
By /s/
-------------------------------------
Name:
Title:
