1
Exhibit 4.11
EXECUTION COPY
--------------------------------------------------------------------------------
REVOLVING CREDIT AGREEMENT
(1997-2C)
Dated as of June 25, 1997
between
WILMINGTON TRUST COMPANY,
as Subordination Agent,
as agent and trustee for the
Continental Airlines Pass Through Trust 1997-2C
as Borrower
and
KREDIETBANK N.V., NEW YORK BRANCH,
as Liquidity Provider
--------------------------------------------------------------------------------
Relating to
Continental Airlines Pass Through Trust 1997-2C
7.206% Continental Airlines Pass Through Certificates,
Series 1997-2C
2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms......................................... 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances.................................................. 10
Section 2.02. Making the Advances........................................... 10
Section 2.03. Fees ......................................................... 12
Section 2.04. Adjustments or Termination of the Maximum Commitment.......... 12
Section 2.05. Repayments of Interest Advances or the Final Advance.......... 13
Section 2.06. Repayments of Downgrade Advances.............................. 13
Section 2.07. Payments to the Liquidity Provider Under the Intercreditor
Agreement................................................ 15
Section 2.08. Book Entries.................................................. 15
Section 2.09. Payments from Available Funds Only............................ 15
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs............................................... 16
Section 3.02. Capital Adequacy.............................................. 17
Section 3.03. Payments Free of Deductions................................... 18
Section 3.04. Payments...................................................... 20
Section 3.05. Computations.................................................. 20
Section 3.06. Payment on Non-Business Days.................................. 21
Section 3.07. Interest...................................................... 21
Section 3.08. Replacement of Borrower....................................... 22
Section 3.09. Funding Loss Indemnification.................................. 23
Section 3.10. Illegality.................................................... 23
- i -
3
Page
----
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01......... 24
Section 4.02. Conditions Precedent to Borrowing............................. 27
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower......................... 27
Section 5.02. Negative Covenants of the Borrower............................ 28
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default................................... 28
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc............................................... 28
Section 7.02. Notices, Etc.................................................. 29
Section 7.03. No Waiver; Remedies........................................... 29
Section 7.04. Further Assurances............................................ 30
Section 7.05. Indemnification; Survival of Certain Provisions............... 30
Section 7.06. Liability of the Liquidity Provider........................... 31
Section 7.07. Costs, Expenses and Taxes..................................... 31
Section 7.08. Binding Effect; Participations................................ 32
Section 7.09. Severability.................................................. 34
Section 7.10. GOVERNING LAW................................................. 34
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Immunity................................................. 34
Section 7.12. Execution in Counterparts..................................... 36
Section 7.13. Entirety...................................................... 36
Section 7.14. Headings...................................................... 36
Section 7.15. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES.............. 36
ANNEX I Interest Advance Notice of Borrowing
- ii -
4
Page
----
ANNEX II Downgrade Advance Notice of Borrowing
ANNEX III Notice of Automatic Reduction or Increase of Commitment
ANNEX IV Notice of Conversion to Final Advance
ANNEX V Notice of Replacement Subordination Agent
- iii -
5
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT dated as of June 25, 1997, between
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its individual
capacity but solely as Subordination Agent under the Intercreditor Agreement
(each as defined below), as agent and trustee for the Class C Trust (as defined
below) (the "Borrower"), and KREDIETBANK N.V., acting through its New York
branch (the "Liquidity Provider").
W I T N E S S E T H:
WHEREAS, pursuant to the Class C Trust Agreement (such term and all
other capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class C Trust is issuing the Class C
Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class C Certificates in accordance with their
terms, has requested the Liquidity Provider to enter into this Agreement,
providing in part for the Borrower to request in specified circumstances that
Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. (a) Definitions. As used in
this Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"Additional Cost" has the meaning assigned to such term in Section
3.01.
"Advance" means an Interest Advance, a Final Advance, a Downgrade
Advance, an Applied Downgrade Advance or an Unpaid Advance, as the case
may be.
6
2
"Applicable Liquidity Rate" has the meaning assigned to such term in
Section 3.07(f).
"Applicable Margin" means (v) with respect to any Unpaid Advance or
Applied Downgrade Advance that is a LIBOR Advance, 1.75% per annum, (w)
with respect to any Final Advance that is a Base Rate Advance, 1.75% per
annum, (x) with respect to any Interest Advance or Applied Downgrade
Advance that is a Base Rate Advance, 0.75% per annum, (y) with respect to
any Unapplied Downgrade Advance that is a LIBOR Advance, 0.45% per annum
and (z) with respect to any Unapplied Downgrade Advance that is a Base
Rate Advance, minus 0.55% per annum.
"Applied Downgrade Advance" has the meaning assigned to such term in
Section 2.06(a).
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall for any day be equal to the
higher of:
(i) the rate per annum announced from time to time by the
Liquidity Provider as its base commercial lending rate, and
(ii) (a) the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, plus one-half
of one percent (1/2 of 1%), or (b) if the rate calculated pursuant
to clause (a) above is not available for such date, the rate quoted
by the Liquidity Provider, at approximately 11:00 A.M., New York
City time on such day (or, if such day is not a Business Day, on the
next preceding Business Day), to dealers in the New York Federal
funds market for overnight Federal funds offerings of dollars by the
Liquidity Provider, plus one-half of one percent (1/2 of 1%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
7
3
"Borrower" has the meaning assigned to such term in the recital of
parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery of a
Notice of Borrowing or pursuant to Section 6.01.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Houston, Texas, New York, New York, or, so long as any Class C Certificate
is outstanding, the city and state in which the Class C Trustee, the
Borrower or any Loan Trustee maintains its Corporate Trust Office or
receives or disburses funds, and, if the applicable Business Day relates
to any Advance or other amount bearing interest based on the LIBOR Rate,
on which dealings are carried on in the London interbank market.
"Downgrade Advance" means an Advance made pursuant to Section
2.02(c).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"Excluded Taxes" means (i) taxes imposed on the overall net income
of the Liquidity Provider or of its Lending Office by the jurisdiction
where such Liquidity Provider's principal office or such Lending Office is
located, and (ii) Excluded Withholding Taxes.
"Excluded Withholding Taxes" means (i) withholding Taxes imposed by
the United States except to the extent that such United States withholding
Taxes are imposed as a result of any change in applicable law or treaty
(including any change in the official interpretation thereof) after the
date hereof (excluding from change in applicable law or treaty for this
purpose any addition of, or change in, any "anti-treaty shopping",
"limitation on benefits", or similar provision in any treaty or other
applicable law restricting the availability of treaty benefits (including
without limitation any provision similar to the Protocol Amending the
Convention Between the United States of America and the Kingdom of the
Netherlands for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with Respect
8
4
to Taxes on Income, signed at Washington on October 13, 1993)), or in the
case of a successor Liquidity Provider (including a transferee of an
Advance) or Lending Office, after the date on which such successor
Liquidity Provider obtains its interest or on which the Lending Office is
changed, and (ii) any withholding Taxes imposed by the United States which
are imposed or increased as a result of the Liquidity Provider failing to
deliver to the Borrower any certificate or document (which certificate or
document in the good faith judgment of the Liquidity Provider it is
legally entitled to provide) which is reasonably requested by the Borrower
to establish that payments under this Agreement are exempt from (or
entitled to a reduced rate of) withholding Tax.
"Expenses" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses, and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"Expiry Date" means January 14, 2006.
"Final Advance" means an Advance made pursuant to Section 2.02(d).
"Intercreditor Agreement" means the Intercreditor Agreement dated
the date hereof, among the Trustees, the Liquidity Provider, the liquidity
provider under each Liquidity Facility (other than this Agreement) and the
Subordination Agent, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Interest Advance" means an Advance made pursuant to Section
2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the third Business Day following the
Liquidity Provider's receipt of the Notice of Borrowing for
such LIBOR Advance and ending on the next Regular Distribution
Date (or ending, in the case of an Interest Period
9
5
applicable to any Unapplied Downgrade Advance, on the
numerically corresponding day in the third or sixth calendar
month after the first day of the applicable Interest Period
and/or on the next Regular Distribution Date, as Continental
may select by providing notice thereof to the Borrower and the
Liquidity Provider no later than three Business Days prior to
the commencement of such Interest Period, provided that if
Continental shall not provide such a notice at least three
Business Days prior to the commencement of such Interest
Period, then Continental shall be deemed to have selected an
Interest Period ending on the next Regular Distribution Date);
and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next
Regular Distribution Date (or ending, in the case of an
Interest Period applicable to any Unapplied Downgrade Advance,
on the numerically corresponding day in the third or sixth
calendar month after the first day of the applicable Interest
Period and/or on the next Regular Distribution Date, as
Continental may select by providing notice thereof to the
Borrower and the Liquidity Provider no later than three
Business Days prior to the commencement of such Interest
Period, provided that if Continental shall not provide such a
notice at least three -------- Business Days prior to the
commencement of such Interest Period, then Continental shall
be deemed to have selected an Interest Period ending on the
next Regular Distribution Date);
provided, however, that (I) if an Unapplied Downgrade Advance which is a
LIBOR Advance becomes an Applied Downgrade Advance, the Interest Period
then applicable to such Unapplied Downgrade Advance shall be applicable to
such Applied Downgrade Advance, (II) if (x) the Final Advance shall have
been made, or (y) other outstanding Advances shall have been converted
into the Final Advance, then the Interest Periods shall be successive
periods of one month beginning on the third Business Day following the
date the Liquidity Provider makes the Final Advance (in the case of clause
(x) above) or the Regular Distribution Date following
10
6
such conversion (in the case of clause (y) above) and (III) in the case of
any Interest Period applicable to a Downgrade Advance, each Interest
Period that would otherwise end on a day that is not a Business Day shall
end on the next succeeding Business Day.
"Lending Office" means the lending office of the Liquidity Provider
presently located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
such other lending office as the Liquidity Provider from time to time
shall notify the Borrower as its lending office hereunder; provided that
the Liquidity Provider shall not change its Lending Office to a Lending
Office outside the United States of America except in accordance with
Section 3.01, 3.02 or 3.03 hereof.
"LIBOR Advance" means an Advance bearing interest at a rate based
upon the LIBOR Rate.
"LIBOR Rate" means, with respect to any Interest Period:
(i) the rate per annum appearing on display page 3750 (British
Bankers Association-LIBOR) of the Dow ▇▇▇▇▇ Markets Service (or any
successor or substitute therefor) at approximately 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period, or
(ii) if (a) the rate calculated pursuant to clause (i) above
is not available or (b) the Liquidity Provider determines in good
faith, and certifies to the Borrower and Continental, prior to two
Business Days prior to the commencement of such Interest Period,
that the rate calculated pursuant to clause (i) above does not
adequately and fairly reflect the cost to the Liquidity Provider of
making and maintaining the relevant Advance during such Interest
Period, the rate per annum at which deposits in dollars are offered
for the relevant Interest Period by the Liquidity Provider to prime
banks in the London interbank market at approximately 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period in an amount approximately equal to the principal
amount of
11
7
the LIBOR Advance to which such Interest Period is to apply and for
a period of time comparable to such Interest Period, as quoted by
the Liquidity Provider to the Borrower.
"Liquidity Event of Default" means the occurrence of either (a) the
acceleration of all of the Equipment Notes or (b) a Continental Bankruptcy
Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii) each
Affiliate of the Liquidity Provider, (iii) the directors, officers,
employees, servants and agents of the Liquidity Provider and its
Affiliates, and (iv) the successors and permitted assigns of the persons
described in clauses (i) through (iii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in the
recital of parties to this Agreement.
"Maximum Available Commitment" shall mean, subject to the proviso
contained in the third sentence of Section 2.02(a), at any time of
determination, (a) the Maximum Commitment at such time less (b) the
aggregate amount of each Interest Advance outstanding at such time;
provided that following a Downgrade Advance or a Final Advance, the
Maximum Available Commitment shall be zero.
"Maximum Commitment" means initially $2,967,925, as the same may be
adjusted from time to time in accordance with Section 2.04(a); provided
that the Maximum Commitment shall at no time exceed an amount equal to
$3,173,860.
"Non-Excluded Taxes" has the meaning specified in Section 3.03.
"Notice of Borrowing" has the meaning specified in Section 2.02(e).
"Notice of Conversion to Final Advance" means the Notice of
Conversion to Final Advance substantially in the form of Annex IV to this
Agreement.
"Notice of Replacement Subordination Agent" has the meaning
specified in Section 3.08.
12
8
"Offering Memorandum" means the Offering Memorandum dated June 17,
1997 relating to the Certificates, as such Offering Memorandum may be
amended or supplemented.
"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.
"Regulatory Change" has the meaning assigned to such term in Section
3.01.
"Replenishment Amount" has the meaning assigned to such term in
Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the Class C Certificates, that would be payable on the
Class C Certificates on each of the three successive semiannual Regular
Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding two semiannual
Regular Distribution Dates, in each case calculated on the basis of the
Pool Balance of the Class C Certificates on such day and without regard to
expected future payments of principal on the Class C Certificates.
"Termination Date" means the earliest to occur of the following: (i)
the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class C Certificates have been paid
in full (or provision has been made for such payment in accordance with
the Intercreditor Agreement and the Trust Agreements) or are otherwise no
longer entitled to the benefits of this Agreement; (iii) the date on which
the Borrower delivers to the Liquidity Provider a certificate, signed by a
Responsible Officer of the Borrower, certifying that a Replacement
Liquidity Facility has been substituted for this Agreement in full
pursuant to Section 3.6(e) of the Intercreditor Agreement; (iv) the date
on which the Liquidity Provider makes the Final Advance; and (v) the date
on which no Advance is or may (including by reason of reinstatement as
herein provided) become available for a Borrowing hereunder.
13
9
"Transferee" has the meaning assigned to such term in Section
7.08(b).
"Unapplied Downgrade Advance" means any Downgrade Advance other than
an Applied Downgrade Advance.
"Unpaid Advance" has the meaning assigned to such term in Section
2.05.
(b) Terms Defined in the Intercreditor Agreement. For all purposes
of this Agreement, the following terms shall have the respective meanings
assigned to such terms in the Intercreditor Agreement:
"Affiliate", "Certificates", "Class A Certificates", "Class B
Certificates", "Class C Cash Collateral Account", "Class C Certificates",
"Class C Certificateholders", "Class C Trust", "Class C Trust Agreement",
"Class C Trustee", "Class D Certificates", "Closing Date", "Continental",
"Continental Bankruptcy Event", "Controlling Party", "Corporate Trust
Office", "Distribution Date", "Downgraded Facility", "Equipment Notes",
"Fee Letter", "Indenture", "Initial Purchasers", "Investment Earnings",
"Liquidity Facility", "Loan Trustee", "▇▇▇▇▇'▇", "Operative Agreements",
"Participation Agreement", "Performing Equipment Note", "Person", "Pool
Balance", "Postponed Notes", "Purchase Agreement", "Rating Agency",
"Registration Rights Agreement", "Regular Distribution Date, "Replacement
Liquidity Facility", "Responsible Officer", "Scheduled Payment", "Special
Payment", "Standard & Poor's", "Stated Interest Rate", "Subordination
Agent", "Taxes", "Threshold Rating", "Transfer", "Trust Agreements,
"Trustee" and "Written Notice".
(c) Interest on Certificates. For all purposes of this Agreement,
each Scheduled Payment with respect to a Class C Certificate shall be deemed to
be comprised of interest and principal components, with the interest component
equalling interest accrued at the Stated Interest Rate for the Class C
Certificates from (i) the later of (x) the date of 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
14
10
considered payable in arrears on such Regular Distribution Date and to be
calculated and allocated in the same manner as interest on the Series C
Equipment Notes.
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01. The Advances. The Liquidity Provider hereby
irrevocably agrees, on the terms and conditions hereinafter set forth, to make
Advances to the Borrower from time to time on any Business Day during the period
from the Effective Date until 12:00 Noon (New York City time) on the Expiry Date
(unless the obligations of the Liquidity Provider shall be earlier terminated in
accordance with the terms of Section 2.04(b)) in an aggregate amount at any time
outstanding not to exceed the Maximum Commitment.
Section 2.02. Making the Advances. (a) Interest Advances shall be
made in one or more Borrowings by delivery to the Liquidity Provider of one or
more written and completed Notices of Borrowing in substantially the form of
Annex I attached hereto, signed by a Responsible Officer of the Borrower, in an
amount not exceeding the Maximum Available Commitment at such time and shall be
used solely for the payment when due of the interest on the Class C Certificates
at the Stated Interest Rate therefor in accordance with Section 3.6(a) of the
Intercreditor Agreement. Each Interest Advance made hereunder shall
automatically reduce the Maximum Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Maximum Available Commitment shall be
reinstated by the amount of such repaid Interest Advance, but not to exceed the
Maximum Commitment; provided, however, that the Maximum Available Commitment
shall not be so reinstated at any time if (i) a Liquidity Event of Default shall
have occurred and be continuing and (ii) there is a Performing Note Deficiency.
(b) [Intentionally Omitted].
(c) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the Liquidity Provider's short-
15
11
term unsecured debt rating issued by either Rating Agency below the Threshold
Rating (as provided for in Section 3.6(c) of the Intercreditor Agreement) unless
a Replacement Liquidity Facility to replace this Agreement shall have been
delivered to the Borrower in accordance with said Section 3.6(c), by delivery to
the Liquidity Provider of a written and completed Notice of Borrowing in
substantially the form of Annex II attached hereto, signed by a Responsible
Officer of the Borrower, in an amount equal to the Maximum Available Commitment
at such time, and shall be used to fund the Class C Cash Collateral Account in
accordance with said Section 3.6(c).
(d) A Final Advance shall be made by the Liquidity Provider without
the necessity of a Notice of Borrowing at the option of the Liquidity Provider
as provided in Section 6.01 in an amount equal to the Maximum Available
Commitment at such time, and shall be used to fund the Class C Cash Collateral
Account (in accordance with Section 3.6(i) of the Intercreditor Agreement).
(e) Each Borrowing (other than under Section 2.02(d)) shall be made
on notice in writing (a "Notice of Borrowing") in substantially the form
required by Section 2.02(a) or 2.02(c), as the case may be, given by the
Borrower to the Liquidity Provider. If a Notice of Borrowing is delivered by the
Borrower in respect of any Borrowing no later than 12:00 Noon (New York City
time) on a Business Day, the Liquidity Provider shall, upon satisfaction of the
conditions precedent set forth in Section 4.02 with respect to a requested
Borrowing, before 12:00 Noon (New York City time) on the first Business Day next
following the day of receipt of such Notice of Borrowing or on such later
Business Day specified in such Notice of Borrowing, make available to the
Borrower, in accordance with its payment instructions, in U.S. dollars and
immediately available funds, the amount of such Borrowing. If a Notice of
Borrowing is delivered by the Borrower in respect of any Borrowing after 12:00
Noon (New York City time) on a Business Day, the Liquidity Provider shall, upon
satisfaction of the conditions precedent set forth in Section 4.02 with respect
to a requested Borrowing, before 12:00 Noon (New York City time) on the second
Business Day next following the day of receipt of such Notice of Borrowing or on
such later Business Day specified by the Borrower in such Notice of Borrowing,
make available to the Borrower, in accordance with its payment instructions, in
U.S. dollars and in immediately available funds, the amount of such Borrowing.
Payments of proceeds of a Borrowing shall be made by wire transfer of
16
12
immediately available funds to the Borrower in accordance with such wire
transfer instructions as the Borrower shall furnish from time to time to the
Liquidity Provider for such purpose. Each Notice of Borrowing shall be
irrevocable and binding on the Borrower.
(f) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the Liquidity
Provider shall be fully discharged of its obligation hereunder with respect to
such Notice of Borrowing, and the Liquidity Provider shall not thereafter be
obligated to make any further Advances hereunder in respect of such Notice of
Borrowing to the Borrower or to any other Person. Following the making of any
Advance pursuant to Section 2.02(c) or (d) hereof to fund the Class C Cash
Collateral Account, the Liquidity Provider shall have no interest in or rights
to the Class C Cash Collateral Account, such Advance or any other amounts from
time to time on deposit in the Class C Cash Collateral Account; provided that
the foregoing shall not affect or impair the obligations of the Subordination
Agent to make the distributions contemplated by Section 3.6(e) or (f) of the
Intercreditor Agreement. By paying to the Borrower proceeds of Advances
requested by the Borrower in accordance with the provisions of this Agreement,
the Liquidity Provider makes no representation as to, and assumes no
responsibility for, the correctness or sufficiency for any purpose of the amount
of the Advances so made and requested.
Section 2.03. Fees. The Borrower agrees to pay to the Liquidity
Provider the fees set forth in the Fee Letter.
Section 2.04. Adjustments or Termination of the Maximum Commitment.
(a) Automatic Adjustments. Promptly following each date on which the Required
Amount is (1) reduced as a result of a reduction in the Pool Balance of the
Class C Certificates or otherwise, (2) increased as a result of an increase in
the Stated Interest Rate or (3) subsequent to such an increase described in
clause (2), reduced pursuant to the definition of "Stated Interest Rate", the
Maximum Commitment shall automatically be reduced or increased, as the case may
be, to an amount equal to such adjusted Required Amount (as calculated by the
Borrower). The Borrower shall give notice of any such automatic reduction or
increase of the Maximum Commitment (substantially in the form of Annex III
hereto) to the Liquidity Provider within two Business Days thereof. The failure
17
13
by the Borrower to furnish any such notice shall not affect such automatic
reduction or increase of the Maximum Commitment.
(b) Termination. Upon the making of any Downgrade Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request any
further Borrowing hereunder.
Section 2.05. Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.06, 2.07 and 2.09 hereof, the Borrower hereby agrees,
without notice of an Advance or demand for repayment from the Liquidity Provider
(which notice and demand are hereby waived by the Borrower), to pay, or to cause
to be paid, to the Liquidity Provider on each date on which the Liquidity
Provider shall make an Interest Advance or the Final Advance, an amount equal to
(a) the amount of such Advance (any such Advance, until repaid, is referred to
herein as an "Unpaid Advance"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07 hereof; provided that if (i) the
Liquidity Provider shall make a Downgrade Advance at any time after making one
or more Interest Advances which shall not have been repaid in accordance with
this Section 2.05 or (ii) this Liquidity Facility shall become a Downgraded
Facility at any time when unreimbursed Interest Advances have reduced the
Maximum Available Commitment to zero, then such Interest Advances shall cease to
constitute Unpaid Advances and shall be deemed to have been changed into an
Applied Downgrade Advance for all purposes of this Agreement (including, without
limitation, for the purpose of determining when such Interest Advance is
required to be repaid to the Liquidity Provider in accordance with Section 2.06
and for the purposes of Section 2.06(b)). The Borrower and the Liquidity
Provider agree that the repayment in full of each Interest Advance and Final
Advance on the date such Advance is made is intended to be a contemporaneous
exchange for new value given to the Borrower by the Liquidity Provider.
Section 2.06. Repayments of Downgrade Advances. (a) Amounts advanced
hereunder in respect of a Downgrade Advance shall be deposited in the Class C
Cash Collateral Account, and invested and withdrawn from the Class C Cash
Collateral Account as set forth in Sections 3.6(c) and (f) of the Intercreditor
Agreement. The Borrower agrees to pay to the Liquidity Provider, on each Regular
Distribution Date, commencing on the first
18
14
Regular Distribution Date after the making of a Downgrade Advance, interest on
the principal amount of any such Downgrade Advance as provided in Section 3.07;
provided, however, that amounts in respect of a Downgrade Advance withdrawn from
the Class C Cash Collateral Account for the purpose of paying interest on the
Class C Certificates in accordance with Section 3.6(f) of the Intercreditor
Agreement (the amount of any such withdrawal being an "Applied Downgrade
Advance") shall thereafter (subject to Section 2.06(b)) be treated as an
Interest Advance under this Agreement for purposes of determining the Applicable
Liquidity Rate for interest payable thereon; provided further, however, that if,
following the making of a Downgrade Advance, the Liquidity Provider delivers a
Notice of Conversion to Final Advance (substantially in the form of Annex IV to
this Agreement) to the Borrower, such Downgrade Advance shall thereafter be
treated as a Final Advance under this Agreement for purposes of determining the
Applicable Liquidity Rate for interest payable thereon. Subject to Sections 2.07
and 2.09 hereof, immediately upon the withdrawal of any amounts from the Class C
Cash Collateral Account on account of a reduction in the Required Amount, the
Borrower shall repay to the Liquidity Provider a portion of the Downgrade
Advances in a principal amount equal to the amount of such reduction, plus
interest on the principal amount prepaid as provided in Section 3.07 hereof.
(b) At any time when an Applied Downgrade Advance (or any portion
thereof) is outstanding, upon the deposit in the Class C Cash Collateral Account
of any amount pursuant to clause "third" of Section 2.4(b) of the Intercreditor
Agreement, clause "third" of Section 3.2 of the Intercreditor Agreement or
clause "fourth" of Section 3.3 of the Intercreditor Agreement (any such amount
being a "Replenishment Amount") for the purpose of replenishing or increasing
the balance thereof up to Required Amount at such time, (i) the aggregate
outstanding principal amount of all Applied Downgrade Advances (and of Downgrade
Advances treated as an Interest Advance for purposes of determining the
Applicable Liquidity Rate for interest payable thereon) shall be automatically
reduced by the amount of such Replenishment Amount and (ii) the aggregate
outstanding principal amount of all Unapplied Downgrade Advances shall be
automatically increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, amounts remaining
19
15
on deposit in the Class C Cash Collateral Account after giving effect to any
Applied Downgrade Advance on the date of such replacement shall be reimbursed to
the Liquidity Provider, but only to the extent such amounts are necessary to
repay in full to the Liquidity Provider all amounts owing to it hereunder.
Section 2.07. Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to the
Liquidity Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider in the order of
priority required by the applicable provisions of Articles II and III of the
Intercreditor Agreement.
Section 2.08. Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time and
the amounts of principal and interest payable hereunder and paid from time to
time in respect thereof; provided, however, that the failure by the Liquidity
Provider to maintain such account or accounts shall not affect the obligations
of the Borrower in respect of Advances.
Section 2.09. Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from amounts that
constitute Scheduled Payments, Special Payments or payments under Section 8.1 of
the Participation Agreements and only to the extent that the Borrower shall have
sufficient income or proceeds therefrom to enable the Borrower to make payments
in accordance with the terms hereof after giving effect to the priority of
payments provisions set forth in the Intercreditor Agreement. The Liquidity
Provider agrees that it will look solely to such amounts to the extent available
for distribution to it as provided in the Intercreditor Agreement and this
Agreement and that the Borrower, in its individual capacity, is not personally
liable to it for any amounts payable or liability under this Agreement except as
expressly provided in this Agreement, the Intercreditor Agreement or any
Participation Agreement. Amounts on deposit in the
20
16
Class C Cash Collateral Account shall be available to the Borrower to make
payments under this Agreement only to the extent and for the purposes expressly
contemplated in Section 3.6(f) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01. Increased Costs. The Borrower shall pay to the
Liquidity Provider from time to time such amounts as may be necessary to
compensate the Liquidity Provider for any increased costs incurred by the
Liquidity Provider (or its head office) which are attributable to its making or
maintaining any Advances hereunder or its obligation to make any such Advances
hereunder, or any reduction in any amount receivable by the Liquidity Provider
under this Agreement or the Intercreditor Agreement in respect of any such
Advances or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), (A) resulting from any
change after the date of this Agreement in U.S. federal or state, or any
foreign, laws or regulations (including Regulation D), or the adoption or making
after the date of this Agreement of any interpretations, directives, or
requirements applying to a class of banks including the Liquidity Provider under
any U.S. federal or state, or any foreign, laws or regulations (whether or not
having the force of law) by any court, central bank or monetary authority
charged with the interpretation or administration thereof (a "Regulatory
Change"), which: (1) changes the basis of taxation of any amounts payable to the
Liquidity Provider under this Agreement in respect of any such Advances (other
than Excluded Taxes); (2) imposes on the Liquidity Provider any other condition
regarding this Agreement or any such Advance (other than with respect to Taxes)
or (3) imposes or modifies any reserve, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, the Liquidity Provider (or its head office) (including any
such Advances or any deposits referred to in the definition of LIBOR Rate) and
(B) which the Liquidity Provider has certified to the Borrower and Continental
are not included or reflected in the determination of the LIBOR Rate or the Base
Rate. The Liquidity Provider agrees to use reasonable efforts (consistent with
applicable legal and regulatory restrictions) to change the jurisdiction of its
Lending Office if making such change would avoid the need for, or reduce the
amount of, any
21
17
amount payable under this Section that may thereafter accrue and would not, in
the reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event
occurring after the date of this Agreement that will entitle the Liquidity
Provider to compensation pursuant to this Section 3.01 as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation, which notice shall describe in reasonable detail the calculation
of the amounts owed under this Section 3.01 and contain a representation of the
Liquidity Provider to the Borrower and to Continental to the effect that it is
the customary practice of the Liquidity Provider to charge its customers for
Additional Costs in respect of such event. Without limiting the Liquidity
Provider's notice obligations under the preceding sentence, the Borrower shall
not be required to compensate the Liquidity Provider pursuant to this Section
3.01 for any Additional Costs incurred more than sixty days prior to the date
that the Liquidity Provider notifies the Borrower of the Regulatory Change
giving rise to such Additional Costs and of the Liquidity Provider's intention
to claim compensation therefor. Determinations by the Liquidity Provider for
purposes of this Section 3.01 of the effect of any Regulatory Change on its
costs of making or maintaining Advances or on amounts receivable by it in
respect of Advances, and of the additional amounts required to compensate the
Liquidity Provider in respect of any Additional Costs, shall be prima facie
evidence of the amount owed under this Section.
Section 3.02. Capital Adequacy. If (1) the adoption, after the date
hereof, of any applicable governmental law, rule or regulation regarding capital
adequacy of banks or bank holding companies (or any change therein), (2) any
change, after the date hereof, in the interpretation or administration of any
such law, rule or regulation by any central bank or other governmental authority
or comparable agency charged with the interpretation or administration thereof
or (3) compliance by the Liquidity Provider (or its head office) or any
corporation controlling the Liquidity Provider with any applicable guideline or
request of general applicability, issued after the date hereof, by any central
bank or other governmental authority (whether or not having the force of law)
that constitutes a change of the nature described in clause (2), has the effect
of requiring an increase
22
18
in the amount of capital required to be maintained by the Liquidity Provider or
any corporation controlling the Liquidity Provider, and such increase is based
upon the Liquidity Provider's obligations hereunder and other similar
obligations, the Borrower shall pay to the Liquidity Provider from time to time
such additional amount or amounts as are necessary to compensate the Liquidity
Provider for such portion of such increase as shall be reasonably allocable to
the Liquidity Provider's obligations to the Borrower hereunder. The Liquidity
Provider agrees to use reasonable efforts (consistent with applicable legal and
regulatory restrictions) to change the jurisdiction of its Lending Office if
making such change would avoid the need for, or reduce the amount of, any amount
payable under this Section that may thereafter accrue and would not, in the
reasonable judgment of the Liquidity Provider, be otherwise materially
disadvantageous to the Liquidity Provider.
The Liquidity Provider will notify the Borrower of any event
occurring after the date of this Agreement that will entitle the Liquidity
Provider to compensation pursuant to this Section 3.02 as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation, which notice shall describe in reasonable detail the calculation
of the amounts owed under this Section 3.02 and contain a representation of the
Liquidity Provider to the Borrower and to Continental to the effect that it is
the customary practice of the Liquidity Provider to charge its customers for
compensation in respect of such event. Without limiting the Liquidity Provider's
notice obligations under the preceding sentence, the Borrower shall not be
required to compensate the Liquidity Provider, in respect of an event described
in this Section 3.02, for any amount attributable to any period which is more
than sixty days prior to the date that the Liquidity Provider notifies the
Borrower of such event and of the Liquidity Provider's intention to claim
compensation therefor. Determinations by the Liquidity Provider for purposes of
this Section 3.02 of the effect of any increase in the amount of capital
required to be maintained by the bank and of the amount allocable to the
Liquidity Provider's obligations to the Borrower hereunder shall be prima facie
evidence of the amounts owed under this Section.
Section 3.03. Payments Free of Deductions. (a) All payments made by
the Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts,
23
19
duties, charges, fees, deductions, withholdings, restrictions or conditions of
any nature whatsoever now or hereafter imposed, levied, collected, withheld or
assessed, excluding Excluded Taxes (such non-excluded taxes being referred to
herein, collectively, as "Non-Excluded Taxes" and, individually, as a
"Non-Excluded Tax"). If any Non-Excluded Taxes are required to be withheld from
any amounts payable to the Liquidity Provider under this Agreement, the amounts
so payable to the Liquidity Provider shall be increased to the extent necessary
to yield to the Liquidity Provider (after payment of all Non-Excluded Taxes and
any net increase in Taxes imposed on the Liquidity Provider as a result of any
payment made pursuant to this Section 3.03) interest or any other such amounts
payable under this Agreement at the rates or in the amounts specified in this
Agreement.
If as a result of any Tax indemnified or payment made pursuant to
this Section 3.03, the Liquidity Provider shall realize any tax savings, whether
by credit, deduction or refund (including by way of offset), then the Liquidity
Provider shall pay to Borrower an amount which, after subtraction of any further
Tax savings the Liquidity Provider realizes as a result of the payment thereof
and the addition of any Tax detriment suffered by the Liquidity Provider as a
result of such payment, plus, in the case of any refund (including by way of
offset) of any taxes giving rise to a payment hereunder, interest actually
received or credited thereon, provided that if any Tax savings giving rise to a
payment pursuant to this paragraph is subsequently lost or disallowed, the
Borrower shall, upon written notice, repay such amounts to the Liquidity
Provider provided further, that the payment of any amount to the Borrower
pursuant to this Section 3.03(a) shall not be required if a Final Advance has
been made and not yet reimbursed, but shall be deferred until such Final Advance
has been fully reimbursed or shall be credited against the reimbursement
obligation of the Borrower for such Final Advance.
The determination of any amount payable pursuant to this Section
3.03(a) shall be made by the Liquidity Provider and set forth in a certificate
of an officer of the Liquidity Provider which certificate shall be final and
conclusive, absent error manifest on the face of such certificate, provided that
the Borrower may request verification of such payment amount, in which case the
outside accounting firm regularly employed by the Liquidity Provider shall be
requested to verify the calculation of such payment amount within 30 days, at
the expense of the
24
20
Borrower, unless the payment amount is determined to be in error by more than
five percent, in which case such expense shall be paid by the Liquidity
Provider. The Liquidity Provider shall have sole control over the positions
taken on its tax returns and filings. The Liquidity Provider shall in no event
be required to disclose its tax returns or filings or any related records other
than to the verifying accounting firm.
Whenever any Non-Excluded Tax is payable by the Borrower, promptly
thereafter, the Borrower shall send to the Liquidity Provider copies of tax
receipts evidencing such payment by the Borrower, if reasonably available to it,
or other evidence of payment reasonably requested by the Liquidity Provider.
(b) The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would avoid
the need for, or reduce the amount of, any such additional amounts payable under
Section 3.03(a) that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous to the
Liquidity Provider. From time to time upon the reasonable request of the
Borrower, the Liquidity Provider agrees to provide to the Borrower, to the
extent the Liquidity Provider is legally entitled to do so, two original
Internal Revenue Service Forms 1001 or 4224, as appropriate, or any successor or
other form prescribed by the Internal Revenue Service, certifying that the
Liquidity Provider is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement.
Section 3.04. Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New York
City time) on the day when due. The Borrower shall make all such payments in
lawful money of the United States of America, to the Liquidity Provider in
immediately available funds, by wire transfer to The Bank of New York, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ABA No. ▇▇▇-▇▇▇-▇▇▇, for the account of
Kredietbank New York, Account No. 802-▇▇▇▇▇▇▇, Attention: Loan Administration
(referencing Continental Airlines 1997-2 Liquidity Facility).
Section 3.05. Computations. All computations of interest based on
the Base Rate shall be made on the basis of a
25
21
year of 365 or 366 days, as the case may be, and all computations of interest
based on the LIBOR Rate shall be made on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is payable.
Section 3.06. Payment on Non-Business Days. Whenever any payment to
be made hereunder (other than a payment of interest on LIBOR Advances) shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be.
Section 3.07. Interest. (a) Subject to Section 2.09, the Borrower
shall pay, or shall cause to be paid, without duplication, interest on (i) the
unpaid principal amount of each Advance from and including the date of such
Advance (or, in the case of an Applied Downgrade Advance, from and including the
date on which the amount thereof was withdrawn from the Class C Cash Collateral
Account to pay interest on the Class C Certificates) to but excluding the date
such principal amount shall be paid in full (or, in the case of an Applied
Downgrade Advance, the date on which the Class C Cash Collateral Account is
fully replenished in respect of such Advance) and (ii) any other amount due
hereunder (whether fees, commissions, expenses or other amounts or, to the
extent permitted by law, installments of interest on Advances or any such other
amount) which is not paid when due (whether at stated maturity, by acceleration
or otherwise) from and including the due date thereof to but excluding the date
such amount is paid in full, in each such case, at a fluctuating interest rate
per annum for each day equal to the Applicable Liquidity Rate (as defined below)
for such Advance or such other amount as in effect for such day, but in no event
at a rate per annum greater than the maximum rate permitted by applicable law;
provided, however, that, if at any time the otherwise applicable interest rate
as set forth in this Section 3.07 shall exceed the maximum rate permitted by
applicable law, then any subsequent reduction in such interest rate will not
reduce the rate of interest payable pursuant to this Section 3.07 below the
maximum rate permitted by applicable law until the total amount of interest
accrued equals the amount of interest that would have accrued if such otherwise
applicable interest rate as set forth in this Section 3.07 had at all times been
in effect.
26
22
(b) Each Advance will be either a Base Rate Advance or a LIBOR
Advance as provided in this Section. Each such Advance will be a Base Rate
Advance for the period from the date of its borrowing to (but excluding) the
third Business Day following the Liquidity Provider's receipt of the Notice of
Borrowing for such Advance (or, in the case of a Final Advance, three Business
Days following the date of such Final Advance). Thereafter, such Advance shall
be a LIBOR Advance; provided that the Borrower (at the direction of the
Controlling Party (so long as the Controlling Party is not the Liquidity
Provider)) may convert the Final Advance into a Base Rate Advance on the last
day of an Interest Period for such Advance by giving the Liquidity Provider no
less than four Business Days' prior written notice of such election.
(c) Each LIBOR Advance shall bear interest during each Interest
Period at a rate per annum equal to the LIBOR Rate for such Interest Period plus
the Applicable Margin for such LIBOR Advance, payable in arrears on the last day
of such Interest Period and, in the event of the payment of principal of such
LIBOR Advance on a day other than such last day, on the date of such payment (to
the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by applicable
law, installments of interest on Advances but excluding Advances) shall bear
interest at a rate per annum equal to the Base Rate until paid.
(f) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any Advance
or other amount shall be referred to as the "Applicable Liquidity Rate".
Section 3.08. Replacement of Borrower. Subject to Section 5.02(b),
from time to time and subject to the successor
27
23
Borrower's meeting the eligibility requirements set forth in Section 6.9 of the
Intercreditor Agreement applicable to the Subordination Agent, upon the
effective date and time specified in a written and completed Notice of
Replacement Subordination Agent in substantially the form of Annex V attached
hereto (a "Notice of Replacement Subordination Agent") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09. Funding Loss Indemnification. The Borrower shall pay
to the Liquidity Provider, upon the request of the Liquidity Provider, such
amount or amounts as shall be sufficient (in the reasonable opinion of the
Liquidity Provider) to compensate it for any loss, cost, or expense incurred by
reason of the liquidation or redeployment of deposits or other funds acquired by
the Liquidity Provider to fund or maintain any LIBOR Advance (but excluding loss
of anticipated profits) incurred as a result of:
(1) Any repayment of a LIBOR Advance, or any conversion of a LIBOR
Advance to a Base Rate Advance, on a date other than the last day of the
Interest Period for such Advance; or
(2) Any failure by the Borrower to borrow a LIBOR Advance on the
date for borrowing specified in the relevant notice under Section 2.02.
Section 3.10. Illegality. Notwithstanding any other provision in
this Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency, shall make it unlawful
or impossible for the Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances, then upon notice to the Borrower by the Liquidity
Provider, the outstanding principal amount of each LIBOR Advance shall be
converted to a Base Rate Advance (a) immediately upon demand of the Liquidity
Provider, if such change or compliance with such request, in the judgment of the
Liquidity Provider, requires immediate conversion; or (b) at the
28
24
expiration of the last Interest Period for such LIBOR Advance to expire before
the effective date of any such change or request if such notice of the Liquidity
Provider is provided to the Borrower prior to such expiration date, and
otherwise at the expiration of the Interest Period for such LIBOR Advance in
effect on the date of receipt of such notice of the Liquidity Provider. In the
event any change of the nature described in the preceding sentence shall make it
unlawful or impossible for the Liquidity Provider (or its Lending Office) to
maintain or fund its Base Rate Advances, the Liquidity Provider shall have the
right to cause a Replacement Liquidity Facility to be substituted for this
Agreement, subject to (i) the satisfaction of the conditions precedent to the
effectiveness of, and the other provisions regarding, a Replacement Liquidity
Facility set forth in Section 3.6(e) of the Intercreditor Agreement and (ii)
such Replacement Liquidity Facility and Replacement Liquidity Provider being
reasonably acceptable to Continental.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following (in the case of each document delivered
pursuant to paragraphs (i), (ii) and (iii) below), in form and substance
satisfactory to the Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto;
(iii) Fully executed copies of each of the Operative
Agreements executed and delivered on or before the Closing Date
(other than this Agreement and the Intercreditor Agreement) which
are in full force and effect in accordance with their respective
terms;
29
25
(iv) A copy of the Offering Memorandum, with copies of the
Appraisals attached thereto, and specimen copies of the Class C
Certificates;
(v) Evidence that, on the Effective Date, the Class A
Certificates, the Class B Certificates, the Class C Certificates and
the Class D Certificates will receive long-term credit ratings from
▇▇▇▇▇'▇ of not lower than AA, A, BBB- and BB, respectively, and from
Standard & Poor's of not lower than A1, A3, Baa2 and Ba2,
respectively;
(vi) An executed copy of each document, instrument,
certificate and opinion delivered on or before the Closing Date
pursuant to the Class C Trust Agreement, the Intercreditor Agreement
and the other Operative Agreements (together with, in the case of
each such opinion, other than the opinion of counsel for the Initial
Purchasers, a letter from the counsel rendering such opinion to the
effect that the Liquidity Provider is entitled to rely on such
opinion as of its date as if it were addressed to the Liquidity
Provider);
(vii) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order
to establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Trustees, the Borrower and the
Liquidity Provider created by the Operative Agreements executed and
delivered on or prior to the Closing Date;
(viii) An agreement from Continental, pursuant to which (i)
Continental agrees to provide copies of quarterly financial
statements and audited annual financial statements to the Liquidity
Provider, and such other information as the Liquidity Provider shall
reasonably request with respect to the transactions contemplated by
the Operative Agreements, in each case,
30
26
only to the extent that Continental is obligated to provide such
information pursuant to Section 8.04(a) of the Trust Agreements and
(ii) Continental agrees to allow the Liquidity Provider to inspect
Continental's books and records regarding such transactions, and to
discuss such transactions with officers and employees of
Continental; and
(ix) Such other documents, instruments, opinions and approvals
as the Liquidity Provider shall have reasonably requested.
(b) The following statements shall be true on and as of the
Effective Date:
(i) The representations and warranties contained in the
Participation Agreements (other than the Participation Agreements
with respect to any Postponed Notes) of each party thereto are true
and correct on and as of the Effective Date as though made on and as
of the Effective Date; and
(ii) No event has occurred and is continuing, or would result
from the entering into of this Agreement or the making of any
Advance, which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of
all fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Certificates
under the Trust Agreements shall have been satisfied, all conditions
precedent to the effectiveness of the other Liquidity Facilities shall
have been satisfied, and all conditions precedent to the purchase of the
Certificates by the Initial Purchasers under the Purchase Agreement shall
have been satisfied (unless any of such conditions precedent shall have
been waived by the Initial Purchasers).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
31
27
Section 2.01 have been satisfied or waived (other than this Section
4.01(e)).
Section 4.02. Conditions Precedent to Borrowing. The obligation of
the Liquidity Provider to make an Advance on the occasion of each Borrowing
shall be subject to the conditions precedent that the Effective Date shall have
occurred and, except in the case of a Final Advance, prior to the date of such
Borrowing, the Borrower shall have delivered a Notice of Borrowing which
conforms to the terms and conditions of this Agreement and has been completed as
may be required by the relevant form of the Notice of Borrowing for the type of
Advance requested.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will, unless the Liquidity
Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements. Punctually pay or
cause to be paid all amounts payable by it under this Agreement and the
other Operative Agreements and observe and perform in all material
respects the conditions, covenants and requirements applicable to it
contained in this Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's
books and records with respect to such transactions and to meet with
officers and employees of the Borrower to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness, such Operative Agreements entered into after
the date hereof as
32
28
from time to time may be reasonably requested by the Liquidity Provider.
Section 5.02. Negative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any Maximum
Commitment hereunder or the Borrower shall have any obligation to pay any amount
to the Liquidity Provider hereunder, the Borrower will not appoint or permit or
suffer to be appointed any successor Borrower without the written consent of the
Liquidity Provider, which consent shall not be unreasonably withheld.
ARTICLE VI
LIQUIDITY EVENTS OF DEFAULT
Section 6.01. Liquidity Events of Default. If (a) any Liquidity
Event of Default has occurred and is continuing and (b) there is a Performing
Note Deficiency, the Liquidity Provider may, at its option, make a Final Advance
to the Borrower before 12:00 Noon (New York City time) on a Business Day in
accordance with Section 2.02(d) whereupon (i) the Liquidity Provider shall have
no further obligation to make Advances hereunder, (ii) all other outstanding
Advances shall be automatically converted into Final Advances for purposes of
determining the Applicable Liquidity Rate for interest payable thereon, and
(iii) subject to Sections 2.07 and 2.09 hereof, all Advances (including, without
limitation, any Downgrade Advance and Applied Downgrade Advance), any accrued
interest thereon and any other amounts outstanding hereunder shall become
immediately due and payable to the Liquidity Provider. Any payment in respect of
a Final Advance shall be made in the lawful money of the United States of
America, to the Borrower in immediately available funds, by wire transfer to
Wilmington Trust Company, One ▇▇▇▇▇▇ Square, ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ABA No. ▇▇▇-▇▇▇-▇▇▇, Account No. 42216-1, Attention: Corporate
Trust Administration, Reference: Continental 1997-2 Class C Cash Collateral
Account (or to such other account as the Borrower may from time to time
designate to the Liquidity Provider for such purpose).
ARTICLE VII
MISCELLANEOUS
Section 7.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure
33
29
by the Borrower therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Liquidity Provider, and, in the case of an
amendment or of a waiver by the Borrower, the Borrower, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 7.02. Notices, Etc. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telecopier and mailed or delivered or sent by telecopier):
Borrower: WILMINGTON TRUST COMPANY
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇ ▇▇▇▇
Liquidity Provider: KREDIETBANK N.V.
New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Manager
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when deposited
in the mails addressed as specified above, and (iii) if given by other means,
when delivered at the address specified above, except that written notices to
the Liquidity Provider pursuant to the provisions of Articles II and III hereof
shall not be effective until received by the Liquidity Provider. A copy of all
notices delivered hereunder to either party shall in addition be delivered to
each of the parties to the Participation Agreements at their respective
addresses set forth therein.
Section 7.03. No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under this
Agreement shall operate as a
34
30
waiver thereof; nor shall any single or partial exercise of any right under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
Section 7.04. Further Assurances. The Borrower agrees to do such
further acts and things and to execute and deliver to the Liquidity Provider
such additional assignments, agreements, powers and instruments as the Liquidity
Provider may reasonably require or deem advisable to carry into effect the
purposes of this Agreement and the other Operative Agreements or to better
assure and confirm unto the Liquidity Provider its rights, powers and remedies
hereunder and under the other Operative Agreements.
Section 7.05. Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 of the Participation Agreements. In addition,
the Borrower agrees to indemnify, protect, defend and hold harmless the
Liquidity Provider from, against and in respect of, and shall pay on demand, all
Expenses of any kind or nature whatsoever (other than any Expenses of the nature
described in Sections 3.01, 3.02 or 7.07 hereof or in the Fee Letter (regardless
of whether indemnified against pursuant to said Sections or in such Fee
Letter)), that may be imposed, incurred by or asserted against any Liquidity
Indemnitee, in any way relating to, resulting from, or arising out of or in
connection with any action, suit or proceeding by any third party against such
Liquidity Indemnitee and relating to this Agreement, the Fee Letter, the
Intercreditor Agreement or any Participation Agreement; provided, however, that
the Borrower shall not be required to indemnify, protect, defend and hold
harmless any Liquidity Indemnitee in respect of any Expense of such Liquidity
Indemnitee to the extent such Expense is (i) attributable to the gross
negligence or willful misconduct of such Liquidity Indemnitee or any other
Liquidity Indemnitee, (ii) ordinary and usual operating overhead expense or
(iii) attributable to the failure by such Liquidity Indemnitee or any other
Liquidity Indemnitee to perform or observe any agreement, covenant or condition
on its part to be performed or observed in this Agreement, the Intercreditor
Agreement, the Fee Letter or any other Operative Agreement to which it is a
party. The indemnities contained in such Section 8.1, and the provisions of
35
31
Sections 3.01, 3.02, 3.03, 3.09, 7.05 and 7.07 hereof, shall survive the
termination of this Agreement.
Section 7.06. Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers, employees, directors or Affiliates
shall be liable or responsible for: (i) the use which may be made of the
Advances or any acts or omissions of the Borrower or any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (iii) the making of Advances by the Liquidity Provider against
delivery of a Notice of Borrowing and other documents which do not comply with
the terms hereof; provided, however, that the Borrower shall have a claim
against the Liquidity Provider, and the Liquidity Provider shall be liable to
the Borrower, to the extent of any damages suffered by the Borrower which were
the result of (A) the Liquidity Provider's willful misconduct or negligence in
determining whether documents presented hereunder comply with the terms hereof,
or (B) any breach by the Liquidity Provider of any of the terms of this
Agreement, including, but not limited to, the Liquidity Provider's failure to
make lawful payment hereunder after the delivery to it by the Borrower of a
Notice of Borrowing strictly complying with the terms and conditions hereof.
(b) Neither the Liquidity Provider nor any of its officers,
employees, director or Affiliates shall be liable or responsible in any respect
for (i) any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with this
Agreement or any Notice of Borrowing delivered hereunder, or (ii) any action,
inaction or omission which may be taken by it in good faith, absent willful
misconduct or negligence (in which event the extent of the Liquidity Provider's
potential liability to the Borrower shall be limited as set forth in the
immediately preceding paragraph), in connection with this Agreement or any
Notice of Borrowing.
Section 7.07. Costs, Expenses and Taxes. The Borrower agrees to pay,
or cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses (including, without limitation, the reasonable fees and
expenses of outside counsel for the Liquidity Provider) of the Liquidity
36
32
Provider in connection with the preparation, negotiation, execution, delivery,
filing and recording of this Agreement, any other Operative Agreement and any
other documents which may be delivered in connection with this Agreement and (B)
on demand, all reasonable costs and expenses (including reasonable counsel fees
and expenses) of the Liquidity Provider in connection with (i) the enforcement
of this Agreement or any other Operative Agreement, (ii) the modification or
amendment of, or supplement to, this Agreement or any other Operative Agreement
or such other documents which may be delivered in connection herewith or
therewith (whether or not the same shall become effective) or (iii) any action
or proceeding relating to any order, injunction, or other process or decree
restraining or seeking to restrain the Liquidity Provider from paying any amount
under this Agreement, the Intercreditor Agreement or any other Operative
Agreement or otherwise affecting the application of funds in the Cash Collateral
Accounts. In addition, the Borrower shall pay any and all recording, stamp and
other similar taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of this Agreement, any other
Operative Agreement and such other documents, and agrees to save the Liquidity
Provider harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees.
Section 7.08. Binding Effect; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower and the Liquidity
Provider and their respective successors and assigns, except that neither the
Liquidity Provider (except as otherwise provided in this Section 7.08) nor
(except as contemplated by Section 3.08) the Borrower shall have the right to
assign its rights or obligations hereunder or any interest herein without the
prior written consent of the other party, subject to the requirements of Section
7.08(b). The Liquidity Provider may grant participations herein or in any of its
rights and security hereunder (including, without limitation, funded
participations and participations in rights to receive interest payments
hereunder) and under the other Operative Agreements to such Persons as the
Liquidity Provider may in its sole discretion select, subject to the
requirements of Section 7.08(b). No such granting of participations by the
Liquidity Provider, however, will relieve the Liquidity Provider of its
obligations hereunder. In connection with any participation or any proposed
participation, the Liquidity Provider may disclose to the participant or the
37
33
proposed participant any information that the Borrower is required to deliver or
to disclose to the Liquidity Provider pursuant to this Agreement. The Borrower
acknowledges and agrees that the Liquidity Provider's source of funds may derive
in part from its participants (other than Continental). Accordingly, references
in this Agreement and the other Operative Agreements to determinations, reserve
and capital adequacy requirements, increased costs, reduced receipts, additional
amounts due pursuant to Section 3.03 and the like as they pertain to the
Liquidity Provider shall be deemed also to include those of each of its
participants (subject, in each case, to the maximum amount that would have been
incurred by or attributable to the Liquidity Provider directly if the Liquidity
Provider, rather than the participant, had held the interest participated).
(b) If, pursuant to subsection (a) above, the Liquidity Provider
sells any participation in this Agreement to any bank or other entity (each, a
"Transferee"), then, concurrently with the effectiveness of such participation,
the Transferee shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld by the
Borrower or the Liquidity Provider with respect to any payments to be made to
such Transferee in respect of this Agreement, (ii) furnish to the Liquidity
Provider and the Borrower either (x) a statement that it is incorporated under
the laws of the United States or a state thereof or (y) if it is not so
incorporated, two copies of a properly completed United States Internal Revenue
Service Form 4224 or Form 1001, as appropriate, or other applicable form,
certificate or document prescribed by the Internal Revenue Service certifying,
in each case, such Transferee's entitlement to a complete exemption from United
States federal withholding tax in respect of any and all payments to be made
hereunder, and (iii) agree (for the benefit of the Liquidity Provider and the
Borrower) to provide the Liquidity Provider and the Borrower a new Form 4224 or
Form 1001, as appropriate, (A) on or before the date that any such form expires
or becomes obsolete or (B) after the occurrence of any event requiring a change
in the most recent form previously delivered by it and prior to the immediately
following due date of any payment by the Borrower hereunder, certifying in the
case of a Form 1001 or Form 4224 that such Transferee is entitled to a complete
exemption from United States federal withholding tax on payments under this
Agreement. Unless
38
34
the Borrower has received forms or other documents reasonably satisfactory to it
(and required by applicable law) indicating that payments hereunder are not
subject to United States federal withholding tax, the Borrower will withhold
taxes as required by law from such payments at the applicable statutory rate.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Advances made by the
Borrower to the Liquidity Provider in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect of such
assigned Advance to the extent of such payment. No such assignment shall release
the Liquidity Provider from its obligations hereunder.
Section 7.09. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 7.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative
Agreement, or for recognition and enforcement of any judgment in
respect hereof or thereof, to the nonexclusive general jurisdiction
of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and the
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection
39
35
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) if such party does not maintain an office for the
transaction of its business in New York, agrees that service of
process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to each party hereto at its
address set forth in Section 7.02 hereof, or at such other address
of which the Liquidity Provider shall have been notified pursuant
thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to ▇▇▇ in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS
BEING ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may have
from the jurisdiction of the courts of the United States or of any State and
waives any immunity any of its properties located in the United States may have
from attachment or execution upon a judgement entered by any such court under
the United States Foreign Sovereign Immunities Act of 1976 or any similar
successor legislation.
40
36
Section 7.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13. Entirety. This Agreement, the Intercreditor Agreement
and the other Operative Agreements to which the Liquidity Provider is a party
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements of
such parties.
Section 7.14. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 7.15. LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE
LIQUIDITY PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO
DELIVER NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL
BE UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
41
37
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first set forth above.
WILMINGTON TRUST COMPANY, not in
its individual capacity but
solely as Subordination Agent,
as agent and trustee for the
Class C Trust, as Borrower
By:
---------------------------------
Name:
Title:
KREDIETBANK N.V., acting through
its New York branch,
as Liquidity Provider
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
42
Annex I to
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
borrower (the "Borrower"), hereby certifies to KREDIETBANK N.V., acting through
its New York branch (the "Liquidity Provider"), with reference to the Revolving
Credit Agreement (1997-2C) dated as of June 25, 1997, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of an Interest Advance by the Liquidity Provider to be used for the
payment of the interest on the Class C Certificates which was payable on
____________, ____ (the "Distribution Date") in accordance with the terms
and provisions of the Class C Trust Agreement and the Class C Certificates
and has not been paid pursuant to clause seventh of Section 3.2 of the
Intercreditor Agreement or clause ninth of Section 3.3 of the
Intercreditor Agreement, which Advance is requested to be made on
____________, ____.
(3) The amount of the Interest Advance requested hereby (i) is
$_______________.__, to be applied in respect of the payment of the
interest which was due and payable on the Class C Certificates on the
Distribution Date, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class A Certificates, the
Class B Certificates, the Class C Certificates or the Class D Certificates
or interest on the Class A Certificates, the Class B Certificates or the
Class D Certificates, (iii) was computed in accordance with the provisions
of the Class C Certificates, the Class C Trust Agreement and the
Intercreditor Agreement (a copy of which computation is attached hereto as
Schedule I), (iv) does not exceed the Maximum Available Commitment on the
date hereof and (v) has not been and is not the subject of a prior or
contemporaneous Notice of Borrowing.
43
I-2
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Section 3.6(b) of the Intercreditor Agreement, (b) no portion
of such amount shall be applied by the Borrower for any other purpose and
(c) no portion of such amount until so applied shall be commingled with
other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby
be a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Maximum Available Commitment by
an amount equal to the amount of the Interest Advance requested to be made
hereby as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the amounts
available to be borrowed pursuant to a subsequent Advance.
44
I-3
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but
solely as Subordination Agent,
as Borrower
By:
---------------------------------
Name:
Title:
45
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with Interest Advance Notice of
Borrowing]
46
Annex II to
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby certifies to KREDIETBANK N.V.,
acting through its New York branch (the "Liquidity Provider"), with reference to
the Revolving Credit Agreement (1997-2C) dated as of June 25, 1997, between the
Borrower and the Liquidity Provider (the "Liquidity Agreement"); the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of the Downgrade Advance by the Liquidity Provider to be used for
the funding of the Class C Cash Collateral Account in accordance with
Section 3.6(c) of the Intercreditor Agreement by reason of the downgrading
of the short-term unsecured debt rating of the Liquidity Provider issued
by either Rating Agency below the Threshold Rating, which Advance is
requested to be made on __________, ____.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_______________.__, which equals the Maximum Available Commitment on the
date hereof and is to be applied in respect of the funding of the Class C
Cash Collateral Account in accordance with Section 3.6(c) of the
Intercreditor Agreement, (ii) does not include any amount with respect to
the payment of the principal of, or premium on, the Class C Certificates,
or principal of, or interest or premium on, the Class A Certificates, the
Class B Certificates or the Class D Certificates, (iii) was computed in
accordance with the provisions of the Class C Certificates, the Class C
Trust Agreement and the Intercreditor Agreement (a copy of which
computation is attached hereto as Schedule I), and (iv) has not been and
is not the subject of a prior or contemporaneous Notice of Borrowing under
the Liquidity Agreement.
47
II-2
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class C
Cash Collateral Account and apply the same in accordance with the terms of
Section 3.6(c) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other
funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby
be a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Advance on the third Business Day following your receipt of this
notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of the
Liquidity Provider to make further Advances under the Liquidity Agreement; and
(B) following the making by the Liquidity Provider of the Downgrade Advance
requested by this Notice of Borrowing, the Borrower shall not be entitled to
request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the ____ day of _________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but
solely as Subordination Agent,
as Borrower
By:
---------------------------------
Name:
Title:
48
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
49
Annex III to
Revolving Credit Agreement
NOTICE OF AUTOMATIC REDUCTION OR INCREASE OF COMMITMENT
[Date]
Ladies and Gentlemen:
The undersigned, a duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby notifies Kredietbank N.V., acting
through its New York branch (the "Liquidity Provider"), with reference to the
Revolving Credit Agreement dated as of June 25, 1997, between the Borrower and
the Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined or
referenced), that, pursuant to Section 2.04(a) of the Liquidity Agreement, the
Commitment has been automatically reduced or increased to $_________.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the _ day of __________, _____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but
solely as Subordination Agent,
as agent and trustee for the
Class C Trust, as Borrower
By:
---------------------------------
Name:
Title:
50
Annex IV to
Revolving Credit Agreement
NOTICE OF CONVERSION TO FINAL ADVANCE
[Date]
WILMINGTON TRUST COMPANY
as Subordination Agent, as Borrower
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Revolving Credit Agreement dated as of June 25, 1997, between Wilmington
Trust Company, as Subordination Agent, as agent and trustee for the Continental
Airlines Pass Through Trust, 1997-2C, as Borrower, and Kredietbank N.V., acting
through its New York branch (the "Liquidity Agreement")
--------------------------------------------------------------------------------
Ladies and Gentlemen:
You are hereby notified that pursuant to Section 2.06 of the
Liquidity Agreement, by reason of the occurrence of a Liquidity Event of Default
and the existence of a Performing Note Deficiency (each as defined therein), we
are giving this notice to you in order to convert the existing Downgrade Advance
to a Final Advance.
51
IV-2
THIS NOTICE IS THE "NOTICE OF CONVERSION TO FINAL ADVANCE" PROVIDED
FOR UNDER THE LIQUIDITY AGREEMENT.
Very truly yours,
KREDIETBANK N.V.,
NEW YORK BRANCH
as Liquidity Provider
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
cc: Wilmington Trust Company,
as Class C Trustee
52
Annex V to
Revolving Credit Agreement
NOTICE OF REPLACEMENT SUBORDINATION AGENT
[Date]
Attention:
Revolving Credit Agreement dated as of June 25, 1997, between
Wilmington Trust Company, as Subordination Agent, as agent and trustee for the
Continental Airlines Pass Through Trust, 1997-2C, as Borrower, and Kredietbank
N.V., acting through its New York branch (the "Liquidity Agreement")
--------------------------------------------------------------------------------
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
------------------------------
[Name of Transferee]
------------------------------
[Address of Transferee]
all rights and obligations of the undersigned as Borrower under the Liquidity
Agreement referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement, pursuant to the terms of Section 8.1 of
the Intercreditor Agreement.
By this transfer, all rights of the undersigned as Borrower under
the Liquidity Agreement are transferred to the transferee and the transferee
shall hereafter have the sole rights and obligations as Borrower thereunder. The
undersigned shall pay any costs and expenses of such transfer, including, but
not limited to, transfer taxes or governmental charges.
53
V-2
We ask that this transfer be effective as of _______________, ____.
WILMINGTON TRUST COMPANY, not in
its individual capacity but
solely as Subordination Agent,
as Borrower
By:
---------------------------------
Name:
Title: