INTERCREDITOR AGREEMENT Dated as of June 9, 2006 AMONG WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Trustee under the Continental Airlines Pass Through Trust 2006-1G and Continental Airlines Pass Through Trust 2006-1B, MORGAN...
(2006-1)
Dated
as
of
June
9,
2006
AMONG
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity
but
solely 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,
not
in
its individual capacity except
as
expressly set forth herein but
solely
as
Subordination Agent and Trustee
Page
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ARTICLE
I DEFINITIONS
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2
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SECTION
1.1. Definitions
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2
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ARTICLE
II TRUST
ACCOUNTS; CONTROLLING PARTY
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21
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21
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SECTION
2.2. Trust Accounts
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21
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23
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SECTION
2.4. Distributions of Special
Payments
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23
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SECTION
2.5. Designated Representatives
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24
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SECTION
2.6. Controlling Party
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25
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26
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SECTION
3.1. Written Notice of
Distribution
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26
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29
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SECTION
3.3. Other Payments
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32
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32
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SECTION
3.5. Liquidity Facilities
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32
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SECTION
3.6. The Policy
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42
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ARTICLE
IV EXERCISE
OF REMEDIES
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47
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SECTION
4.1. Directions from the Controlling
Party
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47
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SECTION
4.2. Remedies Cumulative
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48
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SECTION
4.3. Discontinuance of
Proceedings
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48
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48
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SECTION
4.5. Undertaking for Costs
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48
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49
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SECTION
5.1. Notice of Indenture Default or Triggering
Event
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49
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SECTION
5.2. Indemnification
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50
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SECTION
5.3. No Duties Except as Specified in Intercreditor
Agreement
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50
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SECTION
5.4. Notice from the Liquidity Providers and
Trustees
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51
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ARTICLE
VI THE
SUBORDINATION AGENT
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51
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SECTION
6.1. Authorization; Acceptance of Trusts and
Duties
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51
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SECTION
6.2. Absence of Duties
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51
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i
Page
INTERCREDITOR
AGREEMENT dated as of June 9, 2006, among WILMINGTON TRUST COMPANY, a Delaware
banking corporation ("WTC"),
not
in its individual capacity but solely as Trustee of each Trust (each as defined
below); XXXXXX XXXXXXX BANK, a Utah industrial bank, as Primary Liquidity
Provider, XXXXXX XXXXXXX CAPITAL SERVICES INC., a Delaware corporation, as
Above-Cap Liquidity Provider; FINANCIAL GUARANTY INSURANCE COMPANY, a stock
insurance corporation incorporated under the laws of the State of New York,
as
Policy Provider; and WILMINGTON TRUST COMPANY, not in its individual capacity
except as expressly set forth herein, but solely as Subordination Agent and
trustee hereunder (in such capacity, together with any successor appointed
pursuant to Article VIII hereof, the "Subordination
Agent").
WHEREAS,
all capitalized terms used herein shall have the respective meanings referred
to
in Article I hereof;
WHEREAS,
pursuant to the Indenture, Continental will issue on a recourse basis up to
(and
including) two series of Equipment Notes secured by the Pledged Spare
Parts;
WHEREAS,
pursuant to the Note Purchase Agreement, each Trust will acquire the Equipment
Note having an interest rate equal to the interest rate applicable to the
Certificates to be issued by such Trust;
WHEREAS,
pursuant to each Trust Agreement, the Trust created thereby proposes to issue
a
single class of Certificates (a "Class")
bearing the interest rate and having the final distribution date described
in
such Trust Agreement on the terms and subject to the conditions set forth
therein;
WHEREAS,
pursuant to the Underwriting Agreement, the Underwriter proposes to purchase
the
Class G Certificates issued by the Class G Trust and the Class B Certificates
issued by the Class B Trust in the aggregate face amount set forth opposite
the
name of such Trust on Schedule I thereto on the terms and subject to the
conditions set forth therein;
WHEREAS,
the Primary Liquidity Provider proposes to enter into a revolving credit
agreement relating to the Class G Certificates and the Above-Cap Liquidity
Provider proposes to enter into an irrevocable interest rate cap agreement
relating to the Class G Certificates, in each case with the Subordination Agent,
as agent for the Class G Trustee, for the benefit of the Class G
Certificateholders;
WHEREAS,
the Policy Provider proposes to enter into the Policy Provider Agreement
providing for the issuance by the Policy Provider of the Policy for the benefit
of the Class G Certificateholders; and
WHEREAS,
it is a condition precedent to the obligations of the Underwriter under the
Underwriting Agreement that the Subordination Agent, the Trustees, the Liquidity
Providers
and the Policy Provider agree to the terms of subordination set forth in this
Agreement in respect of each Class of Certificates, and the Subordination Agent,
the Trustees, the Liquidity Providers and the Policy Provider, by entering
into
this Agreement, hereby acknowledge and agree to such terms of subordination
and
the other provisions of this Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained, and
of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
DEFINITIONS
SECTION
1.1. Definitions.
For all
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(1) the
terms
used herein that are defined in this Article have the meanings assigned to
them
in this Article, and words importing the plural include the singular and words
importing the singular include the plural;
(2) all
references in this Agreement to designated "Articles", "Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions
of
this Agreement;
(3) the
words
"herein", "hereof" and "hereunder" and other words of similar import refer
to
this Agreement as a whole and not to any particular Article, Section or other
subdivision; and
(4) the
term
"including" means "including without limitation".
"Above-Cap
Account"
means
an Eligible Deposit Account in the name of the Subordination Agent maintained
at
an Eligible Institution, which shall be the Subordination Agent if it shall
so
qualify, into which all amounts paid under the Above-Cap Liquidity Facility
pursuant to Section 3.5(a) shall be deposited.
"Above-Cap
Collateral Account"
means
an Eligible Deposit Account in the name of the Subordination Agent maintained
at
an Eligible Institution, which shall be the Subordination Agent if it shall
so
qualify, into which all amounts paid under the Above-Cap Liquidity Facility
pursuant to Section 3.5(c)(iv) shall be deposited.
"Above-Cap
Liquidity Facility"
means,
initially, the ISDA Master Agreement, dated as of the date hereof, between
the
Subordination Agent, as agent and trustee for the Class G Trust, and the initial
Above-Cap Liquidity Provider, together with the Schedule and Confirmation
attached thereto, relating to the Class G Certificates, and, from and after
the
replacement of such ISDA Master Agreement pursuant hereto, the Replacement
Above-Cap Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Above-Cap
Liquidity Provider"
means
Xxxxxx Xxxxxxx Capital Services Inc., together with any Replacement Above-Cap
Liquidity Provider which has issued a Replacement Above-Cap Liquidity Facility
to replace any Above-Cap Liquidity Facility pursuant to Section
3.5(c)(iv).
"Above-Cap
Payment"
has the
meaning specified in Section 3.5(a).
"Above-Cap
Withdrawal"
has the
meaning specified in
Section
3.5(a).
"Acceleration"
means,
with respect to the amounts payable in respect of the Equipment Notes, such
amounts becoming immediately due and payable by declaration or otherwise.
"Accelerate",
"Accelerated"
and
"Accelerating"
have
meanings correlative to the foregoing.
"Accrued
Class G Interest"
has the
meaning specified in Section 3.6(a).
"Advance"
means
any Advance as defined in the Primary Liquidity Facility.
"Affiliate"
means,
with respect to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with such Person. For the purposes of
this
definition, "control" means the power, directly or indirectly, to direct or
cause the direction of the management and policies of such Person whether
through the ownership of voting securities or by contract or otherwise; and
the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable
Fraction"
means,
with respect to any Special Distribution Date, a fraction, the numerator of
which shall be the amount of principal of the applicable Equipment Note or
Equipment Notes being redeemed, purchased or prepaid on such Special
Distribution Date, and the denominator of which shall be the aggregate
outstanding principal amount of all Equipment Notes.
"Appraisal"
means a
Fair Market Value appraisal (which may be a "desktop" appraisal) performed
by
any nationally recognized aircraft or aircraft parts appraiser.
"Available
Amount"
means,
on any date, the Maximum Available Commitment (as defined in the Primary
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.
"Basic
Agreement"
means
the Pass Through Trust Agreement dated as of September 25, 1997 between
Continental and WTC, not in its individual capacity, except as otherwise
expressly provided therein, but solely as trustee.
"Business
Day"
means
any day (i) other than a Saturday or Sunday or a day on which insurance
companies in New York, New York or commercial banks are required or authorized
to close in Houston, Texas, New York, New York, or, so long as any Certificate
is outstanding, the city and state in which any Trustee, the Subordination
Agent
or the Mortgagee maintains its Corporate Trust Office or, solely with respect
to
draws under the 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 or the city and state
in which the corporate trust office of the Fiscal Agent is located (ii) that
is
a day for trading by and between banks in the London interbank Eurodollar market
and (iii) that, solely with respect to draws under any Liquidity Facility,
also
is a "Business Day" as defined in such Liquidity Facility.
"Capped
Interest Rate"
means,
at any time, Capped LIBOR at such time plus 0.35% per annum.
"Capped
LIBOR"
means,
at any time, 10% per annum.
"Cash
Collateral Account"
means
the Primary Cash Collateral Account, or the Above-Cap Collateral Account, as
applicable.
"Certificate"
means a
Class G Certificate or a Class B Certificate, as applicable.
"Certificateholder"
means
any holder of one or more Certificates.
"Class"
has the
meaning assigned to such term in the preliminary statements to this
Agreement.
"Class
B Certificateholder"
means,
at any time, any holder of one or more Class B Certificates.
"Class
B Certificates"
means
the certificates issued by the Class B Trust, substantially in the form of
Exhibit A to the Class B Trust Agreement, and authenticated by the Class B
Trustee, representing fractional undivided interests in the Class B Trust,
and
any certificates issued in exchange therefor or replacement thereof pursuant
to
the terms of the Class B Trust Agreement.
"Class
B Trust"
means,
the Continental Airlines Pass Through Trust 2006-1B created and administered
pursuant to the Class B Trust Agreement.
"Class
B Trust Agreement"
means,
the Basic Agreement, as supplemented by the Supplement No. 2006-1B thereto
dated
as of the date hereof (the "Class
B Trust Supplement"),
governing the creation and administration of the Continental Airlines Pass
Through Trust 2006-1B and the issuance of the Class B Certificates, as the
same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class
B Trust Supplement"
has the
meaning assigned to such term in the definition of Class B Trust
Agreement.
"Class
B Trustee"
means
WTC, not in its individual capacity except as expressly set forth in the Class
B
Trust Agreement, but solely as trustee under the Class B Trust Agreement,
together with any successor trustee appointed pursuant thereto.
"Class
G Certificateholder"
means,
at any time, any holder of one or more Class G Certificates.
"Class
G Certificates"
means
the certificates issued by the Class G Trust, substantially in the form of
Exhibit A to the Class G Trust Agreement, and authenticated by the Class G
Trustee, representing fractional undivided interests in the Class G Trust,
and
any certificates issued in exchange therefor or replacement thereof pursuant
to
the terms of the Class G Trust Agreement.
"Class
G Trust"
means
the Continental Airlines Pass Through Trust 2006-1G created and administered
pursuant to the Class G Trust Agreement.
"Class
G Trust Agreement"
means
the Basic Agreement, as supplemented by the Supplement No. 2006-1G thereto
dated
as of the date hereof (the “Class
G Trust Supplement”),
governing the creation and administration of the Continental Airlines Pass
Through Trust 2006-1G and the issuance of the Class G Certificates, as the
same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class
G Trust Supplement"
has the
meaning assigned to such term in the definition of Class G Trust
Agreement.
"Class
G Trustee"
means
WTC, not in its individual capacity except as expressly set forth in the Class
G
Trust Agreement, but solely as trustee under the Class G Trust Agreement,
together with any successor trustee appointed pursuant thereto.
"Closing
Date"
means
June 9, 2006.
"Code"
means
the Internal Revenue Code of 1986, as amended from time to time, and the
Treasury Regulations promulgated thereunder.
"Collateral"
has the
meaning specified in the Indenture.
"Collateral
Maintenance Agreement"
has the
meaning specified in the Indenture.
"Collection
Account"
means
the Eligible Deposit Account established by the Subordination Agent pursuant
to
Section 2.2(a)(i) which the Subordination Agent shall make deposits in and
withdrawals from in accordance with this Agreement.
"Consent
Period"
has the
meaning specified in Section 3.5(d).
"Continental"
means
Continental Airlines, Inc., a Delaware corporation, and its successors and
assigns.
"Continental
Bankruptcy Event"
means
the occurrence and continuation of any of the following:
(a) Continental
shall consent to the appointment of or the taking of possession by a receiver,
trustee or liquidator of itself or of a substantial part of its property, or
Continental shall admit in writing its inability to pay its debts generally
as
they come due, or does not pay its debts generally as they become due or shall
make a general assignment for the benefit of creditors, or Continental shall
file a voluntary petition in bankruptcy or a voluntary petition or an answer
seeking reorganization, liquidation or other relief in a case under any
bankruptcy laws or other insolvency laws (as in effect at such time) or an
answer admitting the material allegations of a petition filed against
Continental in any such case, or Continental shall seek relief by voluntary
petition, answer or consent, under the provisions of any other bankruptcy or
other similar law providing for the reorganization or winding-up of corporations
(as in effect at such time) or Continental shall seek an agreement, composition,
extension or adjustment with its creditors under such laws, or Continental's
board of directors shall adopt a resolution authorizing corporate action in
furtherance of any of the foregoing; or
(b) an
order,
judgment or decree shall be entered by any court of competent jurisdiction
appointing, without the consent of Continental, a receiver, trustee or
liquidator of Continental or of any substantial part of its property, or any
substantial part of the property of Continental shall be sequestered, or
granting any other relief in respect of Continental as a debtor under any
bankruptcy laws or other insolvency laws (as in effect at such time), and any
such order, judgment or decree of appointment or sequestration shall remain
in
force undismissed, unstayed and unvacated for a period of 60 days after the
date
of entry thereof; or
(c) a
petition against Continental in a case under any bankruptcy laws or other
insolvency laws (as in effect at such time) is filed and not withdrawn or
dismissed within 60 days thereafter, or if, under the provisions of any law
providing for reorganization or winding-up of corporations which may apply
to
Continental, any court of competent jurisdiction assumes jurisdiction, custody
or control of Continental or of any substantial part of its property and such
jurisdiction, custody or control remains in force unrelinquished, unstayed
and
unterminated for a period of 60 days.
"Continental
Provisions"
has the
meaning specified in Section 9.1(a).
"Controlling
Party"
means
the Person entitled to act as such pursuant to the terms of Section
2.6.
"Corporate
Trust Office"
means,
with respect to any Trustee, the Subordination Agent or the Mortgagee, the
office of such Person in the city at which, at any particular time, its
corporate trust business shall be principally administered.
"Credit
Downgrade"
has the
meaning specified in the Above-Cap Liquidity Facility.
"Credit
Support Event"
has the
meaning specified in the Above-Cap Liquidity Facility.
"Current
Distribution Date"
means a
Distribution Date specified as a reference date for calculating the Expected
Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"Current
Fair Market Value",
with
respect to any Pledged Spare Parts, means the Fair Market Value of such Pledged
Spare Parts as determined on the basis of the most recent Appraisal obtained
under Section 4.1(a)(iii) or (iv).
"Default
Period"
has the
meaning specified in Section 3.6(c).
"Deficiency
Amount"
has the
meaning specified in Section 3.5(a).
"Designated
Representatives"
means
the Subordination Agent Representatives, the Trustee Representatives and the
Provider Representatives identified under Section 2.5.
"Disposition"
has the
meaning specified in Section 3.6(b).
"Distribution
Date"
means a
Regular Distribution Date or a Special Distribution Date.
"Dollars"
or
"$"
means
United States dollars.
"Downgrade
Drawing"
has the
meaning specified in Section 3.5(c).
"Downgrade
Event"
has the
meaning assigned to such term in the Primary Liquidity Facility.
"Downgraded
Facility"
has the
meaning specified in Section 3.5(c).
"Drawing"
means
an Interest Drawing, a Final Drawing, a Non-Extension Drawing or a Downgrade
Drawing, as the case may be.
"DTC"
means
the Depositary Trust Company.
"Early
Termination Date"
has the
meaning assigned to such term in the Above-Cap Liquidity Facility.
"Early
Termination Fee"
has the
meaning assigned to such term in the Policy Fee Letter.
"Election
Distribution Date"
has the
meaning specified in Section 3.6(c).
"Election
Interest Payment"
has the
meaning specified in Section 3.6(c).
"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 of at least A3 from Moody’s and a
long-term unsecured issuer credit rating of at least A- from Standard &
Poor’s. An Eligible Deposit Account may be maintained with the Primary Liquidity
Provider so long as it is an Eligible Institution; provided
that the
Primary Liquidity Provider shall have waived all rights of set-off and
counterclaim with respect to such account.
"Eligible
Institution"
means
(a) the corporate trust department of the Subordination Agent or any Trustee,
as
applicable, or (b) a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), which has a long-term unsecured
debt rating of at least A3 from Moody’s and a long-term unsecured issuer credit
rating of at least A- from Standard & Poor’s.
"Eligible
Investments"
means
(a) investments in obligations of, or guaranteed by, the United States
Government having maturities no later than 90 days following the date of such
investment, (b) investments in open market commercial paper of any corporation
incorporated under the laws of the United States of America or any state thereof
with a short-term unsecured debt rating issued by Moody's 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
Continental or any of its Affiliates, and no investment in the obligations
of
any one bank in excess of $10,000,000, shall be an Eligible Investment unless
written approval has been obtained from the Policy Provider and a Ratings
Confirmation shall have been received with respect to the making of such
investment.
"Equipment
Notes"
means,
at any time, the Series G Equipment Note and the Series B Equipment Note,
collectively, and in each case, any Equipment Notes issued in exchange therefor
or replacement thereof pursuant to the terms of the Indenture.
"Excess
Reimbursement Obligations"
means
(a) in the event of any Policy Provider Election, the portion of the Policy
Provider Obligations that represents, when added to that portion of any
Liquidity Obligations that represents, interest on the Series G Equipment Note,
in excess of 24 months of interest at the interest rate applicable to such
Equipment Note, (b) any interest on the Liquidity Obligations in respect of
the
Primary Liquidity Facility paid by the Policy Provider to the Primary Liquidity
Provider from and after the end of the 24-month period referred to in Section
3.6(c) hereof and (c) interest on Policy Drawings as set forth in the Policy
Provider Agreement (other than any such interest that constitutes a Policy
Provider Obligation).
"Expected
Distributions"
means,
with respect to the Certificates of any Trust on any Current Distribution Date,
the sum of (x) accrued and unpaid interest on the outstanding Pool Balance
of
such Certificates and (y) the difference between (A) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (or, if the
Current Distribution Date is the first Distribution Date, the Pool Balance
as of
the Closing Date) and (B) the Pool Balance of such Certificates as of the
Current Distribution Date calculated on the basis that (i) the principal of
any Performing Equipment Note held in such Trust has been paid when due (whether
at stated maturity, upon redemption, prepayment, purchase, Acceleration or
otherwise) and such payments have been distributed to the holders of such
Certificates, (ii) the principal of any Non-Performing Equipment Note held
in such Trust has been paid in full and such payments have been distributed
to
the holders of such Certificates and (iii) the principal of any Equipment Note
formerly held in such Trust that has been sold pursuant to the terms hereof
has
been paid in full and such payments have been distributed to the holders of
such
Certificates. For purposes of calculating Expected Distributions with respect
to
the Certificates of any Trust, any Premium paid on the Equipment Notes held
in
such Trust which has not been distributed to the Certificateholders of such
Trust (other than such Premium or a portion thereof applied to the payment
of
interest on the Certificates of such Trust or the reduction of the Pool Balance
of such Trust) shall be added to the amount of such Expected Distributions.
For
the purposes of the application of any Special Payment in accordance with
Section 3.2 hereof, clause (x) of this definition shall be deemed to read as
follows: “(x) accrued, due and unpaid interest on the outstanding Pool Balance
of such Certificates together with (without duplication) accrued and unpaid
interest on a portion of the outstanding Pool Balance of such Certificates
equal
to the outstanding principal amount of the Equipment Notes held in such Trust
and being redeemed, purchased or prepaid (immediately prior to such redemption,
purchase or prepayment).”
"Expiry
Date"
has the
meaning set forth in the Primary Liquidity Facility.
"Fair
Market Value"
has the
meaning specified in the Indenture.
"Fee
Letters"
means,
collectively, (i) the Fee Letter dated as of the date hereof between the
Subordination Agent and the initial Primary Liquidity Provider with respect
to
the initial Primary Liquidity Facility and (ii) any fee letter entered into
between the Subordination Agent and any Replacement Primary Liquidity Provider
in respect of any Replacement Primary Liquidity Facility.
"Final
Distributions"
means,
with respect to the Certificates of any Trust on any Distribution Date, the
sum
of (x) the aggregate amount of all accrued and unpaid interest on such
Certificates
and (y) the Pool Balance of such Certificates as of the immediately preceding
Distribution Date. For purposes of calculating Final Distributions with respect
to the Certificates of any Trust, any Premium paid on the Equipment Notes held
in such Trust which has not been distributed to the Certificateholders of such
Trust (other than such Premium or a portion thereof applied to the payment
of
interest on the Certificates of such Trust or the reduction of the Pool Balance
of such Trust) shall be added to the amount of such Final
Distributions.
"Final
Drawing"
has the
meaning assigned to such term in Section 3.5(i).
"Final
Legal Distribution Date"
means,
(i) with respect to the Class G Certificates, June 2, 2015, and (ii) with
respect to the Class B Certificates, June 2, 2013.
"Fiscal
Agent"
has the
meaning assigned to such term in the Policy.
"Indenture"
means
the Trust Indenture and Mortgage entered into by the Mortgagee and Continental,
pursuant to the Note Purchase Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Indenture
Default"
means
an Event of Default (as such term is defined in the Indenture) under the
Indenture.
"Interest
Drawing"
has the
meaning specified in Section 3.5(a).
"Interest
Payment Date"
means
each date on which interest is due and payable under the Primary Liquidity
Facility on a Downgrade Drawing, Non-Extension Drawing or Final Drawing
thereunder, other than any such date on which interest is due and payable under
the Primary Liquidity Facility only on an Applied Provider Advance (as such
term
is defined in the Primary Liquidity Facility).
"Interest
Period"
has the
meaning specified in the Indenture.
"Investment
Earnings"
means
investment earnings on funds on deposit in the Trust Accounts net of losses
and
investment expenses of the Subordination Agent in making such
investments.
"Lending
Office"
has the
meaning set forth in the Primary Liquidity Facility.
"LIBOR"
has the
meaning specified in the Reference Agency Agreement.
"Lien"
means
any mortgage, pledge, lien, charge, claim, disposition of title, encumbrance,
lease, sublease, sub-sublease or security interest of any kind, including,
without limitation, any thereof arising under any conditional sales or other
title retention agreement.
"Liquidity
Event of Default"
has the
meaning assigned to such term in the Primary Liquidity Facility.
"Liquidity
Expenses"
means
all Liquidity Obligations other than (i) the principal amount of any Drawings
under the Primary Liquidity Facility and (ii) any interest accrued on any
Liquidity Obligations.
"Liquidity
Facility"
means,
at any time, the Primary Liquidity Facility or the Above-Cap Liquidity Facility,
as applicable.
“Liquidity
Guarantee”
means
the Guarantee Agreement, dated as of the date hereof, providing for the
guarantee by the Liquidity Guarantor of the obligations of the Above-Cap
Liquidity Provider under the Above-Cap Liquidity Facility.
“Liquidity
Guarantor”
means
Xxxxxx Xxxxxxx, a Delaware corporation, as guarantor of the Above-Cap Liquidity
Facility.
"Liquidity
Obligations"
means
all principal, interest, fees and other amounts owing to the Primary Liquidity
Provider under the Primary Liquidity Facility, Section 8.1 of the Note Purchase
Agreement or the Fee Letters.
"Liquidity
Provider"
means,
at any time, the Primary Liquidity Provider or Above-Cap Liquidity Provider,
as
applicable.
"Liquidity
Provider Reimbursement Date"
has the
meaning specified in Section 3.6(d).
"Mandatory
Termination Event"
has the
meaning specified in Section 3.5(c)(iv).
"Minimum
Sale Price"
means,
with respect to (a) any Pledged Spare Parts proposed to be sold, 75% of the
aggregate Current Fair Market Value of such Pledged Spare Parts and (b) the
Equipment Notes, the lesser of (i) 75% of the Current Fair Market Value of
all
Pledged Spare Parts then subject to the Lien of the Indenture and (ii) the
aggregate outstanding principal amount of the Equipment Notes, plus accrued
and
unpaid interest thereon.
"Moody's"
means
Xxxxx'x Investors Service, Inc.
"Mortgagee"
has the
meaning specified in the Indenture.
"Non-Controlling
Party"
means,
at any time, any Trustee, Liquidity Provider or Policy Provider which is not
the
Controlling Party at such time.
"Non-Extended
Facility"
has the
meaning specified in Section 3.5(d).
"Non-Extension
Drawing"
has the
meaning specified in Section 3.5(d).
"Non-Performing
Equipment Note"
means
an Equipment Note that is not a Performing Equipment Note.
"Note
Holder"
has the
meaning specified in the Indenture.
"Note
Purchase Agreement"
means
the Note Purchase Agreement, dated as of the date hereof, among Continental,
each Trustee, the Subordination Agent and the Mortgagee, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"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.
"Officer's
Certificate"
of any
Person means a certification signed by a Responsible Officer of such
Person.
"Operative
Agreements"
means
this Agreement, the Liquidity Facilities, the Liquidity Guarantee, the Policy,
the Policy Provider Agreement, the Policy Fee Letter, the Indenture, the
Collateral Maintenance Agreement, the Trust Agreements, the Underwriting
Agreement, the Fee Letters, the Reference Agency Agreement, the Note Purchase
Agreement, the Equipment Notes and the Certificates, together with all exhibits
and schedules included with any of the foregoing.
"Order"
has the
meaning assigned to such term in the Policy.
"Outstanding"
means,
when used with respect to each Class of Certificates, as of the date of
determination, all Certificates of such Class theretofore authenticated and
delivered under the related Trust Agreement, except:
(i) Certificates
of such Class theretofore canceled by the Registrar (as defined in such Trust
Agreement) or delivered to the Trustee thereunder or such Registrar for
cancellation;
(ii) Certificates
of such Class for which money in the full amount required to make the Final
Distributions with respect to such Certificates pursuant to Section 11.01 of
such Trust Agreement has been theretofore deposited with the related Trustee
in
trust for the holders of such Certificates as provided in Section 4.01 of such
Trust Agreement pending distribution of such money to such Certificateholders
pursuant to such Final Distributions payment; and
(iii) Certificates
of such Class in exchange for or in lieu of which other Certificates have been
authenticated and delivered pursuant to such Trust Agreement;
provided,
however,
that in
determining whether the holders of the requisite Outstanding amount of such
Certificates have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, any Certificates owned by Continental or any of
its
Affiliates shall be disregarded and deemed not to be Outstanding, except that,
in determining whether such Trustee shall be protected in relying upon any
such
request, demand, authorization, direction, notice, consent or waiver, only
Certificates that such Trustee knows to be so owned shall be so disregarded.
Certificates so owned that have been pledged in good faith may be regarded
as
Outstanding if the pledgee establishes to the satisfaction of the applicable
Trustee the pledgee's
right
so
to act with respect to such Certificates and that the pledgee is not Continental
or any of its Affiliates.
"Overdue
Scheduled Payment"
means
any Scheduled Payment which is not in fact received by the Subordination Agent
within five days after the Scheduled Payment Date relating thereto.
"Payee"
has the
meaning specified in Section 2.4(c).
"Payment
Default"
has the
meaning specified in the Indenture.
"Performing
Equipment Note"
means
an Equipment Note with respect to which no Payment Default has occurred and
is
continuing (without giving effect to any Acceleration); provided
that in
the event of a bankruptcy proceeding under the Bankruptcy Code in which
Continental is a debtor any Payment Default existing during the 60-day period
under Section 1110(a)(2)(A) of the Bankruptcy Code (or such longer period as
may
apply under Section 1110(b) of the Bankruptcy Code or as may apply for the
cure
of such Payment Default under Section 1110(a)(2)(B) of the Bankruptcy Code)
shall not be taken into consideration until the expiration of the applicable
period.
"Person"
means
any individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, trustee, unincorporated
organization or government or any agency or political subdivision
thereof.
"Pledged
Spare Parts"
has the
meaning assigned to such term in the Indenture.
"Policy"
means
Financial Guaranty Insurance Company Policy No. 06030067 issued as of the
Closing Date with respect to the Class G Certificates, as amended, supplemented
or otherwise modified from time to time in accordance with its
terms.
"Policy
Account"
means
the Eligible Deposit Account established by the Subordination Agent pursuant
to
Section 2.2(a)(iv) which the Subordination Agent shall make deposits in and
withdrawals from in accordance with this Agreement.
"Policy
Drawing"
means
any payment of a claim under the Policy.
"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
or
the Note Purchase Agreement other than (i) any amounts due under the Policy
Fee
Letter, (ii) the amount of any Excess Reimbursement Obligations, (iii) any
Policy Drawing, (iv) any interest accrued on any Policy Provider Obligations,
(v) any amounts that the Policy Provider is entitled to receive by virtue of
the
subrogation rights of the Policy Provider hereunder and (vi) reimbursement
of
and interest on the Liquidity Obligations in respect of the Primary Liquidity
Facility paid by the Policy Provider to the Primary 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 date hereof, from the Policy Provider to
Continental and acknowledged by the Subordination Agent, setting forth the
fees
and premiums payable with respect to the Policy.
"Policy
Provider"
means
Financial Guaranty Insurance Company, a New York stock insurance company, and
its successors and permitted assigns.
"Policy
Provider Agreement"
means
the Insurance and Indemnity Agreement dated as of the date hereof among the
Subordination Agent, as agent and trustee for the Class G Trustee, Continental
and the Policy Provider, as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Policy
Provider Amounts"
means
all Policy Provider Obligations, Policy Expenses, amounts due under the Policy
Fee Letter (excluding any Early Termination Fee and without duplication of
any
Policy Provider Obligations or Policy Expenses) and Excess Reimbursement
Obligations.
"Policy
Provider Default"
means
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 Insurance Department
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 Documents"
means
the Policy, the Policy Provider Agreement and the Policy Fee
Letter.
"Policy
Provider Election"
has the
meaning specified in Section 3.6(c).
“Policy
Provider Interest Obligations”
means
any interest on any Policy Drawing made to cover any shortfall attributable
to
any failure of the Primary Liquidity Provider to honor any Interest Drawing
in
accordance with Section 2.02(e) of the Primary 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
Primary 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 (i) amounts under the Policy Fee Letter and (ii) any interest on Policy
Drawings other than Policy Provider Interest Obligations.
"Pool
Balance"
means,
with respect to each Trust or the Certificates issued by any Trust, as of any
date, (i) the original aggregate face amount of the Certificates of such Trust
less
(ii) the
aggregate amount of all payments made as of such date in respect of the
Certificates of such Trust other than payments made in respect of interest
or
Premium thereon or reimbursement of any costs and expenses in connection
therewith. The Pool Balance for each Trust or for the Certificates issued by
any
Trust as of any date shall be computed after giving effect to any payment of
principal of the Equipment Notes, payments under the Policy, if any, for such
Trust (other than in respect of interest on the Certificates) or payment with
respect to other Trust Property held in such Trust and the distribution thereof
to be made on that date.
“Premium”
means
any “Premium” or any “Break Amount”, as such terms are defined in the
Indenture.
"Primary
Cash Collateral Account"
means
an Eligible Deposit Account in the name of the Subordination Agent maintained
at
an Eligible Institution, which shall be the Subordination Agent if it shall
so
qualify, into which all amounts drawn under the Primary Liquidity Facility
pursuant to Section 3.5(c), 3.5(d) or 3.5(i) shall be deposited.
"Primary
Liquidity Facility"
means,
initially, the Revolving Credit Agreement, dated as of the date hereof, between
the Subordination Agent, as agent and trustee for the Class G Trust, and the
initial Primary Liquidity Provider, and from and after the replacement of the
Revolving Credit Agreement pursuant hereto, the Replacement Primary Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Primary
Liquidity Provider"
means
Xxxxxx Xxxxxxx Bank, together with any Replacement Primary Liquidity Provider
which has issued a Replacement Primary Liquidity Facility to replace the Primary
Liquidity Facility pursuant to Section 3.5(e).
"Prior
Funds"
means,
on any Distribution Date, any Drawing paid under the Primary Liquidity Facility
in respect of interest due on the Class G Certificates on such Distribution
Date
and any funds withdrawn from the Primary Cash Collateral Account or from the
Above-Cap Account on such Distribution Date in respect of such
interest.
"Proceeding"
means
any suit in equity, action at law or other judicial or administrative
proceeding.
"Provider
Incumbency Certificate"
has the
meaning specified in Section 2.5(c).
"Provider
Representatives"
has the
meaning specified in Section 2.5(c).
"PTC
Event of Default"
means,
with respect to each Trust Agreement, the failure to pay within 10 Business
Days
of the due date thereof: (i) the outstanding Pool Balance of the applicable
Class of Certificates on the Final Legal Distribution Date for such Class
(unless, in the
case
of
the Class G Trust Agreement, the Subordination Agent shall have made a drawing
under the Policy with respect thereto in an amount sufficient to pay such
outstanding Pool Balance and shall have distributed such amount to the Trustee
entitled thereto) or (ii) interest due on such Certificates on any Distribution
Date (unless, in the case of the Class G Trust, the Subordination Agent shall
have made an Interest Drawing, a withdrawal from the Primary Cash Collateral
Account, a withdrawal from the Above-Cap Account or a drawing under the Policy
with respect thereto in an aggregate amount sufficient to pay such interest
and
shall have distributed such amount to the Class G Trustee).
"Rating
Agencies"
means,
collectively, at any time, and with respect to a Class of Certificates, each
nationally recognized rating agency which shall have been requested by
Continental to rate such Class of Certificates and which shall then be rating
such Class of Certificates. The initial Rating Agencies for each Class of
Certificates will be Moody's and Standard & Poor's.
"Ratings
Confirmation"
means,
with respect to any action proposed to be taken, a written confirmation from
each of the Rating Agencies with respect to the applicable Class of Certificates
that such action would not result in (i) a reduction of the rating of such
Class
of Certificates below the then current rating for such Class of Certificates
(such rating, in the case of the Class G Certificates, as determined without
regard to the Policy) or (ii) a withdrawal or suspension of the rating of such
Class of Certificates.
"Redemption
Notice"
means a
notice of redemption issued by Continental pursuant to Section 2.12 of the
Indenture.
"Reference
Agency Agreement"
means
the Reference Agency Agreement, dated as of the date hereof, among Continental,
WTC, as the reference agent thereunder, and the Subordination
Agent.
"Regular
Distribution Dates"
means
each March 2, June 2, September 2 and December 2, commencing on September 2,
2006; provided,
however,
that,
if any such day shall not be a Business Day, the related distribution shall
be
made on the next succeeding Business Day, with additional interest for such
additional period.
"Replacement
Above-Cap Liquidity Facility"
means
an irrevocable interest rate cap agreement (or agreements) for the same term
as
the Above-Cap Liquidity Facility being replaced, in substantially the form
of
the Above-Cap Liquidity Facility being replaced or in such other form (which
may
include a letter of credit) as shall permit the Rating Agencies to confirm
in
writing their respective ratings then in effect for the Class G Certificates
(before the downgrading of such ratings, if any, as a result of the downgrading
of the Above-Cap Liquidity Provider and without regard to the Policy), and
be
consented to by the Policy Provider, which consent shall not be unreasonably
withheld or delayed, issued by a Person (or Person(s)) having a short-term
unsecured debt rating issued by Moody's and a short-term issuer credit rating
issued by Standard & Poor's that are equal to or higher than the applicable
Threshold Rating.
"Replacement
Above-Cap Liquidity Provider"
means a
Person (or Persons) who issues a Replacement Above-Cap Liquidity
Facility.
"Replacement
Liquidity Facility"
means
any of a Replacement Above-Cap Liquidity Facility or a Replacement Primary
Liquidity Facility.
"Replacement
Primary Liquidity Facility"
means
an irrevocable revolving credit agreement (or agreements) in substantially
the
form of the replaced Primary Liquidity Facility, including reinstatement
provisions, or in such other form (which may include a letter of credit) as
shall permit the Rating Agencies to confirm in writing their respective ratings
then in effect for the Class G Certificates (before downgrading of such ratings,
if any, as a result of the downgrading of the Primary Liquidity Provider but
without regard to the Policy), 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 Class
G
Certificates (at the Capped Interest Rate, and without regard to expected future
principal payments) on the eight Regular Distribution Dates following the date
of replacement of the Primary 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 both Rating Agencies which are equal to or higher than
the Threshold Rating. Without limitation of the form that a Replacement Primary
Liquidity Facility otherwise may have pursuant to the preceding sentence, a
Replacement Primary Liquidity Facility may have a stated expiration date earlier
than 15 days after the Final Legal Distribution Date of the Class G Certificates
so long as such Replacement Primary Liquidity Facility provides for a
Non-Extension Drawing as contemplated by Section 3.5(d) hereof.
"Replacement
Primary Liquidity Provider"
means a
Person (or Persons) who issues a Replacement Primary Liquidity
Facility.
"Required
Amount"
means
with respect to the Primary Liquidity Facility or the Primary Cash Collateral
Account, for any day, the sum of the aggregate amount of interest, calculated
at
the rate per annum equal to the Capped Interest Rate, that would be payable
on
the Class G Certificates on each of the eight successive Regular Distribution
Dates immediately following such day or, if such day is a Regular Distribution
Date, on such day and the succeeding seven Regular Distribution Dates, in each
case calculated on the basis of the Pool Balance of the Class G Certificates
on
such date and without regard to expected future payments of principal on the
Class G Certificates. The Pool Balance solely for purposes of the definition
of
Required Amount with respect to the Primary Liquidity Facility shall, in the
event of any Policy Provider Election, be deemed to be reduced to
zero.
"Responsible
Officer"
means
(i) with respect to the Subordination Agent and each of the Trustees, any
officer in the corporate trust administration department of the Subordination
Agent or such Trustee or any other officer customarily performing functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with a particular subject, (ii)
with
respect to each Liquidity Provider, any authorized officer of such Liquidity
Provider, and (iii) with respect to the Policy Provider, any authorized officer
of the Policy Provider.
"Scheduled
Payment"
means,
with respect to any Equipment Note, (i) any payment of principal or interest
on
such Equipment Note (other than an Overdue Scheduled Payment) due from the
obligor thereon, which payment represents the installment of principal scheduled
to be paid pursuant to the Indenture (without giving effect to Acceleration)
on
such Equipment Note (including after giving effect to any change in the amount
of such installment due to an optional redemption pursuant to the Indenture),
the payment of regularly scheduled interest accrued on the unpaid principal
amount of such Equipment Note, or both, (ii) any payment of interest on the
Class G Certificates with funds drawn under the Primary Liquidity Facility
(or
the Primary Cash Collateral Account) or withdrawn from the Above-Cap Account
or
(iii) any payment of interest on or principal of the Class G Certificates with
funds drawn under the Policy, which payment in any such case represents the
installment of principal scheduled to be paid pursuant to the Indenture (without
giving effect to Acceleration) on such Equipment Note (including after giving
effect to any change in the amount of such installment due to an optional
redemption pursuant to the Indenture), the payment of regularly scheduled
interest accrued on the unpaid principal amount of such Equipment Note, or
both;
provided
that any
payment of principal, Premium, if any, or interest resulting from the redemption
or purchase of any Equipment Note shall not constitute a Scheduled
Payment.
"Scheduled
Payment Date"
means,
with respect to any Scheduled Payment, the date on which such Scheduled Payment
is scheduled to be made.
"Series
B Equipment Note"
means
the Series B Equipment Note issued pursuant to the Indenture by Continental
and
authenticated by the Mortgagee thereunder, and any such Equipment Note issued
in
exchange therefor or replacement thereof pursuant to the terms of the
Indenture.
"Series
G Equipment Note"
means
the Series G Equipment Note issued pursuant to the Indenture by Continental
and
authenticated by the Mortgagee thereunder, and any such Equipment Note issued
in
exchange therefor or replacement thereof pursuant to the terms of the
Indenture.
"Special
Distribution Date"
means,
with respect to any Special Payment, (i) the date chosen by the Subordination
Agent pursuant to Section 2.4(a) for the distribution of such Special Payment
in
accordance with this Agreement or (ii) the date chosen by the Subordination
Agent pursuant to Section 3.6(b), 3.6(c) or Section 3.6(f), as the
case may be, for the distribution of such Special Payment in accordance with
the
provisions thereof or otherwise designated as a Special Distribution
Date.
"Special
Distribution Withdrawal"
has the
meaning specified in Section 3.5(f) hereof.
"Special
Payment"
means
any payment (other than a Scheduled Payment) in respect of, or any proceeds
of,
any Equipment Note or Collateral.
"Special
Payments Account"
means
the Eligible Deposit Account created pursuant to Section 2.2(a)(ii) as a
sub-account to the Collection Account.
"Special
Termination"
has the
meaning specified in Section 3.5(n).
"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 Primary Liquidity Facility) of the
Primary Liquidity Provider.
"Stated
Expiration Date"
has the
meaning specified in Section 3.5(d).
"Stated
Interest Rate"
means
(i) with respect to the Class G Certificates, in the case of the first Interest
Period, 5.6325% per annum and, in the case of any subsequent Interest Period,
LIBOR for such Interest Period plus 0.35% per annum, and (ii) with respect
to
the Class B Certificates, in the case of the first Interest Period, 8.4075%
per
annum and, in the case of any subsequent Interest Period, LIBOR for such
Interest Period plus 3.125% per annum; provided that if a Payment Default has
occurred and is continuing on any Regular Distribution Date, the Stated Interest
Rate for the Class G Certificates for the Interest Period commencing on such
Regular Distribution Date shall not exceed the Capped Interest
Rate.
"Subordination
Agent"
has the
meaning assigned to it in the preliminary statements to this
Agreement.
"Subordination
Agent Incumbency Certificate"
has the
meaning specified in Section 2.5(a).
"Subordination
Agent Representatives"
has the
meaning specified in Section 2.5(a).
"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
Amount"
has the
meaning assigned to such term in the Above-Cap Liquidity Facility.
"Termination
Event"
has the
meaning assigned to such term in the Above-Cap Liquidity Facility.
"Termination
Notice"
has the
meaning assigned to such term in the Primary Liquidity Facility.
"Threshold
Rating"
means
the short-term unsecured debt rating of P-1 by Moody's and the short-term issuer
credit rating of A-1 by Standard & Poor's.
"Treasury
Regulations"
means
regulations, including proposed or temporary regulations, promulgated under
the
Code. References herein to specific provisions of proposed or temporary
regulations shall include analogous provisions of final Treasury Regulations
or
other successor Treasury Regulations.
"Triggering
Event"
means
(x) the occurrence of an Indenture Default resulting in a PTC Event of Default
with respect to the most senior Class of Certificates then Outstanding, (y)
the
Acceleration of all of the outstanding Equipment Notes or (z) the occurrence
of
a Continental Bankruptcy Event.
"Trust"
means
any of the Class G Trust or the Class B Trust.
"Trust
Accounts"
has the
meaning specified in Section 2.2(a).
"Trust
Agreement"
means
any of the Class G Trust Agreement or the Class B Trust Agreement.
"Trust
Property"
with
respect to any Trust, has the meaning set forth in the Trust Agreement for
such
Trust.
"Trust
Supplement"
means
any of the Class G Trust Supplement or the Class B Trust
Supplement.
"Trustee"
means
any of the Class G Trustee or the Class B Trustee.
"Trustee
Incumbency Certificate"
has the
meaning specified in Section 2.5(b).
"Trustee
Representatives"
has the
meaning specified in Section 2.5(b).
"Unapplied
Provider Advance"
has the
meaning specified in the Primary Liquidity Facility.
"Underwriter"
means
Xxxxxx Xxxxxxx & Co. Incorporated.
"Underwriting
Agreement"
means
the Underwriting Agreement dated May 24, 2006 between the Underwriter and
Continental, relating to the purchase of the Class G Certificates and the Class
B Certificates by the Underwriter, as the same may be amended, supplemented
or
otherwise modified from time to time in accordance with its terms.
"Withdrawal
Notice"
has the
meaning specified in Section 3.5(d).
"Written
Notice"
means,
from the Subordination Agent, any Trustee, any Liquidity Provider or the Policy
Provider, a written instrument executed by the Designated Representative of
such
Person. An invoice delivered by the Primary Liquidity Provider pursuant
to
Section 3.1 in accordance with its normal invoicing procedures shall constitute
Written Notice under such Section.
"WTC"
has the
meaning assigned to such term in the recital of parties to this
Agreement.
TRUST
ACCOUNTS; CONTROLLING PARTY
SECTION
2.1. Agreement
to Terms of Subordination; Payments from Monies Received Only.
(a)
Each Trustee hereby acknowledges and agrees to the terms of subordination and
distribution set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes, the Liquidity Facilities and the Policy to
be
applied in accordance with the terms of this Agreement. In addition, each
Trustee hereby agrees to cause the Equipment Notes purchased by the related
Trust to be registered in the name of the Subordination Agent or its nominee,
as
agent and trustee for such Trustee, to be held in trust by the Subordination
Agent solely for the purpose of facilitating the enforcement of the
subordination and other provisions of this Agreement.
(b) Except
as
otherwise expressly provided in the next succeeding sentence of this Section
2.1, all payments to be made by the Subordination Agent hereunder shall be
made
only from amounts received by it that constitute Scheduled Payments, Special
Payments or payments under Section 8.1 of the Note Purchase Agreement, and
only
to the extent that the Subordination Agent shall have received sufficient income
or proceeds therefrom to enable it to make such payments in accordance with
the
terms hereof. Each of the Trustees and the Subordination Agent hereby agrees
and, as provided in each Trust Agreement, each Certificateholder, by its
acceptance of a Certificate, the Primary Liquidity Provider, by entering into
the Primary Liquidity Facility, and the Policy Provider, by entering into the
Policy Provider Agreement, has agreed to look solely to such amounts to the
extent available for distribution to it as provided in this Agreement and that
none of the Trustees, Mortgagee nor the Subordination Agent is personally liable
to any of them for any amounts payable or any liability under this Agreement,
any Trust Agreement, any Liquidity Facility, the Policy Provider Agreement,
the
Policy or such Certificate, except (in the case of the Subordination Agent)
as
expressly provided herein or (in the case of the Trustees) as expressly provided
in each Trust Agreement or (in the case of the Mortgagee) as expressly provided
in any Operative Agreement.
SECTION
2.2. Trust
Accounts.
(a)
Upon the execution of this Agreement, the Subordination Agent shall establish
and maintain in its name (i) the Collection Account as an Eligible Deposit
Account, bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Trustees, the
Certificateholders, the Primary Liquidity Provider and the Policy Provider,
(ii) as a sub-account in the Collection Account, the Special Payments
Account as an Eligible Deposit Account, bearing a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of the
Trustees, the Certificateholders, the Primary Liquidity Provider and the Policy
Provider, (iii) an Above-Cap Account, as an Eligible Deposit Account, bearing
a
designation clearly indicating that the funds
deposited
therein are held in trust for the benefit of the Class G Trustee and Class
G
Certificateholders and (iv) a Policy Account, as an Eligible Deposit Account,
bearing a designation clearly indicating that the funds deposited therein are
held in trust for the benefit of the Class G Trustee and the Class G
Certificateholders. The Subordination Agent shall establish and maintain the
Cash Collateral Accounts pursuant to and under the circumstances set forth
in
Section 3.5(f) hereof. The Above-Cap Collateral Account shall bear a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Class G Trustee and Class G Certificateholders. Upon such
establishment and maintenance under Section 3.5(f) hereof, the Cash Collateral
Accounts shall, together with the Collection Account, the Above-Cap Account
and
the Policy Account, constitute the "Trust
Accounts"
hereunder. Without limiting the foregoing, all monies credited to the Trust
Accounts shall be, and shall remain, the property of the relevant
Trusts.
(b) Funds
on
deposit in the Trust Accounts shall be invested and reinvested by the
Subordination Agent in Eligible Investments selected by the Subordination Agent
if such investments are reasonably available and have maturities no later than
the earlier of (i) 90 days following the date of such investment and (ii) the
Business Day immediately preceding the Regular Distribution Date or the date
of
the related distribution pursuant to Section 2.4 hereof, as the case may be,
next following the date of such investment (provided
that the
Subordination Agent shall invest and reinvest funds on deposit in the Above-Cap
Account and Above-Cap Collateral Account in the manner specified in Schedule
2.2(b) attached hereto); provided,
however,
that
following the making of a Downgrade Drawing or a Non-Extension Drawing under
the
Primary Liquidity Facility, the Subordination Agent shall invest and reinvest
such amounts in Eligible Investments at the direction of Continental (or, if
and
to the extent so specified to the Subordination Agent by Continental, the
Primary Liquidity Provider); provided further,
however,
that,
notwithstanding the foregoing proviso, following the making of a Non-Extension
Drawing under the initial Primary Liquidity Facility, the Subordination Agent
shall invest and reinvest the amounts in the Primary Cash Collateral Account
in
Eligible Investments pursuant to the written instructions of the Primary
Liquidity Provider funding such Drawing; provided further,
however,
that
upon the occurrence and during the continuation of a Triggering Event, the
Subordination Agent shall invest and reinvest such amounts in Eligible
Investments in accordance with the written instructions of the Controlling
Party. Unless otherwise expressly provided in this Agreement (including, without
limitation, with respect to Investment Earnings on amounts on deposit in the
Cash Collateral Accounts and in the Above-Cap Account, in each case pursuant
to
Section 3.5(f) hereof), any Investment Earnings shall be deposited in the
Collection Account when received by the Subordination Agent and shall be applied
by the Subordination Agent in the same manner as the other amounts on deposit
in
the Collection Account are to be applied and any losses shall be charged against
the principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination
Agent
shall not be liable for any loss resulting from any investment, reinvestment
or
liquidation required to be made under this Agreement other than by reason of
its
willful misconduct or gross negligence. Eligible Investments and any other
investment required to be made hereunder shall be held to their maturities
except that any such investment may be sold (without regard to its maturity)
by
the Subordination Agent without instructions whenever such sale is necessary
to
make a distribution required under this Agreement. Uninvested funds held
hereunder shall not earn or accrue interest.
(c) The
Subordination Agent shall possess all right, title and interest in all funds
on
deposit from time to time in the Trust Accounts and in all proceeds thereof
(including all income thereon, except as otherwise expressly provided in Section
3.3(b) with respect to Investment Earnings). The Trust Accounts shall be held
in
trust by the Subordination Agent under the sole dominion and control of the
Subordination Agent for the benefit of the Trustees, the Certificateholders,
the
Primary Liquidity Provider and the Policy Provider, as the case may be. If,
at
any time, any of the Trust Accounts ceases to be an Eligible Deposit Account,
the Subordination Agent shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, for which a Ratings Confirmation for each Class
of Certificates and the consent of the Policy Provider (which consent shall
not
be unreasonably withheld or delayed) shall have been obtained) establish a
new
Collection Account, Special Payments Account, Policy Account, Cash Collateral
Account or Above-Cap Account, as the case may be, as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new Collection
Account, Special Payments Account, Policy Account, Cash Collateral Account
or
Above-Cap Account, as the case may be. So long as WTC is an Eligible
Institution, the Trust Accounts shall be maintained with it as Eligible Deposit
Accounts.
SECTION
2.3. Deposits
to the Collection Account and Special Payments Account.
(a) The
Subordination Agent shall, upon receipt thereof, deposit in the Collection
Account all Scheduled Payments received by it (other than any Scheduled Payment
which by the express terms hereof is to be deposited to a Policy Account or
a
Cash Collateral Account).
(b) The
Subordination Agent shall, on each date when one or more Special Payments are
made to the Subordination Agent as holder of the Equipment Notes, deposit in
the
Special Payments Account the aggregate amount of such Special
Payments.
SECTION
2.4. Distributions
of Special Payments.
(a) Notice
of Special Payment.
Except as provided in Section 2.4(c) below, upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any notice
of a Special Payment (or, in the absence of any such notice, upon receipt by
the
Subordination Agent of a Special Payment), the Subordination Agent shall
promptly give notice thereof to each Trustee, the Primary Liquidity Provider
and
the Policy Provider. The Subordination Agent shall promptly calculate the
amount of the redemption or purchase of all or any portion of any Equipment
Note, the amount of any Overdue Scheduled Payment or the proceeds of any portion
of any Equipment Note or the Collateral, as the case may be, comprising such
Special Payment under the Indenture and shall promptly send to each Trustee,
the
Primary Liquidity Provider and the Policy Provider a Written Notice of such
amount and the amount allocable to each Trust. Such Written Notice shall
also set the distribution date for such Special Payment, which shall be the
Business Day which immediately follows the later to occur of (x) the 15th
day after the date of such Written Notice or (y) the date the Subordination
Agent has received or expects to receive such Special Payment. For purposes
of
calculating any such distribution, if the Special Payment to be distributed
on
any Special Distribution Date results from the redemption, purchase or
prepayment of any portion of any Equipment Note prior to the occurrence of
a
Payment Default under the Indenture, the amount of accrued and unpaid Liquidity
Expenses and Policy Expenses which are not yet due that are payable pursuant
to
clause “second” of Section 3.2 and any unpaid amounts which are not yet due
that are payable to the Policy Provider under the Policy Fee Letter pursuant
to
clause “ninth” of Section 3.2 shall be multiplied by the Applicable
Fraction. Amounts on deposit in the
Special
Payments Account shall be distributed in accordance with Section 2.4(b), 2.4(c)
and Article III hereof, as applicable.
(b) Investment
of Amounts in Special Payments Account.
Any
amounts on deposit in the Special Payments Account prior to the distribution
thereof pursuant to Article III hereof shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be distributed
in
accordance with Article III hereof.
(c) Certain
Payments.
Except
for amounts constituting Liquidity Obligations, Policy Expenses or Policy
Provider Obligations which shall be distributed on a Distribution Date as
provided in Section 3.2, the Subordination Agent will distribute promptly upon
receipt thereof (i) any indemnity payment or expense reimbursement received
by
it from Continental in respect of any Trustee, any Liquidity Provider or the
Policy Provider (collectively, the "Payees")
and
(ii) any compensation received by it from Continental under any Operative
Agreement in respect of any Payee, directly to the Payee entitled thereto.
SECTION
2.5. Designated
Representatives.
(a) With
the delivery of this Agreement, the Subordination Agent shall furnish to each
Liquidity Provider, the Policy Provider and each Trustee, and from time to
time
thereafter may furnish to each Liquidity Provider, the Policy Provider and
each
Trustee, at the Subordination Agent's discretion, or upon any Liquidity
Provider's, the Policy Provider's or any Trustee's request (which request shall
not be made more than one time in any 12-month period), a certificate (a
"Subordination
Agent Incumbency Certificate")
of a
Responsible Officer of the Subordination Agent certifying as to the incumbency
and specimen signatures of the officers of the Subordination Agent and the
attorney-in-fact and agents of the Subordination Agent (the "Subordination
Agent Representatives")
authorized to give Written Notices on behalf of the Subordination Agent
hereunder. Until each Liquidity Provider, the Policy Provider and each Trustee
receives a subsequent Subordination Agent Incumbency Certificate, it shall
be
entitled to rely on the last Subordination Agent Incumbency Certificate
delivered to it hereunder.
(b) With
the
delivery of this Agreement, each Trustee shall furnish to the Subordination
Agent, and from time to time thereafter may furnish to the Subordination Agent,
at such Trustee's discretion, or upon the Subordination Agent's request (which
request shall not be made more than one time in any 12-month period), a
certificate (a "Trustee
Incumbency Certificate")
of a
Responsible Officer of such Trustee certifying as to the incumbency and specimen
signatures of the officers of such Trustee and the attorney-in-fact and agents
of such Trustee (the "Trustee
Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder. Until
the Subordination Agent receives a subsequent Trustee Incumbency Certificate,
it
shall be entitled to rely on the last Trustee Incumbency Certificate delivered
to it hereunder.
(c) With
the
delivery of this Agreement, each Liquidity Provider and the Policy Provider
shall furnish to the Subordination Agent, and from time to time thereafter
may
furnish to the Subordination Agent, at such Liquidity Provider's or Policy
Provider's discretion, or upon the Subordination Agent's request (which request
shall not be made more than one time in any 12-month period), a certificate
(each, a "Provider
Incumbency Certificate")
of any
Responsible Officer of such Liquidity Provider or Policy Provider certifying
as
to the
incumbency
and specimen signatures of any officer, attorney-in-fact, agent or other
designated representative of such Liquidity Provider or Policy Provider (in
each
case, the "Provider
Representatives"
and,
together with the Subordination Agent Representatives and the Trustee
Representatives, the "Designated
Representatives")
authorized to give Written Notices on behalf of such Liquidity Provider or
Policy Provider hereunder. Until the Subordination Agent receives a subsequent
Provider Incumbency Certificate, it shall be entitled to rely on the last
Provider Incumbency Certificate delivered to it hereunder by the relevant
Liquidity Provider or the Policy Provider.
SECTION
2.6. Controlling
Party.
(a) The Trustees, the Policy Provider and the Liquidity Providers
hereby agree that, at any given time, the Mortgagee will be directed (i) in
taking, or refraining from taking, any action under the Indenture or with
respect to the Equipment Notes, so long as no Indenture Default has occurred
and
is continuing thereunder, by the holders of at least a majority of the
outstanding principal amount of the Equipment Notes (provided that, for so
long
as the Subordination Agent is the registered holder of the Equipment Notes,
the
Subordination Agent shall act with respect to this clause (i) in accordance
with
the directions of the Trustees (in the case of each such Trustee, with respect
to the Equipment Notes issued under such Indenture and held as Trust Property
of
such Trust) constituting, in the aggregate, directions with respect to at least
a majority of outstanding principal amount of Equipment Notes except as provided
in Section 9.1(b)), and (ii) after the occurrence and during the continuance
of
an Indenture Default thereunder, in taking, or refraining from taking, any
action under the Indenture or with respect to the Equipment Notes, including
exercising remedies thereunder (including Accelerating the Equipment Notes
issued thereunder or foreclosing the Lien on the Collateral), by the Controlling
Party.
(b) The
Person who shall be the "Controlling Party" with respect to the Indenture upon
the occurrence of an Indenture Default shall be (x) the Policy Provider (or,
(i)
if any Policy Provider Default shall have occurred and be continuing or (ii)
the
Policy has been surrendered to the Policy Provider for cancellation thereby
releasing the Policy Provider from its obligations under the Policy and all
Policy Provider Amounts (other than any amount referred to in clause (c) of
the
definition of Excess Reimbursement Obligations) have been paid in full as set
forth in clause (d) below, the Class G Trustee); and (y) upon (i) payment of
Final Distributions to the holders of Class G Certificates and (ii) unless
a
Policy Provider Default shall have occurred and be continuing, payment of all
Policy Provider Amounts (other than Excess Reimbursement Obligations) to the
Policy Provider, the Class B Trustee; provided,
that if
the Policy Provider makes a payment in full on a Policy Drawing in respect
of an
Avoided Payment after the payment of the Final Distributions to the Class G
Certificateholders, so long as no Policy Provider Default has occurred and
is
continuing, the Policy Provider will be the Controlling Party until no Policy
Provider Amounts (other than any Excess Reimbursement Obligations) remain
outstanding, and thereafter, the Class B Trustee. For purposes of giving effect
to the provisions of Section 2.6(a) and this Section 2.6(b), the Trustees (other
than the Controlling Party) irrevocably agree (and the Certificateholders (other
than the Certificateholders represented by the Controlling Party) shall be
deemed to agree by virtue of their purchase of Certificates) that the
Subordination Agent, as record holder of the Equipment Notes, and subject always
to the provisions of Article IX hereof, shall exercise its voting rights in
respect of the Equipment Notes as directed by the Controlling Party and any
vote
so exercised shall be binding upon the Trustees and all
Certificateholders.
The
Subordination Agent shall give Written Notice to all of the other parties to
this Agreement promptly upon a change in the identity of the Controlling Party.
Each of the parties hereto agrees that it shall not exercise any of the rights
of the Controlling Party at such time as it is not the Controlling Party
hereunder; provided,
however,
that
nothing herein contained shall prevent or prohibit any Non-Controlling Party
from exercising such rights as shall be specifically granted to such
Non-Controlling Party hereunder and under the other Operative
Agreements.
(c) Notwithstanding
the foregoing, at any time after the Liquidity Provider Reimbursement Date,
if a
Policy Provider Default attributable to a failure to make a payment referred
to
in Section 3.6(d) shall have occurred and be continuing, the Primary Liquidity
Provider (so long as the Primary Liquidity Provider has not defaulted in its
obligation to make any Drawing under the Primary Liquidity Facility) shall
have
the right to elect, by Written Notice to the Subordination Agent, each of the
Trustees and the Policy Provider, to become the Controlling Party hereunder
at
any time from and including the Liquidity Provider Reimbursement Date;
provided,
however,
that if
the Policy Provider subsequently pays to the Primary Liquidity Provider all
outstanding Drawings, together with accrued interest thereon, under the Primary
Liquidity Facility, then, the Person determined in accordance with Section
2.6(b), rather than the Primary Liquidity Provider, shall be the Controlling
Party.
(d) Subject
to clause (b) above and the rights of the Primary Liquidity Provider under
clause (c) above, following the surrender of the Policy to the Policy Provider
for cancellation and the payment in full of all Policy Provider Amounts (other
than any amount referred to in clause (c) of the definition of Excess
Reimbursement Obligations), all in accordance with Section 5.01 of the Class
G
Trust Supplement and, if applicable, Section 5.01 of the Class B Trust
Supplement, the Class G Trustee shall be the Controlling Party. Upon the
delivery of the Policy to the Policy Provider for cancellation, the Policy
Provider shall be released from its obligations under the Policy.
(e) The
exercise of remedies by the Controlling Party under this Agreement shall be
expressly limited by Section 4.1(a)(ii) hereof.
(f) The
Controlling Party shall not be entitled to require or obligate any
Non-Controlling Party to provide funds necessary to exercise any right or remedy
hereunder.
RECEIPT,
DISTRIBUTION AND APPLICATION
OF
AMOUNTS RECEIVED
SECTION
3.1. Written
Notice of Distribution.
(a) No
later than 3:00 P.M. (New York City time) on the Business Day immediately
preceding each Distribution Date, each of the following Persons shall deliver
to
the Subordination Agent a Written Notice setting forth the following information
as at the close of business on such Business Day:
(i) With
respect to the Class G Certificates, the Class G Trustee shall separately set
forth the amounts to be paid in accordance with clause "first" (to reimburse
payments
made by such Trustee or the Class G Certificateholders, as the case may be,
pursuant to subclause (ii) or (iv) of clause "first"), subclauses (ii) and
(iii)
of clause "seventh" of Section 3.2 hereof and clause "eighth" of Section 3.2
hereof;
(ii) With
respect to the Class B Certificates, the Class B Trustee shall separately set
forth the amounts to be paid in accordance with clause "first" (to reimburse
payments made by such Trustee or the Class B Certificateholders, as the case
may
be, pursuant to subclause (ii) or (iv) of clause "first"), subclauses (ii)
and
(iii) of clause "seventh" of Section 3.2 hereof and clause "tenth" of Section
3.2 hereof;
(iii) The
Primary Liquidity Provider shall separately set forth the amounts to be paid
to
it in accordance with subclause (iv) of clause "first", subclause (i) of clause
"second", subclause (i) of clause "third", subclause (I) of clause "fourth"
and
clause "fifth" of Section 3.2 hereof;
(iv) The
Policy Provider shall (A) separately set forth the amounts to be paid to it
in
accordance with subclauses (iii) and (iv) of clause "first", subclause (ii)
of
clause "second", subclauses (ii) and (iii) of clause "third", subclause (II)
of
clause "fourth", clause "ninth" and clause "eleventh" of Section 3.2 hereof
and
(B) confirm to the Subordination Agent that none of the amounts referred to
in
this clause (iv) have been previously paid by Continental after demand therefor
under any Policy Provider Document; and
(v) Each
Trustee shall set forth the amounts to be paid in accordance with clause
"seventh" of Section 3.2 hereof.
The
notices required under this Section 3.1(a) may be in the form of a schedule
or
similar document provided to the Subordination Agent by the parties referenced
therein or by any one of them, which schedule or similar document may state
that, unless there has been a prepayment of the Certificates, such schedule
or
similar document is to remain in effect until any substitute notice or amendment
shall be given to the Subordination Agent by the party providing such
notice.
(b) Following
the occurrence of a Triggering Event, the Subordination Agent shall request
the
following information from the following Persons, and each of the following
Persons shall, upon the request of the Subordination Agent, deliver a Written
Notice to the Subordination Agent setting forth for such Person the following
information:
(i) With
respect to the Class G Certificates the Class G Trustee shall separately set
forth the amounts to be paid in accordance with clause "first" (to reimburse
payments made by such Trustee or the Class G Certificateholders pursuant to
subclause (ii) or (iv) of clause "first"), subclauses (ii) and (iii) of clause
"seventh" of Section 3.2 hereof and clause "eighth" of Section 3.2
hereof;
(ii) With
respect to the Class B Certificates, the Class B Trustee shall separately set
forth the amounts to be paid in accordance with clause "first" (to reimburse
payments made by such Trustee or the Class B Certificateholders, as the case
may
be;
(iv) The
Primary Liquidity Provider shall separately set forth the amounts to be paid
to
it in accordance with subclause (iv) of clause "first" of Section 3.2 hereof,
subclause (i) of clause "second" of Section 3.2 hereof, subclause (i) of clause
"third" of Section 3.2 hereof, subclause (I) of clause "fourth" of Section
3.2
hereof and clause "fifth" of Section 3.2 hereof;
(v) The
Policy Provider shall (A) separately set forth amounts to be paid to it in
accordance with subclauses (iii) and (iv) of clause "first" of Section 3.2
hereof, subclause (ii) of clause "second" of Section 3.2 hereof, subclauses
(ii)
and (iii) of clause "third" of Section 3.2 hereof, subclause (II) of clause
"fourth" of Section 3.2 hereof, clause "ninth" of Section 3.2 hereof and clause
"eleventh" of Section 3.2 hereof and (B) confirm to the Subordination Agent
that
none of the amounts referred to in this clause (v) have been previously paid
by
Continental after demand therefor under any Policy Provider Document;
and
(vi) Each
Trustee shall set forth the amounts to be paid in accordance with clause
"seventh" of Section 3.2 hereof.
(c) At
such
time as a Trustee, the Primary Liquidity Provider or the Policy Provider shall
have received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Section 3.2 or 3.6
hereof, as applicable, and, in the case of the Primary Liquidity Provider or
the
Policy Provider, its commitment or obligations under the Primary Liquidity
Facility or the Policy, as the case may be, shall have terminated or expired,
such Person shall, by a Written Notice, so inform the Subordination Agent and
each other party to this Agreement.
(d) As
provided in Section 6.5 hereof, the Subordination Agent shall be fully protected
in relying on any of the information set forth in a Written Notice provided
by
any Trustee, the Primary Liquidity Provider or the Policy Provider pursuant
to
paragraphs (a) through (c) above and shall have no independent obligation to
verify, calculate or recalculate any amount set forth in any Written Notice
delivered in accordance with such paragraphs.
(e) Any
Written Notice delivered by a Trustee, the Primary Liquidity Provider, the
Policy Provider or the Subordination Agent, as applicable, pursuant to Section
3.1(a), 3.1(b), 3.1(c) or 3.6 hereof, if made prior to 10:00 A.M. (New York
City
time) on any Business Day, shall be effective on the date delivered (or if
delivered later on a Business Day or if delivered on a day which is not a
Business Day shall be effective as of the next Business Day). Subject to the
terms of this Agreement, the Subordination Agent shall as promptly as
practicable comply with any such instructions; provided,
however,
that
any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New
York City time) on any Business Day may be made on the next succeeding Business
Day.
(f) In
the
event the Subordination Agent shall not receive from any Person any information
set forth in paragraph (a) or (b) above which is required to enable the
Subordination Agent to make a distribution to such Person pursuant to Section
3.2 hereof, the Subordination Agent shall request such information and, failing
to receive any such information, the Subordination Agent shall not make such
distribution(s) to such Person. In such event, the
Subordination
Agent shall make distributions pursuant to clauses "first"
through
"
thirteenth
" of
Section 3.2 to the extent it shall have sufficient information to enable it
to
make such distributions, and shall continue to hold any funds remaining, after
making such distributions, until the Subordination Agent shall receive all
necessary information to enable it to distribute any funds so
withheld.
(g) On
such
dates (but not more frequently than monthly) as the Primary Liquidity Provider,
the Policy Provider or any Trustee shall request, but in any event automatically
at the end of each calendar quarter, the Subordination Agent shall send to
such
party a written statement reflecting all amounts on deposit with the
Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION
3.2. Distribution
of Amounts on Deposit in the Collection Account.
Except
as otherwise provided in Sections 2.4(c), 3.1(f), 3.3, 3.5(b), 3.5(k) and 3.6,
amounts on deposit in the Collection Account (or, in the case of any Special
Payment, on deposit in the Special Payments Account) shall be promptly
distributed on each Regular Distribution Date (or, in the case of any Special
Payment, on the Special Distribution Date thereof) in the following order of
priority and in accordance with the information provided to the Subordination
Agent pursuant to Section 3.1(a) or (b), as applicable:
first,
such
amount as shall be required to reimburse (i) the Subordination Agent for any
reasonable out-of-pocket costs and expenses actually incurred by it (to the
extent not previously reimbursed) in the protection of, or the realization
of
the value of, the Equipment Notes or any Collateral, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses, (ii) each
Trustee for any amounts of the nature described in clause (i) above actually
incurred by it under the applicable Trust Agreement (to the extent not
previously reimbursed), shall be distributed to such Trustee, (iii) the Policy
Provider for any amounts of the nature described in clause (i) above actually
incurred by it under the Policy Provider Agreement (to the extent not previously
reimbursed), shall be distributed to the Policy Provider, and (iv) the Primary
Liquidity Provider, the Policy Provider or any Certificateholder for payments,
if any, made by it to the Subordination Agent or any Trustee in respect of
amounts described in clause (i) above, shall be distributed to the Primary
Liquidity Provider, the Policy Provider or to the applicable Trustee for the
account of such Certificateholder, in each such case, pro rata on the basis
of
all amounts described in clauses (i) through (iv) above;
second,
such
amount as shall be required to pay (i) all accrued and unpaid Liquidity Expenses
owed to the Primary Liquidity Provider and (ii) all accrued and unpaid Policy
Expenses owed to the Policy Provider, shall be distributed to the Primary
Liquidity Provider and the Policy Provider pro rata on the basis of the amount
of Liquidity Expenses and Policy Expenses owed to the Primary Liquidity Provider
and the Policy Provider;
third,
such
amount as shall be required to pay (i) the aggregate amount of accrued and
unpaid interest on all Liquidity Obligations (at the rate, or in the amount,
provided in the Primary Liquidity Facility and determined after application
of
the proceeds of any Policy Drawing pursuant to Section 3.6(d) or other payment
by the Policy Provider to the
Primary
Liquidity Provider in respect of any interest on Drawings in accordance with
the
provisions of Section 2.6(c)), (ii) the aggregate amount of accrued and unpaid
Policy Provider Interest Obligations and (iii) if the Policy Provider has paid
pursuant to Section 3.6(d) or the proviso to Section 2.6(c) to the Primary
Liquidity Provider all outstanding Drawings and interest thereon owing to the
Primary Liquidity Provider under the Primary Liquidity Facility, the amount
of
such payments made to the Primary Liquidity Provider attributable to interest
accrued on Drawings under the Primary Liquidity Facility, shall be distributed
to the Primary Liquidity Provider and the Policy Provider, as the case may
be,
pro rata on the basis of the amounts owed to the Primary Liquidity Provider
and
the Policy Provider under subclauses (i), (ii) and (iii) of this clause
“third”;
fourth,
such
amount as shall be required (I)(A) if the Primary Cash Collateral Account had
been previously funded as provided in Section 3.5(f), unless (i) on such
Distribution Date, any Equipment Note is a Non-Performing Equipment Note and
a
Liquidity Event of Default shall have occurred and be continuing or (ii) a
Final Drawing shall have occurred, to fund the Primary Cash Collateral Account
up to its Required Amount (less the amount of any repayments of Interest
Drawings under the Primary Liquidity Facility while subclause (A)(i) above
is
applicable) shall be deposited in the Primary Cash Collateral Account, (B)
if
the Primary Liquidity Facility shall become a Downgraded Facility or a
Non-Extended Facility at a time when unreimbursed Interest Drawings under the
Primary Liquidity Facility have reduced the Available Amount thereunder to
zero,
unless (i) on such Distribution Date, any Equipment Note is a Non-Performing
Equipment Note and a Liquidity Event of Default shall have occurred and be
continuing or (ii) a Final Drawing shall have occurred, to deposit into the
Primary Cash Collateral Account an amount equal to the Required Amount (less
the
amount of any repayments of Interest Drawings under the Primary Liquidity
Facility while subclause (B)(i) above is applicable) shall be deposited in
the
Primary Cash Collateral Account, and (C) if, with respect to the Primary
Liquidity Facility, neither subclause (I)(A) nor subclause (I)(B) of this clause
"fourth" are applicable, to pay in full the outstanding amount of all Liquidity
Obligations then due under the Primary Liquidity Facility (other than amounts
payable pursuant to clause "second" or "third" of this Section 3.2) (net of
any
and all payments made by the Policy Provider to the Primary Liquidity Provider)
shall be paid to the Primary Liquidity Provider and (II) if the Policy Provider
has paid pursuant to Section 3.6(d) or the proviso to Section 2.6(c) to the
Primary Liquidity Provider all outstanding Drawings and interest thereon owing
to the Primary Liquidity Provider under the Primary Liquidity Facility or if
the
Policy Provider has honored any Policy Drawings pursuant to Section 3.6(a)
as a
result of the failure of the Primary Liquidity Provider to honor Interest
Drawings in accordance with Section 2.02(a) of the Primary Liquidity Facility,
the amount of such payments made to the Primary Liquidity Provider in respect
of
principal of Drawings under the Primary Liquidity Facility and the amount of
such Policy Drawings, as applicable, shall be paid to the Policy Provider,
pro
rata on the basis of the amounts of all such deficiencies and/or unreimbursed
Liquidity Obligations payable to the Primary Liquidity Provider and the amount
of such unreimbursed Policy Provider Obligations payable to the Policy Provider,
in each instance, under this clause “fourth”;
fifth,
if any
amounts are to be distributed pursuant to either subclause (I)(A) or (I)(B)
of
clause "fourth" above, then the Primary Liquidity Provider shall be paid the
excess of (x) the aggregate outstanding amount of unreimbursed Advances (whether
or not then due) over (y) the Required Amount (less the amount of any repayments
of Interest Drawings under the Primary Liquidity Facility while subclause
(I)(A)(i) or (I)(B)(i), as the case may be, of clause "fourth" above is
applicable);
sixth,
such
amount as shall be required, if the Above-Cap Collateral Account had been
previously funded as provided in Section 3.5(f), unless (i) on such Distribution
Date, any Equipment Note is a Non-Performing Equipment Note and a Liquidity
Event of Default shall have occurred and be continuing or (ii) a Final
Drawing shall have occurred, to fund the Above-Cap Collateral Account up to
an
amount equal to the applicable Termination Amount (as recalculated on such
Distribution Date) less any amount then on deposit in the Above-Cap Account
shall be deposited in the Above-Cap Collateral Account;
seventh,
such
amount as shall be required to reimburse or pay (i) the Subordination Agent
for
any Tax (other than Taxes imposed on compensation paid hereunder), expense,
fee,
charge or other loss incurred by or any other amount payable to the
Subordination Agent in connection with the transactions contemplated hereby
(to
the extent not previously reimbursed), shall be applied by the Subordination
Agent in reimbursement of such amount, (ii) each Trustee for any Tax (other
than
Taxes imposed on compensation paid under the applicable Trust Agreement),
expense, fee, charge, loss or any other amount payable to such Trustee under
the
applicable Trust Agreements (to the extent not previously reimbursed), shall
be
distributed to such Trustee, and (iii) each Certificateholder for payments,
if
any, made by it pursuant to Section 5.2 hereof in respect of amounts described
in clause (i) above, shall be distributed to the applicable Trustee for the
account of such Certificateholder, in each such case, pro rata on the basis
of
all amounts described in clauses (i) through (iii) above;
eighth,
such
amount as shall be required to pay in full Expected Distributions on the Class
G
Certificates on such Distribution Date shall be distributed to the Class G
Trustee;
ninth,
such
amount as shall be required to pay all Policy Provider Obligations then due
(other than amounts payable pursuant to clauses "first", "second", "third"
and
"fourth" of this Section 3.2 and any Excess Reimbursement Obligations) and
amounts due under the Policy Fee Letter (other than any Early Termination Fee)
shall be paid to the Policy Provider;
tenth,
such
amount as shall be required to pay in full Expected Distributions on the Class
B
Certificates on such Distribution Date shall be distributed to the Class B
Trustee;
eleventh,
such
amount as shall be required to pay any Excess Reimbursement Obligations shall
be
distributed to the Policy Provider;
twelfth,
such
amount as shall be required, if the Above-Cap Collateral Account had been
previously funded as provided in Section 3.5(f), unless (i) any Equipment Note
is a Non-Performing Equipment Note and a Liquidity Event of Default shall have
occurred and be continuing or (ii) a Final Drawing shall have occurred, to
fund the Above-Cap Collateral Account up to an amount equal to the applicable
Termination Amount (as recalculated on such Distribution Date) shall be
deposited in the Above-Cap Collateral Account; and
thirteenth,
the
balance, if any, of any such amount remaining thereafter shall be held in the
Collection Account for later distribution in accordance with this Article
III.
SECTION
3.3. Other
Payments.
(a) Any payments received by the Subordination Agent for which no
provision as to the application thereof is made in this Agreement shall be
distributed by the Subordination Agent in the order of priority specified in
Section 3.2 hereof.
(b) Notwithstanding
the priority of payments specified in Section 3.2, in the event any Investment
Earnings on amounts on deposit in the Primary Cash Collateral Account resulting
from an Unapplied Provider Advance are deposited in the Collection Account
or
the Special Payments Account, such Investment Earnings shall be used to pay
interest payable in respect of such Unapplied Provider Advance to the extent
of
such Investment Earnings.
(c) Except
as
otherwise provided in Section 3.2 hereof, if the Subordination Agent receives
any Scheduled Payment after the Scheduled Payment Date relating thereto, but
prior to such payment becoming an Overdue Scheduled Payment, then the
Subordination Agent shall deposit such Scheduled Payment in the Collection
Account and promptly distribute such Scheduled Payment in accordance with the
priority of distributions set forth in Section 3.2 hereof; provided
that,
for the purposes of this Section 3.3(c) only, each reference in clause
"eighth"
and
"tenth"
of
Section 3.2 to "Distribution Date" shall be deemed to refer to such Scheduled
Payment Date.
SECTION
3.4. Payments
to the Trustees, the Primary Liquidity Provider
and
Policy Provider.
Any
amounts distributed hereunder to the Primary Liquidity Provider or Policy
Provider shall be paid to the Primary Liquidity Provider or Policy Provider
by
wire transfer of funds to the address the Primary Liquidity Provider or Policy
Provider shall provide to the Subordination Agent. The Subordination Agent
shall
provide a Written Notice of any such transfer to the Primary Liquidity Provider
or Policy Provider, as the case may be, at the time of such transfer. Any
amounts distributed hereunder by the Subordination Agent to any Trustee which
shall not be the same institution as the Subordination Agent shall be paid
to
such Trustee by wire transfer funds at the address such Trustee shall provide
to
the Subordination Agent.
SECTION
3.5. Liquidity
Facilities.
(a)
Interest
Drawings and Above-Cap Payments.
If on
any Distribution Date, after giving effect to the subordination provisions
of
this Agreement, the Subordination Agent shall not have sufficient funds for
the
payment of any amounts due and owing in respect of accrued interest on the
Class
G Certificates (at the Stated Interest Rate for the Class G Certificates
calculated assuming that Continental will not cure any Payment Default), then,
prior to 12:00 p.m. (New York City time) on such Distribution Date, (i)
the
Subordination Agent shall request a drawing (each such drawing, an "Interest
Drawing")
under
the Primary Liquidity Facility (and concurrently with the making of such
request, the Subordination Agent will give notice to the Policy Provider of
such
insufficiency of funds) in an amount equal to the lesser of (x) an amount
sufficient to pay the amount of such accrued interest (at the Stated Interest
Rate for the Class G Certificates calculated assuming that Continental will
not
cure any Payment Default) and (y) the Available Amount under the Primary
Liquidity Facility, and shall pay such amount to the Class G Trustee in payment
of such accrued interest; and (ii) if LIBOR for the Interest Period ending
on
such Distribution Date (or, if such Distribution Date is not the last day of
an
Interest Period, LIBOR for the Interest Period including such Distribution
Date)
exceeds Capped LIBOR and if the Stated Interest Rate for the Class G
Certificates for the Interest Period ending on such Distribution Date (or,
if
such Distribution Date is not the last day of an Interest Period, the Stated
Interest Rate for the Interest Period including such Distribution Date) exceeds
the Capped Interest Rate, the Subordination Agent shall (if it can make the
certification described in the last sentence of this Section 3.5(a) and the
Above-Cap Liquidity Facility has not been terminated or expired in accordance
with its terms) request an interest rate cap payment (each such payment, an
"Above-Cap
Payment")
under
the Above-Cap Liquidity Facility for credit to the Above-Cap Account in an
amount equal to the excess of (1) the product of (x) the difference between
LIBOR for the Interest Period ending on such Distribution Date (or, if such
Distribution Date is not the last day of an Interest Period, LIBOR for the
Interest Period including such Distribution Date) and Capped LIBOR, multiplied
by (y) the Pool Balance with respect to the Class G Certificates as of such
Distribution Date (and before giving effect to any distribution on such date),
multiplied by (z) the actual number of days elapsed in such Interest Period
to such Distribution Date divided by 360 over (2) the amount, if any, on deposit
in the Above-Cap Account, and upon the receipt thereof the Subordination Agent
shall immediately deposit such Above-Cap Payment into the Above-Cap Account.
If
the Interest Drawing on such Distribution Date pursuant to clause (i) above
with
respect to the Class G Certificates, together with all other amounts available
to the Subordination Agent on such Distribution Date (after giving effect to
the
subordination provisions of this Agreement and any withdrawals from the Primary
Cash Collateral Account), is insufficient to pay accrued interest (at the
applicable Stated Interest Rate with respect to the Class G Certificates)
payable with respect to the Class G Certificates on such Distribution Date
(such
deficiency, the "Deficiency
Amount"),
the
Subordination Agent shall, prior to 4:00 p.m. (New York City time) on such
Distribution Date, withdraw (each, an "Above-Cap
Withdrawal")
from
the Above-Cap Account an amount equal to the lesser of (x) such Deficiency
Amount and (y) the amount on deposit in the Above-Cap Account (including any
amounts deposited, or to be deposited, on such Distribution Date pursuant to
clause (ii) above), and shall pay such amount to the Class G Trustee in payment
of such accrued interest with respect to the Class G Certificates. In
connection with a request for an Above-Cap Payment under the Above-Cap Liquidity
Facility pursuant to clause (ii) above, the Subordination Agent shall certify
to
the Above-Cap Liquidity Provider that at least one of the following statements
is true as of such Distribution Date: (i) the Available Amount under the Primary
Liquidity Facility (prior to giving effect to any Interest Advances to be made
on such Distribution Date) is greater than zero; or (ii) the amount on deposit
in the Primary Cash Collateral Account (prior to giving effect to any withdrawal
to be made from such account on such Distribution Date) is greater than
zero.
(b) Application
of Interest Drawings and Above-Cap Withdrawals.
Notwithstanding anything to the contrary contained in this Agreement, (i) all
payments received
by
the
Subordination Agent in respect of an Interest Drawing under the Primary
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the
Primary Cash Collateral Account, and payable in each case to the Class G
Certificateholders or the Class G Trustee, shall be promptly distributed to
the
Class G Trustee, provided
that if
(x) the Subordination Agent shall receive any amount in respect of an Interest
Drawing under the Primary Liquidity Facility or a withdrawal from the Primary
Cash Collateral Account to pay Accrued Class G Interest after such Accrued
Class
G Interest has been fully paid to the Class G Trustee by a Policy Drawing under
the Policy pursuant to Section 3.6(a) hereof or (y) the Subordination Agent
shall receive any amount in respect of a Policy Drawing under the Policy
pursuant to Section 3.6(a) hereof to fully pay Accrued Class G Interest after
such Accrued Class G Interest has been paid (in full or in part) to the Class
G
Trustee by an Interest Drawing under the Primary Liquidity Facility or a
withdrawal from the Primary Cash Collateral Account, the Subordination Agent,
in
the case of either clause (x) or (y), shall pay an amount equal to the amount
of
such Interest Drawing or withdrawal directly to the Policy Provider as
reimbursement of such Policy Drawing rather than to the Class G
Certificateholders or the Class G Trustee (except for any such amount
constituting an Election Interest Payment with respect to the Series G Equipment
Note, which shall be paid directly to the Primary Liquidity Provider as
reimbursement for such Interest Drawing or to the Primary Cash Collateral
Account as replenishment for such withdrawal, as applicable), and (ii)
all
payments received by the Subordination Agent in respect of an Above-Cap
Withdrawal from the Above-Cap Account, and payable to the Class G
Certificateholders or the Class G Trustee, shall be promptly distributed to
the
Class G Trustee,
provided
that if
(x) the Subordination Agent shall receive any amount in respect of such
Above-Cap Withdrawal to pay Accrued Class G Interest after such Accrued Class
G
Interest has been fully paid to the Class G Trustee by a Policy Drawing under
the Policy pursuant to Section 3.6(a) hereof or (y) the Subordination Agent
shall receive any amount in respect of a Policy Drawing under the Policy
pursuant to Section 3.6(a) hereof to fully pay Accrued Class G Interest after
such Accrued Class G Interest has been paid (in full or in part) to the Class
G
Trustee by an Above-Cap Withdrawal, the Subordination Agent, in the case of
either clause (x) or (y), shall pay an amount equal to the amount of such
Above-Cap Withdrawal directly to the Policy Provider as reimbursement of such
Policy Drawing rather than to the Class G Certificateholders or the Class G
Trustee.
(c) Downgrade
Drawings.
(i) The
Subordination Agent shall request a Downgrade Drawing under the Primary
Liquidity Facility as provided in Section 3.5(c)(iii), if at any time a
Downgrade Event shall have occurred with respect to the Primary Liquidity
Facility (a "Downgraded
Facility"),
unless an event described in Section 3.5(c)(ii) occurs with respect to the
Primary Liquidity Facility.
(ii)
If
at any time the Primary Liquidity Facility becomes a Downgraded Facility, the
Subordination Agent shall request a Downgrade Drawing thereunder in accordance
with Section 3.5(c)(iii), unless the Primary Liquidity Provider or Continental
arranges for a Replacement Primary Liquidity Provider to issue and deliver
a
Replacement Primary Liquidity Facility to the Subordination Agent within 10
days
of a Downgrade Event (but not later than the expiration date of such Downgraded
Facility).
(iii)
Upon the occurrence of any Downgrade Event with respect to the Primary Liquidity
Facility, unless any event described in Section 3.5(c)(ii) occurs with respect
thereto,
the Subordination Agent shall, on the 10th day referred to in Section 3.5(c)(ii)
(or if such 10th day is not a Business Day, on the next succeeding Business
Day)
(or, if earlier, the expiration date of such Downgraded Facility), request
a
drawing in accordance with and to the extent permitted by such Downgraded
Facility (such drawing, a "Downgrade
Drawing")
of the
Available Amount thereunder. Amounts drawn pursuant to a Downgrade Drawing
shall
be maintained and invested as provided in Section 3.5(f) hereof. The Primary
Liquidity Provider may also arrange for a Replacement Primary Liquidity Provider
to issue and deliver a Replacement Primary Liquidity Facility at any time after
such Downgrade Drawing so long as such Downgrade Drawing has not been reimbursed
in full to the Primary Liquidity Provider.
(iv)
If a
Termination Event, a Credit Downgrade or a Credit Support Event (each such
event, a "Mandatory
Termination Event")
shall
occur under the Above-Cap Liquidity Facility, the Above-Cap Liquidity Provider
shall provide prompt notice of such Mandatory Termination Event in writing
to
Continental, the Subordination Agent, the Policy Provider, the Class G
Trustee and the Class B Trustee, and within the time period specified in
the Above-Cap Liquidity Facility (but in no event later than the expiration
date
of the Above-Cap Liquidity Facility) Continental or the Above-Cap Liquidity
Provider may, in each case at its own expense, arrange for one or more
Replacement Above-Cap Liquidity Providers to issue and deliver a Replacement
Above-Cap Liquidity Facility to the Subordination Agent. In the event that
the Above-Cap Liquidity Provider or Continental makes arrangements for a
Replacement Above-Cap Liquidity Facility in accordance with the terms of the
Above-Cap Liquidity Facility, (y) the Subordination Agent shall, if and to
the extent so requested by the Above-Cap Liquidity Provider or Continental,
execute and deliver any certificate or other instrument required to give effect
to such replacement and (z) each of the parties hereto shall enter into any
amendments to this Agreement necessary to give effect to such replacement.
If the Above-Cap Liquidity Facility is subject to a Mandatory Termination Event
and has not been replaced in accordance with its terms and the terms of this
paragraph or if an Early Termination Date has been designated under the
Above-Cap Liquidity Facility after the occurrence of an Event of Default (as
defined in the Above-Cap Liquidity Facility) which is not otherwise a Mandatory
Termination Event, the Above-Cap Liquidity Provider shall, on the applicable
Early Termination Date, pay to the Subordination Agent, for the benefit of
the
Class G Trustee on behalf of the Class G Certificateholders, the applicable
Termination Amount for credit to the Above-Cap Collateral Account, to be applied
as provided in Section 3.5(f) hereof plus the amount of all other unpaid
sums due and payable by the Above-Cap Liquidity Provider thereunder on or prior
to such date, and upon such payment, the Above-Cap Liquidity Facility shall
be
terminated. Nothing contained herein shall limit the rights of the
Above-Cap Liquidity Provider to transfer its rights and obligations under the
Above-Cap Liquidity Facility or otherwise arrange for a Replacement Above-Cap
Liquidity Facility, subject to and in accordance with the provisions of the
Above-Cap Liquidity Facility.
(d) Non-Extension
Drawings.
If the
Primary Liquidity Facility is scheduled to expire on a date (the "Stated
Expiration Date")
prior
to the date that is 15 days after the Final Legal Distribution Date for the
Class G Certificates, then, no earlier than the 60th day and no later than
the
40th day prior to the then Stated Expiration Date, the Subordination Agent
shall
request that the Primary Liquidity Provider extend the Stated Expiration Date
until the earlier of (i) the date which is 15 days after such Final Legal
Distribution Date and (ii) the date that is the day immediately preceding the
364th
day
occurring after the last day of the applicable Consent
Period
(as hereinafter defined) (unless the obligations of the Primary Liquidity
Provider under the Primary Liquidity Facility are earlier terminated in
accordance with the Primary Liquidity Facility). Whether or not the Primary
Liquidity Provider has received a request from the Subordination Agent, the
Primary Liquidity Provider shall advise the Subordination Agent, no earlier
than
the 40th
day (or,
if earlier, the date of the Primary Liquidity Provider's receipt of such
request, if any, from the Subordination Agent) and no later than the
25th
day
prior to the Stated Expiration Date then in effect for the Primary Liquidity
Facility (such period, with respect to the Primary Liquidity Facility, the
"Consent
Period"),
whether, in its sole discretion, it agrees to extend such Stated Expiration
Date.
If
(A) on
or before the date on which such Consent Period ends, the Primary Liquidity
Facility shall not have been replaced in accordance with Section 3.5(e) and
(B)
the Primary Liquidity Provider fails irrevocably and unconditionally to advise
the Subordination Agent on or before the date on which such Consent Period
ends
that such Stated Expiration Date then in effect shall be so extended for the
Primary Liquidity Facility, the Subordination Agent shall, on the date on which
such Consent Period ends (or as soon as possible thereafter), in accordance
with
the terms of the expiring Primary Liquidity Facility (a "Non-Extended
Facility"),
request a drawing under the expiring Primary Liquidity Facility (such drawing,
a
"Non-Extension
Drawing")
of all
available and undrawn amounts thereunder. Amounts drawn pursuant to a
Non-Extension Drawing shall be maintained and invested in accordance with
Section 3.5(f) hereof.
(e) Issuance
of Replacement Primary Liquidity Facility.
(i) At any time, Continental may, at its option, with cause or
without cause, arrange for a Replacement Primary Liquidity Facility to replace
the Primary Liquidity Facility (including any Replacement Primary Liquidity
Facility provided pursuant to Section 3.5(e)(ii) hereof); provided,
however,
that
the initial Primary Liquidity Provider for the Primary Liquidity Facility shall
not be replaced by Continental as the Primary Liquidity Provider without the
consent of such initial Primary Liquidity Provider unless (A) there shall have
become due to the initial Primary Liquidity Provider, or the initial Primary
Liquidity Provider shall have demanded, amounts pursuant to Section 3.01, 3.02
or 3.03 of the Primary Liquidity Facility and the replacement of such initial
Primary Liquidity Provider would reduce or eliminate the obligation to pay
such
amounts or Continental determines in good faith that there is a substantial
likelihood that the initial Primary Liquidity Provider will have the right
to
claim any such amounts (unless such initial Primary Liquidity Provider waives,
in writing, any right it may have to claim such amounts), which determination
shall be set forth in a certificate delivered by Continental to such initial
Primary Liquidity Provider setting forth the basis for such determination and
accompanied by an opinion of outside counsel selected by Continental and
reasonably acceptable to such initial Primary Liquidity Provider verifying
the
legal conclusions, if any, of such certificate relating to such basis,
provided
that, in
the case of any likely claim for such amounts based upon any proposed, or
proposed change in, law, rule, regulation, interpretation, directive,
requirement, request or administrative practice, such opinion may assume the
adoption or promulgation of such proposed matter, (B) it shall become unlawful
or impossible for the initial Primary Liquidity Provider (or its Lending Office)
to maintain or fund its LIBOR Advances as described in Section 3.10 of the
Primary Liquidity Facility, (C) the Primary Liquidity Facility of such initial
Primary Liquidity Provider shall become a Downgraded Facility or a Non-Extended
Facility or a Downgrade Drawing or a Non-Extension Drawing shall have occurred
under the Primary Liquidity Facility
of
such
initial Primary Liquidity Provider or (D) the initial Primary Liquidity Provider
shall have breached any of its payment (including, without limitation, funding)
obligations under the Primary Liquidity Facility in respect of which it is
the
Primary Liquidity Provider. If such Replacement Primary Liquidity Facility
is
provided at any time after a Downgrade Drawing or Non-Extension Drawing has
been
made, all funds on deposit in the Primary Cash Collateral Account will be
returned to the Primary Liquidity Provider being replaced.
(ii) If
the
Primary Liquidity Provider shall determine not to extend its Primary Liquidity
Facility in accordance with Section 3.5(d), then the Primary Liquidity Provider
may, at its option, arrange for a Replacement Primary Liquidity Facility to
replace the Primary Liquidity Facility during the period no earlier than 40
days
and no later than 25 days prior to the then effective Stated Expiration Date
of
the Primary Liquidity Facility. In addition, so long as the initial Primary
Liquidity Provider for the Primary Liquidity Facility is the Primary Liquidity
Provider for the Primary Liquidity Facility, at any time after a Non-Extension
Drawing has been made under the Primary Liquidity Facility, the Primary
Liquidity Provider may, at its option, arrange for a Replacement Primary
Liquidity Facility to replace the Primary Liquidity Facility.
(iii) No
Replacement Primary Liquidity Facility arranged by Continental or the Primary
Liquidity Provider in accordance with clause (i) or (ii) above or pursuant
to
Section 3.5(c), respectively, shall become effective and no such Replacement
Primary Liquidity Facility shall be deemed a "Primary Liquidity Facility" under
the Operative Agreements, unless and until (A) each of the conditions referred
to in sub-clauses (iv)(x) and (z) below shall have been satisfied, (B) if such
Replacement Primary Liquidity Facility shall materially adversely affect the
rights, remedies, interests or obligations of the Class G Certificateholders
or
the Class B Certificateholders under any of the Operative Agreements, the
applicable Trustee shall have consented, in writing, to the execution and
issuance of such Primary Replacement Liquidity Facility and (C) in the case
of a
Primary Replacement Liquidity Facility arranged by the Primary Liquidity
Provider under Section 3.5(e)(ii) or pursuant to Section 3.5(c), such
Replacement Primary Liquidity Facility is acceptable to
Continental.
(iv) In
connection with the issuance of each Replacement Primary Liquidity Facility,
the
Subordination Agent shall (x) prior to the issuance of such Replacement Primary
Liquidity Facility, obtain written confirmation from each Rating Agency that
such Replacement Primary Liquidity Facility will not cause a reduction,
withdrawal or suspension of any rating then in effect for any Class of
Certificates by such Rating Agency (without regard to any downgrading of any
rating of any Primary Liquidity Provider being replaced pursuant to Section
3.5(c) hereof and, without regard to the Policy) and the written consent of
the
Policy Provider (which consent will not be unreasonably withheld or delayed),
(y) pay all Liquidity Obligations then owing to the replaced Primary
Liquidity Provider (which payment shall be made first from available funds
in
the Primary Cash Collateral Account as described in clause (v) of Section 3.5(f)
hereof, and thereafter from any other available source, including, without
limitation, a drawing under the Replacement Primary Liquidity Facility) and
(z)
cause the issuer of the Replacement Primary Liquidity Facility to deliver the
Replacement Primary Liquidity Facility to the Subordination Agent, together
with
a legal opinion opining that such Replacement Primary Liquidity Facility is
an
enforceable obligation of such Replacement Primary Liquidity Provider. In
connection with the issuance of each Replacement Primary Liquidity Facility,
the
Primary
Liquidity Provider being replaced agrees to return its certified copy of the
Policy to the Policy Provider prior to the issuance of such Replacement Primary
Liquidity Facility.
(v) Upon
satisfaction of the conditions set forth in clauses (iii) and (iv) of this
Section 3.5(e) with respect to a Replacement Primary Liquidity Facility, (w)
the
replaced Primary Liquidity Facility shall terminate, (x) the Subordination
Agent
shall, if and to the extent so requested by Continental or the Primary Liquidity
Provider being replaced, execute and deliver any certificate or other instrument
required in order to terminate the replaced Primary Liquidity Facility, shall
surrender the replaced Primary Liquidity Facility to the Primary Liquidity
Provider being replaced and shall execute and deliver the Replacement Primary
Liquidity Facility and any associated Fee Letter, (y) each of the parties hereto
shall enter into any amendments to this Agreement necessary to give effect
to
(1) the replacement of the Primary Liquidity Provider with the Replacement
Primary Liquidity Provider and (2) the replacement of the Primary Liquidity
Facility with the Replacement Primary Liquidity Facility and (z) the Replacement
Primary Liquidity Provider shall be deemed to be a Primary Liquidity Provider
with the rights and obligations of the Primary Liquidity Provider hereunder
and
under the other Operative Agreements and such Replacement Primary Liquidity
Facility shall be deemed to be the Primary Liquidity Facility hereunder and
under the other Operative Agreements.
(f) Cash
Collateral Accounts; Above-Cap Accounts; Withdrawals;
Investments.
In the
event the Subordination Agent shall draw all available amounts under the Primary
Liquidity Facility pursuant to Section 3.5(c), 3.5(d) or 3.5(i) hereof, or
in
the event amounts are to be deposited in the Primary Cash Collateral Account
pursuant to subclause (i)(A) or (i)(B) of clause "fourth" of Section 3.2,
amounts so drawn or to be deposited, as the case may be, shall be deposited
by
the Subordination Agent in the Primary Cash Collateral Account. If the Above-Cap
Liquidity Provider shall at any time make a Termination Amount payment under
the
Above-Cap Liquidity Facility, such Termination Amount payment shall be deposited
by the Subordination Agent in the Above-Cap Collateral Account, to be applied
as
specified below in this Section 3.5(f). All amounts on deposit in each Cash
Collateral Account shall be invested and reinvested in Eligible Investments
in
accordance with Section 2.2(b) hereof.
On
each
Interest Payment Date (or, in the case of any Special Distribution Date
occurring in connection with the redemption, purchase or prepayment of any
Equipment Note as contemplated in Section 2.4(a) hereof occurring (a
“Special
Distribution Withdrawal”),
on
such Special Distribution Date), Investment Earnings on amounts on deposit
in
the Primary Cash Collateral Account (or, in the case of any Special Distribution
Withdrawal, a fraction of such Investment Earnings equal to the Applicable
Fraction) shall be deposited in the Collection Account (or, in the case of
a
Special Distribution Withdrawal, the Special Payments Account) and applied
on
such Interest Payment Date (or Special Distribution Date, as the case may be)
in
accordance with Section 3.2 or 3.3 (as applicable). Investment Earnings on
amounts on deposit in the Above-Cap Collateral Account shall be credited to
such
account and applied in the same manner as the applicable Termination Amount
payment credited thereto. Investment Earnings on amounts on deposit in the
Above-Cap Account shall be credited to such account and applied in the same
manner as Above-Cap Payments credited thereto. The Subordination Agent shall
deliver a written statement to Continental, each Liquidity Provider and the
Policy Provider one day prior to each Interest Payment Date and Special
Distribution Date setting forth the aggregate amount of Investment Earnings
held
in the Cash Collateral Accounts as of such date. The
Subordination
Agent shall also deliver a written statement to Continental, each Liquidity
Provider and the Policy Provider one day after each Distribution Date on which
amounts have been deposited in the Above-Cap Account and/or withdrawn from
the
Above-Cap Collateral Account setting forth the amount of such deposit and/or
withdrawal. In addition, from and after the date funds are so deposited, the
Subordination Agent shall make withdrawals from such accounts as
follows:
(i) on
each
Distribution Date, the Subordination Agent shall, to the extent it shall not
have received funds to pay accrued and unpaid interest due and owing on the
Class G Certificates (at the applicable Stated Interest Rate for the Class
G
Certificates) after giving effect to the subordination provisions of this
Agreement, (A) withdraw from the Primary Cash Collateral Account, and pay to
the
Class G Trustee, an amount equal to the lesser of (x) an amount necessary
to pay accrued and unpaid interest (at the applicable Stated Interest Rate
for
the Class G Certificates) on such Class G Certificates and (y) the amount on
deposit in the Primary Cash Collateral Account and (B) if an “Above-Cap Payment”
would have been required to be made on such Distribution Date pursuant to the
terms of the Above-Cap Liquidity Facility were such Liquidity Facility still
in
effect, withdraw from the Above-Cap Collateral Account and deposit in the
Above-Cap Account, an amount (if any) equal to the lesser of (x) an amount
equal
to such Above-Cap Payment and (y) the amount on deposit in the Above-Cap
Collateral Account;
(ii) on
each
date on which the Pool Balance of the Class G Trust shall have been reduced
by
payments made to the Class G Certificateholders pursuant to Section 3.2 hereof
or otherwise, the Subordination Agent shall withdraw from the Primary Cash
Collateral Account such amount as is necessary so that, after giving effect
to
the reduction of the Pool Balance on such date (and any reduction in the amounts
on deposit in the Primary Cash Collateral Account resulting from a prior
withdrawal of amounts on deposit in the Primary Cash Collateral Account on
such
date) and any transfer of Investment Earnings from such Cash Collateral Account
to the Collection Account or the Special Payments Account on such date, an
amount equal to the sum of the Required Amount plus (if on a Distribution Date
not coinciding with an Interest Payment Date) Investment Earnings on deposit
in
the Primary Cash Collateral Account (after giving effect to any such transfer
of
Investment Earnings) will be on deposit in the Primary Cash Collateral Account
and shall first, pay such withdrawn amount to the Primary Liquidity Provider
until the Liquidity Obligations owing to the Primary Liquidity Provider shall
have been paid in full, and second, deposit any remaining withdrawn amount
in
the Collection Account;
(iii) if
a
Replacement Primary Liquidity Facility shall be delivered to the Subordination
Agent following the date on which funds have been deposited into the Primary
Cash Collateral Account, the Subordination Agent shall withdraw all amounts
on
deposit in the Primary Cash Collateral Account and shall pay such amounts to
the
replaced Primary Liquidity Provider until all Liquidity Obligations owed to
such
Person shall have been paid in full, and shall deposit any remaining amount
in
the Collection Account; and
(iv) (x)
following the payment of Final Distributions with respect to the Class G
Certificates, on the date on which the Subordination Agent shall have been
notified by the Primary Liquidity Provider that the Primary Liquidity
Obligations owed to the Primary Liquidity Provider have been paid in full,
the
Subordination Agent shall withdraw all amounts on deposit in the Primary Cash
Collateral Account and shall deposit such amount in the Collection Account
and
(y) on the first Business Day occurring immediately after the earlier of (1)
the
date of the payment of Final Distributions with respect to the Class G
Certificates and (2) the Final Legal Distribution Date for the Class G
Certificates (after giving effect to all distributions to be made on such date),
the Subordination Agent shall pay to the Above-Cap Liquidity Provider an amount
equal to the sum of the amounts (if any) on deposit in (A) the Above-Cap Account
and (B) the Above-Cap Collateral Account by wire transfer of funds to the
account identified by the Above-Cap Liquidity Provider in writing to the
Subordination Agent.
(g) Reinstatement.
With
respect to any Interest Drawing under the Primary Liquidity Facility, upon
the
reimbursement of the Primary Liquidity Provider for all or any part of the
amount of such Interest Drawing, together with any accrued interest thereon,
the
Available Amount of the Primary Liquidity Facility shall be reinstated by an
amount equal to the amount of such Interest Drawing so reimbursed to the Primary
Liquidity Provider but not to exceed the Stated Amount for the Primary Liquidity
Facility; provided,
however,
that
the Primary Liquidity Facility shall not be so reinstated in part or in full
at
any time if (x) any Equipment Note is a Non-Performing Equipment Note and a
Liquidity Event of Default shall have occurred and be continuing or (y) a Final
Drawing shall have occurred; provided
further,
that
any payment by the Policy Provider to the Primary Liquidity Provider of any
amounts pursuant to Section 3.6(d) or the proviso to Section 2.6(c) shall not
reinstate the Primary Liquidity Facility, but the Primary Liquidity Facility
(so
long as the Primary Liquidity Facility is in effect) shall be reinstated, pro
tanto, to the extent the Policy Provider receives any reimbursement in respect
of such payment under clause “fourth” of Section 3.2, unless (x) any Equipment
Note is a Non-Performing Equipment Note and a Liquidity Event of Default shall
have occurred and be continuing or (y) a Final Drawing shall have occurred.
In
the event that, with respect to the Primary Liquidity Facility, (i) funds
are withdrawn from the Primary Cash Collateral Account pursuant to clause (i)
of
Section 3.5(f) hereof or (ii) the Primary Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under the Primary Liquidity Facility have reduced the
Available Amount thereunder to zero, then funds received by the Subordination
Agent at any time other than (x) any time when a Liquidity Event of Default
shall have occurred and be continuing and any Equipment Note is a Non-Performing
Equipment Note or (y) any time after a Final Drawing shall have occurred, shall
be deposited in such Cash Collateral Account as and to the extent provided
in
clause "fourth"
of
Section 3.2 and applied in accordance with Section 3.5(f) hereof.
(h) Reimbursement.
The
amount of each drawing under the Primary Liquidity Facility shall be due and
payable, together with interest thereon, on the dates and at the rates,
respectively, provided in the Primary Liquidity Facility. The Subordination
Agent shall have no obligation to reimburse the Above-Cap Liquidity Provider
for
any Above-Cap Payments and the Above-Cap Liquidity Provider shall have no
interest in any monies credited to any Trust Account.
(i) Final
Drawing.
Upon
receipt from the Primary Liquidity Provider of a Termination Notice with respect
to the Primary Liquidity Facility, the Subordination Agent shall, not later
than
the date specified in such Termination Notice, in accordance with the terms
of
the Primary Liquidity Facility, request a drawing under the Primary Liquidity
Facility of all available and undrawn amounts thereunder (a "Final
Drawing").
Amounts drawn pursuant to a Final Drawing shall be maintained and invested
in
accordance with Section 3.5(f) hereof.
(j) Reduction
of Stated Amount.
Promptly following each date on which the Required Amount of the Primary
Liquidity Facility is reduced as a result of a reduction in the Pool Balance
with respect to the Class G Certificates (including by reason of a Policy
Provider Election) or otherwise, the Stated Amount of the Primary Liquidity
Facility shall automatically be reduced to an amount equal to the Required
Amount with respect to the Primary Liquidity Facility (as calculated by the
Subordination Agent after giving effect to such payment).
(k) Relation
to Subordination Provisions.
Subject
in the case of the Primary Liquidity Facility to the proviso contained in clause
(i) of Section 3.5(b), Interest Drawings under the Primary Liquidity Facility
and withdrawals from the Primary Cash Collateral Account and the Above-Cap
Account, in each case, in respect of interest on the Class G Certificates,
will
be distributed to the Class G Trustee, notwithstanding Sections 2.1(b) and
3.2.
(l) Assignment
of Liquidity Facility.
The
Subordination Agent agrees not to consent to the assignment by any Liquidity
Provider of any of its rights or obligations under any Liquidity Facility or
any
interest therein, unless (i) Continental shall have consented to such
assignment and (ii) each Rating Agency shall have provided a Ratings
Confirmation in respect of such assignment and (iii) in the case of the Primary
Liquidity Facility only, the Policy Provider shall have consented to such
assignment (which consent shall not be unreasonably withheld or delayed);
provided,
that
the Subordination Agent shall consent to such assignment if the conditions
in
the foregoing clauses (i), (ii) and (iii) are satisfied, and the foregoing
is
not intended to and shall not be construed to limit the rights of the Primary
Liquidity Provider under Section 3.5(e)(ii).
(m) Interest
Coverage.
The
interest payable by the Liquidity Provider under any Liquidity Facility shall
include interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding.
(n) Termination
upon Release of Policy.
In the
event that (x) one or more Class B Certificateholders elect to purchase all
of
the Class G Certificates pursuant to Section 5.01 of the Trust Supplements
and,
in connection therewith, elect to surrender the Policy to the Policy Provider
for cancellation (thereby releasing the Policy Provider from its obligations
under the Policy) or (y) the Class G Certificateholders shall have otherwise
elected to so surrender the Policy pursuant to Section 5.01(b) of the Class
G
Trust Supplement, the Primary Liquidity Facility shall be terminated (such
termination, the "Special
Termination")
upon
(i) the payment of all Policy Provider Amounts (other than amounts referred
to
in clause (c) of the definition of Excess Reimbursement Obligations) to the
Policy Provider and (ii) the payment of all outstanding Liquidity Obligations
to
the Primary Liquidity Provider, in each case, as required by Section 5.01 of
the
Trust Supplements.
SECTION
3.6. The
Policy.
(a) Interest
Drawings.
If on
any Regular Distribution Date (other than the Final Legal Distribution Date)
after
giving effect to the application of available funds in accordance with the
subordination provisions of this Agreement and to the application of Prior
Funds,
the
Subordination Agent does not then have sufficient funds available for the
payment of all amounts due and owing in respect of accrued and unpaid interest
on the Class G Certificates at the applicable Stated Interest Rate (calculated
assuming that Continental will not cure any Payment Default) ("Accrued
Class G Interest"),
then
the Subordination Agent (A) prior to 12:00 p.m. (New York City time) on such
Distribution Date shall deliver a Notice for Payment, as provided in the Policy,
to the Policy Provider and its Fiscal Agent, requesting a Policy Drawing under
the Policy (for payment into the Policy Account) in an amount sufficient to
enable the Subordination Agent to pay such Accrued Class G Interest and
(B) upon receipt shall pay such amount from the Policy Account to the Class
G Trustee in payment of such Accrued Class G Interest.
(b) Proceeds
Deficiency Drawing.
If on
any Special Distribution Date (which is not also an Election Distribution Date
or a Special Distribution Date established pursuant to the second paragraph
of
Section 3.6(c)) established by the Subordination Agent by reason of its receipt
of a Special Payment constituting the proceeds from the sale of the Series
G
Equipment Note (as to which there has been a payment default or which has been
accelerated) or of the Pledged Spare Parts comprising all of the Pledged Spare
Parts subject to the Lien of the Indenture at the time of such sale, as the
case
may be (each, a “Disposition”),
after
giving effect to the application of such proceeds in accordance with the
subordination provisions of this Agreement and to the application of Prior
Funds, the Subordination Agent does not then have sufficient funds available
for
(A) the payment in full of the then outstanding Pool Balance of the Class G
Certificates and (B) the payment of accrued and unpaid interest thereon at
the
Stated Interest Rate for the Class G Certificates for the period from the
immediately preceding Regular Distribution Date to such Special Distribution
Date (calculated assuming that Continental will not cure any Payment Default),
then the Subordination Agent (i) prior to 12:00 p.m. (New York City time)
on such Special Distribution Date shall deliver a Notice for Payment, as
provided in the Policy, to the Policy Provider and its Fiscal Agent, requesting
a Policy Drawing under the Policy (for payment into the Policy Account) in
an
amount sufficient to enable the Subordination Agent to pay the outstanding
Pool
Balance of the Class G Certificates and the amount of such accrued and unpaid
interest and (ii) upon receipt shall pay such amount from such Policy Account
to
the Class G Trustee in payment of such reduction in the outstanding Pool Balance
of the Class G Certificates plus such accrued and unpaid interest.
(c) No
Proceeds Drawing.
If a
Payment Default exists with respect to the Series G Equipment Note (without
giving effect to any Acceleration or any payments by any Liquidity Provider
or
the Policy Provider) for a period of eight consecutive Interests Periods (such
period, the “Default
Period”)
(regardless of whether the Subordination Agent has received a Special Payment
constituting proceeds from any Disposition during such Default Period) and
continues to exist on the Regular Distribution Date on which such eighth
Interest Period ends, on the 25th
day
following such Regular Distribution Date (or if such 25th
day is
not a Business Day, the next Business Day), unless a Policy Provider Election
has been made, the Subordination Agent shall deliver a Notice for Payment,
as
provided in the Policy, to the Policy Provider and its Fiscal Agent, requesting
a Policy Drawing under such Policy (for payment into the Policy Account) in
an
amount equal to the then outstanding principal amount of the Series G Equipment
Note
(less the amount of any Policy Drawings previously paid by the Policy Provider
in respect of principal) plus accrued and unpaid interest thereon at the Stated
Interest Rate for the Class G Certificates (calculated assuming that Continental
will not cure any Payment Default) from the immediately preceding Regular
Distribution Date to such Special Distribution Date. Unless a Policy Provider
Election has been made or deemed to have been made, the Subordination Agent
shall promptly, but not less than 25 days prior to such Special Distribution
Date, send to the Class G Trustee and the Policy Provider a Written Notice
setting forth the non-receipt of any such Special Payment and establishing
such
Special Distribution Date as the date for the distribution of the proceeds
of
such Policy Drawing. No later than 12:00 p.m. (New York City time) on the
specified Special Distribution Date, the Subordination Agent shall make the
specified Policy Drawing and upon its receipt of the proceeds thereof pay the
amount thereof from the Policy Account to the Class G Trustee in reduction
of
the outstanding Pool Balance of the Class G Certificates together with such
accrued and unpaid interest thereon. For the avoidance of doubt, after the
payment in full of such amount under this Section 3.6(c), the Subordination
Agent shall have no right to make any further Policy Drawings under this Section
3.6(c) except for Avoided Payments as provided in Section 3.6(f).
Notwithstanding
the foregoing, the Policy Provider has the right, by Written Notice to the
Subordination Agent given at least 10 days prior to the end of any such 24-month
period, so long as no Policy Provider Default shall have occurred and be
continuing, to make an election (the "Policy
Provider Election")
(which
Policy Provider Election shall be deemed to have been given on the day that
is
ten days prior to end of such 24-month period, unless (x) the Policy Provider
shall have affirmatively elected by notice to the Subordination Agent to not
make such Policy Provider Election on or prior to such day or (y) a Policy
Provider Default shall have occurred and be continuing as of such day) instead
(a) to pay on such Special Distribution Date an amount equal to any shortfall
in
the scheduled interest payable but not paid (whether by Continental or by the
application of proceeds from the sale of any Collateral in connection with
the
exercise of remedies under the Indenture) on the Series G Equipment Note
(calculated assuming that Continental will not cure any Payment Default), during
such 24-month period (reduced by the amount of funds received from the Policy
Provider in connection with any prior Policy Drawing made under Section 3.6(b)
hereof and from the Primary Liquidity Facility, the Primary Cash Collateral
Account, the Above-Cap Account or the Policy Provider to the extent of any
Policy Drawings pursuant to Section 3.6(a) made as a result of a failure of
the
Primary Liquidity Provider to honor Interest Drawings under Section 2.02(a)
of
the Primary Liquidity Facility or a failure of the Above-Cap Liquidity Provider
and the Liquidity Guarantor to make an Above-Cap Payment under the Above-Cap
Liquidity Facility), (b) thereafter, on each Regular Distribution Date until
the
establishment of an Election Distribution Date or a Special Distribution Date
referred to in clause (c)(i) below, to permit drawings under the Policy for
an
amount equal to the scheduled principal (without regard to any Acceleration
thereof or any Redemption Notice that Continental has failed to honor but taking
into account any adjustments previously made for redemptions) and interest
payments (without regard to any funds available under the Primary Liquidity
Facility, the Primary Cash Collateral Account or the Above-Cap Account and
calculated assuming Continental will not cure any Payment Default) at the Stated
Interest Rate for the Class G Certificates scheduled to be paid on the Series
G
Equipment Note on the related payment date (each such interest payment on the
Series G Equipment Note, an “Election
Interest Payment”),
except that the Policy Provider shall not be required to pay (x) any amount
in
respect of principal under this clause (b) on any Regular Distribution Date
(1) if it has
theretofore
honored Policy Drawings under Section 3.6(b) or (c) hereof in respect of
principal of the Series G Equipment Note or (2) if in connection with
exercise of remedies under the Indenture there has previously been a reduction
in the outstanding principal balance of the Series G Equipment Note as a result
of the application of proceeds from the sale of Collateral, to the extent that
after giving effect to the distribution of any such amount or proceeds or both
in accordance with the provisions of this Agreement the Pool Balance of the
Class G Certificates as of such Regular Distribution Date would be less than
the
Pool Balance of the Class G Certificates as of such Regular Distribution Date
were all payments on the Series G Equipment Note to have been made by
Continental when due (without regard to Acceleration or any Redemption Notice
that Continental has failed to honor but taking into account any adjustments
previously made for redemptions) in accordance with Schedule 1 to such Series
G
Equipment Note nor (y) for the avoidance of doubt, any amount in respect of
interest under this clause (b) on such Regular Distribution Date other than
accrued and unpaid interest (at the applicable Stated Interest Rate calculated
assuming that Continental will not cure any Payment Default) on the Pool Balance
of the Class G Certificates as of such Regular Distribution Date (calculated
without giving effect to any Policy Drawing in respect of principal under this
clause (b) on such Regular Distribution Date) and (c) (i) on any Business Day
(other than a Regular Distribution Date) elected by the Policy Provider upon
20
days' Written Notice to the Subordination Agent and the Class G Trustee (which
shall be a Special Distribution Date), have the right to direct the
Subordination Agent, or (ii) following the occurrence of a Policy Provider
Default, on any Business Day (which shall be a Special Distribution Date)
specified by the Subordination Agent upon 20 days' Written Notice to the Class
G
Trustee (each such Business Day in the case of clause (ii) an "Election
Distribution Date"),
permit the Subordination Agent, in each case, to make a Policy Drawing under
the
Policy for an amount (as determined after giving effect to the application
of
available funds in accordance with the subordination provisions of this
Agreement on such Special Distribution Date) equal to the then outstanding
Pool
Balance of the Class G Certificates and accrued and unpaid interest on such
amount at the Stated Interest Rate for the Class G Certificates (calculated
assuming that Continental will not cure any Payment Default) from the
immediately preceding Regular Distribution Date to such Election Distribution
Date or such Special Distribution Date, as the case may be, without derogation
of the Policy Provider's continuing obligations for all previous Policy Drawings
that remain unpaid in respect of the Series G Equipment Note. The Subordination
Agent shall make each such drawing referred to in this paragraph under the
Policy (for payment into the Policy Account) no later than 12:00 p.m. (New
York
City time) on each such date and upon its receipt of the proceeds thereof pay
the amount thereof from the Policy Account to the Class G Trustee in reduction
of the outstanding Pool Balance of the Class G Certificates, together with
such
accrued and unpaid interest thereon.
(d) Primary
Liquidity Provider Drawing.
On or
after the Business Day which is the earliest to occur of (i) the date on which
an Interest Drawing shall have been made under the Primary Liquidity Facility
and remains unreimbursed for 24 months, (ii) the date on which any Downgrade
Drawing, Non-Extension Drawing or Final Drawing that was deposited into the
Primary Cash Collateral Account shall have been applied to pay any scheduled
payment of interest on the Class G Certificates and remains unreplenished to
the
Primary Cash Collateral Account or unreimbursed to the Primary Liquidity
Provider, as the case may be, for 24 months and (iii) the date on which all
of
the Equipment Notes have been Accelerated and remain unpaid for 24 months (in
each case, disregarding any reimbursements from payments by the Policy Provider
and from any Special Payment constituting proceeds from the sale of Equipment
Notes
or
Collateral during such 24-month period) (such Business Day, the “Liquidity
Provider Reimbursement Date”),
the
Policy Provider (upon at least 20 days’ prior notice from the Subordination
Agent on behalf of the Primary Liquidity Provider, which notice can be given
in
advance of the expiry of such 24-month period but cannot become effective until
the Liquidity Provider Reimbursement Date) will be required to honor drawings
under the Policy by the Subordination Agent on behalf of the Primary Liquidity
Provider in an amount sufficient to repay all outstanding drawings under the
Primary Liquidity Facility, together with interest accrued thereon in accordance
with the Primary Liquidity Facility. The Primary Liquidity Provider hereby
appoints the Subordination Agent as its agent for purposes of making the drawing
pursuant to this clause (d) and clause (vii) of the definition of “Deficiency
Amount” in the Policy and the Subordination Agent hereby accepts such
appointment and agrees to make such drawing at the direction of the Primary
Liquidity Provider and to promptly distribute all amounts received in respect
of
such drawing to the Primary Liquidity Provider.
(e) Final
Policy Drawing.
If on
the Final Legal Distribution Date of the Class G Certificates after giving
effect to the application of available funds in accordance with the
subordination provisions of this Agreement and to the application of Prior
Funds, the Subordination Agent does not then have sufficient funds available
on
such date for the payment in full of the Final Distributions (calculated as
of
such date but excluding any accrued and unpaid Premium and calculated assuming
that Continental will not cure any Payment Default) on the Class G Certificates,
then the Subordination Agent shall (i) prior to 12:00 p.m. (New York City time)
on such date deliver a Notice for Payment, as provided in the Policy, to the
Policy Provider and its Fiscal Agent, requesting a Policy Drawing under such
Policy (for payment into the Policy Account) in an amount equal to the minimum
amount sufficient to enable the Subordination Agent to pay the Final
Distributions (calculated as of such date but excluding any accrued and unpaid
Premium and calculated assuming that Continental will not cure any Payment
Default) on the Class G Certificates and (ii) upon receipt pay such amount
from the Policy Account to the Class G Trustee in payment of such
amount.
(f) Avoidance
Drawings.
If at
any time the Subordination Agent shall have actual knowledge of the issuance
of
any Order, the Subordination Agent shall promptly give notice thereof to the
Class G Trustee, the Primary Liquidity Provider and the Policy Provider. The
Subordination Agent shall thereupon calculate the relevant Avoided Payments
resulting therefrom and shall promptly: (a) send to the Class G Trustee a
Written Notice of such amounts and (b) prior to the expiration of the
Policy, deliver to the Policy Provider and its Fiscal Agent a Notice of Avoided
Payment under such Policy, together with a copy of the documentation required
by
such Policy with respect thereto, requesting a Policy Drawing thereunder (for
payment to the receiver, conservator, debtor-in-possession, trustee in
bankruptcy or the Subordination Agent, as applicable (for deposit into the
Policy Account)) in an amount equal to the amount of relevant Avoided Payment.
To the extent that any portion of such Avoided Payment is to be paid to the
Subordination Agent, such Written Notice shall also set the date for the
distribution of such portion of the proceeds of such Policy Drawing which date
shall constitute a Special Distribution Date and shall be the earlier of three
Business Days after the date of the expiration of the Policy and the Business
Day that immediately follows the 25th
day
after the date of such Written Notice. Upon receipt, the Subordination Agent
shall pay the proceeds of the specified Policy Drawing under the Policy to
the
Class G Trustee.
(g) Application
of Policy Drawings.
Notwithstanding anything to the contrary contained in this Agreement (including,
without limitation, Sections 2.4 and 3.2), except as provided in Sections 3.5(b)
and 3.6(d) hereof, all payments received by the Subordination Agent in respect
of a Policy Drawing (including, without limitation, that portion, if any, of
the
proceeds of a Policy Drawing for any Avoided Payment that is to be paid to
the
Subordination Agent and not to any receiver, conservator, debtor-in-possession
or trustee in bankruptcy as provided in the Policy) shall be promptly paid
from
the Policy Account to the Class G Trustee for distribution to the Class G
Certificateholders.
(h) Limitation
to Outstanding Pool Balance; Interest on Policy Drawings.
Notwithstanding anything to the contrary in this Section 3.6, except as provided
in Section 3.6(f), at no time shall the Subordination Agent make any Policy
Drawing under the Policy under clause (b), (c) or (e) of this Section 3.6 in
excess of the then outstanding Pool Balance of the Class G Certificates and
accrued and unpaid interest at the Stated Interest Rate on the Class G
Certificates (calculated assuming that Continental will not cure any Payment
Default). Nothing contained in this Intercreditor Agreement shall alter or
amend
the liabilities, obligations, requirements or procedures of the Policy Provider
under the Policy, and the Policy Provider shall not be obligated to make payment
except at the times and in the amounts and under the circumstances expressly
set
forth in the Policy.
(i) Resubmission
of Notice for Payment.
If the
Policy Provider at any time informs the Subordination Agent in accordance with
the Policy that a Notice for Payment or Notice of Avoided Payment submitted
by
the Subordination Agent does not meet the requirements of such Policy, the
Subordination Agent shall, as promptly as possible after being so informed,
submit to the Policy Provider and its Fiscal Agent an amended and revised Notice
for Payment or Notice of Avoided Payment, as the case may be, and shall pay
to
the Class G Trustee out of the Policy Account the amount received pursuant
to
such amended or revised Notice for Payment or Notice of Avoided Payment, as
the
case may be, when received.
(j) Subrogation.
The
Policy Provider will be subrogated to all of the rights of (i) the Class G
Certificateholders to payment on the Class G Certificates only to the extent
of
payment made in respect thereof under the Policy as set forth herein and (ii)
the rights of the Primary Liquidity Provider to payment under the Primary
Liquidity Facility only to the extent of payment made in respect thereof under
the Policy as set forth herein, such subrogation rights to be expressly subject
to Section 3.2 hereof and the other provisions of this Agreement, and without
duplication of any amounts payable to the Policy Provider under this Agreement
or any Policy Provider Document.
(k) Interest
Coverage.
The
interest payable by the Policy Provider under the Policy shall include interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding.
EXERCISE
OF REMEDIES
SECTION
4.1. Directions
from the Controlling Party.
(a) (i)
Following the occurrence and during the continuation of an Indenture Default
under the Indenture, the Controlling Party shall direct the Subordination Agent,
which in turn shall direct the Mortgagee under the Indenture, in the exercise
of
remedies available to the holders of the Equipment Notes, including, without
limitation, the ability to vote all the Equipment Notes in favor of Accelerating
the Equipment Notes in accordance with the provisions of the Indenture. Subject
to the provisions of the next paragraph, if the Equipment Notes have been
Accelerated following an Indenture Default, the Controlling Party may direct
the
Subordination Agent to sell, assign, contract to sell or otherwise dispose
of
and deliver some or all of the Pledged Spare Parts or all (but not less than
all) of the Equipment Notes to any Person at public or private sale, at any
location at the option of the Controlling Party, all upon such terms and
conditions as it may reasonably deem advisable in accordance with applicable
law.
(ii) Notwithstanding
the foregoing, so long as any Certificates remain Outstanding, during the period
ending on the date which is nine months after the earlier of (x) the
Acceleration of the Equipment Notes or (y) the occurrence of a Continental
Bankruptcy Event, without the consent of each Trustee, no Pledged Spare Parts
or
Equipment Notes may be sold if the net proceeds from such sale would be less
than the Minimum Sale Price.
(iii) At
the
request of the Controlling Party, the Subordination Agent shall from time to
time during the continuance of an Indenture Default (and before the occurrence
of a Triggering Event) commission an Appraisal with respect to the Collateral
subject to the Indenture.
(iv) After
a
Triggering Event occurs and any Equipment Note is a Non-Performing Equipment
Note, the Subordination Agent shall obtain an Appraisal with respect to the
Collateral as soon as practicable and an additional Appraisal on or prior to
each anniversary of the date of such initial Appraisal; provided
that if
the Controlling Party reasonably objects to the appraised value of the
Collateral shown in such Appraisal, the Controlling Party shall have the right
to obtain or cause to be obtained a substitute Appraisal (including any
Appraisal based upon physical inspection of the Collateral). For the avoidance
of doubt, the obligation of the Subordination Agent to obtain an Appraisal
under
this Section 4.1(a)(iv) shall not in any way diminish or discharge Continental’s
obligation to provide Appraisals under the Collateral Maintenance
Agreement.
(b) Following
the occurrence and during the continuance of an Indenture Default, the
Controlling Party shall take such actions as it may reasonably deem most
effectual to complete the sale or other disposition of the Collateral or the
Equipment Notes. In addition, in lieu of any sale, assignment, contract to
sell
or other disposition, the Controlling Party may maintain or cause the
Subordination Agent to maintain possession of the Equipment Notes and continue
to apply monies received in respect of the Equipment Notes in accordance with
Article III hereof. In addition, in lieu of such sale, assignment, contract
to
sell or other disposition, or in lieu of such maintenance of possession, the
Controlling Party may, subject to the terms and
conditions
of the Indenture, instruct the Mortgagee to foreclose on the Lien on the
Collateral or to take any other remedial action permitted under the Indenture
or
under any applicable law.
SECTION
4.2. Remedies
Cumulative.
Each and
every right, power and remedy given to the Trustees, each Liquidity Provider,
the Policy Provider, the Controlling Party or the Subordination Agent
specifically or otherwise in this Agreement shall be cumulative and shall be
in
addition to every other right, power and remedy herein specifically given or
now
or hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically herein given or otherwise existing may,
subject always to the terms and conditions hereof, be exercised from time to
time and as often and in such order as may be deemed expedient by any Trustee,
any Liquidity Provider, the Policy Provider, the Controlling Party or the
Subordination Agent, as appropriate, and the exercise or the beginning of the
exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by any Trustee, any Liquidity Provider, the Policy
Provider, the Controlling Party or the Subordination Agent in the exercise
of
any right, remedy or power or in the pursuit of any remedy shall impair any
such
right, power or remedy or be construed to be a waiver of any default or to
be an
acquiescence therein.
SECTION
4.3. Discontinuance
of Proceedings.
In case
any party to this Agreement (including the Controlling Party in such capacity)
shall have instituted any Proceeding to enforce any right, power or remedy
under
this Agreement by foreclosure, entry or otherwise, and such Proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.
SECTION
4.4. Right
of Certificateholders, Liquidity Provider and the Policy Provider to Receive
Payments Not to Be Impaired.
Anything
in this Agreement to the contrary notwithstanding but subject to each Trust
Agreement, the right of any Certificateholder, any Liquidity Provider or the
Policy Provider, respectively, to receive payments hereunder (including without
limitation pursuant to Section 2.4 or 3.2 hereof) when due, or to institute
suit
for the enforcement of any such payment on or after the applicable Distribution
Date, shall not be impaired or affected without the consent of such
Certificateholder, Liquidity Provider or Policy Provider,
respectively.
SECTION
4.5. Undertaking
for Costs.
In any
Proceeding for the enforcement of any right or remedy under this Agreement
or in
any Proceeding against any Controlling Party or the Subordination Agent for
any
action taken or omitted by it as Controlling Party or Subordination Agent,
as
the case may be, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due
regard to the merits and good faith of the claims or defenses made by the party
litigant. The provisions of this Section do not apply to a suit instituted
by
the Subordination Agent, a Liquidity Provider, the Policy Provider or a Trustee
or a suit by Certificateholders holding more than 10% of the original principal
amount of any Class of Certificates.
DUTIES
OF
THE SUBORDINATION AGENT;
AGREEMENTS
OF TRUSTEES, ETC.
SECTION
5.1. Notice
of Indenture Default or Triggering Event.
(a) In
the event the Subordination Agent shall have actual knowledge of the occurrence
of an Indenture Default or a Triggering Event, as promptly as practicable,
and
in any event within 10 days after obtaining knowledge thereof, the Subordination
Agent shall transmit by mail or courier to the Rating Agencies, the Liquidity
Providers, the Policy Provider and the Trustees notice of such Indenture Default
or Triggering Event, unless such Indenture Default or Triggering Event shall
have been cured or waived. For all purposes of this Agreement, in the absence
of
actual knowledge on the part of a Responsible Officer, the Subordination Agent
shall not be deemed to have knowledge of any Indenture Default or Triggering
Event unless notified in writing by one or more Trustees, one or more of the
Liquidity Providers, the Policy Provider or one or more
Certificateholders.
(b) Other
Notices.
The
Subordination Agent will furnish to each Liquidity Provider, the Policy Provider
and each Trustee, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to the Subordination Agent as registered holder
of
the Equipment Notes or otherwise in its capacity as Subordination Agent to
the
extent the same shall not have been otherwise directly distributed to such
Liquidity Provider, Policy Provider or Trustee, as applicable, pursuant to
the
express provision of any other Operative Agreement.
(c) Upon
the
occurrence of an Indenture Default, the Subordination Agent shall instruct
each
Trustee to, and each Trustee shall, request that DTC post on its internet
bulletin board a securities position listing setting forth the names of all
the
parties reflected on DTC's books as holding interests in the
Certificates.
(d) Reports.
Promptly after the occurrence of a Triggering Event or an Indenture Default
resulting from the failure of Continental to make payments on any Equipment
Note
and on every Regular Distribution Date while the Triggering Event or such
Indenture Default shall be continuing, the Subordination Agent will provide
to
each Trustee, the Liquidity Providers, the Policy Provider, the Rating Agencies
and Continental a statement setting forth the following
information:
(i)
after
a Continental Bankruptcy Event, whether the Pledged Spare Parts are
(A) subject to the 60-day period of Section 1110 of the Bankruptcy
Code, (B) subject to an election by Continental under Section 1110(a)
of the Bankruptcy Code, (C) covered by an agreement contemplated by
Section 1110(b) of the Bankruptcy Code or (D) not subject to any of
(A), (B) or (C);
(ii)
to
the best of the Subordination Agent's knowledge, after requesting such
information from Continental, the location of the Pledged Spare
Parts;
(iii)
the
current Pool Balance of each Class of Certificates and the outstanding principal
amount of all Equipment Notes;
(iv)
the
expected amount of interest which will have accrued on the Equipment Notes
and
on the Certificates as of the next Regular Distribution Date;
(v)
the
amounts paid to each person on such Distribution Date pursuant to this
Agreement;
(vi)
details of the amounts paid on such Distribution Date identified by reference
to
the relevant provision of this Agreement and the source of payment (by party,
if
applicable);
(vii)
if
the Subordination Agent has made a Final Drawing under the Primary Liquidity
Facility;
(viii)
the amounts currently owed to each Liquidity Provider;
(ix)
the
amounts drawn under each Liquidity Facility;
(x)
the
amounts owed to the Policy Provider; and
(xi)
after a Continental Bankruptcy Event, any operational reports filed by
Continental with the bankruptcy court which are available to the Subordination
Agent on a non-confidential basis.
SECTION
5.2. Indemnification.
The
Subordination Agent shall not be required to take any action or refrain from
taking any action under Section 5.1 (other than the first sentence thereof)
or
Article IV hereof unless the Subordination Agent shall have been indemnified
(to
the extent and in the manner reasonably satisfactory to the Subordination Agent)
against any liability, cost or expense (including counsel fees and expenses)
which may be incurred in connection therewith. The Subordination Agent shall
not
be under any obligation to take any action under this Agreement and nothing
contained in this Agreement shall require the Subordination Agent to expend
or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. The Subordination Agent shall not be required to take any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof, nor
shall any other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or
is
otherwise contrary to law.
SECTION
5.3. No
Duties Except as Specified in Intercreditor Agreement.
The
Subordination Agent shall not have any duty or obligation to take or refrain
from taking any action under, or in connection with, this Agreement, except
as
expressly provided by the terms of this Agreement; and no implied duties or
obligations shall be read into this Agreement against the Subordination Agent.
The Subordination Agent agrees that it will, in its individual capacity
and
at
its own cost and expense (but without any right of indemnity in respect of
any
such cost or expense under Sections 5.2 or 7.1 hereof) promptly take such action
as may be necessary to duly discharge all Liens on any of the Trust Accounts
or
any monies deposited therein which result from claims against it in its
individual capacity not related to its activities hereunder or any other
Operative Agreement.
SECTION
5.4. Notice
from the Liquidity Providers and Trustees.
If any
Liquidity Provider or Trustee has notice of an Indenture Default or a Triggering
Event, such Person shall promptly give notice thereof to all other Liquidity
Providers, the Policy Provider and Trustees and to the Subordination Agent,
provided,
however,
that no
such Person shall have any liability hereunder as a result of its failure to
deliver any such notice.
THE
SUBORDINATION AGENT
SECTION
6.1. Authorization;
Acceptance of Trusts and Duties.
The
Class G Trustee hereby designates and appoints the Subordination Agent as the
agent and trustee of the Class G Trustee under the Liquidity Facilities and
the
Policy Provider Agreement and authorizes the Subordination Agent to enter into
each Liquidity Facility and the Policy Provider Agreement as agent and trustee
for the Class G Trustee. Each of the Liquidity Providers, the Policy Provider
and the Trustees hereby designates and appoints the Subordination Agent as
the
Subordination Agent under this Agreement. WTC hereby accepts the duties hereby
created and applicable to it as the Subordination Agent and agrees to perform
the same but only upon the terms of this Agreement and agrees to receive and
disburse all monies received by it in accordance with the terms hereof. The
Subordination Agent shall not be answerable or accountable under any
circumstances, except (a) for its own willful misconduct or gross negligence
(or
ordinary negligence in the handling of funds), (b) as provided in Sections
2.2
or 5.3 hereof and (c) for liabilities that may result from the material
inaccuracy of any representation or warranty of the Subordination Agent made
in
its individual capacity in any Operative Agreement. The Subordination Agent
shall not be liable for any error of judgment made in good faith by a
Responsible Officer of the Subordination Agent, unless it is proved that the
Subordination Agent was negligent in ascertaining the pertinent
facts.
SECTION
6.2. Absence
of Duties.
The
Subordination Agent shall have no duty to see to any recording or filing of
this
Agreement or any other document, or to see to the maintenance of any such
recording or filing.
SECTION
6.3. No
Representations or Warranties as to Documents.
The
Subordination Agent in its individual capacity does not make nor shall be deemed
to have made any representation or warranty as to the validity, legality or
enforceability of this Agreement or any other Operative Agreement or as to
the
correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party.
The
Certificateholders, the Trustees, the Liquidity Providers and the Policy
Provider make no representation or warranty hereunder whatsoever.
SECTION
6.4. No
Segregation of Monies; No Interest.
Any
monies paid to or retained by the Subordination Agent pursuant to any provision
hereof and not then required to be distributed to any Trustee, the Primary
Liquidity Provider or the Policy Provider as provided in Articles II and III
hereof or deposited into one or more Trust Accounts need not be segregated
in
any manner except to the extent required by such Articles II and III and by
law,
and the Subordination Agent shall not (except as otherwise provided in Section
2.2 hereof) be liable for any interest thereon; provided,
however,
that
any payments received or applied hereunder by the Subordination Agent shall
be
accounted for by the Subordination Agent so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source
thereof.
SECTION
6.5. Reliance;
Agents; Advice of Counsel.
The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of
the
applicable Trustee, and such certificate shall constitute full protection to
the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers, the Policy Provider or the Trustees the manner of ascertainment
of
which is not specifically described herein, the Subordination Agent may for
all
purposes hereof rely on a certificate, signed by any Responsible Officer of
the
applicable Liquidity Provider, Policy Provider or Trustee, as the case may
be,
as to such fact or matter, and such certificate shall constitute full protection
to the Subordination Agent for any action taken or omitted to be taken by it
in
good faith in reliance thereon. The Subordination Agent shall assume, and shall
be fully protected in assuming, that each of the Liquidity Providers, the Policy
Provider and each of the Trustees are authorized to enter into this Agreement
and to take all action to be taken by them pursuant to the provisions hereof,
and shall not inquire into the authorization of each of the Liquidity Providers,
the Policy Provider and the Trustees with respect thereto. In the administration
of the trusts hereunder, the Subordination Agent may execute any of the trusts
or powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may consult with counsel, accountants and other skilled
persons to be selected and retained by it, and the Subordination Agent shall
not
be liable for the acts or omissions of any agent appointed with due care or
for
anything done, suffered or omitted in good faith by it in accordance with the
advice or written opinion of any such counsel, accountants or other skilled
persons.
SECTION
6.6. Capacity
in Which Acting.
The
Subordination Agent acts hereunder solely as agent and trustee herein and not
in
its individual capacity, except as otherwise expressly provided in the Operative
Agreements.
SECTION
6.7. Compensation.
The
Subordination Agent shall be entitled to reasonable compensation, including
expenses and disbursements, for all services rendered hereunder and shall have
a
priority claim to the extent set forth in Article III hereof on all monies
collected hereunder for the payment of such compensation, to the extent that
such compensation shall not be paid by others. The Subordination Agent agrees
that it shall have no right against any Trustee, Liquidity Provider or the
Policy Provider for any fee as compensation for its
services
as agent under this Agreement. The provisions of this Section 6.7 shall survive
the termination of this Agreement.
SECTION
6.8. May
Become Certificateholder.
The
institution acting as Subordination Agent hereunder may become a
Certificateholder and have all rights and benefits of a Certificateholder to
the
same extent as if it were not the institution acting as the Subordination
Agent.
SECTION
6.9. Subordination
Agent Required; Eligibility.
There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States
of
America or of any State or the District of Columbia having a combined capital
and surplus of at least $100,000,000 (or the obligations of which, whether
now
in existence or hereafter incurred, are fully and unconditionally guaranteed
by
a corporation organized and doing business under the laws of the United States
of America, any State thereof or of the District of Columbia and having a
combined capital and surplus of at least $100,000,000), if there is such an
institution willing and able to perform the duties of the Subordination Agent
hereunder upon reasonable or customary terms. Such corporation shall be a
citizen of the United States and shall be authorized under the laws of the
United States or any State thereof or of the District of Columbia to exercise
corporate trust powers and shall be subject to supervision or examination by
federal, state or District of Columbia authorities. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of any of the aforesaid supervising or examining authorities,
then,
for the purposes of this Section 6.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
In
case
at any time the Subordination Agent shall cease to be eligible in accordance
with the provisions of this Section, the Subordination Agent shall resign
immediately in the manner and with the effect specified in Section
8.1.
SECTION
6.10. Money
to Be Held in Trust.
All
Equipment Notes, monies and other property deposited with or held by the
Subordination Agent pursuant to this Agreement shall be held in trust for the
benefit of the parties entitled to such Equipment Notes, monies and other
property. All such Equipment Notes, monies or other property shall be held
in
the Trust Department of the institution acting as Subordination Agent
hereunder.
INDEMNIFICATION
OF SUBORDINATION AGENT
SECTION
7.1. Scope
of Indemnification.
The
Subordination Agent shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 of the Note Purchase Agreement. The indemnities
contained in such Sections of such agreements shall survive the termination
of
this Agreement.
SUCCESSOR
SUBORDINATION AGENT
SECTION
8.1. Replacement
of Subordination Agent; Appointment of Successor.
The
Subordination Agent may resign at any time by so notifying the Trustees, the
Liquidity Providers and the Policy Provider. The Controlling Party may remove
the Subordination Agent for cause by so notifying the Subordination Agent and
may appoint a successor Subordination Agent. The Controlling Party shall remove
the Subordination Agent if:
(1) the
Subordination Agent fails to comply with Section 6.9 hereof;
(2) the
Subordination Agent is adjudged bankrupt or insolvent;
(3) a
receiver or other public officer takes charge of the Subordination Agent or
its
property; or
(4) the
Subordination Agent otherwise becomes incapable of acting.
If
the
Subordination Agent resigns or is removed or if a vacancy exists in the office
of Subordination Agent for any reason (the Subordination Agent in such event
being referred to herein as the retiring Subordination Agent), the Controlling
Party shall promptly appoint a successor Subordination Agent.
A
successor Subordination Agent shall deliver (x) a written acceptance of its
appointment as Subordination Agent hereunder to the retiring Subordination
Agent
and (y) a written assumption of its obligations hereunder and under each
Liquidity Facility and the Policy Provider Agreement to each party hereto,
upon
which the resignation or removal of the retiring Subordination Agent shall
become effective, and the successor Subordination Agent shall have all the
rights, powers and duties of the Subordination Agent under this Agreement.
The
successor Subordination Agent shall mail a notice of its succession to the
Liquidity Providers, the Policy Provider and the Trustees. The retiring
Subordination Agent shall promptly transfer its rights under each of the
Liquidity Facilities and all of the property held by it as Subordination Agent
to the successor Subordination Agent.
If
a
successor Subordination Agent does not take office within 60 days after the
retiring Subordination Agent resigns or is removed, the retiring Subordination
Agent or one or more of the Trustees may petition any court of competent
jurisdiction for the appointment of a successor Subordination
Agent.
If
the
Subordination Agent fails to comply with Section 6.9 hereof (to the extent
applicable), one or more of the Trustees, one or more of the Liquidity Providers
or the Policy Provider may petition any court of competent jurisdiction for
the
removal of the Subordination Agent and the appointment of a successor
Subordination Agent.
Notwithstanding
the foregoing, no resignation or removal of the Subordination Agent shall be
effective unless and until a successor has been appointed. No appointment of
a
successor
Subordination Agent shall be effective unless and until the Rating Agencies
shall have delivered a Ratings Confirmation.
SUPPLEMENTS
AND AMENDMENTS
SECTION
9.1. Amendments,
Waivers, etc.
(a) This Agreement may not be supplemented, amended or modified
without the consent of each Trustee (acting, except in the case of any amendment
pursuant to Section 3.5(e)(v)(y) hereof with respect to any Replacement Primary
Liquidity Facility, any amendment pursuant to Section 3.5(c)(iv) hereof with
respect to any Replacement Above-Cap Liquidity Facility or any amendment
contemplated by the last sentence of this Section 9.1(a), with the consent
of
holders of Certificates of the related Class evidencing interests in the related
Trust aggregating not less than a majority in interest in such Trust or as
otherwise authorized pursuant to the relevant Trust Agreement), the
Subordination Agent, each Liquidity Provider and the Policy Provider;
provided,
however,
that
this Agreement may be supplemented, amended or modified without the consent
of
any Trustee if such supplement, amendment or modification cures an ambiguity
or
inconsistency or does not materially adversely affect such Trustee or the
holders of the related Class of Certificates; provided further,
however,
that,
if such supplement, amendment or modification (A) would (x) directly or
indirectly modify or supersede, or otherwise conflict with, Section 2.2(b),
Section 3.5(e), Section 3.5(f)(other than the last sentence thereof), Section
3.5(l), the last sentence of this Section 9.1(a), the second sentence of Section
10.6 or this proviso (collectively, the "Continental
Provisions")
or (y)
otherwise adversely affect the interests of a potential Replacement Primary
Liquidity Provider or of Continental with respect to its ability to replace
the
Primary Liquidity Facility or with respect to its payment obligations under
any
Operative Agreement or (B) is made pursuant to the last sentence of this Section
9.1(a), then such supplement, amendment or modification shall not be effective
without the additional written consent of Continental. Notwithstanding the
foregoing, without the consent of each Certificateholder, each Liquidity
Provider and the Policy Provider, no supplement, amendment or modification
of
this Agreement may (i) reduce the percentage of the interest in any Trust
evidenced by the Certificates issued by such Trust necessary to consent to
modify or amend any provision of this Agreement or to waive compliance therewith
or (ii) except as provided in this Section 9.1(a), modify Section 2.4 or 3.2
hereof, relating to the distribution of monies received by the Subordination
Agent hereunder from the Equipment Notes or pursuant to the Liquidity Facilities
or the Policy. Nothing contained in this Section shall require the consent
of a
Trustee at any time following the payment of Final Distributions with respect
to
the related Class of Certificates. If the Replacement Primary Liquidity Facility
for the Primary Liquidity Facility in accordance with Section 3.5(e) hereof
is
to be comprised of more than one instrument as contemplated by the definition
of
the term "Replacement Primary Liquidity Facility", then each of the parties
hereto agrees to amend this Agreement to incorporate appropriate mechanics
for
multiple Primary Liquidity Facilities for an individual Trust. If the
Replacement Above-Cap Liquidity Facility for the Above-Cap Liquidity Facility
in
accordance with Section 3.5(c)(iv) hereof is to be comprised of more than one
instrument as contemplated by the definition of the term "Replacement Above-Cap
Liquidity Facility", then each of the parties hereto agrees to amend this
Agreement to incorporate appropriate mechanics for multiple Above-Cap Liquidity
Facilities for an individual Trust.
(b) In
the
event that the Subordination Agent, as the registered holder of any Equipment
Note, receives a request for the giving of any notice or for its consent to
any
amendment, supplement, modification, approval, consent or waiver under such
Equipment Note, the Indenture, the Note Purchase Agreement or other related
document, (i) if no Indenture Default shall have occurred and be continuing,
the
Subordination Agent shall request directions with respect to each Series of
Equipment Notes from the Trustee of the Trust which holds such Series of
Equipment Notes and shall vote or consent in accordance with the directions
of
such Trustee except that so long as (A) Final Distributions on the Class G
Certificates have not been made or any Policy Provider Amounts (other than
any
Excess Reimbursement Obligations) remain outstanding and (B) no Policy Provider
Default shall have occurred and be continuing, the Subordination Agent shall
request directions from the Policy Provider rather than the Class G Trustee
with
respect to the Series G Equipment Note, and (ii) if any Indenture Default shall
have occurred and be continuing with respect to such Indenture, the
Subordination Agent will exercise its voting rights as directed by the
Controlling Party, subject to Sections 4.1 and 4.4 hereof; provided
that no
such amendment, modification or waiver shall, without the consent of each
Liquidity Provider, the Policy Provider and each affected Certificateholder,
(x)
reduce the amount of principal or interest payable by Continental, or change
the
time of payment or method of calculation of any amount, under any Equipment
Note, (y) modify any of the provisions of Section 5.01, 5.02(c), 5.02(d), 6.02,
10.01, or of Article II or III of the Indenture, the definitions of “Break
Amount”, “Default”, “Event of Default”, “Interest Period”, “Majority in Interest
of Note Holders”, “Note Holder”, “Premium” or “Special Default” or the
percentage of Note Holders required to take or approve any action under the
Indenture or (z) reduce, modify or amend any indemnities in favor of the
Mortgagee or the Note Holders (except that the Mortgagee may consent to any
waiver or reduction of an indemnity payable to it) or permit the creation of
any
Lien on the Collateral or any part thereof (other than Permitted Liens (as
defined in the Indenture)) or deprive any Note Holder of the benefit of the
Lien
of the Indenture on the Collateral, except in connection with the exercise
of
remedies.
In
addition, the Subordination Agent shall not consent to any amendment or
modification of (i) the definitions of “Maximum Available Commitment” or
“Liquidity Event of Default” under the Primary Liquidity Facility or (ii) the
definition of “LIBOR” or Section 6(b) of the Reference Agency Agreement, in each
case, without the prior written consent of the Above-Cap Liquidity
Provider.
SECTION
9.2. Subordination
Agent Protected.
If, in
the reasonable opinion of the institution acting as the Subordination Agent
hereunder, any document required to be executed pursuant to the terms of Section
9.1 affects any right, duty, immunity or indemnity with respect to it under
this
Agreement or any Liquidity Facility or the Policy, the Subordination Agent
may
in its discretion decline to execute such document.
SECTION
9.3. Effect
of Supplemental Agreements.
Upon the
execution of any amendment, consent or supplement hereto pursuant to the
provisions hereof, this Agreement shall be and be deemed to be and shall be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Agreement
of the parties hereto and beneficiaries hereof shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
agreement shall be and be deemed to be and shall be part of the terms and
conditions of this Agreement for any and all purposes. In executing or accepting
any supplemental agreement permitted by this Article IX, the Subordination
Agent
shall
be
entitled to receive, and shall be fully protected in relying upon, an opinion
of
counsel stating that the execution of such supplemental agreement is authorized
or permitted by this Agreement.
SECTION
9.4. Notice
to Rating Agencies.
Promptly
upon receipt of any amendment, consent, modification, supplement, waiver or
direction by the Policy Provider contemplated by this Article IX and prior
to
taking any action required to be taken thereunder, the Subordination Agent
shall
send a copy thereof to each Rating Agency.
Upon
the
reasonable request of any Rating Agency in writing, the Subordination Agent
and
the Trustees shall provide to such Rating Agency such information available
to
the Subordination Agent and the Trustees as may be relevant to maintaining
such
Rating Agency's rating on the Certificates. During the continuance of a
Triggering Event or an Indenture Default resulting from a Payment Default,
the
Subordination Agent and Trustees shall permit each Rating Agency, upon
reasonable notice and on a periodic basis, to be provided copies of documents
in
the possession of the Subordination Agent and Trustees in their respective
capacities as such reasonably related to the transactions contemplated by the
Operative Agreements and, on a reasonable periodic basis, to meet or confer
with
officers and employees of the Subordination Agent and Trustees in their
respective capacities as such to discuss such transactions, so long as such
actions are reasonably related to maintaining such Rating Agency's rating on
the
Certificates.
MISCELLANEOUS
SECTION
10.1. Termination
of Intercreditor Agreement.
Following payment of Final Distributions with respect to each Class of
Certificates and the payment in full of all Liquidity Obligations to the Primary
Liquidity Provider and all Policy Provider Amounts to the Policy Provider and
provided
that
there shall then be no other amounts due to the Certificateholders, the
Trustees, the Primary Liquidity Provider, the Policy Provider and the
Subordination Agent hereunder or under the Trust Agreements, and that the
commitment of the (i) Primary Liquidity Provider under the Primary Liquidity
Facility and (ii) Policy Provider under the Policy shall have expired or been
terminated, this Agreement and the trusts created hereby shall terminate and
this Agreement shall be of no further force or effect. Except as aforesaid
or
otherwise provided, this Agreement and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.
SECTION
10.2. Intercreditor
Agreement for Benefit of Trustees, Liquidity Providers, the Policy Provider
and
Subordination Agent.
Subject
to the second sentence of Section 10.6 and the provisions of Sections 4.4 and
9.1, nothing in this Agreement, whether express or implied, shall be construed
to give to any Person other than the Trustees, the Liquidity Providers, the
Policy Provider and the Subordination Agent any legal or equitable right, remedy
or claim under or in respect of this Agreement.
SECTION
10.3. Notices.
Unless
otherwise expressly specified or permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers or documents
provided or permitted by this Agreement to be made, given, furnished or filed
shall be in writing, mailed by certified mail, postage prepaid, or by confirmed
telecopy and
(i) if
to the
Subordination Agent, addressed to it at its office at:
Wilmington
Trust Company
One
Xxxxxx Square
0000
X.
Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Corporate Capital Market Services
Telecopy:
(000) 000-0000
(ii) if
to any
Trustee, addressed to it at its office at:
Wilmington
Trust Company
One
Xxxxxx Square
0000
X.
Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Corporate Capital Market Services
Telecopy:
(000) 000-0000
(iii) if
to the
Primary Liquidity Provider, addressed to it at its office at:
Xxxxxx
Xxxxxxx Bank
0000
Xxxx
Xxxx Xxxx., Xxxxx #0X
Xxxx
Xxxxxx Xxxx, Xxxx 00000
Attention:
Xxxxxxx Xxxxx, Chairman and Chief Credit Officer
Telephone:
(000) 000-0000
Telecopy:
(000) 000-0000
with
a
copy of any Notice of Borrowing to:
Xxxxxx
Xxxxxxx
0000
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Su Bai, Executive Director
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
and
Xxxxxx
Xxxxxxx
0000
Xxxxxx xx xxx Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxxxx, Managing Director
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
(iv) if
to the
Above-Cap Liquidity Provider, addressed to it at its office at:
Xxxxxx
Xxxxxxx Capital Services Inc.
Transaction
Management Group
0000
Xxxxxxxx
Xxx
Xxxx,
XX 00000-0000
Attention:
Chief Legal Officer
Telecopy:
(000) 000-0000
(v) if
to the
Policy Provider, addressed to it at its office at:
Financial
Guaranty Insurance Company
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
SF Surveillance
Facsimile: (000)
000-0000
|
Telephone:
(000) 000-0000
|
with
a
copy to:
Xxxxxx
& Xxxxxxx LLP
000
Xxxxx
Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxxxx
Telephone:
(000) 000-0000
|
Telecopy:
(000) 000-0000
|
Whenever
any notice in writing is required to be given by any Trustee, Liquidity
Provider, Policy Provider or the Subordination Agent to any of the other of
them, such notice shall be deemed given and such requirement satisfied when
such
notice is received. A copy of any notice given by the Trustee, the Liquidity
Providers or the Subordination Agent shall be given to the Policy Provider;
provided
that the
failure to do so shall not impair the validity of any such notice or the Policy
Provider's obligations hereunder and under the Policy. Any party hereto may
change the address to which notices to such party will be sent by giving notice
of such change to the other parties to this Agreement.
SECTION
10.4. Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
SECTION
10.5. No
Oral Modifications or Continuing Waivers.
No terms
or provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other Person
against whom enforcement of the change, waiver, discharge or termination is
sought and any other party or other Person whose consent is required pursuant
to
this Agreement and any waiver of the terms hereof shall be effective only in
the
specific instance and for the specific purpose given.
SECTION
10.6. Successors
and Assigns.
All
covenants and agreements contained herein shall be binding upon, and inure
to
the benefit of, each of the parties hereto and the successors and assigns of
each, all as herein provided. In addition, the Continental Provisions shall
inure to the benefit of Continental and its successors and assigns, and (without
limitation of the foregoing) Continental is hereby constituted, and agreed
to
be, an express third party beneficiary of the Continental Provisions.
SECTION
10.7. Headings.
The
headings of the various Articles and Sections herein and in the table of
contents hereto are for convenience of reference only and shall not define
or
limit any of the terms or provisions hereof.
SECTION
10.8. Counterpart
Form.
This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
agreement.
SECTION
10.9. Subordination.
(a) As between the Liquidity Providers and the Policy Provider, on
the one hand, and the Trustees and the Certificateholders, on the other hand,
and as among the Trustees and the related Certificateholders, this Agreement
shall be a subordination agreement for purposes of Xxxxxxx 000 xx xxx
Xxxxxx Xxxxxx Bankruptcy Code, as amended from time to time.
(b) Notwithstanding
the provisions of this Agreement, if prior to the payment in full to the (i)
Primary Liquidity Provider of all Liquidity Obligations then due and payable
and
(ii) Policy Provider of all Policy Provider Amounts then due and payable, any
party hereto shall have received any payment or distribution in respect of
Equipment Notes or any other amount under the Indenture or other Operative
Agreements which, had the subordination provisions of this Agreement been
properly applied to such payment, distribution or other amount, would not have
been distributed to such Person, then such payment, distribution or other amount
shall be received and held in trust by such Person and paid over or delivered
to
the Subordination Agent for application as provided herein.
(c) If
any
Trustee, the Primary Liquidity Provider, the Policy Provider or the
Subordination Agent receives any payment in respect of any obligations owing
hereunder (or, in the case of the Primary Liquidity Provider or the Policy
Provider, in respect of the Liquidity Obligations or the Policy Provider
Amounts, as the case may be), which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver
or
other party, then, to the extent of such payment, such obligations (or, in
the
case of the Primary Liquidity Provider or the Policy Provider, such Liquidity
Obligations or the Policy Provider Amounts, as the case may be) intended to
be
satisfied shall be revived and continue in full force and effect as if such
payment had not been received.
(d) The
Trustees (on behalf of themselves and the holders of Certificates), the Primary
Liquidity Provider, the Policy Provider and the Subordination Agent confirm
that
the payment priorities specified in Section 3.2 shall apply in all
circumstances, notwithstanding the fact that the obligations owed to the
Trustees and the holders of Certificates are secured by certain assets and
the
Liquidity Obligations and Policy Provider Amounts may not be so secured. The
Trustees expressly agree (on behalf of themselves and the holders of
Certificates) not to assert priority over the holders of Liquidity Obligations
or Policy Provider Amounts (except as specifically set forth in Section 3.2)
due
to their status as secured creditors in any bankruptcy, insolvency or other
legal proceeding.
(e) Each
of
the Trustees (on behalf of themselves and the holders of Certificates), the
Primary Liquidity Provider, the Policy Provider and the Subordination Agent
may
take any of the following actions without impairing its rights under this
Agreement:
(i) obtain
a
Lien on any property to secure any amounts owing to it hereunder, including,
in
the case of the Primary Liquidity Provider and the Policy Provider, the
Liquidity Obligations or the Policy Provider Amounts, as the case may
be,
(ii) obtain
the primary or secondary obligation of any other obligor with respect to any
amounts owing to it hereunder, including, in the case of the Primary Liquidity
Provider and the Policy Provider, any of the Liquidity Obligations or the Policy
Provider Obligations, as the case may be,
(iii) renew,
extend, increase, alter or exchange any amounts owing to it hereunder,
including, in the case of the Primary Liquidity Provider and the Policy
Provider, any of the Liquidity Obligations or the Policy Provider Obligations,
as the case may be, or release or compromise any obligation of any obligor
with
respect thereto,
(iv) refrain
from exercising any right or remedy, or delay in exercising such right or
remedy, which it may have, or
(v) take
any
other action which might discharge a subordinated party or a surety under
applicable law;
provided,
however,
that
the taking of any such actions by any of the Trustees, the Primary Liquidity
Provider, the Policy Provider or the Subordination Agent shall not prejudice
the
rights or adversely affect the obligations of any other party under this
Agreement.
SECTION
10.10. Governing
Law.
THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
SECTION
10.11. Submission
to Jurisdiction; Waiver of Jury Trial.
(i) submits
for itself and its property in any legal action or proceeding relating to this
Agreement or any other Operative Agreement, or for recognition and enforcement
of any judgment in respect hereof or thereof, to the nonexclusive general
jurisdiction of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and the appellate
courts from any thereof;
(ii) consents
that any such action or proceeding may be brought in such courts, and waives
any
objection that it may now or hereafter have to the venue of any such action
or
proceeding in any such court or that such action or proceeding was brought
in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to each party hereto at its address
set
forth in Section 10.3 hereof, or at such other address of which the other
parties shall have been notified pursuant thereto; and
(iv) agrees
that nothing herein shall affect the right to effect service of process in
any
other manner permitted by law or shall limit the right to xxx in any other
jurisdiction.
(b) EACH
OF
THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT
OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT
AND
THE RELATIONSHIP THAT IS BEING ESTABLISHED, including, without limitation,
contract claims, tort claims, breach of duty claims and all other common law
and
statutory claims. Each of the parties warrants and represents that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR
IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, as of the
day
and year first above written, and acknowledge that this Agreement has been
made
and delivered in the City of New York, and this Agreement has become effective
only upon such execution and delivery.
|
WILMINGTON
TRUST COMPANY,
not
in its individual capacity but solely as
Trustee
for each of the Trusts
|
||
| |
|
|
|
By:
|
||
| Name: | ||
| Title: | ||
|
XXXXXX
XXXXXXX BANK,
as
Primary Liquidity Provider
|
||
| |
|
|
|
By:
|
||
| Name: | ||
| Title: | ||
|
By:
|
||
| Name: | ||
| Title: |
|
XXXXXX
XXXXXXX CAPITAL SERVICES INC.,
as
Above-Cap Liquidity Provider
|
||
| |
|
|
|
By:
|
||
| Name: | ||
| Title: | ||
|
|
By:
|
|
| Name: | ||
| Title: |
|
FINANCIAL
GUARANTY INSURANCE
COMPANY,
as Policy Provider
|
||
| |
|
|
|
By:
|
||
| Name: | ||
| Title: | ||
|
WILMINGTON
TRUST COMPANY,
not
in its individual capacity except as expressly
set
forth herein but solely as Subordination
Agent
and trustee
|
||
| |
|
|
|
By:
|
||
| Name: | ||
| Title: | ||
Schedule
2.2(b)
Upon
the
funding of the Above-Cap Account or the Above-Cap Collateral Account or the
maturity or redemption of any investment of funds in any such account (such
funds, the "Funds"), the Above-Cap Liquidity Provider shall send a notice to
the
Subordination Agent containing a list of Eligible Investments (the "Specified
Investments") which shall contain at least 10 investments in open market
commercial paper of corporations incorporated under the laws of the United
States of America or any state thereof.
Following
receipt of such notice, the Subordination Agent shall use its best efforts
to
invest or reinvest the Funds in any Specified Investment. If no Specified
Investment is then available, the Subordination Agent shall invest or reinvest
the Funds in any other Eligible Investment selected by the Subordination
Agent.
Following
such investment or reinvestment of the Funds by the Subordination Agent in
any
Specified Investment or other Eligible Investment, the Subordination Agent
shall
deliver a written statement to the Above-Cap Liquidity Provider setting forth
for each such Specified Investment or Eligible Investment the CUSIP number
or
other similar number for such obligation (or, if such obligation does not have
such a number, (i) the name of the issuer, (ii) its maturity date, (iii) its
yield or rate of return and (iv) its rating, if rated by any nationally
recognized rating agency).
