AMENDMENT NO. 1 TO
COLLATERAL MAINTENANCE AGREEMENT
AMENDMENT NO. 1, dated as of May 9, 2003 (this "AMENDMENT"), to Collateral
Maintenance Agreement, dated as of December 6, 2002 (the "AGREEMENT"), between
CONTINENTAL AIRLINES, INC., a Delaware corporation (the "COMPANY"), and MBIA
INSURANCE CORPORATION, a New York insurance company (the "POLICY PROVIDER").
Certain terms used herein have the defined meanings referred to in Section 1
hereof.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, in connection with the issuance and sale of the Company's Floating
Rate Secured Notes due 2007 pursuant to the Original Indenture, the Company and
the Security Agent entered into the Agreement to set forth certain agreements
relating to the Spare Parts Collateral; and
WHEREAS, in connection with the issuance and sale of the Company's Floating
Rate Secured Subordinated Notes due 2007 pursuant to the Indenture, the Company
has requested that the Agreement be amended to provide, among other things, for
certain matters with respect to such Subordinated Securities; and
WHEREAS, the Original Indenture, as amended and restated to provide for the
issuance of the Subordinated Securities, provides for the issuance of
$300,000,000 aggregate principal amount of the Notes.
NOW, THEREFORE, in consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined or provided herein, terms
used herein that are defined in the Agreement, as amended by this Amendment,
have such respective defined meanings.
SECTION 2. AMENDMENTS. Effective as of the date hereof, the Agreement is
hereby amended as follows:
Section 2.1 CERTAIN REFERENCES TO SECURITIES. Each reference to
"Securities" in the first sentence of Section 2.1 and the first sentence of
Section 2.2 is deleted and replaced with "Notes".
Section 2.2 ANNUAL APPRAISAL. Section 2.1 is amended as follows:
(a) The second sentence of the second paragraph is amended to delete
the phrase "and the Rotable Ratio" and to replace it with the following: ",
the Subordinated Collateral Ratio, the Rotable Ratio and the Subordinated
Rotable Ratio".
(b) The second sentence of the second paragraph is further amended to
delete "and" before the phrase "the principal amount of the Securities
Outstanding" and to insert following such phrase the following: "and the
principal amount of the Subordinated Securities Outstanding".
Section 2.3 SEMIANNUAL APPRAISAL. Section 2.2 is amended as follows:
(a) The first sentence of the second paragraph is amended to delete
the phrase "and Minimum Rotable Ratio" and to replace it with the
following: ", the Maximum Subordinated Collateral Ratio, Minimum Rotable
Ratio and Minimum Subordinated Rotable Ratio".
(b) The second sentence of the second paragraph is amended to delete
the phrase "and the Rotable Ratio" in the two instances where such phrase
appears and to replace it with the following: ", the Subordinated
Collateral Ratio, the Rotable Ratio and the Subordinated Rotable Ratio".
(c) The second sentence of the second paragraph is further amended to
delete "and" before the phrase "the principal amount of the Securities
Outstanding" and to insert following such phrase the following: "and the
principal amount of the Subordinated Securities Outstanding".
Section 2.4 INFORMATION FROM THE TRUSTEE. Section 2.5 is amended to insert
in the second sentence after "Securities Outstanding" the following: ", the
principal amount of the Subordinated Securities Outstanding".
Section 2.5 COLLATERAL RATIO. Subsections (a) and (b) of Section 3.1 are
amended and restated to read in their entirety as follows:
"(a) If the Collateral Ratio, as most recently determined pursuant to
an Appraisal Compliance Report, is greater than the Maximum Collateral
Ratio or the Subordinated Collateral Ratio, as most recently determined
pursuant to an Appraisal Compliance Report, is greater than the Maximum
Subordinated Collateral Ratio, the Company shall within 90 days after the
date of the Appraisal Compliance Report setting forth the calculation of
such Collateral Ratio or Subordinated Collateral Ratio:
(i) subject additional Qualified Spare Parts (the "ADDITIONAL
PARTS") to the Lien of the Security Agreement in accordance with
Section 3.1(c);
(ii) grant a security interest to a Collateral Agent in other
property to secure the Obligations for the benefit of the Holders and
the Indemnitees, provided that the Company shall have received, with
respect to the use for purposes of this Section 3.1(a) of such
additional collateral and the applicable Collateral Agreement, (x)
approval of the Policy Provider and (y) Rating Agency Confirmation
with respect to the Securities and the Subordinated Securities;
(iii) provide additional cash and/or Investment Securities to the
Collateral Agent under the Security Agreement, provided that if the
Continental Cash Balance as of the applicable Valuation Date was less
than $600,000,000, then the amount of Cash Collateral included in the
Collateral, after giving effect to the action taken pursuant to
Sections 3.1(a) and 3.1(b) with respect to such Valuation Date, shall
not exceed $20,000,000;
(iv) deliver Notes to the Trustee for cancellation;
(v) redeem some or all of the Notes pursuant to Article 4 of the
Indenture; or
(vi) any combination of the foregoing;
such that, the Collateral Ratio and the Subordinated Collateral Ratio, as
recalculated giving effect to such action taken pursuant to this Section 3.1(a)
and, in the case of clauses (i), (ii) and (iii) of this Section 3.1(a), using
the Fair Market Value of any such additional Collateral determined pursuant to
Section 3.1(d) (but otherwise using the information used to determine the
Collateral Ratio and the Subordinated Collateral Ratio as most recently
determined pursuant to Article 2), would not be greater than the Maximum
Collateral Ratio or the Maximum Subordinated Collateral Ratio, respectively.
(b) If the Rotable Ratio, as most recently determined pursuant to an
Appraisal Compliance Report, is less than the Minimum Rotable Ratio or the
Subordinated Rotable Ratio, as most recently determined pursuant to an Appraisal
Compliance Report, is less than the Minimum Subordinated Rotable Ratio, the
Company shall within 90 days after the date of the Appraisal Compliance Report
setting forth the calculation of such Rotable Ratio or Subordinated Rotable
Ratio:
(i) subject additional Rotables (the "ADDITIONAL ROTABLES") to
the Lien of the Security Agreement in accordance with Section 3.1(c);
(ii) provide additional cash and/or Investment Securities to the
Collateral Agent under the Security Agreement; PROVIDED that if the
Continental Cash Balance as of the applicable Valuation Date was less
than $600,000,000, then the amount of Cash Collateral included in the
Collateral, after giving effect to the action taken pursuant to
Sections 3.1(a) and 3.1(b) with respect to such Valuation Date, shall
not exceed $20,000,000;
(iii) deliver Notes to the Trustee for cancellation;
(iv) redeem some or all of the Notes pursuant to Article 4 of the
Indenture; or
(v) any combination of the foregoing.
such that, the Rotable Ratio and the Subordinated Rotable Ratio, as recalculated
giving effect to such action taken pursuant to this Section 3.1(b) and, in the
case of clauses (i) and (ii) of this Section 3.1(b), using the Fair Market Value
of any such additional Collateral determined pursuant to Section 3.1(d) (but
otherwise using the information used to determine the Rotable Ratio and the
Subordinated Rotable Ratio as most recently determined pursuant to Article 2),
would not be less than the Minimum Rotable Ratio or the Minimum Subordinated
Rotable Ratio, respectively."
Section 2.6 FLEET REDUCTION. Section 3.3 is amended to insert after the
first sentence the following:
"If at any time after the Subordinated Closing Date so long as any
Subordinated Securities are Outstanding the total number of Aircraft of any
Aircraft Model (as defined below) in the Company's in-service fleet during
any period of 60 consecutive days is less than the Specified Minimum (as
defined below) for such Aircraft Model (other than due to restrictions on
operating such Aircraft imposed by the FAA or any other instrumentality or
agency of the United States), then within 90 days after such occurrence the
Company shall redeem Subordinated Securities pursuant to Article 4 of the
Indenture or deliver Subordinated Securities to the Trustee for
cancellation, or a combination of the foregoing, in an aggregate principal
amount not less than the principal amount of the Subordinated Securities
Outstanding at the end of such 60 day period multiplied by a fraction, the
numerator of which shall be the Appraised Value of the Pledged Spare Parts
that are appropriate for incorporation in, installation on, attachment or
appurtenance to, or use in only Aircraft of such Aircraft Model or Engines
utilized only on such Aircraft, and the denominator of which shall be the
Appraised Value of the Collateral."
Section 2.7 BENEFITS OF AGREEMENT RESTRICTED. Section 4.1 is amended to
insert at the end of the first sentence the following:
", PROVIDED, FURTHER, that the Trustee on behalf of the Subordinated
Securityholders is an intended third-party beneficiary of the following
provisions of this Agreement (collectively, the "SUBORDINATED SECURITY
PROVISIONS"): (i) the requirement that appraisals of the Collateral be
obtained for purposes of determining the Maximum Subordinated Collateral
Ratio by the fifth Business Day of February and the fifth Business Day of
August in each year, commencing in August 2003; (ii) the requirement that
the Maximum Subordinated Collateral Ratio be complied with in connection
with such appraisals; (iii) the second sentence of Section 3.3; and (iv)
clause (z) of the proviso to Section 4.4 (it being understood that the
other provisions of this Agreement not expressly included within clauses
(i), (ii), (iii) and (iv) of this proviso, including without limitation
defined terms, are not Subordinated Security Provisions). Upon payment in
full of the Securities, the Policy Expenses and the Policy Provider
Obligations, if any Subordinated Securities are then Outstanding, Sections
3.4, 3.5, 3.6, 3.7 and 3.8 and Appendix IV, as then in effect, shall at
such time become Subordinated Security Provisions, except that each
reference therein to the Policy Provider shall be deemed changed to the
Trustee."
Section 2.8 AMENDMENTS. Section 4.4 is amended (i) to insert after
"PROVIDED that" the following: "(x)"; (ii) to insert after "as the case may be"
the following: "(y) the Subordinated Security Provisions may not be amended,
supplemented or waived by the Company and the Policy Provider but may be
amended, supplemented or waived by the Company and the Trustee, with the consent
of the Required Subordinated Holders and without the consent of the Policy
Provider and (z) if Section 3.2 is amended or supplemented, or compliance
therewith waived, any transaction entered into subsequent thereto that would not
be in compliance with the provisions of such sentence as in effect on the
Subordinated Closing Date shall not be permitted if the Subordinated Collateral
Ratio, as recalculated giving effect to such transaction but otherwise using the
information used to determine the Subordinated Collateral Ratio as most recently
determined pursuant to Article 2, would be greater than the Maximum Subordinated
Collateral Ratio."
Section 2.9 DEFINITIONS APPENDIX. Appendix I to the Agreement is amended by
deleting existing Appendix I and substituting therefor new Appendix I attached
as Appendix I hereto.
Section 2.10 APPRAISAL COMPLIANCE REPORT. Appendix II to the Agreement is
amended by deleting existing Appendix II and substituting therefor new Appendix
II attached as Appendix II hereto.
SECTION 3. CONSTRUCTION. All references in the Agreement to the "Agreement"
shall be deemed to refer to the Agreement as amended by this Amendment, and the
parties hereto confirm their respective obligations thereunder. The Agreement is
hereby ratified by the parties hereto and shall remain in all respects unchanged
(except as otherwise expressly specified in this Amendment) and in full force
and effect.
SECTION 4. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the law of the State of New York.
SECTION 5. COUNTERPARTS. This Amendment may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
[Remainder of this page is blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized, as of the
date and year first above written.
CONTINENTAL AIRLINES, INC.
By
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Name:
Title:
MBIA INSURANCE CORPORATION
By
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Name:
Title:
Appendix I
DEFINITIONS APPENDIX
SECTION 1. DEFINED TERMS.
"ACCELERATION" means, with respect to the amounts payable in respect of the
Notes issued under the Indenture, such amounts becoming immediately due and
payable pursuant to Section 7.2 of the Indenture. "ACCELERATE", "ACCELERATED"
and "ACCELERATING" have meanings correlative to the foregoing.
"ACCRUED INTEREST" is defined in Section 3.6(a) of the Indenture.
"ADDITIONAL PARTS" is defined in Section 3.1(a)(i) of the Collateral
Maintenance Agreement.
"ADDITIONAL ROTABLES" is defined in Section 3.1(b)(i) of the Collateral
Maintenance Agreement.
"ADVANCE" means any Advance as defined in the Liquidity Facility.
"AFFILIATE" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
"AGENT" means any Registrar, Paying Agent or co-Registrar or co-Paying
Agent.
"AGENT MEMBERS" is defined in Section 2.5(a) of the Indenture.
"AIRCRAFT" means any contrivance invented, used, or designed to navigate,
or fly in, the air.
"AMENDMENT NO. 1 TO COLLATERAL MAINTENANCE AGREEMENT" means Amendment No.
1, dated as of the Subordinated Issuance Date, to the Collateral Maintenance
Agreement.
"AMENDMENT NO. 1 TO REFERENCE AGENCY AGREEMENT" means Amendment No. 1,
dated as of the Subordinated Issuance Date, to the Reference Agency Agreement.
"AMENDMENT NO. 1 TO SECURITY AGREEMENT" means Amendment No. 1, dated as of
the Subordinated Issuance Date, to the Security Agreement.
"ANNUAL METHODOLOGY" means, in determining an opinion as to the Fair Market
Value of the Spare Parts Collateral, taking at least the following actions: (i)
reviewing the Parts Inventory Report
prepared as of the applicable Valuation Date; (ii) reviewing the Independent
Appraiser's internal value database for values applicable to Qualified Spare
Parts included in the Spare Parts Collateral; (iii) developing a representative
sampling of a reasonable number of the different Qualified Spare Parts included
in Spare Parts Collateral for which a market check will be conducted; (iv)
checking other sources, such as manufacturers, other airlines, U.S. government
procurement data and airline parts pooling price lists, for current market
prices of the sample parts referred to in clause (iii); (v) establishing an
assumed ratio of Serviceable Parts to Unserviceable Parts as of the applicable
Valuation Date based upon information provided by the Company and the
Independent Appraiser's limited physical review of the Spare Parts Collateral
referred to in the following clause (vi); (vi) visiting at least two locations
selected by the Independent Appraiser where the Pledged Spare Parts are kept by
the Company (neither of which was visited for purposes of the last appraisal
under Section 2.1 or 2.2 of the Collateral Maintenance Agreement, whichever was
most recent), PROVIDED that at least one such location shall be one of the top
three locations at which the Company keeps the largest number of Pledged Spare
Parts, to conduct a limited physical inspection of the Spare Parts Collateral;
(vii) conducting a limited review of the inventory reporting system applicable
to the Pledged Spare Parts, including checking information reported in such
system against information determined through physical inspection pursuant to
the preceding clause (vi) and (viii) reviewing a sampling of the Spare Parts
Documents (including tear-down reports).
"ANNUAL VALUATION DATE" is defined in Section 2.1 of the Collateral
Maintenance Agreement.
"APPLIANCE" means an instrument, equipment, apparatus, a part, an
appurtenance, or an accessory used, capable of being used, or intended to be
used, in operating or controlling Aircraft in flight, including a parachute,
communication equipment, and another mechanism installed in or attached to
Aircraft during flight, and not a part of an Aircraft, Engine, or Propeller.
"APPLICABLE MARGIN" means 0.90%.
"APPLICABLE PERIOD" is defined in Section 3.2 of the Collateral Maintenance
Agreement.
"APPRAISAL COMPLIANCE REPORT" means, as of any date, a report providing
information relating to the calculation of the Collateral Ratio, the
Subordinated Collateral Ratio, Rotable Ratio and Subordinated Rotable Ratio,
which shall be substantially in the form of Appendix II to the Collateral
Maintenance Agreement.
"APPRAISED VALUE" means, with respect to any Collateral, the Fair Market
Value of such Collateral as most recently determined pursuant to (i) the report
attached as Appendix II to the Offering Memo or (ii) Article 2 and, if
applicable, Section 3.1 of the Collateral Maintenance Agreement.
"AVAILABLE AMOUNT" means, as of any date, the Maximum Available Commitment
(as defined in the Liquidity Facility) on such date.
"AVOIDED PAYMENT" has the meaning assigned to such term in the Policy.
"BANKRUPTCY CODE" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 ET SEQ.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
committee of such board duly authorized to act in respect of any particular
matter.
"BREAK AMOUNT" means, as of any date of payment, redemption or acceleration
of any Note (the "APPLICABLE DATE"), an amount determined by the Reference Agent
on the date that is two Business Days prior to the Applicable Date pursuant to
the formula set forth below; PROVIDED, HOWEVER, that no Break Amount will be
payable (x) if the Break Amount, as calculated pursuant to the formula set forth
below, is equal to or less than zero or (y) on or in respect of any Applicable
Date that is an Interest Payment Date (or, if such an Interest Payment Date is
not a Business Day, the next succeeding Business Day)
Break Amount = Z-Y
Where:
X = with respect to any applicable Interest Period, the sum of (i) the
amount of the outstanding principal amount of such Note as of the first
day of the then applicable Interest Period plus (ii) interest payable
thereon during such entire Interest Period at then effective LIBOR.
Y = X, discounted to present value from the last day of the then applicable
Interest Period to the Applicable Date, using then effective LIBOR as
the discount rate.
Z = X, discounted to present value from the last day of the then applicable
Interest Period to the Applicable Date, using a rate equal to the
applicable London interbank offered rate for a period commencing on the
Applicable Date and ending on the last day of the then applicable
Interest Period, determined by the Reference Agent as of two Business
Days prior to the Applicable Date as the discount rate.
"BUSINESS DAY" means any day that is a day for trading by and between banks
in the London interbank Eurodollar market and that is 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 Security is outstanding,
the city and state in which the Trustee maintains its Corporate Trust Office or,
solely with respect to draws under any Policy, the city and state in which the
office of the Policy Provider at which notices, presentations, transmissions,
deliveries and communications are to be made under the Policy is located, and
that, solely with respect to draws under the Liquidity Facility, also is a
"Business Day" as defined in the Liquidity Facility.
"CAPPED INTEREST RATE" means a rate per annum equal to 12%.
"CASH COLLATERAL" means cash and/or Investment Securities deposited or to
be deposited with the Collateral Agent or an Eligible Institution and subject to
the Lien of any Collateral Agreement.
"CASH COLLATERAL ACCOUNT" means an Eligible Deposit Account in the name of
the Trustee maintained at an Eligible Institution, which shall be the Trustee if
it shall so qualify, into which all amounts drawn under the Liquidity Facility
pursuant to Section 3.5(c), 3.5(d) or 3.5(i) of the Indenture shall be
deposited.
"CITIZEN OF THE UNITED STATES" is defined in 49 X.X.X.xx. 40102(a)(15).
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"CLEARSTREAM" means Clearstream Banking societe anonyme, Luxembourg.
"CLOSING DATE" means the Issuance Date.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means the Spare Parts Collateral and all other collateral in
which the Collateral Agent has a security interest pursuant to the Collateral
Agreements.
"COLLATERAL AGENT" means the Security Agent and each other Person acting as
agent on behalf of the Holders under any other Collateral Agreement.
"COLLATERAL AGREEMENT" means the Security Agreement and any agreement under
which a security interest has been granted pursuant to Section 3.1(a)(ii) of the
Collateral Maintenance Agreement.
"COLLATERAL MAINTENANCE AGREEMENT" means the Collateral Maintenance
Agreement, dated as of the Issuance Date, between the Company and the Policy
Provider.
"COLLATERAL RATIO" shall mean a percentage determined by dividing (i) the
aggregate principal amount of all Securities Outstanding minus the sum of the
Cash Collateral held by the Collateral Agent by (ii) the Fair Market Value of
all Collateral (excluding any Cash Collateral), as set forth in the most recent
Independent Appraiser's Certificate delivered by the Company pursuant to Article
2 of the Collateral Maintenance Agreement, as supplemented pursuant to Section
3.1 of the Collateral Maintenance Agreement, if applicable.
"COLLECTION ACCOUNT" means the Eligible Deposit Account established by the
Trustee pursuant to Section 8.13 of the Indenture which the Trustee shall make
deposits in and withdrawals from in accordance with the Indenture.
"COMPANY" means the party named as such in the Indenture or any obligor on
the Notes until a successor replaces it pursuant to the Indenture and thereafter
means the successor.
"CONSENT PERIOD" is defined in Section 3.5(d) of the Indenture.
"CONTINENTAL BANKRUPTCY EVENT" means the occurrence and continuation of an
Event of Default under Section 7.1(d), (e) or (f) of the Indenture.
"CONTINENTAL CASH BALANCE" means the sum of (a) the amount of cash and cash
equivalents that would have been shown on the balance sheet of Continental and
its consolidated subsidiaries prepared in accordance with GAAP as of any
Valuation Date, plus (b) the amount of marketable securities that would have
been reflected on such balance sheet which had, as of such Valuation Date, a
maturity of less than one year and which, but for their maturity, would have
qualified to be reflected on such balance sheet as cash equivalents.
"CONTROLLING PARTY" means the Person entitled to act as such pursuant to
the terms of Section 3.8 of the Indenture.
"CORPORATE TRUST OFFICE" when used with respect to the Trustee means the
office of the Trustee at which at any particular time its corporate trust
business is administered and which, at the Closing Date, is located at
Wilmington Trust Company, as Trustee, Xxxxxx Square North 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration.
"DEBT BALANCE" means 110% of the principal amount of the Outstanding Notes.
"DEBT RATE" means a rate per annum equal, in the case of the first Interest
Period for the Securities, to 2.32% and, in the case of any subsequent Interest
Period, LIBOR for such Interest Period, as determined pursuant to the Reference
Agency Agreement, plus the Applicable Margin, PROVIDED that, solely in the event
no Registration Event (as defined in the Registration Rights Agreement) occurs
on or prior to the 210th day after the Closing Date, the Debt Rate shall be
increased by an additional margin equal to 0.50% per annum, from and including
such 210th day to and excluding the earlier of (i) the date on which such
Registration Event occurs and (ii) the date on which there ceases to be any
Registrable Securities (as defined in the Registration Rights Agreement)); or if
the Shelf Registration Statement (as defined in the Registration Rights
Agreement) (if it is filed), after being declared effective by the SEC, ceases
to be effective at any time during the period specified by Section 2(b)(B) of
the Registration Rights Agreement for more than 60 days, whether or not
consecutive, during any 12-month period, the Debt Rate shall be increased by an
additional margin equal to 0.50% per annum from and including the 61st day of
the applicable 12-month period such Shelf Registration Statement ceases to be
effective to and excluding the date on which the Shelf Registration Statement
again becomes effective (or, if earlier, the end of the period specified by
Section 2(b)(B) of the Registration Rights Agreement), PROVIDED that the
additional margin added to the Debt Rate pursuant to the preceding proviso shall
never exceed 0.50% at any time, PROVIDED FURTHER that, if a default in the
payment of interest on the Securities occurs and is continuing on any Interest
Payment Date, then the Debt Rate applicable to the Interest Period ending on
such Interest Payment Date shall not exceed the Capped Interest Rate, except
that for purposes of any payment made by the Company intended to cure such
default, this proviso shall not apply.
"DEFAULT" means any event which is, or after notice or passage of time, or
both, would be, an Event of Default.
"DEFINITIONS APPENDIX" means the Definitions Appendix attached as Appendix
I to the Indenture and constituting a part of the Indenture.
"DEFINITIVE SECURITIES" is defined in Section 2.1(e) of the Indenture.
"DEFINITIVE SUBORDINATED SECURITIES" is defined in Section 2A.1(e) of the
Indenture.
"DESIGNATED LOCATIONS" means the locations in the U.S. designated from time
to time by the Company at which the Pledged Spare Parts may be maintained by or
on behalf of the Company, which initially shall be the locations set forth on
Schedule 1 to the Security Agreement and shall include the additional locations
designated by the Company pursuant to Section 4.04(d) of the Security Agreement.
"DESIGNATED REPRESENTATIVES" is defined in Section 3.7(b) of the Indenture.
"DISTRIBUTION DATE" means (i) each Scheduled Payment Date (and, if a
Payment required to be paid to the Trustee for distribution on such Scheduled
Payment Date has not been so paid by 12:30 p.m., New York time, in whole or in
part, on such Scheduled Payment Date, the next Business Day on which the Trustee
receives some or all of such Payment by 12:30 p.m., New York time, except for a
defaulted payment of interest that is not paid within five days after the
Scheduled Payment Date therefor), (ii) each day established for payment by the
Trustee pursuant to Section 7.10, (iii) the Non-Performance Payment Date, (iv)
the Final Legal Maturity Date, (v) the Election Distribution Date, (vi) the
Policy Election Distribution Date, (vii) the date established as a Distribution
Date pursuant to Section 3.6(f) of the Indenture and (viii) solely for purposes
of payments to be made by the Policy Provider pursuant to Section 3.6(d) of the
Indenture and not for purposes of any other payment or distribution under the
Indenture, the date established for such payment in accordance with the Policy.
"DOWNGRADE DRAWING" is defined in Section 3.5(c) of the Indenture.
"DOWNGRADE EVENT" has the meaning assigned to such term in Section 3.5(c)
of the Indenture.
"DOWNGRADED FACILITY" is defined in Section 3.5(c) of the Indenture.
"DRAWING" means an Interest Drawing, a Final Drawing, a Non-Extension
Drawing or a Downgrade Drawing, as the case may be.
"DTC" means The Depository Trust Company, its nominees and their respective
successors.
"ELECTION DISTRIBUTION DATE" is defined in Section 3.6(c) of the Indenture.
"ELIGIBLE ACCOUNT" means an account established by and with an Eligible
Institution at the request of the Security Agent, which institution agrees, for
all purposes of the New York UCC including Article 8 thereof, that (a) such
account shall be a "securities account" (as defined in Section 8-501 of the New
York UCC), (b) such institution is a "securities intermediary" (as defined in
Section 8-102(a)(14) of the New York UCC), (c) all property (other than cash)
credited to such account shall be treated as a "financial asset" (as defined in
Section 8-102(9) of the New York UCC), (d) the Security Agent shall be the
"entitlement holder" (as defined in Section 8-102(7) of the New York UCC) in
respect of such account, (e) it will comply with all entitlement orders issued
by the Security Agent to the exclusion of the Company, (f) it will waive or
subordinate in favor of the Security Agent all claims (including without
limitation, claims by way of security interest, lien or right of set-off or
right of recoupment), and (g) the "securities intermediary jurisdiction" (under
Section 8-110(e) of the New York UCC) shall be the State of New York.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any U.S. branch of a foreign bank), having corporate trust powers and acting
as trustee for funds deposited in such account, so long as any of the securities
of such depository institution has a long-term unsecured debt rating or issuer
credit rating, as the case may be, from Moody's of at least A-3 or its
equivalent. An Eligible Deposit Account may be maintained with the Liquidity
Provider so long as the Liquidity Provider is an Eligible Institution; provided
that such Liquidity Provider shall have waived all rights of set-off and
counterclaim with respect to such account.
"ELIGIBLE INSTITUTION" means (a) the Security Agent or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any U.S. branch of a
foreign bank), which has a long-term unsecured debt rating or issuer credit
rating, as the case may be, from Moody's of at least A-3 or its equivalent.
"ELIGIBLE INVESTMENTS" means (a) investments in obligations of, or
guaranteed by, the U.S. Government having maturities no later than 90 days
following the date of such investment, (b) investments in open market commercial
paper of any corporation incorporated under the laws of the United States of
America or any state thereof with a short-term unsecured debt rating issued by
Moody's of at least P-1 and a short-term issuer credit rating issued by Standard
& Poor's of at least A-1 having maturities no later than 90 days following the
date of such investment or (c) investments in negotiable certificates of
deposit, time deposits, banker's acceptances, commercial paper or other direct
obligations of, or obligations guaranteed by, commercial banks organized under
the laws of the United States or of any political subdivision thereof (or any
U.S. branch of a foreign bank) with a short-term unsecured debt rating by
Moody's of at least P-1 and a short-term issuer credit rating by Standard &
Poor's of at least A-1, having maturities no later than 90 days following the
date of such investment; PROVIDED, HOWEVER, that (x) all Eligible Investments
that are bank obligations shall be denominated in U.S. dollars; and (y) the
aggregate amount of Eligible Investments at any one time that are bank
obligations issued by any one bank shall not be in excess of 5% of such bank's
capital surplus; PROVIDED FURTHER that any investment of the types described in
clauses (a), (b) and (c) above may be made through a repurchase agreement in
commercially reasonable form with a bank or other financial institution
qualifying as an Eligible Institution so long as such investment is held by a
third party custodian also qualifying as an Eligible Institution; PROVIDED
FURTHER, HOWEVER, that in the case of any Eligible Investment issued by a
domestic branch of a foreign bank, the income from such investment shall be from
sources within the United States for purposes of the Code. Notwithstanding the
foregoing, no investment of the types described in clause (b) above which is
issued or guaranteed by the Company or any of its Affiliates, and no investment
in the obligations of any one bank in excess of $10,000,000, shall be an
Eligible Investment unless written approval has been obtained from the Policy
Provider and a Ratings Confirmation shall have been received with respect to the
making of such investment.
"ENGINE" means an engine used, or intended to be used, to propel an
Aircraft, including a part, appurtenance, and accessory of the Engine, except a
Propeller.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the Euroclear
System.
"EVENT OF DEFAULT" is defined in Section 7.1 of the Indenture.
"EVENT OF LOSS" means (i) the loss of any of the Pledged Spare Parts or of
the use thereof due to destruction, damage beyond repair or rendition of any of
the Pledged Spare Parts permanently unfit for normal use for any reason
whatsoever (other than the use of Expendables in the Company's operations); (ii)
any damage to any of the Pledged Spare Parts which results in the receipt of
insurance proceeds with respect to such Pledged Spare Parts on the basis of an
actual or constructive loss; or (iii) the loss of possession of any of the
Pledged Spare Parts by the Company for ninety (90) consecutive days as a result
of the theft or disappearance of such Pledged Spare Parts.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time.
"EXCHANGE FLOATING RATE SECURED NOTES DUE 2007" is defined in Section
2.1(a) of the Indenture.
"EXCHANGE FLOATING RATE SECURED SUBORDINATED NOTES DUE 2007" is defined in
Section 2A.1(a) of the Indenture.
"EXCHANGE OFFER" means (i) with respect to the Securities, the exchange
offer which may be made pursuant to the Registration Rights Agreement to
exchange Initial Securities for Exchange Securities and (ii) with respect to the
Subordinated Securities, the exchange offer which may be made pursuant to the
Subordinated Security Registration Rights Agreement to exchange Initial
Subordinated Securities for Exchange Subordinated Securities.
"EXCHANGE OFFER REGISTRATION STATEMENT" means (i) with respect to the
Securities, the registration statement that, pursuant to the Registration Rights
Agreement, is filed by the Company with the SEC with respect to the exchange of
Initial Securities for Exchange Securities and (ii) with respect to Subordinated
Securities, the registration statement that, pursuant to the Subordinated
Security Registration Rights Agreement, is filed by the Company with the SEC
with respect to the exchange of Initial Subordinated Securities for Exchange
Subordinated Securities.
"EXCHANGE SECURITIES" means the securities substantially in the form of
Exhibit A to the Indenture issued in exchange for the Initial Securities
pursuant to the Registration Rights Agreement and authenticated pursuant to the
Indenture.
"EXCHANGE SUBORDINATED SECURITIES" means the securities substantially in
the form of Exhibit D to the Indenture issued in exchange for the Initial
Subordinated Securities pursuant to the
Subordinated Security Registration Rights Agreement and authenticated pursuant
to the Indenture.
"EXCLUDED PARTS" means Spare Parts and Appliances held by the Company at a
location not a Designated Location.
"EXPENDABLES" means Qualified Spare Parts other than Rotables.
"EXPENSES" means any and all liabilities, obligations, losses, damages,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and disbursements
of legal counsel, accountants, appraisers, inspectors or other professionals,
and costs of investigation).
"FAA" means the Federal Aviation Administration or similar regulatory
authority established to replace it.
"FAA FILED DOCUMENTS" means the Security Agreement and Amendment No. 1 to
Security Agreement.
"FACILITY OFFICE" means, with respect to any Liquidity Facility, the office
of the Liquidity Provider thereunder, presently located at 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or such other office as such Liquidity Provider from time
to time shall notify the Trustee as its "Facility Office" under any such
Liquidity Facility; provided that such Liquidity Provider shall not change its
Facility Office to another Facility Office outside the United States of America
except in accordance with Sections 3.01, 3.02 or 3.03 of any such Liquidity
Facility.
"FAIR MARKET VALUE" means, with respect to any Collateral, its fair market
value determined on the basis of a hypothetical sale negotiated in an arm's
length free market transaction between a willing and able seller and a willing
and able buyer, neither of whom is under undue pressure to complete the
transaction, under then current market conditions, provided that cash shall be
valued at its Dollar amount.
"FEDERAL AVIATION ACT" means Title 49 of the United States Code,
"Transportation", as amended from time to time, or any similar legislation of
the United States enacted in substitution or replacement thereof.
"FEE LETTERS" means, collectively, (i) the Fee Letter dated as of the
Closing Date between the Trustee and the initial Liquidity Provider with respect
to the initial Liquidity Facility and (ii) any fee letter entered into between
the Trustee and any Replacement Liquidity Provider in respect of any Replacement
Liquidity Facility.
"FINAL DRAWING" is defined in Section 3.5(i) of the Indenture.
"FINAL LEGAL MATURITY DATE" means December 6, 2009.
"FINAL ORDER" has the meaning assigned to such term in the Policy.
"FINAL SCHEDULED PAYMENT DATE" means December 6, 2007.
"FINANCING STATEMENTS" means, collectively, UCC-1 financing statements
covering the Spare Parts Collateral, by the Company, as debtor, showing the
Security Agent as secured party, for filing in Delaware, Guam and each other
jurisdiction that, in the opinion of the Security Agent, is necessary to perfect
its Lien on the Spare Parts Collateral.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Closing Date, including those set forth in (i)
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"GLOBAL EXCHANGE SECURITY" is defined in Section 2.1(f) of the Indenture.
"GLOBAL EXCHANGE SUBORDINATED SECURITY" is defined in Section 2A.1(f) of
the Indenture.
"GLOBAL SECURITIES" is defined in Section 2.1(d) of the Indenture.
"GLOBAL SUBORDINATED SECURITIES" is defined in Section 2A.1(d) of the
Indenture.
"GOVERNMENT ENTITY" means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Documents or relating
to the observance or performance of the obligations of any of the parties to the
Operative Documents.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Registrar's books.
"INDEMNITEE" means (i) WTC, the Trustee and the Collateral Agent, (ii) each
separate or additional trustee or security agent appointed pursuant to the
Indenture, (iii) each Liquidity Provider, (iv) the Policy Provider, and (v) each
of the respective directors, officers, employees, agents and servants of each of
the persons described in clauses (i) through (iv) inclusive above.
"INDENTURE" means the Amended and Restated Indenture dated as of May 9,
2003, among the Company, the Trustee, the Liquidity Provider and the Policy
Provider under which the Notes are issued.
"INDENTURE DISCHARGE DATE" means the date of the termination of the
effectiveness of the Indenture pursuant to Section 9.1(a) thereof (without
giving effect to Section 9.1(b) thereof).
"INDENTURE TRUSTEE" means the Trustee.
"INDEPENDENT APPRAISER" means Simat, Helliesen & Xxxxxxx, Inc. or any other
Person (i) engaged in a business which includes appraising Aircraft and assets
related to the operation and maintenance of Aircraft from time to time and (ii)
who does not have any material financial interest in the Company and is not
connected with the Company or any of its Affiliates as an officer, director,
employee, promoter, underwriter, partner or person performing similar functions.
"INDEPENDENT APPRAISER'S CERTIFICATE" means a certificate signed by an
Independent Appraiser and attached as Appendix II to the Offering Memo or
delivered thereafter pursuant to Article 2 or Section 3.1 of the Collateral
Maintenance Agreement.
"INITIAL CASH COLLATERAL" shall mean cash in the amount of $13,056,950.
"INITIAL FLOATING RATE SECURED NOTES DUE 2007" is defined in Section 2.1(a)
of the Indenture.
"INITIAL FLOATING RATE SECURED SUBORDINATED NOTES DUE 2007" is defined in
Section 2A.1(a) of the Indenture.
"INITIAL PURCHASER" means Xxxxxx Xxxxxxx & Co. Incorporated.
"INITIAL SECURITIES" mean the securities issued and authenticated pursuant
to the Indenture and substantially in the form of Exhibit A thereto, other than
the Exchange Securities.
"INITIAL SUBORDINATED SECURITIES" means the securities issued and
authenticated pursuant to the Indenture and substantially in the form of Exhibit
D thereto, other than the Exchange Subordinated Securities.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional investor that is
an "accredited investor" within the meaning set forth in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act.
"INTEREST DRAWING" is defined in Section 3.5(a) of the Indenture.
"INTEREST PAYMENT DATE" means March 6, June 6, September 6 and December 6
of each year so long as any Note is Outstanding (commencing March 6, 2003 in the
case of the Securities and June 6, 2003 in the case of the Subordinated
Securities), PROVIDED that if any such day is not a Business Day, then the
relevant Interest Payment Date shall be the next succeeding Business Day.
"INTEREST PERIOD" means (i) in the case of the first Interest Period, the
period commencing on (and including) the Closing Date (in the case of the
Securities) or the Subordinated Closing Date (in the case of the Subordinated
Securities) and ending on (but excluding) the first Interest Payment Date
following such date and (ii) in the case of each subsequent Interest Period, the
period commencing on (and including) the last day of the immediately preceding
Interest Period, and ending on (but excluding) the next Interest Payment Date.
"INVESTMENT EARNINGS" means investment earnings on funds on deposit in the
Trust Accounts net of losses and investment expenses of the Trustee in making
such investments.
"INVESTMENT SECURITY" means (a) any bond, note or other obligation which is
a direct obligation of or guaranteed by the U.S. or any agency thereof; (b) any
obligation which is a direct obligation of or guaranteed by any state of the
U.S. or any subdivision thereof or any agency of any such state or subdivision,
and which has the highest rating published by Moody's or Standard & Poor's; (c)
any commercial paper issued by a U.S. obligor and rated at least P-1 by Moody's
or A-1 by Standard & Poor's; (d) any money market investment instrument relying
upon the credit and backing of any bank or trust company which is a member of
the Federal Reserve System and which has a combined capital (including capital
reserves to the extent not included in capital) and surplus and undivided
profits of not less than $250,000,000 (including the Collateral Agent and its
Affiliates if such requirements as to Federal Reserve System membership and
combined capital and surplus and undivided profits are satisfied), including,
without limitation, certificates of deposit, time and other interest-bearing
deposits, bankers' acceptances, commercial paper, loan and mortgage
participation certificates and documented discount notes accompanied by
irrevocable letters of credit and money market fund investing solely in
securities backed by the full faith and credit of the United States; or (e)
repurchase agreements collateralized by any of the foregoing.
"ISSUANCE DATE" means the date of initial issuance of the Initial
Securities.
"LAW" means (a) any constitution, treaty, statute, law, decree, regulation,
order, rule or directive of any Government Entity, and (b) any judicial or
administrative interpretation or application of, or decision under, any of the
foregoing.
"LIBOR" has the meaning specified in the Reference Agency Agreement.
"LIBOR ADVANCE" has the meaning provided in the Liquidity Facility.
"LIEN" means any mortgage, pledge, lease, security interest, encumbrance,
lien or charge of any kind affecting title to or any interest in property.
"LIQUIDITY EVENT OF DEFAULT" has the meaning assigned to such term in the
Liquidity Facility.
"LIQUIDITY EXPENSES" means all Liquidity Obligations other than (i) the
principal amount of any Drawings under the Liquidity Facility and (ii) any
interest accrued on any Liquidity Obligations.
"LIQUIDITY FACILITY" means, initially, the Revolving Credit Agreement dated
as of the Issuance Date, between the Trustee and the initial Liquidity Provider,
and from and after the replacement of such Revolving Credit Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"LIQUIDITY GUARANTEE" means the Guarantee Agreement, dated as of the date
of the Original Indenture, providing for the guarantee by the Liquidity
Guarantor of the obligations of the Liquidity Provider under the Liquidity
Facility.
"LIQUIDITY GUARANTOR" means Xxxxxx Xxxxxxx.
"LIQUIDITY OBLIGATIONS" means all principal, interest, fees and other
amounts owing to the Liquidity Provider under the Liquidity Facility or the Fee
Letter.
"LIQUIDITY PROVIDER" means Xxxxxx Xxxxxxx Capital Services Inc., together
with any Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Liquidity Facility pursuant to Section 3.5(e) of the
Indenture.
"LIQUIDITY PROVIDER REIMBURSEMENT DATE" is defined in Section 3.6(d) of the
Indenture.
"LOANS" is defined in Section 3.2 of the Collateral Maintenance Agreement.
"MATERIAL ADVERSE CHANGE" means, with respect to any person, any event,
condition or circumstance that materially and adversely affects such person's
business or consolidated financial condition, or its ability to observe or
perform its obligations, liabilities and agreements under the Operative
Documents.
"MAXIMUM COLLATERAL RATIO" means 45%.
"MAXIMUM SUBORDINATED COLLATERAL RATIO" means 67.5%.
"MINIMUM ROTABLE RATIO" means 150%.
"MINIMUM SUBORDINATED ROTABLE RATIO" means 100%.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MOVES" is defined in Section 3.2 of the Collateral Maintenance Agreement.
"MSCS" has the meaning specified in the first paragraph of the Indenture.
"NEW YORK UCC" is defined in Section 1.01 of the Security Agreement.
"NONAPPRAISAL COMPLIANCE REPORT" means a report providing information
relating to compliance by the Company with Section 3.2 of the Collateral
Maintenance Agreement, which shall be substantially in the form of Appendix III
to the Collateral Maintenance Agreement.
"NON-CONTROLLING PARTY" means, at any time, the Securityholders, the
Subordinated Securityholders, the Liquidity Provider and the Policy Provider,
excluding whichever is the Controlling Party at such time.
"NON-EXTENDED FACILITY" is defined in Section 3.5(d) of the Indenture.
"NON-EXTENSION DRAWING" is defined in Section 3.5(d) of the Indenture.
"NON-PERFORMANCE DRAWING" is defined in Section 3.6(c) of the Indenture.
"NON-PERFORMANCE PAYMENT DATE" is defined in Section 3.6(c) of the
Indenture.
"NON-PERFORMING" means, with respect to any Security, a Payment Default
existing thereunder (without giving effect to any Acceleration); PROVIDED, that,
in the event of a bankruptcy proceeding under the Bankruptcy Code in which the
Company is a debtor, any Payment Default existing at the commencement of such
bankruptcy proceeding or during the 60-day period under Section 1110(a)(2)(A) of
the Bankruptcy Code (or such longer period as may apply under Section 1110(b) of
the Bankruptcy Code or as may apply for the cure of such Payment Default under
Section 1110(a)(2)(B) of the Bankruptcy Code) shall not be taken into
consideration until the expiration of the applicable period.
"NON-PERFORMING PERIOD" is defined in Section 3.6(c) of the Indenture.
"NON-U.S. PERSON" means any Person other than a U.S. person, as defined in
Regulation S.
"NOTES" means the Securities and the Subordinated Securities.
"NOTEHOLDER" means any holder of one or more Notes.
"NOTICE OF AVOIDED PAYMENT" has the meaning assigned to such term in the
Policy.
"NOTICE FOR PAYMENT" means a Notice of Nonpayment as such term is defined
in the Policy.
"OBLIGATIONS" is defined in Section 2.01 of the Security Agreement.
"OFFERING MEMO" means the Offering Memorandum, dated December 2, 2002, of
the Company relating to the offering of the Securities.
"OFFICER" means the Chairman of the Board, the President, any Vice
President of any grade, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Secretary, any Assistant Secretary or the Controller of
the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers
satisfying the requirements of Sections 12.4 and 12.5 of the Indenture.
"OPERATIVE DOCUMENTS" means the Indenture, the Collateral Agreements, the
Collateral Maintenance Agreement and the Reference Agency Agreement.
"OPINION OF COUNSEL" means a written opinion from the General Counsel of
the Company, legal counsel to the Company or another legal counsel who is
reasonably acceptable to the Trustee, which Opinion of Counsel shall comply with
Sections 12.4 and 12.5 of the Indenture. The counsel may be an employee of the
Company. The acceptance by the Trustee (without written objection to the Company
during the fifteen (15) Business Days following receipt) of, or its action on,
an opinion of counsel not specifically referred to above shall be sufficient
evidence that such counsel is acceptable to the Trustee.
"OUTSTANDING" or "OUTSTANDING" when used with respect to Notes or a Note,
means all Notes theretofore authenticated and delivered under the Indenture,
except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee in trust
for the Holders of such Notes, PROVIDED that, if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to the Indenture or
provision therefor satisfactory to the Trustee has been made;
(c) Notes for which payment has been deposited with the Trustee or any
Paying Agent in trust pursuant to Article 9 of the Indenture (except to the
extent provided therein); and
(d) Notes which have been paid, or for which other Notes shall have
been authenticated and delivered in lieu thereof or in substitution therefor
pursuant to the terms of Section 2.12 of the Indenture, unless proof
satisfactory to the Trustee is presented that any such Notes are held by bona
fide purchasers in whose hands the Notes are valid obligations of the Company.
A Note does not cease to be Outstanding because the Company or one of its
Affiliates holds the Note; PROVIDED, HOWEVER, that in determining whether the
Holders of the requisite aggregate principal amount of Notes Outstanding have
given any request, demand, authorization, direction, notice, consent or waiver
under the Indenture or any other Operative Document, Section 2.13 of the
Indenture shall be applicable.
"ORIGINAL INDENTURE" has the meaning set forth in the introductory
paragraph of the Indenture.
"OUTSTANDING AMOUNT" is defined in Section 3.6(b) of the Indenture.
"OVERDUE SCHEDULED PAYMENT" means any Payment of accrued interest on any
Notes which is not in fact received by the Trustee (whether from the Company,
the Liquidity Provider, the Policy Provider or otherwise) on or within five days
after the Scheduled Payment Date relating thereto and which is not subsequently
paid in connection with the redemption or final maturity of a Note.
"PARTS INVENTORY REPORT" means, as of any date, a list identifying the
Pledged Spare Parts by manufacturer's part number and brief description and
stating the quantity of each such part included in the Pledged Spare Parts as of
such specified date.
"PAYING AGENT" has the meaning provided in Section 2.8 of the Indenture.
"PAYMENT" means (i) any payment of principal of, interest on, or Premium,
if any, or Break Amount, if any, with respect to the Notes from the Company,
(ii) any payment of interest on the Securities with funds drawn under the
Liquidity Facility or from a Cash Collateral Account or (iii) any payment of
interest on or principal of Securities with funds drawn under the Policy, or
(iv) any payment received or amount realized by the Trustee from the exercise of
remedies after the occurrence of an Event of Default.
"PAYMENT DEFAULT" means a Default referred to in Section 7.1(a) of the
Indenture.
"PAYMENT DUE RATE" means (a) the Debt Rate plus 2% or, if less, (b) the
maximum rate permitted by applicable law.
"PERMITTED DAYS" is defined in Section 2.1 of the Collateral Maintenance
Agreement.
"PERMITTED LESSEE" has the meaning provided in Section 3.6(b) of the
Collateral Maintenance Agreement.
"PERMITTED LIEN" means (a) the rights of Security Agent under the Operative
Documents; (b) Liens attributable to Security Agent (both in its capacity as
Security Agent and in its individual capacity); (c) the rights of others under
agreements or arrangements to the extent expressly permitted by the terms of
Section 3.6 of the Collateral Maintenance Agreement; (d) Liens for Taxes of the
Company (and its U.S. federal tax law consolidated group), either not yet due or
being contested in good faith by appropriate proceedings so long as such Liens
and such proceedings do not involve any material risk of the sale, forfeiture or
loss of the Pledged Spare Parts or the interest of Security Agent therein or
impair the Lien of the Security Agreement; (e) materialmen's, mechanics',
workers', repairers', employees' or other like Liens arising in the ordinary
course of business for amounts the payment of which is either not yet delinquent
for more than 60 days or is being contested in good faith by appropriate
proceedings, so long as such Liens and such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Pledged Spare Parts or the
interest of Security Agent therein or impair the Lien of the Security Agreement;
(f) Liens arising out of any judgment or award against the Company, so long as
such judgment shall, within 60 days after the entry thereof, have been
discharged or vacated, or execution thereof stayed pending appeal or shall have
been discharged, vacated or reversed within 60 days after the expiration of such
stay, and so long as during any such 60 day period there is not as a result, or
any such judgment or award does not involve, any material risk of the sale,
forfeiture or loss of the Pledged Spare Parts or the interest of Security Agent
therein or any impairment of the Lien of the Security Agreement; (g) any other
Lien with respect to which the Company shall have provided a bond, cash
collateral or other security adequate in the reasonable opinion of Security
Agent.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, trustee,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"PLEDGED SPARE PARTS" has the meaning set forth in clause (1) of the first
paragraph of Section 2.01 of the Security Agreement.
"POLICY" means MBIA Insurance Corporation Financial Guaranty Insurance
Policy No. 39753, issued as of the Closing Date, as amended, supplemented or
otherwise modified from time to time in accordance with its respective terms.
"POLICY ACCOUNT" means the Eligible Deposit Account established by the
Trustee pursuant to Section 8.13(a) of the Indenture which the Trustee shall
make deposits in and withdrawals from in accordance with the Indenture.
"POLICY DRAWING" means any payment of a claim under the Policy.
"POLICY ELECTION DISTRIBUTION DATE" is defined in Section 3.6(c) of the
Indenture.
"POLICY EXPENSES" means all amounts (including amounts in respect of
premiums, fees, expenses or indemnities) due to the Policy Provider under the
Policy Provider Agreement other than (i) any Policy Drawing, (ii) any interest
accrued on any Policy Provider Obligations, and (iii) reimbursement of and
interest on the Liquidity Obligations in respect of the Liquidity Facility paid
by the Policy Provider to the Liquidity Provider; provided that if, at the time
of determination, a Policy Provider Default exists, Policy Expenses shall not
include any indemnity payments owed to the Policy Provider.
"POLICY FEE LETTER" means the fee letter, dated as of the Closing Date,
from the Policy Provider to the Company and acknowledged by the Trustee, setting
forth the fees and premiums payable with respect to the Policy.
"POLICY PROVIDER" means MBIA Insurance Corporation, a New York insurance
company, and its successors and permitted assigns.
"POLICY PROVIDER AGREEMENT" means the Insurance and Indemnity Agreement
dated as of the Closing Date, among the Trustee, the Company and the Policy
Provider, as amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"POLICY PROVIDER DEFAULT" shall mean the occurrence of any of the following
events: (a) the Policy Provider fails to make a payment required under the
Policy in accordance with its terms and such failure remains unremedied for two
Business Days following the delivery of Written Notice of such failure to the
Policy Provider or (b) the Policy Provider (i) files any petition or commences
any case or proceeding under any provisions of any federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (ii)
makes a general assignment for the benefit of its creditors or (iii) has an
order for relief entered against it under any federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization that is
final and nonappealable, or (c) a court of competent jurisdiction, the New York
Department of Insurance or another competent regulatory authority enters a final
and nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent or receiver for the Policy Provider or for all or any material portion of
its property or (ii) authorizing the taking of possession by a custodian,
trustee, agent or receiver of the Policy Provider (or taking of possession of
all or any material portion of the Policy Provider's property).
"POLICY PROVIDER ELECTION" is defined in Section 3.6(c) of the Indenture.
"POLICY PROVIDER INTEREST OBLIGATIONS" means any interest on any Policy
Drawing made to cover any shortfall attributable to any failure of the Liquidity
Provider to honor any Interest Drawing in accordance with Section 2.02(e) of the
Liquidity Facility in an amount equal to the amount of interest that would have
accrued on such Interest Drawing if such Interest Drawing had been made in
accordance with Section 2.02(e) of the Liquidity Facility at the interest rate
applicable to such Interest Drawing until such Policy Drawing has been repaid in
full.
"POLICY PROVIDER OBLIGATIONS" means all reimbursement and other amounts,
including, without limitation, fees and indemnities (to the extent not included
in Policy Expenses), due to the Policy Provider under the Policy Provider
Agreement but shall not include any interest on Policy Drawings other than
Policy Provider Interest Obligations.
"PREMIUM" means, with respect to any Note redeemed pursuant to Article 4 of
the Indenture, the following percentage of the principal amount of such Note:
(a) with respect to a Security, (i) if redeemed before the first anniversary of
the Issuance Date, 1.5%; (ii) if redeemed on or after such first anniversary and
before the second anniversary of the Issuance Date, 1.0%; and (iii) if redeemed
on or after such second anniversary and before the third anniversary of the
Issuance Date, 0.5%; and (b) with respect to a Subordinated Security, (i) if
redeemed before the second anniversary of the Subordinated Issuance Date, 3.0%;
(ii) if redeemed on or after such second anniversary and before the third
anniversary of the Subordinated Issuance Date, 2.0%; and (iii) if redeemed on or
after such third anniversary and before the fourth anniversary of the
Subordinated Issuance Date, 1.0%; PROVIDED that no Premium shall be payable in
connection with a redemption made by the Company to satisfy the Maximum
Collateral Ratio, Maximum Subordinated Collateral Ratio, Minimum Rotable Ratio
or Minimum Subordinated Rotable Ratio requirement pursuant to Section 3.1 of the
Collateral Maintenance Agreement.
"PRIOR FUNDS" means, on any Distribution Date, any Drawing paid under the
Liquidity Facility on such Distribution Date and any funds withdrawn from the
Cash Collateral Account on such Distribution Date in respect of accrued interest
on the Securities.
"PROCEEDS DEFICIENCY DRAWING" is defined in Section 3.6(b) of the
Indenture.
"PROPELLER" includes a part, appurtenance, and accessory of a propeller.
"PROVIDER INCUMBENCY CERTIFICATE" is defined in Section 3.7(b) of the
Indenture.
"PROVIDER REPRESENTATIVES" is defined in Section 3.7(b) of the Indenture.
"PURCHASE AGREEMENT" means the Purchase Agreement dated December 2, 2002 by
and between the Initial Purchaser and the Company.
"QIB" means a qualified institutional buyer as defined in Rule 144A.
"QUALIFIED SPARE PARTS" has the meaning provided in clause (1) of the first
paragraph in Section 2.01 of the Security Agreement.
"RATING AGENCIES" means, collectively, at any time, and with respect to a
Series of Notes, each nationally recognized rating agency which shall have been
requested by the Company to rate such Series of Notes and which shall then be
rating such Series of Notes. The initial Rating Agency will be Moody's, in the
case of the Securities, and Moody's and Standard & Poor's, in the case of the
Subordinated Securities.
"RATINGS CONFIRMATION" means, with respect to any action proposed to be
taken, a written confirmation from each of the Rating Agencies with respect to
the applicable Series of Notes that such action would not result in (i) a
reduction of the rating for such Series of Notes below the then current rating
for such Series of Notes (such rating, in the case of the Securities, as
determined without regard to the Policy) or (ii) a withdrawal or suspension of
the rating of such Series of Notes.
"RECORD DATE" means the fifteenth (15th) day preceding any Scheduled
Interest Payment Date, whether or not a Business Day.
"REDEMPTION DATE", when used with respect to any Note to be redeemed, means
the date fixed for such redemption by or pursuant to the Indenture and such
Note.
"REFERENCE AGENCY AGREEMENT" means the Reference Agency Agreement, dated as
of the Issuance Date, among the Company, WTC, as the reference agent thereunder,
and the Trustee.
"REGISTER" has the meaning provided in Section 2.8 of the Indenture.
"REGISTRAR" has the meaning provided in Section 2.8 of the Indenture.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of December 6, 2002, by and between the Company and the Initial
Purchaser.
"REGULATION S" means Regulation S under the Securities Act.
"REGULATION S DEFINITIVE SECURITIES" is defined in Section 2.1(e) of the
Indenture.
"REGULATION S DEFINITIVE SUBORDINATED SECURITIES" is defined in Section
2A.1(e) of the Indenture.
"REGULATION S GLOBAL SECURITY" is defined in Section 2.1(d) of the
Indenture.
"REGULATION S GLOBAL SUBORDINATED SECURITY" is defined in Section 2A.1(d)
of the Indenture.
"RELEVANT DATE" is defined in Section 3.6(c) of the Indenture.
"REPLACEMENT LIQUIDITY FACILITY" means an irrevocable revolving credit
agreement (or agreements) in substantially the form of the replaced Liquidity
Facility, including reinstatement provisions, or in such other form (which may
include a letter of credit) as shall permit the Rating Agencies with respect to
the Securities to confirm in writing their respective ratings then in effect for
the Securities (before downgrading of such ratings, if any, as a result of the
downgrading of the Liquidity Provider), and be consented to by the Policy
Provider, which consent shall not be unreasonably withheld or delayed, in a face
amount (or in an aggregate face amount) equal to the amount of interest payable
on the Securities (at the Capped Interest Rate, and without regard to expected
future principal payments) on the eight Interest Payment Dates following the
date of replacement of such Liquidity Facility (or if such date is an Interest
Payment Date, on such day and the seven Interest Payment Dates following the
date of replacement of such Liquidity Facility) and issued by a Person (or
Persons) having unsecured short-term debt rating or issuer credit rating, as the
case may be, issued by Moody's and Standard & Poor's which are equal to or
higher than the Threshold Rating. Without limitation of the form that a
Replacement Liquidity Facility otherwise may have pursuant to the preceding
sentence, a Replacement Liquidity Facility for the Securities may have a stated
expiration date earlier than 15 days after the Final Legal Maturity Date so long
as such Replacement Liquidity Facility provides for a Non-Extension Drawing as
contemplated by Section 3.5(d) of the Indenture.
"REQUEST" means a written request for the action therein specified signed
on behalf of the Company by any Officer and delivered to the Trustee. Each
Request shall be accompanied by an Officers' Certificate if and to the extent
required by Section 12.4 of the Indenture.
"REQUIRED AMOUNT" means, for any day, the sum of the aggregate amount of
interest, calculated at the Capped Interest Rate, that would be payable on the
Securities on each of the eight successive Interest Payment Dates immediately
following such day or, if such day is an Interest Payment Date, on such day and
the succeeding seven Interest Payment Dates, in each case calculated on the
basis of the outstanding principal amount of the Securities on such date and
without regard to expected future payments of principal on the Securities.
"REQUIRED HOLDERS" means from time to time the Holders of more than 50% in
aggregate unpaid principal amount of the Securities then Outstanding.
"REQUIRED SUBORDINATED HOLDERS" means from time to time the holders of more
than 50% in aggregate unpaid principal amount of the Subordinated Securities
then Outstanding.
"RESPONSIBLE OFFICER" means (i) with respect to the Trustee, any officer in
the corporate trust administration department of the Trustee or any other
officer customarily performing functions similar to those performed by the
Persons who at the time shall be such officers or to whom any corporate trust
matter is referred because of his or her knowledge of and familiarity with a
particular subject, (ii) with respect to the Liquidity Provider, any authorized
officer of the Liquidity Provider, and (iii) with respect to the Policy
Provider, any authorized officer of the Policy Provider.
"RESTRICTED DEFINITIVE SECURITIES" is defined in Section 2.1(e) of the
Indenture.
"RESTRICTED DEFINITIVE SUBORDINATED SECURITIES" is defined in Section
2A.1(e) of the Indenture.
"RESTRICTED GLOBAL SECURITY" is defined in Section 2.1(c) of the Indenture.
"RESTRICTED GLOBAL SUBORDINATED SECURITY" is defined in Section 2A.1(c) of
the Indenture.
"RESTRICTED LEGEND" is defined in Section 2.2 of the Indenture.
"RESTRICTED PERIOD" is defined in Section 2.1(d) of the Indenture for
purposes of the Securities and in Section 2A.1(d) for purposes of the
Subordinated Securities.
"RESTRICTED SECURITIES" are defined in Section 2.2 of the Indenture.
"RESTRICTED SUBORDINATED SECURITIES" are defined in Section 2A.2 of the
Indenture.
"ROTABLE" means a Qualified Spare Part that wears over time and can be
repeatedly restored to a serviceable condition over a period approximating the
life of the flight equipment to which it relates.
"ROTABLE RATIO" shall mean a percentage determined by dividing (i) the Fair
Market Value of the Rotables, as set forth in the most recent Independent
Appraiser's Certificate delivered by the Company pursuant to Article 2 of the
Collateral Maintenance Agreement, as supplemented pursuant to Section 3.1 of the
Collateral Maintenance Agreement, if applicable, by (ii) the aggregate principal
amount of all Securities Outstanding minus the sum of the Cash Collateral held
by the Collateral Agent.
"RULE 144A" means Rule 144A under the Securities Act.
"SALES" is defined in Section 3.2 of the Collateral Maintenance Agreement.
"SCHEDULED INTEREST PAYMENT DATE" means each Interest Payment Date, without
giving effect to the proviso to the definition of Interest Payment Date.
"SCHEDULED PAYMENT DATE" means (i) with respect to any payment of interest,
the Interest Payment Date applicable thereto, (ii) with respect to any payment
of defaulted interest, the payment date established pursuant to Section 2.16,
(iii) with respect to amounts due on the redemption of any Note, the Redemption
Date applicable thereto, and (iv) with respect to the final maturity of the
Notes, December 6, 2007.
"SEC" means the Securities and Exchange Commission and any government
agency succeeding to its functions.
"SECTION 1110" means Section 1110 of the Bankruptcy Code.
"SECTION 1110 PERIOD" means the continuous period of (i) 60 days specified
in Section 1110(a)(2)(A) of the Bankruptcy Code (or such longer period, if any,
agreed to under Section 1110(b) of the Bankruptcy Code), plus (ii) an additional
period, if any, commencing with the trustee or debtor-in-possession in such
proceeding agreeing, with court approval, to perform its obligations under the
Operative Documents within such 60 days (or longer period as agreed) and
continuing until such time as such trustee or debtor-in-possession ceases to
fully perform its obligations thereunder with the result that the period during
which the Collateral Agent is prohibited from repossessing the collateral under
any Collateral Agreement comes to an end.
"SECURITIES" means the Initial Securities and the Exchange Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time.
"SECURITY AGENT" means the Trustee acting in the capacity of security agent
on behalf of the Holders under the Security Agreement until a successor replaces
it in accordance with the provisions of the Security Agreement and thereafter
means the successor.
"SECURITY AGREEMENT" means the Spare Parts Security Agreement dated as of
the Issuance Date between the Company and the Security Agent.
"SECURITYHOLDER" means any holder of one or more Securities.
"SEMIANNUAL METHODOLOGY" means the Annual Methodology, excluding actions
referred to in clauses (iii) and (iv) of the definition of Annual Methodology.
"SEMIANNUAL VALUATION DATE" is defined in Section 2.2 of the Collateral
Maintenance Agreement.
"SERIES" means each of the Securities and the Subordinated Securities,
considered as a separate class.
"SERVICEABLE PARTS" means Pledged Spare Parts in condition satisfactory for
incorporation in, installation on, attachment or appurtenance to or use in an
Aircraft, Engine or other Qualified Spare Part.
"SHELF REGISTRATION STATEMENT" means the shelf registration statement which
may be required to be filed by the Company with the SEC pursuant to (i) with
respect to Securities, the Registration Rights Agreement, other than an Exchange
Offer Registration Statement, and (ii) with respect to Subordinated Securities,
the Subordinated Securities Registration Rights Agreement, other than an
Exchange Offer Registration Statement.
"SPARE PART" means an accessory, appurtenance, or part of an Aircraft
(except an Engine or Propeller), Engine (except a Propeller), Propeller, or
Appliance, that is to be installed at a later time in an Aircraft, Engine,
Propeller or Appliance.
"SPARE PARTS COLLATERAL" has the meaning specified in Section 2.01 of the
Security Agreement.
"SPARE PARTS DOCUMENTS" has the meaning set forth in clause (6) of the
first paragraph of Section 2.01 of the Security Agreement.
"SPECIAL DEFAULT" means a Payment Default or a Continental Bankruptcy
Event.
"SPECIAL RECORD DATE" has the meaning provided in Section 2.10 of the
Indenture.
"SPECIAL VALUATION DATE" is defined in Section 2.4 of the Collateral
Maintenance Agreement.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc.
"STATED AMOUNT" means the Maximum Commitment (as defined in the Liquidity
Facility).
"STATED EXPIRATION DATE" is defined in Section 3.5(d) of the Indenture.
"SUBORDINATED APPLICABLE MARGIN" means 7.50%.
"SUBORDINATED CLOSING DATE" means the Subordinated Issuance Date.
"SUBORDINATED COLLATERAL RATIO" shall mean a percentage determined by
dividing (i) the aggregate principal amount of all Notes Outstanding minus the
sum of the Cash Collateral held by the Collateral Agent by (ii) the Fair Market
Value of all Collateral (excluding any Cash Collateral), as set forth in the
most recent Independent Appraiser's Certificate delivered by the Company
pursuant to Article 2 of the Collateral Maintenance Agreement, as supplemented
pursuant to Section 3.1 of the Collateral Maintenance Agreement, if applicable.
"SUBORDINATED DEBT RATE" means a rate per annum equal, in the case of the
first Interest Period for the Subordinated Securities, to 8.78% and, in the case
of any subsequent Interest Period, LIBOR for such Interest Period, as determined
pursuant to the Reference Agency Agreement, plus the Subordinated Applicable
Margin, PROVIDED that, solely in the event no Registration Event (as defined in
the Subordinated Security Registration Rights Agreement) occurs on or prior to
the 210th day after the Subordinated Closing Date, the Subordinated Debt Rate
shall be increased by an additional margin equal to 0.50% per annum, from and
including such 210th day to and excluding the earlier of (i) the date on which
such Registration Event occurs and (ii) the date on which there ceases to be any
Registrable Securities (as defined in the Subordinated Security Registration
Rights Agreement)); or if the Shelf Registration Statement (as defined in the
Subordinated Security Registration Rights Agreement) (if it is filed), after
being declared effective by the SEC, ceases to be effective at any time during
the period specified by Section 2(b)(B) of the Subordinated Security
Registration Rights Agreement for more than 60 days, whether or not consecutive,
during any 12-month period, the Subordinated Debt Rate shall be increased by an
additional margin equal to 0.50% per annum from and including the 61st day of
the applicable 12-month period such Shelf Registration Statement ceases to be
effective to and excluding the date on which the Shelf Registration Statement
again becomes effective (or, if earlier, the end of the period specified by
Section 2(b)(B) of the Subordinated Security Registration Rights Agreement),
PROVIDED that the additional margin added to the Subordinated Debt Rate pursuant
to the preceding proviso shall never exceed 0.50% at any time.
"SUBORDINATED DOCUMENTS" means the Indenture, Amendment No. 1 to Collateral
Maintenance Agreement, Amendment No. 1 to Reference Agency Agreement and
Amendment No. 1 to Security Agreement.
"SUBORDINATED ISSUANCE DATE" means the date of initial issuance of the
Initial Subordinated Securities.
"SUBORDINATED PAYMENT DUE RATE" means (a) the Subordinated Debt Rate plus
2% or, if less, (b) the maximum rate permitted by applicable law.
"SUBORDINATED ROTABLE RATIO" shall mean a percentage determined by dividing
(i) the Fair Market Value of the Rotables, as set forth in the most recent
Independent Appraiser's Certificate delivered by the Company pursuant to Article
2 of the Collateral Maintenance Agreement, as supplemented pursuant to Section
3.1 of the Collateral Maintenance Agreement, if applicable, by (ii) the
aggregate principal amount of all Notes Outstanding minus the sum of the Cash
Collateral held by the Collateral Agent.
"SUBORDINATED SECURITIES" means the Initial Subordinated Securities and the
Exchange Subordinated Securities.
"SUBORDINATED SECURITY OFFERING MEMO" means the Offering Memorandum, dated
May 2, 2003 of the Company relating to the offering of the Subordinated
Securities.
"SUBORDINATED SECURITY PROVISIONS" is defined in Section 4.1 of the
Collateral Maintenance Agreement.
"SUBORDINATED SECURITY PURCHASE AGREEMENT" means the Purchase Agreement,
dated as of May 2, 2003, by and between the Initial Purchaser and the Company.
"SUBORDINATED SECURITY REGISTRATION RIGHTS AGREEMENT" means the
Registration Rights Agreement dated as of the Subordinated Issuance Date, by and
between the Company and the Initial Purchaser.
"SUBORDINATED SECURITYHOLDER" means any holder of one or more Subordinated
Securities.
"SUCCESSOR COMPANY" is defined in Section 5.4(a)(i) of the Indenture.
"SUPPLEMENTAL SECURITY AGREEMENT" means a supplement to the Security
Agreement substantially in the form of Exhibit A to the Security Agreement.
"SUPPORT DOCUMENTS" means the Liquidity Facility, the Policy, the Policy
Provider Agreement and the Fee Letters.
"TAX" and "TAXES" mean any and all taxes, fees, levies, duties, tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, loss, damage, liability, expense, additions to tax and additional
amounts or costs incurred or imposed with respect thereto) imposed or otherwise
assessed by the United States of America or by any state, local or foreign
government (or any subdivision or agency thereof) or other taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth and similar charges; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer, value
added, taxes on goods and services, gains taxes, license, registration and
documentation fees, customs duties, tariffs, and similar charges.
"TERMINATION NOTICE" has the meaning assigned to such term in the Liquidity
Facility.
"THRESHOLD AMOUNT" means $2,000,000.
"THRESHOLD RATING" means the short-term unsecured debt rating of P-1 by
Moody's and A-1 by Standard & Poor's; PROVIDED that so long as the initial
Liquidity Provider is the Liquidity Provider, the Threshold Rating shall apply
to the Liquidity Guarantor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture; PROVIDED, HOWEVER, that
in the event the TIA is amended after such date, "TIA" means, to the extent
required by any such amendment, the TIA as so amended.
"TRUST ACCOUNTS" is defined in Section 8.13(a) of the Indenture.
"TRUST OFFICER" means any officer in the corporate trust department of the
Trustee, or any other officer or assistant officer of the Trustee assigned by
the Trustee to administer its corporate trust matters.
"TRUSTEE" means the party named as such in the Indenture until a successor
replaces it in accordance with the provisions of the Indenture and thereafter
means the successor Trustee and if, at any time, there is more than one Trustee,
"Trustee" as used with respect to the Notes of any Series shall mean the Trustee
with respect to the Notes of that Series.
"TRUSTEE INCUMBENCY CERTIFICATE" is defined in Section 3.7(a) of the
Indenture.
"TRUSTEE PROVISIONS" is defined in Section 4.1 of the Collateral
Maintenance Agreement.
"TRUSTEE REPRESENTATIVES" is defined in Section 3.7(a) of the Indenture.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
"UNAPPLIED PROVIDER ADVANCE" is defined in the Liquidity Facility.
"UNSERVICEABLE PARTS" means Pledged Spare Parts that are not Serviceable
Parts.
"U.S." or "UNITED STATES" means the United States of America.
"U.S. AIR CARRIER" means any United States air carrier that is a Citizen of
the United States holding an air carrier operating certificate issued pursuant
to chapter 447 of title 49 of the United States Code for aircraft capable of
carrying 10 or more individuals or 6000 pounds or more of cargo.
"U.S. GOVERNMENT" means the federal government of the United States, or any
instrumentality or agency thereof the obligations of which are guaranteed by the
full faith and credit of the federal government of the United States.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the option of the issuer thereof.
"U.S. PERSON" means any Person described in Section 7701(a)(30) of the
Code.
"VALUATION DATES" is defined in Section 2.4 of the Collateral Maintenance
Agreement.
"WARRANTIES" is defined in clause (2) of Section 2.01 of the Security
Agreement.
"WRITTEN NOTICE" means, from the Trustee, the Liquidity Provider or the
Policy Provider, a written instrument executed by the Designated Representative
of such Person. An invoice delivered by the Liquidity Provider pursuant to
Section 3.1 of the Indenture in accordance with its normal invoicing procedures
shall constitute Written Notice under such Section.
"WTC" has the meaning specified in the first paragraph of the Indenture.
SECTION 2. RULES OF CONSTRUCTION. Unless the context otherwise requires, the
following rules of construction shall apply for all purposes of the Operative
Documents (including this appendix) and of such agreements as may incorporate
this appendix by reference.
(a) In each Operative Document, unless otherwise expressly provided, a
reference to:
(i) each of the Company, the Trustee, the Collateral Agent, the Security
Agent or any other person includes, without prejudice to the
provisions of any Operative Document, any successor in interest to it
and any permitted transferee, permitted purchaser or permitted
assignee of it;
(ii) words importing the plural include the singular and words importing
the singular include the plural;
(iii) any agreement, instrument or document, or any annex, schedule or
exhibit thereto, or any other part thereof, includes, without
prejudice to the provisions of any Operative Document, that
agreement, instrument or document, or annex, schedule or exhibit, or
part, respectively, as amended, modified or supplemented from time to
time in accordance with its terms and in accordance with the
Operative Documents, and any agreement, instrument or document
entered into in substitution or replacement therefor;
(iv) any provision of any Law includes any such provision as amended,
modified, supplemented, substituted, reissued or reenacted prior to
the Closing Date, and thereafter from time to time;
(v) the words "Agreement", "this Agreement", "hereby", "herein",
"hereto", "hereof" and "hereunder" and words of similar import when
used in any Operative Document refer to such Operative Document as a
whole and not to any particular provision of such Operative Document;
(vi) the words "including", "including, without limitation", "including,
but not limited to", and terms or phrases of similar import when used
in any Operative Document, with respect to any matter or thing, mean
including, without limitation, such matter or thing; and
(vii) a"Section", an "Exhibit", an "Annex", an "Appendix" or a "Schedule"
in any Operative Document, or in any annex thereto, is a reference to
a section of, or an exhibit, an annex, an appendix or a schedule to,
such Operative Document or such annex, respectively.
(b) Each exhibit, annex, appendix and schedule to each Operative
Document is incorporated in, and shall be deemed to be a part of, such Operative
Document.
(c) Unless otherwise defined or specified in any Operative Document,
all accounting terms therein shall be construed and all accounting
determinations thereunder shall be made in accordance with GAAP.
(d) Headings used in any Operative Document are for convenience only
and shall not in any way affect the construction of, or be taken into
consideration in interpreting, such Operative Document.
(e) For purposes of each Operative Document, the occurrence and
continuance of a Default or Event of Default referred to in Section 7.1(d), (e)
or (f) of the Indenture shall not be deemed to prohibit the Company from taking
any action or exercising any right that is conditioned on no Special Default,
Default or Event of Default having occurred and be continuing if such Special
Default, Default or Event of Default consists of the institution of
reorganization proceedings with respect to the Company under Chapter 11 of the
Bankruptcy Code and the trustee or debtor-in-possession in such proceedings
shall have agreed to perform its obligations under the Operative Documents with
the approval of the applicable court and thereafter shall have continued to
perform such obligations in accordance with Section 1110.
Appendix II to the
Collateral Maintenance Agreement
Address to Policy Provider and
to the Trustee]
APPRAISAL COMPLIANCE REPORT UNDER THE COLLATERAL
MAINTENANCE AGREEMENT
Ladies and Gentlemen:
We refer to the Collateral Maintenance Agreement, dated as of December 6,
2002, between Continental Airlines, Inc. (the "COMPANY") and MBIA Insurance
Corporation (as amended, the "AGREEMENT"). Terms defined in the Agreement and
used herein have such respective defined meanings. The Company hereby certifies
that:
1. This Compliance Report is accompanied by an Independent Appraiser's
Certificate (the "RELEVANT APPRAISAL") dated [___________]. The Valuation
Date for purposes of the Relevant Appraisal was [___________] (the
"RELEVANT VALUATION DATE").
2. The following sets forth the calculation of the Collateral Ratio as of the
Relevant Valuation Date:
a. The aggregate principal amount of all
Securities Outstanding as of the
Relevant Valuation Date $[_______]
b. The Fair Market Value of the Cash
Collateral as of the Relevant Valuation
Date $[_______]
c. The Fair Market Value of the Collateral
(excluding Cash Collateral) as of the
Relevant Valuation Date, as set forth in
the accompanying Independent Appraiser'
Certificate $[_______]
d. The Collateral Ratio
((a - b) / c) [_______]%
3. The following sets forth the calculation of the
Subordinated Collateral Ratio as of the Relevant
Valuation Date:
a. The aggregate principal amount of all
Notes Outstanding as of the Relevant
Valuation Date $[_______]
b. The Fair Market Value of the Cash
Collateral as of the Relevant Valuation
Date $[_______]
c. The Fair Market Value of the Collateral
(excluding Cash Collateral) as of the
Relevant Valuation Date, as set forth in
the accompanying Independent Appraiser's
Certificate $[_______]
d. The Subordinated Collateral
Ratio ((a - b) / c) [_______]%
4. The following sets forth the calculation of the Rotable
Ratio as of the Relevant Valuation Date:
a. The Fair Market Value of the Rotables as
of the Relevant Valuation Date, as set
forth in the accompanying Independent
Appraiser's Certificate $[_______]
b. The aggregate principal amount of all
Securities Outstanding as of the
Relevant Valuation Date $[_______]
c. The Fair Market Value of the Cash
Collateral as of the Relevant Valuation
Date $[_______]
d. The Rotable Ratio
(a / b - c) [_______]%
5. The following sets forth the calculation of the
Subordinated Rotable Ratio as of the Relevant Valuation
Date:
a. The Fair Market Value of the Rotables as
of the Relevant Valuation Date, as set
forth in the accompanying Independent
Appraiser's Certificate $[_______]
b. The aggregate principal amount of all
Notes Outstanding as of the Relevant
Valuation Date $[_______]
c. The Fair Market Value of the Cash
Collateral as of the Relevant Valuation
Date $[_______]
d. The Subordinated Rotable Ratio
(a / b - c) [_______]%
6. The Continental Cash Balance as of the Relevant
Valuation Date was $[___________].
Dated: [__________]
Very truly yours,
CONTINENTAL AIRLINES, INC.
By:
----------------------------------
Name:
Title:
