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INTERCREDITOR AGREEMENT
(2001-1)
Dated as of
April 19, 2001
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Continental Airlines Pass Through Trust 2001-1A-1
Continental Airlines Pass Through Trust 2001-1A-2,
and
Continental Airlines Pass Through Trust 2001-1B
LANDESBANK HESSEN-THURINGEN GIROZENTRALE,
as Class A-1 Liquidity Provider,
as Class A-2 Liquidity Provider and
as Class B Liquidity Provider
AND
WILMINGTON TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.......................................................2
SECTION 1.1. Definitions.................................................2
ARTICLE II TRUST ACCOUNTS; CONTROLLING PARTY...............................23
SECTION 2.1. Agreement to Terms of Subordination; Payments from
Monies Received Only.......................................23
SECTION 2.2. Trust Accounts.............................................23
SECTION 2.3. Deposits to the Collection Account and Special
Payments Account...........................................25
SECTION 2.4. Distributions of Special Payments..........................25
SECTION 2.5. Designated Representatives.................................27
SECTION 2.6. Controlling Party..........................................28
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED...........................................................29
SECTION 3.1. Written Notice of Distribution.............................29
SECTION 3.2. Distribution of Amounts on Deposit in the Collection
Account....................................................32
SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event...........................................33
SECTION 3.4. Other Payments.............................................35
SECTION 3.5. Payments to the Trustees and the Liquidity Providers.......35
SECTION 3.6. Liquidity Facilities.......................................36
ARTICLE IV EXERCISE OF REMEDIES............................................44
SECTION 4.1. Directions from the Controlling Party......................44
SECTION 4.2. Remedies Cumulative........................................45
SECTION 4.3. Discontinuance of Proceedings..............................45
SECTION 4.4. Right of Certificateholders to Receive Payments Not to
Be Impaired................................................45
SECTION 4.5. Undertaking for Costs......................................46
ARTICLE V DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC...46
SECTION 5.1. Notice of Indenture Default or Triggering Event............46
SECTION 5.2. Indemnification............................................46
SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement..................................................47
SECTION 5.4. Notice from the Liquidity Providers and Trustees...........47
ARTICLE VI THE SUBORDINATION AGENT.........................................47
SECTION 6.1. Authorization; Acceptance of Trusts and Duties.............47
SECTION 6.2. Absence of Duties..........................................48
SECTION 6.3. No Representations or Warranties as to Documents...........48
SECTION 6.4. No Segregation of Monies; No Interest......................48
SECTION 6.5. Reliance; Agents; Advice of Counsel........................48
SECTION 6.6. Capacity in Which Acting...................................49
SECTION 6.7. Compensation...............................................49
PAGE
SECTION 6.8. May Become Certificateholder...............................49
SECTION 6.9. Subordination Agent Required; Eligibility..................49
SECTION 6.10. Money to Be Held in Trust..................................49
ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT.........................50
SECTION 7.1. Scope of Indemnification...................................50
ARTICLE VIII SUCCESSOR SUBORDINATION AGENT.................................50
SECTION 8.1. Replacement of Subordination Agent; Appointment of
Successor..................................................50
ARTICLE IX SUPPLEMENTS AND AMENDMENTS......................................51
SECTION 9.1. Amendments, Waivers, etc...................................51
SECTION 9.2. Subordination Agent Protected..............................53
SECTION 9.3. Effect of Supplemental Agreements..........................53
SECTION 9.4. Notice to Rating Agencies..................................54
ARTICLE X MISCELLANEOUS....................................................54
SECTION 10.1. Termination of Intercreditor Agreement....................54
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent...............54
SECTION 10.3. Notices...................................................54
SECTION 10.4. Severability..............................................55
SECTION 10.5. No Oral Modifications or Continuing Waivers...............56
SECTION 10.6. Successors and Assigns....................................56
SECTION 10.7. Headings..................................................56
SECTION 10.8. Counterpart Form..........................................56
SECTION 10.9. Subordination.............................................56
SECTION 10.10. Governing Law.............................................57
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity........................................57
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of April 19, 2001, among
WILMINGTON TRUST COMPANY, a Delaware corporation ("WTC"), not in its
individual capacity but solely as Trustee of each Offered Certificate Trust
(each as defined below); LANDESBANK HESSEN-THURINGEN GIROZENTRALE, a
public-law banking institution organized under the laws of Germany
("HELABA"), as Class A-1 Liquidity Provider, Class A-2 Liquidity Provider and
Class B Liquidity Provider; and WILMINGTON TRUST COMPANY, not in its
individual capacity except as expressly set forth herein, but solely as
Subordination Agent and trustee hereunder (in such capacity, together with
any successor appointed pursuant to Article VIII hereof, the "SUBORDINATION
AGENT").
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each
Aircraft that is owned by Continental at the time such Indenture is entered
into (the "OWNED AIRCRAFT"), Continental will issue on a recourse basis up to
(and including) three (or four or five, under certain circumstances) series
of Equipment Notes to finance the purchase of such Aircraft, and (ii) in the
case of each Aircraft that is leased to Continental pursuant to a related
Lease at the time such Indenture is entered into (the "LEASED AIRCRAFT"), the
related Owner Trustee will issue on a nonrecourse basis up to (and including)
three (or four or five, under certain circumstances) 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 relating to an Offered
Certificate Trust, the Offered Certificate Trust created thereby proposes to
issue a single class of Offered Certificates bearing the interest rate and
having the final distribution date described in such Trust Agreement on the
terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters
propose to purchase the Offered Certificates issued by each Offered
Certificate Trust in the aggregate face amount set forth opposite the name of
such Offered Certificate Trust on Schedule I thereto on the terms and subject
to the conditions set forth therein;
WHEREAS, Helaba proposes to enter into three separate revolving
credit agreements with the Subordination Agent, as agent for the Trustee of
the applicable Offered Certificate Trust, respectively, for the benefit of
the Certificateholders of such Trust;
WHEREAS, after the date hereof, a Class C Trust may be formed to
issue Class C Certificates pursuant to a Class C Trust Agreement and, if and
when such Class C Trust is formed, among other things, (i) the Class C
Trustee will become a party to this Agreement and agree to the terms hereof,
including the terms of subordination set forth herein, (ii) the Class C Trust
will acquire Series C Equipment Notes having an interest rate equal to the
interest rate applicable to the Class C Certificates, and (iii) if
applicable, the Class C Liquidity Provider will enter into the Class C
Liquidity Facility for the benefit of the Class C Certificateholders;
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent,
the applicable Trustees and the Liquidity Providers agree to the terms of
subordination set forth in this Agreement in respect of each Class of Offered
Certificates, and the Subordination Agent, the applicable Trustees and the
Liquidity Providers, by entering into this Agreement, hereby acknowledge and
agree to such terms of subordination and the other provisions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have
the meanings assigned to them in this Article, and include the plural
as well as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without
limitation".
"ACCELERATION" means, with respect to the amounts payable in
respect of the Equipment Notes issued under any Indenture, such amounts
becoming immediately due and payable by declaration or otherwise.
"ACCELERATE", "ACCELERATED" and "ACCELERATING" have meanings correlative to
the foregoing.
"ADJUSTED EXPECTED DISTRIBUTIONS" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of
(x) accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits related to such Trust) and (y) the
greater of:
(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (or, if
the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust) and
(y) the Pool Balance of such Certificates as of the Current
Distribution Date calculated on the basis that (i) the principal of the
Non-Performing Equipment Notes held in such Trust has been paid in full
and such payments have been distributed to the holders of such
Certificates, (ii) the principal of the Performing Equipment Notes held
in such Trust has been paid when due (but without giving effect to any
Acceleration of Performing Equipment Notes) and such payments have been
distributed to the holders of such Certificates and (iii) the principal
of any Equipment Notes formerly held in such Trust that have been sold
pursuant to the terms hereof has been paid in full and such payments
have been distributed to the holders of such Certificates, but without
giving effect to any reduction in the Pool Balance as a result of any
distribution attributable to Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution Date is
the first Distribution Date, occurring after the initial issuance of
the Certificates of such Trust), and
(B) the amount of the excess, if any, of (i) the Pool Balance
of such Class of Certificates as of the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the
Certificates of such Trust), less the amount of the Deposits for such
Class of Certificates as of such preceding Distribution Date (or, if
the Current Distribution Date is the first Distribution Date, the
original aggregate amount of the Deposits for such Class of
Certificates) other than any portion of such Deposits thereafter used
to acquire Equipment Notes pursuant to the Note Purchase Agreement,
over (ii) the Aggregate LTV Collateral Amount for such Class of
Certificates for the Current Distribution Date;
PROVIDED that, until the date of the initial LTV Appraisals, clause (B) shall
not apply.
For purposes of calculating Adjusted Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust that has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion
thereof applied to the payment of interest on the Certificates of such Trust
or the reduction of the Pool Balance of such Trust) shall be added to the
amount of Adjusted Expected Distributions.
"ADVANCE", with respect to any Liquidity Facility, means any
Advances as defined in such Liquidity Facility.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control" means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of
voting securities or by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"AGGREGATE LTV COLLATERAL AMOUNT" for any Class of Certificates
for any Distribution Date means the product of (A)(i) the sum of the
applicable LTV Collateral Amounts for each Leased Aircraft and Owned
Aircraft, minus (ii) 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,
multiplied by (B)(i) in the case of the Class A-1 Certificates or Class A-2
Certificates, a fraction the numerator of which equals the Current Pool
Balance for the Class A-1 Certificates or Class A-2 Certificates, as the case
may be, and the denominator of which equals the aggregate Current Pool
Balance for the Class A-1 Certificates and Class A-2 Certificates and (ii) in
the case of the Class B Certificates and Class C Certificates, 1.0.
"AIRCRAFT" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"APPRAISAL" means a fair market value appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"APPRAISED CURRENT MARKET VALUE" of any Leased Aircraft or Owned
Aircraft means the lower of the average and the median of the three most
recent Appraisals of such Aircraft.
"APPRAISERS" means Aircraft Information Services, Inc., AVITAS,
Inc. and Xxxxxx Xxxxx and Xxxxx, Inc.
"ASSIGNMENT AND ASSUMPTION AGREEMENTS" means each of the
Assignment and Assumption Agreements to be executed between a Trustee and
trustee of the relevant Successor Trust in accordance with the relevant Trust
Agreement, as the same may be amended, modified or supplemented from time to
time.
"AVAILABLE AMOUNT" means, with respect to any Liquidity Facility
on any drawing date, subject to the proviso contained in the first sentence
of Section 3.6(g) hereof, an amount equal to (a) the Stated Amount of such
Liquidity Facility at such time, LESS (b) the aggregate amount of each
Interest Drawing honored by the Liquidity Provider under such Liquidity
Facility on or prior to such date which has not been reimbursed or reinstated
as of such date; PROVIDED that, following a Downgrade Drawing, a
Non-Extension Drawing or a Final Drawing under such Liquidity Facility, the
Available Amount of such Liquidity Facility shall be zero.
"BASIC AGREEMENT" means the Pass Through Trust Agreement dated as
of September 25, 1997 between Continental and WTC, not in its individual
capacity, except as otherwise expressly provided therein, but solely as
trustee.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in Houston,
Texas, New York, New York, or, so long as any Certificate is outstanding, the
city and state in which any Trustee, the Subordination Agent or any Loan
Trustee maintains its Corporate Trust Office or receives and disburses funds,
and that, solely with respect to draws under any Liquidity Facility, also is
a "Business Day" as defined in such Liquidity Facility.
"CASH COLLATERAL ACCOUNT" means the Class A-1 Cash Collateral
Account, the Class A-2 Cash Collateral Account, the Class B Cash Collateral
Account or the Class C Cash Collateral Account, as applicable.
"CERTIFICATE" means a Class A-1 Certificate, a Class A-2
Certificate, a Class B Certificate or a Class C Certificate, as applicable.
"CERTIFICATEHOLDER" means any holder of one or more Certificates.
"CLASS" means any class of Certificates, as applicable.
"CLASS A-1 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-1 Liquidity Facility pursuant
to Section 3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"CLASS A-1 CERTIFICATEHOLDER" means, at any time, any holder of
one or more Class A-1 Certificates.
"CLASS A-1 CERTIFICATES" means the certificates issued by the
Class A-1 Trust, substantially in the form of Exhibit A to the Class A-1
Trust Agreement, and authenticated by the Class A-1 Trustee, representing
fractional undivided interests in the Class A-1 Trust, and any certificates
issued in exchange therefor or replacement thereof pursuant to the terms of
the Class A-1 Trust Agreement.
"CLASS A-1 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-1 Trust, and the initial Class
A-1 Liquidity Provider, and from and after the replacement of such Revolving
Credit Agreement pursuant hereto, the Replacement Liquidity Facility
therefor, if any, in each case as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"CLASS A-1 LIQUIDITY PROVIDER" means Helaba, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class A-1 Liquidity Facility pursuant to Section
3.6(e).
"CLASS A-1 TRUST" means (i) prior to the Transfer, the
Continental Airlines Pass Through Trust 2001-1A-1-O created and administered
pursuant to the Class A-1 Trust Agreement and (ii) after the Transfer, the
Continental Airlines Pass Through Trust 2001-1A-1-S created and administered
pursuant to the Class A-1 Trust Agreement.
"CLASS A-1 TRUST AGREEMENT" means (i) prior to the Transfer, the
Basic Agreement, as supplemented by the Supplement No. 2001-1A-1-O thereto
dated as of the date hereof, governing the creation and administration of the
Continental Airlines Pass Through Trust 2001-1A-1-O and the issuance of the
Class A-1 Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms, and (ii) after the
Transfer, the Basic Agreement, as supplemented by the Supplement
No. 2001-1A-1-S thereto, governing the creation and administration of the
Continental Airlines Pass Through Trust 2001-1A-1-S and the issuance of the
Class A-1 Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"CLASS A-1 TRUSTEE" means WTC, not in its individual capacity
except as expressly set forth in the Class A-1 Trust Agreement, but solely as
trustee under the Class A-1 Trust Agreement, together with any successor
trustee appointed pursuant thereto.
"CLASS A-2 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-2 Liquidity Facility pursuant
to Section 3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"CLASS A-2 CERTIFICATEHOLDER" means, at any time, any holder of
one or more Class A-2 Certificates.
"CLASS A-2 CERTIFICATES" means the certificates issued by the
Class A-2 Trust, substantially in the form of Exhibit A to the Class A-2
Trust Agreement, and authenticated by the Class A-2 Trustee, representing
fractional undivided interests in the Class A-2 Trust, and any certificates
issued in exchange therefor or replacement thereof pursuant to the terms of
the Class A-2 Trust Agreement.
"CLASS A-2 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-2 Trust, and the initial Class
A-2 Liquidity Provider, and from and after the replacement of such Revolving
Credit Agreement pursuant hereto, the Replacement Liquidity Facility
therefor, if any, in each case as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"CLASS A-2 LIQUIDITY PROVIDER" means Helaba, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class A-2 Liquidity Facility pursuant to Section
3.6(e).
"CLASS A-2 TRUST" means (i) prior to the Transfer, the
Continental Airlines Pass Through Trust 2001-1A-2-O created and administered
pursuant to the Class A-2 Trust Agreement and (ii) after the Transfer, the
Continental Airlines Pass Through Trust 2001-1A-2-S created and administered
pursuant to the Class A-2 Trust Agreement.
"CLASS A-2 TRUST AGREEMENT" means (i) prior to the Transfer, the
Basic Agreement, as supplemented by the Supplement No. 2001-1A-2-O thereto
dated as of the date hereof, governing the creation and administration of the
Continental Airlines Pass Through Trust 2001-1A-2-O and the issuance of the
Class A-2 Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms, and (ii) after the
Transfer, the Basic Agreement, as supplemented by the Supplement
No. 2001-1A-2-S thereto, governing the creation and administration of the
Continental Airlines Pass Through Trust 2001-1A-2-S and the issuance of the
Class A-2 Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"CLASS A-2 TRUSTEE" means WTC, not in its individual capacity
except as expressly set forth in the Class A-2 Trust Agreement, but solely as
trustee under the Class A-2 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 Trust, and the initial Class B
Liquidity Provider, and, from and after the replacement of such Agreement
pursuant hereto, the Replacement Liquidity Facility therefor, if any, in each
case as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS B LIQUIDITY PROVIDER" means Helaba, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class B Liquidity Facility pursuant to Section 3.6(e).
"CLASS B TRUST" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 2001-1B-O created and administered pursuant to
the Class B Trust Agreement and (ii) after the Transfer, the Continental
Airlines Pass Through Trust 2001-1B-S created and administered pursuant to
the Class B Trust Agreement.
"CLASS B TRUST AGREEMENT" means (i) prior to the Transfer, the
Basic Agreement, as supplemented by the Supplement No. 2001-1B-O thereto
dated as of the date hereof, governing the creation and administration of the
Continental Airlines Pass Through Trust 2001-1B-O and the issuance of the
Class B Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms, and (ii) after the
Transfer, the Basic Agreement, as supplemented by the Supplement No.
2001-1B-S thereto, governing the creation and administration of the
Continental Airlines Pass Through Trust 2001-1B-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, if and when any Class C
Certificates are issued and the Class C Liquidity Facility is issued, 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 (if any).
"CLASS C CERTIFICATES" means any certificates if and when 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, if and when any Class C
Certificates are issued, initially, the Revolving Credit Agreement (if any)
dated as of the date of the issuance of the Class C Certificates, between the
Subordination Agent, as agent and trustee for the Class C Trust, and the
initial Class C Liquidity Provider, and, from and after the replacement of
such Agreement pursuant hereto, the Replacement Liquidity Facility therefor,
if any, in each case as amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"CLASS C LIQUIDITY PROVIDER" means the liquidity provider under
the initial Class C Liquidity Facility (if any), together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class C Liquidity Facility pursuant to Section 3.6(e).
"CLASS C TRUST" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 2001-1C-O, if and when created pursuant to the
Class C Trust Agreement, and (ii) after the Transfer, the Continental
Airlines Pass Through Trust 2001-1C-S, if and when created pursuant to the
Class C Trust Agreement.
"CLASS C TRUST AGREEMENT" means, if and when any Class C
Certificates are issued, (i) prior to the Transfer, the Basic Agreement, as
supplemented by the Supplement No. 2001-1C-O thereto dated as of the date of
the issuance of the Class C Certificates, governing the creation and
administration of the Continental Airlines Pass Through Trust 2001-1C-O and
the issuance of the Class C Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms, and (ii) after the Transfer, the Basic Agreement, as supplemented by
the Supplement No. 2001-1C-S thereto, governing the creation and
administration of the Continental Airlines Pass Through Trust 2001-1C-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, if and when any Class C Certificates are
issued, the Person acting as trustee under the Class C Trust Agreement, not
in its individual capacity except as expressly set forth therein, but solely
as trustee thereunder, together with any successor trustee appointed pursuant
thereto.
"CLASS D CERTIFICATES" means any pass through certificates issued
by the Class D Trust representing fractional undivided interests in the Class
D Trust.
"CLASS D TRUST" means the Continental Airlines Pass Through Trust
2001-1D, if and when established.
"CLOSING DATE" means April 19, 2001.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and the Treasury Regulations promulgated thereunder.
"COLLECTION ACCOUNT" means the Eligible Deposit Account
established by the Subordination Agent pursuant to Section 2.2 which the
Subordination Agent shall make deposits in and withdrawals from in accordance
with this Agreement.
"CONSENT PERIOD" has the meaning specified in Section 3.6(d).
"CONTINENTAL" means Continental Airlines, Inc., a Delaware
corporation, and its successors and assigns.
"CONTINENTAL BANKRUPTCY EVENT" means the occurrence and
continuation of any of the following:
(a) Continental shall consent to the appointment of or the
taking of possession by a receiver, trustee or liquidator of itself or
of a substantial part of its property, or Continental shall admit in
writing its inability to pay its debts generally as they come due, or
does not pay its debts generally as they become due or shall make a
general assignment for the benefit of creditors, or Continental shall
file a voluntary petition in bankruptcy or a voluntary petition or an
answer seeking reorganization, liquidation or other relief in a case
under any bankruptcy laws or other insolvency laws (as in effect at
such time) or an answer admitting the material allegations of a
petition filed against Continental in any such case, or Continental
shall seek relief by voluntary petition, answer or consent, under the
provisions of any other bankruptcy or other similar law providing for
the reorganization or winding-up of corporations (as in effect at such
time) or Continental shall seek an agreement, composition, extension or
adjustment with its creditors under such laws, or Continental's board
of directors shall adopt a resolution authorizing corporate action in
furtherance of any of the foregoing; or
(b) an order, judgment or decree shall be entered by any court
of competent jurisdiction appointing, without the consent of
Continental, a receiver, trustee or liquidator of Continental or of any
substantial part of its property, or any substantial part of the
property of Continental shall be sequestered, or granting any other
relief in respect of Continental as a debtor under any bankruptcy laws
or other insolvency laws (as in effect at such time), and any such
order, judgment or decree of appointment or sequestration shall remain
in force undismissed, unstayed and unvacated for a period of 60 days
after the date of entry thereof; or
(c) a petition against Continental in a case under any
bankruptcy laws or other insolvency laws (as in effect at such time) is
filed and not withdrawn or dismissed within 60 days thereafter, or if,
under the provisions of any law providing for reorganization or
winding-up of corporations which may apply to Continental, any court of
competent jurisdiction assumes jurisdiction, custody or control of
Continental or of any substantial part of its property and such
jurisdiction, custody or control remains in force unrelinquished,
unstayed and unterminated for a period of 60 days.
"CONTINENTAL PROVISIONS" has the meaning specified in Section
9.1(a).
"CONTROLLING PARTY" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"CORPORATE TRUST OFFICE" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the
city at which, at any particular time, its corporate trust business shall be
principally administered.
"CURRENT DISTRIBUTION DATE" means a Distribution Date specified
as a reference date for calculating the Expected Distributions or the
Adjusted Expected Distributions with respect to the Certificates of any Trust
as of such Distribution Date.
"CURRENT POOL BALANCE" means the amount described in clause
(B)(i) of the definition of "Adjusted Expected Distributions".
"DELIVERY PERIOD EXPIRY DATE" means the earlier of (a) September
30, 2002, or, if the Equipment Notes relating to all the New Aircraft (or
Substitute Aircraft in lieu thereof) have not been purchased by the Trusts on
or prior to such date due to any reason beyond the control of Continental and
not occasioned by Continental's fault or negligence, December 31, 2002
(PROVIDED that, if a labor strike occurs at The Boeing Company on or prior to
either or both of such dates referred to in this clause (a), such date or
dates on or following the commencement of such strike shall be extended by
adding thereto the number of days that such strike continued in effect) and
(b) the date on which Equipment Notes with respect to all New Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Trusts in
accordance with the Note Purchase Agreement.
"DEPOSIT AGREEMENT" shall mean, with respect to any applicable
Class, the Deposit Agreement pertaining to such Class dated as of the date
hereof between the Escrow Agent, and the Depositary, as the same may be
amended, modified or supplemented from time to time in accordance with the
terms thereof.
"DEPOSITARY" means Credit Suisse First Boston, New York branch,
as depositary under each Deposit Agreement.
"DEPOSITS" with respect to any applicable 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" or "$" means United States dollars.
"DOWNGRADE DRAWING" has the meaning assigned to such term in
Section 3.6(c).
"DOWNGRADE EVENT" with respect to any Liquidity Facility, has the
meaning assigned to such term in such Liquidity Facility.
"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.
"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.
"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 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; 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) above which is issued or guaranteed by Continental or any of its
Affiliates, and no investment in the obligations of any one bank in excess of
$10,000,000, shall be an Eligible Investment unless written confirmation
shall have been received from each Rating Agency that the making of such
investment will not result in a withdrawal or downgrading of the ratings of
the Certificates.
"EQUIPMENT NOTES" means, at any time, the Series A-1 Equipment
Notes, the Series A-2 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 applicable Class, the Escrow and Paying Agent Agreement pertaining to
such Class dated as of the date hereof between the Escrow Agent, the
Underwriters, the Trustee for such Class and the Paying Agent, as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.
"EXPECTED DISTRIBUTIONS" means, with respect to the Certificates
of any Trust on any Current Distribution Date, the sum of (x) accrued and
unpaid interest on such Certificates (excluding interest, if any, payable
with respect to the Deposits related to such Trust) and (y) the difference
between (A) the Pool Balance of such Certificates as of the immediately
preceding Distribution Date (or, if the Current Distribution Date is the
first Distribution Date, the original aggregate face amount of the
Certificates of such Trust), and (B) the Pool Balance of such Certificates as
of the Current Distribution Date calculated on the basis that (i) the
principal of the Equipment Notes held in such Trust has been paid when due
(whether at stated maturity, upon redemption, prepayment, purchase,
Acceleration or otherwise) and such payments have been distributed to the
holders of such Certificates and (ii) the principal of any Equipment Notes
formerly held in such Trust that have been sold pursuant to the terms hereof
has been paid in full and such payments have been distributed to the holders
of such Certificates, but without giving effect to any reduction in the Pool
Balance as a result of any distribution attributable to Deposits occurring
after the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, occurring after the initial
issuance of the Certificates of such Trust). For purposes of calculating
Expected Distributions with respect to the Certificates of any Trust, any
premium paid on the Equipment Notes held in such Trust which has not been
distributed to the Certificateholders of such Trust (other than such premium
or a portion thereof applied to the payment of interest on the Certificates
of such Trust or the reduction of the Pool Balance of such Trust) shall be
added to the amount of such Expected Distributions.
"EXPIRY DATE" with respect to any Liquidity Facility, shall have
the meaning set forth in such Liquidity Facility.
"FACILITY OFFICE" means, with respect to any Liquidity Facility,
the office of the Liquidity Provider thereunder, presently located at (i)
Frankfurt, Germany, in the case of Helaba, or (ii) such location as shall be
specified in any Class C Liquidity Facility, in the case of any Class C
Liquidity Provider, or, in each case, such other office as such Liquidity
Provider from time to time shall notify the applicable Trustee as its
"Facility Office" under any such Liquidity Facility; PROVIDED that such
Liquidity Provider shall not change its Facility Office to another Facility
Office outside the United States of America except in accordance with Section
3.01, 3.02 or 3.03 of any such Liquidity Facility.
"FEE LETTERS" means, collectively, (i) the Fee Letter dated as of
the date hereof between Helaba and the Subordination Agent with respect to
the initial Class A-1 Liquidity Facility, Class A-2 Liquidity Facility and
Class B Liquidity Facility, (ii) any Fee Letter entered into after the date
hereof between the initial Class C Liquidity Provider (if any) and the
Subordination Agent with respect to the initial Class C Liquidity Facility
(if any) and (iii) any fee letter entered into between the Subordination
Agent and any Replacement Liquidity Provider in respect of such Liquidity
Facilities.
"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-1 Certificates, December 15, 2022, (ii) with respect to the Class A-2
Certificates, December 15, 2012, (iii) with respect to the Class B
Certificates, June 15, 2017, (iv) with respect to the Class C Certificates,
if and when issued, as specified in the amendment, if any, to this Agreement
pursuant to Section 9.1(c).
"FINANCING AGREEMENT" means each of the Participation Agreements
and the Note Purchase Agreement.
"HELABA" has the meaning assigned to such term in the recital of
the parties to this Agreement.
"INDENTURE" means each of the Trust Indentures entered into by
the Loan Trustee, and the Owner Trustee or Continental, pursuant to the Note
Purchase Agreement, in each case as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"INDENTURE DEFAULT" means, with respect to any Indenture, any
Event of Default (as such term is defined in such Indenture) thereunder.
"INTEREST DRAWING" has the meaning assigned to such term in
Section 3.6(a).
"INTEREST PAYMENT DATE" means, with respect to any Liquidity
Facility, each date on which interest is due and payable under such Liquidity
Facility on a Downgrade Drawing, Non-Extension Drawing or Final Drawing
thereunder, other than any such date on which interest is due and payable
under such Liquidity Facility only on an Applied Provider Advance (as such
term is defined in such Liquidity Facility).
"INVESTMENT EARNINGS" means investment earnings on funds on
deposit in the Trust Accounts net of losses and investment expenses of the
Subordination Agent in making such investments.
"LEASE" means, with respect to each Indenture pertaining to a
Leased Aircraft, the "Lease" referred to therein.
"LEASED AIRCRAFT" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"LEASED AIRCRAFT INDENTURE" means, with respect to each Leased
Aircraft, the Indenture pertaining thereto.
"LIEN" means any mortgage, pledge, lien, charge, claim,
disposition of title, encumbrance, lease, sublease, sub-sublease or security
interest of any kind, including, without limitation, any thereof arising
under any conditional sales or other title retention agreement.
"LIQUIDITY EVENT OF DEFAULT" with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity Facility.
"LIQUIDITY EXPENSES" means all Liquidity Obligations other than
(i) the principal amount of any Drawings under the Liquidity Facilities and
(ii) any interest accrued on any Liquidity Obligations.
"LIQUIDITY FACILITIES" means, at any time, the Class A-1
Liquidity Facility, the Class A-2 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 Participation Agreements with respect to Owned
Aircraft, Section 9.1 of the Participation Agreements with respect to Leased
Aircraft or the Fee Letters.
"LIQUIDITY PROVIDER" means, at any time, any Class A-1 Liquidity
Provider, any Class A-2 Liquidity Provider, any Class B Liquidity Provider or
any Class C Liquidity Provider, as applicable.
"LOAN TRUSTEE" means, with respect to any Indenture, the
mortgagee thereunder.
"LP INCUMBENCY CERTIFICATE" has the meaning assigned to such term
in Section 2.5(c).
"LP REPRESENTATIVES" has the meaning assigned to such term in
Section 2.5(c).
"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 each Class of Offered Certificates as of
any Distribution Date, the percentages set forth in the following table:
Class A-1 Class A-2 Class B
Certificates Certificates Certificates
------------ ------------ ------------
43.0% 43.0% 53.0%
The LTV Ratio for the Class C Certificates (if and when issued) will be
specified in the amendment, if any, to this Agreement pursuant to Section
9.1(c).
"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.
"NEW AIRCRAFT" shall have the meaning set forth in the Note
Purchase Agreement.
"NON-CONTROLLING PARTY" means, at any time, any Trustee or
Liquidity Provider which is not the Controlling Party at such time.
"NON-EXTENDED FACILITY" has the meaning assigned to such term in
Section 3.6(d).
"NON-EXTENSION DRAWING" has the meaning assigned to such term in
Section 3.6(d).
"NON-PERFORMING EQUIPMENT NOTE" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement dated
as of the date hereof, among Continental, each Trustee of an Offered
Certificate Trust, the Escrow Agent, the Subordination Agent and the Paying
Agent, as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"OFFERED CERTIFICATE" means a Class A-1 Certificate, a Class A-2
Certificate or a Class B Certificate, as applicable.
"OFFERED CERTIFICATE TRUST" means any of the Class A-1 Trust,
Class A-2 Trust or Class B Trust, as applicable.
"OFFICER'S CERTIFICATE" of any Person means a certification
signed by a Responsible Officer of such Person.
"OPERATIVE AGREEMENTS" means this Agreement, the Liquidity
Facilities, the Indentures, the Trust Agreements, the Underwriting Agreement,
the Financing Agreements, the Leases, the Fee Letters, the Equipment Notes
and the Certificates, together with all exhibits and schedules included with
any of the foregoing.
"OUTSTANDING" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such Class
theretofore authenticated and delivered under the related Trust Agreement,
except:
(i) Certificates of such Class theretofore canceled by the
Registrar (as defined in such Trust Agreement) or delivered to the
Trustee thereunder or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full
amount required to make the final distribution with respect to such
Certificates pursuant to Section 11.01 of such Trust Agreement has been
theretofore deposited with the related Trustee in trust for the holders
of such Certificates as provided in Section 4.01 of such Trust
Agreement pending distribution of such money to such Certificateholders
pursuant to such final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of
which other Certificates have been authenticated and delivered pursuant
to such Trust Agreement;
PROVIDED, HOWEVER, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by Continental or any of its Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether such Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates that such Trustee knows to be so owned shall be so disregarded.
Certificates so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the applicable
Trustee the pledgee's right so to act with respect to such Certificates and
that the pledgee is not Continental or any of its Affiliates.
"OVERDUE SCHEDULED PAYMENT" means any Scheduled Payment which is
not in fact received by the Subordination Agent within five days after the
Scheduled Payment Date relating thereto.
"OWNED AIRCRAFT" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"OWNED AIRCRAFT INDENTURE" means, with respect to each Owned
Aircraft, the Indenture pertaining to such Aircraft.
"OWNER TRUSTEE" means, with respect to any Indenture pertaining
to a Leased Aircraft, the Owner Trustee (as defined therein) not in its
individual capacity but solely as trustee under the related owner trust
agreement, together with any successor trustee appointed pursuant to such
owner trust agreement.
"PARTICIPATION AGREEMENT" means, with respect to each Indenture,
the "Participation Agreement" referred to therein.
"PAYEE" has the meaning assigned to such term in Section 2.4(e).
"PAYING AGENT" means Wilmington Trust Company, as paying agent
under each Escrow and Paying Agent Agreement, together with its successors in
such capacity.
"PERFORMING EQUIPMENT NOTE" means an Equipment Note 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 under Title 11 of the United States Code (the "BANKRUPTCY CODE")
in which Continental is a debtor any payment default existing during the
60-day period under Section 1110(a)(2)(A) of the Bankruptcy Code (or such
longer period as may apply under Section 1110(b) of the Bankruptcy Code or as
may apply for the cure of such payment default under Section 1110(a)(2)(B) of
the Bankruptcy Code) shall not be taken into consideration until the
expiration of the applicable period.
"PERFORMING NOTE DEFICIENCY" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"PERSON" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.
"POOL BALANCE" means, with respect to each Trust or the
Certificates issued by any Trust, as of any date, (i) the original aggregate
face amount of the Certificates of such Trust LESS (ii) the aggregate amount
of all payments made in respect of the Certificates of such Trust or in
respect of Deposits relating to such Trust other than payments made in
respect of interest or premium thereon or reimbursement of any costs and
expenses in connection therewith. The Pool Balance for each Trust or for the
Certificates issued by any Trust as of any Distribution Date shall be
computed after giving effect to any special distribution with respect to
unused Deposits, payment of principal of the Equipment Notes or payment with
respect to other Trust Property held in such Trust and the distribution
thereof to be made on that date.
"PROCEEDING" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PTC EVENT OF DEFAULT" means, with respect to each Trust
Agreement, the failure to pay within 10 Business Days of the due date
thereof: (i) the outstanding Pool Balance of the applicable Class of
Certificates on the Final Legal Distribution Date for such Class or (ii)
interest due on such Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing, or a withdrawal from
the Cash Collateral Account, with respect thereto in an aggregate amount
sufficient to pay such interest and shall have distributed such amount to the
Trustee entitled thereto).
"RATING AGENCIES" means, collectively, at any time, each
nationally recognized rating agency which shall have been requested to rate
the Certificates and which shall then be rating the Certificates. The
initial Rating Agencies will be Moody's and Standard & Poor's.
"RATINGS CONFIRMATION" means, with respect to any action proposed
to be taken, a written confirmation from each of the Rating Agencies that
such action would not result in (i) a reduction of the rating for any Class
of Certificates below the then current rating for such Class of Certificates
or (ii) a withdrawal or suspension of the rating of any Class of Certificates.
"REGULAR DISTRIBUTION DATES" means, for the Class A-1
Certificates, Class A-2 Certificates and Class B Certificates, each June 15
and December 15, commencing on December 15, 2001, and for the Class C
Certificates, if and when issued, the dates specified in the amendment, if
any, to this Agreement pursuant to Section 9.1(c); 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 (or agreements) 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 related Certificates (before
downgrading of such ratings, if any, as a result of the downgrading of the
applicable Liquidity Provider), in a face amount (or in an aggregate face
amount) equal to the amount of interest payable on the Certificates of such
Trust (at the Stated Interest Rate for such Trust, and without regard to
expected future principal payments) on the three Regular Distribution Dates
following the date of replacement of such Liquidity Facility and issued by a
Person (or Persons) having unsecured short-term debt ratings issued by both
Rating Agencies which are equal to or higher than the Threshold Rating.
Without limitation of the form that a Replacement Liquidity Facility
otherwise may have pursuant to the preceding sentence, a Replacement
Liquidity Facility for any Class of Certificates may have a stated expiration
date earlier than 15 days after the Final Legal Distribution Date of such
Class of Certificates so long as such Replacement Liquidity Facility provides
for a Non-Extension Drawing as contemplated by Section 3.6(d) hereof.
"REPLACEMENT LIQUIDITY PROVIDER" means a Person (or Persons) 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, 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, or (ii) any payment of interest on the corresponding Class of
Certificates with funds drawn under any Liquidity Facility; 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.
"SECTION 2.4(B) FRACTION" has the meaning assigned to such term
in Section 2.4(b).
"SERIES A-1 EQUIPMENT NOTES" means the 6.703% Series A-1
Equipment Notes issued pursuant to any Indenture by the related Owner Trustee
or Continental, as the case may be, and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"SERIES A-2 EQUIPMENT NOTES" means the 6.503% Series A-2
Equipment Notes issued pursuant to any Indenture by the related Owner Trustee
or Continental, as the case may be, and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"SERIES B EQUIPMENT NOTES" means the 7.373% Series B Equipment
Notes issued pursuant to any Indenture by the related Owner Trustee or
Continental, as the case may be, and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"SERIES C EQUIPMENT NOTES" means equipment notes, if any, issued
pursuant to any Indenture by the related Owner Trustee or Continental, as the
case may be, and authenticated by the Loan Trustee thereunder, and designated
as "Series C" thereunder, and any such equipment notes issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"SERIES D EQUIPMENT NOTES" means equipment notes, if any, issued
pursuant to any Indenture by the related Owner Trustee or Continental, as the
case may be, and authenticated by the Loan Trustee thereunder, and designated
as "Series D" thereunder, and any such equipment notes issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"SPECIAL DISTRIBUTION DATE" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section
2.4(a) for the distribution of such Special Payment in accordance with this
Agreement.
"SPECIAL PAYMENT" means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note or Trust
Indenture Estate (as defined in each Leased Aircraft Indenture) or Collateral
(as defined in each Owned Aircraft Indenture).
"SPECIAL PAYMENTS ACCOUNT" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account to the Collection Account.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
"STATED AMOUNT" with respect to any Liquidity Facility, means the
Maximum Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"STATED EXPIRATION DATE" has the meaning specified in Section
3.6(d).
"STATED INTEREST RATE" means (i) with respect to the Class A-1
Certificates, 6.703% per annum, (ii) with respect to the Class A-2
Certificates, 6.503% per annum, (iii) with respect to the Class B
Certificates, 7.373% per annum, (iv) with respect to the Class C
Certificates, if and when issued, the rate per annum specified as the Stated
Interest Rate therefor in the amendment, if any, to this Agreement pursuant
to Section 9.1(c).
"SUBORDINATION AGENT" has the meaning assigned to it in the
preliminary statements to this Agreement.
"SUBORDINATION AGENT INCUMBENCY CERTIFICATE" has the meaning
assigned to such term in Section 2.5(a).
"SUBORDINATION AGENT REPRESENTATIVES" has the meaning assigned to
such term in Section 2.5(a).
"SUBSTITUTE AIRCRAFT" shall have the meaning set forth in the
Note Purchase Agreement.
"SUCCESSOR TRUSTS" means, collectively, Continental Airlines Pass
Through Trust 2001-1A-1-S, Continental Airlines Pass Through Trust
2001-1A-2-S, Continental Airlines Pass Through Trust 2001-1B-S and, if Class
C Certificates are issued, Continental Airlines Pass Through Trust 2001-1C-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, each of the three Tax Letters,
dated as of the date hereof, between Continental and Helaba, with respect to
the Class A-1 Liquidity Facility, the Class A-2 Liquidity Facility and the
Class B Liquidity Facility, and all tax letters entered into between
Continental 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 Moody's and A-1+ by Standard & Poor's, in the case of the Class A-1
Liquidity Provider, the Class A-2 Liquidity Provider and the Class B
Liquidity Provider, and the short-term unsecured debt rating of P-1 by
Moody's and A-1 by Standard & Poor's, in the case of the Class C Liquidity
Provider.
"TRANSFER" means, with respect to any particular Trust, the
transfers contemplated by the Assignment and Assumption Agreement with
respect to such Trust.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"TRIGGERING EVENT" means (x) the occurrence of an Indenture
Default under all of the Indentures resulting in a PTC Event of Default with
respect to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes (PROVIDED that, with
respect to the period prior to the Delivery Period Expiry Date, the aggregate
principal balance of such Equipment Notes is in excess of $300,000,000) or
(z) the occurrence of a Continental Bankruptcy Event.
"TRUST" means any of the Class A-1 Trust, the Class A-2 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-1 Trust Agreement, the
Class A-2 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-1 Trustee, the Class A-2
Trustee, the Class B Trustee or the Class C Trustee.
"TRUSTEE INCUMBENCY CERTIFICATE" has the meaning assigned to such
term in Section 2.5(b).
"TRUSTEE REPRESENTATIVES" has the meaning assigned to such term
in Section 2.5(b).
"UNDERWRITERS" means Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx
Xxxxx Barney Inc., Credit Suisse First Boston Corporation, Chase Securities
Inc. and Credit Lyonnais Securities (USA) Inc.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated
April 4, 2001 among the Underwriters, the Depositary and Continental,
relating to the purchase of the Offered Certificates by the Underwriters, as
the same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"WITHDRAWAL NOTICE" has the meaning specified in Section 3.6(d).
"WRITTEN NOTICE" means, from the Subordination Agent, any Trustee
or Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing procedures
shall constitute Written Notice under such Section.
"WTC" has the meaning assigned to such term in the recital of
parties to this Agreement.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. AGREEMENT TO TERMS OF SUBORDINATION; PAYMENTS FROM
MONIES RECEIVED ONLY. (a) Each Trustee hereby acknowledges and agrees to
the terms of subordination and distribution 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
8.1 of the Participation Agreements with respect to Owned Aircraft, payments
under Section 9.1 of the Participation Agreements with respect to Leased
Aircraft or payments under Section 6 of the Note Purchase Agreement, and only
to the extent that the Subordination Agent shall have received sufficient
income or proceeds therefrom to enable it to make such payments in accordance
with the terms hereof. Each of the Trustees and the Subordination Agent
hereby agrees and, as provided in each Trust Agreement, each
Certificateholder, by its acceptance of a Certificate, and each Liquidity
Provider, by entering into the Liquidity Facility to which it is a party, has
agreed to look solely to such amounts to the extent available for
distribution to it as provided in this Agreement and to the relevant Deposits
and that none of the Trustees, Owner Trustees, Loan Trustees, Owner
Participants nor the Subordination Agent is personally liable to any of them
for any amounts payable or any liability under this Agreement, any Trust
Agreement, any Liquidity Facility or such Certificate, except (in the case of
the Subordination Agent) as expressly provided herein or (in the case of the
Trustees) as expressly provided in each Trust Agreement or (in the case of
the Owner Trustees and the Loan Trustees) as expressly provided in any
Operative Agreement.
SECTION 2.2. TRUST ACCOUNTS. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name
(i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders and the
Liquidity Providers, and (ii) as a sub-account in the Collection Account, the
Special Payments Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders and the
Liquidity Providers. The Subordination Agent shall establish and maintain
the Cash Collateral Accounts pursuant to and under the circumstances set
forth in Section 3.6(f) hereof. Upon such establishment and maintenance
under Section 3.6(f) hereof, the Cash Collateral Accounts shall, together
with the Collection Account, constitute the "TRUST ACCOUNTS" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested
and reinvested by the Subordination Agent in Eligible Investments selected by
the Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of
such investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.4 hereof, as the case may be, next following the date of such investment;
PROVIDED, HOWEVER, that following the making of a Downgrade Drawing or a
Non-Extension Drawing under any Liquidity Facility, the Subordination Agent
shall invest and reinvest such amounts in Eligible Investments at the
direction of Continental (or, if and to the extent so specified to the
Subordination Agent by Continental with respect to any Liquidity Facility,
the Liquidity Provider with respect to such Liquidity Facility); PROVIDED
FURTHER, HOWEVER, that, notwithstanding the foregoing proviso, following the
making of a Non-Extension Drawing under any initial Liquidity Facility, the
Subordination Agent shall invest and reinvest the amounts in the Cash
Collateral Account with respect to such Liquidity Facility in Eligible
Investments pursuant to the written instructions of the Liquidity Provider
funding such Drawing; PROVIDED FURTHER, HOWEVER, that upon the occurrence and
during the continuation of a Triggering Event, the Subordination Agent shall
invest and reinvest such amounts in accordance with the written instructions
of the Controlling Party. Unless otherwise expressly provided in this
Agreement (including, without limitation, with respect to Investment Earnings
on amounts on deposit in the Cash Collateral Accounts, Section 3.6(f)
hereof), any Investment Earnings shall be deposited in the Collection Account
when received by the Subordination Agent and shall be applied by the
Subordination Agent in the same manner as the other amounts on deposit in the
Collection Account are to be applied and any losses shall be charged against
the principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination
Agent shall not be liable for any loss resulting from any investment,
reinvestment or liquidation required to be made under this Agreement other
than by reason of its willful misconduct or gross negligence. Eligible
Investments and any other investment required to be made hereunder shall be
held to their maturities except that any such investment may be sold (without
regard to its maturity) by the Subordination Agent without instructions
whenever such sale is necessary to make a distribution required under this
Agreement. Uninvested funds held hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon, except as otherwise
expressly provided in Section 3.4(b) with respect to Investment Earnings).
The Trust Accounts shall be held in trust by the Subordination Agent under
the sole dominion and control of the Subordination Agent for the benefit of
the Trustees, the Certificateholders and the Liquidity Providers, as the case
may be. If, at any time, any of the Trust Accounts ceases to be an Eligible
Deposit Account, the Subordination Agent shall within 10 Business Days (or
such longer period, not to exceed 30 calendar days, for which a Ratings
Confirmation for each Class of Certificates shall have been obtained)
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 Distribution Date MULTIPLIED BY (y) a
fraction, the numerator of which is the aggregate outstanding principal
amount of Equipment Notes being redeemed, purchased or prepaid on such
Special Distribution Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes (the "SECTION
2.4(B) FRACTION"), shall be distributed to the Liquidity Providers pro
rata on the basis of the amount of Liquidity Expenses owed to each
Liquidity Provider;
SECOND, such amount as shall be required to pay (A) all accrued
and unpaid interest then in arrears on all Liquidity Obligations plus
(B) the product of (x) the aggregate amount of all accrued and unpaid
interest on all Liquidity Obligations not in arrears to such Special
Distribution Date (at the rate provided in the applicable Liquidity
Facility) MULTIPLIED BY (y) the Section 2.4(b) Fraction, shall be
distributed to the Liquidity Providers pro rata 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, pro
rata on the basis of the amounts of all such deficiencies and/or
unreimbursed Interest Drawings in respect of each Liquidity Provider;
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, pro rata 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-1 Certificates on such Special
Distribution Date shall be distributed to the Class A-1 Trustee and
such amount as shall be required to pay in full Expected Distributions
to the holders of Class A-2 Certificates on such Special Distribution
Date shall be distributed to the Class A-2 Trustee, pro rata on the
basis of such amounts in respect of each such Class of Certificates;
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 the Equipment Notes held in such
Trust and being redeemed, purchased or prepaid (immediately prior to such
redemption, purchase or prepayment), in each case 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. Except for amounts constituting
Liquidity Obligations which shall be distributed as provided in Section
2.4(b), 3.2 or 3.3 (as the case may be), the Subordination Agent will
distribute promptly upon receipt thereof (i) any indemnity payment received
by it from the Owner Participant, the Owner Trustee or Continental in respect
of any Trustee, any Liquidity Provider, any Paying Agent, any Depositary or
any Escrow Agent (collectively, the "PAYEES") and (ii) any compensation
received by it from the Owner Participant, the Owner Trustee or Continental
under any Operative Agreement in respect of any Payee, directly to the Payee
entitled thereto.
SECTION 2.5. DESIGNATED REPRESENTATIVES. (a) With the delivery
of this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider and each Trustee, and from time to time thereafter may furnish to
each Liquidity Provider and each Trustee, at the Subordination Agent's
discretion, or upon any Liquidity Provider's or Trustee's request (which
request shall not be made more than one time in any 12-month period), a
certificate (a "SUBORDINATION AGENT INCUMBENCY CERTIFICATE") of a Responsible
Officer of the Subordination Agent certifying as to the incumbency and
specimen signatures of the officers of the Subordination Agent and the
attorney-in-fact and agents of the Subordination Agent (the "SUBORDINATION
AGENT REPRESENTATIVES") authorized to give Written Notices on behalf of the
Subordination Agent hereunder. Until each Liquidity Provider and Trustee
receives a subsequent Subordination Agent Incumbency Certificate, it shall be
entitled to rely on the last Subordination Agent Incumbency Certificate
delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall
furnish to the Subordination Agent, and from time to time thereafter may
furnish to the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "TRUSTEE INCUMBENCY
CERTIFICATE") of a Responsible Officer of such Trustee certifying as to the
incumbency and specimen signatures of the officers of such Trustee and the
attorney-in-fact and agents of such Trustee (the "TRUSTEE REPRESENTATIVES")
authorized to give Written Notices on behalf of such Trustee hereunder.
Until the Subordination Agent receives a subsequent Trustee Incumbency
Certificate, it shall be entitled to rely on the last Trustee Incumbency
Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity
Provider shall furnish to the Subordination Agent, and from time to time
thereafter may furnish to the Subordination Agent, at such Liquidity
Provider's discretion, or upon the Subordination Agent's request (which
request shall not be made more than one time in any 12-month period), a
certificate (an "LP INCUMBENCY CERTIFICATE") of any Responsible Officer of
such Liquidity Provider certifying as to the incumbency and specimen
signatures of any officer, attorney-in-fact, agent or other designated
representative of such Liquidity Provider (the "LP REPRESENTATIVES" and,
together with the Subordination Agent Representatives and the Trustee
Representatives, the "DESIGNATED REPRESENTATIVES") authorized to give Written
Notices on behalf of such Liquidity Provider hereunder. Until the
Subordination Agent receives a subsequent LP Incumbency Certificate, it shall
be entitled to rely on the last LP Incumbency Certificate delivered to it
hereunder.
SECTION 2.6. CONTROLLING PARTY. (a) The Trustees and the
Liquidity Providers hereby agree that, with respect to any Indenture at any
given time, the Loan Trustee thereunder will be directed (i) in taking, or
refraining from taking, any action under such Indenture or with respect to
the Equipment Notes issued thereunder, so long as no Indenture Default has
occurred and is continuing thereunder, by the holders of at least a majority
of the outstanding principal amount of such Equipment Notes (provided that,
for so long as the Subordination Agent is the registered holder of the
Equipment Notes, the Subordination Agent shall act with respect to this
clause (i) in accordance with the directions of the Trustees (in the case of
each such Trustee, with respect to the Equipment Notes issued under such
Indenture and held as Trust Property of such Trust) constituting, in the
aggregate, directions with respect to at least a majority of outstanding
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 upon the occurrence of an Indenture Default
thereunder shall be: (v) the Class A-1 Trustee or Class A-2 Trustee,
whichever represents the Class with the larger principal amount of
Certificates outstanding at the time that such Indenture Default occurs
(whether or not any other Indenture Default shall thereafter occur so long as
such initial Indenture Default shall continue); (w) upon payment of Final
Distributions to the holders of Certificates of such larger Class, the other
of the Class A-1 Trustee or Class A-2 Trustee; (x) upon payment of Final
Distributions to the holders of Class A-1 Certificates and Class A-2
Certificates, the Class B Trustee; and (y) upon payment of Final
Distributions to the holders of Class B Certificates, the Class C Trustee.
For purposes of giving effect to the foregoing, the Trustees (other than the
Controlling Party) irrevocably agree (and the Certificateholders (other than
the Certificateholders represented by the Controlling Party) shall be deemed
to agree by virtue of their purchase of Certificates) that the Subordination
Agent, as record holder of the Equipment Notes, shall exercise its voting
rights in respect of the Equipment Notes as directed by the Controlling Party
and any vote so exercised shall be binding upon the Trustees and all
Certificateholders.
The Subordination Agent shall give Written Notice to all of the
other parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; PROVIDED, HOWEVER, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months
from the earlier to occur of (i) the date on which the entire Available
Amount under any Liquidity Facility shall have been drawn (for any reason
other than a Downgrade Drawing or a Non-Extension Drawing) and remain
unreimbursed, (ii) the date on which the entire amount of any Downgrade
Drawing or Non-Extension Drawing shall have become and remain "Applied
Downgrade Advances" or "Applied Non-Extension Advances", as the case may be,
under and as defined in such Liquidity Facility and (iii) the date on which
all Equipment Notes shall have been Accelerated (PROVIDED that, with respect
to the period prior to the Delivery Period Expiry Date, such Equipment Notes
have an aggregate outstanding principal balance of in excess of
$300,000,000), the Liquidity Provider with the highest outstanding aggregate
amount of Liquidity Obligations owed to it shall have the right to elect, by
Written Notice to the Subordination Agent and each of the Trustees, to become
the Controlling Party hereunder with respect to any Indenture at any time
from and including the last day of such 18-month period.
(d) The exercise of remedies by the Controlling Party under
this Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION
OF AMOUNTS RECEIVED
SECTION 3.1. WRITTEN NOTICE OF DISTRIBUTION. (a) No later than
3:00 P.M. (New York City time) on the Business Day immediately preceding each
Regular Distribution Date (or Special Distribution Date for purposes of
Section 2.4(b) hereof, as the case may be), each of the following Persons
shall deliver to the Subordination Agent a Written Notice setting forth the
following information as at the close of business on such Business Day:
(i) With respect to the Class A-1 Certificates and the Class
A-2 Certificates, respectively, the Class A-1 Trustee and the Class A-2
Trustee, respectively, 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 (without giving effect to the pro rata sharing
therein);
(ii) With respect to the Class B Certificates, the Class B
Trustee shall separately set forth the amounts to be paid in accordance
with clause "SIXTH" of Section 3.2 or 2.4(b), as the case may be,
hereof;
(iii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in accordance
with clause "SEVENTH" of Section 3.2 or 2.4(b), as the case may be,
hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid
in accordance with clauses "FIRST", "SECOND", "THIRD" and "FOURTH" of
Section 3.2 or 2.4(b), as the case may be, hereof; and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "EIGHTH" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form
of a schedule or similar document provided to the Subordination Agent by the
parties referenced therein or by any one of them, which schedule or similar
document may state that, unless there has been a prepayment of the
Certificates, such schedule or similar document is to remain in effect until
any substitute notice or amendment shall be given to the Subordination Agent
by the party providing such notice.
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the
following Persons, and each of the following Persons shall, upon the request
of the Subordination Agent, deliver a Written Notice to the Subordination
Agent setting forth for such Person the following information:
(i) With respect to the Class A-1 Certificates and the Class
A-2 Certificates, respectively, the Class A-1 Trustee and Class A-2
Trustee, respectively, shall separately set forth the amounts to be
paid in accordance with clauses "FIRST" (to reimburse payments made by
such Trustee or the Class A-1 Certificateholders and Class A-2
Certificateholders, as the case may be, pursuant to subclause (ii) or
(iii) of clause "FIRST" of Section 3.3 hereof, respectively) and
"SEVENTH" of Section 3.3 hereof (without giving effect to the pro rata
sharing therein);
(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 such Trustee or the
Class B Certificateholders, as the case may be, pursuant to subclause
(ii) or (iii) of clause "FIRST" of Section 3.3 hereof, respectively)
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 such Trustee or the
Class C Certificateholders, as the case may be, pursuant to subclause
(ii) or (iii) of clause "FIRST" of Section 3.3 hereof, respectively)
and "NINTH" of Section 3.3 hereof (without giving effect to the pro
rata sharing therein);
(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) on any Business Day, shall
be effective on the date delivered (or if delivered later on a Business Day
or if delivered on a day which is not a Business Day shall be effective as of
the next Business Day). Subject to the terms of this Agreement, the
Subordination Agent shall as promptly as practicable comply with any such
instructions; PROVIDED, HOWEVER, that any transfer of funds pursuant to any
instruction received after 10:00 A.M. (New York City time) on any Business
Day may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from
any Person any information set forth in paragraph (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 3.2 or 3.3 hereof, the Subordination Agent shall
request such information and, failing to receive any such information, the
Subordination Agent shall not make such distribution(s) to such Person. In
such event, the Subordination Agent shall make distributions pursuant to
clauses "FIRST" through "NINTH" of Section 3.2 and clauses "FIRST" through
"NINTH" of Section 3.3 to the extent it shall have sufficient information to
enable it to make such distributions, and shall continue to hold any funds
remaining, after making such distributions, until the Subordination Agent
shall receive all necessary information to enable it to distribute any funds
so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Trustee shall request, but in any event
automatically at the end of each calendar quarter, the Subordination Agent
shall send to such party a written statement reflecting all amounts on
deposit with the Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION 3.2. DISTRIBUTION OF AMOUNTS ON DEPOSIT IN THE
COLLECTION ACCOUNT. Except as otherwise provided in Sections 2.4, 3.1(f),
3.3, 3.4 and 3.6(b), amounts on deposit in the Collection Account (or, in the
case of any amount described in Section 2.4(c), on deposit in the Special
Payments Account) shall be promptly distributed on each Regular Distribution
Date (or, in the case of any amount described in Section 2.4(c), on the
Special Distribution Date thereof) in the following order of priority and in
accordance with the information provided to the Subordination Agent pursuant
to Section 3.1(a) hereof:
FIRST, such amount as shall be required to pay all accrued and
unpaid Liquidity Expenses owed to each Liquidity Provider shall be
distributed to the Liquidity Providers pro rata 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
pro rata on the basis of the amount of such Liquidity Obligations owed
to each Liquidity Provider;
THIRD, such amount as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Cash Collateral Account up to its Required Amount
shall be deposited in such Cash Collateral Account, (B) if any
Liquidity Facility shall become a Downgraded Facility or a Non-Extended
Facility at a time when unreimbursed Interest Drawings under such
Liquidity Facility have reduced the Available Amount thereunder to
zero, to deposit into the related Cash Collateral Account an amount
equal to such Cash Collateral Account's Required Amount shall be
deposited in such Cash Collateral Account, and (C) if, with respect to
any particular Liquidity Facility, neither subclause (A) nor subclause
(B) of this clause "THIRD" is applicable, to pay or reimburse the
Liquidity Provider in respect of such Liquidity Facility in an amount
equal to the amount of all Liquidity Obligations then due under such
Liquidity Facility (other than amounts payable pursuant to clause
"FIRST" or "SECOND" of this Section 3.2) shall be distributed to such
Liquidity Provider, pro rata on the basis of the amounts of all such
deficiencies and/or unreimbursed Liquidity Obligations in respect of
each Liquidity Provider;
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, pro rata 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-1 Certificates on such
Distribution Date shall be distributed to the Class A-1 Trustee and
such amount as shall be required to pay in full Expected Distributions
to the holders of the Class A-2 Certificates on such Distribution Date
shall be distributed to the Class A-2 Trustee, pro rata on the basis of
such amounts in respect of each such Class of Certificates;
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. Except as otherwise provided in Sections 3.1(f) and 3.6(b)
hereof, upon the occurrence of a Triggering Event and at all times
thereafter, all funds in the Collection Account or the Special Payments
Account shall be promptly distributed by the Subordination Agent in the
following order of priority:
FIRST, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Notes
or any "Collateral" or "Trust Indenture Estate" (as such terms are
defined in each relevant Indenture), 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, pro rata 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 pro rata 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
pro rata on the basis of the amount of such accrued and unpaid interest
owed to each Liquidity Provider;
FOURTH, such amount remaining as shall be required (A) if any
Cash Collateral Account had been previously funded as provided in
Section 3.6(f), unless (i) a Performing Note Deficiency exists and a
Liquidity Event of Default shall have occurred and be continuing with
respect to the relevant Liquidity Facility or (ii) a Final Drawing
shall have occurred with respect to such Liquidity Facility, to fund
such Cash Collateral Account up to its Required Amount (less the amount
of any repayments of Interest Drawings under such Liquidity Facility
while subclause (A)(i) above is applicable) shall be deposited in such
Cash Collateral Account, (B) if any Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Available Amount thereunder to zero, unless (i) a
Performing Note Deficiency exists and a Liquidity Event of Default
shall have occurred and be continuing with respect to the relevant
Liquidity Facility or (ii) a Final Drawing shall have occurred with
respect to such Liquidity Facility, to deposit into the related Cash
Collateral Account an amount equal to such Cash Collateral Account's
Required Amount (less the amount of any repayments of Interest Drawings
under such Liquidity Facility while subclause (B)(i) above is
applicable) shall be deposited in such Cash Collateral Account, and
(C) if, with respect to any particular Liquidity Facility, neither
subclause (A) nor subclause (B) of this clause "fourth" are applicable,
to pay in full the outstanding amount of all Liquidity Obligations then
due under such Liquidity Facility (other than amounts payable pursuant
to clause "SECOND" or "THIRD" of this Section 3.3) shall be distributed
to such Liquidity Provider, pro rata on the basis of the amounts of all
such deficiencies and/or unreimbursed Liquidity Obligations in respect
of each Liquidity Provider;
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), pro rata 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, pro rata 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-1 Certificates
shall be distributed to the Class A-1 Trustee and such amount remaining
as shall be required to pay in full Adjusted Expected Distributions on
the Class A-2 Certificates shall be distributed to the Class A-2
Trustee, pro rata on the basis of such amounts in respect of each such
Class of Certificates;
EIGHTH, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee; and
NINTH, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Certificates shall be
distributed to the Class C Trustee.
SECTION 3.4. OTHER PAYMENTS. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this Agreement shall be distributed by the Subordination Agent (i) in
the order of priority specified in Section 3.3 hereof and (ii) to the extent
received or realized at any time after the Final Distributions for each Class
of Certificates have been made, in the manner provided in clause "first" of
Section 3.3 hereof.
(b) Notwithstanding the priority of payments specified in
Sections 2.4(b)(i), 3.2 and 3.3, in the event any Investment Earnings on
amounts on deposit in any Cash Collateral Account resulting from an Unapplied
Provider Advance are deposited in the Collection Account or the Special
Payments Account, such Investment Earnings shall be used to pay interest
payable in respect of such Unapplied Provider Advance to the extent of such
Investment Earnings.
(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-1 Certificates, the Class A-2 Certificates, the Class B
Certificates or the Class C Certificates (at the Stated Interest Rate for
such Class of Certificates), then, prior to 1:00 p.m. (New York City time) on
such Distribution Date, the Subordination Agent shall request a drawing (each
such drawing, an "INTEREST DRAWING") under the Liquidity Facility with
respect to such Class of Certificates in an amount equal to the lesser of
(i) an amount sufficient to pay the amount of such accrued interest (at the
Stated Interest Rate for such Class of Certificates) and (ii) the Available
Amount under such Liquidity Facility, and shall pay such amount to the
Trustee with respect to such Class of Certificates in payment of such accrued
interest.
(b) APPLICATION OF INTEREST DRAWINGS. Notwithstanding anything
to the contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A-1
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class A-1 Cash Collateral Account, and payable in each case to the Class
A-1 Certificateholders or the Class A-1 Trustee, shall be promptly
distributed to the Class A-1 Trustee, (ii) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A-2
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class A-2 Cash Collateral Account, and payable in each case to the Class
A-2 Certificateholders or the Class A-2 Trustee, shall be promptly
distributed to the Class A-2 Trustee, (iii) 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 or the Class B Trustee, shall be promptly distributed to
the Class B Trustee and (iv) 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 or the Class C Trustee, shall be promptly distributed to
the Class C Trustee. For the avoidance of doubt, Interest Drawings and
Applied Provider Advances (as defined in the Liquidity Facilities) to be
applied in respect of the payment of interest with respect to the
Certificates shall not include any amount of interest due and payable on the
Deposits.
(c) DOWNGRADE DRAWINGS. (i) With respect to each Liquidity
Facility, a Downgrade Drawing shall be requested by the Subordination Agent
thereunder as provided in Section 3.6(c)(iii), if at any time, a Downgrade
Event shall have occurred with respect to such Liquidity Facility (a
"DOWNGRADED FACILITY"), unless an event described in Section 3.6(c)(ii)
occurs with respect to such Liquidity Facility.
(ii) If at any time any Liquidity Facility becomes a Downgraded
Facility, the Subordination Agent shall request a Downgrade Drawing
thereunder in accordance with Section 3.6(c)(iii), unless the Liquidity
Provider under such Downgraded Facility or Continental arranges for a
Replacement Liquidity Provider to issue and deliver a Replacement Liquidity
Facility to the Subordination Agent within 10 days (or, in the case of a
downgrade by Standard & Poor's of the short-term unsecured debt rating of
such Liquidity Provider from A-1+ to A-1, such longer period not to exceed 45
days for which a Ratings Confirmation for the applicable Class of
Certificates shall have been obtained) after receiving notice of a Downgrade
Event (but not later than the expiration date of such Downgraded Facility).
(iii) Upon the occurrence of any Downgrade Event with respect to
any Liquidity Facility, unless any event described in Section 3.6(c)(ii)
occurs with respect thereto, the Subordination Agent shall, on the 10th day
(or the last day of such longer period) referred to in Section 3.6(c)(ii)(or
if such 10th day (or the last day of such longer period) 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 the Available Amount thereunder. Amounts drawn
pursuant to a Downgrade Drawing shall be maintained and invested as provided
in Section 3.6(f) hereof. The applicable 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 such Liquidity Provider.
(d) NON-EXTENSION DRAWINGS. If any Liquidity Facility with respect
to any Class of Certificates is scheduled to expire on a date (the "STATED
EXPIRATION DATE") prior to the date that is 15 days after the Final Legal
Distribution Date for such Class of Certificates, then, no earlier than the 60th
day and no later than the 40th day prior to the then Stated Expiration Date, the
Subordination Agent shall request that such Liquidity Provider extend the Stated
Expiration Date until the earlier of (i) the date which is 15 days after such
Final Legal Distribution Date and (ii) the date that is the day immediately
preceding the 364th day occurring after the last day of the applicable Consent
Period (as hereinafter defined) (unless the obligations of such Liquidity
Provider under such Liquidity Facility are earlier terminated in accordance with
such Liquidity Facility). Whether or not the Liquidity Provider has received a
request from the Subordination Agent, such Liquidity Provider shall advise the
Subordination Agent, no earlier than the 40th day (or, if earlier, the date of
such Liquidity Provider's receipt of such request, if any, from the
Subordination Agent) and no later than the 25th day prior to the Stated
Expiration Date then in effect for such Liquidity Facility (such period, with
respect to such Liquidity Facility, the "CONSENT PERIOD"), whether, in its sole
discretion, it agrees to extend such Stated Expiration Date. If (A) on or before
the date on which such Consent Period ends, such Liquidity Facility shall not
have been replaced in accordance with Section 3.6(e) and (B) the applicable
Liquidity Provider fails irrevocably and unconditionally to advise the Borrower
on or before the date on which such Consent Period ends that such Stated
Expiration Date then in effect shall be so extended for such Liquidity Facility,
the Subordination Agent shall, on the date on which such Consent Period ends (or
as soon as possible thereafter), in accordance with the terms of the expiring
Liquidity Facility (a "NON-EXTENDED FACILITY"), request a drawing under such
expiring Liquidity Facility (such drawing, a "NON-EXTENSION DRAWING") of all
available and undrawn amounts thereunder. Amounts drawn pursuant to a
Non-Extension Drawing shall be maintained and invested in accordance with
Section 3.6(f) hereof.
(e) ISSUANCE OF REPLACEMENT LIQUIDITY FACILITY. (i) At any
time, Continental may, at its option, with cause or without cause, arrange
for a Replacement Liquidity Facility to replace any Liquidity Facility for
any Class of Certificates (including any Replacement Liquidity Facility
provided pursuant to Section 3.6(e)(ii) hereof); PROVIDED, HOWEVER, that the
initial Liquidity Provider for any Liquidity Facility relating to an Offered
Certificate Trust shall not be replaced by Continental as a Liquidity
Provider with respect to such Liquidity Facility prior to the fifth
anniversary of the Closing Date unless (A) there shall have become due to
such initial Liquidity Provider, or such initial Liquidity Provider shall
have demanded, amounts pursuant to Section 3.01, 3.02 or 3.03 of any
applicable Liquidity Facility or pursuant to the Tax Letter and the
replacement of such initial Liquidity Provider would reduce or eliminate the
obligation to pay such amounts or Continental determines in good faith that
there is a substantial likelihood that such initial Liquidity Provider will
have the right to claim any such amounts (unless such initial Liquidity
Provider waives, in writing, any right it may have to claim such amounts),
which determination shall be set forth in a certificate delivered by
Continental to such initial Liquidity Provider setting forth the basis for
such determination and accompanied by an opinion of outside counsel selected
by Continental and reasonably acceptable to such initial Liquidity Provider
verifying the legal conclusions, if any, of such certificate relating to such
basis, PROVIDED that, in the case of any likely claim for such amounts based
upon any proposed, or proposed change in, law, rule, regulation,
interpretation, directive, requirement, request or administrative practice,
such opinion may assume the adoption or promulgation of such proposed matter,
(B) it shall become unlawful or impossible for such initial Liquidity
Provider (or its Facility Office) to maintain or fund its LIBOR Advances as
described in Section 3.10 of any Liquidity Facility, (C) the short-term
unsecured debt rating of such initial Liquidity Provider is downgraded by
Standard & Poor's from A-1+ to A-1 and there is a resulting downgrade in the
rating by any Rating Agency of any Class of Certificates, (D) any Liquidity
Facility of such initial Liquidity Provider shall become a Downgraded
Facility or a Non-Extended Facility or a Downgrade Drawing or a Non-Extension
Drawing shall have occurred under any Liquidity Facility of such initial
Liquidity Provider or (E) such initial Liquidity Provider shall have breached
any of its payment (including, without limitation, funding) obligations under
any Liquidity Facility in respect of which it is the Liquidity Provider. If
such Replacement Liquidity Facility is provided at any time after a Downgrade
Drawing or Non-Extension Drawing has been made, all funds on deposit in the
relevant Cash Collateral Account will be returned to the Liquidity Provider
being replaced.
(ii) If any Liquidity Provider shall determine not to extend any
of its Liquidity Facilities in accordance with Section 3.6(d), then such
Liquidity Provider may, at its option, arrange for a Replacement Liquidity
Facility to replace such Liquidity Facility during the period no earlier than
40 days and no later than 25 days prior to the then effective Stated
Expiration Date of such Liquidity Facility. In addition, so long as Helaba
is the Liquidity Provider for any Liquidity Facility relating to an Offered
Certificate Trust, at any time after a Non-Extension Drawing has been made
under any such Liquidity Facility or at any time after Helaba has extended
the Stated Expiration Date under any such Liquidity Facility to the date that
is 15 days after the applicable Final Legal Distribution Date in accordance
with the provisions of such Liquidity Facility, the Liquidity Provider
thereunder may, at its option, arrange for a Replacement Liquidity Facility
to replace such Liquidity Facility; PROVIDED, HOWEVER, that if Helaba has
extended the Stated Expiration Date as described above, it shall not have the
right to replace such Liquidity Facility prior to the first anniversary of
the Closing Date.
(iii) No Replacement Liquidity Facility arranged by Continental
or a Liquidity Provider in accordance with clause (i) or (ii) above or
pursuant to Section 3.6(c), respectively, shall become effective and no such
Replacement Liquidity Facility shall be deemed a "Liquidity Facility" under
the Operative Agreements, unless and until (A) each of the conditions
referred to in sub-clauses (iv)(x) and (z) below shall have been satisfied,
(B) if such Replacement Liquidity Facility shall materially adversely affect
the rights, remedies, interests or obligations of the Class A-1
Certificateholders, the Class A-2 Certificateholders, the Class B
Certificateholders or the Class C Certificateholders under any of the
Operative Agreements, the applicable Trustee shall have consented, in
writing, to the execution and issuance of such Replacement Liquidity Facility
and (C) in the case of a Replacement Liquidity Facility arranged by a
Liquidity Provider under Section 3.6(e)(ii) or pursuant to Section 3.6(c),
such Replacement Liquidity Facility is acceptable to Continental.
(iv) In connection with the issuance of each Replacement
Liquidity Facility, the Subordination Agent shall (x) prior to the issuance
of such Replacement Liquidity Facility, obtain written confirmation from each
Rating Agency that such Replacement Liquidity Facility will not cause a
reduction of any rating then in effect for any Class of Certificates by such
Rating Agency (without regard to any downgrading of any rating of any
Liquidity Provider being replaced pursuant to Section 3.6(c) hereof), (y) pay
all Liquidity Obligations then owing to the replaced Liquidity Provider
(which payment shall be made first from available funds in the applicable
Cash Collateral Account as described in clause (ix) 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) with respect to a Replacement Liquidity
Facility, (w) the replaced Liquidity Facility shall terminate, (x) the
Subordination Agent shall, if and to the extent so requested by Continental
or the Liquidity Provider being replaced, execute and deliver any certificate
or other instrument required in order to terminate the replaced Liquidity
Facility, shall surrender the replaced Liquidity Facility to the Liquidity
Provider being replaced and shall execute and deliver the Replacement
Liquidity Facility and any associated Fee Letters, (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-1 Liquidity Facility, the Class A-2 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-1 Cash Collateral Account, the Class A-2 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.
On each Interest Payment Date (or, in the case of any Special
Distribution Date with respect to a distribution pursuant to Section 2.4(b)
hereof occurring prior to the occurrence of a Triggering Event, on such Special
Distribution Date), Investment Earnings on amounts on deposit in each Cash
Collateral Account (or, in the case of any Special Distribution Date with
respect to a distribution pursuant to Section 2.4(b) hereof occurring prior to
the occurrence of a Triggering Event, a fraction of such Investment Earnings
equal to the Section 2.4(b) Fraction) shall be deposited in the Collection
Account (or, in the case of any Special Distribution Date with respect to a
distribution pursuant to Section 2.4(b) hereof occurring prior to the occurrence
of a Triggering Event, the Special Payments Account) and applied on such
Interest Payment Date (or Special Distribution Date, as the case may be) in
accordance with Section 2.4, 3.2, 3.3 or 3.4 (as applicable). The Subordination
Agent shall deliver a written statement to Continental and the Liquidity
Provider one day prior to each Interest Payment Date and Special Distribution
Date setting forth the aggregate amount of Investment Earnings held in the Cash
Collateral Accounts as of such date. In addition, from and after the date funds
are so deposited, the Subordination Agent shall make withdrawals from such
account as follows:
(i) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest due and owing on the Class A-1 Certificates (at the
Stated Interest Rate for the Class A-1 Certificates) from any other
source, withdraw from the Class A-1 Cash Collateral Account, and pay to
the Class A-1 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-1 Certificates) on such Class A-1 Certificates and
(y) the amount on deposit in the Class A-1 Cash Collateral Account;
(ii) on each Distribution Date, the Subordination Agent shall,
to the extent it shall not have received funds to pay accrued and
unpaid interest due and owing on the Class A-2 Certificates (at the
Stated Interest Rate for the Class A-2 Certificates) from any other
source, withdraw from the Class A-2 Cash Collateral Account, and pay to
the Class A-2 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-2 Certificates) on such Class A-2 Certificates and
(y) the amount on deposit in the Class A-2 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 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;
(iv) 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;
(v) on each date on which the Pool Balance of the Class A-1
Trust shall have been reduced by payments made to the Class A-1
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-1
Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of the Pool Balance on such date (and
any reduction in the amounts on deposit in the Class A-1 Cash
Collateral Account resulting from a prior withdrawal of amounts on
deposit in the Class A-1 Cash Collateral Account on such date) and any
transfer of Investment Earnings from such Cash Collateral Account to
the Collection Account or the Special Payments Account on such date, an
amount equal to the sum of the Required Amount (with respect to the
Class A-1 Liquidity Facility) plus Investment Earnings on deposit in
such Cash Collateral Account (after giving effect to any such transfer
of Investment Earnings) will be on deposit in the Class A-1 Cash
Collateral Account and shall FIRST, pay such withdrawn amount to the
Class A-1 Liquidity Provider until the Liquidity Obligations (with
respect to the Class A-1 Certificates) owing to such Liquidity Provider
shall have been paid in full, and SECOND, deposit any remaining
withdrawn amount in the Collection Account;
(vi) on each date on which the Pool Balance of the Class A-2
Trust shall have been reduced by payments made to the Class A-2
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-2
Cash Collateral Account such amount as is necessary so that, after
giving effect to the reduction of the Pool Balance on such date (and
any reduction in the amounts on deposit in the Class A-2 Cash
Collateral Account resulting from a prior withdrawal of amounts on
deposit in the Class A-2 Cash Collateral Account on such date) and any
transfer of Investment Earnings from such Cash Collateral Account to
the Collection Account or the Special Payments Account on such date, an
amount equal to the sum of the Required Amount (with respect to the
Class A-2 Liquidity Facility) plus Investment Earnings on deposit in
such Cash Collateral Account (after giving effect to any such transfer
of Investment Earnings) will be on deposit in the Class A-2 Cash
Collateral Account and shall FIRST, pay such withdrawn amount to the
Class A-2 Liquidity Provider until the Liquidity Obligations (with
respect to the Class A-2 Certificates) owing to such Liquidity Provider
shall have been paid in full, and SECOND, deposit any remaining
withdrawn amount in the Collection Account;
(vii) 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 for
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 (and
any reduction in the amounts on deposit in the Class B Cash Collateral
Account resulting from a prior withdrawal of amounts on deposit in the
Class B Cash Collateral Account on such date) and any transfer of
Investment Earnings from such Cash Collateral Account to the Collection
Account or the Special Payments 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 (after giving effect to any such transfer of
Investment Earnings) will be on deposit in the Class B Cash Collateral
Account and shall FIRST, pay such withdrawn amount to the Class B
Liquidity Provider until the Liquidity Obligations (with respect to the
Class B Certificates) owing to such Liquidity Provider shall have been
paid in full, and SECOND, deposit any remaining withdrawn amount in the
Collection Account;
(viii) 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, if applicable, 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 (and any reduction in the
amounts on deposit in the Class C Cash Collateral Account resulting from a
prior withdrawal of amounts on deposit in the Class C Cash Collateral
Account on such date) and any transfer of Investment Earnings from such
Cash Collateral Account to the Collection Account or the Special Payments
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 (after giving effect to any
such transfer of Investment Earnings) will be on deposit in the Class C
Cash Collateral Account and shall FIRST, pay such withdrawn 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 withdrawn amount in
the Collection Account;
(ix) 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
(x) following the payment of Final Distributions with respect
to any Class of Certificates, on the date on which the Subordination
Agent shall have been notified by the Liquidity Provider for such Class
of Certificates that the Liquidity Obligations owed to such Liquidity
Provider have been paid in full, the Subordination Agent shall withdraw
all amounts on deposit in the Cash Collateral Account in respect of
such Class of Certificates and shall deposit such amount in the
Collection Account.
(g) REINSTATEMENT. With respect to any Interest Drawing under
the Liquidity Facility for any Trust, upon the reimbursement of the
applicable Liquidity Provider for all or any part of the amount of such
Interest Drawing, together with any accrued interest thereon, the Available
Amount of such Liquidity Facility shall be reinstated by an amount equal to
the amount of such Interest Drawing so reimbursed to the applicable Liquidity
Provider but not to exceed the Stated Amount for such Liquidity Facility;
PROVIDED, HOWEVER, that such Liquidity Facility shall not be so reinstated in
part or in full at any time if (x) both a Performing Note Deficiency exists
and a Liquidity Event of Default shall have occurred and be continuing with
respect to the relevant Liquidity Facility or (y) a Final Drawing shall have
occurred with respect to such Liquidity Facility. In the event that, with
respect to any particular Liquidity Facility, (i) funds are withdrawn from
any Cash Collateral Account pursuant to clause (i), (ii) or (iii) of Section
3.6(f) hereof or (ii) such Liquidity Facility shall become a Downgraded
Facility or a Non-Extended Facility at a time when unreimbursed Interest
Drawings under such Liquidity Facility have reduced the Available Amount
thereunder to zero, then funds received by the Subordination Agent at any
time other than (x) any time when a Liquidity Event of Default shall have
occurred and be continuing with respect to such Liquidity Facility and a
Performing Note Deficiency exists or (y) any time after a Final Drawing shall
have occurred with respect to such Liquidity Facility shall be deposited in
such Cash Collateral Account as and to the extent provided in clause "THIRD"
of Section 2.4(b), clause "THIRD" of Section 3.2 or clause "FOURTH" of
Section 3.3, as applicable, and applied in accordance with Section 3.6(f)
hereof.
(h) REIMBURSEMENT. The amount of each drawing under the
Liquidity Facilities shall be due and payable, together with interest
thereon, on the dates and at the rates, respectively, provided in the
Liquidity Facilities.
(i) FINAL DRAWING. Upon receipt from a Liquidity Provider of a
Termination Notice with respect to any Liquidity Facility, the Subordination
Agent shall, not later than the date specified in such Termination Notice, in
accordance with the terms of such Liquidity Facility, request a drawing under
such Liquidity Facility of all available and undrawn amounts thereunder (a
"FINAL DRAWING"). Amounts drawn pursuant to a Final Drawing shall be
maintained and invested in accordance with Section 3.6(f) hereof.
(j) REDUCTION OF STATED AMOUNT. Promptly following each date
on which the Required Amount of the Liquidity Facility for a Class of
Certificates is reduced as a result of a reduction in the Pool Balance with
respect to such Certificates, the Stated Amount of such Liquidity Facility
shall automatically reduce to an amount equal to the Required Amount with
respect to such Liquidity Facility (as calculated by the Subordination Agent
after giving effect to such payment).
(k) RELATION TO SUBORDINATION PROVISIONS. Interest Drawings
under the Liquidity Facilities and withdrawals from the Cash Collateral
Accounts, in each case, in respect of interest on the Certificates of any
Class, will be distributed to the Trustee for such Class of Certificates,
notwithstanding Sections 2.4, 3.2 and 3.3 hereof.
(l) ASSIGNMENT OF LIQUIDITY FACILITY. The Subordination Agent
agrees not to consent to the assignment by any Liquidity Provider of any of
its rights or obligations under any Liquidity Facility or any interest
therein, unless (i) Continental shall have consented to such assignment and
(ii) each Rating Agency shall have provided a Ratings Confirmation in respect
of such assignment; PROVIDED, that the Subordination Agent shall consent to
such assignment if the conditions in the foregoing clauses (i) and (ii) are
satisfied, and the foregoing is not intended to and shall not be construed to
limit the rights of the initial Liquidity Provider under Section 3.6(e)(ii).
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 direct the
Subordination Agent to sell, assign, contract to sell or otherwise dispose of
and deliver all (but not less than all) of such Equipment Notes to any Person
at public or private sale, at any location at the option of the Controlling
Party, all upon such terms and conditions as it may reasonably deem advisable
in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights, if any, set forth in the Indentures with respect to Leased Aircraft
to purchase the Equipment Notes, and notwithstanding the foregoing, so long
as any Certificates remain Outstanding, during the period ending on the date
which is nine months after the earlier of (x) the Acceleration of the
Equipment Notes issued pursuant to any Indenture or (y) the occurrence of a
Continental Bankruptcy Event, without the consent of each Trustee, (A) no
Aircraft subject to the Lien of such Indenture or such Equipment Notes may be
sold if the net proceeds from such sale would be less than the Minimum Sale
Price for such Aircraft or such Equipment Notes, and (B) with respect to any
Leased Aircraft, the amount and payment dates of rentals payable by
Continental under the Lease for such Aircraft may not be adjusted, if, as a
result of such adjustment, the discounted present value of all such rentals
would be less than 75% of the discounted present value of the rentals payable
by Continental under such Lease before giving effect to such adjustment, in
each case, using the weighted average interest rate of the Equipment Notes
issued pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture Default
(and before the occurrence of a Triggering Event) commission LTV Appraisals
with respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note
becomes a Non-Performing Equipment Note, the Subordination Agent shall obtain
Appraisals with respect to all of the Aircraft (the "LTV APPRAISALS") as soon
as practicable and additional LTV Appraisals on or prior to each anniversary
of the date of such initial LTV Appraisals; provided that if the Controlling
Party reasonably objects to the appraised value of the Aircraft shown in such
LTV Appraisals, the Controlling Party shall have the right to obtain or cause
to be obtained substitute LTV Appraisals (including any LTV Appraisals based
upon physical inspection of the Aircraft).
(b) Following the occurrence and during the continuance of an
Indenture Default under any Indenture, the Controlling Party shall take such
actions as it may reasonably deem most effectual to complete the sale or
other disposition of the relevant Aircraft or Equipment Notes. In addition,
in lieu of any sale, assignment, contract to sell or other disposition, the
Controlling Party may maintain possession of such Equipment Notes and
continue to apply monies received in respect of such Equipment Notes in
accordance with Article III hereof. In addition, in lieu of such sale,
assignment, contract to sell or other disposition, or in lieu of such
maintenance of possession, the Controlling Party may, subject to the terms
and conditions of the related Indenture, instruct the Loan Trustee under such
Indenture to foreclose on the Lien on the related Aircraft.
SECTION 4.2. REMEDIES CUMULATIVE. Each and every right, power
and remedy given to the Trustees, the Liquidity Providers, the Controlling
Party or the Subordination Agent specifically or otherwise in this Agreement
shall be cumulative and shall be in addition to every other right, power and
remedy herein specifically given or now or hereafter existing at law, in
equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may, subject always to the
terms and conditions hereof, be exercised from time to time and as often and
in such order as may be deemed expedient by any Trustee, any Liquidity
Provider, the Controlling Party or the Subordination Agent, as appropriate,
and the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same
time or thereafter any other right, power or remedy. No delay or omission by
any Trustee, any Liquidity Provider, the Controlling Party or the
Subordination Agent in the exercise of any right, remedy or power or in the
pursuit of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default or to be an acquiescence therein.
SECTION 4.3. DISCONTINUANCE OF PROCEEDINGS. In case any party
to this Agreement (including the Controlling Party in such capacity) shall
have instituted any Proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, entry or otherwise, and such Proceeding shall
have been discontinued or abandoned for any reason or shall have been
determined adversely to the Person instituting such Proceeding, then and in
every such case each such party shall, subject to any determination in such
Proceeding, be restored to its former position and rights hereunder, and all
rights, remedies and powers of such party shall continue as if no such
Proceeding had been instituted.
SECTION 4.4. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS NOT
TO BE IMPAIRED. Anything in this Agreement to the contrary notwithstanding
but subject to each Trust Agreement, the right of any Certificateholder or
any Liquidity Provider, respectively, to receive payments hereunder
(including without limitation pursuant to Section 2.4, 3.2 or 3.3 hereof)
when due, or to institute suit for the enforcement of any such payment on or
after the applicable Distribution Date, shall not be impaired or affected
without the consent of such Certificateholder or such Liquidity Provider,
respectively.
SECTION 4.5. UNDERTAKING FOR COSTS. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any Proceeding
against any Controlling Party or the Subordination Agent for any action taken
or omitted by it as Controlling Party or Subordination Agent, as the case may
be, a court in its discretion may require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees
and expenses, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. The provisions of this Section do not apply to a suit instituted
by the Subordination Agent, a Liquidity Provider or a Trustee or a suit by
Certificateholders holding more than 10% of the original principal amount of
any Class of Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. NOTICE OF INDENTURE DEFAULT OR TRIGGERING EVENT.
(a) In the event the Subordination Agent shall have actual knowledge of the
occurrence of an Indenture Default or a Triggering Event, as promptly as
practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail or courier to the
Rating Agencies, the Liquidity Providers and the Trustees notice of such
Indenture Default or Triggering Event, unless such Indenture Default or
Triggering Event shall have been cured or waived. For all purposes of this
Agreement, in the absence of actual knowledge on the part of a Responsible
Officer, the Subordination Agent shall not be deemed to have knowledge of any
Indenture Default or Triggering Event unless notified in writing by one or
more Trustees, one or more Liquidity Providers or one or more
Certificateholders.
(b) OTHER NOTICES. The Subordination Agent will furnish to
each Liquidity Provider and Trustee, promptly upon receipt thereof,
duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to the
Subordination Agent as registered holder of the Equipment Notes or otherwise
in its capacity as Subordination Agent to the extent the same shall not have
been otherwise directly distributed to such Liquidity Provider or Trustee, as
applicable, pursuant to the express provision of any other Operative
Agreement.
SECTION 5.2. INDEMNIFICATION. The Subordination Agent shall not
be required to take any action or refrain from taking any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof
unless the Subordination Agent shall have been indemnified (to the extent and
in the manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under
any obligation to take any action under this Agreement and nothing contained
in this Agreement shall require the Subordination Agent to expend or risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. The Subordination Agent shall not be required to take any
action under Section 5.1 (other than the first sentence thereof) or Article
IV hereof, nor shall any other provision of this Agreement be deemed to
impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to law.
SECTION 5.3. NO DUTIES EXCEPT AS SPECIFIED IN INTERCREDITOR
AGREEMENT. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of this Agreement; and
no implied duties or obligations shall be read into this Agreement against
the Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity and at its own cost and expense (but without any right of
indemnity in respect of any such cost or expense under Section 5.2 or 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-1 Trustee, the Class A-2 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 Sections 2.2 or 5.3 hereof and (c) for liabilities
that may result from the material inaccuracy of any representation or
warranty of the Subordination Agent made in its individual capacity in any
Operative Agreement. The Subordination Agent shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Subordination Agent, unless it is proved that the Subordination Agent was
negligent in ascertaining the pertinent facts.
SECTION 6.2. ABSENCE OF DUTIES. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
SECTION 6.3. NO REPRESENTATIONS OR WARRANTIES AS TO DOCUMENTS.
The Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Agreement or any other Operative Agreement
or as to the correctness of any statement contained in any thereof, except
for the representations and warranties of the Subordination Agent, made in
its individual capacity, under any Operative Agreement to which it is a
party. The Certificateholders, the Trustees and the Liquidity Providers make
no representation or warranty hereunder whatsoever.
SECTION 6.4. NO SEGREGATION OF MONIES; NO INTEREST. Any monies
paid to or retained by the Subordination Agent pursuant to any provision
hereof and not then required to be distributed to any Trustee or any
Liquidity Provider as provided in Articles II and III hereof or deposited
into one or more Trust Accounts need not be segregated in any manner except
to the extent required by such Articles II and III and by law, and the
Subordination Agent shall not (except as otherwise provided in Section 2.2
hereof) be liable for any interest thereon; PROVIDED, HOWEVER, that any
payments received or applied hereunder by the Subordination Agent shall be
accounted for by the Subordination Agent so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.5. RELIANCE; AGENTS; ADVICE OF COUNSEL. The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or
parties. As to the Pool Balance of any Trust as of any date, the
Subordination Agent may for all purposes hereof rely on a certificate signed
by any Responsible Officer of the applicable Trustee, and such certificate
shall constitute full protection to the Subordination Agent for any action
taken or omitted to be taken by it in good faith in reliance thereon. As to
any fact or matter relating to the Liquidity Providers or the Trustees the
manner of ascertainment of which is not specifically described herein, the
Subordination Agent may for all purposes hereof rely on a certificate, signed
by any Responsible Officer of the applicable Liquidity Provider or Trustee,
as the case may be, as to such fact or matter, and such certificate shall
constitute full protection to the Subordination Agent for any action taken or
omitted to be taken by it in good faith in reliance thereon. The
Subordination Agent shall assume, and shall be fully protected in assuming,
that each of the Liquidity Providers and each of the Trustees are authorized
to enter into this Agreement and to take all action to be taken by them
pursuant to the provisions hereof, and shall not inquire into the
authorization of each of the Liquidity Providers and each of the Trustees
with respect thereto. In the administration of the trusts hereunder, the
Subordination Agent may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents or
attorneys and may consult with counsel, accountants and other skilled persons
to be selected and retained by it, and the Subordination Agent shall not be
liable for the acts or omissions of any agent appointed with due care or for
anything done, suffered or omitted in good faith by it in accordance with the
advice or written opinion of any such counsel, accountants or other skilled
persons.
SECTION 6.6. CAPACITY IN WHICH ACTING. The Subordination Agent
acts hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7. COMPENSATION. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements,
for all services rendered hereunder and shall have a priority claim to the
extent set forth in Article III hereof on all monies collected hereunder for
the payment of such compensation, to the extent that such compensation shall
not be paid by others. The Subordination Agent agrees that it shall have no
right against any Trustee or Liquidity Provider for any fee as compensation
for its services as agent under this Agreement. The provisions of this
Section 6.7 shall survive the termination of this Agreement.
SECTION 6.8. MAY BECOME CERTIFICATEHOLDER. The institution
acting as Subordination Agent hereunder may become a Certificateholder and
have all rights and benefits of a Certificateholder to the same extent as if
it were not the institution acting as the Subordination Agent.
SECTION 6.9. SUBORDINATION AGENT REQUIRED; ELIGIBILITY. There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America or of any State or the District of Columbia having a combined
capital and surplus of at least $100,000,000 (or the obligations of which,
whether now in existence or hereafter incurred, are fully and unconditionally
guaranteed by a corporation organized and doing business under the laws of
the United States of America, any State thereof or of the District of
Columbia and having a combined capital and surplus of at least $100,000,000),
if there is such an institution willing and able to perform the duties of the
Subordination Agent hereunder upon reasonable or customary terms. Such
corporation shall be a citizen of the United States and shall be authorized
under the laws of the United States or any State thereof or of the District
of Columbia to exercise corporate trust powers and shall be subject to
supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.
SECTION 6.10. MONEY TO BE HELD IN TRUST. All Equipment Notes,
monies and other property deposited with or held by the Subordination Agent
pursuant to this Agreement shall be held in trust for the benefit of the
parties entitled to such Equipment Notes, monies and other property. All
such Equipment Notes, monies or other property shall be held in the Trust
Department of the institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. SCOPE OF INDEMNIFICATION. The Subordination Agent
shall be indemnified hereunder to the extent and in the manner described in
Section 8.1 of the Participation Agreements with respect to Owned Aircraft,
Section 9.1 of the Participation Agreements with respect to Leased Aircraft
and Section 6 of the Note Purchase Agreement. The indemnities contained in
such Sections of such agreements shall survive the termination of this
Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. REPLACEMENT OF SUBORDINATION AGENT; APPOINTMENT OF
SUCCESSOR. The Subordination Agent may resign at any time by so notifying
the Trustees and the Liquidity Providers. The Controlling Party may remove
the Subordination Agent for cause by so notifying the Subordination Agent and
may appoint a successor Subordination Agent. The Controlling Party shall
remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9
hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of
acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party shall promptly appoint a successor
Subordination Agent.
A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the
retiring Subordination Agent and (y) a written assumption of its obligations
hereunder and under each Liquidity Facility to each party hereto, upon which
the resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The
successor Subordination Agent shall mail a notice of its succession to the
Liquidity Providers and the Trustees. The retiring Subordination Agent shall
promptly transfer its rights under each of the Liquidity Facilities and all
of the property held by it as Subordination Agent to the successor
Subordination Agent.
If a successor Subordination Agent does not take office within 60
days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or one or more of the Trustees may petition any
court of competent jurisdiction for the appointment of a successor
Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9
hereof (to the extent applicable), one or more of the Trustees or one or more
of the Liquidity Providers may petition any court of competent jurisdiction
for the removal of the Subordination Agent and the appointment of a successor
Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. AMENDMENTS, WAIVERS, ETC. (a) This Agreement may
not be supplemented, amended or modified without the consent of each Trustee
(acting, except in the case of any amendment pursuant to Section 3.6(e)(v)(y)
hereof with respect to any Replacement Liquidity Facility or any amendment
contemplated by the last sentence of this Section 9.1(a), with the consent of
holders of Certificates of the related Class evidencing interests in the
related Trust aggregating not less than a majority in interest in such Trust
or as otherwise authorized pursuant to the relevant Trust Agreement), the
Subordination Agent and, subject to clause (ii) of the proviso in Section
9.1(c), 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) or 9.1(d) 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(d)
hereof; PROVIDED FURTHER, HOWEVER, that, if such supplement, amendment or
modification (A) would (x) directly or indirectly modify or supersede, or
otherwise conflict with, Section 2.2(b), Section 3.6(e), Section 3.6(f)
(other than the last sentence thereof), Section 3.6(l), the last sentence of
this Section 9.1(a), Section 9.1(c), Section 9.1(d), the second sentence of
Section 10.6 or this proviso (collectively, the "CONTINENTAL PROVISIONS") or
(y) otherwise adversely affect the interests of a potential Replacement
Liquidity Provider or of Continental with respect to its ability to replace
any Liquidity Facility or with respect to its payment obligations under any
Operative Agreement or (B) is made pursuant to the last sentence of this
Section 9.1(a) or pursuant to Section 9.1(c) or 9.1(d), then such supplement,
amendment or modification shall not be effective without the additional
written consent of Continental. Notwithstanding the foregoing, without the
consent of each Certificateholder and each Liquidity Provider, no supplement,
amendment or modification of this Agreement may (i) reduce the percentage of
the interest in any Trust evidenced by the Certificates issued by such Trust
necessary to consent to modify or amend any provision of this Agreement or to
waive compliance therewith or (ii) except as provided in Section 9.1(c) or
9.1(d) or the last sentence of this Section 9.1(a), modify Section 2.4, 3.2
or 3.3 hereof, relating to the distribution of monies received by the
Subordination Agent hereunder from the Equipment Notes or pursuant to the
Liquidity Facilities. Nothing contained in this Section shall require the
consent of a Trustee at any time following the payment of Final Distributions
with respect to the related Class of Certificates. If the Replacement
Liquidity Facility for any Liquidity Facility in accordance with Section
3.6(e) hereof is to be comprised of more than one instrument as contemplated
by the definition of the term "Replacement Liquidity Facility", then each of
the parties hereto agrees to amend this Agreement to incorporate appropriate
mechanics for multiple Liquidity Facilities for an individual Trust.
(b) In the event that the Subordination Agent, as the
registered holder of any Equipment Notes, receives a request for its consent
to any amendment, modification, consent or waiver under such Equipment Notes,
the Indenture pursuant to which such Equipment Notes were issued, or the
related Lease, Participation Agreement or other related document, (i) if no
Indenture Default shall have occurred and be continuing with respect to such
Indenture, the Subordination Agent shall request directions with respect to
each Series of such Equipment Notes from the Trustee of the Trust which holds
such Equipment Notes and shall vote or consent in accordance with the
directions of such Trustee and (ii) if any Indenture Default (which, in the
case of any Indenture pertaining to a Leased Aircraft, has not been cured by
the applicable Owner Trustee or the applicable Owner Participant, if
applicable, pursuant to Section 4.03 of such Indenture) shall have occurred
and be continuing with respect to such Indenture, the Subordination Agent
will exercise its voting rights as directed by the Controlling Party, subject
to Sections 4.1 and 4.4 hereof; provided that no such amendment, modification
or waiver shall, without the consent of each Liquidity Provider, reduce the
amount of rent, supplemental rent or stipulated loss values payable by
Continental under any Lease or reduce the amount of principal or interest
payable by Continental under any Equipment Note issued under any Indenture in
respect of an Owned Aircraft.
(c) Upon the issuance of the Class C Certificates, this
Agreement shall be amended by written agreement of Continental and the
Subordination Agent to provide for the adding as a party hereto the Class C
Trustee and, if applicable, the Class C Liquidity Provider and the parties
hereto confirm and agree that upon the execution and delivery of any such
amendment by Continental and the Subordination Agent, the Class C Trustee
and, if applicable, the Class C Liquidity Provider shall each be a party
hereto as fully and with the same force and effect as if each such Person had
originally executed and delivered a counterpart hereof. Any such amendment
shall specify, among other things, the Regular Distribution Dates for the
Class C Certificates (which may be quarterly), the Final Legal Distribution
Date for the Class C Certificates, the LTV Ratio for the Class C
Certificates, the Stated Interest Rate for the Class C Certificates (which
may be a floating rate of interest), and amend the provisions of this
Agreement to give effect to the issuance of the Class C Certificates,
including, the subordination of the Class C Certificates to the Class A-1
Certificates, the Class A-2 Certificates, the Class B Certificates and the
Liquidity Obligations (other than, if applicable, such portion of the
Liquidity Obligations payable to the Class C Liquidity Provider as to which
the Class C Liquidity Provider may agree), and any such amendment shall make
such further changes hereto as shall be reasonably necessary or advisable in
connection therewith; PROVIDED that (i) Ratings Confirmation for the Class
A-1 Certificates, Class A-2 Certificates and Class B Certificates shall have
been obtained with respect to such amendment, and (ii) the consent of the
Class A-1 Liquidity Provider, Class A-2 Liquidity Provider and Class B
Liquidity Provider shall be obtained for such amendment, such consent not to
be unreasonably withheld or delayed.
(d) If, with respect to any Aircraft, Class D Certificates are
issued, this Agreement shall be amended by written agreement of Continental
and the Subordination Agent to provide for the subordination of such Class D
Certificates to the Class A-1 Certificates, the Class A-2 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
Certificates, the Class A-1 Certificates and the Class A-2 Certificates. No
such amendment shall materially adversely affect any Trustee. The amendment
to this Agreement to give effect to the issuance of any Class D Certificates
shall include, without limitation:
(i) the trustee of the Class D Trust shall be added as a party
to this Agreement;
(ii) the definitions of "Cash Collateral Account",
"Certificate", "Class", "Equipment Notes", "Final Legal Distribution
Date", "Liquidity Facilities", "Liquidity Provider", "LTV Ratio",
"Stated Interest Rate", "Trust", "Trust Agreement" and "Controlling
Party" shall be revised, as appropriate, to reflect the issuance of the
Class D Certificates (and the subordination thereof); and
(iii) the 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 the Class C Certificates.
If, with respect to any Aircraft, Series D Equipment Notes are issued to any
Person other than the Class D Trust, this Agreement shall be amended by
written agreement of Continental and the Subordination Agent to (i) provide
for each holder of a Series D Equipment Note to be bound by the provisions of
Section 2.6(a) hereof so that the Controlling Party, among other things,
shall be entitled to direct the Loan Trustee as provided therein (and such
Series D Equipment Notes shall make effective provision therefor so as to
bind each holder thereof to such provisions of Section 2.6(a) hereof) and
(ii) to revise the definitions of "Controlling Party" and "Equipment Notes",
as appropriate, to reflect the issuance of the Series D Equipment Notes (and
the prior rights, as against the holders of such Series D Equipment Notes, of
the Class A-1 Trustee, the Class A-2 Trustee, the Class B Trustee and the
Class C Trustee to be such "Controlling Party"). No such amendment shall
materially adversely affect any Trustee.
SECTION 9.2. SUBORDINATION AGENT PROTECTED. If, in the
reasonable opinion of the institution acting as the Subordination Agent
hereunder, any document required to be executed pursuant to the terms of
Section 9.1 affects any right, duty, immunity or indemnity with respect to it
under this Agreement or any Liquidity Facility, the Subordination Agent may
in its discretion decline to execute such document.
SECTION 9.3. EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the
execution of any amendment, consent or supplement hereto pursuant to the
provisions hereof, this Agreement shall be and be deemed to be and shall be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this
Agreement of the parties hereto and beneficiaries hereof shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental agreement shall be and be deemed to be and shall be part of the
terms and conditions of this Agreement for any and all purposes. In
executing or accepting any supplemental agreement permitted by this Article
IX, the Subordination Agent shall be entitled to receive, and shall be fully
protected in relying upon, an opinion of counsel stating that the execution
of such supplemental agreement is authorized or permitted by this Agreement.
SECTION 9.4. NOTICE TO RATING AGENCIES. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. TERMINATION OF INTERCREDITOR AGREEMENT. Following
payment of Final Distributions with respect to each Class of Certificates and
the payment in full of all Liquidity Obligations to the Liquidity Providers
and PROVIDED that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers and the
Subordination Agent hereunder or under the Trust Agreements, and that the
commitment of the Liquidity Providers under the Liquidity Facilities shall
have expired or been terminated, this Agreement and the trusts created hereby
shall terminate and this Agreement shall be of no further force or effect.
Except as aforesaid or otherwise provided, this Agreement and the trusts
created hereby shall continue in full force and effect in accordance with the
terms hereof.
SECTION 10.2. INTERCREDITOR AGREEMENT FOR BENEFIT OF TRUSTEES,
LIQUIDITY PROVIDERS AND SUBORDINATION AGENT. Subject to the second sentence
of Section 10.6 and the provisions of Section 4.4, nothing in this Agreement,
whether express or implied, shall be construed to give to any Person other
than the Trustees, the Liquidity Providers and the Subordination Agent any
legal or equitable right, remedy or claim under or in respect of this
Agreement.
SECTION 10.3. NOTICES. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or
permitted by this Agreement to be made, given, furnished or filed shall be in
writing, mailed by certified mail, postage prepaid, or by confirmed telecopy
and
(i) if to the Subordination Agent, addressed to at its office at:
WILMINGTON TRUST COMPANY
One 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
(iii) if to the initial Class A-1 Liquidity Provider, initial
Class A-2 Liquidity Provider and initial Class B Liquidity
Provider, addressed to it at its office at:
LANDESBANK HESSEN-THURINGEN
GIROZENTRALE
Main Tower
Neue Mainzer Xxx. 00 - 00
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Attention: Asset Finance
Telephone: 00-00-0000-0000
Telecopy: 00-00-0000-0000
with a copy of any Notice of Borrowing to:
LANDESBANK HESSEN-THURINGEN
NEW YORK BRANCH
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Project Finance/Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (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 Continental Provisions shall inure to the
benefit of Continental and its successors and assigns, and (without
limitation of the foregoing) Continental is hereby constituted, and agreed to
be, an express third party beneficiary of the Continental Provisions. Upon
the occurrence of the Transfers contemplated by the Assignment and Assumption
Agreements, the Trustee of each Class shall (without any further act) be
deemed to have transferred all of its rights, title and interest in and to
this Agreement to the trustee of the Successor Trust of the same Class and,
thereafter, the trustee of each Successor Trust shall be deemed to be the
"Trustee" of such Successor Trust with the rights and obligations of a
"Trustee" hereunder and under the other Operative Agreements and each
reference to a Trust of any Class herein shall be deemed a reference to the
Successor Trust of such Class.
SECTION 10.7. HEADINGS. The headings of the various Articles
and Sections herein and in the table of contents hereto are for convenience
of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 10.8. COUNTERPART FORM. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same agreement.
SECTION 10.9. SUBORDINATION. (a) As between the Liquidity
Providers, on the one hand, and the Trustees and the Certificateholders, on
the other hand, and as among the Trustees and the related Certificateholders,
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 specified in Sections 2.4, 3.2 and 3.3 shall
apply in all circumstances, notwithstanding the fact that the obligations
owed to the Trustees and the holders of Certificates are secured by certain
assets and the Liquidity Obligations may not be so secured. The Trustees
expressly agree (on behalf of themselves and the holders of Certificates) not
to assert priority over the holders of Liquidity Obligations due to their
status as secured creditors in any bankruptcy, insolvency or other legal
proceeding.
(e) Each of the Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers and the Subordination Agent
may take any of the following actions without impairing its rights under this
Agreement:
(i) obtain a Lien on any property to secure any amounts owing
to it hereunder, including, in the case of the Liquidity Providers, the
Liquidity Obligations,
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder, including,
in the case of the Liquidity Providers, any of the Liquidity
Obligations,
(iii) renew, extend, increase, alter or exchange any amounts
owing to it hereunder, including, in the case of the Liquidity
Providers, any of the Liquidity Obligations, or release or compromise
any obligation of any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated
party or a surety under applicable law;
PROVIDED, HOWEVER, that the taking of any such actions by any of the
Trustees, the Liquidity Providers or the Subordination Agent shall not
prejudice the rights or adversely affect the obligations of any other party
under this Agreement.
SECTION 10.10. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 10.11. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
WAIVER OF IMMUNITY.
(a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any
thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of 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) Each 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized,
as of the day and year first above written, and acknowledge that this
Agreement has been made and delivered in the City of New York, and this
Agreement has become effective only upon such execution and delivery.
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Trustee for each of the Trusts
By__________________________________
Name:
Title:
LANDESBANK HESSEN-THURINGEN GIROZENTRALE,
as Class A-1 Liquidity Provider, Class
A-2 Liquidity Provider and Class B
Liquidity Provider
By__________________________________
Name:
Title:
By__________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity except as
expressly set forth herein but solely as
Subordination Agent and trustee
By__________________________________
Name:
Title:
