INTERCREDITOR AGREEMENT Dated as of April 10, 2007 AMONG WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Trustee under the Continental Airlines Pass Through Trust 2007-1A, Continental Airlines Pass Through Trust 2007-1B, and...
(2007-1)
Dated
as
of
April
10,
2007
AMONG
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity
but
solely as Trustee under the
Continental
Airlines Pass Through Trust 0000-0X,
Xxxxxxxxxxx
Xxxxxxxx Xxxx Through Trust 2007-1B,
and
Continental
Airlines Pass Through Trust 2007-1C
RZB
FINANCE LLC,
as
Class
A Liquidity Provider
and
as
Class
B Liquidity Provider
AND
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity except
as
expressly set forth herein but
solely
as
Subordination Agent and Trustee
Page
i
Page
INTERCREDITOR
AGREEMENT dated as of April 10, 2007, among WILMINGTON TRUST COMPANY, a Delaware
corporation ("WTC"),
not
in its individual capacity but solely as Trustee of each Trust (each as defined
below); RZB FINANCE LLC, a limited liability company organized under the laws
of
Delaware ("RZB"),
as
Class A Liquidity Provider and Class B Liquidity Provider; and WILMINGTON TRUST
COMPANY, not in its individual capacity except as expressly set forth herein,
but solely as Subordination Agent and trustee hereunder (in such capacity,
together with any successor appointed pursuant to Article VIII hereof, the
"Subordination
Agent").
WHEREAS,
all capitalized terms used herein shall have the respective meanings referred
to
in Article I hereof;
WHEREAS,
pursuant to each Indenture, Continental will issue on a recourse basis up to
(and including) three series of Equipment Notes to finance the purchase of
the
related Aircraft;
WHEREAS,
pursuant to the Financing Agreements, each Trust will acquire 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 class of Certificates (a "Class")
bearing the interest rate and having the final distribution date described
in
such Trust Agreement on the terms and subject to the conditions set forth
therein;
WHEREAS,
pursuant to the Underwriting Agreement, the Underwriters propose to purchase
the
Class A Certificates issued by the Class A Trust, the Class B Certificates
issued by the Class B Trust and the Class C Certificates issued by the Class
C
Trust in the aggregate face amount set forth opposite the name of such Trust
on
Schedule I thereto on the terms and subject to the conditions set forth
therein;
WHEREAS,
the Class A Liquidity Provider proposes to enter into a revolving credit
agreement relating to the Class A Certificates and the Class B Liquidity
Provider proposes to enter into a revolving credit agreement relating to the
Class B Certificates, in each case with the Subordination Agent, as agent for
the Trustee of the applicable Trust, respectively, for the benefit of the
Certificateholders of such Trust;
WHEREAS,
Raiffeisen Zentralbank Österreich Aktiengesellschaft, a banking institution
organized and existing under the laws of the Republic of Austria (the
"Guarantor"),
will
guarantee in full, pursuant to a master guaranty certificate dated as of the
date hereof and issued by the Guarantor pursuant to that certain Master Guaranty
Agreement, dated as of September 1, 1997, issued by the Guarantor (collectively,
the "Guarantee
Agreement"),
the
obligations of RZB under the Class A Liquidity Facility and the Class B
Liquidity Facility; 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 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
for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
DEFINITIONS
SECTION
1.1. Definitions.
For all
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(1) the
terms
used herein that are defined in this Article have the meanings assigned to
them
in this Article, and 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" means "including without limitation".
"Acceleration"
means,
with respect to the amounts payable in respect of the Equipment Notes issued
under any Indenture, such amounts becoming immediately due and payable by
declaration or otherwise. "Accelerate",
"Accelerated"
and
"Accelerating"
have
meanings correlative to the foregoing.
"Actual
Disposition Event" means,
in
respect of any Equipment Note: (i) the disposition of the Collateral (as
defined in the Indenture pursuant to which such Equipment Note was issued)
securing such Equipment Note, (ii) the occurrence of the mandatory
redemption date for such Equipment Note following an Event of Loss (as defined
in such Indenture) with respect to the Aircraft which secured such Equipment
Note or (iii) the sale of such Equipment Note.
"Additional
Certificateholders"
has the
meaning specified in Section 9.1(d).
"Additional
Certificates"
has the
meaning specified in Section 9.1(d).
"Additional
Equipment Notes"
has the
meaning specified in Section 9.1(d).
"Additional
Trust"
has the
meaning specified in Section 9.1(d).
"Additional
Trust Agreement"
has the
meaning specified in Section 9.1(d).
"Additional
Trustee"
has the
meaning specified in Section 9.1(d).
"Administration
Expenses"
has the
meaning specified in clause "first" of Section 3.2.
"Advance",
with
respect to any Liquidity Facility, means any Advance as defined in such
Liquidity Facility.
"Affiliate"
means,
with respect to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with such Person. For the purposes of
this
definition, "control" means the power, directly or indirectly, to direct or
cause the direction of the management and policies of such Person whether
through the ownership of voting securities or by contract or otherwise; and
the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Aircraft"
means,
with respect to each Indenture, the "Aircraft" referred to therein.
"Appraisal"
has the
meaning specified in Section 4.1(a)(iv).
"Appraised
Current Market Value"
of any
Aircraft means the lower of the average and the median of the three most recent
Post-Default Appraisals of such Aircraft.
"Appraisers"
means
Aircraft Information Services, Inc., BK Associates, Inc. and Xxxxxx Xxxxx and
Xxxxx, Inc. or, so long as the Person entitled or required hereunder to select
such Appraiser acts reasonably, any other nationally recognized appraiser
reasonably satisfactory to the Subordination Agent and the Controlling
Party.
"Assignment
and Assumption Agreements"
means
each of the Assignment and Assumption Agreements to be executed between a
Trustee and trustee of the relevant Successor Trust in accordance with the
relevant Trust Agreement, as the same may be amended, modified or supplemented
from time to time.
"Available
Amount"
means,
with respect to any Liquidity Facility on any date, the Maximum Available
Commitment (as defined therein) on such date.
"Bankruptcy
Code"
means
the United States Bankruptcy Code, 11 U.S.C. Sections 101 et
seq.
"Basic
Agreement"
means
the Pass Through Trust Agreement dated as of September 25, 1997 between
Continental and WTC, not in its individual capacity, except as otherwise
expressly provided therein, but solely as trustee.
"Business
Day"
means
any day other than a Saturday or Sunday or a day on which commercial banks
are
required or authorized to close in Houston, Texas, New York, New York, or,
so
long as any Certificate is outstanding, the city and state in which any Trustee,
the Subordination Agent or any Loan Trustee maintains its Corporate Trust Office
and that, solely with respect to the making and repayment of Advances under
any
Liquidity Facility, also is a "Business Day" as defined in such Liquidity
Facility.
"Cash
Collateral Account"
means
the Class A Cash Collateral Account or the Class B Cash Collateral Account,
as
applicable.
"Certificate"
means a
Class A Certificate, a Class B Certificate or a Class C Certificate, as
applicable.
"Certificate
Buy-Out Event"
means
that a Continental Bankruptcy Event has occurred and is continuing and the
following events have occurred: (A) (i) the 60-Day Period has expired, and
(ii)
Continental has not entered into one or more agreements under Section
1110(a)(2)(A) of the Bankruptcy Code to perform all of its obligations under
all
of the Indentures or, if it has entered into such agreements, has at any time
thereafter failed to cure any default under any of the Indentures in accordance
with Section 1110(a)(2)(B) of the Bankruptcy Code; or (B) if prior to the expiry
of the 60-Day Period, Continental shall have abandoned any
Aircraft.
"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
an Eligible Institution, which shall be the Subordination Agent if it shall
so
qualify, into which all amounts drawn under the Class A Liquidity Facility
pursuant to Section 3.5(c), 3.5(d) or 3.5(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 Revolving Credit Agreement dated as of the date hereof, between
the Subordination Agent, as agent and trustee for the Class A Trust, and the
initial Class A Liquidity Provider, and from and after the replacement of such
Revolving Credit Agreement pursuant hereto, the Replacement Liquidity Facility
therefor, if any, in each case as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"Class
A Liquidity Provider"
means
RZB or, if applicable, any Replacement Liquidity Provider which has issued
a
Replacement Liquidity Facility to replace any Class A Liquidity Facility
pursuant to Section 3.5(e).
"Class
A Trust"
means
(i) prior to the Transfer, the Continental Airlines Pass Through Trust 2007-1A-O
created and administered pursuant to the Class A Trust Agreement and (ii) after
the Transfer, the Continental Airlines Pass Through Trust 2007-1A-S created
and
administered pursuant to the Class A Trust Agreement.
"Class
A Trust Agreement"
means
(i) prior to the Transfer, the Basic Agreement, as supplemented by the
Supplement No. 2007-1A-O thereto dated as of the date hereof, governing the
creation and administration of the Continental Airlines Pass Through Trust
2007-1A-O 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, and (ii) after the Transfer, the Basic Agreement, as
supplemented by the Supplement No. 2007-1A-S thereto, governing the
creation and administration of the Continental Airlines Pass Through Trust
2007-1A-S 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
WTC, 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 Adjusted Interest" means,
as
of any Current Distribution Date: (I) any interest described in
clause (II) of this definition accruing prior to the immediately preceding
Distribution Date which remains unpaid and (II) interest at the Stated
Interest Rate for the Class B Certificates (A) for the number of days
during the period commencing on, and including, the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the Closing Date) and ending on, but excluding the Current
Distribution Date, on the Preferred B Pool Balance on such Current Distribution
Date and (B) on the principal amount calculated pursuant to
clauses (B)(i), (ii), (iii) and (iv) of the definition of Preferred B
Pool Balance for each Series B Equipment Note with respect to which a
disposition, distribution, sale or Deemed Disposition Event has occurred since
the immediately preceding Distribution Date (but only if no such event has
previously occurred with respect to such Series B Equipment Note), for each
day
during the period, for each such Equipment Note, commencing on, and including,
the immediately preceding Distribution Date (or, if the Current Distribution
Date is the first Distribution Date, the Closing Date) and ending on, but
excluding the date of disposition, distribution, sale or Deemed Disposition
Event with respect to such Equipment Note, Aircraft or Collateral, as the case
may be.
"Class
B Cash Collateral Account"
means
an Eligible Deposit Account in the name of the Subordination Agent maintained
at
an Eligible Institution, which shall be the Subordination Agent if it shall
so
qualify, into which all amounts drawn under the Class B Liquidity Facility
pursuant to Section 3.5(c), 3.5(d) or 3.5(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 Revolving Credit Agreement dated as of the date hereof, between
the Subordination Agent, as agent and trustee for the Class B Trust, and the
initial Class B Liquidity Provider, and from and after the replacement of such
Revolving Credit Agreement pursuant hereto, the Replacement Liquidity Facility
therefor, if any, in each case as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
"Class
B Liquidity Provider"
means
RZB or, if applicable, any Replacement Liquidity Provider which has issued
a
Replacement Liquidity Facility to replace any Class B Liquidity Facility
pursuant to Section 3.5(e).
"Class
B Trust"
means
(i) prior to the Transfer, the Continental Airlines Pass Through Trust 2007-1B-O
created and administered pursuant to the Class B Trust Agreement and (ii) after
the Transfer, the Continental Airlines Pass Through Trust 2007-1B-S created
and
administered pursuant to the Class B Trust Agreement.
"Class
B Trust Agreement"
means
(i) prior to the Transfer, the Basic Agreement, as supplemented by the
Supplement No. 2007-1B-O thereto dated as of the date hereof, governing the
creation and administration of the Continental Airlines Pass Through Trust
2007-1B-O 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, and (ii) after the Transfer, the Basic Agreement, as
supplemented by the Supplement No. 2007-1B-S thereto, governing the
creation and administration of the Continental Airlines Pass Through Trust
2007-1B-S 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
WTC, not in its individual capacity except as expressly set forth in the Class
B
Trust Agreement, but solely as trustee under the Class B Trust Agreement,
together with any successor trustee appointed pursuant thereto.
"Class
C Adjusted Interest" means,
as
of any Current Distribution Date, (I) any interest described in
clause (II) of this definition accruing prior to the immediately preceding
Distribution Date which remains unpaid and (II) interest at the Stated
Interest Rate for the Class C Certificates (A) for the number of days
during the period commencing on, and including, the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the Closing Date) and ending on, but excluding the Current
Distribution Date, on the Preferred C Pool Balance on such Current Distribution
Date and (B) on the principal amount calculated pursuant to
clauses (B)(i), (ii), (iii) and (iv) of the definition of
Preferred C Pool Balance for each Series C Equipment Note with respect to which
a disposition, distribution, sale or Deemed Disposition Event has occurred
since
the immediately preceding Distribution Date (but only if no such event has
previously occurred with respect to such Series C Equipment
Note),
for each day during the period, for each such Equipment Note, commencing on,
and
including, the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the Closing Date) and ending
on, but excluding the date of disposition, distribution, sale or Deemed
Disposition Event with respect to such Equipment Note, Aircraft or Collateral,
as the case may be.
"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 replacement thereof pursuant
to
the terms of the Class C Trust Agreement.
"Class
C Trust"
means
(i) prior to the Transfer, the Continental Airlines Pass Through Trust 2007-1C-O
created and administered pursuant to the Class C Trust Agreement and (ii) after
the Transfer, the Continental Airlines Pass Through Trust 2007-1C-S created
and
administered pursuant to the Class C Trust Agreement.
"Class
C Trust Agreement"
means
(i) prior to the Transfer, the Basic Agreement, as supplemented by the
Supplement No. 2007-1C-O thereto dated as of the date hereof, governing the
creation and administration of the Continental Airlines Pass Through Trust
2007-1C-O 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, and (ii) after the Transfer, the Basic Agreement, as supplemented
by
the Supplement No. 2007-1C-S thereto, governing the creation and administration
of the Continental Airlines Pass Through Trust 2007-1C-S 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
WTC, 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.
"Closing
Date"
means
April 10, 2007.
"Code"
means
the Internal Revenue Code of 1986, as amended from time to time, and the
Treasury Regulations promulgated thereunder.
"Collateral"
has the
meaning specified in the Indentures.
"Collection
Account"
means
the Eligible Deposit Account established by the Subordination Agent pursuant
to
Section 2.2(a)(i) which the Subordination Agent shall make deposits in and
withdrawals from in accordance with this Agreement.
"Consent
Period"
has the
meaning specified in Section 3.5(d).
"Continental"
means
Continental Airlines, Inc., a Delaware corporation, and its successors and
assigns.
"Continental
Bankruptcy Event"
means
the occurrence and continuation of any of the following:
(a) Continental
shall consent to the appointment of or the taking of possession by a receiver,
trustee or liquidator of itself or of a substantial part of its property, or
Continental shall admit in writing its inability to pay its debts generally
as
they come due, or does not pay its debts generally as they become due or shall
make a general assignment for the benefit of creditors, or Continental shall
file a voluntary petition in bankruptcy or a voluntary petition or an answer
seeking reorganization, liquidation or other relief in a case under any
bankruptcy laws or other insolvency laws (as in effect at such time) or an
answer admitting the material allegations of a petition filed against
Continental in any such case, or Continental shall seek relief by voluntary
petition, answer or consent, under the provisions of any other bankruptcy or
other similar law providing for the reorganization or winding-up of corporations
(as in effect at such time) or Continental shall seek an agreement, composition,
extension or adjustment with its creditors under such laws, or Continental's
board of directors shall adopt a resolution authorizing corporate action in
furtherance of any of the foregoing; or
(b) an
order,
judgment or decree shall be entered by any court of competent jurisdiction
appointing, without the consent of Continental, a receiver, trustee or
liquidator of Continental or of any substantial part of its property, or any
substantial part of the property of Continental shall be sequestered, or
granting any other relief in respect of Continental as a debtor under any
bankruptcy laws or other insolvency laws (as in effect at such time), and any
such order, judgment or decree of appointment or sequestration shall remain
in
force undismissed, unstayed and unvacated for a period of 60 days after the
date
of entry thereof; or
(c) a
petition against Continental in a case under any bankruptcy laws or other
insolvency laws (as in effect at such time) is filed and not withdrawn or
dismissed within 60 days thereafter, or if, under the provisions of any law
providing for reorganization or winding-up of corporations which may apply
to
Continental, any court of competent jurisdiction assumes jurisdiction, custody
or control of Continental or of any substantial part of its property and such
jurisdiction, custody or control remains in force unrelinquished, unstayed
and
unterminated for a period of 60 days.
"Continental
Provisions"
has the
meaning specified in Section 9.1(a).
"Controlling
Party"
means
the Person entitled to act as such pursuant to the terms of Section
2.6.
"Corporate
Trust Office"
means,
with respect to any Trustee, the Subordination Agent or any Loan 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 Expected
Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"Deemed
Disposition Event" means,
in
respect of any Equipment Note, the continuation of an Indenture Default in
respect of such Equipment Note without an Actual Disposition Event occurring
in
respect of such Equipment Note for a period of five years from the date of
the
occurrence of such Indenture Default.
"Delivery
Period Expiry Date"
means
the earlier of (a) June 30, 2009, or, if the Equipment Notes relating to all
the
New Aircraft (or Substitute Aircraft in lieu thereof) have not been purchased
by
the Trusts on or prior to such date due to any reason beyond the control of
Continental and not occasioned by Continental's fault or negligence, September
30, 2009 (provided
that, if
a labor strike occurs at The Boeing Company on or prior to either or both of
such dates referred to in this clause (a), such date or dates on or following
the commencement of such strike shall be extended by adding thereto the number
of days that such strike continued in effect) and (b) the date on which
Equipment Notes with respect to all New Aircraft (or Substitute Aircraft in
lieu
thereof) have been purchased by the Trusts in accordance with the Note Purchase
Agreement.
"Deposit
Agreement"
means,
with respect to any Class of Certificates, the Deposit Agreement pertaining
to
such Class, dated as of the date hereof, between the Escrow Agent and the
Depositary, as the same may be amended, modified or supplemented from time
to
time in accordance with the terms thereof.
"Depositary"
means
Credit Suisse, New York Branch, as depositary under each Deposit
Agreement.
"Deposits"
with
respect to any Class of Certificates, has the meaning set forth in the Deposit
Agreement pertaining to such Class.
"Designated
Representatives"
means
the Subordination Agent Representatives, the Trustee Representatives and the
Provider Representatives identified under Section 2.5.
"Distribution
Date"
means a
Regular Distribution Date or a Special Distribution Date.
"Dollars"
or
"$"
means
United States dollars.
"Downgrade
Drawing"
has the
meaning specified in Section 3.5(c).
"Downgrade
Event"
with
respect to any Liquidity Facility, has the meaning assigned to such term in
such
Liquidity Facility.
"Downgraded
Facility"
has the
meaning specified in Section 3.5(c).
"Drawing"
means
an Interest Drawing, a Final Drawing, a Non-Extension Drawing or a Downgrade
Drawing, as the case may be.
"Eligible
Deposit Account"
means
either (a) a segregated account with an Eligible Institution or (b) a segregated
trust account with the corporate trust department of a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any U.S. branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as any of the securities of such depository institution
has a long-term unsecured debt rating of at least A3 from Moody's and a
long-term issuer credit rating of at least A- from Standard & Poor's. 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 set-off and counterclaim
with respect to such account.
"Eligible
Institution"
means
(a) the corporate trust department of the Subordination Agent or any Trustee,
as
applicable, or (b) a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), which has a long-term unsecured
debt rating or issuer credit rating, as the case may be, 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 of at least P-1 and
a
short-term issuer credit rating issued by Standard & Poor's of at least A-1
having maturities no later than 90 days following the date of such investment
or
(c) investments in negotiable certificates of deposit, time deposits, banker's
acceptances, commercial paper or other direct obligations of, or obligations
guaranteed by, commercial banks organized under the laws of the United States
or
of any political subdivision thereof (or any U.S. branch of a foreign bank)
with
a short-term unsecured debt rating by Moody's of at least P-1 and a short-term
issuer credit rating by Standard & Poor's of at least A-1, having maturities
no later than 90 days following the date of such investment; provided,
however,
that
(x) all Eligible Investments that are bank obligations shall be denominated
in
U.S. dollars; and (y) the aggregate amount of Eligible Investments at any one
time that are bank obligations issued by any one bank shall not be in excess
of
5% of such bank's capital surplus; provided further
that any
investment of the types described in clauses (a), (b) and (c) above may be
made
through a repurchase agreement in commercially reasonable form with a bank
or
other financial institution qualifying as an Eligible Institution so long as
such investment is held by a third party custodian also qualifying as an
Eligible Institution; provided further,
however,
that in
the case of any Eligible Investment issued by a domestic branch of a foreign
bank, the income from such investment shall be from sources within the United
States for purposes of the Code. Notwithstanding the foregoing, no investment
of
the types described in clause (b) above which is issued or guaranteed by
Continental or any of its Affiliates, and no investment in the obligations
of
any one bank in excess of $10,000,000, shall be an Eligible Investment unless
a
Ratings Confirmation shall have been received with respect to the making of
such
investment.
"Equipment
Note Buy-Out Event"
means
the occurrence and continuation of (i) a Certificate Buy-Out Event or (ii)
an
Indenture Default under any Indenture that has continued for
a
period
of five years without an Actual Disposition Event occurring with respect to
the
Equipment Notes issued under such Indenture.
"Equipment
Note Special Payment"
means a
Special Payment on account of the redemption, purchase or prepayment of all
of
the Equipment Notes issued pursuant to an Indenture.
"Equipment
Notes"
means,
at any time, the Series A Equipment Notes, the Series B Equipment Notes and
the Series C Equipment Notes, collectively, and in each case, any Equipment
Notes issued in exchange therefor or replacement thereof pursuant to the terms
of the Indentures.
"Escrow
Agent"
means
Xxxxx Fargo Bank Northwest, National Association, as escrow agent under each
Escrow and Paying Agent Agreement, together with its successors in such
capacity.
"Escrow
and Paying Agent Agreement"
means,
with respect to any Class of Certificates, the Escrow and Paying Agent Agreement
pertaining to such Class dated as of the date hereof between the Escrow Agent,
the Underwriters, the Trustee for such Class and the Paying Agent, as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.
"Escrow
Receipts"
has the
meaning assigned to such term in the Escrow and Paying Agent Agreement for
the
Class A Trust, Class B Trust or Class C Trust, as applicable.
"Excess
Liquidity Obligations"
means,
with respect to an Indenture, the amounts payable under clause (a) of the third
paragraph of Section 2.02 of such Indenture.
"Expected
Distributions"
means,
with respect to the Certificates of any Trust on any Current Distribution Date,
the difference between (A) the Pool Balance of such Certificates as of the
immediately preceding Distribution Date (or, if the Current Distribution Date
is
the first Distribution Date, the original aggregate face amount of Certificates
of such Trust) and (B) 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
such
payments have been distributed to the holders of such Certificates, (ii) the
principal of the Performing Equipment Notes held in such Trust has been paid
when due (without giving effect to any Acceleration of Performing Equipment
Notes) and such payments have been distributed to the holders of such
Certificates and (iii) the principal of any Equipment Notes formerly held in
such Trust that have been sold pursuant to the terms hereof has been paid in
full and such payments have been distributed to the holders of such
Certificates, but without giving effect to any reduction in the Pool Balance
as
a result of any distribution attributable to Deposits occurring after the
immediately preceding Distribution Date (or, if the Current Distribution Date
is
the first Distribution Date, occurring after the initial issuance of the
Certificates of such Trust). For purposes of calculating Expected Distributions
with respect to the Certificates of any Trust, any Premium paid on the Equipment
Notes held in such Trust which has not been distributed to the
Certificateholders of such Trust (other than such Premium or a portion thereof
applied to the
payment
of interest on the Certificates of such Trust or the reduction of the Pool
Balance of such Trust) shall be added to the amount of such Expected
Distributions.
"Expiry
Date"
with
respect to any Liquidity Facility, has the meaning set forth in such Liquidity
Facility.
"Facility
Office"
means,
with respect to any Liquidity Facility, the office of the Liquidity Provider
thereunder, presently located at Bethel, Connecticut, or such other office
as
such Liquidity Provider from time to time shall notify the applicable Trustee
as
its "Facility Office" under any such Liquidity Facility; provided
that
such Liquidity Provider shall not change its Facility Office to another Facility
Office outside the United States of America except in accordance with Section
3.01, 3.02 or 3.03 of any such Liquidity Facility.
"Fee
Letters"
means,
collectively, (i) the Fee Letter dated as of the date hereof between RZB and
the
Subordination Agent with respect to the initial Liquidity Facilities and (ii)
any fee letter entered into between the Subordination Agent and any Replacement
Liquidity Provider in respect of such Liquidity Facilities.
"Final
Distributions"
means,
with respect to the Certificates of any Trust on any Distribution Date, the
sum
of (x) the aggregate amount of all accrued and unpaid interest on such
Certificates (excluding interest, if any, payable with respect to the Deposits
relating to such Trust) and (y) the Pool Balance of such Certificates as of
the
immediately preceding Distribution Date (less the amount of the Deposits for
such Class of Certificates as of such preceding Distribution Date other than
any
portion of such Deposits thereafter used to acquire Equipment Notes pursuant
to
the Note Purchase Agreement). For purposes of calculating Final Distributions
with respect to the Certificates of any Trust, any Premium paid on the Equipment
Notes held in such Trust which has not been distributed to the
Certificateholders of such Trust (other than such Premium or a portion thereof
applied to the payment of interest on the Certificates of such Trust or the
reduction of the Pool Balance of such Trust) shall be added to the amount of
such Final Distributions.
"Final
Drawing"
has the
meaning assigned to such term in Section 3.5(i).
"Final
Legal Distribution Date"
means
(i) with respect to the Class A Certificates and Class B Certificates, October
19, 2023, and (ii) with respect to the Class C Certificates, April 19,
2014.
"Financing
Agreement"
means
each of the Participation Agreements and the Note Purchase
Agreement.
"Guarantee
Agreement"
has the
meaning assigned to such term in the preliminary statements to this
Agreement.
"Guarantor"
has the
meaning assigned to such term in the preliminary statements to this
Agreement.
"Indenture"
means
each of the Trust Indentures entered into by the Loan Trustee and Continental,
pursuant to the Note Purchase Agreement, in each case 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 Event of Default (as such term is defined
in
such Indenture) thereunder.
"Interest
Drawing"
has the
meaning specified in Section 3.5(a).
"Interest
Payment Date"
means,
with respect to any Liquidity Facility, each date on which interest is due
and
payable under such Liquidity Facility on a Downgrade Drawing, Non-Extension
Drawing or Final Drawing thereunder, other than any such date on which interest
is due and payable under such Liquidity Facility only on an Applied Provider
Advance (as such term is defined in such Liquidity Facility).
"Interest
Period"
has the
meaning specified in the Indentures.
"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.
"Junior
Additional Certificateholder"
has the
meaning specified in Section 2.7(c).
"Lien"
means
any mortgage, pledge, lien, charge, claim, disposition of title, encumbrance,
lease, sublease, sub-sublease or security interest of any kind, including,
without limitation, any thereof arising under any conditional sales or other
title retention agreement.
"Liquidity
Event of Default"
with
respect to any Liquidity Facility, has the meaning assigned to such term in
such
Liquidity Facility.
"Liquidity
Expenses"
means,
with respect to the Liquidity Facilities, 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 or the Class B Liquidity
Facility, as applicable.
"Liquidity
Obligations"
means,
with respect to the Liquidity Facilities, all principal, interest, fees and
other amounts owing to the Liquidity Providers under the Liquidity Facilities,
Section 8.1 of the Participation Agreements or the Fee Letters.
"Liquidity
Provider"
means,
at any time, the Class A Liquidity Provider or the Class B Liquidity Provider,
as applicable.
"Loan
Trustee"
means,
with respect to any Indenture, the mortgagee thereunder.
"Minimum
Sale Price"
means,
with respect to any Aircraft or the Equipment Notes issued in respect of such
Aircraft, at any time, the lesser of (1) in the case of the sale
of an Aircraft,
75%, or in the case of the sale of related Equipment Notes, 85%, of
the Appraised Current Market Value of such Aircraft and (2) the sum of the
aggregate Note Target Price of such Equipment Notes and an amount equal to
the
Excess Liquidity Obligations in respect of the Indenture under which such
Equipment Notes were issued.
"Moody's"
means
Xxxxx'x Investors Service, Inc.
"New
Aircraft"
has the
meaning set forth in the Note Purchase Agreement.
"Non-Controlling
Party"
means,
at any time, any Trustee or Liquidity Provider which is not the Controlling
Party at such time.
"Non-Extended
Facility"
has the
meaning specified in Section 3.5(d).
"Non-Extension
Drawing"
has the
meaning specified in Section 3.5(d).
"Non-Performing
Equipment Note"
means
an Equipment Note issued pursuant to an Indenture that is not a Performing
Equipment Note.
"Note
Purchase Agreement"
means
the Note Purchase Agreement, dated as of the date hereof, among Continental,
each Trustee, the Escrow Agent, the Subordination Agent and the Paying Agent,
as
amended, supplemented or otherwise modified from time to time in accordance
with
its terms.
"Note
Target Price"
means,
for any Equipment Note issued under any Indenture, (i) the aggregate outstanding
principal amount of such Equipment Note, plus (ii) the accrued and unpaid
interest thereon, together with all other sums owing on or in respect of such
Equipment Note under such Indenture (including, without limitation, enforcement
costs incurred by the Subordination Agent in respect of such Equipment
Note).
"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 Guarantee Agreement, the
Indentures, the Trust Agreements, the Underwriting Agreement, the Financing
Agreements, the Fee Letters, the Equipment Notes and the Certificates, together
with all exhibits and schedules included with any of the foregoing.
"Outstanding"
means,
when used with respect to each Class of Certificates, as of the date of
determination, all Certificates of such Class theretofore authenticated and
delivered under the related Trust Agreement, except:
(i) Certificates
of such Class theretofore canceled by the Registrar (as defined in such Trust
Agreement) or delivered to the Trustee thereunder or such Registrar for
cancellation;
(ii) Certificates
of such Class for which money in the full amount required to make the final
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 request, demand, authorization, direction, notice,
consent or waiver hereunder, any Certificates owned by Continental or any of
its
Affiliates shall be disregarded and deemed not to be Outstanding, except that,
in determining whether such Trustee shall be protected in relying upon any
such
request, demand, authorization, direction, notice, consent or waiver, only
Certificates that such Trustee knows to be so owned shall be so disregarded.
Certificates so owned that have been pledged in good faith may be regarded
as
Outstanding if the pledgee establishes to the satisfaction of the applicable
Trustee the pledgee's right so to act with respect to such Certificates and
that
the pledgee is not Continental or any of its Affiliates.
"Overdue
Scheduled Payment"
means
any Scheduled Payment which is not in fact received by the Subordination Agent
within five days after the Scheduled Payment Date relating thereto.
"Participation
Agreement"
means,
with respect to each Indenture, the "Participation Agreement" referred to
therein.
"Payee"
has the
meaning specified in Section 2.4(e).
"Paying
Agent"
means
Wilmington Trust Company, as paying agent under each Escrow and Paying Agent
Agreement, together with its successors in such capacity.
"Paying
Agent Account"
has the
meaning assigned to such term in the Escrow and Paying Agent
Agreements.
"Performing
Equipment Note"
means
an Equipment Note with respect to which no payment default has occurred and
is
continuing (without giving effect to any Acceleration); provided
that in
the event of a bankruptcy proceeding under the Bankruptcy Code in which
Continental is a debtor any payment default existing during the 60-Day Period
(or such longer period as may apply under Section 1110(b) of the Bankruptcy
Code
or as may apply for the cure of such payment default under Section 1110(a)(2)(B)
of the Bankruptcy Code) shall not be taken into consideration until the
expiration of the applicable period.
"Performing
Note Deficiency"
means
any time that less than 65% of the then aggregate outstanding principal amount
of all Equipment Notes (other than any Additional Equipment Notes issued under
any Indenture) are Performing Equipment Notes.
"Person"
means
any individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, trustee, unincorporated
organization or government or any agency or political subdivision
thereof.
"Pool
Balance"
means,
with respect to each Trust or the Certificates issued by any Trust, as of any
date, (i) the original aggregate face amount of the Certificates of such Trust
less
(ii) the
aggregate amount of all payments made as of such date in respect of the
Certificates of such Trust or in respect of Deposits relating to such Trust
other than payments made in respect of interest or Premium thereon or
reimbursement of any costs and expenses in connection therewith. The Pool
Balance for each Trust or for the Certificates issued by any Trust as of any
date shall be computed after giving effect to any special distribution with
respect to unused Deposits, payment of principal of the Equipment Notes or
payment with respect to other Trust Property held in such Trust and the
distribution thereof to be made on that date.
"Post-Default
Appraisal"
has the
meaning specified in Section 4.1(a)(iv).
"Preferred
B Pool Balance" means,
as
of any date, the excess of (A) the Pool Balance of the Class B
Certificates as of the immediately preceding Distribution Date (or, if such
date
is on or before the first Distribution Date, the original aggregate face amount
of the Class B Certificates) (after giving effect to distributions made on
such date) over (B) the sum of (i) the outstanding principal amount of each
Series B Equipment Note that remains unpaid as of such date subsequent to the
disposition of the Collateral under the Indenture pursuant to which such Series
B Equipment Note was issued and after giving effect to any distributions of
the
proceeds of such disposition applied under such Indenture to the payment of
each
such Series B Equipment Note, (ii) the outstanding principal amount of each
Series B Equipment Note that remains unpaid as of such date subsequent to the
scheduled date of mandatory redemption of such Series B Equipment Note following
an Event of Loss (as defined in such Indenture) with respect to the Aircraft
which secured such Series B Equipment Note and after giving effect to the
distributions of any proceeds in respect of such Event of Loss applied under
such Indenture to the payment of each such Series B Equipment Note,
(iii) the excess, if any, of (x) the outstanding amount of principal
and interest as of the date of sale of each Series B Equipment Note previously
sold over (y) the purchase price received with respect to the sale of such
Series B Equipment Note (net of any applicable costs and expenses of sale)
and
(iv) the outstanding principal amount of any Series B Equipment Note with
respect to which a Deemed Disposition Event has occurred; provided,
however,
that if
more than one of the clauses (i), (ii), (iii) and (iv) is applicable to any
one
Series B Equipment Note, only the amount determined pursuant to the clause
that
first became applicable shall be counted with respect to such Series B Equipment
Note.
"Preferred
C Pool Balance" means,
as
of any date, the excess of (A) the Pool Balance of the Class C
Certificates as of the immediately preceding Distribution Date (or, if such
date
is on or before the first Distribution Date, the original aggregate face amount
of the Class C Certificates) (after giving effect to distributions made on
such date) over (B) the sum of (i) the outstanding principal amount of each
Series C Equipment Note that remains unpaid as of such date subsequent to the
disposition of the Collateral under the Indenture pursuant to which such Series
C Equipment Note was issued and after giving effect to any distributions of
the
proceeds of such disposition applied under such Indenture to the payment of
each
such Series C
Equipment
Note, (ii) the outstanding principal amount of each Series C Equipment Note
that remains unpaid as of such date subsequent to the scheduled date of
mandatory redemption of such Series C Equipment Note following an Event of
Loss
(as defined in such Indenture) with respect to the Aircraft which secured such
Series C Equipment Note and after giving effect to the distributions of any
proceeds in respect of such Event of Loss applied under such Indenture to the
payment of each such Series C Equipment Note, (iii) the excess, if
any, of (x) the outstanding amount of principal and interest as of the date
of sale of each Series C Equipment Note previously sold over (y) the
purchase price received with respect to the sale of such Series C Equipment
Note
(net of any applicable costs and expenses of sale) and (iv) the outstanding
principal amount of any Series C Equipment Note with respect to which a Deemed
Disposition Event has occurred; provided,
however,
that if
more than one of the clauses (i), (ii), (iii) and (iv) is applicable to any
one
Series C Equipment Note, only the amount determined pursuant to the clause
that
first became applicable shall be counted with respect to such Series C Equipment
Note.
"Premium"
means
any "Make-Whole Amount" as such term is defined in any Indenture.
"Proceeding"
means
any suit in equity, action at law or other judicial or administrative
proceeding.
"Provider
Incumbency Certificate"
has the
meaning specified in Section 2.5(c).
"Provider
Representatives"
has the
meaning specified in Section 2.5(c).
"PTC
Event of Default"
means,
with respect to each Trust Agreement, the failure to pay within 10 Business
Days
of the due date thereof: (i) the outstanding Pool Balance of the applicable
Class of Certificates on the Final Legal Distribution Date for such Class or
(ii) interest due on such Certificates on any Distribution Date (unless, in
the
case of the Class A Trust Agreement or the Class B Trust Agreement, the
Subordination Agent shall have made an Interest Drawing or a withdrawal from
the
Cash Collateral Account relating to a Liquidity Facility for such Class, with
respect thereto in an aggregate amount sufficient to pay such interest and
shall
have distributed such amount to the Trustee 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. The initial Rating Agencies will be Moody's and Standard &
Poor's.
"Ratings
Confirmation"
means,
with respect to any action proposed to be taken, a written confirmation from
each of the Rating Agencies 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.
"Refinancing
Certificateholders"
has the
meaning specified in Section 9.1(c).
"Refinancing
Certificates"
has the
meaning specified in Section 9.1(c).
"Refinancing
Equipment Notes"
has the
meaning specified in Section 9.1(c).
"Refinancing
Trust Agreement"
has the
meaning specified in Section 9.1(c).
"Refinancing
Trust"
has the
meaning specified in Section 9.1(c).
"Refinancing
Trustee"
has the
meaning specified in Section 9.1(c).
"Regular
Distribution Dates"
means
each April 19 and October 19, commencing on October 19, 2007; 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.
"Replacement
Liquidity Facility"
means,
for any Liquidity Facility, an irrevocable revolving credit agreement (or
agreements) in substantially the form of the replaced Liquidity Facility,
including reinstatement provisions, or in such other form (which may include
a
letter of credit) as shall permit the Rating Agencies to confirm in writing
their respective ratings then in effect for the related Certificates (before
downgrading of such ratings, if any, as a result of the downgrading of the
applicable Liquidity Provider), in a face amount (or in an aggregate face
amount) equal to the then Required Amount and issued by a Person (or Persons)
having unsecured short-term debt rating or issuer credit rating, as the case
may
be, issued by both Rating Agencies which are equal to or higher than the
Threshold Rating. Without limitation of the form that a Replacement Liquidity
Facility otherwise may have pursuant to the preceding sentence, a Replacement
Liquidity Facility for any Class of Certificates may have a stated expiration
date earlier than 15 days after the Final Legal Distribution Date of such Class
of Certificates so long as such Replacement Liquidity Facility provides for
a
Non-Extension Drawing as contemplated by Section 3.5(d) hereof.
"Replacement
Liquidity Provider"
means a
Person (or Persons) who issues a Replacement Liquidity Facility.
"Required
Amount"
means
with respect to each Liquidity Facility or Cash Collateral Account, 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.
"RZB"
has the
meaning assigned to such term in the recital of parties to this
Agreement.
"Scheduled
Payment"
means,
with respect to any Equipment Note, (i) any payment of principal or interest
on
such Equipment Note (other than an Overdue Scheduled Payment) due from the
obligor thereon, which payment represents the installment of principal 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 or (ii) any payment of interest on the
corresponding Class of Certificates with funds drawn under any Liquidity
Facility or withdrawn from any Cash Collateral Account, which payment represents
the payment of regularly scheduled interest accrued on the unpaid principal
amount of the related Equipment Note; 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.
"Section
2.4 Fraction"
means,
with respect to any Special Distribution Date, a fraction, the numerator of
which shall be the amount of principal of the applicable Series A Equipment
Notes and Series B Equipment Notes being redeemed, purchased or prepaid on
such
Special Distribution Date, and the denominator of which shall be the aggregate
unpaid principal amount of all Series A Equipment Notes and Series B Equipment
Notes outstanding as of such Special Distribution Date.
"Senior
Additional Certificateholder"
has the
meaning specified in Section 2.7(c).
"Senior
Additional Equipment Notes"
has the
meaning specified in Section 2.7(c).
"Series
A Equipment Notes"
means
the Series A Equipment Notes issued pursuant to any Indenture by Continental
and
authenticated by the Loan 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 any Indenture by Continental
and
authenticated by the Loan 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 or re-issued pursuant to any Indenture
by
Continental and authenticated by the Loan Trustee thereunder, and any such
Equipment Notes issued in exchange therefor or replacement thereof pursuant
to
the terms of such Indenture.
"60-Day
Period"
means
60-day period specified in Section 1110(a)(2)(A) of the Bankruptcy
Code.
"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, whether distributed pursuant to Section 2.4
or Section 3.2 hereof.
"Special
Payment"
means
any payment (other than a Scheduled Payment) in respect of, or any proceeds
of,
any Equipment Note or Collateral.
"Special
Payments Account"
means
the Eligible Deposit Account created pursuant to Section 2.2(a)(ii) as a
sub-account to the Collection Account.
"Standard
& Poor's"
means
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc.
"Stated
Amount"
with
respect to any Liquidity Facility, means the Maximum Commitment (as defined
in
such Liquidity Facility) of the applicable Liquidity Provider
thereunder.
"Stated
Expiration Date"
has the
meaning specified in Section 3.5(d).
"Stated
Interest Rate"
means
(i) with respect to the Class A Certificates, 5.983% per annum, (ii) with
respect to the Class B Certificates, 6.903% per annum and (iii) with respect
to
the Class C Certificates, 7.339% per annum.
"Subordination
Agent"
has the
meaning assigned to it in the preliminary statements to this
Agreement.
"Subordination
Agent Incumbency Certificate"
has the
meaning specified in Section 2.5(a).
"Subordination
Agent Representatives"
has the
meaning specified in Section 2.5(a).
"Substitute
Aircraft"
has the
meaning set forth in the Note Purchase Agreement.
"Successor
Trusts"
means,
collectively, Continental Airlines Pass Through Trust 2007-1A-S, Continental
Airlines Pass Through Trust 2007-1B-S and Continental Airlines Pass Through
Trust 2007-1C-S.
"Tax"
and
"Taxes"
mean
any and all taxes, fees, levies, duties, tariffs, imposts, and other charges
of
any kind (together with any and all interest, penalties, loss, damage,
liability, expense, additions to tax and additional amounts or costs incurred
or
imposed with respect thereto) imposed or otherwise assessed by the United States
of America or by any state, local or foreign government (or any subdivision
or
agency thereof) or other taxing authority, including, without limitation: taxes
or other charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth and similar charges; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, taxes on goods
and services, gains taxes, license, registration and documentation fees, customs
duties, tariffs, and similar charges.
"Termination
Notice"
with
respect to any Liquidity Facility has the meaning assigned to such term in
such
Liquidity Facility.
"Threshold
Rating"
means
the short-term unsecured debt rating of P-1 by Moody's and the short-term issuer
credit rating of A-1 by Standard & Poor's; provided that so long as RZB is
the Liquidity Provider for any Liquidity Facility, the Threshold Rating shall
apply to the Guarantor in the case of such Liquidity Facility.
"Transfer"
means,
with respect to any particular Trust, the transfers contemplated by the
Assignment and Assumption Agreement with respect to such Trust.
"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 all of the outstanding Equipment
Notes
(provided
that,
with respect to the period prior to the Delivery Period Expiry Date, the
aggregate principal balance of such Equipment Notes is in excess of
$450,000,000) or (z) the occurrence of a Continental Bankruptcy
Event.
"Trust"
means
any of the Class A Trust, the Class B Trust or the Class C Trust.
"Trust
Accounts"
has the
meaning specified in Section 2.2(a).
"Trust
Agreement"
means
any of the Class A Trust Agreement, the Class B Trust Agreement or the Class
C
Trust Agreement.
"Trust
Property"
with
respect to any Trust, has the meaning set forth in the Trust Agreement for
such
Trust.
"Trustee"
means
any of the Class A Trustee, the Class B Trustee or the Class C
Trustee.
"Trustee
Incumbency Certificate"
has the
meaning specified in Section 2.5(b).
"Trustee
Representatives"
has the
meaning specified in Section 2.5(b).
"Underwriters"
means
Xxxxxx Xxxxxxx & Co. Incorporated, Credit Suisse Securities (USA) LLC,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Citigroup Global Markets
Inc., UBS Securities LLC, Calyon Securities (USA) Inc. and X.X. Xxxxxx
Securities Inc.
"Underwriting
Agreement"
means
the Underwriting Agreement dated March 27, 2007 among the Underwriters, the
Depositary and Continental, 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.
"Withdrawal
Notice"
has the
meaning specified in Section 3.5(d).
"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.
"WTC"
has the
meaning assigned to such term in the recital of parties to this
Agreement.
TRUST
ACCOUNTS; CONTROLLING PARTY
SECTION
2.1. Agreement
to Terms of Subordination; Payments from Monies Received Only.
(a) Each
Trustee hereby acknowledges and agrees to the terms of subordination and
distribution set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes held by the Subordination Agent 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 or
its
nominee, as agent and trustee for such Trustee, to be held in trust by the
Subordination Agent solely for the purpose of facilitating the enforcement
of
the subordination and other provisions of this Agreement.
(b) Except
as
otherwise expressly provided in the next succeeding sentence of this Section
2.1, all payments to be made by the Subordination Agent hereunder shall be
made
only from amounts received by it that constitute Scheduled Payments, Special
Payments, payments under Section 8.1 of the Participation Agreements or payments
under Section 6 of the Note Purchase Agreement, and only to the extent that
the
Subordination Agent shall have received sufficient income or proceeds therefrom
to enable it to make such payments in accordance with the terms hereof. Each
of
the Trustees and the Subordination Agent hereby agrees and, as provided in
each
Trust Agreement, each Certificateholder, by its acceptance of a Certificate
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 to the relevant Deposits
and that none of the Trustees, Loan Trustees nor the Subordination Agent is
personally liable to any of them for any amounts payable or any liability under
this Agreement, any Trust Agreement, any Liquidity Facility 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 Loan 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 3.5(f) hereof. Upon such establishment and maintenance under Section
3.5(f) hereof, the Cash Collateral Accounts shall, together with the Collection
Account, constitute the "Trust
Accounts"
hereunder. Without limiting the foregoing, all monies credited to the Trust
Accounts shall be, and shall remain, the property of the relevant
Trust(s).
(b) Funds
on
deposit in the Trust Accounts shall be invested and reinvested by the
Subordination Agent in Eligible Investments selected by the Subordination Agent
if such investments are reasonably available and have maturities no later than
the earlier of (i) 90 days following the date of such investment and (ii) the
Business Day immediately preceding the Regular Distribution Date or the date
of
the related distribution pursuant to Section 2.4 hereof, as the case may be,
next following the date of such investment; provided,
however,
that
following the making of a Downgrade Drawing or a Non-Extension Drawing under
any
Liquidity Facility, the Subordination Agent shall invest and reinvest such
amounts in Eligible Investments at the direction of Continental (or, if and
to
the extent so specified to the Subordination Agent by Continental with respect
to any Liquidity Facility, the Liquidity Provider with respect to such Liquidity
Facility); provided further,
however,
that,
notwithstanding the foregoing proviso, following the making of an a
Non-Extension Drawing under any initial Liquidity Facility, the Subordination
Agent shall invest and reinvest the amounts in the Cash Collateral Account
with
respect to such Liquidity Facility in Eligible Investments pursuant to the
written instructions of the Liquidity Provider funding such Drawing;
provided further,
however,
that
upon the occurrence and during the continuation of a Triggering Event, the
Subordination Agent shall invest and reinvest such amounts in accordance with
the written instructions of the Controlling Party. Unless otherwise expressly
provided in this Agreement (including, without limitation, with respect to
Investment Earnings on amounts on deposit in the Cash Collateral Accounts
pursuant to Section 3.5(f) hereof), any Investment Earnings shall be deposited
in the Collection Account when received by the Subordination Agent and shall
be
applied by the Subordination Agent in the same manner as the other amounts
on
deposit in the Collection Account are to be applied and any losses shall be
charged against the principal amount invested, in each case net of the
Subordination Agent's reasonable fees and expenses in making such investments.
The Subordination Agent shall not be liable for any loss resulting from any
investment, reinvestment or liquidation required to be made under this Agreement
other than by reason of its willful misconduct or gross negligence. Eligible
Investments and any other investment required to be made hereunder shall be
held
to their maturities except that any such investment may be sold (without regard
to its maturity) by the Subordination Agent without instructions whenever such
sale is necessary to make a distribution required under this Agreement.
Uninvested funds held hereunder shall not earn or accrue interest.
(c) The
Subordination Agent shall possess all right, title and interest in all funds
on
deposit from time to time in the Trust Accounts and in all proceeds thereof
(including all income thereon, except as otherwise expressly provided in Section
3.3(b) with respect to Investment Earnings). The Trust Accounts shall be held
in
trust by the Subordination Agent under the sole dominion and control of the
Subordination Agent for the benefit of the Trustees, the Certificateholders
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, for which
a Ratings Confirmation for each Class of Certificates shall have been obtained)
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. So long as WTC is an
Eligible Institution, the Trust Accounts shall be maintained with it as Eligible
Deposit Accounts.
SECTION
2.3. Deposits
to the Collection Account and Special Payments Account.
(a) The
Subordination Agent shall, upon receipt thereof, deposit in the Collection
Account all Scheduled Payments received by it (other than any Scheduled Payment
which by the express terms hereof is to be deposited to a Cash Collateral
Account).
(b) The
Subordination Agent shall, on each date when one or more Special Payments are
made to the Subordination Agent as holder of the Equipment Notes, deposit in
the
Special Payments Account the aggregate amount of such Special
Payments.
SECTION
2.4. Distributions
of Special Payments.
(a)
Notice
of Special Payment.
Except
as provided in Section 2.4(c) below, upon receipt by the Subordination Agent,
as
registered holder of the Equipment Notes, of any notice of a Special Payment
(or, in the absence of any such notice, upon receipt by the Subordination Agent
of a Special Payment), the Subordination Agent shall promptly give notice
thereof to each Trustee and the Liquidity Providers. The Subordination Agent
shall promptly calculate the amount of the redemption or purchase of Equipment
Notes, the amount of any Overdue Scheduled Payment or the proceeds of Equipment
Notes or Collateral, 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 set the distribution date for such Special Payment
(a
"Special
Distribution Date"),
which
shall be the Business Day which immediately follows the later to occur of (x)
the 15th day after the date of such Written Notice or (y) the date the
Subordination Agent has received or expects to receive such Special Payment.
Amounts on deposit in the Special Payments Account shall be distributed in
accordance with Sections 2.4(b) and 2.4(c) and Article III hereof, as
applicable.
For
the
purposes of the application of any Equipment Note Special Payment distributed
on
a Special Distribution Date in accordance with Section 3.2 hereof, so long
as no
Indenture Default shall have occurred and be continuing under any Indenture:
(i) the
amount of accrued and unpaid Liquidity Expenses that are not yet due that are
payable pursuant to clause "second" thereof shall be multiplied by the Section
2.4 Fraction;
(ii) clause
"third" thereof shall be deemed to read as follows: "third,
such
amount as shall be required to pay accrued and unpaid interest then in arrears
on all Liquidity Obligations (at the rate, or in the amount, provided in the
applicable Liquidity Facility) plus an amount equal to the amount of accrued
and
unpaid interest on the Liquidity Obligations not in arrears multiplied by the
Section 2.4 Fraction, shall be distributed to the Liquidity Providers, pro
rata
on the basis of the amounts owed to each Liquidity Provider";
(iii) clause
"seventh" thereof shall be deemed to read as follows: "seventh,
such
amount as shall be required to pay accrued, due and unpaid interest at the
Stated Interest Rate on the outstanding Pool Balance of the Class A Certificates
together with (without duplication) accrued and unpaid interest at the Stated
Interest Rate on the outstanding principal amount of the Series A Equipment
Notes held in the Class A Trust being redeemed, purchased or prepaid, in each
case excluding interest, if any, payable with respect to the Deposits relating
to the Class A Trust";
(iv) clause
"eighth" thereof shall be deemed to read as follows: "eighth,
such
amount as shall be required to pay any accrued, due and unpaid Class B Adjusted
Interest to the holders of the Class B Certificates (excluding interest, if
any,
payable with respect to the Deposits relating to the Class B
Trust)";
(v) clause
"ninth" thereof shall be deemed to read as follows: "ninth,
such
amount as shall be required to pay any accrued, due and unpaid Class C Adjusted
Interest to the holders of the Class C Certificates (excluding interest, if
any,
payable with respect to the Deposits relating to the Class C
Trust)";
(vi) clause
"eleventh" thereof shall be deemed to read as follows: "eleventh,
such
amount as shall be required to pay in full accrued, due and unpaid interest
at
the Stated Interest Rate on the outstanding Pool Balance of the Class B
Certificates which was not previously paid pursuant to clause "eighth" above
to
the holders of the Class B Certificates together with (without duplication)
accrued and unpaid interest at the Stated Interest Rate on the outstanding
principal amount of the Series B Equipment Notes held in the Class B Trust
and
being redeemed, purchased or prepaid, in each case excluding interest, if any,
payable with respect to the Deposits relating to the Class B Trust;"
and
(vii) clause
"thirteenth" thereof shall be deemed to read as follows: "thirteenth,
such
amount as shall be required to pay in full accrued, due and unpaid interest
at
the Stated Interest Rate on the outstanding Pool Balance of the Class C
Certificates which was not previously paid pursuant to clause "ninth" above
to
the holders of the Class C Certificates together with (without duplication)
accrued and unpaid interest at the Stated Interest Rate on the outstanding
principal amount of the Series C Equipment Notes held in the Class C Trust
and
being redeemed, purchased or prepaid, in each case excluding interest, if any,
payable with respect to the Deposits relating to the Class C
Trust;".
(b) Investment
of Amounts in Special Payments Account.
Any
amounts on deposit in the Special Payments Account prior to the distribution
thereof pursuant to Section 2.4 or 3.2 shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be distributed
in
accordance with Article III hereof.
(c) Certain
Payments.
Except
for amounts constituting Liquidity Obligations which shall be distributed as
provided in Section 3.2, the Subordination Agent will distribute promptly upon
receipt thereof (i) any indemnity payment or expense reimbursement received
by
it from Continental in respect of any Trustee, any Liquidity Provider, the
Guarantor, any Paying Agent, any Depositary or any Escrow Agent (collectively,
the "Payees")
and
(ii) any
compensation
received by it from Continental under any Operative Agreement in respect of
any
Payee, directly to the Payee entitled thereto.
SECTION
2.5. Designated
Representatives.
(a) With
the delivery of this Agreement, the Subordination Agent shall furnish to each
Liquidity Provider 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 any Trustee's request
(which request shall not be made more than one time in any 12-month period),
a
certificate (a "Subordination
Agent Incumbency Certificate")
of a
Responsible Officer of the Subordination Agent certifying as to the incumbency
and specimen signatures of the officers of the Subordination Agent and the
attorney-in-fact and agents of the Subordination Agent (the "Subordination
Agent Representatives")
authorized to give Written Notices on behalf of the Subordination Agent
hereunder. Until each Liquidity Provider and each Trustee receives a subsequent
Subordination Agent Incumbency Certificate, it shall be entitled to rely on
the
last Subordination Agent Incumbency Certificate delivered to it
hereunder.
(b) With
the
delivery of this Agreement, each Trustee shall furnish to the Subordination
Agent, and from time to time thereafter may furnish to the Subordination Agent,
at such Trustee's discretion, or upon the Subordination Agent's request (which
request shall not be made more than one time in any 12-month period), a
certificate (a "Trustee
Incumbency Certificate")
of a
Responsible Officer of such Trustee certifying as to the incumbency and specimen
signatures of the officers of such Trustee and the attorney-in-fact and agents
of such Trustee (the "Trustee
Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder. Until
the Subordination Agent receives a subsequent Trustee Incumbency Certificate,
it
shall be entitled to rely on the last Trustee Incumbency Certificate delivered
to it hereunder.
(c) With
the
delivery of this Agreement, each Liquidity Provider 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 (each, a "Provider
Incumbency Certificate")
of any
Responsible Officer 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 (in each case, the
"Provider
Representatives"
and,
together with the Subordination Agent Representatives and the Trustee
Representatives, the "Designated
Representatives")
authorized to give Written Notices on behalf of such Liquidity Provider
hereunder. Until the Subordination Agent receives a subsequent Provider
Incumbency Certificate, it shall be entitled to rely on the last Provider
Incumbency Certificate delivered to it hereunder by the relevant Liquidity
Provider.
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 Loan Trustee thereunder will
be
directed in taking, or refraining from taking, any action under such Indenture
or with respect to the Equipment Notes issued thereunder (i) 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 (in the
case of each such Trustee, with respect to the Equipment Notes issued under
such
Indenture and held as Trust Property of such Trust) constituting, in the
aggregate, directions with respect to at least a majority of outstanding
principal amount of Equipment Notes except as provided in Section 9.1(b)),
and
(ii) after the occurrence and during the continuance of an Indenture Default
thereunder, in taking, or refraining from taking, any action under such
Indenture or with respect to such Equipment Notes, including exercising remedies
thereunder (including Accelerating the Equipment Notes issued thereunder or
foreclosing the Lien on the Aircraft securing such Equipment Notes), by the
Controlling Party (except as otherwise provided in Section 2.6(d)).
Notwithstanding the foregoing, in taking any action or giving any direction
to
the applicable Loan Trustee pursuant to Section 4.08 of any Indenture, the
Subordination Agent shall be directed by the Controlling Party, notwithstanding
that no Indenture Default under such Indenture shall have occurred and be
continuing.
(b) The
"Controlling Party" shall be (x) the Class A Trustee, (y) upon payment of Final
Distributions to the holders of Class A Certificates, the Class B Trustee
and (z) upon payment of Final Distributions to the holders of the Class B
Certificates, the Class C Trustee. For purposes of giving effect to the
provisions of Section 2.6(a) and this Section 2.6(b), the Trustees (other
than the Controlling Party) irrevocably agree (and the Certificateholders (other
than the Certificateholders represented by the Controlling Party) shall be
deemed to agree by virtue of their purchase of Certificates) that the
Subordination Agent, as record holder of the Equipment Notes, shall exercise
its
voting rights in respect of the Equipment Notes so held by the Subordination
Agent as directed by the Controlling Party and any vote so exercised shall
be
binding upon the Trustees and all Certificateholders.
The
Subordination Agent shall give Written Notice to all of the other parties to
this Agreement promptly upon a change in the identity of the Controlling Party.
Each of the parties hereto agrees that it shall not exercise any of the rights
of the Controlling Party at such time as it is not the Controlling Party
hereunder; provided,
however,
that
nothing herein contained shall prevent or prohibit any Non-Controlling Party
from exercising such rights as shall be specifically granted to such
Non-Controlling Party hereunder and under the other Operative
Agreements.
(c) Notwithstanding
the foregoing provisions of clauses (a) and (b) above, at any time after 18
months from the earliest to occur of (i) the date on which the entire Required
Amount as of such date under any Liquidity Facility shall have been drawn
(excluding a Downgrade Drawing or a Non-Extension Drawing but including a Final
Drawing or a Downgrade Drawing or a Non-Extension Drawing that has been
converted to a Final Drawing under such Liquidity Facility) and remain
unreimbursed, (ii) the date on which the portion of any Downgrade Drawing or
Non-Extension Drawing equal to the Required Amount as of such date under any
Liquidity Facility shall have become and remain "Applied Downgrade Advances"
or
"Applied Non-Extension Advances", as the case may be, under and as defined
in
such Liquidity Facility and (iii) the date on which all Equipment Notes under
all Indentures shall have been Accelerated (provided
that (x)
with respect to the period prior to the Delivery Period Expiry Date, such
Equipment Notes have an aggregate outstanding principal balance of in excess
of
$450,000,000, and (y) in the event of a bankruptcy proceeding under the
Bankruptcy Code in which Continental is a debtor, any amounts payable in respect
of Equipment Notes which have
become
immediately due and payable by declaration or otherwise shall not be considered
Accelerated for purposes of this sub-clause (iii) until the expiration of the
60-day period under Section 1110(a)(2)(A) of the Bankruptcy Code or such longer
period as may apply under Section 1110(a)(2)(B) or Section 1110(b) of the
Bankruptcy Code), the Liquidity Provider with the highest outstanding aggregate
amount of Liquidity Obligations owed to it (so long as such Liquidity Provider
has not defaulted in its obligation to make any Drawing under any Liquidity
Facility) shall have the right to elect, by Written Notice to the Subordination
Agent and each of the Trustees, to become the Controlling Party hereunder at
any
time from and including the last day of such 18-month period.
(d) Notwithstanding
the foregoing provisions of clauses (a) through (c) above, if any holders of
the
Class B Certificates, Class C Certificates or Additional Certificates exercise
their right under Section 2.7 hereof to purchase Equipment Notes issued under
any Indenture, the holders of the majority in aggregate unpaid principal amount
of all the Equipment Notes issued under such Indenture, instead of the
Controlling Party, shall be entitled to direct the relevant Indenture Trustee
in
taking, or refraining from taking, any action under such Indenture or with
respect to such Equipment Notes, including exercising remedies thereunder
(including Accelerating the Equipment Notes issued thereunder or foreclosing
the
Lien on the Aircraft securing such Equipment Notes) (it being understood and
agreed that any Equipment Notes that continue to be held by the Subordination
Agent shall be voted in accordance with clause (a) above).
(e) The
exercise of remedies by the Controlling Party under this Agreement shall be
expressly limited by Sections 4.1(a)(ii) and 4.1(a)(iii) hereof.
(f) The
Controlling Party shall not be entitled to require or obligate any
Non-Controlling Party to provide funds necessary to exercise any right or remedy
hereunder.
SECTION
2.7. Equipment
Note Buy-Out Rights.
(a) If an Equipment Note Buy-Out Event has occurred and is
continuing, then so long as, with respect to the Indentures referred to below
in
this clause (a), no Class C Certificateholder or Additional Certificateholder
has elected to exercise its right to purchase Equipment Notes issued under
such
Indentures pursuant to this Section 2.7, any Class B Certificateholder may,
upon
15 days’ prior written notice to the Subordination Agent, each Trustee (and each
such Trustee shall promptly provide such notice to all Certificateholders of
its
Trust) and each applicable Indenture Trustee given on or before the date which
is six months after the occurrence of the applicable Equipment Note Buy-Out
Event, purchase on the third Business Day next following the expiry of such
15-day notice period all, but not less than all, of the Series A Equipment
Notes
issued under any one or more of the Indentures for a purchase price equal to
the
sum of the aggregate Note Target Price for such Series A Equipment Notes plus
an
amount equal to the Excess Liquidity Obligations in respect of such Indentures.
If prior to the end of such 15-day period, any other holder of the Class B
Certificates notifies the Subordination Agent, each Trustee (and each such
Trustee shall promptly notify all Certificateholders of its Trust, including
the
purchasing Class B Certificateholder) and each applicable Indenture Trustee
that
it wishes to participate in such purchase, then such other Certificateholder
may
join with the purchasing Certificateholder to purchase such Series A Equipment
Notes pro rata based on the interest in the Class B Trust held
by
each
such Certificateholder compared to such interests held by all such participating
Certificateholders.
(b) If
an
Equipment Note Buy-Out Event has occurred and is continuing, then, regardless
of
whether any Class B Certificateholder has elected to exercise its right to
purchase Equipment Notes under this Section 2.7 (and so long as, with respect
to
the Indentures referred to below in this clause (b), no Additional
Certificateholder has elected to exercise its right to purchase Equipment Notes
issued under such Indentures pursuant to this Section 2.7), any Class C
Certificateholder may, upon
15 days’ prior written notice to the Subordination Agent, each Trustee (and each
such Trustee shall promptly provide such notice to all Certificateholders of
its
Trust) and each applicable Indenture Trustee given on or before the date which
is six months after the occurrence of the applicable Equipment Note Buy-Out
Event, purchase on the third Business Day next following the expiry of such
15-day notice period all, but not less than all, of the Series A Equipment
Notes
and the Series B Equipment Notes issued under any one or more Indentures for
a
purchase price equal to the sum of the aggregate Note Target Price for such
Series A Equipment Notes and Series B Equipment Notes plus an amount equal
to
Excess Liquidity Obligations in respect of such Indentures. If prior to the
end
of such 15-day period, any other holder of the Class C Certificates notifies
the
Subordination Agent, each Trustee (and each such Trustee shall promptly notify
all Certificateholders of the applicable Trust, including the purchasing Class
C
Certificateholder) and each applicable Indenture Trustee that it wishes to
participate in such purchase, then such other Certificateholder may join with
the purchasing Certificateholder to purchase such Series A Equipment Notes
and
Series B Equipment Notes pro rata based on the interest in the Class C Trust
held by each such Certificateholder compared to such interests held by all
such
participating Certificateholders.
(c) If
an
Equipment Note Buy-Out Event has occurred and is continuing, then regardless
of
whether any Class B Certificateholder or Class C Certificateholder (or, if
applicable, any Senior Additional Certificateholder (as defined below)) has
elected to exercise its right to purchase Equipment Notes under this Section
2.7
(and so long as, with respect to the Indentures referred to in this clause
(c),
no Junior Additional Certificateholder (as defined below) has elected to
exercise its right to purchase Equipment Notes issued under such Indentures
pursuant to this Section 2.7), any Additional Certificateholder may,
upon
15 days’ prior written notice to the Subordination Agent, each Trustee (and each
such Trustee shall promptly provide such notice to all Certificateholders of
the
applicable Trust) and each applicable Indenture Trustee given on or before
the
date which is six months after the occurrence of the applicable Equipment Note
Buy-Out Event, purchase on the third Business Day next following the expiry
of
such 15-day notice period all, but not less than all, of the Series A Equipment
Notes, the Series B Equipment Notes and Series C Equipment Notes (and, if
applicable, any Senior Additional Equipment Notes (as defined below)) issued
under any one or more Indentures for a purchase price equal to the sum of the
aggregate Note Target Price for such Series A Equipment Notes, Series B
Equipment Notes and Series C Equipment Notes (and, if applicable, any Senior
Additional Equipment Notes) plus an amount equal to the Excess Liquidity
Obligations in respect of such Indentures. If prior to the end of such 15-day
period, any other holder of such class of Additional Certificates notifies
the
Subordination Agent, each Trustee (and each such Trustee shall promptly notify
all Certificateholders of the applicable Trust, including the purchasing
Additional Certificateholder) and each applicable Indenture Trustee that it
wishes to participate in such purchase, then such other Certificateholder may
join with the purchasing
Certificateholder
to purchase such Series A Equipment Notes, Series B Equipment Notes and Series
C
Equipment Notes (and, if applicable, any Senior Additional Equipment Notes)
pro
rata based on the interest in the applicable Trust held by each such
Certificateholder compared to such interests held by all such participating
Certificateholders.
"Junior
Additional Certificateholder"
means, with respect to any Additional Certificateholder exercising its right
to
purchase Equipment Notes under this Section 2.7(c), any holder of any class
(or
classes) of Additional Certificates that rank junior, in priority of payment
under this Agreement, to the class of Additional Certificates held by such
Additional Certificateholder.
"Senior
Additional Certificateholder"
means, with respect to any Additional Certificateholder exercising its right
to
purchase Equipment Notes under this Section 2.7(c), any holder of any class
(or
classes) of Additional Certificates that rank senior, in priority of payment
under this Agreement, to the class of Additional Certificates held by such
Additional Certificateholder.
"Senior
Additional Equipment Notes"
means, with respect to any Additional Certificateholder exercising its right,
under this Section 2.7(c), to purchase Equipment Notes issued under any
Indenture, any series of Additional Equipment Notes that rank senior, in
priority of payment under such Indenture, to the series of Additional Equipment
Notes corresponding to the class of Additional Certificates held by such
Additional Certificateholder.
(d) On
the
date of any purchase by the Class B Certificateholders, the Class C
Certificateholders or any Additional Certificateholders, as applicable, of
Equipment Notes issued under any Indenture, the purchasing Certificateholders
shall pay to the Subordination Agent in immediately available funds the
aggregate purchase price of all of the Equipment Notes being purchased as
specified in this Section 2.7. The proceeds received by the Subordination Agent
pursuant to this clause (d) shall be promptly applied by the Subordination
Agent
in accordance with Section 3.2 hereof.
(e) From
and after the purchase of any Equipment Notes pursuant to this Section 2.7,
any proceeds or payments made with respect to such purchased Equipment Notes
shall be paid directly to the holders of such Equipment Notes in accordance
with
the related Indentures pro rata and shall not be subject to application under
Article III hereof. Any proceeds or payments made with respect to any
Equipment Notes under the related Indenture not purchased pursuant to this
Section 2.7 shall continue to be paid to the Subordination Agent and shall
be
applied in accordance with Article III hereof.
(f) Notwithstanding
the purchase of any Equipment Notes under any Indenture pursuant to this Section
2.7, the provisions of the Granting Clause, Section 2.06, Article III and
Section 11.01 and the definitions of “Related Equipment Note”, “Related
Indenture”, “Related Mortgage”, “Related Note Holder”, “Related Secured
Obligations”, “Related Series A Equipment Note”, “Related Series B Equipment
Note”, “Related Series C Equipment Note”, “Related Additional Series Equipment
Note” and “Indenture Indemnitee” (the "Cross-Collateralization
Provisions")
of such Indenture shall remain unchanged and in full force and effect, and
may
not be amended, modified or otherwise waived in any manner without
the
prior
written consent of the Subordination Agent acting on the instructions of each
Trustee. As a condition precedent to any purchase of Equipment Notes under
this
Section 2.7, each purchasing Certificateholder shall confirm in writing to
the
Subordination Agent that such purchasing Certificateholder acknowledges,
consents and agrees to the provisions of this Section 2.7(f) and shall not
take
any action in contravention thereof or otherwise amend, modify or waive the
Cross-Collateralization Provisions of such Indenture, and further acknowledges,
consents and agrees to the restrictions set forth in Sections 4.1(a)(ii) and
4.1(a)(iii) hereof.
(g) In
the event that Continental or any of its Affiliates is an owner of a Class
B
Certificate or Class C Certificate (or an Additional Certificate), it shall
not
have any right, as a Class B Certificateholder or Class C Certificateholder
(or
an Additional Certificateholder), as applicable, to purchase any Equipment
Notes
under this Section 2.7.
(h) In
connection with the purchase of Equipment Notes pursuant to this Section 2.7,
upon the payment by any Certificateholder of the applicable Excess Liquidity
Obligations and that portion of Note Target Price constituting enforcement
costs
incurred by the Subordination Agent, such Certificateholder, as the holder
of
such Equipment Notes, shall be subrogated to the right of the Subordination
Agent to receive payment of such amounts in respect of such Equipment Notes
under the applicable Indenture.
(i) The
right of any Certificateholder to purchase Equipment Notes pursuant to this
Section 2.7 shall be subject to such purchase being exempt from, or not subject
to, the registration requirements of the Securities Act of 1933, as amended,
and
in compliance with other applicable state or foreign securities laws. Each
purchaser shall be required to provide to the Subordination Agent reasonably
satisfactory evidence of compliance with such laws.
(j) Any
Taxes incurred by the applicable Loan Trustee, the Subordination Agent or the
applicable Trustee in connection with the sale of any Equipment Note pursuant
to
the exercise by one or more Certificateholders of the right to purchase
Equipment Notes pursuant to this Section 2.7 shall be paid by such purchasing
Certificateholders, on a pro rata basis.
RECEIPT,
DISTRIBUTION AND APPLICATION
OF
AMOUNTS RECEIVED
SECTION
3.1. Written
Notice of Distribution.
(a) No
later than 3:00 P.M. (New York City time) on the Business Day immediately
preceding each Distribution Date, each of the following Persons shall deliver
to
the Subordination Agent a Written Notice setting forth the following information
as at the close of business on such Business Day:
(i) With
respect to the Class A Certificates, the Class A Trustee shall separately set
forth the amounts to be paid in accordance with clause "first" (to reimburse
payments made by such Trustee or the Class A Certificateholders, as the case
may
be, pursuant to subclause (ii) or (iv) of clause "first"), subclauses (ii)
and
(iii) of clause "sixth" of Section 3.2 hereof and clauses "seventh" and
"tenth" of Section 3.2 hereof;
(ii) With
respect to the Class B Certificates, the Class B Trustee shall separately set
forth the amounts to be paid in accordance with clause "first" (to reimburse
payments made by such Trustee or the Class B Certificateholders, as the case
may
be, pursuant to subclause (ii) or (iv) of clause "first"), subclauses (ii)
and
(iii) of clause "sixth" of Section 3.2 hereof and clauses "eighth",
"eleventh" and "twelfth" of Section 3.2 hereof;
(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 "first" (to reimburse
payments made by such Trustee or the Class C Certificateholders, as the case
may
be, pursuant to subclause (ii) or (iii) of clause "first"), subclauses (ii)
and (iii) of clause "sixth" of Section 3.2 hereof and clauses "ninth",
"thirteenth" and "fourteenth" of Section 3.2 hereof;
(iv) With
respect to each Liquidity Facility, the Liquidity Provider thereunder shall
separately set forth the amounts to be paid to it in accordance with subclauses
(iii) and (iv) of clause "first" of Section 3.2 hereof, clause "second" of
Section 3.2 hereof, clause "third" of Section 3.2 hereof, clause "fourth" of
Section 3.2 hereof and clause "fifth" of Section 3.2 hereof; and
(v) Each
Trustee shall set forth the amounts to be paid in accordance with clause "sixth"
of Section 3.2 hereof.
(b) 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 3.2 hereof, as applicable, and, in the case of
a
Liquidity Provider, its commitment or obligations 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.
(c) 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, any Liquidity Provider pursuant to paragraphs (a) and (b) 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.
(d) Any
Written Notice delivered by a Trustee, a Liquidity Provider or the Subordination
Agent, as applicable, pursuant to Section 3.1(b) hereof, if made prior to 10:00
A.M. (New York City time) on any Business Day, shall be effective on the date
delivered (or if delivered later on a Business Day or if delivered on a day
which is not a Business Day shall be effective as of the next Business Day).
Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; provided,
however,
that
any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.
(e) In
the
event the Subordination Agent shall not receive from any Person any information
set forth in paragraph (a) above which is required to enable the Subordination
Agent
to
make a distribution to such Person pursuant to Section 3.2 hereof, the
Subordination Agent shall request such information and, failing to receive
any
such information, the Subordination Agent shall not make such distribution(s)
to
such Person. In such event, the Subordination Agent shall make distributions
pursuant to clauses "first" through "fourteenth" of Section 3.2 to the extent
it
shall have sufficient information to enable it to make such distributions,
and
shall continue to hold any funds remaining, after making such distributions,
until the Subordination Agent shall receive all necessary information to enable
it to distribute any funds so withheld.
(f) On
such
dates (but not more frequently than monthly) as any Liquidity Provider or any
Trustee shall request, but in any event automatically at the end of each
calendar quarter, the Subordination Agent shall send to such party a written
statement reflecting all amounts on deposit with the Subordination Agent
pursuant to Section 3.1(e) 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.
SECTION
3.2. Distribution
of Amounts on Deposit in the Collection Account.
Except
as otherwise provided in Sections 2.4, 3.1(e), 3.3, 3.5(b) and 3.5(k), amounts
on deposit in the Collection Account (including amounts on deposit in the
Special Payments Account) shall be promptly distributed on each Regular
Distribution Date (or, in the case of any amount described in Section 2.4(a),
on
the Special Distribution Date thereof) in the following order of priority and
in
accordance with the information provided to the Subordination Agent pursuant
to
Section 3.1(a) hereof:
first,
such
amount as shall be required to reimburse (i) the Subordination Agent for
any reasonable out-of-pocket costs and expenses actually incurred by it (to
the
extent not previously reimbursed) or reasonably expected to be incurred by
it
for the period ending on the next succeeding Regular Distribution Date (which
shall not exceed $150,000 unless approved in writing by the Controlling Party)
in the protection of, or the realization of the value of, the Equipment Notes
or
any Collateral, shall be applied by the Subordination Agent in reimbursement
of
such costs and expenses, (ii) any Trustee for any amounts of the nature
described in clause (i) above actually incurred by it under the applicable
Trust Agreement (to the extent not previously reimbursed), shall be distributed
to such Trustee, (iii) any Liquidity Provider for any amounts of the nature
described in clause (i) above actually incurred by it (to the extent not
previously reimbursed), shall be distributed to such Liquidity Provider, and
(iv) any Liquidity Provider or any Certificateholder for payments, if any,
made by it to the Subordination Agent or any Trustee in respect of amounts
described in clause (i) above actually incurred by it (to the extent not
previously reimbursed) (collectively, the "Administration
Expenses"),
shall
be distributed to such Liquidity Provider or the applicable Trustee for the
account of such Certificateholder, in each such case, pro rata on the basis
of
all amounts described in clauses (i) through
(iv) above;
second,
such
amount as shall be required to pay all accrued and unpaid Liquidity Expenses
owed to each Liquidity Provider shall be distributed to the Liquidity Providers
pro rata on the basis of the amount of Liquidity Expenses owed to each Liquidity
Provider;
third,
such
amount as shall be required to pay the aggregate amount of accrued and unpaid
interest on all Liquidity Obligations (at the rate, or in the amount, provided
in the applicable Liquidity Facility), pro rata on the basis of the amounts
owed
to each Liquidity Provider;
fourth,
such
amount as shall be required (A) if any Cash Collateral Account had been
previously funded as provided in Section 3.5(f), unless (i) a Performing Note
Deficiency exists and a Liquidity Event of Default shall have occurred and
be
continuing with respect to the relevant Liquidity Facility or (ii) a Final
Drawing shall have occurred with respect to such Liquidity Facility, to fund
such Cash Collateral Account up to its Required Amount shall be deposited in
such Cash Collateral Account, (B) if any Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under such Liquidity Facility have reduced the Available
Amount thereunder to zero, unless (i) a Performing Note Deficiency exists and
a
Liquidity Event of Default shall have occurred and be continuing with respect
to
the relevant Liquidity Facility or (ii) a Final Drawing shall have occurred
with
respect to such Liquidity Facility, to deposit into the related Cash Collateral
Account an amount equal to such Cash Collateral Account's Required Amount shall
be deposited in such Cash Collateral Account, and (C) if, with respect to any
particular Liquidity Facility, neither subclause (A) nor subclause (B) of this
clause "fourth" is applicable, to pay or reimburse the Liquidity Provider in
respect of such Liquidity Facility in an amount equal to the amount of all
Liquidity Obligations then due under such Liquidity Facility (other than amounts
payable pursuant to clause "second" or "third" of this Section 3.2), pro rata
on
the basis of the amounts of all such deficiencies and/or unreimbursed Liquidity
Obligations payable to each Liquidity Provider;
fifth,
if,
with respect to any particular Liquidity Facility, any amounts are to be
distributed pursuant to either subclause (A) or (B) of clause "fourth" above,
then the Liquidity Provider with respect to such Liquidity Facility shall be
paid the excess of (x) the aggregate outstanding amount of unreimbursed
Advances (whether or not then due) under such Liquidity Facility over
(y) the Required Amount for the relevant Class, pro rata on the basis of
such amounts in respect of each Liquidity Provider;
sixth,
such
amount as shall be required to reimburse or pay (i) the Subordination Agent
for any Tax (other than Taxes imposed on compensation paid hereunder), expense,
fee, charge or other loss incurred by or any other amount payable to the
Subordination Agent in connection with the transactions contemplated hereby
(to
the extent not previously reimbursed), shall be applied by the Subordination
Agent in reimbursement of such amount, (ii) each Trustee for any Tax (other
than Taxes imposed on compensation paid under the applicable Trust Agreement),
expense, fee, charge, loss or any other amount payable to such Trustee under
the
applicable Trust Agreements (to the extent not previously reimbursed), shall
be
distributed to such Trustee, and (iii) each
Certificateholder
for payments, if any, made by it pursuant to Section 5.2 hereof in respect
of amounts described in clause (i) above, shall be distributed to the
applicable Trustee for the account of such Certificateholder, in each such
case,
pro rata on the basis of all amounts described in clauses (i) through
(iii) above;
seventh,
such
amount as shall be required to pay in full accrued and unpaid interest at the
Stated Interest Rate on Pool Balance of the Class A Certificates (excluding
interest, if any, payable with respect to the Deposits relating to the Class
A
Trust) shall be distributed to the Class A Trustee;
eighth,
such
amount as shall be required to pay unpaid Class B Adjusted Interest to the
holders of the Class B Certificates (excluding interest, if any, payable
with respect to the Deposits relating to the Class B Trust);
ninth,
such
amount as shall be required to pay unpaid Class C Adjusted Interest to the
holders of the Class C Certificates (excluding interest, if any, payable
with respect to the Deposits relating to the Class C Trust);
tenth,
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;
eleventh,
such
amount as shall be required to pay in full accrued and unpaid interest at the
Stated Interest Rate on the Pool Balance of the Class B Certificates which
was not previously paid pursuant to clause "eighth" above to the holders of
the Class B Certificates (excluding interest, if any, payable with respect
to the Deposits related to the Class B Trust);
twelfth,
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;
thirteenth,
such
amount as shall be required to pay in full accrued and unpaid interest at the
Stated Interest Rate on the Pool Balance of the Class C Certificates which
was not previously paid pursuant to clause "ninth" above to the holders of
the Class C Certificates (excluding interest, if any, payable with respect
to the Deposits related to the Class C Trust);
fourteenth,
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; and
fifteenth,
the
balance, if any, of any such amount remaining thereafter shall be held in the
Collection Account for later distribution in accordance with this Article
III.
With
respect to clauses "first" and "sixth" above, no amounts shall be reimbursable
to the Subordination Agent, any Trustee, any Liquidity Provider or any
Certificateholder for any payments made by any such Person in connection with
any Equipment
Note
that
is no longer held by the Subordination Agent (to the extent that such payments
relate to periods after such Equipment Note ceases to be held by the
Subordination Agent).
SECTION
3.3. Other
Payments.
(a) Any payments received by the Subordination Agent for which no
provision as to the application thereof is made in this Agreement shall be
distributed by the Subordination Agent (i) in the order of priority specified
in
Section 3.2 hereof and (ii) to the extent received or realized at any time
after
the Final Distributions for each Class of Certificates have been made, in the
manner provided in clause "first" of Section 3.2 hereof.
(b) Notwithstanding
the priority of payments specified in Section 3.2, in the event any Investment
Earnings on amounts on deposit in any Cash Collateral Account resulting from
an
Unapplied Provider Advance are deposited in the Collection Account or the
Special Payments Account, such Investment Earnings shall be used to pay interest
payable in respect of such Unapplied Provider Advance to the extent of such
Investment Earnings.
(c) If
the
Subordination Agent receives any Scheduled Payment after the Scheduled Payment
Date relating thereto, but prior to such payment becoming an Overdue Scheduled
Payment, then the Subordination Agent shall deposit such Scheduled Payment
in
the Collection Account and promptly distribute such Scheduled Payment in
accordance with the priority of distributions set forth in Section 3.2 hereof;
provided
that,
for the purposes of this Section 3.3(c) only, each reference in clause "tenth",
"twelfth" or "fourteenth" of Section 3.2 to "Distribution Date" shall be deemed
to refer to such Scheduled Payment Date.
SECTION
3.4. 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 at the time of such transfer. Any amounts distributed hereunder by
the
Subordination Agent to any Trustee which shall not be the same institution
as
the Subordination Agent shall be paid to such Trustee by wire transfer funds
at
the address such Trustee shall provide to the Subordination Agent.
SECTION
3.5. Liquidity
Facilities.
(a)
Interest
Drawings.
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 or the Class B Certificates (at the Stated Interest
Rate for such Class of Certificates) (other than any amount of interest which
was due and payable on the Class A Certificates or the Class B Certificates
on
such Distribution Date but which remains unpaid due to the failure of the
Depositary to pay any amount of accrued interest on the Deposits on such
Distribution Date), then, prior to 12:30 p.m. (New York City time) on such
Distribution Date, (i) the Subordination Agent shall request a drawing
(each such drawing, an "Interest
Drawing")
under
the Liquidity Facility with respect to such Class of Certificates in an amount
equal to the lesser of (x) an amount sufficient to pay the amount of such
accrued interest (at the applicable Stated Interest Rate for such Class of
Certificates) and (y) 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 or the Class A Trustee, shall be
promptly distributed to the Class A Trustee and (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 or the Class B Trustee, shall be promptly distributed to
the
Class B Trustee.
(c) Downgrade
Drawings.
(i)
With respect to each Liquidity Facility, a Downgrade Drawing shall be requested
by the Subordination Agent thereunder as provided in Section 3.5(c)(iii), if
at
any time a Downgrade Event shall have occurred with respect to such Liquidity
Facility (a "Downgraded
Facility"),
unless an event described in Section 3.5(c)(ii) occurs with respect to such
Liquidity Facility.
(ii) If
at any
time any Liquidity Facility becomes a Downgraded Facility, the Subordination
Agent shall request a Downgrade Drawing thereunder in accordance with Section
3.5(c)(iii), unless the Liquidity Provider under such Downgraded Facility or
Continental arranges for a Replacement Liquidity Provider to issue and deliver
a
Replacement Liquidity Facility to the Subordination Agent within 10 days after
receiving notice of a Downgrade Event (but not later than the expiration date
of
such Downgraded Facility).
(iii) Upon
the
occurrence of any Downgrade Event with respect to any Liquidity Facility, unless
a Replacement Liquidity Facility is arranged as provided in Section 3.5(c)(ii),
the Subordination Agent shall, on the 10th day referred to in Section 3.5(c)(ii)
(or if such 10th day is not a Business Day, on the next succeeding Business
Day)
(or, if earlier, the expiration date of such Downgraded Facility), request
a
drawing in accordance with and to the extent permitted by such Downgraded
Facility (such drawing, a "Downgrade
Drawing")
of the
Available Amount thereunder. Amounts drawn pursuant to a Downgrade Drawing
shall
be maintained and invested as provided in Section 3.5(f) hereof. The applicable
Liquidity Provider may also arrange for a Replacement Liquidity Provider to
issue and deliver a Replacement Liquidity Facility at any time after such
Downgrade Drawing so long as such Downgrade Drawing has not been reimbursed
in
full to such Liquidity Provider.
(d) Non-Extension
Drawings.
If any
Liquidity Facility with respect to any Class of Certificates is scheduled to
expire on a date (the "Stated
Expiration Date")
prior
to the date that is 15 days after the Final Legal Distribution Date for such
Class of Certificates, then, no earlier than the 60th day and no later than
the
40th day prior to the then Stated Expiration Date, the Subordination Agent
shall
request that the applicable Liquidity Provider extend the Stated Expiration
Date
until the earlier of (i) the date which is 15 days after such Final Legal
Distribution Date and (ii) the date that is the day immediately preceding the
364th
day
occurring after the last day of the applicable Consent Period (as hereinafter
defined) (unless the obligations of such Liquidity Provider under such Liquidity
Facility are earlier terminated in accordance with such Liquidity Facility).
Whether or not the Liquidity Provider has received a request from the
Subordination Agent, such Liquidity Provider shall advise the Subordination
Agent, no
earlier
than the 40th
day (or,
if earlier, the date of such Liquidity Provider's receipt of such request,
if
any, from the Subordination Agent) and no later than the 25th
day
prior to the Stated Expiration Date then in effect for such Liquidity Facility
(such period, with respect to such Liquidity Facility, the "Consent
Period"),
whether, in its sole discretion, it agrees to extend such Stated Expiration
Date. If (A) on or before the date on which such Consent Period ends, such
Liquidity Facility shall not have been replaced in accordance with Section
3.5(e) and (B) the applicable Liquidity Provider fails irrevocably and
unconditionally to advise the Subordination Agent on or before the date on
which
such Consent Period ends that such Stated Expiration Date then in effect shall
be so extended for such Liquidity Facility, the Subordination Agent shall,
on
the date on which such Consent Period ends (or as soon as possible thereafter),
in accordance with the terms of the expiring Liquidity Facility (a "Non-Extended
Facility"),
request a drawing under such expiring Liquidity Facility (such drawing, a
"Non-Extension
Drawing")
of all
available and undrawn amounts thereunder. Amounts drawn pursuant to a
Non-Extension Drawing shall be maintained and invested in accordance with
Section 3.5(f) hereof.
(e) Issuance
of Replacement Liquidity Facility.
(i) At any time, Continental may, at its option, with cause or
without cause, arrange for a Replacement Liquidity Facility to replace any
Liquidity Facility for any Class of Certificates (including any Replacement
Liquidity Facility provided pursuant to Section 3.5(e)(ii) hereof); provided,
however,
that
the initial Liquidity Provider for any Liquidity Facility shall not be replaced
by Continental as a Liquidity Provider with respect to such Liquidity Facility
prior to the third anniversary of the Closing Date unless (A) there shall have
become due to such initial Liquidity Provider, or such initial Liquidity
Provider shall have demanded, amounts pursuant to Section 3.01, 3.02 or 3.03
of
any applicable Liquidity Facility and the replacement of such initial Liquidity
Provider would reduce or eliminate the obligation to pay such amounts or
Continental determines in good faith that there is a substantial likelihood
that
such initial Liquidity Provider will have the right to claim any such amounts
(unless such initial Liquidity Provider waives, in writing, any right it may
have to claim such amounts), which determination shall be set forth in a
certificate delivered by Continental to such initial Liquidity Provider setting
forth the basis for such determination and accompanied by an opinion of outside
counsel selected by Continental and reasonably acceptable to such initial
Liquidity Provider verifying the legal conclusions, if any, of such certificate
relating to such basis, provided
that, in
the case of any likely claim for such amounts based upon any proposed, or
proposed change in, law, rule, regulation, interpretation, directive,
requirement, request or administrative practice, such opinion may assume the
adoption or promulgation of such proposed matter, (B) it shall become unlawful
or impossible for such initial Liquidity Provider (or its Facility Office)
to
maintain or fund its LIBOR Advances as described in Section 3.10 of any
Liquidity Facility, (C) any Liquidity Facility of such initial Liquidity
Provider shall become a Downgraded Facility or a Non-Extended Facility or a
Downgrade Drawing or a Non-Extension Drawing shall have occurred under any
Liquidity Facility of such initial Liquidity Provider or (D) such initial
Liquidity Provider shall have breached any of its payment (including, without
limitation, funding) obligations under any Liquidity Facility in respect of
which it is the Liquidity Provider. If such Replacement Liquidity Facility
is
provided at any time after a Downgrade Drawing or a Non-Extension Drawing has
been made, all funds on deposit in the relevant Cash Collateral Account will
be
returned to the Liquidity Provider being replaced.
(ii) If
any Liquidity Provider shall determine not to extend any of
its
Liquidity Facilities in accordance with Section 3.5(d), then such Liquidity
Provider may, at its
option,
arrange for a Replacement Liquidity Facility to replace such Liquidity Facility
during
the period no earlier than 40 days and no later than 25 days prior to the then
effective Stated Expiration Date of such Liquidity Facility. At any time after
a
Non-Extension Drawing has been made under any Liquidity Facility, the Liquidity
Provider thereunder may, at its option, arrange for a Replacement Liquidity
Facility to replace the Liquidity Facility under which such Non-Extension
Drawing has been made.
(iii) No
Replacement Liquidity Facility arranged by Continental or a Liquidity Provider
in accordance with clause (i) or (ii) above or pursuant to Section 3.5(c),
respectively, shall become effective and no such Replacement Liquidity Facility
shall be deemed a "Liquidity Facility" under the Operative Agreements, unless
and until (A) each of the conditions referred to in sub-clauses (iv)(x) and
(z)
below shall have been satisfied, (B) if such Replacement Liquidity Facility
shall materially adversely affect the rights, remedies, interests or obligations
of the Class A Certificateholders or the Class B Certificateholders under any
of
the Operative Agreements, the applicable Trustee shall have consented, in
writing, to the execution and issuance of such Replacement Liquidity Facility
and (C) in the case of a Replacement Liquidity Facility arranged by a Liquidity
Provider under Section 3.5(e)(ii) or pursuant to Section 3.5(c), such
Replacement Liquidity Facility is acceptable to Continental.
(iv) In
connection with the issuance of each Replacement Liquidity Facility, the
Subordination Agent shall (x) prior to the issuance of such Replacement
Liquidity Facility, obtain written confirmation from each Rating Agency that
such Replacement Liquidity Facility will not cause a reduction of any rating
then in effect for any Class of Certificates by such Rating Agency (without
regard to any downgrading of any rating of any Liquidity Provider being replaced
(or, in the case of the initial Liquidity Provider, the Guarantor) pursuant
to
Section 3.5(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 applicable Cash Collateral Account as described in clause (v)
of
Section 3.5(f) hereof, and thereafter from any other available source,
including, without limitation, a drawing under the Replacement Liquidity
Facility) 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.
(v) Upon
satisfaction of the conditions set forth in clauses (iii) and (iv) of this
Section 3.5(e) with respect to a Replacement Liquidity Facility, (w) the
replaced Liquidity Facility shall terminate, (x) the Subordination Agent shall,
if and to the extent so requested by Continental or the Liquidity Provider
being
replaced, execute and deliver any certificate or other instrument required
in
order to terminate the replaced Liquidity Facility, shall surrender the replaced
Liquidity Facility to the Liquidity Provider being replaced and shall execute
and deliver the Replacement Liquidity Facility and any associated Fee Letters,
(y) each of the parties hereto shall enter into any amendments to this Agreement
necessary to give effect to (1) the replacement of the applicable Liquidity
Provider with the applicable Replacement Liquidity Provider and (2) the
replacement of the applicable Liquidity Facility with the applicable Replacement
Liquidity Facility and (z) the applicable 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 or the Class B Liquidity Facility pursuant to Section 3.5(c),
3.5(d) or 3.5(i) hereof, or in the event amounts are to be deposited in the
Class A Cash Collateral Account or the Class B Cash Collateral Account pursuant
to subclause (A) or (B) of clause "fourth" of Section 3.2, amounts so drawn
or
to be deposited, as the case may be, shall be deposited by the Subordination
Agent in the Class A Cash Collateral Account or the Class B Cash Collateral
Account, as applicable. All amounts on deposit in each Cash Collateral Account
shall be invested and reinvested in Eligible Investments in accordance with
Section 2.2(b) hereof.
On
each
Interest Payment Date (or, in the case of any Special Distribution Date with
respect to the distribution of a Special Payment, on such Special Distribution
Date), Investment Earnings on amounts on deposit in each Cash Collateral Account
with respect to any Liquidity Facility (or, in the case of any Special
Distribution Date with respect to the distribution of a Special Payment, so
long
as no Indenture Default shall have occurred and be continuing under any
Indenture, a fraction of such Investment Earnings equal to the Section 2.4
Fraction) shall be deposited in the Collection Account (or, in the case of
any
Special Distribution Date with respect to the distribution of a Special Payment,
the Special Payments Account) and applied on such Interest Payment Date (or
Special Distribution Date, as the case may be) in accordance with Section 3.2
or
3.3 (as applicable). The Subordination Agent shall deliver a written statement
to Continental and each Liquidity Provider one day prior to each Interest
Payment Date and Special Distribution Date setting forth the aggregate amount
of
Investment Earnings held in the Cash Collateral Accounts as of such date. In
addition, from and after the date funds are so deposited, the Subordination
Agent shall make withdrawals from such accounts as follows:
(i) on
each
Distribution Date, the Subordination Agent shall, to the extent it shall not
have received funds to pay accrued and unpaid interest due and owing on the
Class A Certificates (at the applicable Stated Interest Rate for the Class
A
Certificates) after giving effect to the subordination provisions of this
Agreement, 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 applicable 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 due and owing on the
Class B Certificates (at the Stated Interest Rate for the Class B Certificates)
after giving effect to the subordination provisions of this Agreement, 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
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 3.2
hereof or pursuant to Section 2.03 of the Escrow and Paying Agent Agreement
for
such Class, 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 (and any reduction in the amounts
on deposit in the Class A Cash Collateral Account resulting from a prior
withdrawal of amounts on deposit in the Class A Cash Collateral Account on
such
date) and any transfer of Investment Earnings from such Cash Collateral Account
to the Collection Account or the Special Payments Account on such date, an
amount equal to the sum of the Required Amount (with respect to the Class A
Liquidity Facility) plus (if on a Distribution Date not coinciding with an
Interest Payment Date) Investment Earnings on deposit in such Cash Collateral
Account (after giving effect to any such transfer of Investment Earnings) will
be on deposit in the Class A Cash Collateral Account and shall first, pay such
withdrawn amount to the Class A Liquidity Provider until the Liquidity
Obligations (with respect to the Class A Certificates) owing to such Liquidity
Provider shall have been paid in full, and second, deposit any remaining
withdrawn amount in the Collection Account;
(iv) 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 3.2 hereof
or pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for such
Class, 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 (and any reduction in the amounts
on
deposit in the Class B Cash Collateral Account resulting from a prior withdrawal
of amounts on deposit in the Class B Cash Collateral Account on such date)
and
any transfer of Investment Earnings from such Cash Collateral Account to the
Collection Account or the Special Payments Account on such date, an amount
equal
to the sum of the Required Amount (with respect to the Class B Liquidity
Facility) plus (if on a Distribution Date not coinciding with an Interest
Payment Date) Investment Earnings on deposit in such Cash Collateral Account
(after giving effect to any such transfer of Investment Earnings) will be on
deposit in the Class B Cash Collateral Account and shall first, pay such
withdrawn amount to the Class B Liquidity Provider until the Liquidity
Obligations (with respect to the Class B Certificates) owing to such Liquidity
Provider shall have been paid in full, and second, deposit any remaining
withdrawn amount in the Collection Account;
(v) 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 related to the Liquidity Facility 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
(vi) following
the payment of Final Distributions with respect to any Class of 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 related to the
Liquidity Facility 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 of such Interest Drawing so reimbursed to the applicable
Liquidity Provider but not to exceed the Stated Amount for such Liquidity
Facility; provided,
however,
that
such Liquidity Facility shall not be so reinstated in part or in full at any
time if (x) both a Performing Note Deficiency exists and a Liquidity Event
of
Default shall have occurred and be continuing with respect to the relevant
Liquidity Facility or (y) a Final Drawing, a Non-Extension Drawing or a
Downgrade Drawing shall have occurred with respect to such Liquidity Facility
or
an Interest Drawing shall have been converted into a Final Drawing. In the
event
that, with respect to any particular Liquidity Facility, (i) funds are
withdrawn from any related Cash Collateral Account pursuant to clause (i) or
(ii) of Section 3.5(f) hereof or (ii) such Liquidity Facility shall become
a
Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under such Liquidity Facility have reduced the Available
Amount thereunder to zero, then funds received by the Subordination Agent at
any
time other than (x) any time when a Liquidity Event of Default shall have
occurred and be continuing with respect to such Liquidity Facility and a
Performing Note Deficiency exists or (y) any time after a Final Drawing shall
have occurred with respect to such Liquidity Facility or an Interest Drawing
shall have been converted into a Final Drawing, shall be deposited in such
Cash
Collateral Account as and to the extent provided in clause "fourth" of Section
3.2 and applied in accordance with Section 3.5(f) hereof.
(h) Reimbursement.
The
amount of each drawing under the 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.
Upon
receipt from a Liquidity Provider of a Termination Notice with respect to any
Liquidity Facility, the Subordination Agent shall, not later than the date
specified in such Termination Notice, in accordance with the terms of such
Liquidity Facility, request a drawing under such Liquidity Facility of all
available and undrawn amounts thereunder (a "Final
Drawing").
Amounts drawn pursuant to a Final Drawing shall be maintained and invested
in
accordance with Section 3.5(f) hereof.
(j) Adjustments
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 reduction
in
the Pool Balance with respect to such Certificates or otherwise, the Stated
Amount of such Liquidity Facility shall automatically be adjusted 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).
(k) Relation
to Subordination Provisions.
Interest Drawings under the Liquidity Facilities and withdrawals from the Cash
Collateral Accounts relating to such Liquidity
Facilities,
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
Section 3.2 hereof.
(l) Assignment
of Liquidity Facility.
The
Subordination Agent agrees not to consent to the assignment by any Liquidity
Provider of any of its rights or obligations under any Liquidity Facility or
any
interest therein, unless (i) Continental shall have consented to such
assignment and (ii) each Rating Agency shall have provided a Ratings
Confirmation in respect of such assignment; provided,
that
the Subordination Agent shall consent to such assignment if the conditions
in
the foregoing clauses (i) and (ii) are satisfied, and the foregoing is not
intended to and shall not be construed to limit the rights of the initial
Liquidity Provider under Section 3.5(e)(ii).
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 (except as otherwise provided in
Section 2.6(d)) shall direct the Subordination Agent, as the holder of Equipment
Notes issued under such Indenture, which in turn shall direct the Loan Trustee
under such Indenture, in the exercise of remedies available to the holder of
such Equipment Notes, including, without limitation, the ability to vote all
such Equipment Notes held by the Subordination Agent in favor of Accelerating
such Equipment Notes in accordance with the provisions of such Indenture. If
the
Equipment Notes issued pursuant to any Indenture and held by the Subordination
Agent have been Accelerated following an Indenture Default with respect thereto,
the Controlling Party may direct the Subordination Agent 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) Following
the occurrence and during the continuation of an Indenture Default under any
Indenture, in the exercise of remedies pursuant to such Indenture, the Loan
Trustee under such Indenture may be directed to lease the related Aircraft
to
any Person (including Continental) so long as the Loan Trustee in doing so
acts
in a "commercially reasonable" manner within the meaning of Article 9 of the
Uniform Commercial Code as in effect in any applicable jurisdiction (including
Sections 9-610 and 9-627 thereof).
(iii) 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 a Continental Bankruptcy Event, without the consent of each
Trustee, no Aircraft 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 or such Equipment Notes.
(iv) Upon
the
occurrence and continuation of an Indenture Default under any Indenture, the
Subordination Agent will obtain three desktop appraisals from the Appraisers
selected by the Controlling Party setting forth the current market value,
current lease rate and distressed value (in each case, as defined by the
International Society of Transport Aircraft Trading or any successor
organization) of the Aircraft subject to such Indenture (each such appraisal,
an
"Appraisal" and
the
current market value appraisals being referred to herein as the "Post-Default
Appraisals"). For
so
long as any Indenture Default shall be continuing under any Indenture, and
without limiting the right of the Controlling Party to request more frequent
Appraisals, the Subordination Agent will obtain updated Appraisals on the date
that is 364 days from the date of the most recent Appraisal (or if a
Continental Bankruptcy Event shall have occurred and is continuing, on the
date
that is 180 days from the date of the most recent
Appraisal).
(b) Following
the occurrence and during the continuance of an Indenture Default under any
Indenture, the Controlling Party shall take such actions as it may reasonably
deem most effectual to complete the sale or other disposition of the relevant
Aircraft or Equipment Notes. In addition, in lieu of any sale, assignment,
contract to sell or other disposition, the Controlling Party may maintain or
cause the Subordination Agent to maintain possession of 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, subject to the terms
and
conditions of the related Indenture, instruct the Loan Trustee under such
Indenture to foreclose on the Lien on the related Aircraft or to take any other
remedial action permitted under such Indenture or under any applicable
law.
(c) If
following a Continental Bankruptcy Event and during the pendency thereof, the
Controlling Party receives a proposal from or on behalf of Continental to
restructure the financing of any one or more of the Aircraft, the Controlling
Party shall promptly thereafter give the Subordination Agent and each Trustee
notice of the material economic terms and conditions of such restructuring
proposal whereupon the Subordination Agent acting on behalf of each Trustee
shall endeavor using reasonable commercial efforts to make such terms and
conditions of such restructuring proposal available to all Certificateholders
(whether by posting on DTC’s Internet board or otherwise). Thereafter, neither
the Subordination Agent nor any Trustee, whether acting on instructions of
the
Controlling Party or otherwise, may, without the consent of each Trustee, enter
into any term sheet, stipulation or other agreement (whether in the form of
an
adequate protection stipulation, an extension under Section 1110(b) of the
Bankruptcy Code or otherwise) to effect any such restructuring proposal with
or
on behalf of Continental unless and until the material economic terms and
conditions of such restructuring shall have been made available to all
Certificateholders for a period of not less than 15 calendar days (except that
such requirement shall not apply to any such term sheet, stipulation or other
agreement that is entered into on or prior to the expiry of the 60-Day Period
and that is effective for a period not longer than three months from the expiry
of the 60-Day Period). In the event that any Certificateholder gives irrevocable
notice of the exercise of (i) its right to purchase any Equipment Notes pursuant
to Section 2.7 hereof or (ii) its right to purchase all (but not less than
all)
of the Class of Certificates represented by the then Controlling Party pursuant
to the applicable Trust Agreement, in either case, prior to the expiry of the
15-day notice period specified above, such Controlling Party may not direct
the
Subordination Agent or any Trustee to
enter
into (i) in the case of such purchase of Equipment Notes, any such restructuring
proposal with respect to the Aircraft related to such Equipment Notes, or (ii)
in the case of such purchase of Certificates, any such restructuring proposal
with respect to any of the Aircraft, in either case, unless and until such
Certificateholder shall fail to purchase such Equipment Notes or Class of
Certificates, as applicable, on the date that it is required to make such
purchase.
SECTION
4.2. Remedies
Cumulative.
Each and
every right, power and remedy given to the Trustees, the Liquidity Providers,
the Controlling Party or the Subordination Agent specifically or otherwise
in
this Agreement shall be cumulative and shall be in addition to every other
right, power and remedy herein specifically given or now or hereafter existing
at law, in equity or by statute, and each and every right, power and remedy
whether specifically herein given or otherwise existing may, subject always
to
the terms and conditions hereof, be exercised from time to time and as often
and
in such order as may be deemed expedient by any Trustee, any Liquidity Provider,
the Controlling Party or the Subordination Agent, as appropriate, and the
exercise or the beginning of the exercise of any power or remedy shall not
be
construed to be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy. No delay or omission by any Trustee, any
Liquidity Provider, the Controlling Party or the Subordination Agent in the
exercise of any right, remedy or power or in the pursuit of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default or to be an acquiescence therein.
SECTION
4.3. Discontinuance
of Proceedings.
In case
any party to this Agreement (including the Controlling Party in such capacity)
shall have instituted any Proceeding to enforce any right, power or remedy
under
this Agreement by foreclosure, entry or otherwise, and such Proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.
SECTION
4.4. Right
of Certificateholders and the Liquidity Providers 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 hereunder (including without limitation
pursuant to Section 3.2 hereof) when due, or to institute suit for the
enforcement of any such payment on or after the applicable Distribution Date,
shall not be impaired or affected without the consent of such Certificateholder
or such Liquidity Provider, respectively.
SECTION
4.5. Undertaking
for Costs.
In any
Proceeding for the enforcement of any right or remedy under this Agreement
or in
any Proceeding against any Controlling Party or the Subordination Agent for
any
action taken or omitted by it as Controlling Party or Subordination Agent,
as
the case may be, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due
regard to the merits and good faith of the claims or defenses made by the party
litigant. The provisions of this Section do not apply to a suit instituted
by
the Subordination Agent, a Liquidity Provider or a Trustee or a suit
by
Certificateholders
holding more than 10% of the original principal amount of any Class of
Certificates.
DUTIES
OF
THE SUBORDINATION AGENT;
AGREEMENTS
OF TRUSTEES, ETC.
SECTION
5.1. Notice
of Indenture Default or Triggering Event.
(a) In
the event the Subordination Agent shall have actual knowledge of the occurrence
of an Indenture Default or a Triggering Event, as promptly as practicable,
and
in any event within 10 days after obtaining knowledge thereof, the Subordination
Agent shall transmit by mail or courier to the Rating Agencies, the Liquidity
Providers and the Trustees notice of such Indenture Default or Triggering Event,
unless such Indenture Default or Triggering Event shall have been cured or
waived. For all purposes of this Agreement, in the absence of actual knowledge
on the part of a Responsible Officer, the Subordination Agent shall not be
deemed to have knowledge of any Indenture Default or Triggering Event unless
notified in writing by one or more Trustees, one or more of the Liquidity
Providers or one or more Certificateholders.
(b) Other
Notices.
The
Subordination Agent will furnish to each Liquidity Provider and each Trustee,
promptly upon receipt thereof, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and other instruments
furnished to the Subordination Agent as registered holder of the Equipment
Notes
or otherwise in its capacity as Subordination Agent to the extent the same
shall
not have been otherwise directly distributed to such Liquidity Provider or
Trustee, as applicable, pursuant to the express provision of any other Operative
Agreement.
(c) Securities
Position.
Upon
the occurrence of an Indenture Default, the Subordination Agent shall instruct
the Trustees to, and the Trustees shall, request that DTC post on its Internet
bulletin board a securities position listing setting forth the names of all
the
parties reflected on DTC's books as holding interests in the
Certificates.
(d) Reports.
Promptly after the occurrence of a Triggering Event or an Indenture Default
resulting from the failure of Continental to make payments on any Equipment
Note
and on every Regular Distribution Date while the Triggering Event or such
Indenture Default shall be continuing, the Subordination Agent will provide
to
the Trustee, Liquidity Providers, the Rating Agencies and Continental a
statement setting forth the following information:
(i) after
a
Continental Bankruptcy Event, with respect to each Aircraft, whether such
Aircraft is (A) subject to the 60-day period of Section 1110 of
the Bankruptcy Code, (B) subject to an election by Continental under
Section 1110(a) of the Bankruptcy Code, (C) covered by an agreement
contemplated by Section 1110(b) of the Bankruptcy Code or (D) not
subject to any of (A), (B) or (C);
(ii) to
the
best of the Subordination Agent's knowledge, after requesting such information
from Continental, (A) whether the Aircraft are currently in
service
or
parked
in storage, (B) the maintenance status of the Aircraft and (C) the
location of the Engines (as defined in the Indentures);
(iii) the
current Pool Balance of the Certificates, the Preferred B Pool Balance, the
Preferred C Pool Balance and outstanding principal amount of all Equipment
Notes;
(iv) the
expected amount of interest which will have accrued on the Equipment Notes
and
on the Certificates as of the next Regular Distribution Date;
(v) the
amounts paid to each Person on such Distribution Date pursuant to this
Agreement;
(vi) details
of the amounts paid on such Distribution Date identified by reference to the
relevant provision of this Agreement and the source of payment (by Aircraft
and
party);
(vii) if
the
Subordination Agent has made a Final Drawing under any Liquidity
Facility;
(viii) the
amounts currently owed to each Liquidity Provider;
(ix) the
amounts drawn under each Liquidity Facility; and
(x) after
a
Continental Bankruptcy Event, any operational reports filed by Continental
with
the bankruptcy court which are available to the Subordination Agent on a
non-confidential basis.
SECTION
5.2. Indemnification.
The
Subordination Agent shall not be required to take any action or refrain from
taking any action under Section 5.1 (other than the first sentence thereof)
or
Article IV hereof unless the Subordination Agent shall have been indemnified
(to
the extent and in the manner reasonably satisfactory to the Subordination Agent)
against any liability, cost or expense (including counsel fees and expenses)
which may be incurred in connection therewith. The Subordination Agent shall
not
be under any obligation to take any action under this Agreement and nothing
contained in this Agreement shall require the Subordination Agent to expend
or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. The Subordination Agent shall not be required to take any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof, nor
shall any other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or
is
otherwise contrary to law.
SECTION
5.3. No
Duties Except as Specified in Intercreditor Agreement.
The
Subordination Agent shall not have any duty or obligation to take or refrain
from taking any action under, or in connection with, this Agreement, except
as
expressly provided by the terms of this Agreement; and no implied duties or
obligations shall be read into this Agreement against
the
Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity and at its own cost and expense (but without any right
of
indemnity in respect of any such cost or expense under Section 5.2 or 7.1
hereof) promptly take such action as may be necessary to duly discharge all
Liens on any of the Trust Accounts or any monies deposited therein which result
from claims against it in its individual capacity not related to its activities
hereunder or any other Operative Agreement.
SECTION
5.4. Notice
from the Liquidity Providers and Trustees.
If any
Liquidity Provider or Trustee has notice of an Indenture Default or a Triggering
Event, such Person shall promptly give notice thereof to all other Liquidity
Providers and Trustees and to the Subordination Agent, provided,
however,
that no
such Person shall have any liability hereunder as a result of its failure to
deliver any such notice.
THE
SUBORDINATION AGENT
SECTION
6.1. Authorization;
Acceptance of Trusts and Duties.
Each of
the Class A Trustee and the Class B 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. WTC
hereby accepts the duties hereby created and applicable to it as the
Subordination Agent and agrees to perform the same but only upon the terms
of
this Agreement and agrees to receive and disburse all monies received by it
in
accordance with the terms hereof. The Subordination Agent shall not be
answerable or accountable under any circumstances, except (a) for its own
willful misconduct or gross negligence (or ordinary negligence in the handling
of funds), (b) as provided in Sections 2.2 or 5.3 hereof and (c) for liabilities
that may result from the material inaccuracy of any representation or warranty
of the Subordination Agent made in its individual capacity in any Operative
Agreement. The Subordination Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Subordination Agent, unless
it is proved that the Subordination Agent was negligent in ascertaining the
pertinent facts.
SECTION
6.2. Absence
of Duties.
The
Subordination Agent shall have no duty to see to any recording or filing of
this
Agreement or any other document, or to see to the maintenance of any such
recording or filing.
SECTION
6.3.. o
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 or deposited into one or
more
Trust Accounts need not be segregated in any manner except to the extent
required by such Articles II and III and by law, and the Subordination Agent
shall not (except as otherwise provided in Section 2.2 hereof) be liable for
any
interest thereon; provided,
however,
that
any payments received or applied hereunder by the Subordination Agent shall
be
accounted for by the Subordination Agent so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source
thereof.
SECTION
6.5. Reliance;
Agents; Advice of Counsel.
The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of
the
applicable Trustee, and such certificate shall constitute full protection to
the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers 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 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 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
of America, any State thereof or of the District of Columbia and having a
combined capital and surplus of at least $100,000,000), if there is such an
institution willing and able to perform the duties of the Subordination Agent
hereunder upon reasonable or customary terms. Such corporation shall be a
citizen of the United States and shall be authorized under the laws of the
United States or any State thereof or of the District of Columbia to exercise
corporate trust powers and shall be subject to supervision or examination by
federal, state or District of Columbia authorities. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of any of the aforesaid supervising or examining authorities,
then,
for the purposes of this Section 6.9, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
In
case
at any time the Subordination Agent shall cease to be eligible in accordance
with the provisions of this Section, the Subordination Agent shall resign
immediately in the manner and with the effect specified in Section
8.1.
SECTION
6.10. Money
to Be Held in Trust.
All
Equipment Notes, monies and other property deposited with or held by the
Subordination Agent pursuant to this Agreement shall be held in trust for the
benefit of the parties entitled to such Equipment Notes, monies and other
property. All such Equipment Notes, monies or other property shall be held
in
the Trust Department of the institution acting as Subordination Agent
hereunder.
INDEMNIFICATION
OF SUBORDINATION AGENT
SECTION
7.1. Scope
of Indemnification.
The
Subordination Agent shall be indemnified hereunder to the extent and in the
manner described in Section 8.1 of the Participation Agreements and Section
6 of
the Note Purchase Agreement. The indemnities contained in such Sections of
such
agreements shall survive the termination of this Agreement.
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 Controlling Party may remove the Subordination Agent
for cause by so notifying the Subordination Agent and may appoint a successor
Subordination Agent. The Controlling Party shall remove the Subordination Agent
if:
(1) the
Subordination Agent fails to comply with Section 6.9 hereof;
(2) the
Subordination Agent is adjudged bankrupt or insolvent;
(3) a
receiver or other public officer takes charge of the Subordination Agent or
its
property; or
(4) the
Subordination Agent otherwise becomes incapable of acting.
If
the
Subordination Agent resigns or is removed or if a vacancy exists in the office
of Subordination Agent for any reason (the Subordination Agent in such event
being referred to herein as the retiring Subordination Agent), the Controlling
Party shall promptly appoint a successor Subordination Agent.
A
successor Subordination Agent shall deliver (x) a written acceptance of its
appointment as Subordination Agent hereunder to the retiring Subordination
Agent
and (y) a written assumption of its obligations hereunder and under each
Liquidity Facility to each party hereto, upon which the resignation or removal
of the retiring Subordination Agent shall become effective, and the successor
Subordination Agent shall have all the rights, powers and duties of the
Subordination Agent under this Agreement. The successor Subordination Agent
shall mail a notice of its succession to the Liquidity Providers and the
Trustees. The retiring Subordination Agent shall promptly transfer its rights
under each of the Liquidity Facilities and all of the property held by it as
Subordination Agent to the successor Subordination Agent.
If
a
successor Subordination Agent does not take office within 60 days after the
retiring Subordination Agent resigns or is removed, the retiring Subordination
Agent or one or more of the Trustees may petition any court of competent
jurisdiction for the appointment of a successor Subordination
Agent.
If
the
Subordination Agent fails to comply with Section 6.9 hereof (to the extent
applicable), one or more of the Trustees, one or more of the Liquidity Providers
may petition any court of competent jurisdiction for the removal of the
Subordination Agent and the appointment of a successor Subordination
Agent.
Notwithstanding
the foregoing, no resignation or removal of the Subordination Agent shall be
effective unless and until a successor has been appointed. No appointment of
a
successor Subordination Agent shall be effective unless and until the Rating
Agencies shall have delivered a Ratings Confirmation.
SUPPLEMENTS
AND AMENDMENTS
SECTION
9.1. Amendments,
Waivers, etc.(a) This
Agreement may not be supplemented, amended or modified without the consent
of
each Trustee (acting, except in the case of any amendment pursuant to Section
3.5(e)(v)(y) hereof with respect to any Replacement Liquidity Facility or any
amendment contemplated by the last sentence of this Section 9.1(a), with the
consent of holders of Certificates of the related Class evidencing interests
in
the related Trust aggregating not less than a majority in interest in such
Trust
or as otherwise authorized pursuant to the relevant Trust Agreement), the
Subordination Agent and each Liquidity Provider; provided,
however,
that
this Agreement may be supplemented, amended or modified without the consent
of
any Trustee if such supplement, amendment or modification (i) is in accordance
with Section 9.1(c) or Section 9.1(d) hereof or (ii) cures an ambiguity or
inconsistency or does not materially adversely affect such Trustee or the
holders of the related Class of Certificates; provided further,
however,
that,
if such supplement, amendment or modification (A) would (x) directly or
indirectly modify or supersede, or otherwise conflict with, Section 2.2(b),
Section 3.5(e), Section 3.5(f)(other than the last sentence thereof), Section
3.5(l), the last sentence of this Section 9.1(a), Section 9.1(c), Section
9.1(d), the second sentence of Section 10.6 or this proviso (collectively,
the
"Continental
Provisions")
or (y)
otherwise adversely affect the interests of a potential Replacement Liquidity
Provider or of Continental with respect to its ability to replace any Liquidity
Facility or with respect to its payment obligations under any Operative
Agreement or (B) is made pursuant to the last sentence of this Section 9.1(a)
or
pursuant to Section 9.1(c) or Section 9.1(d), then such supplement, amendment
or
modification shall not be effective without the additional written consent
of
Continental. Notwithstanding the foregoing, without the consent of each
Certificateholder 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) except as provided in this Section 9.1(a), Section
9.1(c) or Section 9.1(d), modify Section 2.4 or 3.2 hereof, relating to the
distribution of monies received by the Subordination Agent hereunder from the
Equipment Notes or pursuant to the Liquidity Facilities. Nothing contained
in
this Section shall require the consent of a Trustee at any time following the
payment of Final Distributions with respect to the related Class of
Certificates. If the Replacement Liquidity Facility for any Liquidity Facility
in accordance with Section 3.5(e) hereof is to be comprised of more than one
instrument as contemplated by the definition of the term "Replacement Liquidity
Facility", then each of the parties hereto agrees to amend this Agreement to
incorporate appropriate mechanics for multiple Liquidity Facilities for an
individual Trust.
(b) In
the
event that the Subordination Agent, as the registered holder of any Equipment
Notes, receives a request for the giving of any notice or for its consent to
any
amendment, supplement, modification, consent or waiver under such Equipment
Notes, the Indenture pursuant to which such Equipment Notes were issued, or
the
related Participation Agreement or other related document, (i) if no Indenture
Default shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent shall request directions with respect to each Series
of
such Equipment Notes from the Trustee of the Trust which holds such Equipment
Notes and shall vote or consent in accordance with the directions of such
Trustee, and
(ii)
if
any Indenture Default shall have occurred and be continuing with respect to
such
Indenture, the Subordination Agent will exercise its voting rights with respect
to such Equipment Notes as directed by the Controlling Party (subject to
Sections 4.1 and 4.4 hereof); provided that no such amendment, modification
or
waiver shall, without the consent of each affected Certificateholder and each
Liquidity Provider, reduce the amount of principal or interest payable by
Continental under any Equipment Note or change the time of payments or method
of
calculation of any amount under any Equipment Note.
(c) If
Series
B Equipment Notes or Series C Equipment Notes (or any series of Additional
Equipment Notes) issued with respect to all of the Aircraft are redeemed and
re-issued in accordance with the terms of Section 2.11(b) of each Indenture
and
Section 4(a)(vi) of the Note Purchase Agreement, such series of re-issued
Equipment Notes (the "Refinancing
Equipment Notes")
shall
be issued to a new pass through trust (a "Refinancing
Trust")
that
issues a class of pass through certificates (the "Refinancing
Certificates")
to
certificateholders (the "Refinancing
Certificateholders")
pursuant to a pass through trust agreement (a "Refinancing
Trust Agreement")
with a
trustee (a "Refinancing
Trustee").
A
Refinancing Trust, a Refinancing Trustee and the Refinancing Certificates shall
be subject to all of the provisions of this Agreement in the same manner as
the
Trust, the Trustee and the Certificates of the Class corresponding to the series
of the refinanced Equipment Notes, including, the subordination of the
Refinancing Certificates to the Administration Expenses, the Liquidity
Obligations, the Class A Certificates and, if applicable, the Class B
Certificates. Such issuance of Refinancing Equipment Notes and Refinancing
Certificates and the amendment of this Agreement as provided below shall require
Ratings Confirmation and shall not materially adversely affect any of the
Trustees. This Agreement shall be amended by written agreement of Continental
and the Subordination Agent to give effect to the issuance of the Refinancing
Certificates subject to the following terms and conditions:
(i) the
Refinancing Trustee shall be added as a party to this Agreement;
(ii) the
definitions of "Certificate", "Class", "Class B Certificates" (if applicable),
"Class C Certificates" (if applicable), "Final Legal Distribution Date",
"Trust", "Trust Agreement" and "Controlling Party" (and such other applicable
definitions) shall be revised, as appropriate, to reflect such issuance (and
the
subordination of the Refinancing Certificates and the Refinancing Equipment
Notes);
(iii) the
Refinancing Certificates may have the benefit of credit support similar to
the
Liquidity Facilities and claims for fees, interest, expenses, reimbursement of
advances and other obligations arising from such credit support may rank pari
passu with similar claims in respect of the Liquidity Facilities so long as
Ratings Confirmation and the prior written consent of the Liquidity Providers
shall have been obtained;
(iv) the
Refinancing Certificates cannot be issued to Continental but may be issued
to
any of Continental's Affiliates so long as such Affiliate shall have bankruptcy
remote and special purpose provisions in its certificate of incorporation or
other organizational documents and any subsequent transfer of the Refinancing
Certificates to any Affiliate of Continental shall be similarly restricted;
and
(v) the
scheduled payment dates on the Refinancing Equipment Notes shall be on the
Regular Distribution Dates.
The
issuance of the Refinancing Certificates in compliance with all of the foregoing
terms of this Section 9.1(c) shall not require the consent of any of the
Trustees or the holders of any Class of Certificates. Each of the Liquidity
Providers hereby agrees and confirms that it shall be deemed to consent to
any
issuance and amendment in accordance with this Section 9.1(c) (subject to the
Liquidity Providers’ consent right in Section 9.1(c)(iii)) and any such issuance
and amendment shall not affect any of its respective obligations under the
Liquidity Facilities.
(d) Pursuant
to the terms of Section 2.02 of each Indenture and Section 4(a)(vi) of the
Note
Purchase Agreement, one or more additional series of Equipment Notes (the
"Additional
Equipment Notes"),
which
shall be subordinated in right of payment to the Series A Equipment Notes,
the
Series B Equipment Notes and the Series C Equipment Notes under such Indenture,
may be issued at any time and from time to time. If any series of Additional
Equipment Notes is issued under any Indenture, such series of Additional
Equipment Notes shall be issued to a new pass through trust (an "Additional
Trust")
that
issues a class of pass through certificates (the "Additional
Certificates")
to
certificateholders (the "Additional
Certificateholders")
pursuant to a pass through trust agreement (an "Additional
Trust Agreement")
with a
trustee (an "Additional
Trustee").
In
such case, this Agreement shall be amended by written agreement of Continental
and the Subordination Agent to provide for the subordination of the Additional
Certificates to the Administration Expenses, the Liquidity Obligations, the
Class A Certificates, the Class B Certificates and the Class C Certificates
and,
if applicable, any previously issued class (or classes) of Additional
Certificates (in order of their issuance) (subject to clause (iii) below).
Such
issuance and the amendment of this Agreement as provided below shall require
Ratings Confirmation and shall not materially adversely affect any of the
Trustees. This Agreement shall be amended by written agreement of Continental
and the Subordination Agent to give effect to the issuance of any Additional
Certificates subject to the following terms and conditions:
(i) the
Additional Trustee shall be added as a party to this Agreement;
(ii) the
definitions of "Certificate", "Class", "Equipment Notes", "Final Legal
Distribution Date", "Trust", "Trust Agreement" and "Controlling Party" (and
such
other applicable definitions) shall be revised, as appropriate, to reflect
the
issuance of the Additional Certificates (and the subordination
thereof);
(iii) Section
3.2 may be revised, with respect to each Class of Additional Certificates,
to
provide for the distribution of “Adjusted Interest” for such Class of Additional
Certificates (calculated in a manner substantially similar to the calculation
of
Class C Adjusted Interest) after the Class C Adjusted Interest but before
Expected Distributions on the Class A Certificates (it being understood that
the
Rating Agencies, in connection with providing a Ratings Confirmation, may
require that such class of Additional Certificates be rated);
(iv) the
Additional Certificates may have the benefit of credit support similar to the
Liquidity Facilities and claims for fees, interest, expenses, reimbursement
of
advances and
other
obligations arising from such credit support may rank pari passu with similar
claims in respect of the Liquidity Facilities so long as Ratings Confirmation
and the prior written consent of the Liquidity Providers shall have been
obtained;
(v) the
Additional Certificates cannot be issued to Continental but may be issued to
any
of Continental's Affiliates so long as such Affiliate shall have bankruptcy
remote and special purpose provisions in its certificate of incorporation or
other organizational documents and any subsequent transfer of the Additional
Certificates to any Affiliate of Continental shall be similarly restricted;
(vi) the
provisions of this Agreement governing payments with respect to Certificates
and
related notices, including Sections 2.4, 3.1 and 3.2, shall be revised to
provide for distributions on such class of the Additional Certificates after
payment of Administration Expenses, the Liquidity Obligations, the Class A
Certificates, the Class B Certificates and the Class C Certificates (and, if
applicable, any previously issued class (or classes) of Additional Certificates
(in order of their issuance)), subject to clause (iii) above; and
(vii) the
scheduled payment dates on such series of Additional Equipment Notes shall
be on
the Regular Distribution Dates.
The
issuance of the Additional Certificates in compliance with all of the foregoing
terms of this Section 9.1(d) shall not require the consent of any of the
Trustees or the holders of any Class of Certificates. Each of the Liquidity
Providers hereby agrees and confirms that it shall be deemed to consent to
any
issuance and amendment in accordance with this Section 9.1(d) (subject to the
Liquidity Providers’ consent right in Section 9.1(d)(iv)) and any such issuance
and amendment shall not affect any of its respective obligations under the
Liquidity Facilities.
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, consent or supplement hereto pursuant to the
provisions hereof, this Agreement shall be and be deemed to be and shall be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Agreement
of the parties hereto and beneficiaries hereof shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
agreement shall be and be deemed to be and shall be part of the terms and
conditions of this Agreement for any and all purposes. In executing or accepting
any supplemental agreement permitted by this Article IX, the Subordination
Agent
shall be entitled to receive, and shall be fully protected in relying upon,
an
opinion of counsel stating that the execution of such supplemental agreement
is
authorized or permitted by this Agreement.
SECTION
9.4. Notice
to Rating Agencies.
Promptly
upon receipt of any amendment, consent, modification, supplement or
waiver contemplated by this Article IX and prior to taking any action
required to be taken thereunder, the Subordination Agent shall send a copy
thereof to each Rating Agency.
MISCELLANEOUS
SECTION
10.1. Termination
of Intercreditor Agreement.
Following payment of Final Distributions with respect to each Class of
Certificates and the payment in full of all Liquidity Obligations to the
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.
Subject
to the second sentence of Section 10.6 and the provisions of Sections 4.4
and 9.1, nothing in this Agreement, whether express or implied, shall be
construed to give to any Person other than the Trustees, the Liquidity Providers
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:
WILMINGTON
TRUST COMPANY
One
Xxxxxx Square
0000
X.
Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Corporate Capital Market Services
Telecopy:
(000) 000-0000
(ii) if
to any
Trustee, addressed to it at its office at:
WILMINGTON
TRUST COMPANY
One
Xxxxxx Square
0000
X.
Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Corporate Capital Market Services
Telecopy:
(000) 000-0000
(iii) if
to the
Liquidity Provider, addressed to it at its office at:
RZB
FINANCE LLC
00
Xxxxxx
Xxxxx Xxxxxx
Xxxxxx,
XX 00000
Attention:
Xx. Xxxxx Xxxxx, Xx. Xxxxx Xxxxxx
Telephone:
(000) 000-0000
Telecopy:
(000) 000-0000
Whenever
any notice in writing is required to be given by any Trustee, 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. In addition, the Continental Provisions shall
inure to the benefit of Continental and its successors and assigns, and (without
limitation of the foregoing) Continental is hereby constituted, and agreed
to
be, an express third party beneficiary of the Continental Provisions. Upon
the
occurrence of the Transfers contemplated by the Assignment and Assumption
Agreements, the Trustee of each Class shall (without any further act) be deemed
to have transferred all of its rights, title and interest in and to this
Agreement to the trustee of the Successor Trust of the same Class and,
thereafter, the trustee
of
each
Successor Trust shall be deemed to be the "Trustee" of such Successor Trust
with
the rights and obligations of a "Trustee" hereunder and under the other
Operative Agreements and each reference to a Trust of any Class herein shall
be
deemed a reference to the Successor Trust of such Class.
SECTION
10.7. Headings.
The
headings of the various Articles and Sections herein and in the table of
contents hereto are for convenience of reference only and shall not define
or
limit any of the terms or provisions hereof.
SECTION
10.8. Counterpart
Form.
This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
agreement.
SECTION
10.9. Subordination.
(a) As between the Liquidity Providers (and any additional liquidity
providers in respect of any class of Refinancing Certificates or Additional
Certificates), on the one hand, and the Trustees (and any Refinancing Trustees
or Additional Trustees) and the Certificateholders (and any Refinancing
Certificateholders or Additional Certificateholders), on the other hand, and
as
among the Trustees (and any Refinancing Trustees or Additional Trustees) and
the
related Certificateholders (and any Refinancing Certificateholders or Additional
Certificateholders), this Agreement shall be a subordination agreement for
purposes of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, as amended
from time to time.
(b) Notwithstanding
the provisions of this Agreement, if prior to the payment in full to the
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 Section 3.2 shall apply in all circumstances,
notwithstanding the fact that the obligations owed to the Trustees and the
holders of Certificates are secured by certain assets and the Liquidity
Obligations may not be so secured. The Trustees expressly agree (on behalf
of
themselves and the holders of Certificates) not to assert priority over the
holders of Liquidity Obligations (except
as
specifically set forth in Section 3.2) due to their status as secured creditors
in any bankruptcy, insolvency or other legal proceeding.
(e) Each
of
the Trustees (on behalf of themselves and the holders of Certificates), the
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 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;
provided,
however,
that
the taking of any such actions by any of the Trustees, the Liquidity Providers
or the Subordination Agent shall not prejudice the rights or adversely affect
the obligations of any other party under this Agreement.
SECTION
10.10. Governing
Law.
THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
SECTION
10.11. Submission
to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity.
(a) Each
of
the parties hereto hereby irrevocably and unconditionally:
(i) submits
for itself and its property in any legal action or proceeding relating to this
Agreement or any other Operative Agreement, or for recognition and enforcement
of any judgment in respect hereof or thereof, to the nonexclusive general
jurisdiction of the courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and the appellate
courts from any thereof;
(ii) consents
that any such action or proceeding may be brought in such courts, and waives
any
objection that it may now or hereafter have to the venue of any such action
or
proceeding in any such court or that such action or proceeding was brought
in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to each party hereto at its address
set
forth in Section 10.3 hereof, or at such other address of which the other
parties shall have been notified pursuant thereto; and
(iv) agrees
that nothing herein shall affect the right to effect service of process in
any
other manner permitted by law or shall limit the right to xxx in any other
jurisdiction.
(b) EACH
OF
THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT
OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT
AND
THE RELATIONSHIP THAT IS BEING ESTABLISHED, including, without limitation,
contract claims, tort claims, breach of duty claims and all other common law
and
statutory claims. Each of the parties warrants and represents that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such legal
counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR
IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
(c) Each
Liquidity Provider hereby waives any immunity it may have from the jurisdiction
of the courts of the United States of America or of any State and waives any
immunity any of its properties located in the United States of America may
have
from attachment or execution upon a judgment entered by any such court under
the
United States Foreign Sovereign Immunities Act of 1976 or any similar successor
legislation.
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.
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WILMINGTON
TRUST COMPANY,
not
in its individual capacity but solely as Trustee for each of the
Trusts
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By
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Name:
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Title:
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RZB
FINANCE LLC, as Class A Liquidity Provider and Class B Liquidity
Provider
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By
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Name:
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Title:
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By
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Name:
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Title:
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WILMINGTON
TRUST COMPANY,
not
in its individual capacity except as expressly set forth herein but
solely
as Subordination Agent and truste
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By
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Name:
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Title:
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By
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Name:
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Title:
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