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Exhibit 4.15
INTERCREDITOR AGREEMENT
Dated as of
November __, 1996
AMONG
FLEET NATIONAL BANK,
not in its individual capacity
but solely as Trustee under the
America West Airlines Pass Through Trust 0000-0X,
Xxxxxxx Xxxx Xxxxxxxx Xxxx Through Trust 0000-0X,
Xxxxxxx Xxxx Xxxxxxxx Xxxx Through Trust 0000-0X
Xxxxxxx Xxxx Xxxxxxxx Xxxx Through Trust 0000-0X,
xxx
Xxxxxxx Xxxx Xxxxxxxx Xxxx Through Trust 1996-1E.
KREDIETBANK N.V.,
NEW YORK BRANCH,
as Class A Liquidity Provider,
Class B Liquidity Provider
and Class C Liquidity Provider,
AND
FLEET NATIONAL BANK,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee hereunder
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS..................... 2
SECTION 1.1 Definitions................................. 2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY........................ 21
SECTION 2.1 Agreement to Terms of Subordination;
Payments from Monies Received Only................... 21
SECTION 2.2 Trust Accounts....................................... 22
SECTION 2.3 Deposits to the Collection Account and
Special Payments Account............................. 23
SECTION 2.4 Distributions of Special Payments.................... 23
SECTION 2.5 Designated Representatives........................... 26
SECTION 2.6 Controlling Party.................................... 27
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED................... 28
SECTION 3.1 Written Notice of Distribution....................... 28
SECTION 3.2 Distribution of Amounts on Deposit in the Collection
Account.............................................. 31
SECTION 3.3 Distribution of Amounts on Deposit Following a
Triggering Event..................................... 32
SECTION 3.4 Other Payments....................................... 34
SECTION 3.5 Payments to the Trustees and the
Liquidity Providers.................................. 34
SECTION 3.6 Liquidity Facilities................................. 35
ARTICLE IV
EXERCISE OF REMEDIES................ 41
SECTION 4.1 Directions from the Controlling Party................ 41
SECTION 4.2 Remedies Cumulative.................................. 42
SECTION 4.3 Discontinuance of Proceedings........................ 42
SECTION 4.4 Right of Certificateholders to Receive
Payments Not to Be Impaired.......................... 43
SECTION 4.5 Undertaking for Costs................................ 43
SECTION 4.6 No Action Contrary to America West's Rights
Under the Lease...................................... 43
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ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC............ 43
SECTION 5.1 Notice of Indenture Default or
Triggering Event.................................... 43
SECTION 5.2 Indemnification..................................... 44
SECTION 5.3 No Duties Except as Specified in
Intercreditor Agreement............................. 44
SECTION 5.4 Notice from the Liquidity Providers and Trustees.... 45
ARTICLE VI
THE SUBORDINATION AGENT................ 45
SECTION 6.1 Authorization; Acceptance of Trusts and Duties...... 45
SECTION 6.2 Absence of Duties................................... 46
SECTION 6.3 No Representations or Warranties as to
Documents........................................... 46
SECTION 6.4 No Segregation of Monies; No Interest............... 46
SECTION 6.5 Reliance; Agents; Advice of Counsel................. 46
SECTION 6.6 Capacity in Which Acting............................ 47
SECTION 6.7 Compensation........................................ 47
SECTION 6.8 May Become Certificateholder........................ 47
SECTION 6.9 Subordination Agent Required; Eligibility........... 47
SECTION 6.10 Money to Be Held in Trust........................... 48
ARTICLE VII
INDEMNIFICATION AND REIMBURSEMENT OF SUBORDINATION AGENT. 48
SECTION 7.1 Scope of Indemnification and Reimbursement.......... 48
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT........... 48
SECTION 8.1 Replacement of Subordination Agent;
Appointment of Successor........................... 48
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ARTICLE IX
SUPPLEMENTS AND AMENDMENTS............. 50
SECTION 9.1 Amendments, Waivers, Etc............................. 50
SECTION 9.2 Subordination Agent Protected........................ 51
SECTION 9.3 Effect of Supplemental Agreements.................... 51
SECTION 9.4 Notice to Rating Agencies............................ 51
ARTICLE X
MISCELLANEOUS.................... 51
SECTION 10.1 Termination of Intercreditor Agreement............. 52
SECTION 10.2 Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent........ 52
SECTION 10.3 Notices............................................ 52
SECTION 10.4 Severability....................................... 53
SECTION 10.5 No Oral Modifications or Continuing Waivers........ 53
SECTION 10.6 Successors and Assigns............................. 53
SECTION 10.7 Headings........................................... 53
SECTION 10.8 Counterpart Form................................... 53
SECTION 10.9 Subordination...................................... 53
SECTION 10.10 GOVERNING LAW...................................... 55
Schedule 1 Indentures
Schedule 2 Refunding Agreements
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INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT (as amended, modified and supplemented from time
to time, this "Agreement") dated as of November __, 1996, among FLEET NATIONAL
BANK, a national banking association ("Fleet"), not in its individual capacity
but solely as Trustee of each Trust (each as defined below), KREDIETBANK N.V.,
acting through its New York Branch ("Kredietbank"), as Class A Liquidity
Provider, Class B Liquidity Provider and Class C Liquidity Provider, and FLEET
NATIONAL BANK, a national banking association, not in its individual capacity
except as expressly set forth herein, but solely as Subordination Agent and
trustee hereunder (in such capacity, together with any successor appointed
pursuant to Article VIII hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture, the related Owner Trustee proposes to
issue on a nonrecourse basis up to five series of Equipment Notes to refinance
the current indebtedness of such Owner Trustee originally incurred to finance
the purchase of the Aircraft or Spare Engine referred to in such Indenture
which has been leased to America West pursuant to the related Lease;
WHEREAS, pursuant to the Refunding Agreements, each Trust will acquire
those Equipment Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single series 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 Underwriters propose
to purchase the Certificates issued by each Trust in the aggregate face amount
set forth under the name of such Trust on Schedule I thereto on the terms and
subject to the conditions set forth therein;
WHEREAS, each Liquidity Provider proposes to enter into a revolving credit
agreement (each, a "Liquidity Facility") with the Subordination Agent, as agent
for the respective Trustee of each Trust (other than the Class D and Class E
Trusts), for the benefit of the Certificateholders of such Trust; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent, the
Trustees and the Liquidity Providers agree to the terms of subordination set
forth in this Agreement in respect of each Class of Certificates, and the
Subordination Agent, the Trustees and the Liquidity Providers, by entering into
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this Agreement, hereby acknowledge and agree to such terms of subordination
and the other provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"Acceleration" means, with respect to the amounts payable in respect of
the Equipment Notes issued under any Indenture, the declaration or deemed
declaration (pursuant to Section 4.04(b) of such Indenture) of such amounts to
be immediately due and payable. "Accelerate" and "Accelerated" have meanings
correlative to the foregoing.
"Adjusted Expected Distributions" means, with respect to the Certificates
of any Class on any Current Distribution Date, the sum of (x) the amount of
accrued and unpaid interest on such Certificates plus (y) the greater of:
(A) the difference between (x) the Pool Balance of such Certificates
as of the immediately preceding
Distribution Date and (y) the Pool Balance of such Certificates as of the
Current Distribution Date, calculated on the basis that (i) the principal
of the Non-Performing Equipment Notes held in such Trust has been paid in
full and
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such payments have been distributed to the holders of such
Certificates and (ii) the principal of the Performing Equipment Notes has
been paid when due (but without giving effect to any acceleration of
Performing Equipment Notes) and has been distributed to the holders of
such Certificates; and
(B) the amount if any by which (i) the Pool Balance of such Class of
Certificates as of the immediately preceding Distribution Date exceeds
(ii) the Aggregate LTV Collateral Amount for such Class of Certificates
for the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B) above
shall not be applicable.
"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.
"Aggregate LTV Collateral Amount" means, for any Class of Certificates for
any Distribution Date, the sum of the applicable LTV Collateral Amounts for
each Aircraft and Spare Engine minus the Pool Balance for each Class of
Certificates, if any, senior to such Class after giving effect to any
distribution of principal on such Distribution Date on such senior Class or
Classes, but in no event an amount less than zero.
"Agreement" has the meaning assigned to such term in the heading hereof.
"Aircraft" means, with respect to each Indenture relating to Equipment
Notes that are secured by an aircraft, the "Aircraft" referred to therein.
"America West" means America West Airlines, Inc., a Delaware corporation,
and its successors and assigns.
"America West Bankruptcy Event" means the occurrence and continuation of
any of the following:
(a) the commencement of an involuntary case or other
proceeding in respect of America West in an involuntary case under
the federal bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or
other similar law in the United States or seeking the
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appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of America West or for all or
substantially all of its property, or seeking the winding-up or
liquidation of its affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of ninety (90)
consecutive days or an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without the
consent of America West, a receiver, trustee or liquidator of America
West, or of substantially all of its property, or sequestering
substantially all of the property of America West and any such order,
judgment or decree or appointment or sequestration shall be final or shall
remain in force undismissed, unstayed or unvacated for a period of ninety
(90) days after the date of entry thereof; or
(b) the commencement by America West of a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy,
insolvency or other similar law in the United States, or the
consent by America West to the appointment of or taking,
possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of America
West or for all or substantially all of its property, or the
making by America West of any assignment for the benefit of
creditors generally or the taking by America West of any corporate
action to authorize any of the foregoing.
"Appraised Current Market Value" of any Aircraft or Spare Engine means the
lower of the average or the median of the most recent three LTV Appraisals of
such Aircraft or Spare Engine obtained pursuant to Section 4.1(a)(iv).
"Appraisers" means BK Associates, Inc., Aircraft Information Services,
Inc. and Xxxxxx Xxxxx and Associates.
"Available Amount" means, with respect to any Liquidity Facility on any
drawing date, an amount equal to (a) the Stated Amount of such Liquidity
Facility, less (b) the amount of each Interest Drawing honored by the Liquidity
Provider under such
Liquidity Facility on or prior to such date which has not been reimbursed or
reinstated as of such date; provided that, following a Downgrade Drawing or a
Final Drawing under such Liquidity Facility, the Available Amount of such
Liquidity Facility shall be zero.
"Business Day" means any day other than a Saturday or Sunday or a day on
which commercial banks are required or
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authorized to close in New York, New York or Hartford Connecticut.
"Cash Collateral Account" means the Class A Cash Collateral Account, the
Class B Cash Collateral Account or the Class C Cash Collateral Account, as
applicable.
"Certificate" means a Class A Certificate, a Class B Certificate, a Class
C Certificate, a Class D Certificate or a Class E 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 A Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at the Subordination Agent, into
which all amounts drawn under the Class A Liquidity Facility pursuant to
Section 3.6(c) or 3.6(i) shall be deposited.
"Class A Certificateholder" means, at any time, any holder of one or more
Class A Certificates.
"Class A Certificates" means the certificates issued by the Class A Trust,
substantially in the form of Exhibit A to the Class A Trust Agreement, and
authenticated by the Class A Trustee, representing fractional undivided
interests in the Class A Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class A Trust
Agreement.
"Class A Liquidity Facility" means, initially, the Irrevocable Revolving
Credit Agreement dated as of November __, 1996, between the Subordination
Agent, as agent and trustee for the Class A Trust, and the Class A Liquidity
Provider, and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Class A Liquidity Provider" means Kredietbank N.V., acting through its
New York Branch, together with any Replacement Liquidity Provider which has
issued a Replacement Liquidity Facility to replace the Class A Liquidity
Facility pursuant to Section 3.6(e).
"Class A Trust" means America West Airlines 1996-1A Pass Through Trust
created and administered pursuant to the Class A Trust Agreement.
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"Class A Trust Agreement" means the Pass Through Trust Agreement dated as
of November __, 1996 between America West and the Class A Trustee, as
supplemented by the Supplement No. 1996-1A thereto dated November __, 1996,
governing the creation and administration of the Class A Trust and the issuance
of the Class A Certificates, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Class A Trustee" means Fleet, not in its individual capacity except as
expressly set forth in the Class A Trust Agreement, but solely as trustee under
the Class A Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class B Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at the Subordination Agent, into
which all amounts drawn under the Class B Liquidity Facility pursuant to
Section 3.6(c) or 3.6(i) shall be deposited.
"Class B Certificateholder" means, at any time, any holder of one or more
Class B Certificates.
"Class B Certificates" means the certificates issued by the Class B Trust,
substantially in the form of Exhibit A to the Class B Trust Agreement, and
authenticated by the Class B Trustee, representing fractional undivided
interests in the Class B Trust, and any certificates issued in exchange
therefor or replacement thereof pursuant to the terms of the Class B Trust
Agreement.
"Class B Liquidity Facility" means, initially, the Irrevocable Revolving
Credit Agreement dated as of November __, 1996, between the Subordination
Agent, as agent and trustee for the Class B Trust, and the Class B Liquidity
Provider, and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class B Liquidity Provider" means Kredietbank N.V., acting through its
New York Branch, together with any Replacement Liquidity Provider which has
issued a Replacement Liquidity Facility to replace the Class B Liquidity
Facility pursuant to Section 3.6(e).
"Class B Trust" means America West Airlines 1996-1B Pass Through Trust
created and administered pursuant to the Class B Trust Agreement.
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"Class B Trust Agreement" means the Pass Through Trust Agreement dated as
of November __, 1996, between America West and the Class B Trustee, as
supplemented by the Supplement No. 1996-1B thereto dated November __, 1996,
governing the creation and administration of the Class B Trust 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 Trustee" means Fleet, not in its individual capacity except as
expressly set forth in the Class B Trust Agreement, but solely as trustee under
the Class B Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class C Cash Collateral Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at the Subordination Agent, into
which all amounts drawn under the Class C Liquidity Facility pursuant to
Section 3.6(c) or 3.6(i) shall be deposited.
"Class C Certificateholder" means, at any time, any holder of one or more
Class C Certificates.
"Class C Certificates" means the certificates issued by the Class C Trust,
substantially in the form of Exhibit A to the Class C Trust Agreement, and
authenticated by the Class C Trustee, representing fractional undivided
interests in the Class C Trust, and any certificates issued in exchange
therefor or in replacement thereof pursuant to the terms of the Class C Trust
Agreement.
"Class C Liquidity Facility" means, initially, the Irrevocable Revolving
Credit Agreement dated as of November __, 1996, between the Subordination
Agent, as agent and trustee for the Class C Trust, and the Class C Liquidity
Provider and, from and after the replacement of such Agreement pursuant hereto,
the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Class C Liquidity Provider" means Kredietbank N.V., acting through its
New York Branch, together with any Replacement Liquidity Provider which has
issued a Replacement Liquidity Facility to replace the Class C Liquidity
Facility pursuant to Section 3.6(e).
"Class C Trust" means America West Airlines 1996-1C Pass Through Trust
created and administered pursuant to the Class C Trust Agreement.
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"Class C Trust Agreement" means the Pass Through Trust Agreement dated as
of November __, 1996, between America West and the Class C Trustee, as
supplemented by the Supplement No. 1996-1C thereto dated November __, 1996,
governing the creation and administration of the Class C Trust and the issuance
of the Class C Certificates, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Class C Trustee" means Fleet, not in its individual capacity except as
expressly set forth in the Class C Trust Agreement, but solely as trustee under
the Class C Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class D Certificateholder" means, at any time, any holder of one or more
Class D Certificates.
"Class D Certificates" means the certificates issued by the Class D Trust,
substantially in the form of Exhibit A to the Class D Trust Agreement, and
authenticated by the Class D Trustee, representing fractional undivided
interests in the Class D Trust, and any certificates issued in exchange
therefor or in replacement thereof pursuant to the terms of the Class D Trust
Agreement.
"Class D Trust" means America West Airlines 1996-1D Pass Through Trust
created and administered pursuant to the Class D Trust Agreement.
"Class D Trust Agreement" means the Pass Through Trust Agreement dated as of
November __, 1996, between America West and the Class D Trustee, as
supplemented by the Supplement No. 1996-1D thereto dated November __, 1996,
governing the creation and administration of the Class D Trust and the
issuance of the Class D Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class D Trustee" means Fleet, not in its individual capacity except as
expressly set forth in the Class D Trust Agreement, but solely as trustee under
the Class D Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class E Certificateholder" means, at any time, any holder of one or more
Class E Certificates.
"Class E Certificates" means the certificates issued by the Class E Trust,
substantially in the form of Exhibit A to the Class E Trust Agreement, and
authenticated by the Class E Trustee, representing fractional undivided
interests in the
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Class E Trust, and any certificates issued in exchange therefor or in
replacement thereof pursuant to the terms of the Class E Trust Agreement.
"Class E Trust" means America West Airlines 1996-1E Pass Through Trust
created and administered pursuant to the Class E Trust Agreement.
"Class E Trust Agreement" means the Pass Through Trust Agreement dated as
of November __, 1996, between America West and the Class E Trustee, as
supplemented by the Supplement No. 1996-1E thereto dated November __, 1996,
governing the creation and administration of the Class E Trust and the issuance
of the Class E Certificates, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Class E Trustee" means Fleet, not in its individual capacity except as
expressly set forth in the Class E Trust Agreement, but solely as trustee under
the Class E Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Closing Date" means November __, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the Eligible Deposit Account established by the
Subordination Agent pursuant to Section 2.2 which the Subordination Agent shall
make deposits in and withdrawals from in accordance with this Agreement.
"Controlling Party" means the Person entitled to act as
such pursuant to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Indenture Trustee, the office of such Person in the
city at which, at any particular time, its corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as a
reference date for calculating the Adjusted Expected Distributions or Expected
Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"Designated Representatives" means the Subordination Agent
Representatives, the Trustee Representatives and the LP Representatives
identified under Section 2.5.
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"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in Section
3.6(c).
"Downgraded Facility" has the meaning assigned to such term in Section
3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing or a Downgrade
Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any U.S. branch of a foreign bank), having corporate trust powers and
acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution has a long-term unsecured debt rating
from each Rating Agency of at least A-3 or its equivalent. An Eligible Deposit
Account may be maintained with a Liquidity Provider so long as such Liquidity
Provider is an Eligible Institution; provided that such Liquidity Provider
shall have waived all rights of setoff 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 from each Rating
Agency of at least A-3 or its equivalent.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than 90
days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt rating
issued by Moody's and Standard & Poor's of at least A-1 and P-1, respectively,
having maturities no later than 90 days following the date of such investment,
(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
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issuer ratings of at least B/C by Thomson BankWatch, Inc., having
maturities no later than 90 days following the date of such investment or (d)
investments in any U.S. money market fund registered under the Investment
Company Act of 1940, as amended, which has been issued the highest rating in
its category by Moody's and Standard & Poor's that invests solely in
obligations described in clause (a) above; 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 (1) any investment of the
types described in clauses (a), (b), (c) and (d) above may be made through a
repurchase agreement in commercially reasonable form with a bank or other
financial institution qualifying as an Eligible Institution so long as such
investment is held by a third party custodian also qualifying as an Eligible
Institution, and (2) all such investments set forth in clauses (a), (b), (c)
and (d) above mature no later than the Business Day immediately preceding the
next Regular Distribution Date; provided further, however, that in the case of
any Eligible Investment issued by a domestic branch of a foreign bank, the
income from such investment shall be from sources within the United States for
purposes of the Code. Notwithstanding the foregoing, no investment of the
types described in clause (b), (c) or (d) above which is issued or guaranteed
by a Liquidity Provider or America West or any of their respective Affiliates
shall be an Eligible Investment.
"Equipment" means, with respect to each Indenture, the "Aircraft" or
"Spare Engine" referred to therein.
"Equipment Notes" means, at any time, the Series A Equipment Notes, the
Series B Equipment Notes, the Series C Equipment Notes, the Series D Equipment
Notes and the Series E Equipment Notes, collectively, and in each case, any
Equipment Notes issued in exchange therefor or replacement thereof pursuant to
the terms of the Indentures.
"Expected Distributions" means, with respect to the Certificates of any
Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates and (y) the difference between (A) the Pool
Balance of such Certificates as of the immediately preceding Distribution Date
and (B) the Pool Balance of such Certificates as of the Current Distribution
Date, calculated on the basis that the principal of the Equipment Notes held in
such Trust has been paid when due (whether at stated maturity or upon
redemption, prepayment, purchase or acceleration or otherwise) and such
payments have been distributed to the holders of such Certificates.
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"Final Distributions" means, with respect to the Certificates of any Trust
on any Distribution Date, the sum of (a) the aggregate amount of all accrued
and unpaid interest on such Certificates and (b) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date.
"Final Drawing" means, in respect of a Liquidity Facility, a borrowing or
drawing of all available and undrawn amounts under such Liquidity Facility in
accordance with the provisions thereof other than a Downgrade Drawing.
"Final Legal Distribution Date" means, for each of the Class A
Certificates, the Class B Certificates and the Class C Certificates, _________
__, 20__, for the Class D Certificates, _________ __, 20__ and for the Class E
Certificates, _________ __, 20__.
"Fleet" has the meaning assigned to such term in the heading of this
Agreement.
"Indenture" means each Trust Indenture and Security Agreement listed on
Schedule 1 hereto, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Indenture Default" means, with respect to any Indenture, any Indenture
Event of Default (as such term is defined in such Indenture) thereunder.
"Indenture Trustee" means, with respect to any
Indenture, the indenture trustee thereunder.
"Interest Drawing" has the meaning assigned to such term in Section
3.6(a).
"Investment Earnings" means investment earnings on funds on deposit in the
Trust Accounts net of losses and investment expenses of the Subordination Agent
in making such investments.
"Lease" means, with respect to each Indenture, the "Lease" referred to
therein.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition of
title, encumbrance or security interest of any kind, including, without
limitation, any thereof arising under any conditional sales or other title
retention agreement.
"Liquidity Event of Default" with respect to any Liquidity Facility, has
the meaning assigned to such term in such Liquidity Facility.
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"Liquidity Expenses" means all Liquidity Obligations other than (i) the
principal amount of any Drawings under the Liquidity Facilities and (ii) any
interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A Liquidity Facility,
the Class B Liquidity Facility or the Class C Liquidity Facility, as
applicable.
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities,
Sections 10 and 13 of the Leases and Section 21 of the Refunding Agreements.
"Liquidity Provider" means, at any time, the Class A Liquidity Provider,
the Class B Liquidity Provider or the Class C Liquidity Provider, as
applicable.
"LP Incumbency Certificate" has the meaning assigned to such term in
Section 2.5(c).
"LP Representatives" has the meaning assigned to such term in Section
2.5(c).
"LTV Appraisal" means a current fair market appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing
purchaser under no compulsion to buy and an informed and willing seller under
no compulsion to sell, both parties having knowledge of all relevant facts.
"LTV Collateral Amount" of any Aircraft or Spare Engine for any Class of
Certificates on any Distribution Date means the lesser of (i) the LTV Ratio for
such Class of Certificates multiplied by the Appraised Current Market Value of
such Aircraft or Spare Engine and (ii) the outstanding principal amount of the
Equipment Notes secured by such Aircraft or Spare Engine after giving effect to
any principal payments of such Equipment Notes on or before such Distribution
Date.
"LTV Ratio" means for the Class A Certificates 39.9%, for the Class B
Certificates 54.8%, for the Class C Certificates 69.8%, for the Class D
Certificates 81.4% and for the Class E Certificates 93.4%.
"Margin" has the meaning assigned thereto in each of the Liquidity
Facilities.
"Minimum Sale Price" means, with respect to any Equipment or the Equipment
Notes issued in respect of such Equipment, at any time, the lesser of (a) 75%
of the Appraised
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Current Market Value of such Equipment based upon the most
recent LTV Appraisal and (b) the aggregate outstanding principal amount of such
Equipment Notes, plus accrued and unpaid interest thereon.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Non-Controlling Party" means, at any time, any Trustee or Liquidity
Provider which is not the Controlling Party at such time.
"Non-Performing Equipment Notes" means Equipment Notes issued pursuant to
an Indenture other than Performing Equipment Notes.
"Officer's Certificate" of any Person means a certification signed by a
Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity Facilities, the
Indentures, the Trust Agreements, the Underwriting Agreement, the Refunding
Agreements, the Leases, the Equipment Notes and the Certificates, together with
all exhibits and schedules included with any of the foregoing and each of the
other documents and instruments referred to in the definition of "Operative
Documents" contained in the Leases.
"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 cancelled by the
Registrar (as defined in such Trust Agreement) or delivered to the
Trustee thereunder or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full
amount required to make the final distribution with respect to
such Certificates pursuant to Section 11.01 of such Trust
Agreement has been theretofore deposited with the related Trustee
in trust for the holders of such Certificates as provided in
Section 4.01 of such Trust Agreement pending distribution of such
money to such Certificateholders pursuant to such final
distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of
which other Certificates have been authenticated and delivered pursuant
to such Trust Agreement;
provided, however, that in determining whether the holders of the requisite
outstanding amount of such Certificates have given any
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request, demand, authorization, direction, notice, consent or waiver hereunder,
any Certificates owned by America West, any related Owner Trustee, any related
Owner Participant or any Affiliate of such Person shall be disregarded and
deemed not to be outstanding (provided that if any such Person or Affiliate
thereof owns 100% of the Certificates of any Class, such Certificates shall not
be so disregarded), 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 a Responsible Officer of the
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
America West 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 of the Scheduled
Payment Date relating thereto.
"Owner Participant" means, with respect to any Refunding Agreement, the
Owner Participant (as defined therein).
"Owner Trustee" means, with respect to any Indenture, the Owner Trustee
(as defined therein) not in its individual capacity but solely as trustee under
the related owner trust agreement, together with any successor trustee
appointed pursuant to such owner trust agreement.
"Performing Equipment Note" means an Equipment Note issued pursuant to an
Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any acceleration thereof); provided that
in the event of a bankruptcy proceeding involving America West under Title 11
of the United States Code (the "Bankruptcy Code"), (i) any payment default
existing during 60-day period under Section 1110(a)(1)(A) of the Bankruptcy
Code (or such longer period as may apply under Section 1110(b) of the
Bankruptcy Code) (the "Section 1110 Period") shall not be taken into
consideration, unless during such period the trustee in such proceeding or
America West refuses to assume or agree to perform its obligations under the
Lease related to such Equipment Notes and (ii) any payment default occurring
after the date of the order of relief in such proceeding shall not be taken
into consideration if such payment default is cured under Section 1110(a)(1)(B)
of the Bankruptcy Code before the later of (A) 30 days after the date of such
default or (B) the expiration of the Section 1110 Period.
"Performing Note Deficiency" means any time that less than 65% of the then
aggregate outstanding principal amount of all Equipment Notes are Performing
Equipment Notes.
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"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, trustee,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance" means, with respect to each Trust or the Certificates
issued by any Trust, as of any date, (i) the original aggregate face amount of
the Certificates of such Trust less (ii) the aggregate amount of all payments
made in respect of the Certificates of such Trust other than payments made in
respect of interest or premium thereon or reimbursement of any costs and
expenses in connection therewith. The Pool Balance for each Trust or the
Certificates issued by any Trust as of any Distribution Date shall be computed
after giving effect to any payment of principal, if any, on the Equipment Notes
or other Trust Property held in such Trust and the distribution thereof to be
made on such Distribution Date.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"PTC Event of Default" means, with respect to each Trust Agreement, the
failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class or (ii) interest due on such
Certificates on any Distribution Date (unless, in the case of the Class A,
Class B or Class C Certificates, the Subordination Agent shall have made an
Interest Drawing with respect thereto in an amount sufficient to pay such
interest and shall have distributed such amount to the holders of the
Certificates entitled thereto).
"Rating Agencies" means, collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. Initially, the
Rating Agencies shall consist of Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed to be
taken, a written confirmation from each of the Rating Agencies that such action
would not result in (i) a reduction of the rating for any Class of Certificates
below the then current rating for such Class of Certificates or (ii) a
withdrawal or suspension of the rating of any Class of Certificates.
"Refunding Agreements" means each of the Refunding Agreements listed on
Schedule 2 hereto, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
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"Regular Distribution Dates" means each _________ __, commencing on
_________ __, 199_; provided, however, that, if any such day shall not be a
Business Day, the regular distribution shall be made on the next succeeding
Business Day without additional interest.
"Replacement Liquidity Facility" means, for any Trust, an irrevocable
revolving credit agreement in substantially the form of the initial Liquidity
Facility for such Trust, 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
Certificates (before downgrading of such ratings, if any, as a result of the
downgrading of the Liquidity Provider), in a face amount equal to the Required
Amount for such Liquidity Facility and issued by a Replacement Liquidity
Provider, provided that, if a form of Liquidity Facility that is not
substantially in the form of the replaced Liquidity Facility is to be used,
America West shall have received a satisfactory opinion of tax counsel
satisfactory to America West with respect to such form of
Replacement Liquidity Facility and to the effect that the related Trust
continues to be a "grantor trust" (and a copy of such opinion shall be
furnished to the Subordination Agent).
"Replacement Liquidity Provider" means a Person having unsecured debt
ratings which are equal to or higher than the Threshold Rating, who issues a
Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility and each
Cash Collateral Account related thereto, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the related Class of Certificates, that would be payable on
such Class of Certificates on each of the three successive Regular Distribution
Dates immediately following such day or, if such day is a Regular Distribution
Date, on such day and the succeeding two Regular Distribution Dates, in each
case calculated on the basis of the Pool Balance of such Class of Certificates
on such date and without regard to expected future payments of principal on
such Class of Certificates.
"Responsible Officer" means (i) with respect to the Subordination Agent
and each of the Trustees, any officer in the corporate trust administration
department of the Subordination Agent or such Trustee or any other officer
customarily performing functions similar to those performed by the Persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with a
particular subject and (ii) with respect to each Liquidity Provider, any
authorized officer of such Liquidity Provider.
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"Scheduled Payment" means, with respect to any Equipment Note, (i) any
payment of principal and interest on such Equipment Note (other than an Overdue
Scheduled Payment) due from the obligor thereon or (ii) any payment of interest
on the corresponding Class of Certificates with funds drawn under any Liquidity
Facility, which payment represents the installment of principal at the stated
maturity of such installment of principal on such Equipment Note, the payment
of regularly scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both; provided that any payment of principal of, premium, if
any, or interest resulting from the redemption or purchase of any Equipment
Note shall not constitute a Scheduled Payment.
"Scheduled Payment Date" means, with respect to any Scheduled Payment, the
date on which such Scheduled Payment is scheduled to be made.
"Series A Equipment Notes" means the [____]% Series A Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee and
authenticated by the Indenture Trustee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"Series B Equipment Notes" means the [_____]% Series B Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee and
authenticated by the Indenture Trustee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"Series C Equipment Notes" means the [_____]% Series C Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee and
authenticated by the Indenture Trustee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"Series D Equipment Notes" means the [____]% Series D Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee and
authenticated by the Indenture Trustee thereunder, and any such Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of
such Indenture.
"Series E Equipment Notes" means the [____]% Series E Equipment Notes
issued pursuant to the Indenture relating to certain of the Equipment (as
specified in such Indenture) by the related Owner Trustee and authenticated by
the Indenture Trustee thereunder, and any such Equipment Notes issued in
exchange
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therefor or replacement thereof pursuant to the terms of such
Indenture.
"Spare Engine" means, with respect to each Indenture relating to Equipment
Notes that are secured by a spare engine, the "Spare Engine" referred to
therein.
"Special Distribution Date" means, with respect to any Special Payment,
the date chosen by the Subordination Agent pursuant to Section 2.4(a) for the
distribution of such Special Payment in accordance with this Agreement;
provided, however, that, if any such day shall not be a Business Day, the
related distribution shall be made on the next succeeding Business Day without
additional interest.
"Special Payment" means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any
Equipment Note or Trust Indenture Estate (as defined in each Indenture),
including Overdue Scheduled Payments, payments in respect of the redemption or
repurchase of any Equipment Note and payments in respect of the sale of any
Equipment Note to the related Owner Trustee, Owner Participant or any other
Person.
"Special Payments Account" means the Eligible Deposit Account created
pursuant to Section 2.2 as a sub-account to the Collection Account.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx Inc.
"Stated Amount" with respect to any Liquidity Facility, means the
Commitment (as defined in such Liquidity Facility) of the applicable Liquidity
Provider thereunder.
"Stated Interest Rate" means (i) with respect to the Class A Certificates,
[____]% per annum, (ii) with respect to the Class B Certificates, [____]% per
annum, and (iii) with respect to the Class C Certificates, [____]% per annum.
"Subordination Agent" has the meaning assigned to it in the preamble to
this Agreement.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties tariffs,
imposts, and other charges of any kind (together with any and all interest,
penalties, loss, damage, liability, expense, additions to tax and additional
amounts or costs incurred or imposed with respect thereto) imposed or otherwise
assessed by the United States or by any state, local or foreign government (or
any subdivision or agency thereof) or other taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock,
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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.
"Threshold Rating" means the short-term unsecured debt rating of P-1 by
Moody's and A-1 by Standard & Poor's, provided that, in the event a person's
short-term unsecured debt is not rated by either Moody's or Standard & Poor's,
the long-term unsecured debt rating by Moody's and Standard & Poor's at least
equal to the initial rating by each of Moody's and Standard & Poor's on the
Class A Certificates.
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Default under
all of the Indentures resulting in a PTC Event of Default with respect to the
most senior Class of Certificates then Outstanding, (y) the Acceleration of, or
a failure to pay at final maturity, all of the outstanding Equipment Notes or
(z) the occurrence of an America West Bankruptcy Event.
"Trust" means any of the Class A Trust, the Class B Trust, the Class C
Trust, the Class D Trust or the Class E Trust.
"Trust Accounts" has the meaning assigned to such term in Section 2.2(a).
"Trust Agreement" means any of the Class A Trust Agreement, Class B Trust
Agreement, Class C Trust Agreement, Class D Trust Agreement or Class E Trust
Agreement.
"Trustee" means any of the Class A Trustee, the Class B Trustee, the Class
C Trustee, the Class D Trustee or the Class E Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to such term in
Section 2.5(a).
"Trustee Representatives" has the meaning assigned to such term in Section
2.5(a).
"Underwriters" means Xxxxxx Xxxxxxx & Co. Incorporated, Citicorp
Securities, Inc., Xxxxxx Brothers Inc. and Salomon Brothers Inc.
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"Underwriting Agreement" means the Underwriting Agreement dated November
__, 1996, among the Underwriters, America West, GPA Group plc, GPA Leasing USA
I, Inc. and GPA Leasing USA Sub I, Inc. relating to the purchase of the
Certificates by the Underwriters, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Written Notice" means, from the Subordination Agent, any Trustee or any
Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1
in accordance with its normal invoicing procedures shall constitute Written
Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from Monies
Received Only. (a) Each Trustee hereby acknowledges and agrees to the terms of
subordination set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be applied in
accordance with the terms of this Agreement. In addition, each Trustee hereby
agrees to cause the Equipment Notes purchased by the related Trust to be
registered in the name of the Subordination Agent, as 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 Sections 10 or 13 of the
Leases or Section 21 of the Refunding Agreements, 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, and each Liquidity Provider, by entering into the Liquidity
Facility to which it is a party, has agreed to look solely to such amounts to
the extent available for distribution to it as provided in this Agreement and
that none of the Trustees, Owner Trustees, Indenture Trustees, Owner
Participants nor the Subordination Agent is personally liable to any of them
for any amounts payable or any liability under this
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Agreement, any Trust Agreement, any Liquidity Facility or such Certificate,
except (in the case of the Subordination Agent) as expressly provided herein or
(in the case of the Trustees) as expressly provided in each Trust Agreement or
(in the case of the Owner Trustees and the Indenture Trustees) as expressly
provided in any Operative Agreement.
SECTION 2.2 Trust Accounts.
(a) Upon the execution of this Agreement, the Subordination Agent shall
establish and maintain in its name (i) the Collection Account as an Eligible
Deposit Account, bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers and (ii) as a sub-account in the
Collection Account, the Special Payments Account as an Eligible Deposit Account,
bearing a designation clearly indicating that the funds deposited therein are
held in trust for the benefit of the Trustees, the Certificateholders and the
Liquidity Providers. The Subordination Agent shall establish and maintain the
Cash Collateral Accounts pursuant to and under the circumstances set forth in
Section 3.6(f) hereof. Upon such establishment and maintenance under Section
3.6(f) hereof, the Cash Collateral Accounts shall, together with the Collection
Account, constitute the "Trust Accounts" hereunder.
(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 any then specified Special Distribution Date pursuant to
Section 2.4 hereof, as the case may be, next following the date of such
investment; provided, however, that following the making of a Downgrade
Drawing, (i) the Subordination Agent shall invest and reinvest such amounts at
the direction of the Liquidity Provider funding such Drawing and (ii) the
Liquidity Provider funding such drawing shall use reasonable efforts to cause
such amounts to be invested in Eligible Investments which yield at least an
amount equal to the interest (excluding Margin) that is payable to such
Liquidity Provider in respect of such amounts pursuant to Section 3.7 of the
relevant Liquidity Facility (it being understood that it may not be feasible to
obtain such a yield). 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 principal amount
of such investment is 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
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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 provided
herein 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 and
the Liquidity Providers, as the case may be. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Subordination Agent
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days, to which each Rating Agency may consent) establish a new Collection
Account, Special Payments Account or Cash Collateral Account, as the case may
be, as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Collection Account, Special Payments Account or Cash
Collateral Account, as the case may be. Initially, the Trust Accounts shall be
maintained with Fleet 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.
(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. Upon receipt by the Subordination Agent, as registered holder of the
Equipment Notes, of any notice of a Special Payment (or, in the absence of any
such notice, upon receipt by the Subordination Agent of a Special Payment), the
Subordination Agent shall promptly give notice thereof to each Trustee and the
Liquidity Providers. The Subordination Agent shall promptly calculate the
amount of the redemption or purchase of Equipment Notes or the amount of any
Overdue Scheduled Payment, as the case may be, comprising such Special Payment
under the applicable Indenture or Indentures and shall promptly send to each
Trustee a Written Notice of such amount and the amount allocable to each Trust.
Such Written Notice shall also
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set the distribution date for such Special Payment (a "Special Distribution
Date"), which shall be the first Business Day which follows the later to occur
of (x) the 22nd day after the date such Written Notice is received by the
Trustees or (y) the date the Subordination Agent receives or expects to receive
such Special Payment. Amounts on deposit in the Special Payments Account shall
be distributed in accordance with Sections 2.4(b) and 2.4(c) hereof, as
applicable.
(b) (i) Redemptions and Purchases of Equipment Notes. So long as no
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b) of
amounts on deposit in the Special Payments Account on account of the redemption
or purchase of all of the Equipment Notes issued pursuant to an Indenture on
the Special Distribution Date for such Special Payment in the following order
of priority:
first, such amount as shall be required to pay (A) all
accrued and unpaid Liquidity Expenses then in arrears plus (B) the
product of (x) the aggregate amount of all accrued and unpaid
Liquidity Expenses not in arrears to such Special Payment Date
multiplied by (y) a fraction, the numerator of which is the
aggregate outstanding principal amount of Equipment Notes being
redeemed or purchased on such Special Payment Date and the
denominator of which is the aggregate outstanding principal amount
of all Equipment Notes, shall be distributed to the Liquidity
Providers pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay (A) all
accrued and unpaid interest then in arrears on all Liquidity
Obligations plus (B) the product of (x) the aggregate amount of
all accrued and unpaid interest on all Liquidity Obligations not
in arrears to such Special Payment Date (at the rate provided in
the applicable Liquidity Facility) multiplied by (y) a fraction,
the numerator of which is the aggregate outstanding principal
amount of Equipment Notes being redeemed or purchased on such
Special Payment Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes, shall be
distributed to the Liquidity Providers pari passu on the basis of
the amount of Liquidity Obligations owed to each Liquidity
Provider;
third, such amount as shall be required (A) to pay or reimburse the
Liquidity Providers in an amount equal to the amount of any unreimbursed
Interest Drawings under the Liquidity Facilities shall be distributed to
the Liquidity
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Providers or (B) if any Cash Collateral Account had previously been funded
as provided in Section 3.6(f), to replenish such Cash Collateral Account
up to its Required Amount shall be deposited in such Cash Collateral
Account, in each such case, pari passu on the basis of the amounts of such
unreimbursed Interest Drawings and/or deficiencies;
fourth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Certificates on such Special
Distribution Date shall be distributed to the Class A Trustee;
fifth, such amount as shall be required to pay in full
Expected Distributions to the holders of Class B Certificates on
such Special Distribution Date shall be distributed to the Class B
Trustee;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of Class D Certificates on such Special
Distribution Date shall be distributed to the Class D Trustee;
eighth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class E Certificates on such Special
Distribution Date shall be distributed to the Class E Trustee; and
ninth, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance with
Section 3.2 hereof.
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to this
Section 2.4(b) of amounts on deposit in the Special Payments Account on account
of the redemption or purchase of all of the Equipment Notes issued pursuant to
an Indenture on the Special Distribution Date for such Special Payment in
accordance with Section 3.3 hereof.
(c) Other Special Payments. Any amounts on deposit in the Special
Payments Account other than in respect of amounts to be distributed pursuant to
Section 2.4(b) shall be distributed on the Special Distribution Date therefor
in accordance with Article
III hereof.
(d) Investment of Amounts in Special Payments Account. Any amounts on
deposit in the Special Payments Account prior to
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the distribution thereof pursuant to Section 2.4(b) or (c) shall be invested in
accordance with Section 2.2(b). Investment Earnings on such investments shall
be distributed in accordance with Section 2.4(b) or (c), as the case may be.
SECTION 2.5 Designated Representatives. (a) With the delivery of this
Agreement, the Subordination Agent shall furnish to each Liquidity Provider and
each Trustee, and from time to time thereafter may furnish to each Liquidity
Provider and each Trustee, at the Subordination Agent's discretion, or upon any
Liquidity Provider's or 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 and 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 shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Liquidity Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (an "LP Incumbency Certificate") of
any authorized signatory of such Liquidity Provider certifying as to the
incumbency and specimen signatures of any officer, attorney-in-fact, agent or
other designated representative of such Liquidity Provider (the "LP
Representatives" and, together with the Trustee Representatives and the
Subordination Agent Representatives, the "Designated Representatives")
authorized to give Written Notices on behalf of such Liquidity Provider
hereunder. Until the Subordination Agent
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receives a subsequent LP Incumbency Certificate, it shall be entitled to rely
on the last LP Incumbency Certificate delivered to it hereunder.
SECTION 2.6 Controlling Party. (a) The Trustees and the Liquidity
Providers hereby agree that, with respect to any Indenture at any given time,
the Indenture Trustee thereunder will be directed (i) in taking, or refraining
from taking, any action with respect to such Indenture or the Equipment Notes
issued thereunder, so long as no Indenture Default has occurred and is
continuing thereunder, by the holders of at least a majority of the outstanding
principal amount of such Equipment Notes (provided that, for so long as the
Subordination Agent is the registered holder of the Equipment Notes, the
Subordination Agent shall act with respect to this clause (i) in accordance
with the directions of the Trustees representing holders of Certificates
representing an undivided interest in such principal amount of Equipment
Notes), and (ii) after the occurrence and during the continuance of an
Indenture Default thereunder (which has not been cured by the applicable Owner
Trustee or the applicable Owner Participant pursuant to Section 4.3 of such
Indenture), in taking, or refraining from taking, any action with respect to
such Indenture or such Equipment Notes, including exercising remedies
thereunder (including accelerating the Equipment Notes issued thereunder or
foreclosing the Lien on the Aircraft or Spare Engine securing such Equipment
Notes), by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to any
Indenture shall be: (v) the Class A Trustee; (w) upon payment of Final
Distributions to the holders of Class A Certificates, the Class B Trustee; (x)
upon payment of Final Distributions to the holders of Class B Certificates, the
Class C Trustee; (y) upon payment of Final Distributions to the holders of Class
C Certificates, the Class D Trustee; and (z) upon payment of Final Distributions
to the holders of Class D Certificates, the Class E Trustee. For purposes of
giving effect to the foregoing, the Trustees (other than the Controlling Party)
irrevocably agree (and the Certificateholders (other than the Certificateholders
represented by the Controlling Party) shall be deemed to agree by virtue of
their purchase of Certificates) that the Subordination Agent, as record holder
of the Equipment Notes, shall exercise its voting rights in respect of the
Equipment Notes as directed by the Controlling Party 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
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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, the Liquidity Provider with the then
greatest amount of unreimbursed Liquidity Obligations payable to it under the
Liquidity Facilities shall have the right to elect, by Written Notice to the
Subordination Agent and each of the Trustees, to become the Controlling Party
hereunder with respect to any Indenture at any time from and including the date
which is 18 months after the earlier of (i) the Acceleration of the Equipment
Notes under such Indenture and (ii) a Final Drawing with respect to the
Liquidity Facilities, if, in the case of clause (i) or (ii) above, at the time
of such election all Liquidity Obligations owed to such Liquidity Provider
under the Liquidity Facilities have not been paid in full.
(d) The exercise of remedies by the Controlling Party under this Agreement
shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or obligate any
Non-Controlling Party to provide funds necessary to exercise any right or
remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution. (a) No later than 3:00 P.M.
(New York City time) on the Business Day immediately preceding each
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall
deliver to the Subordination Agent a Written Notice setting forth the following
information as at the close of business on such Business Day:
(i) With respect to the Class A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with
clause "fourth" of Section 3.2 or Section 2.4(b), as the case may be,
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 "fifth" of Section 3.2 or Section 2.4(b), as the case may be,
hereof;
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(iii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in
accordance with clause "sixth" of Section 3.2 or Section 2.4(b),
as the case may be, hereof;
(iv) With respect to the Class D Certificates, the Class D Trustee
shall separately set forth the amounts to be paid in accordance with
clause "seventh" of Section 3.2 or Section 2.4(b), as the case may be,
hereof;
(v) With respect to the Class E Certificates, the Class E Trustee
shall separately set forth the amounts to be paid in accordance with
clause "eighth" of Section 3.2 or Section 2.4(b), as the case may be,
hereof; and
(vi) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "first", "second" and "third" of Section 3.2 or
Section 2.4(b), as the case may be, 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 A Certificates, the Class A Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "first" (relating to indemnity payments made by the Class A
Certificateholders) and "sixth" of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "first" (relating to indemnity payments made by the Class B
Certificateholders) and "seventh" of Section 3.3 hereof;
(iii) With respect to the Class C Certificates, the Class C Trustee
shall separately set forth the amounts to be
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paid in accordance with clauses "first" (relating to indemnity payments
made by the Class C Certificateholders) and "eighth" of Section 3.3
hereof;
(iv) With respect to the Class D Certificates, the Class D
Trustee shall separately set forth the amounts to be paid in
accordance with clauses "first" (relating to indemnity payments
made by the Class D Certificateholders) and "ninth" of Section 3.3
hereof;
(v) With respect to the Class E Certificates, the Class E
Trustee shall separately set forth the amounts to be paid in
accordance with clauses "first" (relating to indemnity payments
made by the Class E Certificateholders) and "tenth" of Section 3.3
hereof; and
(vi) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "second", "third" and "fourth" of Section 3.3
hereof.
(c) At such time as a Trustee or a Liquidity Provider shall have received
all amounts owing to it (and, in the case of a Trustee, the Certificateholders
for which it is acting) pursuant to Section 2.4, 3.2 or 3.3 hereof, as
applicable, and, in the case of a Liquidity Provider, its commitment under the
related Liquidity Facility shall have terminated or expired, such Person shall,
by a Written Notice, so inform the Subordination Agent and each other party to
this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall be
fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee or any Liquidity Provider pursuant to paragraphs
(a) through (c) above and shall have no independent obligation to verify,
calculate or recalculate any amount set forth in any Written Notice delivered in
accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity Provider, as
applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof, if made prior
to 10:00 A.M. (New York City time) shall be effective on the date delivered
(or if delivered later on a given date 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.
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(f) In the event the Subordination Agent shall not receive from any Person
any information set forth in paragraphs (a) or (b) above which is required to
enable the Subordination Agent to make a distribution to such Person pursuant
to Section 2.4(b), 3.2 or 3.3 hereof, the Subordination Agent shall request
such information and, failing to receive any such information, the
Subordination Agent shall not make such distribution(s) to such Person. In
such event, the Subordination Agent shall make distributions pursuant to
clauses "first" through "eighth" of Section 2.4(b), clauses "first" through
"ninth" of Section 3.2 and clauses "first" through "tenth" of Section 3.3 to
the extent it shall have sufficient information to enable it to make such
distributions, and shall continue to hold any funds remaining, after making
such distributions, until the Subordination Agent shall receive all necessary
information to enable it to distribute any funds so withheld.
(g) On such dates (but not more frequently than monthly) as any Liquidity
Provider or any Trustee shall request, the Subordination Agent shall send to
such party a written statement reflecting all amounts on deposit with the
Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION 3.2 Distribution of Amounts on Deposit in the Collection Account.
Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and 3.6(b),
amounts on deposit in the Collection Account (or, in the case of any amount
described in Section 2.4(c), on deposit in the Special Payments Account) shall
be promptly distributed on each Distribution Date in the following order of
priority and in accordance with the information provided to the Subordination
Agent pursuant to Section 3.1(a) hereof:
first, such amount as shall be required to pay all accrued
and unpaid Liquidity Expenses owed to each Liquidity Provider
shall be distributed to the Liquidity Providers pari passu on the
basis of the amount of Liquidity Expenses owed to each Liquidity
Provider;
second, such amount as shall be required to pay in full the
aggregate amount of interest accrued on all Liquidity Obligations (at the
rate provided in the applicable Liquidity Facility) shall be distributed
to the Liquidity Providers pari passu on the basis of the amount of
Liquidity Obligations owed to each Liquidity Provider;
third, such amount as shall be required (A) to pay or reimburse the
Liquidity Providers in an amount equal to the amount of all Liquidity
Obligations then due (other than amounts payable pursuant to clause
"first" or "second" of this Section 3.2) shall be distributed to the
Liquidity
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Providers, and (B) if any Cash Collateral Account had previously been
funded as provided in Section 3.6(f), to replenish such Cash Collateral
Account up to its Required Amount shall be deposited in such Cash
Collateral Account, in each such case, pari passu on the basis of the
amounts of such unreimbursed Liquidity Obligations and/or deficiencies;
fourth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Certificates on such
Distribution Date shall be distributed to the Class A Trustee;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Certificates on such
Distribution Date shall be distributed to the Class C Trustee;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class D Certificates on such
Distribution Date shall be distributed to the Class D Trustee;
eighth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class E Certificates on such
Distribution Date shall be distributed to the Class E Trustee; and
ninth, such amount as shall be required to pay in full the aggregate
unpaid amount of fees and expenses payable as of such Distribution Date
to the Subordination Agent and each Trustee pursuant to the terms of this
Agreement and the Trust Agreements, as the case may be, shall be
distributed to the Subordination Agent and such Trustee.
SECTION 3.3 Distribution of Amounts on Deposit Following a Triggering
Event. (a) Except as otherwise provided in Sections 3.1(f) and 3.6(b) hereof,
upon the occurrence of a Triggering Event and at all times thereafter, all
funds in the Collection Account or the Special Payments Account shall be
promptly distributed by the Subordination Agent in the following order of
priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Notes or
any
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Trust Indenture Estate, shall be applied by the Subordination Agent
in reimbursement of such costs and expenses, (ii) each Trustee for any
amounts of the nature described in clause (i) above actually incurred by
it under the applicable Trust Agreement (to the extent not previously
reimbursed), shall be distributed to such Trustee and (iii) any Liquidity
Provider or Certificateholder for payments, if any, made by it to the
Subordination Agent or any Trustee in respect of amounts described in
clause (i) above, shall be distributed to such Liquidity Provider or to
the applicable Trustee for the account of such Certificateholder, in each
such case, pari passu on the basis of all amounts described in clauses
(i) through (iii) above;
second, such amount remaining as shall be required to pay all
accrued and unpaid Liquidity Expenses shall be distributed to each
Liquidity Provider pari passu on the basis of the amount of
Liquidity Expenses owed to each Liquidity Provider;
third, such amount remaining as shall be required to pay accrued and
unpaid interest on the Liquidity Obligations as provided in the Liquidity
Facilities shall be distributed to each Liquidity Provider pari passu on
the basis of the amount of such accrued and unpaid interest owed to each
Liquidity Provider;
fourth, such amount remaining as shall be required (A) to pay in
full the outstanding amount of all Liquidity Obligations, whether or not
then due (other than amounts payable pursuant to clause "second" or
"third" of this Section 3.3) shall be distributed to each Liquidity
Provider that has not funded a Cash Collateral Account in accordance with
Section 3.6(c) or 3.6(i) hereof, and/or (B) if applicable, so long as no
Performing Note Deficiency exists and no Liquidity Event of Default has
occurred and is continuing, to replenish the Cash Collateral Accounts up
to their respective Required Amounts shall be deposited in the Cash
Collateral Accounts, in each case, pari passu on the basis of the amount
of Liquidity Obligations owed to each Liquidity Provider and/or such
deficiencies;
fifth, 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),
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expense, fee, charge, loss or any other amount payable to such Trustee
under the applicable Trust Agreements (to the extent not previously
reimbursed), shall be distributed to such Trustee and (iii) each
Certificateholder for payments, if any, made by it pursuant to Section 5.2
hereof in respect of amounts described in clause (i) above, shall be
distributed to the applicable Trustee for the account of such
Certificateholder, in each such case, pari passu on the basis of all
amounts described in clauses (i) through (iii) above;
sixth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Certificates shall be
distributed to the Class A Trustee;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee;
eighth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Certificates shall be
distributed to the Class C Trustee;
ninth, such amount remaining as shall be required to pay in
full Adjusted Expected Distributions on the Class D Certificates shall
be distributed to the Class D Trustee; and
tenth, such amount remaining as shall be required to pay in
full Adjusted Expected Distributions on the Class E Certificates
shall be distributed to the Class E Trustee.
SECTION 3.4 Other Payments. Any payments received by the Subordination
Agent for which no provision as to the application thereof is made in this
Agreement shall be distributed by the Subordination Agent in the order of
priority specified in Section 3.3 hereof.
SECTION 3.5 Payments to the Trustees and the Liquidity Providers. Any
amounts distributed hereunder to any Liquidity Provider shall be paid to such
Liquidity Provider by wire transfer of funds to the address such Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent
shall provide a Written Notice of any such transfer to the applicable Liquidity
Provider, as the case may be, at the time of such transfer. Any amounts
distributed hereunder by the Subordination Agent to any Trustee which shall not
be the same institution as the Subordination Agent shall be paid to such
Trustee by wire transfer funds at the address such Trustee shall provide to the
Subordination Agent.
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SECTION 3.6 Liquidity Facilities. (a) Interest Drawings. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the Class
A Certificates, the Class B Certificates or the Class C Certificates (at the
Stated Interest Rate for such Class of Certificates), then, prior to 12:00 noon
(New York City time) on the Business Day following such Distribution Date, the
Subordination Agent shall request a drawing (each such drawing, an "Interest
Drawing") under the Liquidity Facility with respect to such Class of
Certificates in an amount equal to the lesser of (i) an amount sufficient to pay
the amount of such accrued interest (at the Stated Interest Rate for such Class
of Certificates) and (ii) the Available Amount under such Liquidity Facility,
and shall pay such amount to the Trustee with respect to such Class of
Certificates in payment of such accrued interest.
(b) Application of Interest Drawings. Notwithstanding anything to the
contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A Cash Collateral Account, and payable in each case to the Class A
Certificateholders, shall be promptly distributed to the Class A Trustee, (ii)
all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class B Liquidity Facility and all amounts withdrawn by the
Subordination Agent from the Class B Cash Collateral Account, and payable in
each case to the Class B Certificateholders, shall be promptly distributed to
the Class B Trustee and (iii) all payments received by the Subordination Agent
in respect of an Interest Drawing under the Class C Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class C Cash Collateral
Account, and payable in each case to the Class C Certificateholders, shall be
promptly distributed to the Class C Trustee.
(c) Downgrade Drawings. If at any time the debt rating of any Liquidity
Provider issued by either Rating Agency is lower than the applicable Threshold
Rating, within 30 days after receiving notice of such downgrading (but no later
than the expiration date of the Liquidity Facility issued by the downgraded
Liquidity Provider (the "Downgraded Facility")), such Liquidity Provider may
arrange, or the Subordination Agent (in consultation with America West) may
arrange, for a Replacement Liquidity Provider to issue and deliver a
Replacement Liquidity Facility to the Subordination Agent. If a Downgraded
Facility has not been replaced in accordance with the terms of this paragraph,
the Subordination Agent shall, on such 30th day (or if such 30th day is not a
Business Day, on the next succeeding
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Business Day) (or, if earlier, the expiration date of such Downgraded Facility),
request a drawing in accordance with and to the extent permitted by such
Downgraded Facility (such drawing, a "Downgrade Drawing") of all available and
undrawn amounts thereunder. Amounts drawn pursuant to a Downgrade Drawing shall
be maintained and invested as provided in Section 3.6(f) hereof.
(d) [Reserved.]
(e) Issuance of Replacement Liquidity Facility. At any time, the
Subordination Agent may, at its option, in consultation with America West (whose
recommendations the Subordination Agent will accept), arrange for a Replacement
Liquidity Facility to replace the Liquidity Facility for any Class of
Certificates; provided that the initial Liquidity Provider may not be replaced
pursuant to this paragraph unless there shall have become due to the initial
Liquidity Provider amounts pursuant to Section 3.1, 3.2 or 3.3 of the Liquidity
Facilities and the replacement of the initial Liquidity Provider would reduce or
eliminate the obligation to pay such amounts. In any such consultation, the
Subordination Agent shall accept the recommendations of America West in the
absence of a good faith reason not to do so. If such Replacement Liquidity
Facility is provided at any time after a Downgrade Drawing has been made, all
funds on deposit in the relevant Cash Collateral Account will be returned to the
Liquidity Provider being replaced. No such Replacement Liquidity Facility
executed in connection therewith shall become effective and no such Replacement
Liquidity Facility shall be deemed a "Liquidity Facility" under the Operative
Agreements, unless and until (i) the conditions referred to in the immediately
following paragraph shall have been satisfied and (ii) if such Replacement
Liquidity Facility shall materially adversely affect the rights, remedies,
interests or obligations of the Class A Certificateholders, the Class B
Certificateholders or the Class C Certificateholders under any of the Operative
Agreements, the applicable Trustee shall have consented, in writing, to the
execution and issuance of such Replacement Liquidity Facility.
In connection with the issuance of each Replacement Liquidity Facility,
the Subordination Agent shall (x) prior to the issuance of such Replacement
Liquidity Facility, receive written confirmation from each Rating Agency that
such Replacement Liquidity Facility will not cause a reduction, withdrawal or
suspension of the rating then in effect for any Class of Certificates by such
Rating Agency (without regard to the ratings of any Liquidity Provider being
replaced pursuant to Section 3.6(c) hereof), (y) pay all Liquidity Obligations
then owing to the replaced Liquidity Provider (which payment shall be made
first from available funds in the Cash Collateral Account as described in
clause (vii) of Section 3.6(f) hereof and thereafter from any other available
source, including, without limitation, a
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drawing under the Replacement Liquidity Facility, it being understood that no
Replacement Liquidity Facility shall become effective (other than insofar as
necessary to permit the repayment of amounts owed to the replaced Liquidity
Provider) until all amounts owed to the replaced Liquidity Provider have been
paid) and (z) cause the issuer of the Replacement Liquidity Facility to deliver
the Replacement Liquidity Facility to the Subordination Agent, together with a
legal opinion opining that such Replacement Liquidity Facility is an enforceable
obligation of such Replacement Liquidity Provider. Upon satisfaction of the
conditions set forth in this Section 3.6(e), (i) the replaced Liquidity Facility
shall terminate and (ii) such Replacement Liquidity Provider shall be deemed to
be a Liquidity Provider with the rights and obligations of a Liquidity Provider
hereunder and under the other Operative Agreements and such Replacement
Liquidity Facility shall be deemed to be a Liquidity Facility hereunder and
under the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals;
Investments. In the event the Subordination Agent shall draw all available
amounts under the Class A Liquidity Facility, the Class B Liquidity Facility or
the Class C Liquidity Facility pursuant to Section 3.6(c) or a Final Drawing
shall be made as provided in the Liquidity Facility, amounts so drawn shall be
deposited by the Subordination Agent in the Class A Cash Collateral Account,
the Class B Cash Collateral Account or the Class C Cash Collateral Account,
respectively. Amounts so deposited shall be invested in Eligible Investments
in accordance with Section 2.2(b) hereof. Investment Earnings on amounts on
deposit in the Cash Collateral Accounts shall be deposited in the Collection
Account. In addition, from and after the date funds are so deposited, the
Subordination Agent shall make withdrawals from such account as follows:
(i) on each Distribution Date, the Subordination Agent
shall, to the extent it shall not have received funds to pay
accrued and unpaid interest on the Class A Certificates (at the
Stated Interest Rate for the Class A Certificates) from any other
source, withdraw from the Class A Cash Collateral Account, and pay
to the Class A Trustee an amount equal to the lesser of (x) an
amount necessary to pay accrued and unpaid interest (at the Stated
Interest Rate for the Class A Certificates) on such Class A
Certificates and (y) the amount on deposit in the Class A Cash
Collateral Account;
(ii) on each Distribution Date, the Subordination Agent
shall, to the extent it shall not have received funds to pay
accrued and unpaid interest on the Class B Certificates (at the
Stated Interest Rate for the Class B Certificates) from any other
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source, withdraw from the Class B Cash Collateral Account, and pay
to the Class B Trustee an amount equal to the lesser of (x) an
amount necessary to pay accrued and unpaid interest (at the Stated
Interest Rate for the Class B Certificates) on such Class B
Certificates and (y) the amount on deposit in the Class B Cash
Collateral Account;
(iii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest on the Class C Certificates (at the Stated Interest Rate for the
Class C Certificates) from any other source, withdraw from the Class C
Cash Collateral Account, and pay to the Class C Trustee an amount equal
to the lesser of (x) an amount necessary to pay accrued and unpaid
interest (at the Stated Interest Rate for the Class C Certificates) on
such Class C Certificates and (y) the amount on deposit in the Class C
Cash Collateral Account;
(iv) on each date on which the Pool Balance of the Class A
Trust shall have been reduced by payments made to the Class A
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof, the
Subordination Agent shall withdraw from the Class A Cash
Collateral Account such amount as is necessary so that, after
giving effect to the reduction of the Pool Balance on such date
(including any such reduction resulting from a prior withdrawal of
amounts on deposit in the Class A Cash Collateral Account on such
date), the Required Amount (with respect to the Class A Liquidity
Facility) will be on deposit in the Class A Cash Collateral
Account and shall first, pay such amount to the Class A Liquidity
Provider until the Liquidity Obligations (with respect to the
Class A Certificates) shall have been paid in full, and second,
deposit any remaining amount in the Collection Account;
(v) on each date on which the Pool Balance of the Class B
Trust shall have been reduced by payments made to the Class B
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof, the
Subordination Agent shall withdraw from the Class B Cash
Collateral Account such amount as is necessary so that, after
giving effect to the reduction of the Pool Balance on such date
(including any such reduction resulting from a prior withdrawal of
amounts on deposit in the Class B Cash Collateral Account on such
date), the Required Amount (with respect to the Class B Liquidity
Facility) will be on deposit in the Class B Cash Collateral
Account and shall first, pay such amount to the Class B Liquidity
Provider until the Liquidity Obligations
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(with respect to the Class B Certificates) shall have been paid in full,
and second, deposit any remaining amount in the Collection Account;
(vi) on each date on which the Pool Balance of the Class C Trust
shall have been reduced by payments made of the Class C Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof, the Subordination Agent shall
withdraw from the Class C Cash Collateral Account such amount as is
necessary so that, after giving effect to the reduction of the Pool
Balance on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class C Cash Collateral Account on
such date), the Required Amount (with respect to the Class C Liquidity
Facility) will be on deposit in the Class C Cash Collateral Account and
shall first, pay such amount to the Class C Liquidity Provider until the
Liquidity Obligations (with respect to the Class C Certificates) shall
have been paid in full, and second, deposit any remaining amount in the
Collection Account;
(vii) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent
following the date on which funds have been deposited into the
Cash Collateral Account for such Class of Certificates, the
Subordination Agent shall withdraw all amounts on deposit in such
Cash Collateral Account and shall pay such amounts to the replaced
Liquidity Provider until all Liquidity Obligations owed to such
Person shall have been paid in full, and shall deposit any
remaining amount in the Collection Account; and
(viii) following the payment of Final Distributions with
respect to any Class of Certificates (other than the Class D and
Class E Certificates), on the date on which the Subordination
Agent shall have been notified by the Liquidity Provider for such
Class of Certificates that the Liquidity Obligations owed to such
Liquidity Provider have been paid in full, the Subordination Agent
shall withdraw all amounts on deposit in the Cash Collateral
Account in respect of such Class of Certificates and shall deposit
such amount in the Collection Account.
(g) Reinstatement. With respect to any Interest Drawing under the
Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Available Amount of such
Liquidity Facility shall be reinstated by an amount equal to the amount so
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reimbursed to the applicable Liquidity Provider; provided, however, that such
Liquidity Facility shall not be so reinstated in part or in full at any time if
(x) both (i) a Triggering Event shall have occurred and (ii) a Performing Note
Deficiency exists or (y) a Liquidity Event of Default shall have occurred and be
continuing under such Liquidity Facility. In the event that at any time prior
to both the occurrence of a Triggering Event and the existence of a Performing
Note Deficiency funds are withdrawn from any Cash Collateral Account pursuant to
clauses (i), (ii) or (iii) of Section 3.6(f) hereof, then funds received by the
Subordination Agent prior to both the occurrence of a Triggering Event and the
existence of a Performing Note Deficiency shall be deposited in such Cash
Collateral Account as provided in clause "third" of Section 2.4(b)(i), clause
"third" of Section 3.2 or clause "fourth" of Section 3.3, as applicable, and
applied in accordance with Section 3.6(f) hereof.
(h) Reimbursement. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) Final Drawing. If any action is expressly required under a Liquidity
Facility to be taken by the Subordination Agent in order to make a Final
Drawing thereunder, the Subordination Agent shall not fail to take such action.
Upon receipt of the proceeds of a Final Drawing under the related Liquidity
Facility, the Subordination Agent shall maintain and invest such proceeds in
accordance with Section 3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each date on which the
Required Amount of the Liquidity Facility for a Class of Certificates is
reduced as a result of a distribution to the Certificateholders of such Class
of Certificates, the Subordination Agent shall, if such Liquidity Facility
provides for reductions of the Stated Amount of such Liquidity Facility and if
such reductions are not automatic, request the Liquidity Provider for such
Class of Certificates to reduce such Stated Amount to an amount equal to the
Required Amount with respect to such Liquidity Facility (as calculated by the
Subordination Agent after giving effect to such payment). Each such request
shall be made in accordance with the provisions of the applicable Liquidity
Facility.
(k) Relation to Subordination Provisions. Interest Drawings under the
Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in each
case, in respect of interest on the Certificates of any Class, will be
distributed to the Trustee for such Class of Certificates, notwithstanding
Sections 2.4(b), 3.2, and 3.3 hereof.
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ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party. (a) (i) Following the
occurrence and during the continuation of an Indenture Default under any
Indenture, the Controlling Party shall direct the Indenture Trustee under such
Indenture in the exercise of remedies available to the holders of the Equipment
Notes issued pursuant to such Indenture, including, without limitation, the
ability to vote all such Equipment Notes in favor of declaring all of the
unpaid principal amount of such Equipment Notes and accrued interest thereon to
be due and payable under, and in accordance with, the provisions of such
Indenture. Subject to the Owner Trustees' and the Owner Participants' rights
set forth in the Indentures to purchase the Equipment Notes, if the Equipment
Notes issued pursuant to any Indenture have been Accelerated following an
Indenture Default with respect thereto, the Controlling Party may, on the terms
and conditions set forth in such Indenture, direct the related Trustee to sell,
assign, contract to sell or otherwise dispose of and deliver all (but not less
than all) of such Equipment Notes to any Person at public or private sale, at
any location at the option of the Controlling Party, all upon such terms and
conditions as it may reasonably deem advisable in accordance with applicable
law.
(ii) Subject to the Owner Trustees' and the Owner Participants' rights
set forth in the Indentures to purchase the Equipment Notes, and
notwithstanding the foregoing, so long as any Certificates remain Outstanding,
during the period ending on the date which is nine months after the earlier of
(x) the Acceleration of the Equipment Notes issued pursuant to any Indenture or
(y) the occurrence of an America West Bankruptcy Event, without the consent of
each Trustee, (A) no Aircraft or Spare Engine subject to the Lien of such
Indenture or such Equipment Notes may be sold if the net proceeds from such
sale would be less than the Minimum Sale Price for such Aircraft, Spare Engine
or such Equipment Notes, and (B) the amount and payment dates of rentals
payable by America West under the Lease for such Aircraft or Spare Engine may
not be adjusted, if, as a result of such adjustment, the discounted present
value of all such rentals would be less than 75% of the discounted present
value of the rentals payable by America West under such Lease before giving
effect to such adjustment, in each case, using the weighted average interest
rate of the Equipment Notes then outstanding pursuant to such Indenture as the
discount rate.
(iii) At the request of the Controlling Party, the Subordination Agent
may from time to time during the continuance
of an Indenture Default (and before the occurrence of a Triggering Event)
commission LTV Appraisals with respect to the related Aircraft or Spare Engine.
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(iv) After a Triggering Event occurs and any Equipment Note becomes a
Non-Performing Equipment Note, the Subordination Agent shall obtain LTV
Appraisals for each Aircraft and Spare Engine as soon as practicable and
additional LTV Appraisals on or prior to each anniversary of the date of such
initial LTV Appraisals; provided that, if the Controlling Party reasonably
objects to the appraised value of the Aircraft or Spare Engine shown in any
such LTV Appraisals, the Controlling Party shall have the right to obtain or
cause to be obtained substitute LTV Appraisals (including any LTV Appraisals
based upon physical inspection of the Aircraft or Spare Engine).
(b) The Controlling Party shall take such actions as it may reasonably
deem most effectual to complete the sale or other disposition of such Aircraft,
Spare Engine or Equipment Notes. In addition, in lieu of any sale, assignment,
contract to sell or other disposition, the Subordination Agent, on behalf of
the Controlling Party, may maintain possession of such Equipment Notes and
continue to apply monies received in respect of such Equipment Notes in
accordance with Article III hereof. In addition, in lieu of such sale,
assignment, contract to sell or other disposition, or in lieu of such
maintenance of possession, the Controlling Party may instruct the Indenture
Trustee under such Indenture to foreclose on the Lien on the related Aircraft
or Spare Engine or to take any other remedial action permitted under such
Indenture or applicable law.
SECTION 4.2 Remedies Cumulative. Each and every right power and remedy
given to the Trustees, 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, 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, the Controlling Party or the Subordination Agent in the exercise of
any right, remedy or power or in the pursuit of any remedy shall impair any
such right, power or remedy or be construed to be a waiver of any
default or to be an acquiescence therein.
SECTION 4.3 Discontinuance of Proceedings. In case any party to this
Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceedings shall have
been
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discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case each such party shall, subject to any determination in such proceedings,
be restored to its former position and rights hereunder, and all rights,
remedies and powers of such party shall continue as if no such Proceedings had
been instituted.
SECTION 4.4 Right of Certificateholders to Receive Payments Not to Be
Impaired. Anything in this Agreement to the contrary notwithstanding but
subject to each Trust Agreement, the right of any Certificateholder or any
Liquidity Provider, respectively, to receive payments pursuant to Section 2.4,
3.2 or 3.3 hereof when due, or to institute suit for the enforcement of any
such payment on or after the applicable Distribution Date, shall not be
impaired or affected without the consent of such Certificateholder or such
Liquidity Provider, respectively.
SECTION 4.5 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Agreement or in any suit against any Controlling
Party or the Subordination Agent for any action taken or omitted by it as
Controlling Party or Subordination Agent, as the case may be, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys, fees and expenses,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant. The
provisions of this Section do not apply to a suit instituted by the
Subordination Agent, a Liquidity Provider or a Trustee or a suit by
Certificateholders holding more than 10% of the original principal amount of
any Class of Certificates.
SECTION 4.6 No Action Contrary to America West's Rights Under the Lease.
Notwithstanding any of the provisions of this Agreement to the contrary, each
of the parties hereto agrees for the benefit of America West that it will not
take any action contrary to America West's rights under any Lease, including
the right of America West to possession and use and quiet enjoyment of the
Equipment, except in accordance with the provisions of such Lease.
ARTICLE V
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
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Triggering Event, as promptly as practicable, and in any event within 10 days
after obtaining knowledge thereof, the Subordination Agent shall transmit by
mail to the Rating Agencies, the Liquidity Providers and the Trustees notice of
such Indenture Default or Triggering Event, unless such Indenture Default or
Triggering Event shall have been cured or waived. For all purposes of this
Agreement, in the absence of actual knowledge on the part of a Responsible
officer, the Subordination Agent shall not be deemed to have knowledge of any
Indenture Default or Triggering Event unless notified in writing by one or more
Trustees, one or more Liquidity Providers or one or more Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each Liquidity
Provider and Trustee, promptly upon receipt thereof, duplicates or copies of
all reports, notices, requests, demands, certificates, financial statements and
other instruments furnished to the Subordination Agent as registered holder of
the Equipment Notes or otherwise in its capacity as Subordination Agent to the
extent the same shall not have been required to be directly distributed to such
Liquidity Provider or Trustee, as applicable, pursuant to the express provision
of any other Operative Agreement.
SECTION 5.2 Indemnification. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the manner
reasonably satisfactory to the Subordination Agent) against any liability, cost
or expense (including counsel fees and expenses) which may be incurred in
connection therewith. The Subordination Agent shall not be under any obligation
to take any action under this Agreement and nothing contained in this Agreement
shall require the Subordination Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. The
Subordination Agent shall not be required to take any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof, nor shall any
other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or is
otherwise contrary to law.
SECTION 5.3 No Duties Except as Specified in Intercreditor Agreement.
The Subordination Agent shall not have any duty or obligation to take or
refrain from taking any action under, or in connection with, this Agreement,
except as expressly
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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 Section 7.1 hereof) promptly take such action as may be
necessary to discharge duly 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 a
Responsible Officer of any Liquidity Provider or Trustee has notice of an
Indenture Default or a Triggering Event, such Liquidity Provider or Trustee, as
the case may be, shall promptly give notice thereof to all other Liquidity
Providers and Trustees and to the Subordination Agent, provided, however, that
no such Person shall have any liability hereunder as a result of its failure to
deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization; Acceptance of Trusts and Duties. Each of the
Class A Trustee, Class B Trustee and Class C Trustee hereby designates and
appoints the Subordination Agent as the agent and trustee of such Trustee under
the applicable Liquidity Facility and authorizes the Subordination Agent to
enter into the applicable Liquidity Facility as agent and trustee for such
Trustee. Each of the Liquidity Providers and the Trustees hereby designates and
appoints the Subordination Agent as the Subordination Agent under this
Agreement.
Fleet National Bank 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 and (b) 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 grossly negligent
in ascertaining the pertinent facts.
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SECTION 6.2 Absence of Duties. The Subordination Agent shall have no
duty to see to any recording or filing of this Agreement or any other document,
or to see to the maintenance of any such recording or filing.
SECTION 6.3 No Representations or Warranties as to Documents. The
Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity, legality
or enforceability of this Agreement or any other Operative Agreement or as to
the correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
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 or any Liquidity Provider as
provided in Articles II and III hereof need not be segregated in
any manner except to the extent required by such Articles II and III and by
law, and the Subordination Agent shall not (except as otherwise provided in
Section 2.2 hereof) be liable for any interest thereon; provided, however, that
any payments received or applied hereunder by the Subordination Agent shall be
accounted for by the Subordination Agent so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.5 Reliance; Agents; Advice of Counsel. The Subordination Agent
shall not incur liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper believed by it to be genuine and believed by it to
be signed by the proper party or parties. As to the Pool Balance of any Trust
as of any date, the Subordination Agent may for all purposes hereof rely on a
certificate signed by any Responsible Officer of the applicable Trustee, and
such certificate shall constitute full protection to the Subordination Agent
for any action taken or omitted to be taken by it in good faith in reliance
thereon. As to any fact or matter relating to the Liquidity Providers or the
Trustees the manner of ascertainment of which is not specifically described
herein, the Subordination Agent may for all purposes hereof rely on a
certificate, signed by any Responsible Officer of the applicable Liquidity
Provider or Trustee, as the case may be, as to such fact or matter, and such
certificate shall constitute full protection to the Subordination Agent for any
action taken or omitted to be taken by it in good faith in reliance thereon.
The Subordination Agent shall assume, and shall be fully protected in
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assuming, that each of the Liquidity Providers and each of the Trustees are
authorized to enter into this Agreement and to take all action to be taken by
them pursuant to the provisions hereof, and shall not inquire into the
authorization of each of the Liquidity Providers and each of the Trustees with
respect thereto. In the administration of the trusts hereunder, the
Subordination Agent may execute any of the trusts or powers hereof and perform
its powers and duties hereunder directly or through agents or attorneys and may
consult with counsel, accountants and other skilled persons to be selected and
retained by it, and the Subordination Agent shall not be liable for the acts or
omissions of any agent appointed with due care or for anything done, suffered or
omitted in good faith by it in accordance with the advice or written opinion of
any such counsel, accountants or other skilled persons.
SECTION 6.6 Capacity in Which Acting. The Subordination Agent acts
hereunder solely as agent and trustee herein and not
in its individual capacity, except as otherwise expressly provided in the
Operative Agreements.
SECTION 6.7 Compensation. The Subordination Agent shall be entitled to
reasonable compensation, including expenses and disbursements, for all services
rendered hereunder and shall have a priority claim to the extent set forth in
Article III hereof on all monies collected hereunder for the payment of such
compensation, to the extent that such compensation shall not be paid by others.
The Subordination Agent agrees that it shall have no right against any Trustee
or Liquidity Provider for any fee as compensation for its services as agent
under this Agreement. The provisions of this Section 6.7 shall survive the
termination of this Agreement.
SECTION 6.8 May Become Certificateholder. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all
rights and benefits of a Certificateholder to the same extent as if it were not
the institution acting as the Subordination Agent.
SECTION 6.9 Subordination Agent Required; Eligibility. There shall at
all times be a Subordination Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $100,000,000 (or the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a
corporation organized and doing business under the laws of the United States,
any State thereof or of the District of Columbia and having a combined capital
and surplus of at least $100,000,000), if there is such an institution willing
and able to perform the duties of the Subordination Agent hereunder upon
reasonable or customary terms. Such corporation
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shall be a citizen of the United States and shall be authorized under the laws
of the United States or any State thereof or of the District of Columbia to
exercise corporate trust powers and shall be subject to supervision or
examination by federal, state or District of Columbia authorities. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of any of the aforesaid supervising or examining
authorities, then, for the purposes of this Section 6.9, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
In case at any time the Subordination Agent shall cease
to be eligible in accordance with the provisions of this Section, the
Subordination Agent shall resign immediately in the manner and with the effect
specified in Section 8.1.
SECTION 6.10 Money to Be Held in Trust. All Equipment Notes, monies and
other property deposited with or held by the Subordination Agent pursuant to
this Agreement shall be held in trust for the benefit of the parties entitled
to such Equipment Notes, monies and other property. All such Equipment Notes,
monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION AND REIMBURSEMENT OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification and Reimbursement. The
Subordination Agent shall be indemnified hereunder to the extent and in the
manner described in Sections 10 and 13 of the Leases and shall be reimbursed
for expenses to the extent and in the manner described in Section 21 of the
Refunding Agreements. The indemnities or reimbursements for expenses contained
in such Sections of the Leases and the Refunding Agreements shall survive the
termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent; Appointment of Successor.
The Subordination Agent may resign at any time by so notifying the Trustees
and the Liquidity Providers. The Liquidity Provider or the Controlling Party
(or, prior to the occurrence of a Triggering Event, the Person who would be the
Controlling Party if a Triggering Event had occurred) may remove the
Subordination Agent for cause by so
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notifying the Subordination Agent and may appoint a successor Subordination
Agent. The Controlling Party (or, prior to the occurrence of a Triggering
Event, the Person who would be the Controlling Party if a Triggering Event had
occurred) 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 (or, prior to the occurrence of a Triggering Event, the
Person who would be the Controlling Party if a Triggering Event had occurred)
shall promptly appoint a successor Subordination Agent.
Any corporation into which the Subordination Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Subordination Agent
shall be a party, or any corporation to which substantially all the corporate
trust business of the Subordination Agent may be transferred, shall, subject to
the terms of Section 6.9 hereof, be the Subordination Agent hereunder and under
the other Operative Agreements to which the Subordination Agent is a party
without further act, except that such Person shall give prompt subsequent
notice of such transaction to the Liquidity Provider and each Trustee.
A successor Subordination Agent shall deliver a written acceptance of its
appointment as Subordination Agent hereunder to the retiring Subordination
Agent, upon which the resignation or removal of the retiring Subordination
Agent shall become effective, and the successor Subordination Agent shall have
all the rights, powers and duties of the Subordination Agent under this
Agreement. The successor Subordination Agent shall mail a notice of its
succession to the Liquidity Providers and the Trustees. The retiring
Subordination Agent shall promptly transfer its rights under each of the
Liquidity Facilities and all of the property held by it as Subordination Agent
to the successor Subordination Agent.
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If a successor Subordination Agent does not take office within 60 days
after the retiring Subordination Agent resigns or is removed, the retiring
Subordination Agent or one or more of the Trustees may petition any court of
competent jurisdiction for the appointment of a successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof (to the
extent applicable), one or more of the Trustees or one or more of the Liquidity
Providers may petition any court of competent jurisdiction for the removal of
the Subordination Agent and the appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc. (a) This Agreement may not be
supplemented, amended or modified without the consent of each Trustee (acting
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), the Subordination Agent and each Liquidity Provider; provided,
however, that this Agreement may be supplemented, amended or modified without
the consent of any Trustee if such supplement or amendment cures an ambiguity
or inconsistency or does not materially adversely affect such Trustee or the
holders of the related Class of Certificates. Notwithstanding the foregoing,
without the consent of each Certificateholder and each Liquidity Provider, no
supplement, amendment or modification of this Agreement may (i) reduce the
percentage of the interest in any Trust evidenced by the Certificates issued by
such Trust necessary to consent to modify or amend any provision of this
Agreement or to waive compliance therewith or (ii) modify Section 2.4, 3.2 or
3.3 hereof, relating to the distribution of monies received by the
Subordination Agent hereunder from the Equipment Notes or pursuant to the
Liquidity Facilities. Nothing contained in this Section shall require the
consent of a Trustee at any time following the payment of Final Distributions
with respect to the related Class of Certificates.
(b) In the event that the Subordination Agent, as the registered holder of
any Equipment Notes, receives a request for its consent to any amendment,
modification or waiver under such Equipment Notes, the Indenture pursuant to
which such Equipment
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Notes were issued, or the Lease, Refunding Agreement or other related document,
(i) if no Indenture Default shall have occurred and be continuing, the
Subordination Agent shall request instructions with respect to each Series of
Equipment Notes from the Trustee of the Trust which holds such Equipment Notes
and shall vote or consent in accordance with the instructions of such Trustee
and (ii) if any Indenture Default (which has not been cured by the applicable
Owner Trustee or the applicable Owner Participant pursuant to such Indenture)
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; provided that no such amendment, modification or waiver
shall, without the consent of each Liquidity Provider, reduce the amount of
rent, supplemental rent or stipulated loss values payable by the lessee under
the Lease.
SECTION 9.2 Subordination Agent Protected. If, in the reasonable opinion
of the institution acting as the Subordination Agent hereunder, any document
required to be executed pursuant to the terms of Section 9.1 affects any right,
duty, immunity or indemnity with respect to it under this Agreement or any
Liquidity Facility, the Subordination Agent may in its discretion decline to
execute such document.
SECTION 9.3 Effect of Supplemental Agreements. Upon the execution of any
amendment 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
(as defined in the Trust Agreements) stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement.
SECTION 9.4 Notice to Rating Agencies. Promptly following its receipt of
each amendment, consent, modification, supplement or waiver contemplated by
this Article IX, the Subordination Agent shall send a copy thereof to each
Rating Agency.
ARTICLE X
MISCELLANEOUS
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SECTION 10.1 Termination of Intercreditor Agreement. Following payment
of Final Distributions with respect to each Class of Certificates and the
payment in full of all Liquidity obligations to the Liquidity Providers and
provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers and the Subordination
Agent hereunder or under the Trust Agreements, and that the commitment of the
Liquidity Providers under the Liquidity Facilities shall have expired or been
terminated, this Agreement and the trusts created hereby shall terminate and
this Agreement shall be of no further force or effect. Except as aforesaid or
otherwise provided, this Agreement and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.
SECTION 10.2 Intercreditor Agreement for Benefit of Trustees, Liquidity
Providers and Subordination Agent. Nothing in this Agreement, whether express
or implied, shall be construed to give to any Person other than,the Trustees,
the Liquidity Providers and the Subordination Agent any legal or equitable
right, remedy or claim under or in respect of this Agreement.
SECTION 10.3 Notices. Unless otherwise expressly specified or permitted
by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed to at its office at:
Fleet National Bank
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
(ii) if to any Trustee, addressed to it at its office at:
Fleet National Bank
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
(iii) if to any Liquidity Provider, addressed to it at its office
at:
Kredietbank X.X.
-00-
00
Xxx Xxxx Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Manager
Telecopy: (000) 000-0000
Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such notice is
received. Any party hereto may change the address to which notices to such
party will be sent by giving notice of such change to the other parties to this
Agreement.
SECTION 10.4 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 10.5 No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other
Person against whom enforcement of the change, waiver, discharge or termination
is sought and any other party or other Person whose 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.
SECTION 10.7 Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8 Counterpart Form. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9 Subordination. (a) As between the Liquidity Providers, on
the one hand, and the Trustees and the Certificateholders, on the other hand,
this Agreement shall be a
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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 Liquidity Providers of all Liquidity Obligations then
due and payable, any party hereto shall have received any payment or
distribution in respect of Equipment Notes or any other amount under the
Indentures or other Operative Agreements which, had the subordination
provisions of this Agreement been properly applied to such payment,
distribution or other amount, would not have been distributed to such Person,
then such payment, distribution or other amount shall be received and held in
trust by such Person and paid over or delivered to the Subordination Agent for
application as provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination Agent
receives any payment in respect of any obligations owing hereunder (or, in the
case of the Liquidity Providers, in respect of the Liquidity Obligations),
which is subsequently invalidated, declared preferential, set aside and/or
required to be repaid to a trustee, receiver or other party, then, to the
extent of such payment, such obligations (or, in the case of the Liquidity
Providers, such Liquidity Obligations) intended to be satisfied shall be
revived and continue in full force and effect as if such payment had not been
received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm that
the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall apply in all
circumstances (including to the payment of any sum which would have accrued but
for the commencement of any applicable insolvency proceeding), notwithstanding
the fact that the obligations owed to the Trustees and the holders of
Certificates are secured by certain assets and the Liquidity Obligations are not
so secured. The Trustees expressly agree (on behalf of themselves and the
holders of Certificates) not to assert priority over the holders of Liquidity
Obligations due to their status as secured creditors in any bankruptcy,
insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent may take any
of the following actions without impairing its rights under this Agreement:
(i) obtain a lien on any property to secure any amounts
owing to it hereunder, including, in the case of the Liquidity
Providers, the Liquidity Obligations,
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it
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hereunder, including, in the case of the Liquidity Providers, any of the
Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any amounts owing
to it hereunder, including, in the case of the Liquidity Providers, any
of the Liquidity Obligations, or release or compromise any obligation of
any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay
in exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated
party or a surety under applicable law.
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written, and acknowledge that this Agreement has been
made and delivered in the City of New York, and this Agreement has become
effective only upon such execution and delivery.
FLEET NATIONAL BANK,
not in its individual capacity but
solely as Trustee for each of the
Trusts
By______________________________
Name:
Title:
KREDIETBANK N.V.,
NEW YORK BRANCH,
as Class A Liquidity Provider, Class B
Liquidity Provider and Class C
Liquidity Provider
By_______________________________
Name:
Title:
FLEET NATIONAL BANK,
not in its individual capacity
except as expressly set forth
herein but solely as Subordination
Agent and Trustee
By_______________________________
Name:
Title:
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SCHEDULE 1 TO
INTERCREDITOR AGREEMENT
Indentures
62
SCHEDULE 2 TO
INTERCREDITOR AGREEMENT
Refunding Agreements
