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EXHIBIT 4.17
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INTERCREDITOR AGREEMENT
Dated as of
March 21, 1997
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
Continental Airlines Pass Through Trust 1997-1A-O,
Continental Airlines Pass Through Trust 1997-1B-O,
Continental Airlines Pass Through Trust 1997-1C-I-O,
and
Continental Airlines Pass Through Trust 1997-1C-II-O
ABN AMRO BANK N.V.,
Chicago Branch
and
ING BANK N.V.,
as Class A Liquidity Providers,
as Class B Liquidity Providers,
as Class C-I Liquidity Providers,
and
as Class C-II Liquidity Providers,
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
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ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions................................................ 2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments
from Monies Received Only ................................. 23
SECTION 2.2. Trust Accounts ............................................ 23
SECTION 2.3. Deposits to the Collection Account
and Special Payments Account .............................. 24
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
SECTION 3.1. Written Notice of Distribution ............................ 29
SECTION 3.2. Distribution of Amounts on Deposit
in the Collection Account ................................. 31
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 ...................................... 35
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party ..................... 41
SECTION 4.2. Remedies Cumulative ....................................... 42
SECTION 4.3. Discontinuance of Proceedings ............................. 43
SECTION 4.4. Right of Certificateholders to Receive
Payments Not to Be Impaired ............................... 43
SECTION 4.5. Undertaking for Costs ..................................... 43
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TABLE OF CONTENTS
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEE
SECTION 5.1. Notice of Indenture Default or Triggering Event ........... 44
SECTION 5.2. Indemnification ........................................... 44
SECTION 5.3. No Duties Except as Specified
in Intercreditor Agreement ................................ 44
SECTION 5.4. Notice from the Liquidity Providers and Trustees .......... 45
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties ............ 45
SECTION 6.2. Absence of Duties ......................................... 45
SECTION 6.3. No Representations or Warranties as to Documents .......... 45
SECTION 6.4. No Segregation of Monies; No Interest ..................... 46
SECTION 6.5. Reliance; Agents; Advice of Counsel ....................... 46
SECTION 6.6. Capacity in Which Acting .................................. 46
SECTION 6.7. Compensation .............................................. 46
SECTION 6.8. May Become Certificateholder .............................. 47
SECTION 6.9. Subordination Agent Required; Eligibility ................. 47
SECTION 6.10. Money to Be Held in Trust ................................. 47
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification.................................... 47
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent;
Appointment of Successor.................................... 48
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc ................................... 49
SECTION 9.2. Subordination Agent Protected .............................. 50
SECTION 9.3. Effect of Supplemental Agreements .......................... 50
SECTION 9.4. Notice to Rating Agencies .................................. 50
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TABLE OF CONTENTS
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ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement ................... 50
SECTION 10.2. Intercreditor Agreement for Benefit
of Trustees, Liquidity Providers and
Subordination Agent....................................... 50
SECTION 10.3. Notices .................................................. 51
SECTION 10.4. Severability ............................................. 52
SECTION 10.5. No Oral Modifications or Continuing Waivers .............. 52
SECTION 10.6. Successors and Assigns ................................... 53
SECTION 10.7. Headings ................................................. 53
SECTION 10.8. Counterpart Form ......................................... 53
SECTION 10.9. Subordination ............................................ 53
SECTION 10.10. GOVERNING LAW ............................................ 54
SECTION 10.11. Submission to Jurisdiction; Waiver of
Jury Trial; Waiver of Immunity ........................... 54
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INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of March 21, 1997, among WILMINGTON TRUST
COMPANY, a Delaware corporation ("WTC"), not in its individual capacity but
solely as Trustee of each Trust (each as defined below); ABN AMRO BANK N.V., a
bank organized under the laws of The Netherlands, acting through its Chicago
Branch ("ABN AMRO"), as a Class A Liquidity Provider, as a Class B Liquidity
Provider, as a Class C-I Liquidity Provider and as a Class C-II Liquidity
Provider; ING BANK N.V., a bank organized under the laws of The Netherlands
("ING"), as a Class A Liquidity Provider, as a Class B Liquidity Provider, as a
Class C-I Liquidity Provider and as a Class C-II Liquidity Provider; and
WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly
set forth herein, but solely as Subordination Agent and trustee hereunder (in
such capacity, together with any successor appointed pursuant to Article VIII
hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each Aircraft that
is owned by Continental at the time such Indenture is entered into (the "Owned
Aircraft"), Continental will issue on a recourse basis three series of
Equipment Notes to finance the purchase of such Aircraft, and (ii) in the case
of each Aircraft that is leased to Continental pursuant to a related Lease at
the time such Indenture is entered into (the "Leased Aircraft"), the related
Owner Trustee will issue on a nonrecourse basis three series of Equipment Notes
to finance the purchase of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust will acquire
Equipment Notes having an interest rate equal to the interest rate applicable
to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single class of Certificates (a "Class") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Purchase Agreement, the Initial Purchasers
propose to purchase the Certificates issued by each Trust in the aggregate face
amount set forth opposite the name of such Trust on Schedule I thereto;
WHEREAS, each Liquidity Provider proposes to enter into four separate
revolving credit agreements (each, a "Liquidity Facility") with the
Subordination Agent, as agent for the Trustee of each Trust, respectively, for
the benefit of the Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the Initial
Purchasers under the Purchase Agreement that the Subordination Agent, the
Trustees and the Liquidity
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Providers agree to the terms of subordination set forth in this Agreement in
respect of each Class of Certificates, and the Subordination Agent, the
Trustees and the Liquidity Providers, by entering into this Agreement, hereby
acknowledge and agree to such terms of subordination and the other provisions
of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(4) the term "including" shall mean "including without limitation";
and
(5) each scheduled payment with respect to the Certificates of any
Class shall be deemed to be comprised of interest and principal
components, with the interest component equaling interest accrued at the
Stated Interest Rate for such Class of Certificates from (i) the later of
(x) the date of the issuance thereof and (y) the most recent but
preceding Regular Distribution Date to (ii) the Regular Distribution Date
on which such Scheduled Payment is being made, such interest to be
considered payable in arrears on such Regular Distribution Date and to be
calculated and allocated in the same manner as interest on the Equipment
Notes.
"ABN AMRO" has the meaning assigned to such term in the recital of parties
to this Agreement.
"ABN AMRO Fee Letter" means the Fee Letter dated March 21, 1997, between
ABN AMRO and the Subordination Agent with respect to the Liquidity Facilities.
"ABN AMRO Sub-Account" means, with respect to any Cash Collateral Account,
a sub-ledger account to such Cash Collateral Account designated the "ABN AMRO
Sub-Account".
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"Acceleration" means, with respect to the amounts payable in respect of
the Equipment Notes issued under any Indenture, the declaration of such amounts
to be immediately due and payable. "Accelerate", "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 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 unpaid 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 which have been sold pursuant to the
terms hereof have 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 the Deposits, 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 (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 Equipments 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 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 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
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voting securities or by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" for any Class of Certificates for any
Distribution Date means the sum of the applicable LTV Collateral Amounts for
each Leased Aircraft and Owned Aircraft, minus the Pool Balance for each Class
of Certificates, if any, senior to such Class, after giving effect to any
distribution of principal on such Distribution Date on such senior Class or
Classes.
"Aircraft" means, with respect to each Indenture, the "Aircraft" referred
to therein.
"Appraisal" means a fair market value appraisal (which may be a "desktop"
appraisal) performed by any Appraiser or any other nationally recognized
appraiser on the basis of an arm's-length transaction between an informed and
willing purchaser under no compulsion to buy and an informed and willing seller
under no compulsion to sell and both having knowledge of all relevant facts.
"Appraised Current Market Value" of any Leased Aircraft or Owned Aircraft
means the lower of the average and the median of the three most recent
Appraisals of such Aircraft.
"Appraisers" means Aircraft Information Services, Inc., BK Associates,
Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ and Associates, Inc.
"Assignment and Assumption Agreements" means each of the Assignment and
Assumption Agreements to be executed among a Trustee and trustee of the
relevant Successor Trust in accordance with the relevant Trust Agreement, as
the same may be amended, modified or supplemented from time to time.
"Business Day" means any day other than a Saturday or Sunday or a day on
which commercial banks are required or authorized to close in Houston, Texas,
New York, New York, or, so long as any Certificate is outstanding, the city and
state in which any Trustee, the Subordination Agent or any Loan Trustee
maintains its Corporate Trust Office or receives and disburses funds, and that,
solely with respect to draws under any Liquidity Facility, also is a "Business
Day" as defined in such Liquidity Facility.
"Cash Collateral Account" means the Class A Cash Collateral Account, the
Class B Cash Collateral Account, the Class C-I Cash Collateral Account or the
Class C-II Cash Collateral Account, as applicable.
"Certificate" means a Class A Certificate, a Class B Certificate, a Class
C-I Certificate or a Class C-II Certificate, as applicable.
"Certificateholder" means any holder of one or more Certificates.
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"Class" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Class A Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class A Liquidity Facility pursuant to Section 3.6(c), 3.6(d)
or 3.6(i) shall be deposited.
"Class A Certificateholder" means, at any time, any holder of one or more
Class A Certificates.
"Class A Certificates" means the certificates issued by the Class A Trust,
substantially in the form of Exhibit A to the Class A Trust Agreement, and
authenticated by the Class A Trustee, representing fractional undivided
interests in the Class A Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class A Trust
Agreement and/or the Registration Rights Agreement (including, without
limitation, any Exchange Certificates (as defined in the Class A Trust
Agreement)).
"Class A Liquidity Facilities" means, initially, (i) the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class A Trustee, and ABN AMRO and (ii) the Revolving
Credit Agreement dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class A Trustee, and ING, and, from and after the
replacement of either such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class A Liquidity Providers" means each of ABN AMRO and ING, together
with any Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace any Class A Liquidity Facility pursuant to
Section 3.6(e).
"Class A Trust" means (i) prior to the Transfer, the Continental Airlines
Pass Through Trust 1997-1A-O created and administered pursuant to the Class A
Trust Agreement and (ii) after the Transfer, the Continental Airlines Pass
Through Trust 1997-1A-S created and administered pursuant to the Class A Trust
Agreement.
"Class A Trust Agreement" means (i) prior to the Transfer, the Pass
Through Trust Agreement dated as of the date hereof, between Continental and
the Class A Trustee, governing the creation and administration of the
Continental Airlines Pass Through Trust 1997-1A-O and the issuance of the Class
A Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms, and (ii) after the Transfer,
the Pass Through Trust Agreement entered into between Continental and the Class
A Trustee, governing the creation and administration of the Continental
Airlines Pass Through Trust 1997-1A-S and the issuance of the Class A
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
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"Class A Trustee" means WTC, not in its individual capacity except as
expressly set forth in the Class A Trust Agreement, but solely as trustee under
the Class A Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class B Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class B Liquidity Facility pursuant to Section 3.6(c), 3.6(d)
or 3.6(i) shall be deposited.
"Class B Certificateholder" means, at any time, any holder of one or more
Class B Certificates.
"Class B Certificates" means the certificates issued by the Class B Trust,
substantially in the form of Exhibit A to the Class B Trust Agreement, and
authenticated by the Class B Trustee, representing fractional undivided
interests in the Class B Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class B Trust
Agreement and/or the Registration Rights Agreement (including, without
limitation, any Exchange Certificates (as defined in the Class B Trust
Agreement)).
"Class B Liquidity Facilities" means, initially, (i) the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class B Trustee, and ABN AMRO and (ii) the Revolving
Credit Agreement dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class B Trustee, and ING, and, from and after the
replacement of either such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class B Liquidity Providers" means each of ABN AMRO and ING, 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 1997-1B-O created and administered pursuant to the Class B
Trust Agreement and (ii) after the Transfer, the Continental Airlines Pass
Through Trust 1997-1B-S created and administered pursuant to the Class B Trust
Agreement.
"Class B Trust Agreement" means (i) prior to the Transfer, the Pass
Through Trust Agreement dated as of the date hereof, between Continental and
the Class B Trustee, governing the creation and administration of the
Continental Airlines Pass Through Trust 1997-1B-O and the issuance of the Class
B Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms, and (ii) after the Transfer,
the Pass Through Trust Agreement entered into between Continental and the Class
B Trustee, governing the creation and administration of the Continental
Airlines Pass Through Trust 1997-1B-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.
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"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 Certificates" means, collectively, the Class C-I Certificates and
the Class C-II Certificates.
"Class C-I Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent and maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class C-I Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class C-I Certificateholder" means, at any time, any holder of one or
more Class C-I Certificates.
"Class C-I Certificates" means the certificates issued by the Class C-I
Trust, substantially in the form of Exhibit A to the Class C-I Trust Agreement,
and authenticated by the Class C-I Trustee, representing fractional undivided
interests in the Class C-I Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class C-I Trust
Agreement and/or the Registration Rights Agreement (including, without
limitation, any Exchange Certificates (as defined in the Class C-I Trust
Agreement) but excluding the Class C-I Certificates).
"Class C-I Liquidity Facilities" means, initially, (i) the Revolving
Credit Agreement dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class C-I Trustee, and ABN AMRO and (ii) the
Revolving Credit Agreement dated as of the date hereof, between the
Subordination Agent, as agent and trustee for the Class C-I Trustee, and ING,
and, from and after the replacement of either such Agreement pursuant hereto,
the Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class C-I Liquidity Providers" means each of ABN AMRO and ING, together
with any Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace any Class C-I Liquidity Facility pursuant to
Section 3.6(e).
"Class C-I Trust" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 1997-1C-I-O created and administered pursuant to
the Class C-I Trust Agreement and (ii) after the Transfer, the Continental
Airlines Pass Through Trust 1997-1C-I-S created and administered pursuant to
the Class C-I Trust Agreement.
"Class C-I Trust Agreement" means (i) prior to the Transfer, the Pass
Through Trust Agreement dated as of the date hereof, between Continental and
the Class C-I Trustee, governing the creation and administration of the
Continental Airlines Pass Through Trust 1997-1C-I-O and the issuance of the
Class C-I Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms, and (ii) after the
Transfer, the Pass Through Trust Agreement entered into between Continental and
the Class
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C-I Trustee, governing the creation and administration of the Continental
Airlines Pass Through Trust 1997-1C-I-S and the issuance of the Class C-I
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"Class C-I Trustee" means WTC, not in its individual capacity except as
expressly set forth in the Class C-I Trust Agreement, but solely as trustee
under the Class C-I Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Class C-II Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent and maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class C-II Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.
"Class C-II Certificateholder" means, at any time, any holder of one or
more Class C-II Certificates.
"Class C-II Certificates" means the certificates issued by the Class C-II
Trust, substantially in the form of Exhibit A to the Class C-II Trust
Agreement, and authenticated by the Class C-II Trustee, representing fractional
undivided interests in the Class C-II Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class
C-II Trust Agreement and/or the Registration Rights Agreement (including,
without limitation, any Exchange Certificates (as defined in the Class C-II
Trust Agreement) but excluding the Class C-I Certificates).
"Class C-II Liquidity Facilities" means, initially, (i) the Revolving
Credit Agreement dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class C-II Trustee, and ABN AMRO and (ii) the
Revolving Credit Agreement dated as of the date hereof, between the
Subordination Agent, as agent and trustee for the Class C-II Trustee, and ING,
and, from and after the replacement of either such Agreement pursuant hereto,
the Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class C-II Liquidity Providers" means each of ABN AMRO and ING, together
with any Replacement Liquidity Provider which has issued a Replacement
Liquidity Facility to replace any Class C-II Liquidity Facility pursuant to
Section 3.6(e).
"Class C-II Trust" means (i) prior to the Transfer, the Continental
Airlines Pass Through Trust 1997-1C-II-O created and administered pursuant to
the Class C-II Trust Agreement and (ii) after the Transfer, the Continental
Airlines Pass Through Trust 1997-1C-II-S created and administered pursuant to
the Class C-II Trust Agreement.
"Class C-II Trust Agreement" means (i) prior to the Transfer, the Pass
Through Trust Agreement dated as of the date hereof, between Continental and
the Class C-II Trustee, governing the creation and administration of the
Continental Airlines Pass Through Trust 1997-1C-II-O and the issuance of the
Class C-II Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms, and (ii) after
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the Transfer, the Pass Through Trust Agreement entered into between Continental
and the Class C-II Trustee, governing the creation and administration of the
Continental Airlines Pass Through Trust 1997-1C-II-S and the issuance of the
Class C-II Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class C-II Trustee" means WTC, not in its individual capacity except as
expressly set forth in the Class C-II Trust Agreement, but solely as trustee
under the Class C-II Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Closing Date" means March 21, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the Eligible Deposit Account established by the
Subordination Agent pursuant to Section 2.2 which the Subordination Agent shall
make deposits in and withdrawals from in accordance with this Agreement.
"Continental" means Continental Airlines, Inc., a Delaware corporation,
and its successors and assigns.
"Continental Bankruptcy Event" means the occurrence and continuation of
any of the following:
(a) Continental shall consent to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a
substantial part of its property, or Continental shall admit in writing
its inability to pay its debts generally as they come due, or does not
pay its debts generally as they become due or shall make a general
assignment for the benefit of creditors, or Continental shall file a
voluntary petition in bankruptcy or a voluntary petition or an answer
seeking reorganization, liquidation or other relief in a case under any
bankruptcy laws or other insolvency laws (as in effect at such time) or
an answer admitting the material allegations of a petition filed against
Continental in any such case, or Continental shall seek relief by
voluntary petition, answer or consent, under the provisions of any other
bankruptcy or other similar law providing for the reorganization or
winding-up of corporations (as in effect at such time) or Continental
shall seek an agreement, composition, extension or adjustment with its
creditors under such laws, or Continental's board of directors shall
adopt a resolution authorizing corporate action in furtherance of any of
the foregoing; or
(b) an order, judgment or decree shall be entered by any court of
competent jurisdiction appointing, without the consent of Continental, a
receiver, trustee or liquidator of Continental or of any substantial part
of its property, or any substantial part of the property of Continental
shall be sequestered, or granting any other relief in respect of
Continental as a debtor under any bankruptcy laws or other insolvency
laws (as in effect at such time), and any such order, judgment or decree
of appointment or
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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.
"Controlling Party" means the Person entitled to act as such pursuant to
the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the city
at which, at any particular time, its corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as a
reference date for calculating the Expected Distributions or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"Delivery Period Expiry Date" means the earlier of (a) March 31, 1998, or,
if the Equipment Notes relating to all the New Aircraft (or Substitute Aircraft
in lieu thereof) have not been purchased by the Trusts on or prior to such date
due to any reason beyond the control of Continental and not occasioned by
Continental's fault or negligence, June 30, 1998 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.
"Deposits" with respect to any Class, shall have the meaning set forth in
the Deposit Agreement pertaining to such Class.
"Deposit Agreement" shall mean, with respect to any Class, the Deposit
Agreement pertaining to such Class dated the date hereof between the Escrow
Agent, and the Depositary, as the same may be amended, modified or supplemented
from time to time in accordance with the terms thereof.
"Depositary" means Credit Suisse First Boston, as depositary under each
Deposit Agreement.
"Designated Representatives" means the Trustee Representatives and the LP
Representatives identified under Section 2.5.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
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"Dollars" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in Section
3.6(c).
"Downgraded Facility" has the meaning assigned to such term in Section
3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing, a Non-Extension
Drawing or a Downgrade Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any U.S. branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution has a long-term unsecured debt rating
from each Rating Agency of at least A-3 or its equivalent. An Eligible Deposit
Account may be maintained with a Liquidity Provider so long as such Liquidity
Provider is an Eligible Institution; provided that such Liquidity Provider
shall have waived all rights of set-off and counterclaim with respect to such
account; and provided further that no Cash Collateral Account may be maintained
with a Liquidity Provider at any time Continental holds any participation in
the related Liquidity Facility unless written confirmation shall have been
received from each Rating Agency prior to such time to the effect that such
maintenance of the Cash Collateral Account with the Liquidity Provider will not
result in a withdrawal or downgrading of the ratings of the Certificates.
"Eligible Institution" means (a) the corporate trust department of the
Subordination Agent or any Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any U.S. branch of a
foreign bank), which has a long-term unsecured debt rating from each Rating
Agency of at least A-3 or its equivalent; provided that a Liquidity Provider
shall not qualify as an Eligible Institution at any time Continental holds any
participation in the related Liquidity Facility unless written confirmation
shall have been received from each Rating Agency to the effect that such
Liquidity Provider's status as an Eligible Institution will not result in a
withdrawal or downgrading of the ratings of the Certificates.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than 90
days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt rating
issued by Moody's and S&P of at least A-1 and P-1, respectively, having
maturities no later than 90 days following the date of such investment or (c)
investments in negotiable certificates of deposit, time deposits, banker's
acceptances, commercial paper or other direct obligations of, or obligations
guaranteed by, commercial banks organized under the laws of the United States
or of any political subdivision thereof (or any U.S. branch of a foreign bank)
with issuer ratings of at least B/C by Thomson Bankwatch, having maturities no
later than 90 days following the date of such investment; provided, however,
that (x) all Eligible Investments that are bank obligations shall be
denominated in U.S. dollars; and (y) the aggregate amount of
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Eligible Investments at any one time that are bank obligations issued by any
one bank shall not be in excess of 5% of such bank's capital surplus; provided
further that (1) any investment of the types described in clauses (a), (b) and
(c) above may be made through a repurchase agreement in commercially reasonable
form with a bank or other financial institution qualifying as an Eligible
Institution so long as such investment is held by a third party custodian also
qualifying as an Eligible Institution, and (2) all such investments set forth
in (a), (b) and (c) above mature no later than the Business Day immediately
preceding the next Regular Distribution Date; provided further, however, that
in the case of any Eligible Investment issued by a domestic branch of a foreign
bank, the income from such investment shall be from sources within the United
States for purposes of the Code. Notwithstanding the foregoing, no investment
of the types described in clauses (b) or (c) above which is issued or
guaranteed by a Liquidity Provider or Continental or any of their respective
Affiliates, and no investment in the obligations of any one bank in excess of
$10,000,000, shall be an Eligible Investment at any time Continental holds any
participation in the related Liquidity Facility unless written confirmation
shall have been received from each Rating Agency that the making of such
investment will not result in a withdrawal or downgrading of the ratings of the
Certificates.
"Equipment Notes" means, at any time, the Series A Equipment Notes, the
Series B Equipment Notes and the Series C Equipment Notes, collectively, and in
each case, any Equipment Notes issued in exchange therefor or replacement
thereof pursuant to the terms of the Indentures.
"Escrow Agent" means First Security Bank, National Association, as escrow
agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Escrow and Paying Agent Agreement" shall mean, with respect to any Class,
the Escrow and Paying Agent Agreement pertaining to such Class dated the date
hereof between the Escrow Agent, the Initial Purchasers, 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 and (B) the Pool Balance of such Certificates as of the Current
Distribution Date calculated on the basis that (i) the principal of the
Equipment Notes held in such Trust has been paid when due (whether at stated
maturity or upon redemption, prepayment or Acceleration or otherwise) and such
payments have been distributed to the holders of such Certificates and (ii) the
principal of any Equipment Notes formerly held in such Trust which have been
sold pursuant to the terms hereof have 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 the Deposits. For purposes of calculating Expected
Distributions with respect to the Certificates of any Trust, any premium paid
on the Equipment Notes held in
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such Trust which has not been distributed to the Certificateholders of such
Trust (other than such premium or a portion thereof applied to the payment of
interest on the Certificates of such Trust or the reduction of the Pool Balance
of such Trust) shall be added to the amount of such Expected Distributions.
"Expiry Date" with respect to any Liquidity Facility, shall have the
meaning set forth in such Liquidity Facility.
"Fee Letter" means, collectively, the ABN AMRO Fee Letter and the ING Fee
Letter and any fee letter entered into between the Subordination Agent and any
Replacement Liquidity Provider.
"Final Drawing" has the meaning assigned to such term in Section 3.6(i).
"Final Distributions" means, with respect to the Certificates of any Trust
on any Distribution Date, the sum of (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 Maturity Date" means (i) with respect to the Class A Certificates,
October 1, 2016, (ii) with respect to the Class B Certificates, October 1,
2014, and (iii) with respect to the Class C Certificates, October 1, 2008.
"Financing Agreement" means each of the Participation Agreements and the
Note Purchase Agreement.
"Indenture" means each of the Trust Indentures entered into by the Loan
Trustee, and the Owner Trustee or Continental, pursuant to the Note Purchase
Agreement, in each case as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Indenture Default" means, with respect to any Indenture, any Event of
Default (as such term is defined in such Indenture) thereunder.
"ING" has the meaning assigned to such term in the recital of parties to
this Agreement.
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"ING Fee Letter" means the Fee Letter dated March 21, 1997, between ING
and the Subordination Agent with respect to the Liquidity Facilities.
"ING Sub-Account" means, with respect to any Cash Collateral Account, a
sub-ledger account to such Cash Collateral Account designated the "ING
Sub-Account".
"Initial Purchasers" means Credit Suisse First Boston Corporation, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, Chase Securities Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
"Interest Drawing" has the meaning assigned to such term in Section
3.6(a).
"Investment Earnings" means investment earnings on funds on deposit in the
Trust Accounts net of losses and investment expenses of the Subordination Agent
in making such investments.
"Lease" means, with respect to each Indenture 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.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition of
title, encumbrance, lease, sublease, sub-sublease or security interest of any
kind, including, without limitation, any thereof arising under any conditional
sales or other title retention agreement.
"Liquidity Event of Default," with respect to any Liquidity Facility, has
the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i) the
principal amount of any Drawings under the Liquidity Facilities and (ii) any
interest accrued on any Liquidity Obligations.
"Liquidity Facilities" means, at any time, the Class A Liquidity
Facilities, the Class B Liquidity Facilities, the Class C-I Liquidity
Facilities and the Class C-II Liquidity Facilities.
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities,
Section 9.1 of the Participation Agreements or the Fee Letter.
"Liquidity Provider" means, at any time, any Class A Liquidity Provider,
any Class B Liquidity Provider, any Class C-I Liquidity Provider or any Class
C-II Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the loan trustee
thereunder.
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"LP Incumbency Certificate" has the meaning assigned to such term in
Section 2.5(b).
"LP Representatives" has the meaning assigned to such term in Section
2.5(b).
"LTV Appraisals" has the meaning assigned to such term in Section 4.1(a).
"LTV Collateral Amount" of any Leased Aircraft or Owned Aircraft for any
Class of Certificates means, as of any Distribution Date, the lesser of (i) the
LTV Ratio for such Class of Certificates multiplied by the Appraised Current
Market Value of such Aircraft (or with respect to any such Aircraft which has
suffered an Event of Loss under and as defined in the relevant Lease (in the
case of a Leased Aircraft) or Indenture (in the case of an Owned Aircraft), the
amount of the insurance proceeds paid to the related Loan Trustee in respect
thereof to the extent then held by such Loan Trustee (and/or on deposit in the
Special Payments Account) or payable to such Loan Trustee in respect thereof)
and (ii) the outstanding principal amount of the Equipment Notes secured by
such Aircraft after giving effect to any principal payments of such Equipment
Notes on or before such Distribution Date.
"LTV Ratio" means for the Class A Certificates 40.36%, for the Class B
Certificates 54.03%, for the Class C-I Certificates 65.19% and for the Class
C-II Certificates, 65.19%.
"Majority Liquidity Providers" means, at any time, Liquidity Providers
holding at least 66-2/3% of the aggregate outstanding Liquidity Obligations at
such time.
"Maximum Available Amount" means, with respect to any Liquidity Facility
at any time of determination, subject to the proviso contained in the first
sentence of Section 3.6(g) hereof, an amount equal to (a) the Maximum Stated
Amount of such Liquidity Facility, less (b) the aggregate amount of each
Interest Drawing outstanding at such time; provided that, following a Downgrade
Drawing, a Non-Extension Drawing or a Final Drawing under such Liquidity
Facility, the Maximum Available Amount of such Liquidity Facility shall be
zero.
"Maximum Stated Amount" with respect to any Liquidity Facility, means the
Maximum Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"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 ▇▇▇▇▇'▇ Investors Service, Inc.
"New Aircraft" shall have the meaning set forth in the Note Purchase
Agreement.
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"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
2.6(d).
"Non-Performing Equipment Note" means an Equipment Note issued pursuant to
an Indenture that is not a Performing Equipment Note.
"Note Purchase Agreement" means the Note Purchase Agreement dated as of
the date hereof, among Continental, each Trustee, the Escrow Agent, the
Subordination Agent and the Paying Agent.
"Officer's Certificate" of any Person means a certification signed by a
Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity Facilities, the
Indentures, the Trust Agreements, the Purchase Agreement, the Financing
Agreements, the Leases, the Participation Agreements, the Fee Letter, the
Equipment Notes and the Certificates, together with all exhibits and schedules
included with any of the foregoing.
"Outstanding" means, when used with respect to each Class of Certificates,
as of the date of determination, all Certificates of such Class theretofore
authenticated and delivered under the related Trust Agreement, except:
(i) Certificates of such Class theretofore 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,
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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.
"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" mean, with respect to each Indenture, the
"Participation Agreement" referred to therein.
"Paying Agent" means Wilmington Trust Company, as paying agent under each
Escrow and Paying Agent Agreement, together with its successors in such
capacity.
"Performing Equipment Note" means an Equipment Note issued pursuant to an
Indenture with respect to which no payment default has occurred and is
continuing; provided that in the event of a bankruptcy proceeding involving
Continental under Title 11 of the United States Code (the "Bankruptcy Code"),
(i) any payment default existing during the 60-day period under Section
1110(a)(1)(A) of the Bankruptcy Code (or such longer period as may apply under
Section 1110(b) of the Bankruptcy Code) (the "Section 1110 Period") shall not
be taken into consideration, unless during the Section 1110 Period the trustee
in such proceeding or Continental refuses to assume or agree to perform its
obligations under the Lease related to such Equipment Note (in the case of a
Leased Aircraft) or under the Indenture related to such Equipment Note (in the
case of an Owned Aircraft) and (ii) any payment default occurring after the
date of the order of relief in such proceeding shall not be taken into
consideration if such payment default is cured under Section 1110(a)(1)(B) of
the Bankruptcy Code before the later of 30 days after the date of such default
or the expiration of the Section 1110 Period.
"Performing Note Deficiency" means any time that less than 65% of the then
aggregate outstanding principal amount of all Equipment Notes are Performing
Equipment Notes.
"Person" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust, trustee,
unincorporated organization or government or any agency or political
subdivision thereof.
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"Pool Balance" means, with respect to each Trust or the Certificates
issued by any Trust, as of any date, (i) the original aggregate face amount of
the Certificates of such Trust less (ii) the aggregate amount of all payments
made in respect of the Certificates of such Trust other than payments made in
respect of interest or premium thereon or reimbursement of any costs and
expenses in connection therewith less (iii) the aggregate amount of unused
Deposits with respect to such Trust distributed as a Final Withdrawal (as
defined in the Escrow and Paying Agent Agreement related to such Trust) other
than payments in respect of interest or premium thereon. The Pool Balance for
each Trust or the Certificates issued by any Trust as of any Distribution Date
shall be computed after giving effect to the payment of principal, if any, on
the Equipment Notes or other Trust Property held in such Trust and the
distribution thereof to be made on such date and the distribution of unused
Deposits to be made on such date.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"PTC Event of Default" means, with respect to each Trust Agreement, the
failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Maturity Date for such Class or (ii) interest due on such Certificates on any
Distribution Date (unless, in the case of the Class A, Class B, Class C-I or
Class C-II Certificates, the Subordination Agent shall have made an Interest
Drawing or Drawings, or withdrawal or withdrawals pursuant to Section 3.6(f),
with respect thereto in an aggregate amount sufficient to pay such interest and
shall have distributed such amount to the Trustee entitled thereto).
"Purchase Agreement" means the Purchase Agreement dated March 12, 1997,
among the Initial Purchasers and Continental, relating to the purchase of the
Certificates by the Initial Purchasers, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Rating Agencies" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. The initial
Rating Agencies will be Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed to be
taken, a written confirmation from each of the Rating Agencies that such action
would not result in (i) a reduction of the rating for any Class of Certificates
below the then current rating for such Class of Certificates or (ii) a
withdrawal or suspension of the rating of any Class of Certificates.
"Registration Rights Agreement" means the Exchange and Registration Rights
Agreement dated as of the date hereof, among the Initial Purchasers, the
Trustees and Continental, as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Regular Distribution Dates" means, each April 1 and October 1, commencing
on October 1, 1997; 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.
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"Replacement Liquidity Facility" means, for any Liquidity Facility, an
irrevocable revolving credit agreement issued by a Replacement Liquidity
Provider in substantially the form of the replaced Liquidity Facility,
including reinstatement provisions, or in such other form (which may include a
letter of credit) as shall permit the Rating Agencies to confirm in writing
their respective ratings then in effect for each Class of Certificates (before
the downgrading of such ratings, if any, as a result of the downgrading of the
replaced Liquidity Provider), in a face amount (together with the face amount
of any Liquidity Facility of the same Class which will continue to be
outstanding after the issuance of such Replacement Liquidity Facility and the
amount in the Cash Collateral Account of such Class) equal to the Required
Amount (without giving effect to the proviso to the definition thereof) for
such Liquidity Facility and issued by a Replacement Liquidity Provider having
short-term unsecured debt ratings issued by each Rating Agency which are equal
to or higher than the Threshold Rating.
"Replacement Liquidity Provider" means a Person having short-term
unsecured debt ratings issued by each Rating Agency which are equal to or
higher than the Threshold Rating.
"Replacement Liquidity Provider Sub-Account" means, with respect to any
Cash Collateral Account, a sub-ledger account to such Cash Collateral Account
having a designation indicating that it is a Sub-Account with respect to such
Replacement Liquidity Provider.
"Required Amount" means, with respect to Liquidity Facilities of 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. The
Required Amount for any Sub-Account of any Cash Collateral Account of any Class
shall be equal to the Stated Portion (under the related Liquidity Facility) of
the Required Amount for such Class.
"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 in the aerospace department of such Liquidity Provider, or,
if none, any other authorized officer of such Liquidity Provider.
"Scheduled Payment" means, with respect to any Equipment Note, (i) any
payment of principal or interest on such Equipment Note (other than an Overdue
Scheduled Payment) due from the obligor thereon or (ii) any payment of interest
on the corresponding Class of Certificates with funds drawn under any Liquidity
Facility, which payment represents the
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installment of principal at the stated maturity of such installment of
principal on such Equipment Note, the payment of regularly scheduled interest
accrued on the unpaid principal amount of such Equipment Note, or both;
provided that any payment of principal of, premium, if any, or interest
resulting from the redemption or purchase of any Equipment Note shall not
constitute a Scheduled Payment.
"Scheduled Payment Date" means, with respect to any Scheduled Payment, the
date on which such Scheduled Payment is scheduled to be made.
"Series A Equipment Notes" means the 7.461% Series A Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Series B Equipment Notes" means the 7.461% Series B Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Series C Equipment Notes" means the 7.42% Series C Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or Continental,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Special Distribution Date" means, with respect to any Special Payment,
the date chosen by the Subordination Agent pursuant to Section 2.4(a) for the
distribution of such Special Payment in accordance with this Agreement.
"Special Payment" means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note or Trust Indenture Estate
(as defined in each Indenture).
"Special Payments Account" means the Eligible Deposit Account created
pursuant to Section 2.2 as a sub-account to the Collection Account.
"Standard & Poor's" means Standard & Poor's Rating Group, a division of
▇▇▇▇▇▇-▇▇▇▇ Inc.
"Stated Interest Rate" means (i) with respect to the Class A Certificates,
7.461% per annum, (ii) with respect to the Class B Certificates, 7.461% per
annum, and (iii) with respect to the Class C-I Certificates and the Class C-II
Certificates, 7.42% per annum (such rate with respect to each Class of
Certificates, the "Initial Stated Interest Rate" for such Class), plus, in each
case, solely in the event no Registration Event (as defined in the Registration
Rights Agreement) occurs on or prior to the 210th day after the Closing Date,
an additional margin equal to 0.50% per annum, from and including such 210th
day (provided that any such additional margin shall cease to be in effect from
and including the earlier of (i) the date on which such
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Registration Event occurs and (ii) the date on which there ceases to be any
Registrable Certificates (as defined in the Registration Rights Agreement));
provided that if the Shelf Registration Statement (as defined in the
Registration Rights Agreement) ceases to be effective at any time during the
period specified by Section 2(b)(B) of the Registration Rights Agreement for
more than 60 days, whether or not consecutive, during any 12-month period, the
Stated Interest Rate shall be increased by 0.50% per annum from the 61st day of
the applicable 12-month period such Shelf Registration Statement ceases to be
effective until such time as the Shelf Registration Statement again becomes
effective (or, if earlier, the end of the period specified by Section 2(b)(B)
of the Registration Rights Agreement). For the avoidance of doubt, the Stated
Interest Rate for any Class of Certificates shall never exceed 0.50% per annum
over the Initial Stated Interest Rate for such Class of Certificates.
"Stated Portion" with respect to any Liquidity Facility, means the Stated
Portion (as defined in such Liquidity Facility).
"Sub-Account" means, collectively, the ABN AMRO Sub-Account, the ING
Sub-Account and any Replacement Liquidity Provider Sub-Account.
"Substitute Aircraft" shall have the meaning set forth in the Note
Purchase Agreement.
"Successor Trusts" means, collectively, Continental Airlines Pass Through
Trust 1997-1A-S, Continental Airlines Pass Through Trust 1997-1B-S, Continental
Airlines Pass Through Trust 1997-1C-I-S and Continental Airlines Pass Through
Trust 1997-1C-II-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 or by any state, local or foreign government (or
any subdivision or agency thereof) or other taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth and similar charges; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value added, taxes on goods and services, gains taxes, license, registration
and documentation fees, customs duties, tariffs, and similar charges.
"Termination Notice" with respect to any Liquidity Facility has the
meaning assigned to such term in such Liquidity Facility.
"Threshold Rating" means the short-term unsecured debt rating of P-1 by
Moody's and A-1+ by Standard & Poor's.
"Transfer" means the transfers contemplated by the Assignment and
Assumption Agreements.
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"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 such Equipment Notes have an
aggregate outstanding principal balance of in excess of $280,000,000) or (z)
the occurrence of a Continental Bankruptcy Event.
"Trust" means any of the Class A Trust, the Class B Trust, the Class C-I
Trust or the Class C-II Trust.
"Trust Accounts" has the meaning assigned to such term in Section 2.2(a).
"Trust Agreement" means any of the Class A Trust Agreement, the Class B
Trust Agreement, the Class C-I Trust Agreement or the Class C-II Trust
Agreement.
"Trustee" means any of the Class A Trustee, the Class B Trustee, the Class
C-I Trustee or the Class C-II Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to such term in
Section 2.5(a).
"Trust Property" with respect to any Trust, has the meaning set forth in
the Trust Agreement for such Trust.
"Trustee Representatives" has the meaning assigned to such term in Section
2.5(a).
"Written Notice" means, from (i) any Trustee or Liquidity Provider, a
written instrument executed by the Designated Representative of such Person,
and (ii) the Subordination Agent, a written instrument executed by a Person
designated in the Officer's Certificate of the Subordination Agent delivered on
the Closing Date. An invoice delivered by a Liquidity Provider pursuant to
Section 3.1 in accordance with its normal invoicing procedures shall constitute
Written Notice under such Section.
"WTC" has the meaning assigned to such term in the recital of parties to
this Agreement.
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ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1. Agreement to Terms of Subordination; Payments from Monies
Received Only. (a) Each Trustee hereby acknowledges and agrees to the terms
of subordination set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be applied in
accordance with the terms of this Agreement. In addition, each Trustee hereby
agrees to cause the Equipment Notes purchased by the related Trust to be
registered in the name of the Subordination Agent, as nominee of such Trustee,
to be held in trust by the Subordination Agent solely for the purpose of
facilitating the enforcement of the subordination and other provisions of this
Agreement.
(b) Except as otherwise expressly provided in the next succeeding sentence
of this Section 2.1, all payments to be made by the Subordination Agent
hereunder shall be made only from amounts received by it that constitute
Scheduled Payments, Special Payments, payments under Section 9.1 of the
Participation Agreements or payments under Sections 6 and 7 of the Note
Purchase Agreement, and only to the extent that the Subordination Agent shall
have received 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
(and the ABN AMRO Sub-Accounts, the ING Sub-Accounts and any Replacement
Liquidity Provider Sub-Accounts related thereto) 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.
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(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 the Sub-Account related to such
Liquidity Facility at the direction of (x) in the case of a Downgrade Drawing
with respect to such Liquidity Facility, until the Expiry Date of such
Liquidity Facility, the Liquidity Provider with respect to such Liquidity
Facility, and (y) otherwise, Continental; provided further, however, that upon
the occurrence and during the continuation of a Triggering Event, the
Subordination Agent shall invest and reinvest such amounts in accordance with
the written instructions of the Controlling Party. Unless otherwise expressly
provided in this Agreement (including, without limitation, Section 3.6(f)
hereof), any Investment Earnings shall be deposited in the Collection Account
when received by the Subordination Agent and shall be applied by the
Subordination Agent in the same manner as the 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). The Trust Accounts shall be
held in trust by the Subordination Agent under the sole dominion and control of
the Subordination Agent for the benefit of the Trustees, the Certificateholders
and the Liquidity Providers, as the case may be. If, at any time, any of the
Trust Accounts ceases to be an Eligible Deposit Account, the Subordination
Agent shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, to which each Rating Agency may consent) establish a new
Collection Account, Special Payments Account or Cash Collateral Account, as the
case may be, as an Eligible Deposit Account and shall transfer any cash and/or
any investments to such new Collection Account, Special Payments Account or
Cash Collateral Account, as the case may be. So long as WTC is an Eligible
Institution, the Trust Accounts shall be maintained with it as Eligible Deposit
Accounts.
SECTION 2.3. Deposits to the Collection Account and Special Payments
Account. (a) The Subordination Agent shall, upon receipt thereof, deposit in
the Collection Account all Scheduled Payments received by it.
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(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. Such Written Notice shall also set the distribution date for such
Special Payment (a "Special Distribution Date"), which shall be a Business Day
which immediately follows the later to occur of (x) the 20th day after the date
of such Written Notice or (y) the date the Subordination Agent has received or
expects to receive such Special Payment.
(b) Redemptions and Purchases of Equipment Notes. So long as no
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b) of
amounts on deposit in the Special Payments Account on account of the redemption
or purchase (including, without limitation, a purchase resulting from a sale of
the Equipment Notes permitted by Article IV hereof) of all of the Equipment
Notes issued pursuant to an Indenture on the Special Distribution Date for such
Special Payment in the following order of priority:
first, such amount as shall be required to pay (A) all accrued and
unpaid Liquidity Expenses then in arrears plus (B) the product of (x) the
aggregate amount of all accrued and unpaid Liquidity Expenses not in
arrears to such Special Payment Date multiplied by (y) a fraction, the
numerator of which is the aggregate outstanding principal amount of
Equipment Notes being redeemed, purchased or prepaid on such Special
Payment Date and the denominator of which is the aggregate outstanding
principal amount of all Equipment Notes, shall be distributed to the
Liquidity Providers pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay (A) all accrued and
unpaid interest then in arrears on all Liquidity Obligations (including
interest accrued and unpaid on any Interest Drawing or any Applied
Provider Advance (as defined in any Liquidity Facility)) plus (B) the
product of (x) the aggregate amount of all accrued and unpaid interest on
all Liquidity Obligations not in arrears to such Special Payment Date (at
the rate provided in the applicable Liquidity Facility) multiplied by (y)
a fraction, the numerator of which is the aggregate outstanding principal
amount of Equipment Notes being redeemed, purchased or prepaid on such
Special Payment Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment
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Notes, shall be distributed to the Liquidity Providers pari passu on the
basis of the amount of such Liquidity Obligations owed to each Liquidity
Provider;
third, such amount as shall be required (A) if any Sub-Account of
any Cash Collateral Account had been previously funded as provided in
Section 3.6(f), fund such Sub-Account up to its Required Amount shall be
deposited in such Sub-Account, (B) if any Liquidity Facility shall become
a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Maximum Available Amount thereunder to zero, to deposit into the
related Sub-Account of the related Cash Collateral Account an amount
equal to such Sub-Account's Required Amount shall be deposited in such
Sub-Account, and (C) if, with respect to any particular Liquidity
Facility, neither subclause (A) nor subclause (B) of this clause "third"
are applicable, to pay or reimburse the Liquidity Provider in respect of
such Liquidity Facility in an amount equal to the amount of any
unreimbursed Interest Drawings under such Liquidity Facility shall be
distributed to such Liquidity Provider, pari passu on the basis of the
amounts of such deficiencies and/or unreimbursed Interest Drawings;
fourth, if, with respect to any particular Liquidity Facility,
either subclause (A) or (B) of clause "third" above is applicable, 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 Stated Portion of the Required Amount for the relevant Class, pari
passu on the basis of such amounts in respect of each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Certificates on such Special
Distribution Date shall be distributed to the Class A Trustee;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
seventh, (x) such amount as shall be required to pay in full
Expected Distributions to the holders of Class C-I Certificates on such
Special Distribution Date shall be distributed to the Class C-I Trustee
and (y) such amount as shall be required to pay in full Expected
Distributions to the holders of Class C-II Certificates on such Special
Distribution Date shall be distributed to the Class C-II Trustee; such
distributions to the Class C-I Trustee and the Class C-II Trustee to be
made pari passu on the basis of the amount of such Expected Distributions
for the Class C-I Certificates and the Class C-II Certificates; 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
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together with accrued and unpaid interest on a portion of such Certificates
equal to the outstanding principal amount of Equipment Notes being redeemed,
purchased or prepaid (immediately prior to such redemption, purchase or
prepayment) (excluding interest, if any, payable with respect to the Deposits
related to such Trust)".
(c) Other Special Payments. Except as provided in clause (e) below, Any
amounts on deposit in the Special Payments Account other than in respect of
amounts to be distributed pursuant to Section 2.4(b) shall be distributed on
the Special Distribution Date therefor in accordance with Article III hereof.
(d) Investment of Amounts in Special Payments Account. Any amounts on
deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b) or (c) shall be invested in accordance with Section
2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will distribute promptly
upon receipt thereof (i) any indemnity payment received by it from the Owner
Participant, the Owner Trustee or Continental in respect of any Trustee, any
Liquidity Provider, any Paying Agent, any Depositary or any Escrow Agent
(collectively, the "Payees") and (ii) any compensation (including, without
limitation, any fees payable to any Liquidity Provider under Section 2.03 of
any Liquidity Facility) received by it from the Owner Participant, the Owner
Trustee or Continental under any Operative Agreement in respect of any Payee,
directly to the Payee entitled thereto.
SECTION 2.5. Designated Representatives. (a) With the delivery of this
Agreement, each Trustee shall furnish to the Subordination Agent, and from time
to time thereafter may furnish to the Subordination Agent, at such Trustee's
discretion, or upon the Subordination Agent's request (which request shall not
be made more than one time in any 12-month period), a certificate (a "Trustee
Incumbency Certificate") of a Responsible Officer of such Trustee certifying as
to the incumbency and specimen signatures of the officers of such Trustee and
the attorney-in-fact and agents of such Trustee (the "Trustee Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder. Until
the Subordination Agent receives a subsequent Trustee Incumbency Certificate,
it shall be entitled to rely on the last Trustee Incumbency Certificate
delivered to it hereunder.
(b) With the delivery of this Agreement, each Liquidity Provider shall
furnish to the Subordination Agent, and from time to time thereafter may
furnish to the Subordination Agent, at such Liquidity Provider's discretion, or
upon the Subordination Agent's request (which request shall not be made more
than one time in any 12-month period), a certificate (an "LP Incumbency
Certificate") of any authorized officer in the aerospace department or any
other authorized signatory of such Liquidity Provider certifying as to the
incumbency and specimen signatures of any officer, attorney-in-fact, agent or
other designated representative of such Liquidity Provider (the "LP
Representatives" and, together with the Trustee Representatives, the
"Designated Representatives") authorized to give Written Notices on behalf of
such Liquidity Provider hereunder. Until the Subordination Agent receives a
subsequent LP Incumbency
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Certificate, it shall be entitled to rely on the last LP Incumbency Certificate
delivered to it hereunder.
SECTION 2.6. Controlling Party. (a) The Trustees and the Liquidity
Providers hereby agree that, with respect to any Indenture at any given time,
the Loan Trustee thereunder will be directed (i) in taking, or refraining from
taking, any action under such Indenture or with respect to the Equipment Notes
issued thereunder, so long as no Indenture Default has occurred and is
continuing thereunder, by the holders of at least a majority of the outstanding
principal amount of such Equipment Notes (provided that, for so long as the
Subordination Agent is the registered holder of the Equipment Notes, the
Subordination Agent shall act with respect to this clause (i) in accordance
with the directions of the Trustees (in the case of each such Trustee, with
respect to the Equipment Notes issued under such Indenture and held as Trust
Property of such Trust) constituting, in the aggregate, directions with respect
to such principal amount of Equipment Notes), and (ii) after the occurrence and
during the continuance of an Indenture Default thereunder (which, in the case
of an Indenture pertaining to a Leased Aircraft, has not been cured by the
applicable Owner Trustee or the applicable Owner Participant, if applicable,
pursuant to Section 4.03 of such Indenture), in taking, or refraining from
taking, any action under such Indenture or with respect to such Equipment
Notes, including exercising remedies thereunder (including Accelerating the
Equipment Notes issued thereunder or foreclosing the Lien on the Aircraft
securing such Equipment Notes), by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to any
Indenture shall be: (x) the Class A Trustee; (y) upon payment of Final
Distributions to the holders of Class A Certificates, the Class B Trustee; and
(z) upon payment of Final Distributions to the holders of Class B Certificates,
the Class C-I Trustee and the C-II Trustee, collectively (who agree to act
collectively in accordance with the instructions of the holders of at least a
majority of the outstanding principal amount of Class C Certificates). For
purposes of giving effect to the foregoing, the Trustees (other than the
Controlling Party) irrevocably agree (and the Certificateholders (other than
the Certificateholders represented by the Controlling Party) shall be deemed to
agree by virtue of their purchase of Certificates) that the Subordination
Agent, as record holder of the Equipment Notes, shall exercise its voting
rights in respect of the Equipment Notes as directed by the Controlling Party.
The Subordination Agent shall give written notice to all of the other
parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from the
earlier to occur of (i) the date on which the entire Maximum Available Amount
under any Liquidity Facility shall have been drawn (for any reason other than a
Downgrade Drawing or a Non-Extension Drawing) and remain unreimbursed, and (ii)
the date on which all Equipment Notes shall have been Accelerated (provided
that, with respect to the period prior to the Delivery
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Period Expiry Date, such Equipment Notes have an aggregate outstanding
principal balance of in excess of $280,000,000), the Liquidity Provider 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.
If there is more than one Liquidity Provider, the Required Liquidity Providers
shall have such right.
(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, each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with
clause "fifth" of Section 3.2 hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with
clause "sixth" of Section 3.2 hereof;
(iii) With respect to the Class C-I Certificates, the Class C-I
Trustee shall separately set forth the amounts to be paid in accordance
with subclause (a) of clause "seventh" of Section 3.2 hereof;
(iv) With respect to the Class C-II Certificates, the Class C-II
Trustee shall separately set forth the amounts to be paid in accordance
with subclause (b) of clause "seventh" of Section 3.2 hereof;
(v) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid in
accordance with clauses "first", "second", "third" and "fourth" of
Section 3.2 hereof; and
(vi) Each Trustee shall set forth the amounts to be paid in
accordance with clause "eighth" of Section 3.2 hereof.
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The notices required under this Section 3.1(a) may be in the form of a schedule
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document
may state that, unless there has been a prepayment of the Certificates, such
schedule or similar document is to remain in effect until any substitute notice
or amendment shall be given to the Subordination Agent by the party providing
such notice.
(b) Following the occurrence of a Triggering Event, the Subordination
Agent shall request the following information from the following Persons, and
each of the following Persons shall, upon the request of the Subordination
Agent, deliver a Written Notice to the Subordination Agent setting forth for
such Person the following information:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "first" (to reimburse payments made by the Class A
Certificateholders pursuant to subclause (iii) of clause "first" of
Section 3.3 hereof) and "seventh" of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "first" (to reimburse payments made by the Class B
Certificateholders pursuant to subclause (iii) of clause "first" of
Section 3.3 hereof) and "eighth" of Section 3.3 hereof;
(iii) With respect to the Class C-I Certificates, the Class C-I
Trustee shall separately set forth the amounts to be paid in accordance
with clause "first" (to reimburse payments made by the Class C-I
Certificateholders pursuant to subclause (iii) of clause "first" of
Section 3.3 hereof) and subclause (i) of clause "ninth" of Section 3.3
hereof;
(iv) With respect to the Class C-II Certificates, the Class C-II
Trustee shall separately set forth the amounts to be paid in accordance
with clause "first" (to reimburse payments made by the Class C-II
Certificateholders pursuant to subclause (iii) of clause "first" of
Section 3.3 hereof) and subclause (ii) of clause "ninth" of Section 3.3
hereof;
(v) 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
(vi) 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.
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(d) As provided in Section 6.5 hereof, the Subordination Agent shall be
fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee or any Liquidity Provider pursuant to paragraphs
(a) through (c) above and shall have no independent obligation to verify,
calculate or recalculate any amount set forth in any Written Notice delivered
in accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity Provider, as
applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof, if made prior
to 10:00 A.M. (New York City time) shall be effective on the date delivered (or
if delivered later shall be effective as of the next Business Day). Subject to
the terms of this Agreement, the Subordination Agent shall as promptly as
practicable comply with any such instructions; provided, however, that any
transfer of funds pursuant to any instruction received after 10:00 A.M. (New
York City time) on any Business Day may be made on the next succeeding Business
Day.
(f) In the event the Subordination Agent shall not receive from any Person
any information set forth in paragraphs (a) or (b) above which is required to
enable the Subordination Agent to make a distribution to such Person pursuant
to Section 3.2 or 3.3 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, the Subordination Agent shall send to
such party a written statement reflecting all amounts on deposit with the
Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION 3.2. Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments Account)
shall be promptly distributed on each Regular Distribution Date (or, in the
case of any amount described in Section 2.4(c), on the Special Distribution
Date thereof) in the following order of priority and in accordance with the
information provided to the Subordination Agent pursuant to Section 3.1(a)
hereof:
first, such amount as shall be required to pay all accrued and
unpaid Liquidity Expenses owed to each Liquidity Provider shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay in full the
aggregate amount of interest accrued on all Liquidity Obligations (at the
rate, or in the amount, provided in the applicable Liquidity Facility)
and unpaid shall be distributed to the Liquidity Providers
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pari passu on the basis of the amount of such Liquidity Obligations owed
to each Liquidity Provider;
third, such amount as shall be required (A) if any Sub-Account of
any Cash Collateral Account had been previously funded as provided in
Section 3.6(f), to fund such Sub-Account up to its Required Amount shall
be deposited in such Sub-Account, (B) if any Liquidity Facility shall
become a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Maximum Available Amount thereunder to zero, to deposit into the
related Sub-Account of the related Cash Collateral Account an amount
equal to such Sub-Account's Required Amount shall be deposited in such
Sub-Account, and (C) if, with respect to any particular Liquidity
Facility, neither subclause (A) nor subclause (B) of this clause "third"
is applicable, to pay or reimburse the Liquidity Provider in respect of
such Liquidity Facility in an amount equal to the amount of all Liquidity
Obligations then due under such Liquidity Facility (other than amounts
payable pursuant to clause "first" or "second" of this Section 3.2) shall
be distributed to such Liquidity Provider, pari passu on the basis of the
amounts of such deficiencies and/or unreimbursed Liquidity Obligations;
fourth, if, with respect to any particular Liquidity Facility,
either subclause (A) or (B) of clause "third" above is applicable, 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 Stated Portion of the Required Amount for the relevant Class, pari
passu on the basis of such amounts in respect of each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Certificates on such
Distribution Date shall be distributed to the Class A Trustee;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
seventh, (a) such amount as shall be required to pay in full
Expected Distributions to the holders of the Class C-I Certificates on
such Distribution Date shall be distributed to the Class C-I Trustee and
(b) such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C-II Certificates on such
Distribution Date shall be distributed to the Class C-II Trustee, pari
passu on the basis of the amount of such Expected Distributions for the
Class C-I Certificates and the Class C-II Certificates;
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
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ninth, the balance, if any, of any such payment remaining thereafter
shall be held in the Collection Account for later distribution in
accordance with this Article III.
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 Trust Indenture Estate, shall be applied by the Subordination Agent
in reimbursement of such costs and expenses, (ii) each Trustee for any
amounts of the nature described in clause (i) above actually incurred by
it under the applicable Trust Agreement (to the extent not previously
reimbursed), shall be distributed to such Trustee, and (iii) any
Liquidity Provider or Certificateholder for payments, if any, made by it
to the Subordination Agent or any Trustee in respect of amounts described
in clause (i) above, shall be distributed to such Liquidity Provider or
to the applicable Trustee for the account of such Certificateholder, in
each such case, pari passu on the basis of all amounts described in
clauses (i) through (iii) above;
second, such amount remaining as shall be required to pay all
accrued and unpaid Liquidity Expenses shall be distributed to each
Liquidity Provider pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
third, such amount remaining as shall be required to pay accrued and
unpaid interest on the Liquidity Obligations as provided in the Liquidity
Facilities shall be distributed to each Liquidity Provider pari passu on
the basis of the amount of such accrued and unpaid interest owed to each
Liquidity Provider;
fourth, such amount as shall be required (A) if any Sub-Account of
any Cash Collateral Account had been previously funded as provided in
Section 3.6(f), 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
Sub-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 Sub-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 Maximum 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 Sub-Account of the related Cash Collateral Account an amount
equal to such
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Sub-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 Sub-Account, and (C) if,
with respect to any particular Liquidity Facility, neither subclause (A)
nor subclause (B) of this clause "fourth" are applicable, to pay in full
the outstanding amount of all Liquidity Obligations then due under such
Liquidity Facility (other than amounts payable pursuant to clause
"second" or "third" of this Section 3.3) shall be distributed to such
Liquidity Provider, pari passu on the basis of the amounts of such
deficiencies and/or unreimbursed Liquidity Obligations;
fifth, if subclause (A) or (B) of clause "fourth" above is
applicable, 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 Stated Portion of the Required Amount for the
relevant Class (less the amount of any Interest Drawings under such
Liquidity Facility while subclause (A)(i) or (B)(i), as the case may be,
of clause "fourth" above is applicable), pari passu on the basis of such
amounts in respect of each Liquidity Provider;
sixth, such amount as shall be required to reimburse or pay (i) the
Subordination Agent for any Tax (other than Taxes imposed on compensation
paid hereunder), expense, fee, charge or other loss incurred by or any
other amount payable to the Subordination Agent in connection with the
transactions contemplated hereby (to the extent not previously
reimbursed), shall be applied by the Subordination Agent in reimbursement
of such amount, (ii) each Trustee for any Tax (other than Taxes imposed
on compensation paid under the applicable Trust Agreement), expense, fee,
charge, loss or any other amount payable to such Trustee under the
applicable Trust Agreements (to the extent not previously reimbursed),
shall be distributed to such Trustee, and (iii) each Certificateholder
for payments, if any, made by it pursuant to Section 5.2 hereof in
respect of amounts described in clause (i) above, shall be distributed to
the applicable Trustee for the account of such Certificateholder, in each
such case, pari passu on the basis of all amounts described in clauses
(i) through (iii) above;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Certificates shall be
distributed to the Class A Trustee;
eighth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee; and
ninth, (i) such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C-I Certificates shall be
distributed to the Class C-I Trustee and (ii) such amount remaining as
shall be required to pay in full Adjusted Expected Distributions on the
Class C-II Certificates shall be distributed to the Class C-II Trustee,
pari passu on the basis of the amount of such Adjusted Expected
Distributions for the Class C-I Certificates and the Class C-II
Certificates.
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SECTION 3.4. Other Payments. Any payments received by the Subordination
Agent for which no provision as to the application thereof is made in this
Agreement shall be distributed by the Subordination Agent (i) in the order of
priority specified in Section 3.3 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.
SECTION 3.5. Payments to the Trustees and the Liquidity Providers. Any
amounts distributed hereunder to any Liquidity Provider shall be paid to such
Liquidity Provider by wire transfer of funds to the address such Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent
shall provide a Written Notice of any such transfer to the applicable Liquidity
Provider, as the case may be, at the time of such transfer. Any amounts
distributed hereunder by the Subordination Agent to any Trustee which shall not
be the same institution as the Subordination Agent shall be paid to such
Trustee by wire transfer funds at the address such Trustee shall provide to the
Subordination Agent.
SECTION 3.6. Liquidity Facilities. (a) Interest Drawings. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the
Class A Certificates, the Class B Certificates, the Class C-I Certificates or
the Class C-II Certificates (at the Stated Interest Rate for such Class of
Certificates), then, prior to 12:00 noon (New York City time) on the Business
Day following such Distribution Date, the Subordination Agent shall request a
drawing (each such drawing, an "Interest Drawing") under each Liquidity
Facility with respect to such Class of Certificates in an amount equal to the
lesser of (i) the Stated Portion (with respect to such Liquidity Facility) of
an amount sufficient to pay the amount of such accrued interest (at the Stated
Interest Rate for such Class of Certificates) and (ii) the Maximum Available
Amount under such Liquidity Facility, and shall pay such amount to the Trustee
with respect to such Class of Certificates in payment of such accrued interest.
(b) Application of Interest Drawings. Notwithstanding anything to the
contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facilities and all amounts withdrawn by the Subordination Agent from
the Class A Cash Collateral Account, and payable in each case to the Class A
Certificateholders, shall be promptly distributed to the Class A Trustee, (ii)
all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class B Liquidity Facilities and all amounts withdrawn by the
Subordination Agent from the Class B Cash Collateral Account, and payable in
each case to the Class B Certificateholders, shall be promptly distributed to
the Class B Trustee, (iii) all payments received by the Subordination Agent in
respect of an Interest Drawing under the Class C-I Liquidity Facilities and all
amounts withdrawn by the Subordination Agent from the Class C-I Cash Collateral
Account, and payable in each case to the Class C-I Certificateholders, shall be
promptly distributed to the Class C-I Trustee, and (iv) all payments received
by the Subordination Agent in respect of an Interest Drawing under the Class
C-II Liquidity Facilities and all amounts withdrawn by the Subordination Agent
from the Class C-II Cash Collateral Account, and payable in each case to the
Class C-II Certificateholders, shall be promptly distributed to the Class C-II
Trustee.
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(c) Downgrade Drawings. If at any time the short-term unsecured debt
rating of any Liquidity Provider issued by either Rating Agency is lower than
the Threshold Rating, within 10 days after receiving notice of such downgrading
(but not later than the expiration date of the Liquidity Facility issued by the
downgraded Liquidity Provider (the "Downgraded Facility")), such Liquidity
Provider or Continental may arrange for a Replacement Liquidity Provider to
issue and deliver a Replacement Liquidity Facility to the Subordination Agent.
If a Downgraded Facility has not been replaced in accordance with the terms of
this paragraph, the Subordination Agent shall on such 10th day (or if such 10th
day is not a Business Day, on the next succeeding Business Day) (or, if
earlier, the expiration date of such Downgraded Facility) request a drawing in
accordance with and to the extent permitted by such Downgraded Facility (such
drawing, a "Downgrade Drawing") of all available and undrawn amounts
thereunder. Amounts drawn pursuant to a Downgrade Drawing shall be maintained
and invested as provided in Section 3.6(f) hereof. The Liquidity Provider may
also arrange for a Replacement Liquidity Provider to issue and deliver a
Replacement Liquidity Facility at any time after such Downgrade Drawing so long
as such Downgrade Drawing has not been reimbursed in full to the Liquidity
Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with respect to any
Class of Certificates is scheduled to expire on a date (the "Stated Expiration
Date") prior to the date that is 15 days after the Final Maturity Date for such
Class of Certificates, then, no earlier than the 60th day and no later than the
40th day prior to the then Stated Expiration Date, the Subordination Agent
shall request that such Liquidity Provider extend the Stated Expiration Date
for a period of 364 days after the Stated Expiration Date (unless the
obligations of such Liquidity Provider thereunder are earlier terminated in
accordance with such Liquidity Facility). The Liquidity Provider shall advise
the Borrower, no earlier than 40 days and no later than 25 days prior to such
Stated Expiration Date, whether, in its sole discretion, it agrees to so extend
the Stated Expiration Date. If, on or before such 25th day, such Liquidity
Facility shall not have been so extended or replaced in accordance with Section
3.6(e), or if the Liquidity Provider fails irrevocably and unconditionally to
advise the Borrower on or before the 25th day prior to the Stated Expiration
Date then in effect that such Stated Expiration Date shall be so extended, the
Subordination Agent shall, on such 25th day (or as soon as possible
thereafter), in accordance with and to the extent permitted by the terms of the
expiring Liquidity Facility (a "Non-Extended Facility"), request a drawing
under such expiring Liquidity Facility (such drawing, a "Non-Extension
Drawing") of all available and undrawn amounts thereunder. Amounts drawn
pursuant to a Non-Extension Drawing shall be maintained and invested in
accordance with Section 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. (i) At any time,
Continental may, at its option, arrange for a Replacement Liquidity Facility to
replace any Liquidity Facility (including any Replacement Liquidity Facility
provided pursuant to Section 3.6(e)(ii) hereof) for any Class of Certificates
with cause or without cause, provided that neither ABN AMRO nor ING shall be
replaced by Continental as a Liquidity Provider with respect to any Class of
Certificates prior to the fourth anniversary of the Closing Date except for
cause, for its ceasing to meet the Threshold Ratings or for any failure to
extend the Expiry Date of any Liquidity Facility in accordance with Section
2.10 of such Liquidity Facility and Section 3.6(d) hereof. If such
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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 Sub-Account of the relevant Cash Collateral Account will be returned
to the Liquidity Provider being replaced.
(ii) If any Liquidity Provider shall determine not to extend any of
its Liquidity Facility in accordance with Section 3.6(d), then such
Liquidity Provider may, at its option, arrange for a Replacement
Liquidity Facility to replace such Liquidity Facility during the period
no earlier than 40 days and no later than 25 days prior to the then
effective Stated Expiration Date of such Liquidity Facility.
(iii) No Replacement Liquidity Facility arranged by Continental or a
Liquidity Provider in accordance with clauses (i) or (ii) above,
respectively, shall become effective and no such Replacement Liquidity
Facility shall be deemed a "Liquidity Facility" under the Operative
Agreements (in each case other than insofar as necessary to permit the
repayment of amounts owed to the replaced Liquidity Provider), unless and
until (A) each of the conditions referred to in clause (iv) below shall
have been satisfied, (B) if such Replacement Liquidity Facility shall
materially adversely affect the rights, remedies, interests or
obligations of the Class A Certificateholders, the Class B
Certificateholders, the Class C-I Certificateholders or the Class C-II
Certificateholders under any of the Operative Agreements, the applicable
Trustee shall have consented, in writing, to the execution and issuance
of such Replacement Liquidity Facility and (C) in the case of a
Replacement Liquidity Facility arranged by a Liquidity Provider under
Section 3.6(e)(ii), such Replacement Liquidity Facility is acceptable to
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 (including, without limitation, any
unreimbursed Advances) then owing to the replaced Liquidity Provider
(which payment may be made as provided in clause (ix) of Section 3.6(f)
hereof, pursuant to a drawing under the Replacement Liquidity Facility,
or otherwise) and (z) cause the issuer of the Replacement Liquidity
Facility to deliver the Replacement Liquidity Facility to the
Subordination Agent, together with a legal opinion opining that such
Replacement Liquidity Facility is an enforceable obligation of such
Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in clauses (iii)
and (iv) of this Section 3.6(e), (w) the replaced Liquidity Facility
shall terminate, (x) the Subordination Agent shall, if so requested by
Continental or the Liquidity Provider being replaced, execute and deliver
the Replacement Liquidity Facility and any associated Fee Letter, (y)
each of the parties hereto shall enter into any amendments to this
Agreement necessary to give effect to (1) the replacement of the
applicable Liquidity Provider with the applicable Replacement Liquidity
Provider and (2) the replacement of the applicable Liquidity
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Facility with the applicable Replacement Liquidity Facility and (z) such
Replacement Liquidity Provider shall be deemed to be a Liquidity Provider
with the rights and obligations of a Liquidity Provider hereunder and
under the other Operative Agreements and such Replacement Liquidity
Facility shall be deemed to be a Liquidity Facility hereunder and under
the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In the event the
Subordination Agent shall draw all available amounts under any Class A
Liquidity Facility, any Class B Liquidity Facility, any Class C-I Liquidity
Facility or any Class C-II 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 into a
Sub-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 relevant Sub-Account
of the Class A Cash Collateral Account, the Class B Cash Collateral Account,
the Class C-I Cash Collateral Account or the Class C-II Cash Collateral
Account, respectively. All amounts on deposit in any such Sub-Account shall be
invested and reinvested in Eligible Investments in accordance with Section
2.2(b) hereof. Investment Earnings on amounts on deposit in each Sub-Account
of the Cash Collateral Accounts shall be deposited in the Collection Account
prior to giving effect to the distributions below on each Distribution Date
commencing on the first Distribution Date after any such deposit into such
Sub-Account. The Subordination Agent shall deliver a written statement to
Continental and the relevant Liquidity Provider one day prior to each
Distribution Date setting forth the aggregate amount of Investment Earnings
held in each Sub-Account of the Cash Collateral Accounts as of such date. In
addition, from and after the date funds are so deposited, the Subordination
Agent shall make withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class A Certificates (at the Stated
Interest Rate for the Class A Certificates) from any other source,
withdraw from each Sub-Account of the Class A Cash Collateral Account,
and pay to the Class A Trustee, an amount equal to the lesser of (x) the
Stated Portion of an amount necessary to pay accrued and unpaid interest
(at the Stated Interest Rate for the Class A Certificates) on such Class
A Certificates and (y) the amount on deposit in such Sub-Account;
(ii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class B Certificates (at the Stated
Interest Rate for the Class B Certificates) from any other source,
withdraw from each Sub-Account of the Class B Cash Collateral Account,
and pay to the Class B Trustee, an amount equal to the lesser of (x) the
Stated Portion of 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 such Sub-Account;
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(iii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class C-I Certificates (at the Stated
Interest Rate for the Class C-I Certificates) from any other source,
withdraw from each Sub-Account of the Class C-I Cash Collateral Account,
and pay to the Class C-I Trustee, an amount equal to the lesser of (x)
the Stated Portion of an amount necessary to pay accrued and unpaid
interest (at the Stated Interest Rate for the Class C-I Certificates) on
such Class C-I Certificates and (y) the amount on deposit in such
Sub-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-II Certificates (at the Stated
Interest Rate for the Class C-II Certificates) from any other source,
withdraw from each Sub-Account of the Class C-II Cash Collateral Account,
and pay to the Class C-II Trustee, an amount equal to the lesser of (x)
the Stated Portion of an amount necessary to pay accrued and unpaid
interest (at the Stated Interest Rate for the Class C-II Certificates) on
such Class C-II Certificates and (y) the amount on deposit in such
Sub-Account;
(v) on each date on which the Pool Balance of the Class A Trust
shall have been reduced by payments made to the Class A
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant
to Section 2.03 of the Escrow and Paying Agent Agreement for such Class,
the Subordination Agent shall withdraw from each Sub-Account of the Class
A Cash Collateral Account an amount equal to the excess, if any, of the
amount on deposit in such Sub-Account over the Required Amount for such
Sub-Account and shall first, pay such amount to the relevant Class A
Liquidity Provider until the Liquidity Obligations (with respect to the
Class A Certificates) owing to such Liquidity Provider shall have been
paid in full, and second, deposit any remaining amount in the Collection
Account;
(vi) on each date on which the Pool Balance of the Class B Trust
shall have been reduced by payments made to the Class B
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant
to Section 2.03 of the Escrow and Paying Agent Agreement of such Class,
the Subordination Agent shall withdraw from each Sub-Account of the Class
B Cash Collateral Account an amount equal to the excess, if any, of the
amount on deposit in such Sub-Account over the Required Amount for such
Sub-Account and shall first, pay such amount to the relevant Class B
Liquidity Provider until the Liquidity Obligations (with respect to the
Class B Certificates) owing to such Liquidity Provider shall have been
paid in full, and second, deposit any remaining amount in the Collection
Account;
(vii) on each date on which the Pool Balance of the Class C-I Trust
shall have been reduced by payments made to the Class C-I
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 each Sub-Account of the Class
C-I Cash Collateral Account an amount equal to the excess, if any,
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of the amount on deposit in such Sub-Account over the Required Amount for
such Sub-Account and shall first, pay such amount to the relevant Class
C-I Liquidity Provider until the Liquidity Obligations (with respect to
the Class C-I Certificates) owing to such Liquidity Provider shall have
been paid in full, and second, deposit any remaining amount in the
Collection Account;
(viii) on each date on which the Pool Balance of the Class C-II
Trust shall have been reduced by payments made to the Class C-II
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 each Sub-Account of the Class
C-II Cash Collateral Account an amount equal to the excess, if any, of
the amount on deposit in such Sub-Account over the Required Amount for
such Sub-Account and shall first, pay such amount to the relevant Class
C-II Liquidity Provider until the Liquidity Obligations (with respect to
the Class C-II Certificates) owing to such Liquidity Provider shall have
been paid in full, and second, deposit any remaining amount in the
Collection Account; and
(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 any Sub-Account of the Cash
Collateral Account for such Class of Certificates, the Subordination
Agent shall withdraw all amounts on deposit in such Sub-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.
(g) Reinstatement. With respect to any Interest Drawing under any
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 Maximum Available Amount of
such Liquidity Facility shall be reinstated by an amount equal to the amount of
such Interest Drawing so reimbursed to the applicable Liquidity Provider but
not to exceed the Maximum 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 (i) a Liquidity Event of Default shall have occurred and be
continuing and (ii) a Performing Note Deficiency exists. In the event that,
with respect to any particular Liquidity Facility, (i) funds are withdrawn from
the related Sub-Account pursuant to clauses (i), (ii), (iii) or (iv) 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 Maximum 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 (or the applicable) Sub-Account as 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.
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(h) Reimbursement. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) Final Drawing Upon Termination Notice. Upon receipt from a Liquidity
Provider of a Termination Notice with respect to any Liquidity Facility, the
Subordination Agent shall, not later than the date specified in such
Termination Notice, in accordance with and to the extent permitted by the terms
of such Liquidity Facility, request a drawing under such Liquidity Facility of
all available and undrawn amounts thereunder (a "Final Drawing"). Amounts
drawn pursuant to a Final Drawing shall be maintained and invested in
accordance with Section 3.6(f) hereof.
(j) Reduction or Increase of Maximum Stated Amount. Promptly following
each date on which the Required Amount of the Liquidity Facilities for a Class
of Certificates is (i) reduced as a result of a reduction in the Pool Balance
with respect to such Certificates, (ii) increased as a result of an increase in
the Stated Interest Rate or (iii) subsequent to such an increase, reduced
pursuant to the definition of "Stated Interest Rate", the Subordination Agent
shall, if any such Liquidity Facility provides for reductions of the Maximum
Stated Amount of such Liquidity Facility and if such reductions are not
automatic, request such Liquidity Provider for such Class of Certificates to
reduce such Maximum Stated Amount to an amount equal to its Stated Portion of
the Required Amount with respect to such Liquidity Facility (as calculated by
the Subordination Agent after giving effect to such payment). Each such
request shall be made in accordance with the provisions of the applicable
Liquidity Facility.
(k) Relation to Subordination Provisions. Interest Drawings under the
Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in each
case, in respect of interest on the Certificates of any Class, will be
distributed to the Trustee for such Class of Certificates, notwithstanding
Sections 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party. (a) (i) Following
the occurrence and during the continuation of an Indenture Default under any
Indenture, the Controlling Party shall direct the 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 Accelerating such Equipment Notes in accordance with
the provisions of such Indenture. Subject to the Owner Trustees' and the Owner
Participants' rights, if any, set forth in the Indentures with respect to
Leased Aircraft to purchase the Equipment Notes and the provisions of the next
paragraph, if the Equipment Notes issued pursuant to any Indenture have been
Accelerated following an Indenture Default with respect thereto, the
Controlling Party may sell, assign, contract to sell or otherwise dispose of
and deliver all (but not less than all) of such Equipment Notes to any Person
at public or private sale, at any
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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
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 LTV Appraisals based upon physical inspection of the
Aircraft).
(b) The Controlling Party shall take such actions as it may reasonably
deem most effectual to complete the sale or other disposition of such Aircraft
or Equipment Notes. In addition, in lieu of any sale, assignment, contract to
sell or other disposition, the Controlling Party may maintain possession of
such Equipment Notes and continue to apply monies received in respect of such
Equipment Notes in accordance with Article III hereof. In addition, in lieu of
such sale, assignment, contract to sell or other disposition, or in lieu of
such maintenance of possession, the Controlling Party may, subject to the terms
and conditions of the related Indenture, instruct the Loan Trustee under such
Indenture to foreclose on the Lien on the related Aircraft.
SECTION 4.2. Remedies Cumulative. Each and every right, power and remedy
given to the Trustees, the Liquidity Providers, the Controlling Party or the
Subordination Agent
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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 Proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case each such party shall, subject to any determination in such proceedings,
be restored to its former position and rights hereunder, and all rights,
remedies and powers of such party shall continue as if no such Proceedings had
been instituted.
SECTION 4.4. Right of Certificateholders to Receive Payments Not to Be
Impaired. Anything in this Agreement to the contrary notwithstanding but
subject to each Trust Agreement, the right of any Certificateholder or any
Liquidity Provider, respectively, to receive payments 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.
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEE
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
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and at its own cost and expense (but without any right of indemnity in respect
of any such cost or expense under Section 7.1 hereof) promptly take such action
as may be necessary to duly discharge all Liens on any of the Trust Accounts or
any monies deposited therein which result from claims against it in its
individual capacity not related to its activities hereunder or any other
Operative Agreement.
SECTION 5.4. Notice from the Liquidity Providers and Trustees. If any
Liquidity Provider or Trustee has notice of an Indenture Default or a
Triggering Event, such Person shall promptly give notice thereof to all other
Liquidity Providers and Trustees and to the Subordination Agent, provided,
however, that no such Person shall have any liability hereunder as a result of
its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties. Each of the
Class A Trustee, the Class B Trustee, the Class C-I Trustee and the Class C-II
Trustee hereby designates and appoints the Subordination Agent as the agent and
trustee of such Trustee under each applicable Liquidity Facility and authorizes
the Subordination Agent to enter into each applicable Liquidity Facility as
agent and trustee for such Trustee. Each of the Liquidity Providers and the
Trustees hereby designates and appoints the Subordination Agent as the
Subordination Agent under this Agreement. WTC hereby accepts the duties hereby
created and applicable to it as the Subordination Agent and agrees to perform
the same but only upon the terms of this Agreement and agrees to receive and
disburse all monies received by it in accordance with the terms hereof. The
Subordination Agent shall not be answerable or accountable under any
circumstances, except (a) for its own willful misconduct or gross negligence
(or ordinary negligence in the handling of funds), (b) as provided in Section
2.2 hereof and (c) for liabilities that may result from the material inaccuracy
of any representation or warranty of the Subordination Agent made in its
individual capacity in any Operative Agreement. The Subordination Agent shall
not be liable for any error of judgment made in good faith by a Responsible
Officer of the Subordination Agent, unless it is proved that the Subordination
Agent was negligent in ascertaining the pertinent facts.
SECTION 6.2. Absence of Duties. The Subordination Agent shall have no
duty to see to any recording or filing of this Agreement or any other document,
or to see to the maintenance of any such recording or filing.
SECTION 6.3. No Representations or Warranties as to Documents. The
Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity, legality
or enforceability of this Agreement or any other Operative Agreement or as to
the correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
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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 either 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
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any Trustee or Liquidity Provider for any fee as compensation for its services
as agent under this Agreement. The provisions of this Section 6.7 shall
survive the termination of this Agreement.
SECTION 6.8. May Become Certificateholder. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all
rights and benefits of a Certificateholder to the same extent as if it were not
the institution acting as the Subordination Agent.
SECTION 6.9. Subordination Agent Required; Eligibility. There shall at
all times be a Subordination Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $100,000,000 (or the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a
corporation organized and doing business under the laws of the United States,
any State thereof or of the District of Columbia and having a combined capital
and surplus of at least $100,000,000), if there is such an institution willing
and able to perform the duties of the Subordination Agent hereunder upon
reasonable or customary terms. Such corporation shall be a citizen of the
United States and shall be authorized under the laws of the United States or
any State thereof or of the District of Columbia to exercise corporate trust
powers and shall be subject to supervision or examination by federal, state or
District of Columbia authorities. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of any of
the aforesaid supervising or examining authorities, then, for the purposes of
this Section 6.9, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
In case at any time the Subordination Agent shall cease to be eligible in
accordance with the provisions of this Section, the Subordination Agent shall
resign immediately in the manner and with the effect specified in Section 8.1.
SECTION 6.10. Money to Be Held in Trust. All Equipment Notes, monies and
other property deposited with or held by the Subordination Agent pursuant to
this Agreement shall be held in trust for the benefit of the parties entitled
to such Equipment Notes, monies and other property. All such Equipment Notes,
monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Scope of Indemnification. The Subordination Agent shall be
indemnified hereunder to the extent and in the manner described in Section 9.1
of the Participation Agreements and Section 7 of the Note Purchase Agreement.
The indemnities contained in such Sections of such agreements shall survive the
termination of this Agreement.
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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
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successor Subordination Agent shall be effective unless and until the Rating
Agencies shall have delivered a Ratings Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, etc. (a) This Agreement may not be
supplemented, amended or modified without the consent of each Trustee (acting,
except in the case of any amendment pursuant to Section 3.6(e)(v)(y) hereof,
with the consent of holders of Certificates of the related Class evidencing
interests in the related Trust aggregating not less than a majority in interest
in such Trust or as otherwise authorized pursuant to the relevant Trust
Agreement), the Subordination Agent and each Liquidity Provider; provided,
however, that this Agreement may be supplemented, amended or modified without
the consent of any Trustee if such supplement, modification or amendment cures
an ambiguity or inconsistency or does not materially adversely affect such
Trustee, the Liquidity Providers or the holders of the related Class of
Certificates; provided, further, however, that if such supplement, amendment or
modification would (x) directly or indirectly modify or supersede, or otherwise
conflict with, Section 2.2(b), Section 3.6(e), Section 3.6(f)(other than the
last sentence thereof), or the second sentence of Section 10.6 (collectively,
together with this proviso, the "Continental Provisions") or (y) otherwise
adversely affect the interests of a potential Replacement Liquidity Provider or
of Continental with respect to its payment obligations under any Lease or Owned
Aircraft Indenture, 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)
modify Section 2.4, 3.2 or 3.3 hereof, relating to the distribution of monies
received by the Subordination Agent hereunder from the Equipment Notes or
pursuant to the Liquidity Facilities. Nothing contained in this Section shall
require the consent of a Trustee at any time following the payment of Final
Distributions with respect to the related Class of Certificates.
(b) In the event that the Subordination Agent, as the registered holder of
any Equipment Notes, receives a request for its consent to any amendment,
modification, consent or waiver under such Equipment Notes, the Indenture
pursuant to which such Equipment Notes were issued, or the Lease, Participation
Agreement or other related document, (i) if no Indenture Default shall have
occurred and be continuing, the Subordination Agent shall request instructions
from the applicable Trustee(s) and shall vote or consent in accordance with the
directions of such Trustee(s) (in the case of each such Trustee, with respect
to the Equipment Notes held in such Trust) constituting, in the aggregate,
directions with respect to the requisite principal amount of Equipment Notes
under such Indenture 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
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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.
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
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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 ▇▇▇▇▇▇ Square
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Trustee Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to any Trustee, addressed to it at its office at:
WILMINGTON TRUST COMPANY
One ▇▇▇▇▇▇ Square
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Trustee Administration
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to ABN AMRO as any Liquidity Provider, addressed to it at
its office at:
ABN AMRO BANK N.V.
Aerospace Department
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Lukas van der Hoef
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Loan Operations
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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(iv) if to ING as any Liquidity Provider, addressed to it at its
office at:
ING BANK N.V.
Department of Bankgarantie Zaken-Juridische Zaken
Location code HG 01.06
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇
by courier:
Amsterdamse Poort
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇-▇▇-▇▇▇-▇▇▇▇
Telecopy: 011-31-20-652-3235
with a copy to:
ING Lease (Ireland) B.V.
▇▇ ▇▇. ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇-▇▇▇-▇▇▇▇
Telecopy: 011-353-1-662-2240
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
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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,
this Agreement shall be a subordination agreement for purposes of ▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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.
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(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
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of any judgment in respect hereof or thereof, to the nonexclusive general
jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and the
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED,
including, without limitation, contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each of the parties
warrants and represents that it has reviewed this waiver with its legal
counsel, and that it knowingly and voluntarily waives its jury trial rights
following consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE,
AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have from the
jurisdiction of the courts of the United States or of any State and waives any
immunity any of its properties located in the United States may have from
attachment or execution upon a judgement entered by any such court under the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
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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: Vice President
ABN AMRO BANK N.V.,
Chicago Branch
as a Class A Liquidity Provider,
a Class B Liquidity Provider, a
Class C-I
Liquidity Provider and
a Class C-II Liquidity Provider
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
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ING BANK N.V.,
as a Class A Liquidity Provider,
a Class B Liquidity Provider,
a Class C-I Liquidity Provider and
a Class C-II 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: Vice President