Reference Number: SQB38
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Date:
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June
9, 2006
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To:
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Wilmington
Trust Company
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From:
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Xxxxxx
Xxxxxxx Capital Services Inc.
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Subject:
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ABOVE
CAP LIQUIDITY FACILITY CONFIRMATION
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Reference
Number: SQB38
Ladies
and Gentlemen:
The
purpose of this letter agreement (this “Confirmation”)
is to
confirm the terms and conditions of the Interest Rate Cap Transaction entered
into on the Trade Date referred to in Paragraph 2 below (the “Transaction”)
between Xxxxxx Xxxxxxx Capital Services Inc. (“Party
A”)
and
Wilmington Trust Company in its capacity as Subordination Agent on behalf of
the
Trustee under the Continental Airlines Pass Through Trust 2006-1G (“Party B”).
This
letter agreement constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below.
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1.
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The
definitions and provisions contained in the 2000 ISDA Definitions
and
Annex to the 2000 ISDA Definitions (June 2000 Version) as published
by the
International Swaps and Derivatives Association, Inc. (as so supplemented,
the “Definitions”)
are incorporated into this Confirmation. In the event of any inconsistency
between the Definitions and this Confirmation, this Confirmation
will
govern. References herein to a “Transaction” shall be deemed to be
references to a “Swap Transaction” for the purposes of the
Definitions.
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This
Confirmation supplements, forms a part of, and is subject to the 1992 ISDA
Master Agreement (Multicurrency - Cross Border) including the Schedule thereto,
dated as of June 9, 2006 as amended and supplemented from time to time
(collectively, the “Agreement”),
between us. All provisions contained in the Agreement govern this Confirmation
except as modified below. In the event of any inconsistency between the
Agreement and this Confirmation, this Confirmation will govern. Capitalized
terms not otherwise defined in the Agreement or this Confirmation shall have
the
meanings ascribed to them in the Intercreditor Agreement dated as of June 9,
2006 among Wilmington Trust Company, as Trustee under the Continental Airlines
Pass Through Trust 2006-1G and Continental Airlines Pass Through Trust 2006-1B,
Xxxxxx Xxxxxxx Bank, as Primary Liquidity Provider, Xxxxxx Xxxxxxx Capital
Services Inc., as Above-Cap Liquidity Provider, Financial Guaranty Insurance
Company, as Policy Provider, and Wilmington Trust Company, as Subordination
Agent (the “Intercreditor
Agreement”).
The
Agreement and the Confirmation will be governed by and construed in accordance
with the laws of the State of New York.
Each
of
Party A and Party B represents to the other that it has entered into this
Transaction in reliance upon such independent accounting, regulatory, legal,
tax
and financial advice as it deems necessary and not upon any view expressed
by
the other.
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2.
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Party
A and Party B by this Confirmation are entering into a Transaction
(the
“Above-Cap
Liquidity Facility”)
that provides an irrevocable interest rate cap. The terms of the
Above-Cap
Liquidity Facility are as follows:
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General
Terms:
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Transaction
Type:
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Interest
Rate Cap Transaction
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Notional
Amount:
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The
Pool Balance for the Class G Certificates from time to time. The
Notional
Amount as of any Floating Rate Payer Payment Date shall be determined
before giving effect to any distributions on such Class G Certificates
on
such Floating Rate Payer Payment Date.
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Trade
Date:
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May
24, 2006
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Effective
Date:
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June
9, 2006
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Termination
Date:
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The
first Business Day following the earlier of (i) June 2, 2015 and
(ii) the
date on which payment in full of Final Distributions with respect
to the
Class G Certificates has been made.
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Currency
Unit:
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USD
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Business
Day/Local Business Day:
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“Business
Day” as defined in the Intercreditor Agreement for all purposes under
the
Agreement.
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Business
Day Convention:
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Following
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Fixed
Amounts:
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Fixed
Amount Payer:
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Party
B
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Fixed
Amount Payer Payment Date:
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Effective
Date
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Fixed
Amount:
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As
set forth in a separate letter agreement between Party A and Party
B.
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Floating
Amounts:
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Floating
Rate Payer:
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Party
A
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Floating
Amount:
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On
each Floating Rate Payer Payment Date on which (i) the Floating Rate
Option exceeds the Cap Rate and (ii) a Drawing Event (as defined
below)
has occurred, the Floating Amount shall be calculated as
follows:
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-2-
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In
the event that either (a) the Available Amount under the Primary
Liquidity
Facility (before giving effect to any Interest Drawing to be made
on such
Payment Date) is greater than zero or (b) the amount on deposit in
the
Primary Cash Collateral Account (before giving effect to any withdrawals
to be made from such account on such Payment Date) is greater than
zero,
the Floating Amount shall equal the Above-Cap Payment for such
date.
In
the event that both statements in clauses (a) and (b) above are not
true,
then the Floating Amount shall equal zero.
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Period
End Dates:
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Each
March 2, June 2, September 2 and December 2, commencing on September
2,
2006 and ending on the Termination Date, subject to adjustment in
accordance with the Following Business Day Convention.
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Floating
Rate Payer Payment Dates:
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Each
day that is a Period End Date and any Special Distribution Date not
coinciding with a Period End Date on which a distribution of interest
is,
by the terms of the Intercreditor Agreement, to be made on the Class
G
Certificates.
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Floating
Rate Option:
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USD-LIBOR-BBA;
provided
that, if the relevant rate does not appear on the Telerate Page 3750,
the
rate shall be “LIBOR” as defined in the Intercreditor Agreement; and
provided
further
that the Floating Rate Option shall be deemed to equal the Cap Rate
during
such period as the Stated Interest Rate applicable to the Class G
Certificates is subject to the Capped Interest Rate pursuant to the
proviso in the definition of “Stated Interest Rate” in the Intercreditor
Agreement.
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Cap
Rate:
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10%
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Designated
Maturity:
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3-Month
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Spread:
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None
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Floating
Rate Day Count Fraction:
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Actual/360
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Reset
Dates:
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The
first day of the relevant Calculation Period.
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Compounding:
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Inapplicable
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Notice:
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Party
B shall, on or before 12:00 p.m. (New York time) on each Floating
Rate
Payer Payment Date, provide Party A with notice of the then-current
Pool
Balance of the Class G Certificates and the Floating Amount payable,
if
any, together with, if such Floating Amount is payable, the certification
referred to in the final sentence of Section 3.5(a) of
the Intercreditor Agreement.
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-3-
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3.
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Role
of Party A; Role of Calculation
Agent
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(i)
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Party
B acknowledges that: (a) in connection with this Transaction and
this
Agreement, Party A has acted in the capacity of an arm’s-length
contractual counterparty and not as its financial advisor or fiduciary;
and (b) in exercising its rights or performing any of its duties
under
this Agreement, Party A will act as principal and not as a fiduciary
of
Party B.
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(ii)
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Whenever
the Calculation Agent is required to act or exercise judgment in
any way,
it will do so in good faith and in a commercially reasonable manner.
The
calculations and determinations of the Calculation Agent shall be
made in
accordance with terms of this Confirmation having regard in each
case to
the criteria stipulated herein.
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4.
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Credit
Downgrade/Replacement of Above-Cap Liquidity
Provider
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In
the
event the relevant credit rating of Xxxxxx Xxxxxxx or any successor or permitted
assignee as Liquidity Guarantor issued by any Rating Agency at any time is
lower
than the applicable Threshold Rating (“Credit
Downgrade”)
or an
Event of Default specified in Section 5(a)(iii)(2) or 5(a)(iii)(3) of the
Agreement (“Credit
Support Event”)
occurs, Party A may, within ten days, at its own expense, arrange for one or
more Replacement Above-Cap Liquidity Providers to enter into and deliver to
Party B a Replacement Above-Cap Liquidity Facility for the Above-Cap Liquidity
Facility. If Party A does not arrange for such replacement and if this
Above-Cap Liquidity Facility has not otherwise been replaced by Continental
Airlines, Inc. (at the expense of Continental Airlines, Inc.) in accordance
with
the terms of Section 3.5(c)(iv) of the Intercreditor Agreement, then (i) in
the
case of a Credit Support Event, such 10th
day (or
if such 10th
day is
not a Business Day, the next succeeding Business Day) shall be designated an
“Early Termination Date” and Part 1(j) of the Schedule to the Agreement will
apply to Party A and (ii) in the case of a Credit Downgrade, Part 1(j) of the
Schedule to the Agreement will apply to Party A as if such 10th
day (or
if such 10th
day is
not a Business Day, the next succeeding Business Day) were designated an “Early
Termination Date”.
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5.
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Additional
Definitions
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“Drawing
Event”
shall
mean an event on any Distribution Date where Party B, after giving effect to
the
subordination provisions of the Intercreditor Agreement and any Election
Interest Payments made by the Policy Provider (but without regard to drawings
under the Primary Liquidity Facility or withdrawals from the Primary Cash
Collateral Account or Above-Cap Account or under the Policy (other than Election
Interest Payments)), shall not have sufficient funds for the payment of any
amounts due and owing in respect of accrued interest on the Class G
Certificates.
“Threshold
Rating”
shall
mean, for purposes of this Agreement, the short-term unsecured debt rating
of
P-1 by Xxxxx’x and short-term issuer credit rating of A-1 by Standard &
Poor’s.
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6.
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Payments
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Party
A
hereby irrevocably instructs Party B to make any payment due to Party A directly
to the account specified below in the name of Party A. Party B hereby
irrevocably instructs Party A to make any payments of Floating Amounts and
any
Termination Amount due to Party B directly to the account specified below in
the
name of Party B. All payments by Party A of Floating Amounts and any
-4-
Termination
Amount due to Party B shall be made prior to 5:00 p.m. (New York City time)
on
the date such payment is due without setoff, deduction, withholding, netting,
or
any other reduction.
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7.
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Account
Details
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Payments
to Party A:
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Citibank,
New York (XXXXXX00)
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ABA#:
000000000
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Account#:
00000000
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Reference:
Xxxxxx Xxxxxxx Capital Services Inc.
(MSCUS33)
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Payments
to Party B:
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Wilmington
Trust Company
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ABA#:
000000000
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Account#:
076970-000
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Reference:
Continental Spare Parts-06
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8.
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Offices
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The
Office of Party A for the Transaction is its office at the address specified
for
notices to it in the Schedule to the Agreement. The Office of Party B for the
Transaction is its office at the address specified for notices to it in the
Schedule to the Agreement.
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9.
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Counterparts
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This
Confirmation may be executed in any number of counterparts and by each party
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 Confirmation.
[Signatures
follow on separate pages]
-5-
Please
confirm that the foregoing correctly sets forth the terms of our agreement
by
executing the copy of this Confirmation enclosed for that purpose and returning
it to us.
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Yours
sincerely,
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XXXXXX
XXXXXXX CAPITAL SERVICES INC.
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By:
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Name:
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Title:
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| Confirmed as of the date first written above: | |
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WILMINGTON
TRUST COMPANY
in
its capacity as Subordination Agent
on
behalf of the Trustee under the
Continental
Airlines Pass Through
Trust
2006-1G
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By:
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Name:
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Title:
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