Exhibit 4(b)(1)
INTERCREDITOR AGREEMENT
Dated as of April 30, 2002
among
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee of the
Delta Air Lines Pass Through Trust 2002-1G-1,
Delta Air Lines Pass Through Trust 2002-1G-2,
Delta Air Lines Pass Through Trust 2002-1C,
and
Delta Air Lines Pass Through Trust 0000-0X
XXXXXXXXXXXX XXXXXXXXXX XXXXXXXXXXXX, XXX XXXX BRANCH,
as Class G-1 Liquidity Provider,
Class G-2 Liquidity Provider,
and
Class C Liquidity Provider,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent
and
MBIA INSURANCE CORPORATION,
as Policy Provider
Table of Contents
ARTICLE I
DEFINITIONS
Section 1.01. Definitions......................................................
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01. Agreement to Terms of Subordination; Payments from Monies
Received Only....................................................
Section 2.02. Trust Accounts...................................................
Section 2.03. Deposits to the Collection Account and Special Payments
Account; Certain Distributions...................................
Section 2.04. Distributions of Special Payments................................
Section 2.05. Designated Representatives.......................................
Section 2.06. Controlling Party................................................
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.01. Written Notice of Distribution...................................
Section 3.02. Distribution of Amounts on Deposit in the Collection Account.....
Section 3.03. Distribution of Amounts on Deposit Following a Triggering
Event............................................................
Section 3.04. Other Payments...................................................
Section 3.05. Payments to the Trustees and the Liquidity Providers.............
Section 3.06. Liquidity Facilities.............................................
Section 3.07. The Policies.....................................................
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.01. Directions from the Controlling Party............................
Section 4.02. Remedies Cumulative..............................................
Section 4.03. Discontinuance of Proceedings....................................
Section 4.04. Right of Certificateholders to Receive Payments Not to Be
Impaired.........................................................
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.01. Notice of Indenture Event of Default or Triggering Event.........
Section 5.02. Indemnification..................................................
Section 5.03. No Duties Except as Specified in Intercreditor Agreement.........
Section 5.04. Notice from the Liquidity Providers and Trustees.................
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.01. Authorization; Acceptance of Trusts and Duties...................
Section 6.02. Absence of Duties................................................
Section 6.03. No Representations or Warranties as to Documents.................
Section 6.04. No Segregation of Monies; No Interest............................
Section 6.05. Reliance; Agents; Advice of Counsel..............................
Section 6.06. Capacity in Which Acting.........................................
Section 6.07. Compensation.....................................................
Section 6.08. May Become Certificateholder.....................................
Section 6.09. Subordination Agent Required; Eligibility........................
Section 6.10. Money to Be Held in Trust........................................
ARTICLE VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01. Replacement of Subordination Agent; Appointment of Successor.....
ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01. Amendments, Waivers, Etc.........................................
Section 8.02. Subordination Agent Protected....................................
Section 8.03. Effect of Supplemental Agreements................................
Section 8.04. Notice to Rating Agencies and the Policy Provider................
ARTICLE IX
MISCELLANEOUS
Section 9.01. Termination of Intercreditor Agreement...........................
Section 9.02. Intercreditor Agreement for Benefit of Trustees, Liquidity
Providers, Policy Provider and Subordination Agent...............
Section 9.03. Notices..........................................................
Section 9.04. Severability.....................................................
Section 9.05. No Oral Modifications or Continuing Waivers......................
Section 9.06. Successors and Assigns...........................................
Section 9.07. Headings.........................................................
Section 9.08. Counterparts.....................................................
Section 9.09. Subordination....................................................
Section 9.10. Governing Law....................................................
Section 9.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of
Immunity.........................................................
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of April 30, 2002, is made by
and among STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association (in its individual capacity,
together with its successors and permitted assigns, "State Street"), not in its
individual capacity but solely as trustee of each Trust (such term and other
capitalized terms used herein without definition being defined as provided in
Article I); WESTDEUTSCHE LANDESBANK GIROZENTRALE, a German banking institution
organized under the laws of the State of North Rhine-Westphalia, acting through
its New York Branch ("WestLB"), as Class G-1 Liquidity Provider, Class G-2
Liquidity Provider and Class C Liquidity Provider, STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity
except as expressly set forth herein, but solely as Subordination Agent and
trustee hereunder (in such capacity, together with any successor appointed
pursuant to Article VII, the "Subordination Agent") and MBIA INSURANCE
CORPORATION, a New York stock insurance company ("MBIA"), as the Policy
Provider.
WHEREAS, subject to clause (ii) of this recital, (i) pursuant to
each Indenture with respect to an Aircraft owned by Delta at the time such
Indenture is entered into (an "Owned Aircraft"), Delta will issue on a recourse
basis four (or, in the case of a Boeing 737-832 Aircraft, three) series of
Equipment Notes secured by such Aircraft and (ii) if an Aircraft becomes subject
to a sale/leaseback transaction at any time after the date hereof (a "Leased
Aircraft"), pursuant to an Indenture with respect to such Aircraft, as amended
and restated in connection with such sale/leaseback transaction, the Owner
Trustee will assume on a non-recourse basis Delta's obligations in respect of
the Equipment Notes secured by such Aircraft, subject to re-optimization of such
Equipment Notes (if such sale/leaseback transaction occurs prior to May 1,
2003);
WHEREAS, pursuant to the Participation Agreements, each Trust will
acquire those Equipment Notes having an interest rate identical 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 G-1, Class G-2 and Class C Certificates in the
aggregate face amount set forth on Schedule I thereto on the terms and subject
to the conditions set forth therein;
WHEREAS, the Initial Class D Holder proposes to purchase the Class D
Certificates in the aggregate face amount of $90,043,000 on the terms and
subject to the conditions set forth in the Class D Trust Agreement and the
Business Trust Agreement;
WHEREAS, the Liquidity Provider proposes to enter into three
separate revolving credit agreements with the Subordination Agent, as agent and
trustee for the Trustee of each of the Class G-1 Trust, the Class G-2 Trust and
the Class C Trust, respectively, for the benefit of the Certificateholders of
such Trust;
WHEREAS, the Policy Provider proposes to enter into the Policy
Provider Agreement providing for the issuance by the Policy Provider of (i) the
Class G-1 Policy for the benefit of the Class G-1 Certificateholders and (ii)
the Class G-2 Policy for the benefit of the Class G-2 Certificateholders; and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent, the
Trustees, the Liquidity Provider and the Policy Provider agree to the terms of
subordination set forth in this Agreement in respect of each Class of
Certificates, and the Subordination Agent, the Trustees, the Liquidity Provider
and the Policy Provider, by entering into this Agreement, hereby acknowledge and
agree to such terms of subordination and the other provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The definitions stated herein apply
equally to the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Agreement.
(c) 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.
(d) Unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, it shall be deemed to be
followed by the phrase "without limitation".
(e) For purposes of this Agreement, unless the context otherwise
requires, the following capitalized terms shall have the following meanings:
"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.
"Accrued Class G-1 Interest" means, with respect to any Distribution
Date, all amounts due and owing in respect of accrued and unpaid interest on the
Class G-1 Certificates at the Stated Interest Rate for the Class G-1
Certificates on such Distribution Date.
"Accrued Class G-2 Interest" means, with respect to any Distribution
Date, all amounts due and owing in respect of accrued and unpaid interest on the
Class G-2 Certificates at the Stated Interest Rate for the Class G-2
Certificates on such Distribution Date.
"Adjusted Expected Distributions" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (x)
accrued and unpaid interest in respect of such Certificates and (y) the greater
of:
(A) the difference between (x) 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 the Certificates of such Trust) and (y) the Pool Balance of
such Certificates as of the Current Distribution Date calculated on the
basis that (i) the principal of the Non-Performing Equipment Notes held in
such Trust has been paid in full and 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 (but 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,
and
(B) the amount of the excess, if any, of (i) the Pool Balance of
such Class of 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 the Certificates of such Trust),
over (ii) the Aggregate LTV Collateral Amount for such Class of
Certificates for the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals for all the
Aircraft, clause (B) shall not apply.
For purposes of calculating Adjusted Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust that has not been distributed to the Certificateholders
of such Trust (other than such premium or a portion thereof applied to the
distribution 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 Adjusted
Expected Distributions.
"Advance" means, with respect to any Liquidity Facility, 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 direct or indirect
common control with such Person. For the purposes of this definition, "control",
when used with respect to any specified Person, means the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Aggregate LTV Collateral Amount" for any Class of Certificates for
any Distribution Date means an amount, not less than zero, equal to the product
of (i) the sum of the applicable LTV Collateral Amounts for such Class of
Certificates for all Aircraft, minus the Pool Balance for each Class of
Certificates, if any, senior to such Class, after giving effect to any
distribution of principal on such Distribution Date with respect to such senior
Class or Classes multiplied by (ii) (a) in the case of the Class G-1
Certificates or Class G-2 Certificates, a fraction the numerator of which equals
the Pool Balance for the Class G-1 Certificates or the Class G-2 Certificates,
as the case may be, and the denominator of which equals the aggregate Pool
Balance for the Class G-1 Certificates and the Class G-2 Certificates, in each
case prior to giving effect to any distribution of principal on such
Distribution Date with respect to either such Class of Certificates, and (b) in
the case of the Class C Certificates and the Class D Certificates, 1.0.
"Aircraft" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"Appraisal" means a current fair market value appraisal (which may
be a "desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"Appraised Current Market Value" of any Aircraft means the lower of
the average and the median of the three most recent LTV Appraisals of such
Aircraft.
"Appraisers" means Aircraft Information Systems, Inc., BK
Associates, Inc. and AvSolutions, Inc.
"Available Amount" means, with respect to any Liquidity Facility on
any drawing date, subject to the proviso contained in the first sentence of
Section 3.06(g), an amount equal to (a) the Stated Amount of such Liquidity
Facility at such time, less (b) the aggregate amount of each Interest Drawing
honored by the Liquidity Provider under such Liquidity Facility on or prior to
such date that has not been reimbursed or reinstated as of such date; provided
that, following a Downgrade Drawing, a Non-Extension Drawing or a Final Drawing
under such Liquidity Facility, the Available Amount of such Liquidity Facility
shall be zero.
"Avoided Payment", with respect to a Policy, has the meaning
specified in such Policy.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Code ss.ss.101 et seq., as amended, or any successor statutes thereto.
"Basic Agreement" means that certain Pass Through Trust Agreement,
dated as of November 16, 2000, between Delta and State Street, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with its terms, but does not include any Trust Supplement.
"Business Day" means, with respect to the Certificates of any Class,
(a) any day other than a Saturday, a Sunday or a day on which, (i) commercial
banks are required or authorized to close in New York, New York, Atlanta,
Georgia, or, so long as any Certificate of such Class is outstanding, the city
and state in which the Trustee, the Subordination Agent or any related Loan
Trustee maintains its Corporate Trust Office or receives and disburses funds, or
(ii) solely with respect to draws under a Policy, the fiscal agent under such
Policy, at its office specified in such Policy, the Policy Provider, at its
office specified in such Policy, and insurance companies in New York, New York
are required or authorized by law or executive order to close and (b) solely
with respect to Drawings under any Liquidity Facility, which day is also a
"Business Day" as defined in such Liquidity Facility.
"Business Trust Agreement" means the Trust Agreement dated as of
April __, 2002 between New Sky, Ltd. and Wilmington Trust Company, as Owner
Trustee, governing the creation and administration of the Initial Class D
Holder, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"Cash Collateral Account" means the Class G-1 Cash Collateral
Account, the Class G-2 Cash Collateral Account or the Class C Cash Collateral
Account, as applicable.
"Certificate" means a Class G-1 Certificate, a Class G-2
Certificate, a Class C Certificate or a Class D Certificate, as applicable.
"Certificateholder" means, with respect to any Class of
Certificates, the Person in whose name a Certificate is registered in the
Register for the Certificates of such Class.
"Citizen of the United States" has the meaning specified for such
term in Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States enacted in substitution or replacement
therefor.
"Class" has the meaning specified in the recitals to this Agreement.
"Class C 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 so qualifies, into which amounts
shall be deposited as referred to in Section 3.06(f).
"Class C Certificateholder" means, at any time, any
Certificateholder 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 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 C Trustee, and WestLB, and, from and after the
replacement of such agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class C Liquidity Provider" means WestLB, together with any
Replacement Liquidity Provider that has issued a Replacement Liquidity Facility
to replace the Class C Liquidity Facility pursuant to Section 3.06(c) or
3.06(e).
"Class C Trust" means the Delta Air Lines Pass Through Trust 2002-1C
created and administered pursuant to the Class C Trust Agreement.
"Class C Trust Agreement" means the Basic Agreement, as supplemented
by Trust Supplement No. 2002-1C thereto, dated as of the date hereof, governing
the creation and administration of the Delta Air Lines Pass Through Trust
2002-1C 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 State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity except as
expressly set forth in the Class C Trust Agreement, but solely as trustee under
the Class C Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class D Certificateholder" means, at any time, any
Certificateholder of one or more Class D Certificates.
"Class D Certificates" means the certificates issued by the Class D
Trust, substantially in the form of Exhibit A to the Class D Trust Agreement,
and authenticated by the Class D Trustee, representing Fractional Undivided
Interests in the Class D Trust, and any certificates issued in exchange therefor
or replacement thereof pursuant to the terms of the Class D Trust Agreement.
"Class D Trust" means the Delta Air Lines Pass Through Trust 2002-1D
created and administered pursuant to the Class D Trust Agreement.
"Class D Trust Agreement" means the Basic Agreement, as supplemented
by Trust Supplement No. 2002-1D thereto, dated as of the date hereof, governing
the creation and administration of the Delta Air Lines Pass Through Trust
2002-1D and the issuance of the Class D Certificates, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"Class D Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity except as
expressly set forth in the Class D Trust Agreement, but solely as trustee under
the Class D Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class G-1 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 so qualifies, into
which amounts shall be deposited as referred to in Section 3.06(f).
"Class G-1 Certificateholder" means, at any time, any
Certificateholder of one or more Class G-1 Certificates.
"Class G-1 Certificates" means the certificates issued by the Class
G-1 Trust, substantially in the form of Exhibit A to the Class G-1 Trust
Agreement, and authenticated by the Class G-1 Trustee, representing Fractional
Undivided Interests in the Class G-1 Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class G-1
Trust Agreement.
"Class G-1 Liquidity Facility" means, initially, the Revolving
Credit Agreement, dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class G-1 Trustee, and WestLB and, from and after
the replacement of such agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class G-1 Liquidity Provider" means WestLB, together with any
Replacement Liquidity Provider that has issued a Replacement Liquidity Facility
to replace the Class G-1 Liquidity Facility pursuant to Section 3.06(c) or
3.06(e).
"Class G-1 Policy" means the MBIA Financial Guaranty Insurance
Policy No. 37923(1) issued as of the Closing Date by the Policy Provider,
together with all endorsements thereto, in favor of the Subordination Agent for
the benefit of the Class G-1 Certificateholders, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Class G-1 Policy Account" means the Eligible Deposit Account
established pursuant to Section 2.02(a)(iii)(x) into which amounts shall be
deposited as referred to in Section 3.07.
"Class G-1 Trust" means the Delta Air Lines Pass Through Trust
2002-1G-1 created and administered pursuant to the Class G-1 Trust Agreement.
"Class G-1 Trust Agreement" means the Basic Agreement, as
supplemented by Trust Supplement No. 2002-1G-1 thereto, dated as of the date
hereof, governing the creation and administration of the Delta Air Lines Pass
Through Trust 2002-1G-1 and the issuance of the Class G-1 Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class G-1 Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity except as
expressly set forth in the Class G-1 Trust Agreement, but solely as trustee
under the Class G-1 Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Class G-2 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 so qualifies, into
which amounts shall be deposited as referred to in Section 3.06(f).
"Class G-2 Certificateholder" means, at any time, any
Certificateholder of one or more Class G-2 Certificates.
"Class G-2 Certificates" means the certificates issued by the Class
G-2 Trust, substantially in the form of Exhibit A to the Class G-2 Trust
Agreement, and authenticated by the Class G-2 Trustee, representing Fractional
Undivided Interests in the Class G-2 Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class G-2
Trust Agreement.
"Class G-2 Liquidity Facility" means, initially, the Revolving
Credit Agreement, dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class G-2 Trustee, and WestLB and, from and after
the replacement of such agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class G-2 Liquidity Provider" means WestLB, together with any
Replacement Liquidity Provider that has issued a Replacement Liquidity Facility
to replace the Class G-2 Liquidity Facility pursuant to Section 3.06(c) or
3.06(e).
"Class G-2 Policy" means the MBIA Financial Guaranty Insurance
Policy No. 37923(2) issued as of the Closing Date by the Policy Provider,
together with all endorsements thereto, in favor of the Subordination Agent for
the benefit of the Class G-2 Certificateholders, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Class G-2 Policy Account" means the Eligible Deposit Account
established pursuant to Section 2.02(a)(iii)(y) into which amounts shall be
deposited as referred to in Section 3.07.
"Class G-2 Trust" means the Delta Air Lines Pass Through Trust
2002-1G-2 created and administered pursuant to the Class G-2 Trust Agreement.
"Class G-2 Trust Agreement" means the Basic Agreement, as
supplemented by Trust Supplement No. 2002-1G-2 thereto, dated as of the date
hereof, governing the creation and administration of the Delta Air Lines Pass
Through Trust 2001-1G-2 and the issuance of the Class G-2 Certificates, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Class G-2 Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity except as
expressly set forth in the Class G-2 Trust Agreement, but solely as trustee
under the Class G-2 Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Closing Date" means April 30, 2002.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collateral" means, with respect to any Indenture in respect of an
Owned Aircraft, the "Collateral" referred to therein.
"Collection Account" means the Eligible Deposit Account established
by the Subordination Agent pursuant to Section 2.02(a) in and from which the
Subordination Agent shall make deposits and withdrawals in accordance with this
Agreement.
"Consent Notice" has the meaning specified in Section 3.06(d).
"Consent Period" has the meaning specified in Section 3.06(d).
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.06.
"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 or the Adjusted
Expected Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"Defaulted Series G Equipment Note" has the meaning specified in
Section 3.07(c).
"Delta" means Delta Air Lines, Inc., a Delaware corporation, and its
successors and permitted assigns.
"Delta Bankruptcy Event" means the occurrence and continuation of
any of the following:
(a) Delta consents 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, admits in writing its inability to pay its debts generally
as they come due or makes a general assignment for the benefit of
creditors;
(b) Delta files a voluntary petition in bankruptcy or a voluntary
petition or an answer seeking reorganization, liquidation or other relief
as a debtor in a case under any bankruptcy laws or insolvency laws (as in
effect at such time) or an answer admitting the material allegations of a
petition filed against Delta as a debtor in any such case, or Delta seeks
relief as a debtor 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 Delta seeks an agreement, composition, extension or adjustment with its
creditors under such laws; or
(c) an order, judgment or decree is entered by any court of
competent jurisdiction appointing, without the consent of Delta , a
receiver, trustee or liquidator of Delta or sequestering any substantial
part of its property, or granting any other relief in respect of Delta as
a debtor under any bankruptcy laws or insolvency laws (as in effect at
such time), and any such order, judgment or decree of appointment or
sequestration remains in force undismissed, unstayed and unvacated for a
period of 90 days after the date of entry thereof; or
(d) a petition against Delta as a debtor in a case under the federal
bankruptcy laws or other insolvency laws (as in effect at such time) is
filed and not withdrawn or dismissed within 90 days thereafter, or if,
under the provisions of any law providing for reorganization or winding-up
of corporations that applies to Delta , any court of competent
jurisdiction assumes jurisdiction, custody or control of Delta 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
90 days.
"Delta Provisions" has the meaning specified in Section 8.01(a).
"Designated Representatives" means the Subordination Agent
Representatives, the Trustee Representatives, the Policy Provider
Representatives, and the Liquidity Provider Representatives identified under
Section 2.05.
"Disposition Payment" has the meaning specified in Section 3.07(b).
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" means the lawful currency of the United States.
"Downgrade Drawing" has the meaning specified in Section 3.06(c).
"Downgraded Facility" has the meaning specified in Section 3.06(c).
"Drawing" means an Interest Drawing, a Final Drawing, a
Non-Extension Drawing or a Downgrade Drawing, as the case may be.
"Election Distribution Date" has the meaning specified in Section
3.07(c).
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States or any one of the states thereof or the District of
Columbia (or any United States 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 or its equivalent by Moody's or at least A- or its
equivalent by S&P. An Eligible Deposit Account may be maintained with the
Subordination Agent or Liquidity Provider so long as the Subordination Agent or
such Liquidity Provider is an Eligible Institution; provided that the
Subordination Agent, in its individual capacity, or 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
state thereof or the District of Columbia (or any U.S. branch of a foreign
bank), which has a long-term unsecured debt rating of at least A3 or its
equivalent by Moody's or at least A- or its equivalent by S&P.
"Eligible Investments" means investments in (a) obligations of the
United States government or agencies thereof, or obligations guaranteed by the
United States government, (b) open market commercial paper of any corporation
incorporated under the laws of the United States or any state thereof rated at
least P-1 or its equivalent by Moody's or at least A-1 or its equivalent by S&P,
(c) certificates of deposit issued by commercial banks organized under the laws
of the United States or of any political subdivision thereof (or any United
States branch of a foreign bank) having a combined capital and surplus in excess
of $500,000,000 which banks or their holding companies have a rating of A or its
equivalent by Moody's or A or its equivalent by S&P; provided, however, that the
aggregate amount at any one time invested in certificates of deposit issued by
any one bank shall not be in excess of 5% of such bank's capital and surplus,
(d) Dollar denominated offshore certificates of deposit issued by, or offshore
time deposits with, any commercial bank described in (c) or any subsidiary
thereof, and (e) repurchase agreements with any financial institution having
combined capital and surplus of at least $500,000,000 with any of the
obligations described in clauses (a) through (d) as collateral. If none of the
above investments is available, the entire amounts to be invested may be used to
purchase Federal funds from an entity described in clause (c). All Eligible
Investments must be held in an Eligible Deposit Account. Any of the investments
described herein may be made through or with, as applicable, the bank acting as
Trustee or its Affiliates.
"Eligible Liquidity Provider" has the meaning specified in Section
2.06(c).
"Equipment Notes" means, at any time, the Series G-1 Equipment
Notes, the Series G-2 Equipment Notes, the Series C Equipment Notes and the
Series D Equipment Notes, collectively, and in each case, any Equipment Notes
issued in exchange therefor or replacement thereof pursuant to the terms of the
Indentures.
"Excess Reimbursement Obligations" means, (a) in the event of any
Policy Provider Election with respect to a Series G-1 Equipment Note or a Series
G-2 Equipment Note, the portion of the Policy Provider Obligations that
represents interest on such Equipment Note in excess of 18 months of interest at
the interest rate applicable to such Equipment Note and (b) any interest on the
Liquidity Obligations in respect of the Liquidity Facilities paid by the Policy
Provider to the Liquidity Providers from and after the end of the 18-month
period referred to in Section 3.07(c).
"Expected Distributions" means, with respect to the Certificates of
any Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest in respect of such Certificates and (y) the difference between (A) the
Pool Balance of such Certificates as of the immediately preceding Distribution
Date (or, if the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the 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 Equipment Notes held in such Trust
has been paid when due (whether at stated maturity or upon redemption,
prepayment, purchase or Acceleration or otherwise) and such payments have been
distributed to the holders of such Certificates and (ii) 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.
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 distributions 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 specified in such Liquidity Facility.
"Fee Letter" means the Fee Letter among WestLB, the Subordination
Agent and Delta with respect to the Liquidity Facilities and any fee letter
entered into among the Subordination Agent, Delta and any Replacement Liquidity
Provider.
"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 in respect of such Certificates and (y) the Pool
Balance of such Certificates as of the immediately preceding Distribution Date.
For purposes of calculating Final Distributions with respect to the Certificates
of any Trust, any premium paid on the Equipment Notes held in such Trust which
has not been distributed to the Certificateholders of such Trust (other than
such premium or a portion thereof applied to distributions 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 specified in Section 3.06(i).
"Final Legal Distribution Date" means (i) with respect to the Class
G-1 Certificates, July 2, 2024, (ii) with respect to the Class G-2 Certificates,
January 2, 2014, (iii) with respect to the Class C Certificates, July 2, 2013
and (iv) with respect to the Class D Certificates, July 2, 2007.
"Final Order" has the meaning specified in each Policy.
"Fractional Undivided Interest" means the fractional undivided
interest in a Trust that is represented by a Certificate relating to such Trust.
"Indenture" means each of the Indenture and Security Agreements
dated the date hereof entered into by the Loan Trustee and Delta (or the Owner
Trustee, following a sale/leaseback transaction relating to the Aircraft
referred to therein) pursuant to the related Participation Agreements providing
for the issuance of the Equipment Notes on the date hereof (or the assumption
thereof by the Owner Trustee), in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Indenture Estate" means, with respect to any Indenture in respect
of a Leased Aircraft, the "Indenture Estate" referred to therein.
"Indenture Event of Default" means, with respect to any Indenture,
any Event of Default (as such term is defined in such Indenture) thereunder.
"Initial Class D Holder" means Delta 2002-1 Class D Certificate
Trust, a Delaware business trust organized pursuant to the Business Trust
Agreement, as the sole initial purchaser and holder of the Class D Certificates.
"Interest Drawing" has the meaning specified in Section 3.06(a).
"Interest Payment Date" means, with respect to any Liquidity
Facility, each date on which interest is due and payable under Section 3.07(c),
(d) or (e) of such Liquidity Facility on a Downgrade Drawing, Non-Extension
Drawing or Final Drawing thereunder.
"Investment Earnings" means investment earnings on funds on deposit
in the Trust Accounts net of losses and the Subordination Agent's reasonable
expenses in making such investments.
"Lease" means with respect to any Indenture relating to a Leased
Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning specified in the recitals of this
Agreement.
"Lending Office" has the meaning, with respect to any Liquidity
Facility, ascribed to such term in such Liquidity Facility.
"Lien" means any mortgage, pledge, lien, charge, claim, encumbrance,
lease, sublease or security interest of any kind.
"Liquidity Event of Default", with respect to any Liquidity
Facility, has the meaning specified in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i)
the principal amount of any Drawings under the Liquidity Facilities and (ii) any
interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class G-1 Liquidity
Facility, the Class G-2 Liquidity Facility or the Class C Liquidity Facility, as
applicable.
"Liquidity Obligations" means all principal, interest, fees and
other amounts owing to the Liquidity Providers under the Liquidity Facilities,
Section 4.02 of the Participation Agreements relating to the Owned Aircraft,
Section 4.03 of the Participation Agreements relating to the Leased Aircraft or
the Fee Letter.
"Liquidity Provider" means, at any time, the Class G-1 Liquidity
Provider, the Class G-2 Liquidity Provider or the Class C Liquidity Provider, as
applicable.
"Liquidity Provider Incumbency Certificate" has the meaning
specified in Section 2.05(c).
"Liquidity Provider Representatives" has the meaning specified in
Section 2.05(c).
"Loan Trustee" means, with respect to any Indenture, the bank, trust
company or other financial institution designated as loan trustee thereunder,
and any successor to such loan trustee.
"LTV Appraisals" has the meaning specified in Section 4.01(a).
"LTV Collateral Amount" of any Aircraft for any Class of
Certificates means, as of any Distribution Date, the lesser of (i)(x) with
respect to any Aircraft other than an Aircraft referred to in the following
clauses (y) and (z), the LTV Ratio for such Class of Certificates multiplied by
the Appraised Current Market Value of such Aircraft or (y) with respect to any
such Aircraft that has suffered an Event of Loss under and as defined in the
relevant Indenture, the amount of the insurance proceeds paid to the related
Loan Trustee in respect thereof to the extent then held by such Loan Trustee
(and/or on deposit in the Special Payments Account) or payable to such Loan
Trustee in respect thereof or (z) with respect to any such Aircraft that has
been released from the applicable Indenture pursuant to the provisions of
Section 10.01(b) thereof, the amount of money and U.S. Government Obligations
deposited with the Loan Trustee pursuant thereto as of such Distribution Date
and (ii) the outstanding principal amount of the Equipment Notes secured by such
Aircraft after giving effect to any principal payments of such Equipment Notes
on or before such Distribution Date.
"LTV Ratio" means (i) for the Class G-1 Certificates, 56.1%, (ii)
for the Class G-2 Certificates, 56.1%, (iii) for the Class C Certificates, 61.1%
and (iv) for the Class D Certificates, 69.7%.
"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
(a) 75% of the Appraised Current Market Value of such Aircraft and (b) the
aggregate outstanding principal amount of such Equipment Notes, plus accrued and
unpaid interest thereon.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Non-Controlling Party" means, at any time, the Policy Provider, any
Trustee or Liquidity Provider which is not the Controlling Party at such time.
"Non-Extended Facility" has the meaning specified in Section
3.06(d).
"Non-Extension Drawing" has the meaning specified in Section
3.06(d).
"Non-Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"Notice of Avoided Payment", with respect to a Policy, has the
meaning specified in such Policy.
"Notice of Nonpayment", with respect to a Policy, has the meaning
specified in such Policy.
"Officer's Certificate" of any Person means a certification signed
by a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity
Facilities, the Business Trust Agreement, the Policies, the Policy Provider
Agreement, the Policy Fee Letter, the Fee Letter, the Indentures, the Leases (if
any), the Trust Agreements, the Participation Agreements, 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) all of the Certificates of such Class if money in the full
amount required to make the final distribution with respect to such Class
pursuant to Section 11.01 of such Trust Agreement has been theretofore
deposited with the related Trustee in trust for the Certificateholders of
such Certificates as provided in Section 4.01 of such Trust Agreement,
pending distribution of such money to such Certificateholders pursuant to
payment of such final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of which
other Certificates of such Class have been authenticated and delivered
pursuant to such Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Fractional Undivided Interest of such Certificates have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by Delta or any of its Affiliates shall be disregarded and
deemed not to be Outstanding. 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. Notwithstanding the foregoing, (x) if Delta and
its Affiliates own 100% of the Certificates of each Class, such Certificates
shall not be so disregarded and (y) if any amount of such Certificates owned by
Delta and its Affiliates have been pledged in good faith, such Certificates
shall not be disregarded 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 Delta 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.
"Owned Aircraft" has the meaning specified in the recitals of this
Agreement.
"Owner Participant" means, with respect to any Indenture pertaining
to a Leased Aircraft, the Owner Participant (as defined therein) and any
permitted successor or assign of such Owner Participant.
"Owner Trustee" means, with respect to any Indenture pertaining to a
Leased Aircraft, the Owner Trustee (as defined therein) not in its individual
capacity but solely as trustee under the related owner trust agreement, together
with any successor trustee appointed pursuant to such owner trust agreement.
"Participation Agreement" means, with respect to each Indenture, the
"Participation Agreement" referred to therein, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Payees" has the meaning specified in Section 2.03(c).
"Performing Equipment Note" means an Equipment Note issued pursuant
to an Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration); provided, that in the
event of a bankruptcy proceeding in which Delta is a debtor under Title 11 of
the United States Code (the "Bankruptcy Code"), (i) any payment default
occurring before the date of the order for relief for such proceeding shall not
be taken into consideration during the 60-day period under Section 1110(a)(2)(A)
of the Bankruptcy Code (or such longer period as may apply under Section 1110(b)
of the Bankruptcy Code) (the "Section 1110 Period"), (ii) any payment default
occurring after the date of the order for relief in such proceeding shall not be
taken into consideration if such payment default is cured under Section
1110(a)(2)(B) of the Bankruptcy Code before the later of 30 days after the date
of such default or the expiration of the Section 1110 Period and (iii) any
payment default occurring after the Section 1110 Period will not be taken into
consideration if such payment default is cured before the end of the grace
period, if any, set forth in the related Indenture.
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.
"Policy" means the Class G-1 Policy or the Class G-2 Policy.
"Policy Account" means the Class G-1 Policy Account or the Class G-2
Policy Account, as applicable.
"Policy Drawing" means, with respect to any Policy, any payment of a
claim under such Policy.
"Policy Expenses" means all amounts (including amounts in respect of
expenses) owing to the Policy Provider under the Policy Provider Agreement or
the Participation Agreements other than (i) any amounts due under the Policy Fee
Letter, (ii) the amount of any Policy Drawing and any interest accrued thereon,
(iii) reimbursement of and interest on the Liquidity Obligations paid to the
Liquidity Provider by the Policy Provider, (iv) any indemnity payments owed to
the Policy Provider, (v) any amounts that the Policy Provider is entitled to
receive by virtue of the subrogation rights of the Policy Provider hereunder,
including, without limitation, fees and expenses incurred in connection with the
enforcement of such rights and (vi) any Excess Reimbursement Obligations.
"Policy Fee Letter" means the fee letter, dated as of April 30, 2002
from the Policy Provider to Delta and the Subordination Agent setting forth the
Premium and certain other amounts payable in respect of the Policies.
"Policy Provider" means MBIA Insurance Corporation, or any successor
thereto, as issuer of the Policies.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement, dated as of the date of issuance of the Certificates, among the
Subordination Agent, the Class G-1 Trustee, the Class G-2 Trustee, Delta and the
Policy Provider pursuant to which, among other things, the Subordination Agent
agrees to reimburse the Policy Provider for amounts paid pursuant to claims made
under the Policies.
"Policy Provider Default" means the occurrence of any of the
following events: (a) the Policy Provider fails to make a payment required under
any Policy in accordance with its terms and such failure remains unremedied for
two Business Days following the delivery of Written Notice of such failure to
the Policy Provider or (b) the Policy Provider (i) files any petition or
commences any case or proceeding under any provisions of any federal or state
law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) makes a general assignment for the benefit of its creditors
or (iii) has an order for relief entered against it under any federal or state
law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization that is final and nonappealable, or (c) a court of competent
jurisdiction, the New York Insurance Department or another competent regulatory
authority enters a final and nonappealable order, judgment or decree (i)
appointing a custodian, trustee, agent or receiver for the Policy Provider or
for all or any material portion of its property or (ii) authorizing the taking
of possession by a custodian, trustee, agent or receiver of the Policy Provider
(or taking of possession of all or any material portion of the Policy Provider's
property).
"Policy Provider Election" has the meaning specified in Section
3.07(c).
"Policy Provider Incumbency Certificate" has the meaning specified
in Section 2.05(d).
"Policy Provider Obligations" means all reimbursement and other
amounts, including fees and indemnities, due to the Policy Provider under the
Policy Provider Agreement, but shall not include (i) any amounts due under the
Policy Fee Letter and (ii) any interest on Policy Drawings except, if the Class
G-1 Liquidity Provider or the Class G-2 Liquidity Provider has failed to honor
its obligation to make a payment on any Interest Drawing in respect of the Class
G-1 Certificates or the Class G-2 Certificates, as applicable, interest on the
portion of any Policy Drawing made to cover the shortfall attributable to such
failure by the Liquidity Provider in an amount equal to the amount of interest
that would have accrued on such Interest Drawing if such Interest Drawing had
been made at the interest rate applicable to such Interest Drawing until such
Policy Drawing has been repaid in full, up to a maximum of three such Policy
Drawings under the applicable Policy. For the avoidance of doubt, and subject to
the effect of payment priorities with respect to Excess Reimbursement
Obligations, Policy Provider Obligations include reimbursement of and interest
on the Liquidity Obligations in respect of the Liquidity Facilities paid by the
Policy Provider to the Liquidity Provider.
"Policy Provider Representatives" has the meaning specified in
Section 2.05(d).
"Pool Balance" means, with respect to the Certificates of any Class,
as of any date, (i) the original aggregate face amount of the Certificates of
such Class less (ii) the aggregate amount of all distributions made in respect
of such Certificates other than distributions made in respect of interest or
premium or reimbursement of any costs or expenses incurred in connection
therewith. The Pool Balance as of any Distribution Date with respect to each
Class shall be computed after giving effect to the payment of principal, if any,
on the Equipment Notes or other Trust Property held in the related Trust and the
distribution thereof to be made on such date and, with respect to the Class G-1
Trust or the Class G-2 Trust, payments under the related Policy for the benefit
of the Class G-1 Certificateholders or the Class G-2 Certificateholders,
respectively (other than in respect of the Liquidity Facilities and interest on
the Class G-1 Certificates or the Class G-2 Certificates, respectively).
"Premium" has the meaning specified in the Policy Fee Letter.
"Premium Percentage" has the meaning specified in the Policy Fee
Letter.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Provider Representatives" has the meaning specified in Section
2.05(c)
"PTC Event of Default" means, with respect to each Trust Agreement,
the failure to distribute within 10 Business Days after the applicable
Distribution Date: (i) the outstanding Pool Balance of the applicable Class of
Certificates on the Final Legal Distribution Date for such Class (unless, in the
case of the Class G-1 Certificates or the Class G-2 Certificates, the
Subordination Agent shall have made a drawing under the Class G-1 Policy or the
Class G-2 Policy, respectively, in an aggregate amount sufficient to pay such
outstanding Pool Balance and shall have distributed such amount to the Class G-1
Trustee or the Class G-2 Trustee, respectively) or (ii) interest scheduled for
distribution on such Certificates on any Distribution Date (unless the
Subordination Agent shall have made an Interest Drawing, or a withdrawal from
the Cash Collateral Account for such Class or (in the case of the Class G-1
Certificates or the Class G-2 Certificates) a drawing under the Class G-1 Policy
or the Class G-2 Policy, respectively, 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 of two
nationally recognized rating agencies that have been requested to rate the
Certificates and that are then rating the Certificates. The initial Rating
Agencies will be Moody's and S&P.
"Ratings Confirmation" means, with respect to any action proposed to
be taken, a written confirmation from each of the Rating Agencies that such
action (without regard to the related Policy in the case of the Class G-1
Certificates and Class G-2 Certificates) 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.
"Register", with respect to any Trust, has the meaning ascribed to
such term in the Trust Agreement for such Trust.
"Regular Distribution Dates" means each January 2 and July 2,
commencing on January 2, 2003; 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, surety bond, financial
insurance policy or guaranty) as shall permit the Rating Agencies to confirm in
writing their respective ratings then in effect for the Certificates of the
Class with respect to which such Liquidity Facility was issued (before
downgrading of such ratings, if any, as a result of the downgrading, if any, of
the applicable Liquidity Provider without regard to any Policy), and, in the
case of the Class G-1 Liquidity Facility or the Class G-2 Liquidity Facility
only, to be consented to by the Policy Provider, which consent shall not be
unreasonably withheld or delayed, in a face amount (or in an aggregate face
amount) equal to the applicable Required Amount and issued by a Person (or
Persons) having short-term ratings issued by both Rating Agencies that are equal
to or higher than the Threshold Rating specified in clause (a) of the definition
of "Threshold Rating" or if such Person (or Persons) does not have a short-term
rating from a given Rating Agency, a long-term rating issued by such Rating
Agency that is equal to or higher than the "Threshold Rating" specified in
clause (b) of the definition of 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 3.06(d) hereof.
"Replacement Liquidity Provider" means a Person who issues a
Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility, or
the Cash Collateral Account, for any Class, 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 on the basis of a
360-day year comprised of twelve 30-day months, that would be distributable 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 distributions of principal on
such Class of Certificates. The Pool Balance for purposes of the definition of
Required Amount with respect to the Class G-1 Liquidity Facility or the Class
G-2 Liquidity Facility shall, in the event of any Policy Provider Election, be
deemed to be reduced by an amount (if positive) by which (a) the outstanding
principal balance of the Series G-1 Equipment Note or the Series G-2 Equipment
Note, respectively, in respect of which such Policy Provider Election has been
made shall exceed (b) the amount of any Policy Drawings previously paid by the
Policy Provider in respect of principal on such Series G-1 Equipment Note or
Series G-2 Equipment Note, respectively.
"Responsible Officer" means (i) with respect to the Subordination
Agent and each of the Trustees, any officer in the Corporate Trust Department or
similar department of the Subordination Agent or such Trustee, as the case may
be, or any other officer customarily performing functions similar to those
performed by the persons who at the time shall be such officers or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject, (ii) with respect to each Liquidity Provider, any
authorized officer of such Liquidity Provider and (iii) with respect to the
Policy Provider, any of its authorized officers.
"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) or (ii) any distribution in respect of interest on
such Equipment Note to the Certificateholders of Certificates of the
corresponding Class of Certificates with funds drawn under the Liquidity
Facility for such Class or withdrawn from the Cash Collateral Account for such
Class (or, in the case of any Series G-1 Equipment Note or Series G-2 Equipment
Note, under the Class G-1 Policy or the Class G-2 Policy, respectively), which
payment in the case of clause (i) or clause (ii) represents an installment of
principal on such Equipment Note at the stated maturity of such installment, or
the payment of regularly scheduled interest accrued on the unpaid principal
amount of such Equipment Note, or both; provided, however, that any payment of
principal, premium, if any, or interest resulting from the redemption or
purchase of any Equipment Note shall not constitute a Scheduled Payment.
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be made.
"Section 2.04(b) Fraction" has the meaning specified in Section
2.04(b).
"Series C Equipment Notes" means the Series C Equipment Notes issued
pursuant to each Indenture by Delta (or the Owner Trustee, following a
sale/leaseback transaction relating to the Aircraft referred to in such
Indenture) 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 D Equipment Notes" means the Series D Equipment Notes issued
pursuant to each Indenture by Delta 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 G-1 Equipment Notes" means the Series G-1 Equipment Notes
issued pursuant to each Indenture by Delta (or the Owner Trustee, following a
sale/leaseback transaction relating to the Aircraft referred to in such
Indenture) 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 G-2 Equipment Notes" means the Series G-2 Equipment Notes
issued pursuant to each Indenture by Delta (or the Owner Trustee, following a
sale/leaseback transaction relating to the Aircraft referred to in such
Indenture) 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.
"Special Distribution Date" means, (i) with respect to any Special
Payment, the Business Day chosen by the Subordination Agent pursuant to Section
2.04(a) or 3.07(b) for the distribution of such Special Payment in accordance
with this Agreement, (ii) an Election Distribution Date or (iii) each other date
designated in Section 3.07(c) or 3.07(e) as a Special Distribution Date.
"Special Payment" means any payment (other than a Scheduled Payment
or a distribution referred to in Section 2.03(c)) in respect of, or any proceeds
of, any Equipment Note or Collateral (as defined in each Indenture in respect of
an Owned Aircraft) or Indenture Estate (as defined in each Indenture in respect
of a Leased Aircraft).
"Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.02(a) as a sub-account to the Collection Account.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"State Street" has the meaning specified in the introductory
paragraph to this Agreement.
"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
3.06(d).
"Stated Interest Rate" means (i) with respect to the Class G-1
Certificates, 6.718% per annum, (ii) with respect to the Class G-2 Certificates,
6.417% per annum, (iii), with respect to the Class C Certificates, 7.779% per
annum and (iv) with respect to the Class D Certificates, 8.270% per annum.
"Subordination Agent" has the meaning specified in the introductory
paragraph to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning
specified in Section 2.05(a).
"Subordination Agent Representatives" has the meaning specified in
Section 2.05(a).
"Tax" and "Taxes" means all governmental fees (including, without
limitation, license, filing and registration fees) and all taxes (including,
without limitation, franchise, excise, stamp, value added, income, gross
receipts, sales, use and property taxes), withholdings, assessments, levies,
imposts, duties or charges, of any nature whatsoever, together with any related
penalties, fines, additions to tax or interest thereon imposed, withheld, levied
or assessed by any country, taxing authority or governmental subdivision thereof
or therein or by any international authority, including any taxes imposed on any
Person as a result of such Person being required to collect and pay over
withholding taxes.
"Termination Notice" with respect to any Liquidity Facility has the
meaning specified in such Liquidity Facility.
"Threshold Rating" means (a) with respect to the Class G-1 Liquidity
Provider and the Class G-2 Liquidity Provider, a short-term unsecured debt
rating of P-1 in the case of Xxxxx'x and a short-term corporate credit rating of
A-1+ in the case of S&P, and with respect to the Class C Liquidity Provider, a
short-term unsecured debt rating of P-1 in the case of Xxxxx'x and a short-term
corporate credit rating of A-1 in the case of S&P, and (b) in the case of any
Person who does not have such short-term rating from either or both of such
Rating Agencies, then in lieu of such short-term rating from such Rating Agency
or Rating Agencies, with respect to the Class G-1 Liquidity Provider and the
Class G-2 Liquidity Provider, a long-term unsecured debt rating of A1 in the
case of Xxxxx'x and a long-term corporate credit rating of AA- in the case of
S&P and, with respect to the Class C Liquidity Provider, a long-term unsecured
debt rating of A1 in the case of Xxxxx'x and a long-term corporate credit rating
of A in the case of S&P.
"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 Event of
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 or (z) the occurrence of
a Delta Bankruptcy Event.
"Trust" means any of the Class G-1 Trust, the Class G-2 Trust, the
Class C Trust or the Class D Trust.
"Trust Accounts" has the meaning specified in Section 2.02(a).
"Trust Agreement" means any of the Class G-1 Trust Agreement, the
Class G-2 Trust Agreement, the Class C Trust Agreement or the Class D Trust
Agreement.
"Trust Property", with respect to any Trust, has the meaning
specified in the Trust Agreement for such Trust.
"Trust Supplement" means an agreement supplemental to the Basic
Agreement pursuant to which (i) a separate trust is created for the benefit of
the holders of Certificates of a series, (ii) the issuance of the Certificates
of a series representing fractional undivided interests in such trust is
authorized and (iii) the terms of the Certificates of such series are
established, as such agreement may from time to time be supplemented, amended or
otherwise modified.
"Trustee" means any of the Class G-1 Trustee, the Class G-2 Trustee,
the Class C Trustee or the Class D Trustee.
"Trustee Incumbency Certificate" has the meaning specified in
Section 2.05(b).
"Trustee Representatives" has the meaning specified in Section
2.05(b).
"Underwriters" means the several underwriters listed as such in the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated
April 23, 2002, among the Underwriters and Delta, 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.
"United States" means the United States of America.
"WestLB" has the meaning specified in the introductory paragraph to
this Agreement.
"Withdrawal Notice" has the meaning specified in Section 3.06(d).
"Written Notice" means, from the Subordination Agent, any Trustee,
the Liquidity Provider or the Policy Provider, a written instrument executed by
the Designated Representative of such Person. An invoice delivered by a
Liquidity Provider pursuant to Section 3.01 in accordance with its normal
invoicing procedures shall constitute Written Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01. Agreement to Terms of Subordination; Payments from
Monies Received Only. (a) Each Trustee hereby acknowledges and agrees to the
terms of subordination set forth in this Agreement in respect of each Class of
Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes, the Liquidity Facilities and the Policies 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 2.01(b), 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 and other payments under the Operative
Agreements, including payments under Section 4.02 of the Participation
Agreements relating to the Owned Aircraft, Section 4.03 of the Participation
Agreements relating to the Leased Aircraft, and Section 2.14 of the Indentures,
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 each Certificateholder, by its acceptance of a
Certificate, each Liquidity Provider, by entering into the Liquidity Facility to
which it is a party, and the Policy Provider, by entering into the Policy
Provider Agreement, has agreed to look solely to such amounts to the extent
available for distribution to it as provided in this Agreement or the applicable
Trust Agreement, as the case may be, and that none of the Trustees, Owner
Trustees, Loan Trustees, Owner Participants or the Subordination Agent is
personally liable to any of them for any amounts payable or any liability under
this Agreement, any Trust Agreement, any Liquidity Facility, the Policy Provider
Agreement 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 herein and in each Trust Agreement or (in the case of the Loan Trustees
and the Owner Trustees) as expressly provided in any Operative Agreement.
Notwithstanding anything to the contrary in this Agreement and in
the other Operative Agreements, the Certificates do not represent indebtedness
of the related Trust, and references in this Agreement and the Operative
Agreements to accrued interest or principal amounts payable on the Certificates
of any Class are included only for computational purposes. For purposes of such
computations, the Certificates of any Class shall be deemed to be comprised of
interest and principal components, with the principal component deemed to be the
Pool Balance, and the interest component deemed to equal interest accruing at
the Stated Interest Rate for such Class of Certificates from (i) the later of
(1) the date of the issuance thereof and (2) the most recent but preceding
Distribution Date to which such interest was distributed to (ii) the applicable
date of determination, such interest to be considered payable in arrears and to
be calculated on the basis of a 360-day year comprised of twelve 30-day months.
Section 2.02. Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name (i)
the Collection Account as an Eligible Deposit Account, bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustees, the Certificateholders, the Liquidity Providers and the
Policy Provider, (ii) as a sub-account in the Collection Account, the Special
Payments Account as an Eligible Deposit Account, bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Trustees, the Certificateholders, the Liquidity Providers and the Policy
Provider and (iii) (x) a Class G-1 Policy Account as an Eligible Deposit Account
bearing a designation clearly indicating that the funds deposited therein are
held in trust for the benefit of the Class G-1 Certificateholders and (y) a
Class G-2 Policy Account as an Eligible Deposit Account bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Class G-2 Certificateholders. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.06(f). Upon such establishment and
maintenance under Section 3.06(f), the Collection Account, the Cash Collateral
Accounts and the Policy Accounts shall constitute the "Trust Accounts"
hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by Delta
or its designated representative 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
2.04, 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 the amounts in the applicable Cash Collateral Account in Eligible
Investments pursuant to the written instructions of the Liquidity Provider
funding such Drawing, and provided further, however, that upon the occurrence
and during the continuation of a Triggering Event, the Subordination Agent shall
invest and reinvest such amounts (other than amounts in the Cash Collateral
Accounts as a result of a Downgrade Drawing or a Non-Extension Drawing, which
shall be governed by the foregoing proviso) in Eligible Investments in
accordance with the written instructions of the Controlling Party. Unless
otherwise expressly provided in this Agreement (including, without limitation,
with respect to Investment Earnings on amounts on deposit in the Cash Collateral
Accounts, Section 3.06(f)), 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. The Subordination Agent's reasonable
fees and expenses actually incurred in making such investments and any losses
incurred in such investments shall be charged against the principal amount
invested. 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 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 herein with respect to Investment Earnings). The Trust
Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the Trustees,
the Certificateholders, the Liquidity Providers and the Policy Provider, as the
case may be. If, at any time, any of the Trust Accounts ceases to be an Eligible
Deposit Account, the Subordination Agent shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, to which the Policy Provider, the
Liquidity Providers and each Rating Agency may consent) establish a new
Collection Account, Special Payments Account, Policy 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, Policy Account, Cash Collateral Account, as the case may be. So long as
the Subordination Agent is an Eligible Institution, the Trust Accounts shall be
maintained with it as Eligible Deposit Accounts.
Section 2.03. Deposits to the Collection Account and Special
Payments Account; Certain Distributions. (a) The Subordination Agent shall, on
each day when one or more Scheduled Payments are made to the Subordination Agent
as holder of the Equipment Notes (other than any Scheduled Payment which by the
express terms hereof is to be deposited to a Policy Account or a Cash Collateral
Account), deposit in the Collection Account the aggregate amount of such
Scheduled Payments.
(b) The Subordination Agent shall, on each day 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.
(c) In the event that a Loan Trustee distributes to the
Subordination Agent pursuant to Section 3.04 or clause "first" of Section 3.03
of any Indenture any amounts payable under clauses (b), (c), (d) or (e) of
Section 2.14 of any Indenture, the Subordination Agent shall promptly deposit
such amounts in the Collection Account. The Subordination Agent will distribute
promptly upon receipt thereof (or in the case of any such payment, compensation
or reimbursement in respect of the Subordination Agent, will retain) (i) any
indemnity payment received by it from Delta in respect of any Trustee, the
Subordination Agent, any Liquidity Provider or the Policy Provider
(collectively, the "Payees") and (ii) any compensation or reimbursement received
by it from Delta or the Loan Trustee under any Operative Agreement in respect of
any Payee (including, without limitation, any fees payable to any Liquidity
Provider under Section 2.03 of any Liquidity Facility, any premium payable to
the Policy Provider under the Policy Provider Agreement or other amounts
referred to in clauses (a), (c), (d) or (e) of Section 2.14 of any Indenture),
in any such case directly to the Payee entitled thereto, provided that if such
Payee has previously received from the Collection Account such payment,
compensation or reimbursement, then the Subordination Agent shall deposit such
amount in the Collection Account.
Section 2.04. Distributions of Special Payments. (a) Notice of
Special Payment. Upon receipt by the Subordination Agent, as registered holder
of the Equipment Notes, of any notice of a Special Payment (or, in the absence
of any such notice, upon receipt by the Subordination Agent of a Special
Payment), the Subordination Agent shall promptly give notice thereof to each
Trustee, the Liquidity Providers and the Policy Provider. The Subordination
Agent shall promptly calculate the amount of the prepayment (including upon
Acceleration), redemption or purchase of Equipment Notes or the amount of any
Overdue Scheduled Payment, as the case may be, comprising such Special Payment
under the applicable Indenture or Indentures and shall promptly send to each
Trustee and the Policy Provider a Written Notice of such amount and the amount
allocable to each Trust. Such Written Notice shall also set the distribution
date for such Special Payment (a "Special Distribution Date"), which shall be
the first Business Day that 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
2.04(b) and 2.04(c) hereof, as applicable.
(b) Redemptions, Purchases and Prepayments of Equipment Notes. (i)
So long as no Triggering Event shall have occurred (whether or not continuing),
the Subordination Agent shall make distributions pursuant to this Section
2.04(b) of amounts on deposit in the Special Payments Account on account of the
redemption, purchase (including, without limitation, a purchase resulting from a
sale of the Equipment Notes permitted by Article IV) or prepayment (including
upon Acceleration) of all of the Equipment Notes issued pursuant to an Indenture
on the Special Distribution Date for such Special Payment in the following order
of priority:
first, such amount as shall be required to pay (A) all accrued
and unpaid Liquidity Expenses and Policy Expenses then in arrears
plus (B) the product of (x) the aggregate amount of all accrued and
unpaid Liquidity Expenses and Policy Expenses not in arrears to such
Special Distribution Date multiplied by (y) a fraction, the
numerator of which is the aggregate outstanding principal amount of
Equipment Notes being redeemed, purchased or prepaid on such Special
Distribution Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes (the "Section
2.04(b) Fraction"), shall be distributed to the Liquidity Providers
and the Policy Provider pro rata on the basis of the amount of
Liquidity Expenses and Policy Expenses owed to each Liquidity
Provider and the Policy Provider, respectively;
second, such amount as shall be required to pay (i) (A) all
accrued and unpaid interest (including interest accrued and unpaid
on any Interest Drawing or any Applied Provider Advance (as defined
in any Liquidity Facility)) then in arrears on all Liquidity
Obligations (determined after giving effect to payments made by the
Policy Provider to each Liquidity Provider, if any, in respect of
interest on drawings under the Liquidity Facilities) plus (B) the
product of (x) the aggregate amount of all accrued and unpaid
interest on all Liquidity Obligations not in arrears to such Special
Distribution Date (at the rate provided in the applicable Liquidity
Facility) (determined after giving effect to payments made by the
Policy Provider to each Liquidity Provider, if any, in respect of
interest on drawings under the Liquidity Facilities) multiplied by
(y) the Section 2.04(b) Fraction, (ii) if the Class G-1 Liquidity
Provider or Class G-2 Liquidity Provider has defaulted in its
obligation to make any Interest Drawing, (A) the aggregate amount of
interest accrued on the portion of any Policy Drawing made to cover
the shortfall attributable to such default by the Liquidity Provider
at the rate provided in the "except" clause of clause (ii) of the
definition of "Policy Provider Obligations" which is then in arrears
plus (B) the product of (x) the aggregate amount of all accrued and
unpaid interest on such Policy Drawings not in arrears to such
Special Distribution Date multiplied by (y) the Section 2.04(b)
Fraction, and (iii) if the Policy Provider has elected to pay to
each Liquidity Provider all outstanding drawings and interest owing
to such Liquidity Provider under its Liquidity Facility pursuant to
Section 2.06(c) hereof, the amount of such payment made to the
Liquidity Providers attributable to such interest accrued on such
drawings, shall be distributed to the Liquidity Providers and the
Policy Provider pro rata on the basis of the amount of such
Liquidity Obligations owed to each Liquidity Provider and the amount
of such unreimbursed Policy Provider Obligations payable to the
Policy Provider under this clause "second";
third, such amount as shall be required (A) if any Cash
Collateral Account has been previously funded as provided in Section
3.06(f), 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 have 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, 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, (C) if,
with respect to any particular Liquidity Facility, neither subclause
(A) nor subclause (B) of this clause "third" is applicable, to pay
or reimburse the Liquidity Provider in respect of such Liquidity
Facility in an amount equal to the amount of any unreimbursed
Interest Drawings under such Liquidity Facility shall be distributed
to such Liquidity Provider (other than amounts payable pursuant to
clause "first" or "second" of this Section 2.04(b) and as determined
after giving effect to payments made by the Policy Provider to the
Liquidity Provider in respect of principal of drawings under the
Liquidity Facilities), pro rata with any amount distributable
pursuant to subclause (D) of this clause "third" on the basis of the
amount of all such unreimbursed Interest Drawings and unreimbursed
Policy Provider Obligations payable to the Policy Provider under
subclause (D) of this clause "third" and (D) if the Policy Provider
has elected to pay to each Liquidity Provider all outstanding
drawings and interest owing to such Liquidity Provider under its
Liquidity Facility pursuant to Section 2.06(c) hereof, to reimburse
the Policy Provider for the principal amount of such payment made to
the Liquidity Providers, shall be distributed to the Policy
Provider, but only after giving effect to the application of
amounts, if any, under subclause (A) or (B) of this clause "third",
and if any amount shall be distributable under subclause (C) of this
clause "third", pro rata with any amount distributable pursuant to
such subclause (C) on the basis of the amounts of all such
unreimbursed Interest Drawings and the amount of such unreimbursed
Policy Provider Obligations payable to the Policy Provider under
this clause "third";
fourth, if, with respect to any particular Liquidity Facility,
any amounts are to be distributed pursuant to either subclause (A)
or (B) of clause "third" 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;
fifth, if any Class G-1 Certificates or Class G-2 Certificates
are Outstanding on such Special Distribution Date, such amount as
shall be required to pay in full Expected Distributions to the
holders of Class G-1 Certificates on such Special Distribution Date
shall be distributed to the Class G-1 Trustee and such amount as
shall be required to pay in full Expected Distributions to the
holders of Class G-2 Certificates on such Special Distribution Date
shall be distributed to the Class G-2 Trustee, pro rata on the basis
of such amounts in respect of each such Class of Certificates;
sixth, such amount as shall be required to pay Policy Provider
Obligations then due (other than amounts payable pursuant to the
preceding clauses of this Section 2.04(b)(i) and other than any
Excess Reimbursement Obligations) to the Policy Provider;
seventh, if any Class C Certificates are Outstanding on such
Special Distribution Date, such amount as shall be required to pay
in full Expected Distributions to the holders of Class C
Certificates on such Special Distribution Date shall be distributed
to the Class C Trustee;
eighth, such amount as shall be required to pay (x) Excess
Reimbursement Obligations to the Policy Provider and (y) the product
of any amounts due under the Policy Fee Letter multiplied by the
fraction specified in clause (i)(B)(y) of clause "third" of this
Section 2.04(b)(i);
ninth, if any Class D Certificates are Outstanding on such
Special Distribution Date, such amount as shall be required to pay
in full Expected Distributions to holders of Class D Certificates on
such Special Distribution Date shall be distributed to the Class D
Trustee; and
tenth, the balance, if any, of such Special Payment shall be
deposited in the Collection Account.
For the purposes of this Section 2.04(b), clause (x) of the
definition of "Expected Distributions" shall be deemed to read as follows: "(x)
accrued, due and unpaid interest in respect of such Certificates together with
(without duplication) accrued and unpaid interest in respect of a portion of
such Certificates equal to the outstanding principal amount of Equipment Notes
being redeemed, purchased or prepaid (immediately prior to such redemption,
purchase or prepayment)".
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to this
Section 2.04(b) of amounts on deposit in the Special Payments Account on account
of the redemption, purchase or prepayment of the Equipment Notes issued pursuant
to an Indenture on the Special Distribution Date for such Special Payment in
accordance with Section 3.03.
(c) Other Special Payments. Any amounts on deposit in the Special
Payments Account other than in respect of amounts to be distributed pursuant to
Section 2.04(b) shall be distributed on the Special Distribution Date therefor
in accordance with Article III.
(d) Investment of Amounts in Special Payments Account. Any amounts
on deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.04(b) or 2.04(c) shall be invested in accordance with
Section 2.02(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.04(b) or 2.04(c), as the case may be.
Section 2.05. Designated Representatives. (a) With the delivery of
this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider, the Policy Provider and each Trustee, and from time to time thereafter
may furnish to each Liquidity Provider, the Policy Provider and each Trustee, at
the Subordination Agent's discretion, or upon any Liquidity Provider's, the
Policy Provider's or Trustee's request (which request shall not be made more
than one time in any 12-month period), a certificate (a "Subordination Agent
Incumbency Certificate") of a Responsible Officer of the Subordination Agent
certifying as to the incumbency and specimen signatures of the officers of the
Subordination Agent and the attorney-in-fact and agents of the Subordination
Agent (the "Subordination Agent Representatives") authorized to give Written
Notices on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider, the Policy Provider and each Trustee receives a subsequent
Subordination Agent Incumbency Certificate, it shall be entitled to rely on the
last Subordination Agent Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish
to the Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Trustee's discretion, or upon the Subordination
Agent's request (which request shall not be made more than one time in any
12-month period), a certificate (with respect to each such Trustee, 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 (with respect to each 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 from a Trustee, it shall be entitled
to rely on the last Trustee Incumbency Certificate with respect to such Trustee
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 (with respect to each such
Liquidity Provider, a "Liquidity Provider Incumbency Certificate") of a
Responsible Officer of such Liquidity Provider certifying as to the incumbency
and specimen signatures of the officers of such Liquidity Provider and the
attorney-in-fact and agents of such Liquidity Provider (with respect to each
such Liquidity Provider, the "Liquidity Provider Representatives") authorized to
give Written Notices on behalf of such Liquidity Provider hereunder. Until the
Subordination Agent receives a subsequent Liquidity Provider Incumbency
Certificate, it shall be entitled to rely on the last Liquidity Provider
Incumbency Certificate delivered to it hereunder.
(d) With the delivery of this Agreement, the Policy Provider shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at the Policy Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Policy Provider Incumbency
Certificate") of a Responsible Officer of the Policy Provider certifying as to
the incumbency and specimen signatures of the officers of the Policy Provider
and the attorney-in-fact and agents of the Policy Provider (the "Policy Provider
Representatives" and, together with the Subordination Agent Representatives, the
Trustee Representatives, and the Liquidity Provider Representatives, the
"Designated Representatives") authorized to give Written Notices on behalf of
the Policy Provider hereunder. Until the Subordination Agent receives a
subsequent Policy Provider Incumbency Certificate, it shall be entitled to rely
on the last Policy Provider Incumbency Certificate delivered to it hereunder.
Section 2.06. Controlling Party. (a) The Trustees, the Liquidity
Providers and the Policy Provider hereby agree that, with respect to any
Indenture at any given time, the Loan Trustee thereunder will be directed (i) in
taking, or refraining from taking, any action under such Indenture or with
respect to the Equipment Notes issued thereunder, so long as no Indenture Event
of 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 such
Equipment Notes, subject to the provisions of Section 8.01(b), the Subordination
Agent shall act with respect to this clause (i) in accordance with the
directions of the Trustees of Trusts for which the related Trust Properties
include, in the aggregate, such a majority of outstanding principal amount of
such Equipment Notes), and (ii) after the occurrence and during the continuance
of an Indenture Event of Default thereunder (which, in the case of an Indenture
pertaining to a Leased Aircraft, has not been cured by the applicable Owner
Trustee or Owner Participant, if applicable, pursuant to Section 4.03 of such
Indenture), 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 created thereunder on the Aircraft securing such Equipment
Notes), by the Subordination Agent as directed by the Controlling Party.
(b) Subject to subparagraph (c) below, the Person who shall be the
"Controlling Party" with respect to any Indenture shall be: (x) (i) the Policy
Provider until payment of Final Distributions to the holders of Class G-1
Certificates and Class G-2 Certificates and no obligations owing to the Policy
Provider hereunder remain outstanding or, (ii) if a Policy Provider Default has
occurred and is continuing, (A) the Class G-1 Trustee or the Class G-2 Trustee,
whichever represents the Class with the larger Pool Balance of Certificates
Outstanding at the time such Indenture Event of Default occurs (whether or not
any other Indenture Event of Default shall thereafter occur so long as such
initial Indenture Event of Default shall continue); and (B) upon payment of
Final Distributions to the holders of Certificates of such larger Class, the
other of the Class G-1 Trustee or the Class G-2 Trustee; (y) upon payment of
Final Distributions to the holders of Class G-1 Certificates and Class G-2
Certificates and, unless a Policy Provider Default has occurred and is
continuing, no obligations owing to the Policy Provider hereunder remain
outstanding, the Class C Trustee; and (z) upon payment of Final Distributions to
the holders of Class G-1 Certificates, Class G-2 Certificates and Class C
Certificates and, unless a Policy Provider Default has occurred and is
continuing, no obligations owing to the Policy Provider hereunder remain
outstanding, the Class D Trustee. For purposes of giving effect to the
foregoing, the Trustees (other than the Controlling Party) irrevocably agree
(and the Certificateholders (other than the Certificateholders represented by
the Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes as
directed by the Controlling Party and any vote so exercised shall be binding
upon the Trustees and all Certificateholders.
The Subordination Agent shall give written notice to all of the
other parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not exercise
any of the rights of the Controlling Party at such time as it is not the
Controlling Party hereunder; provided, however, that nothing herein contained
shall prevent or prohibit any Non-Controlling Party from exercising such rights
as shall be specifically granted to such Non-Controlling Party hereunder and
under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18 months from
the earliest to occur of (i) the date on which the entire Available Amount under
any Liquidity Facility shall have been drawn (for any reason other than a
Downgrade Drawing or a Non-Extension Drawing) and remain unreimbursed, (ii) the
date on which the entire amount of any Downgrade Drawing or Non-Extension
Drawing 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 shall have been Accelerated, the Liquidity Provider with the
greatest amount of unreimbursed Liquidity Obligations (the "Eligible Liquidity
Provider") shall have the right to elect, by Written Notice to the Subordination
Agent, the Policy Provider and each of the Trustees, to become the Controlling
Party hereunder with respect to any Indenture at any time from and including the
last day of such 18-month period, provided that if, within 15 Business Days
after its receipt of any such Written Notice from such Eligible Liquidity
Provider (which notice may be given on or after the fifteenth Business Day prior
to the end of such 18-month period) the Policy Provider pays to each Liquidity
Provider all outstanding drawings owing to such Liquidity Provider in respect of
its Liquidity Facility, and interest accrued thereon to such date, the Policy
Provider shall remain the Controlling Party so long as no Policy Provider
Default has occurred and is continuing; and if a Policy Provider Default has
occurred and is continuing, the Eligible Liquidity Provider, if it so elects and
if Liquidity Obligations owing to it remain outstanding, shall become the
Controlling Party. At any time after such 18-month period, if a Policy Provider
Default has occurred and is continuing and the Eligible Liquidity Provider does
not elect to be the Controlling Party or if no Liquidity Obligations remain
outstanding, then the Class G-1 Trustee or Class G-2 Trustee, as specified in
subparagraph (b) above, shall become the Controlling Party.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.01(a)(ii).
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
(f) Notwithstanding anything contained herein, neither the
Controlling Party nor the Subordination Agent shall be authorized or empowered
to do anything that would cause any Trust to fail to qualify as a "grantor
trust" for federal income tax purposes.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.01. Written Notice of Distribution. (a) No later than 3:00
P.M. (New York City time) on the Business Day immediately preceding each Regular
Distribution Date (or Special Distribution Date for purposes of Section 2.04(b),
as the case may be), each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class G-1 Certificates and the Class G-2
Certificates, if any are then Outstanding, the Class G-1 Trustee and the
Class G-2 Trustee, respectively, shall separately set forth the amounts to
be paid in accordance with clause "fifth" of Section 3.02 or 2.04(b), as
the case may be (without giving effect to the pro rata sharing therein);
(ii) With respect to the Class C Certificates, if any are then
Outstanding, the Class C Trustee shall separately set forth the amounts to
be paid in accordance with clause "seventh" of Section 3.02 or 2.04(b), as
the case may be;
(iii) With respect to the Class D Certificates, if any are then
Outstanding, the Class D Trustee shall separately set forth the amounts to
be paid in accordance with clause "ninth" of Section 3.02 or 2.04(b), as
the case may be;
(iv) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid in accordance
with clauses "first", "second", "third" and "fourth" of Section 3.02 or
2.04(b), as the case may be; and
(v) The Policy Provider shall set forth the amounts to be paid to it
in accordance with clauses "first", "second", "third", "sixth" and
"eighth" of Section 2.04(b) or Section 3.02, as the case may be; and
(vi) Each Trustee shall set forth the amounts to be paid in
accordance with clause "tenth" of Section 3.02.
The notices required under this Section 3.01(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 redemption, purchase or prepayment of the
Equipment Notes, such schedule or similar document is to remain in effect until
any substitute notice or amendment shall be given to the Subordination Agent by
the party providing such notice.
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the following
Persons, and may from time to time thereafter again request such information
from such Persons, and each of the following Persons shall, within five Business
Days of such request of the Subordination Agent, deliver a Written Notice to the
Subordination Agent setting forth for such Person the following information:
(i) With respect to the Class G-1 Certificates and the Class G-2
Certificates, if any are then Outstanding, the Class G-1 Trustee and the
Class G-2 Trustee, respectively, shall separately set forth the amounts to
be paid in accordance with clauses "first" (to reimburse payments made by
the Class G-1 Certificateholders and the Class G-2 Certificateholders,
respectively, pursuant to subclause (iv) of clause "first" of Section
3.03), "sixth" (to reimburse payments made by the Class G-1
Certificateholders and the Class G-2 Certificateholders pursuant to
subclause (iii) of clause "sixth" of Section 3.03) and "seventh" of
Section 3.03 (without giving effect to the pro rata sharing therein);
(ii) With respect to the Class C Certificates, if any are then
Outstanding, the Class C Trustee shall separately set forth the amounts to
be paid in accordance with clauses "first" (to reimburse payments made by
the Class C Certificateholders pursuant to subclause (iv) of clause
"first" of Section 3.03), "sixth" (to reimburse payments made by the Class
C Certificateholders pursuant to subclause (iii) of clause "sixth" of
Section 3.03) and "ninth" of Section 3.03;
(iii) With respect to the Class D Certificates, if any are then
Outstanding, the Class D Trustee shall separately set forth the amounts to
be paid in accordance with clauses "first" (to reimburse payments made by
the Class D Certificateholders pursuant to subclause (iv) of clause
"first" of Section 3.03), "sixth" (to reimburse payments made by the Class
D Certificateholders pursuant to subclause (iii) of clause "sixth" of
Section 3.03) and "eleventh" of Section 3.03;
(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 subclause (iv) of clause "first" of Section 3.03 and
clauses "second", "third", "fourth" and "fifth" of Section 3.03;
(v) The Policy Provider shall separately set forth amounts to be
paid to it in accordance with clauses "first", "second", "third",
"fourth", "eighth" and "tenth" of Section 3.03 hereof; and
(vi) Each Trustee shall set forth the amounts to be paid in
accordance with subclause (ii) of clause "first" of Section 3.03 and
subclause (ii) of clause "sixth" of Section 3.03.
(c) At such time as a Trustee, a Liquidity Provider or the Policy
Provider shall have received all amounts owing to it (and, in the case of
a Trustee, the Certificateholders for which it is acting) pursuant to
Section 2.04, 3.02, 3.03 or 3.07, as applicable, and, in the case of a
Liquidity Provider or the Policy Provider, its commitment under the
related Liquidity Facility or the Policies shall have terminated or
expired, such Person shall, by a Written Notice, so inform the
Subordination Agent and each other party to this Agreement.
(d) As provided in Section 6.05, 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 or the
Policy Provider pursuant to Sections 3.01(a), 3.01(b) and 3.01(c) above
and shall have no independent obligation to verify, calculate or
recalculate any amount set forth in any Written Notice delivered in
accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee, a Liquidity Provider
or the Policy Provider, as applicable, pursuant to Section 3.01(a),
3.01(b) or 3.01(c), if made prior to 10:00 A.M. (New York City time) on a
given date that is a Business Day shall be effective on the date delivered
(or if delivered later on such date or on a day that is not a Business Day
shall be effective as of the next Business Day). Subject to the terms of
this Agreement, the Subordination Agent shall as promptly as practicable
comply with any such instructions; provided, however, that any transfer of
funds pursuant to any instruction received after 10:00 A.M. (New York City
time) on any Business Day may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in Section 3.01(a) or 3.01(b) that is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 2.04(b), 3.02 or 3.03, 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 "tenth" of Section 2.04(b), clauses "first" through "eleventh" of
Section 3.02 and clauses "first" through "twelfth" of Section 3.03 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, on the terms hereof (including Section 2.02(b))
until the Subordination Agent shall receive all necessary information to
enable it to distribute any funds so withheld, and upon receipt of the
information necessary to distribute any funds so withheld, the
Subordination Agent shall distribute such funds.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider, the Policy Provider or any Trustee shall request, but
in any event automatically at the end of each calendar quarter, the
Subordination Agent shall send to such party a written statement
reflecting all amounts on deposit with the Subordination Agent pursuant to
Section 3.01(f).
Section 3.02. Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.04, 3.01(f), 3.03, 3.04 and
3.06(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.04(c), 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 2.04(c), 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 3.01(a):
first, such amount as shall be required to pay in full (i) all
accrued and unpaid Liquidity Expenses owed to each Liquidity
Provider and (ii) all accrued and unpaid Policy Expenses owed to the
Policy Provider, shall be distributed to each Liquidity Provider and
the Policy Provider pro rata on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider and Policy Expenses owed to
the Policy Provider;
second, such amount as shall be required to pay (i) accrued
and unpaid interest on the Liquidity Obligations as provided in the
applicable Liquidity Facility (determined after giving effect to
payments made by the Policy Provider to each Liquidity Provider, if
any, in respect of interest on drawings under the Liquidity
Facilities), (ii) if the Class G-1 Liquidity Provider or Class G-2
Liquidity Provider has defaulted in its obligation to make any
Interest Drawing in respect of the Class G-1 Certificates or Class
G-2 Certificates, respectively, the aggregate amount of interest
accrued on the portion of any Policy Drawing made to cover the
shortfall attributable to such default by the Liquidity Provider at
the rate provided in the "except" clause of clause (ii) of the
definition of "Policy Provider Obligations" and (iii) if the Policy
Provider has elected to pay to each Liquidity Provider all
outstanding drawings and interest owing to such Liquidity Provider
under its Liquidity Facility pursuant to subsection 2.06(c) hereof,
the amount of such payment made to the Liquidity Providers
attributable to such interest accrued on such drawings, shall be
distributed to the Liquidity Providers and the Policy Provider pro
rata on the basis of the amount of such Liquidity Obligations owed
to each Liquidity Provider and the amount of such Policy Provider
Obligations payable to the Policy Provider under this clause
"second";
third, such amount as shall be required (A) if any Cash
Collateral Account has been previously funded as provided in Section
3.06(f), 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 have 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, 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, (C) if,
with respect to any particular Liquidity Facility, neither subclause
(A) nor subclause (B) of this clause "third" 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 shall be
distributed to such Liquidity Provider (other than amounts payable
pursuant to clause "first" or "second" of this Section 3.02 and as
determined after giving effect to payments made by the Policy
Provider to the Liquidity Providers in respect of principal of
drawings under the Liquidity Facilities), pro rata with any amount
distributable pursuant to subclause (D) of this clause "third" on
the basis of the amount of all such unreimbursed Liquidity
Obligations and unreimbursed Policy Provider Obligations payable to
the Policy Provider under subclause (D) of this clause "third" and
(D) if the Policy Provider has elected to pay to each Liquidity
Provider all outstanding drawings and interest owing to such
Liquidity Provider under its Liquidity Facility pursuant to Section
2.06(c) hereof, to reimburse the Policy Provider for the principal
amount of such payment made to the Liquidity Providers, shall be
distributed to the Policy Provider, but only after giving effect to
the application of amounts, if any, under subclause (A) or (B) of
this clause "third", and if any amount shall be distributable under
subclause (C) of this clause "third", pro rata with any amount
distributable pursuant to such subclause (C), on the basis of the
amounts of all such unreimbursed Liquidity Obligations and the
amount of such unreimbursed Policy Provider Obligations payable to
the Policy Provider under this clause "third";
fourth, if, with respect to any particular Liquidity Facility
and the related Cash Collateral Account, any amounts are to be
deposited pursuant to either subclause (A) or (B) of clause "third"
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;
fifth, if any Class G-1 Certificates or Class G-2 Certificates
are Outstanding on such Distribution Date, such amount as shall be
required to pay in full Expected Distributions to the holders of the
Class G-1 Certificates on such Distribution Date shall be
distributed to the Class G-1 Trustee and such amount as shall be
required to pay in full Expected Distributions to the holders of the
Class G-2 Certificates on such Distribution Date shall be
distributed to the Class G-2 Trustee, pro rata on the basis of such
amounts in respect of each such Class of Certificates;
sixth, such amount as shall be required to pay the Policy
Provider all Policy Provider Obligations then due (other than
amounts payable pursuant to the preceding clauses of this Section
3.02 and other than Excess Reimbursement Obligations) shall be
distributed to the Policy Provider;
seventh, if any Class C Certificates are Outstanding on such
Distribution Date, 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;
eighth, such amount as shall be required to pay in full any
Excess Reimbursement Obligations and any amounts due under the
Policy Fee Letter shall be distributed to the Policy Provider;
ninth, if any Class D Certificates are Outstanding on such
Distribution Date, such amount as shall be required to pay in full
Expected Distributions to holders of Class D Certificates on such
Distribution Date shall be distributed to the Class D Trustee;
tenth, such amount as shall be required to pay in full
(without duplication of any amounts otherwise payable hereunder or
under any Operative Agreement) the aggregate unpaid amount of fees
and expenses payable as of such Distribution Date to the
Subordination Agent and each Trustee pursuant to the terms of this
Agreement and the Trust Agreements, as the case may be, shall be
distributed to the Subordination Agent and such Trustee; and
eleventh, the balance, if any, of any such amount remaining
thereafter shall be held in the Collection Account for later
distribution in accordance with this Article III.
Section 3.03. Distribution of Amounts on Deposit Following a
Triggering Event. Except as otherwise provided in Sections 3.01(f) and 3.06(b),
upon the occurrence of a Triggering Event and at all times thereafter, all funds
in the Collection Account or the Special Payments Account shall be promptly
distributed by the Subordination Agent in the following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses
actually incurred by it (to the extent not previously reimbursed) in
the protection of, or the realization of the value of, the Equipment
Notes or any Collateral or Indenture Estate, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses,
(ii) each Trustee for any amounts of the nature described in clause
(i) above actually incurred by it under the applicable Trust
Agreement (to the extent not previously reimbursed), shall be
distributed to such Trustee, (iii) the Policy 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 the Policy Provider, and (iv) any Liquidity Provider,
the Policy Provider or Certificateholder for payments, if any, made
by it to the Subordination Agent or any Trustee in respect of
amounts described in clause (i) above, shall be distributed to such
Liquidity Provider, the Policy 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 (i) all
accrued and unpaid Liquidity Expenses and (ii) all accrued and
unpaid Policy Expenses shall be distributed to the Liquidity
Providers and the Policy Provider pro rata on the basis of the
amount of Liquidity Expenses and Policy Expenses owed to each
Liquidity Provider and the Policy Provider;
third, such amount as shall be required to pay (i) accrued and
unpaid interest on the Liquidity Obligations as provided in the
applicable Liquidity Facilities (determined after giving effect to
payments made by the Policy Provider to each Liquidity Provider, if
any, in respect of interest on drawings under the Liquidity
Facilities), (ii) if the Class G-1 Liquidity Provider or Class G-2
Liquidity Provider has defaulted in its obligation to make any
Interest Drawing in respect of the Class G-1 Certificates or Class
G-2 Certificates, respectively, the aggregate amount of interest
accrued on the portion of any Policy Drawing made to cover the
shortfall attributable to such default by the Liquidity Provider at
the rate provided in the "except" clause of clause (ii) of the
definition of "Policy Provider Obligations" and (iii) if the Policy
Provider has elected to pay to each Liquidity Provider all
outstanding drawings and interest owing to such Liquidity Provider
under its Liquidity Facility pursuant to Section 2.06(c) hereof, the
amount of such payment made to the Liquidity Providers attributable
to such interest accrued on such drawings, shall be distributed to
the Liquidity Providers and the Policy Provider pro rata on the
basis of the amount of such Liquidity Obligations owed to each
Liquidity Provider and the amount of such Policy Provider
Obligations payable to the Policy Provider under this clause
"third";
fourth, such amount as shall be required (A) if any Cash
Collateral Account has been previously funded as provided in Section
3.06(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 (less
the amount of any repayments of Interest Drawings under such
Liquidity Facility while subclause (A)(i) above is applicable) shall
be deposited in such Cash Collateral Account, (B) if any Liquidity
Facility shall have 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 (less the amount of any
repayments of Interest Drawings under such Liquidity Facility while
subclause (B)(i) above is applicable) shall be deposited in such
Cash Collateral Account, (C) if, with respect to any particular
Liquidity Facility, neither subclause (A) nor subclause (B) of this
clause "fourth" is applicable, to pay in full the outstanding amount
of all Liquidity Obligations then due under such Liquidity Facility
shall be distributed to such Liquidity Provider (other than amounts
payable pursuant to clause "second" or "third" of this Section 3.03
and as determined after giving effect to payments made by the Policy
Provider to the Liquidity Providers in respect of principal of
drawings under the Liquidity Facilities) pro rata with any amount
distributable pursuant to subclause (D) of this clause "fourth" on
the basis of the amount of all such Liquidity Obligations and
unreimbursed Policy Provider Obligations payable to the Policy
Provider under subclause (D) of this clause "fourth" and (D) if the
Policy Provider has elected to pay to each Liquidity Provider all
outstanding drawings and interest owing to such Liquidity Provider
under its Liquidity Facility pursuant to Section 2.06(c) hereof, to
reimburse the Policy Provider for the principal amount of such
payment made to the Liquidity Providers, shall be distributed to the
Policy Provider, but only after giving effect to the application of
amounts, if any, under subclause (A) or (B) of this clause "fourth",
and if any amount shall be distributable under subclause (C) of this
clause "fourth", pro rata with any amount distributable pursuant to
such subclause (C) on the basis of the amounts of all such
unreimbursed Liquidity Obligations and the amount of such
unreimbursed Policy Provider Obligations payable to the Policy
Provider under this clause "fourth";
fifth, if, with respect to any particular Liquidity Facility,
any amounts are to be deposited 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 (less the amount of any repayments of
Interest Drawings under such Liquidity Facility while subclause
(A)(i) or (B)(i), as the case may be, of clause "fourth" above is
applicable), 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 or other
loss incurred by, 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 5.02 in respect of amounts described in clause (i) above
(without duplication of any amounts distributed pursuant to
subclause (iv) of clause "first" of this Section 3.03), 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), (ii) and (iii) above;
seventh, if any Class G-1 Certificates or Class G-2
Certificates are Outstanding on such Distribution Date, such amount
as shall be required to pay in full Adjusted Expected Distributions
on the Class G-1 Certificates shall be distributed to the Class G-1
Trustee and such amount as shall be required to pay in full Adjusted
Expected Distributions on the Class G-2 Certificates shall be
distributed to the Class G-2 Trustee, pro rata on the basis of such
amounts in respect of each such Class of Certificates;
eighth, such amount as shall be required to pay the Policy
Provider Obligations then due to the Policy Provider under the
Policy Provider Agreement (other than amounts payable pursuant to
clauses "first" through "fourth" above and other than any Excess
Reimbursement Obligations) and any amounts due under the Policy Fee
Letter shall be paid to the Policy Provider;
ninth, if any Class C Certificates are Outstanding on such
Distribution Date, such amount as shall be required to pay in full
Adjusted Expected Distributions on the Class C Certificates shall be
distributed to the Class C Trustee;
tenth, such amount as shall be required to pay any Excess
Reimbursement Obligations shall be distributed to the Policy
Provider;
eleventh, if any Class D Certificates are Outstanding on such
Distribution Date, such amount as shall be required to pay in full
Adjusted Expected Distributions on the Class D Certificates shall be
distributed to the Class D Trustee; and
twelfth, (i) if any Class G-1 Certificates or Class G-2
Certificates are Outstanding on such Distribution Date, such amount
as shall be required to pay Final Distributions on the Class G-1
Certificates shall be distributed to the Class G-1 Trustee and such
amount as shall be required to pay Final Distributions on the Class
G-2 Certificates shall be distributed to the Class G-2 Trustee, pro
rata on the basis of the Pool Balance of each such Class of
Certificates after giving effect to the distributions made on such
Distribution Date pursuant to clause "seventh" of this Section
3.03(a); (ii) after giving effect to clause (i) if any Class C
Certificates are Outstanding on such Distribution Date, such amount
remaining as shall be required to pay Final Distributions on the
Class C Certificates shall be distributed to the Class C Trustee and
(iii) after giving effect to clauses (i) and (ii) if any Class D
Certificates are Outstanding on such Distribution Date, such amount
as shall be required to pay Final Distributions on the Class D
Certificates shall be distributed to the Class D Trustee.
Section 3.04. Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent in the order
of priority specified in Section 3.03; provided, however, that to the extent any
such payments are received or realized at any time after the Final Distributions
for all Classes of Certificates have been made, such payments shall be
distributed in the following order of priority: first, in the manner provided in
clause "first" of Section 3.03 and second, in the manner provided in clause
"eleventh" of Section 3.02.
(b) On any Interest Payment Date under each Liquidity Facility which
is not a Distribution Date, the Subordination Agent shall pay to the Liquidity
Provider under such Liquidity Facility from, and to the extent of, amounts on
deposit in the Collection Account, an amount equal to the amount of interest
then due and payable to such Liquidity Provider under such Liquidity Facility.
(c) Except as otherwise provided in Section 3.03 or Sections 3.06(a)
and 3.06(b), 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 3.02; provided that, for the purposes of this Section 3.04(c) only, each
reference in clause "tenth" of Section 3.02 to "Distribution Date" shall be
deemed to mean the actual date of payment of such Scheduled Payment and each
reference in clause "fifth", "seventh" or "ninth" of Section 3.02 to
"Distribution Date" shall be deemed to refer to such Scheduled Payment Date.
Section 3.05. Payments to the Trustees, the Liquidity Providers and
the Policy Provider. Any amounts distributed hereunder to any Liquidity Provider
or the Policy Provider shall be paid to such Liquidity Provider or the Policy
Provider, as the case may be, by wire transfer of funds to the address such
Liquidity Provider or the Policy Provider, as the case may be, shall provide to
the Subordination Agent. The Subordination Agent shall provide a Written Notice
of any such transfer to the applicable Liquidity Provider or the Policy
Provider, as the case may be, at the time of such transfer. Any amounts
distributed hereunder by the Subordination Agent to any Trustee that is not the
same institution as the Subordination Agent shall be paid to such Trustee by
wire transfer of funds at the address such Trustee shall provide to the
Subordination Agent.
Section 3.06. Liquidity Facilities. (a) Interest Drawings. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement and any payment made by the Policy Provider pursuant to subclause (ii)
of Section 3.07(c), the Subordination Agent shall not have sufficient funds for
the payment of any amounts due and owing in respect of accrued interest on the
Class G-1 Certificates, the Class G-2 Certificates or the Class C Certificates
(at the Stated Interest Rate for such Class of Certificates), then, prior to
1:00 p.m. (New York City time) on such Distribution Date, the Subordination
Agent shall request a drawing (each such drawing, an "Interest Drawing") under
the Liquidity Facility with respect to such Class of Certificates (and
concurrently with the making of such request, the Subordination Agent shall give
notice to the Policy Provider of such insufficiency of funds) in an amount equal
to the lesser of (i) an amount sufficient to pay the amount of such accrued
interest (at the Stated Interest Rate for each such Class of Certificates) and
(ii) the Available Amount under such Liquidity Facility, and shall upon receipt
of such amount pay such amount to the Trustee with respect to each such Class of
Certificates in payment of such accrued interest as provided in Section 3.06(b).
(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 G-1
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class G-1 Cash Collateral Account, and payable in each case to the Class G-1
Certificateholders, shall be promptly distributed to the Class G-1 Trustee, (ii)
all payments received by the Subordination Agent in respect of an Interest
Drawing under the Class G-2 Liquidity Facility and all amounts withdrawn by the
Subordination Agent from the Class G-2 Cash Collateral Account, and payable in
each case to the Class G-2 Certificateholders, shall be promptly distributed to
the Class G-2 Trustee and (iii) all payments received by the Subordination Agent
in respect of an Interest Drawing under the Class C Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class C Cash Collateral
Account, and payable in each case to the Class C Certificateholders, shall be
promptly distributed to the Class C Trustee.
(c) Downgrade Drawings. The Liquidity Provider will promptly, but in
any event within ten days of its receipt of notice thereof, deliver notice of
any downgrading of its debt ratings to the Subordination Agent, the Policy
Provider, and Delta. If at any time the short-term unsecured debt rating of any
Liquidity Provider issued by Xxxxx'x or the short-term corporate credit rating
of such Liquidity Provider issued by S&P (or if such Liquidity Provider does not
have a short-term unsecured debt rating or short-term corporate credit rating,
as applicable, issued by Xxxxx'x or S&P, the long-term unsecured debt rating or
long-term corporate credit rating of such Liquidity Provider issued by such
Rating Agency) is lower than the applicable Threshold Rating, within 10 days
after such downgrading (or within 45 days of such downgrading solely in the
event of a downgrading of such Liquidity Provider's short-term corporate credit
rating by S&P from A-1+ to A-1) (but not later than the expiration date of the
Liquidity Facility issued by such downgraded Liquidity Provider (the "Downgraded
Facility")), such Liquidity Provider or Delta may arrange for a Replacement
Liquidity Provider to issue and deliver a Replacement Liquidity Facility to the
Subordination Agent. If a Downgraded Facility has not been replaced in
accordance with the terms of this paragraph, the Subordination Agent shall, on
such 10th (or 45th) day (or if such 10th (or 45th) day is not a Business Day, on
the next succeeding Business Day) (or, if earlier, on the expiration date of
such Downgraded Facility), request a drawing in accordance with and to the
extent permitted by such Downgraded Facility (such drawing, a "Downgrade
Drawing") of all available and undrawn amounts thereunder. Amounts drawn
pursuant to a Downgrade Drawing shall be maintained and invested as provided in
Section 3.06(f). Subject to Section 3.06(e)(iii), the 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 the 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 applicable Stated
Expiration Date, the Subordination Agent shall request in writing that such
Liquidity Provider extend the Stated Expiration Date to the earlier of (i) the
date that is 15 days after the Final Legal Distribution Date for such Class of
Certificates and (ii) the date that is the day immediately preceding the 364th
day after the last day of the Consent Period (unless the obligations of such
Liquidity Provider thereunder are earlier terminated in accordance with such
Liquidity Facility). The Liquidity Provider shall by notice (the "Consent
Notice") to the Subordination Agent, during the period commencing on the date
that is 60 days prior to the then effective Stated Expiration Date and ending on
the date that is 25 days prior to such Stated Expiration Date (the "Consent
Period") advise the Subordination Agent whether, in its sole discretion, it
agrees to so extend the Stated Expiration Date; provided, however, that such
extension shall not be effective with respect to such Liquidity Provider if, by
notice (the "Withdrawal Notice") to the Subordination Agent prior to the end of
the Consent Period, the Liquidity Provider revokes the Consent Notice. If the
Liquidity Provider advises the Subordination Agent in the Consent Notice that
such Stated Expiration Date shall not be so extended, gives a Withdrawal Notice
to the Subordination Agent prior to the end of the Consent Period, or fails to
irrevocably and unconditionally advise the Subordination Agent on or before the
end of the Consent Period that such Stated Expiration Date shall be so extended
(and, in each case, if the Liquidity Provider shall not have been replaced in
accordance with Section 3.06(e)), the Subordination Agent shall, on the date on
which the Consent Period ends (or as soon as possible thereafter but prior to
the Stated Expiration Date), in accordance with and to the extent permitted by
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 3.06(f). If any amounts shall be drawn
pursuant to a Non-Extension Drawing and, within 30 days thereafter, the
Liquidity Provider shall not have been replaced, then at any time following the
30th day after such Non-Extension Drawing, the Liquidity Provider may, by
written notice to the Subordination Agent, agree to reinstate the Liquidity
Facility on the terms of the existing Liquidity Facility for a period ending on
the 364th day after the end of the Consent Period; provided, however, that in
such event the Liquidity Provider shall reimburse the Subordination Agent for
any costs actually incurred by or on behalf of the Subordination Agent in
drawing pursuant to the Non-Extension Drawing and funding the Cash Collateral
Account or otherwise in connection with the Non-Extension Drawing.
(e) Issuance of Replacement Liquidity Facility. (i) Subject to
Section 3.06(e)(iii), at any time, Delta 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 3.06(e)(ii)); provided, however,
that if the initial Liquidity Provider is replaced it shall be replaced with
respect to all Liquidity Facilities under which it is a Liquidity Provider, and
provided further, however, that the initial Liquidity Provider shall not be
replaced by Delta as the Liquidity Provider with respect to any Class of
Certificates prior to the fifth anniversary of the Closing Date unless (A) there
shall have become due to the initial Liquidity Provider, or the initial
Liquidity Provider shall have demanded, amounts pursuant to Section 3.01 or 3.03
of any Liquidity Facility and the replacement of the initial Liquidity Provider
would reduce or eliminate the obligation to pay such amounts or Delta determines
in good faith that there is a substantial likelihood that the initial Liquidity
Provider will have the right to claim any such amounts within 180 days after the
date of such determination (unless the 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 Delta to the initial Liquidity
Provider accompanied by an opinion of outside counsel selected by Delta 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 amounts based upon any proposed, or proposed
change in, law, rule, regulation, interpretation, directive, requirement,
request or administrative practice, such opinion may assume the adoption or
promulgation of such proposed matter, (B) it shall become unlawful or impossible
for the initial Liquidity Provider to maintain or fund its LIBOR Advances as
described in Section 3.10 of any Liquidity Facility, (C) the short-term
corporate credit rating of the initial Liquidity Provider is downgraded by S&P
from A-1+ to A-1 and there is a resulting downgrade in the rating by either
Rating Agency of any Class of Certificates (without regard to the related Policy
in the case of the Class G-1 Certificates and Class G-2 Certificates), (D) 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 or (E) the initial
Liquidity Provider shall have breached any of its payment (including, without
limitation, funding) obligations under any Liquidity Facility. 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 resulting from such Downgrade Drawing or Non-Extension
Drawing will be returned to the Liquidity Provider being replaced.
(ii) If any Liquidity Provider shall determine not to extend its
Liquidity Facility in accordance with Section 3.06(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.
(iii) No Replacement Liquidity Facility arranged by Delta or a
Liquidity Provider in accordance with Section 3.06(c) or clause (i) or (ii) of
this Section 3.06(e) 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 Section 3.06(e)(iv)
below shall have been satisfied and (B) in the case of a Replacement Liquidity
Facility arranged by a Liquidity Provider under Section 3.06(c) or Section
3.06(e)(ii), such Replacement Liquidity Provider and such Replacement Liquidity
Facility (including the fees, compensation, interest, increased costs or
withholding payable thereunder to the Replacement Liquidity Provider) are
reasonably acceptable to Delta.
(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 pursuant to Section 3.06(c) and without regard to any Policy), and in
the case of the Class G-1 Liquidity Facility or the Class G-2 Liquidity
Facility, the written consent of the Policy Provider (which consent shall not be
unreasonably withheld or delayed), (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
Section 3.06(f)(ix), 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 addressed to the Subordination Agent, the Policy Provider, the Trustees
and Delta opining that such Replacement Liquidity Facility is an enforceable
obligation of such Replacement Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in Sections
3.06(e)(iii) and 3.06(e)(iv), (1) the replaced Liquidity Facility shall
terminate, (2) the Subordination Agent shall, if and to the extent so requested
by Delta 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 Letter, (3) each of the parties hereto
shall enter into any amendments to this Agreement necessary to give effect to
the replacement of the applicable Liquidity Provider with the applicable
Replacement Liquidity Provider and the replacement of the applicable Liquidity
Facility with the applicable Replacement Liquidity Facility and (4) 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. If the
Subordination Agent shall draw all available amounts under the Class G-1
Liquidity Facility, the Class G-2 Liquidity Facility, or the Class C Liquidity
Facility pursuant to Section 3.06(c), 3.06(d) or 3.06(i), or in the event
amounts are to be deposited in the Cash Collateral Account pursuant to subclause
(A) or (B) of clause "third" of Section 2.04(b), subclause (A) or (B) of clause
"third" of Section 3.02 or subclause (A) or (B) of clause "fourth" of Section
3.03, amounts so drawn or to be deposited, as the case may be, shall be
deposited by the Subordination Agent in the Class G-1 Cash Collateral Account,
the Class G-2 Cash Collateral Account or the Class C Cash Collateral Account,
respectively. All amounts on deposit in each Cash Collateral Account shall be
invested and reinvested in Eligible Investments in accordance with Section
2.02(b). On each Interest Payment Date (or, in the case of any Special
Distribution Date occurring prior to the occurrence of a Triggering Event, on
such Special Distribution Date), Investment Earnings on amounts on deposit in
each Cash Collateral Account (or in the case of any Special Distribution Date
occurring prior to the occurrence of a Triggering Event, an amount of such
Investment Earnings on amounts of deposits in each Cash Collateral Account equal
to the product of such Investment Earnings multiplied by a fraction, the
numerator of which is the aggregate outstanding principal amount of Equipment
Notes being redeemed, purchased or prepaid on such Special Distribution Date and
the denominator of which is the aggregate outstanding principal amount of all
Equipment Notes) shall be deposited in the Collection Account (or, in the case
of any Special Distribution Date occurring prior to the occurrence of a
Triggering Event, the Special Payments Account) and applied on such Interest
Payment Date (or Special Distribution Date, as the case may be) in accordance
with Section 2.04(b), 3.02, 3.03 or 3.04(b) (as applicable). The Subordination
Agent shall deliver a written statement to Delta and the 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 account as
follows:
(i) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
due and owing on the Class G-1 Certificates (at the Stated Interest Rate
for the Class G-1 Certificates) from any other source (including any
payment made by the Policy Provider pursuant to subclause (ii) of the
second paragraph of Section 3.07(c)), withdraw from the Class G-1 Cash
Collateral Account, and pay to the Class G-1 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 G-1 Certificates) on such Class
G-1 Certificates and (y) the amount on deposit in the Class G-1 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 G-2 Certificates (at the Stated
Interest Rate for the Class G-2 Certificates) from any other source
(including any payment made by the Policy Provider pursuant to subclause
(ii) of the second paragraph of Section 3.07(c)), withdraw from the Class
G-2 Cash Collateral Account, and pay to the Class G-2 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 G-2 Certificates) on
such Class G-2 Certificates and (y) the amount on deposit in the Class G-2
Cash Collateral Account;
(iii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest due and owing on the Class C Certificates (at the Stated Interest
Rate for the Class C Certificates) from any other source, withdraw from
the Class C Cash Collateral Account, and pay to the Class C Trustee, an
amount equal to the lesser of (x) an amount necessary to pay accrued and
unpaid interest (at the Stated Interest Rate for the Class C Certificates)
on such Class C Certificates and (y) the amount on deposit in the Class C
Cash Collateral Account;
(iv) on each date on which the Pool Balance of the Class G-1 Trust
shall have been reduced by payments made to the Class G-1
Certificateholders pursuant to Section 2.04(b), 3.02 or 3.03, the
Subordination Agent shall withdraw from the Class G-1 Cash Collateral
Account such amount as is necessary so that, after giving effect to the
reduction of such Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class G-1
Cash Collateral Account on such date) and any transfer of Investment
Earnings from such Class G-1 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 G-1 Liquidity
Facility) plus the remaining Investment Earnings on deposit in such Class
G-1 Cash Collateral Account (if any) will be on deposit in the Class G-1
Cash Collateral Account and shall, first, pay such withdrawn amount to the
relevant Class G-1 Liquidity Provider until the Liquidity Obligations
(with respect to the Class G-1 Certificates) owing to such Class G-1
Liquidity Provider shall have been paid in full and, second, deposit any
remaining amount in the Collection Account;
(v) on each date on which the Pool Balance of the Class G-2 Trust
shall have been reduced by payments made to the Class G-2
Certificateholders pursuant to Section 2.04(b), 3.02 or 3.03, the
Subordination Agent shall withdraw from the Class G-2 Cash Collateral
Account such amount as is necessary so that, after giving effect to the
reduction of such Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class G-2
Cash Collateral Account on such date) and any transfer of Investment
Earnings from such Class G-2 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 G-2 Liquidity
Facility) plus the remaining Investment Earnings on deposit in such Class
G-2 Cash Collateral Account (if any) will be on deposit in the Class G-2
Cash Collateral Account and shall, first, pay such withdrawn amount to the
relevant Class G-2 Liquidity Provider until the Liquidity Obligations
(with respect to the Class G-2 Certificates) owing to such Class G-2
Liquidity Provider shall have been paid in full and, second, deposit any
remaining amount in the Collection Account;
(vi) on each date on which the Pool Balance of the Class C Trust
shall have been reduced by payments made to the Class C Certificateholders
pursuant to Section 2.04(b), 3.02 or 3.03, the Subordination Agent shall
withdraw from the Class C Cash Collateral Account such amount as is
necessary so that, after giving effect to the reduction of such Pool
Balance on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class C Cash Collateral Account on
such date) and any transfer of Investment Earnings from such Class C 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 C Liquidity Facility) plus the remaining
Investment Earnings on deposit in such Class C Cash Collateral Account (if
any) will be on deposit in the Class C Cash Collateral Account and shall,
first, pay such withdrawn amount to the relevant Class C Liquidity
Provider until the Liquidity Obligations (with respect to the Class C
Certificates) owing to such Class C Liquidity Provider shall have been
paid in full and, second, deposit any remaining amount in the Collection
Account;
(vii) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following the
date on which funds have been deposited into the Cash Collateral Account
for such Class of Certificates, the Subordination Agent shall withdraw all
amounts remaining 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 deposit
any remaining amount in the Collection Account; and
(viii) 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 in respect of such
Class of Certificates and 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
the Available Amount of 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 shall have occurred
with respect to such Liquidity Facility. In the event that, with respect to any
particular Liquidity Facility, (i) funds are withdrawn from any Cash Collateral
Account pursuant to clause (i), (ii), (iii) or (iv) of Section 3.06(f) 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
both a Performing Note Deficiency exists and a Liquidity Event of Default shall
have occurred and be continuing with respect to such Liquidity Facility or (y)
any time after a Final Drawing shall have occurred with respect to such
Liquidity Facility, shall be deposited in such Cash Collateral Account as and to
the extent provided in clause "third" of Section 2.04(b), clause "third" of
Section 3.02 or clause "fourth" of Section 3.03, as applicable, and applied in
accordance with Section 3.06(f).
(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 and to the extent permitted by 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
3.06(f).
(j) Reduction of Stated Amount. Promptly following each date on
which the Required Amount of the Liquidity Facility for a Class of Certificates
is reduced as a result of a reduction in the Pool Balance with respect to such
Certificates, the Subordination Agent shall, if any such Liquidity Facility
provides for reductions of the Stated Amount of such Liquidity Facility and if
such reductions are not automatic, request such Liquidity Provider for such
Class of Certificates to reduce such Stated Amount to an amount equal to the
Required Amount with respect to such Liquidity Facility (as calculated by the
Subordination Agent after giving effect to such payment). Each such request
shall be made in accordance with the provisions of the applicable Liquidity
Facility.
(k) Relation to Subordination Provisions. Interest Drawings under
the Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in
each case, in respect of interest on the Certificates of any Class, will be
distributed to the Trustee for such Class of Certificates, notwithstanding
Sections 2.04(b), 3.02, 3.03 and 3.06.
(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)
Delta 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.
Section 3.07. The Policies. The following provisions of paragraphs
(a) through (i) of this Section 3.07 shall apply to (i) the Class G-1 Trust and
the Class G-1 Certificates and (ii) the Class G-2 Trust and the Class G-2
Certificates, as if such provisions are separately set forth in full for each of
the Class G-1 Trust (and the Class G-1 Certificates) and the Class G-2 Trust
(and the Class G-2 Certificates). For the purposes of clause (i) above, each
reference in paragraphs (a) through (i) of this Section 3.07 to "Accrued Class G
Interest", "Class G Cash Collateral Account", "Class G Certificates", "Class G
Certificateholders", "Class G Liquidity Facility", "Class G Trustee", "Policy",
"Policy Account" and "Series G Equipment Note" shall mean "Accrued Class G-1
Interest", "Class G-1 Cash Collateral Account", "Class G-1 Certificates", "Class
G-1 Certificateholders", "Class G-1 Liquidity Facility", "Class G-1 Trustee",
"Class G-1 Policy", "Class G-1 Policy Account" and "Series G-1 Equipment Note",
respectively. For the purposes of clause (ii) above, each reference in
paragraphs (a) through (i) of this Section 3.07 to "Accrued Class G Interest",
"Class G Cash Collateral Account", "Class G Certificates", "Class G
Certificateholders", "Class G Liquidity Facility", "Class G Trustee", "Policy",
"Policy Account" and "Series G Equipment Note" shall mean "Accrued Class G-2
Interest", "Class G-2 Cash Collateral Account", "Class G-2 Certificates", "Class
G-2 Certificateholders", "Class G-2 Liquidity Facility", "Class G-2 Trustee",
"Class G-2 Policy", "Class G-2 Policy Account" and "Series G-2 Equipment Note",
respectively.
(a) Interest Drawings. If on any Regular Distribution Date (other
than the Final Legal Distribution Date) after giving effect to the application
of available funds in accordance with the priorities specified in Section 2.04
and Article III, and taking into account the application of any Drawing paid
under the Class G Liquidity Facility in respect of accrued interest and any
withdrawal of funds from the Class G Cash Collateral Account in respect of such
interest, the Subordination Agent does not then have sufficient funds available
for the payment of Accrued Class G Interest, then, prior to 1:00 p.m. (New York
City time) on such Distribution Date, the Subordination Agent (i) shall deliver
a Notice of Nonpayment, as provided in the Policy to the Policy Provider or its
fiscal agent, requesting a Policy Drawing under the Policy (for payment into the
Policy Account) in an amount sufficient to enable the Subordination Agent to pay
such Accrued Class G Interest and (ii) shall pay such amount from the Policy
Account to the Class G Trustee in payment of such Accrued Class G Interest on
such Distribution Date.
(b) Proceeds Deficiency Drawing. If on any Special Distribution Date
(other than a Special Distribution Date established pursuant to the second
paragraph of Section 3.07(c)) established by the Subordination Agent by reason
of its receipt of a Special Payment (a "Disposition Payment") constituting the
proceeds of any Series G Equipment Note or related Collateral or Indenture
Estate, as the case may be, there exists a shortfall in the amounts available to
the Subordination Agent (after giving effect to the application of available
funds (including, without limitation, the amount of such Disposition Payment) in
accordance with the priorities specified in Section 2.04 and Article III, and
(if the disposition of such Series G Equipment Note or related Collateral or
Indenture Estate occurs prior to a Policy Provider Election with respect to such
Series G Equipment Note) taking into account the application of any Drawing paid
under the Class G Liquidity Facility in respect of such interest, any withdrawal
of funds in the Class G Collateral Account in respect of such interest) required
to reduce the outstanding Pool Balance of the Class G Certificates by an amount
equal to the outstanding principal amount of the applicable Series G Equipment
Note (determined immediately prior to the receipt of such Disposition Payment
and less the amount of any Policy Drawing previously paid by the Policy Provider
in respect of principal of such Series G Equipment Note) plus accrued and unpaid
interest on the amount of such reduction accrued at the Stated Interest Rate for
the Class G Certificates for the period from the immediately preceding Regular
Distribution Date to such Special Distribution Date, then, prior to 1:00 p.m.
(New York City time) on such Special Distribution Date, the Subordination Agent
(x) shall deliver a Notice of Nonpayment, as provided in the Policy (for payment
into the Policy Account) in an amount equal to the amount of such shortfall and
(y) shall pay such amount from the Policy Account to the Class G Trustee in
payment of such reduction in the outstanding Pool Balance of the Class G
Certificates plus such accrued and unpaid interest on such Special Distribution
Date. The Subordination Agent shall promptly, but not less than 20 days prior to
the Special Distribution Date established pursuant to this Section 3.07(b), send
to Delta, the Trustees, the Liquidity Provider for the Class G Liquidity
Facility and the Policy Provider, a Written Notice of such Special Distribution
Date.
(c) No Proceeds Drawing. On the first Business Day that is 18 months
after the last date on which full payment was made on any Series G Equipment
Note (a "Defaulted Series G Equipment Note") as to which there has subsequently
been a failure to pay principal or that has subsequently been accelerated, if
the Subordination Agent has not theretofore made a drawing under the Policy
pursuant to Section 3.07(b), the Subordination Agent shall deliver a Notice of
Nonpayment, as provided in the Policy, to the Policy Provider or its fiscal
agent, requesting a Policy Drawing under the Policy (for payment into the Policy
Account) in an amount equal to the then outstanding principal amount of such
Defaulted Series G Equipment Note plus accrued and unpaid interest thereon from
the immediately preceding Regular Distribution Date. The Subordination Agent
shall promptly, but not less than 25 days prior to the such Business Day, send
to Delta, the Trustees, the Liquidity Provider for the Class G Liquidity
Facility and the Policy Provider a Written Notice establishing such Business Day
as the date for the distribution of the proceeds of such Policy Drawing, which
date shall constitute a Special Distribution Date. No later than 1:00 p.m. (New
York City time) on the specified Special Distribution Date the Subordination
Agent shall make the specified Policy Drawing and upon its receipt of the
proceeds thereof pay the amount thereof from the Policy Account to the Class G
Trustee in reduction of the outstanding Pool Balance of the Class G Certificates
together with such accrued and unpaid interest on the amount of such reduction.
For the avoidance of doubt, after the payment by the Policy Provider in full of
such amount under this Section 3.07(c), the Subordination Agent shall have no
right to make any further Policy Drawings under Section 3.07(c) in respect of
such Defaulted Series G Equipment Note except for a drawing under Section
3.07(e).
Notwithstanding the foregoing, the Policy Provider has the right, so
long as no Policy Provider Default shall have occurred and be continuing, upon
notice to the Subordination Agent given at least five days prior to the Special
Distribution Date established by the Subordination Agent pursuant to the first
paragraph of this Section 3.07(c), to elect instead (the "Policy Provider
Election") to pay (i) on such Special Distribution Date an amount equal to the
scheduled principal and interest that came due on such Defaulted Series G
Equipment Note (without regard to the acceleration thereof) but was not paid
during such 18-month period (after giving effect to the application of funds
received from the Class G Liquidity Facility and the Class G Cash Collateral
Account, in each case attributable to such interest) and (ii) thereafter, on
each Regular Distribution Date, an amount equal to the scheduled principal and
interest that were to become due on such Defaulted Series G Equipment Note on
the related payment date (without regard to any acceleration thereof or to any
funds available under any Liquidity Facility or any Cash Collateral Account)
until the establishment of an Election Distribution Date or a Special
Distribution Date established as provided in the immediately following sentence.
Following a Policy Provider Election with respect to a Defaulted Series G
Equipment Note, on any Business Day (which shall be a Special Distribution Date)
elected by the Policy Provider upon 20 days' Written Notice to the Subordination
Agent and the Class G Trustee, the Policy Provider may, notwithstanding the
Policy Provider Election, request the Subordination Agent to, and the
Subordination Agent shall, make a Policy Drawing for an amount equal to the then
outstanding principal balance of such Defaulted Series G Equipment Note (less
any Policy Drawings previously paid by the Policy Provider in respect of
principal of such Defaulted Series G Equipment Note) and accrued and unpaid
interest on such amounts at the Stated Interest Rate for the Class G
Certificates from the previous Regular Distribution Date to such Special
Distribution Date.
Further, following a Policy Provider Election with respect to a
Defaulted Series G Equipment Note, upon the occurrence and continuance of a
Policy Provider Default, the Subordination Agent shall on any Business Day (an
"Election Distribution Date", which shall be a Special Distribution Date)
elected by the Subordination Agent upon 20 days' Written Notice to the Class G
Trustee and the Policy Provider, make a Policy Drawing for an amount equal to
the then outstanding principal balance of such Defaulted Series G Equipment Note
(less any Policy Drawings previously paid by the Policy Provider in respect of
principal of such Equipment Note) and accrued and unpaid interest on such
amounts at the Stated Interest Rate for the Class G Certificates from the
immediately preceding Regular Distribution Date to such Election Distribution
Date. The Subordination Agent shall make each such Policy Drawing referred to in
this subparagraph (c) under the Policy (for payment into the Policy Account) no
later than 1:00 p.m. (New York City time) on the relevant Special Distribution
Date and upon its receipt of the proceeds thereof pay the amount thereof from
the Policy Account to the Class G Trustee in reduction of the outstanding Pool
Balance of the Class G Certificates together with such accrued and unpaid
interest thereon.
In addition, regardless of whether or not the Policy Provider makes
a Policy Provider Election, the Policy Provider shall, at the end of the first
occurring 18-month period described in Section 3.07(c), endorse the Policy (if
not already endorsed to so provide) to provide for the payment to the Liquidity
Providers of interest accruing on the outstanding drawings in respect of the
Liquidity Facilities from and after the end of such 18-month period as and when
such interest becomes due in accordance with such Liquidity Facilities. The
Policy Provider hereby agrees not to otherwise amend or modify the Policy
without the consent of the Liquidity Provider if such amendment or modification
would adversely affect the rights of the Liquidity Provider.
(d) Final Policy Drawing. If on the Final Legal Distribution Date of
the Class G Certificates after giving effect to the application of available
funds in accordance with the priorities specified in Section 2.04 and Article
III, and taking into account the application of any Drawing paid under the Class
G Liquidity Facility in respect of interest included in the Final Distribution
and any withdrawal of funds in the Class G Cash Collateral Account in respect of
interest included in the Final Distribution, the Subordination Agent does not
then have sufficient funds available on such date for the payment in full of the
Final Distribution (calculated as at such date but excluding any accrued and
unpaid premium) on the Class G Certificates then, prior to 1:00 p.m. (New York
City time) on such date, the Subordination Agent shall: (i) deliver a Notice of
Nonpayment, as provided in the Policy, to the Policy Provider or its fiscal
agent, requesting a Policy Drawing under the Policy (for payment into the Policy
Account) in an amount equal to the minimum amount sufficient to enable the
Subordination Agent to pay the Final Distribution (calculated as at such date
but excluding any accrued and unpaid premium) on the Class G Certificates, and
(ii) shall pay such amount from the Policy Account to the Class G Trustee in
payment of such amount on such date.
(e) Avoidance Drawings. If at any time the Subordination Agent shall
have actual knowledge of the issuance of any Final Order, the Subordination
Agent shall promptly give notice thereof to Delta, each Trustee, the Liquidity
Providers and the Policy Provider. The Subordination Agent shall thereupon
calculate the relevant Avoided Payments resulting therefrom and shall promptly:
(a) send to the Class G Trustee a Written Notice of such amount and (b) deliver
to the Policy Provider, or its fiscal agent, a Notice of Avoided Payment,
together with a copy of the documentation required by the Policy with respect
thereto, requesting a Policy Drawing (for payment to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy and/or the Subordination Agent for
deposit into the Policy Account) in an amount equal to the amount of relevant
Avoided Payment. Such Written Notice shall also set the date for the
distribution of the proceeds of such Policy Drawing, which date shall constitute
a Special Distribution Date and shall be the earlier of the third Business Day
that immediately precedes the expiration of the Policy and the Business Day that
immediately follows the 25th day after the date of such Written Notice. No later
than 1:00 p.m. (New York City time) on the specified Special Distribution Date,
the Subordination Agent shall make the specified Policy Drawing and, upon its
receipt of the proceeds thereof, pay the amount thereof from the Policy Account
to the Class G Trustee in reinstatement of the Avoided Payment.
(f) Application of Policy Drawings. Notwithstanding anything to the
contrary contained in this Agreement (including, without limitation, Sections
2.04, 3.02 and 3.03 hereof), all payments received by the Subordination Agent in
respect of a Policy Drawing shall be promptly paid from the Policy Account to
the Class G Trustee for distribution to the Class G Certificateholders.
(g) Reduction of Outstanding Pool Balance. Promptly following each
date on which the Pool Balance of the Class G Certificates is reduced as a
result of a payment under this Agreement, the Subordination Agent shall inform
the Policy Provider of such reduction. Anything contained herein to the contrary
notwithstanding, (i) no Policy Drawing for payment in respect of the Class G
Certificates under clause (a) of this Section 3.07 shall be in excess of Accrued
Class G Interest and (ii) no Policy Drawing under clauses (b)-(d) of this
Section 3.07 shall be for an amount in excess of the outstanding Pool Balance of
the Class G Certificates plus accrued and unpaid interest thereon at the Stated
Interest Rate for the Class G Certificates. Nothing contained in this
Intercreditor Agreement shall be deemed to alter or amend the liabilities,
obligations, requirements or procedures of the Policy Provider under the Policy
and the Policy Provider shall not be obligated to make payment except at the
times and in the amounts and under the circumstances expressly set forth in the
Policy.
(h) Resubmission of Notice of Payment. If the Policy Provider at any
time informs the Subordination Agent in accordance with the Policy that a Notice
of Nonpayment or Notice of Avoided Payment submitted by the Subordination Agent
does not satisfy the requirements of the Policy, the Subordination Agent shall,
as promptly as possible after being so informed, submit to the Policy Provider
an amended and revised Notice of Nonpayment or Notice of Avoided Payment, as the
case may be, and shall pay to the Class G Trustee out of the Policy Account the
amount received pursuant to such amended or revised Notice of Nonpayment or
Notice of Avoided Payment, as the case may be, when received.
(i) Subrogation. The Policy Provider will be subrogated to all of
the rights of the holders of the Class G Certificates to payment on the Class G
Certificates to the extent of the payments made under the Policy as set forth
herein, the exercise of such subrogation right to be subject to the other
provisions of this Agreement.
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.01. Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture Event of
Default under any Indenture, the Controlling Party shall direct the
Subordination Agent, which in turn shall direct the Loan Trustee under such
Indenture, in the exercise of remedies available to the holders of the Equipment
Notes issued pursuant to such Indenture, including, without limitation, the
ability to vote all such Equipment Notes in favor of Accelerating such Equipment
Notes in accordance with the provisions of such Indenture. Subject to the Owner
Trustees' and the Owner Participants' rights set-forth in the Indentures with
respect to Leased Aircraft to purchase the Equipment Notes, if the Equipment
Notes issued pursuant to any Indenture have been Accelerated following an
Indenture Event of 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 and in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights set-forth in the Indentures with respect to Leased Aircraft to purchase
the Equipment Notes, and notwithstanding the foregoing, so long as any
Certificates remain Outstanding, during the period ending on the date which is
nine months after the earlier of (x) the Acceleration of the Equipment Notes
issued pursuant to any Indenture or (y) the occurrence of a Delta Bankruptcy
Event, without the consent of each Trustee (other than the Trustee of any Trust
all of the Certificates of which are held or beneficially owned by Delta and/or
its Affiliates), (A) 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 and (B)
with respect to any Leased Aircraft, the amount and payment dates of rentals
payable by Delta under the Lease for such Aircraft may not be adjusted, if, as a
result of such adjustment, the discounted present value of all such rentals
would be less than 75% of the discounted present value of the rentals payable by
Delta under such Lease before giving effect to such adjustment, in each case,
using the weighted average interest rate of the Equipment Notes issued pursuant
to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture Event of
Default (and before the occurrence of a Triggering Event) commission an LTV
Appraisal with respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note becomes
a Non-Performing Equipment Note, the Subordination Agent shall obtain Appraisals
with respect to all of the Aircraft (the "LTV Appraisals") as soon as
practicable and additional LTV Appraisals on or prior to each anniversary of the
date of such initial LTV Appraisals; provided that, if the Controlling Party
reasonably objects to the appraised value of the Aircraft shown in such LTV
Appraisals, the Controlling Party shall have the right to obtain or cause to be
obtained substitute LTV Appraisals (including any LTV Appraisals based upon
physical inspection of the Aircraft).
(b) To the extent permitted by applicable law, the Subordination
Agent, at the direction of the Controlling Party, shall take such actions as it
may reasonably deem most effectual to complete the sale or other disposition of
such Aircraft or Equipment Notes. In addition, in lieu of any sale, assignment,
contract to sell or other disposition, if the Subordination Agent is so directed
by the Controlling Party, the Subordination Agent may maintain possession of
such Equipment Notes and continue to apply monies received in respect of such
Equipment Notes in accordance with Section 2.04(b) and Article III. 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 direct the
Subordination Agent to, 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 take any other remedial action permitted by such
Indenture or applicable law.
Section 4.02. Remedies Cumulative. Each and every right, power and
remedy given to the Trustees, the Liquidity Providers, the Policy Provider, the
Controlling Party or the Subordination Agent specifically or otherwise in this
Agreement shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law,
in equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may, subject always to the terms
and conditions hereof, be exercised from time to time and as often and in such
order as may be deemed expedient by any Trustee, any Liquidity Provider, the
Policy Provider, the Controlling Party or the Subordination Agent, as
appropriate, and the exercise or the beginning of the exercise of any right,
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No delay or
omission by any Trustee, any Liquidity Provider, the Policy Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
Section 4.03. 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 4.04. Right of Certificateholders to Receive Payments Not to
Be Impaired. Subject to the provisions of this Agreement and each Trust
Agreement, the right of any Certificateholder or any Liquidity Provider or the
Policy Provider, respectively, to receive payments hereunder (including, without
limitation, pursuant to Section 2.04, 3.02 or 3.03) 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, such Liquidity Provider or the Policy Provider, respectively.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.01. Notice of Indenture Event of Default or Triggering
Event. (a) If the Subordination Agent shall have knowledge of an Indenture Event
of Default or a Triggering Event, as promptly as possible and in any event
within ten days after obtaining actual knowledge thereof, the Subordination
Agent shall give notice thereof to the Rating Agencies, Delta, the Liquidity
Providers, the Policy Provider and the Trustees by telegram, cable, facsimile or
telephone (to be promptly confirmed in writing), unless such Indenture Event of
Default or Triggering Event shall have been cured or waived. For all purposes of
this Agreement, in the absence of actual knowledge, the Subordination Agent
shall not be deemed to have knowledge of any Indenture Event of Default or
Triggering Event unless notified in writing by Delta, one or more Trustees, one
or more Liquidity Providers, the Policy Provider or one or more
Certificateholders; and "actual knowledge" (as used in the foregoing clause) of
the Subordination Agent shall mean actual knowledge of an officer in the
Corporate Trust Office of the Subordination Agent or any other Responsible
Officer thereof.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider, the Policy Provider and each Trustee, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to the
Subordination Agent as registered holder of the Equipment Notes or otherwise in
its capacity as Subordination Agent to the extent the same shall not have been
otherwise directly distributed to such Liquidity Provider, the Policy Provider
or each Trustee, as applicable, pursuant to any other Operative Agreement.
Section 5.02. Indemnification. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Article IV
unless the Subordination Agent shall have received indemnification against any
risks incurred in connection therewith in form and substance reasonably
satisfactory to it, including, without limitation, adequate advances against
costs that may be incurred by it in connection therewith. The Subordination
Agent shall not be required to take any action under Article IV, nor shall any
other provision of this Agreement or any other Operative Agreement be deemed to
impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by outside counsel that such action
is contrary to the terms hereof or is otherwise contrary to law.
Section 5.03. 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) promptly take such action as
may be necessary duly to discharge all Liens on any of the Trust Accounts or any
monies deposited therein that are attributable to the Subordination Agent in its
individual capacity and that are unrelated to the transaction contemplated
hereby and by the other Operative Agreements.
Section 5.04. Notice from the Liquidity Providers and Trustees. If
any Liquidity Provider, the Policy Provider or any Trustee has notice of an
Indenture Event of Default or a Triggering Event, such Person shall promptly
give notice thereof to all other Liquidity Providers, the Policy Provider and
all other Trustees and to the Subordination Agent; provided, however, that no
such Person shall have any liability hereunder as a result of its failure to
deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.01. Authorization; Acceptance of Trusts and Duties. Each
of the Class G-1 Trustee, the Class G-2 Trustee, the Class C Trustee and the
Class D 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,
the Policy Provider and the Trustees hereby designates and appoints the
Subordination Agent as the Subordination Agent under this Agreement. State
Street accepts the trusts and duties hereby created and applicable to it and
agrees to perform such duties, but only upon the terms of this Agreement and
agrees to receive, handle and disburse all monies received by it in accordance
with the terms hereof. The Subordination Agent shall have no liability hereunder
except (a) for its own willful misconduct or negligence, (b) as provided in
Section 2.02 and the last sentence of Section 5.03, (c) for liabilities that may
result from the inaccuracy of any representation or warranty of the
Subordination Agent made in its individual capacity in any Operative Agreement
and (d) as otherwise expressly provided herein or in the other Operative
Agreements.
Section 6.02. 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 6.03. No Representations or Warranties as to Documents. The
Subordination Agent shall not 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
herein or therein (other than the representations and warranties of the
Subordination Agent made in its individual capacity under any Operative
Agreement), except that the Subordination Agent hereby represents and warrants
that each of said specified documents to which it is a party has been or will be
duly executed and delivered by one of its officers who is and will be duly
authorized to execute and deliver such document on its behalf. The
Certificateholders, the Trustees, the Policy Provider and the Liquidity
Providers make no representation or warranty hereunder whatsoever.
Section 6.04. No Segregation of Monies; No Interest. Any monies paid
to or retained by the Subordination Agent pursuant to any provision hereof and
not then required to be distributed to any Trustee, the Policy Provider or any
Liquidity Provider as provided in Articles II and III 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 2.02) 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 6.05. Reliance; Agents; Advice of Counsel. The Subordination
Agent shall not incur any liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers, the Policy Provider or the Trustees the manner of ascertainment of
which is not specifically described herein, the Subordination Agent may for all
purposes hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider, the Policy Provider or Trustee, as the case may
be, as to such fact or matter, and such certificate shall constitute full
protection to the Subordination Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon. In the administration of the
trusts hereunder, the Subordination Agent may (a) execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and (b) consult with counsel, accountants and other skilled
Persons to be selected and retained by it. The Subordination Agent shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
Persons acting within such counsel's, accountants' or Person's area of
competence (so long as the Subordination Agent shall have exercised reasonable
care and judgment in selecting such Persons).
Section 6.06. Capacity in Which Acting. The Subordination Agent acts
hereunder solely as agent or trustee herein and not in its individual capacity,
except as otherwise expressly provided herein and in the Operative Agreements.
Section 6.07. Compensation. The Subordination Agent shall be
entitled to such compensation, including reasonable expenses and disbursements,
for all services rendered hereunder as Delta and the Subordination Agent may
agree from time to time in writing and shall have a priority claim to the extent
set forth in Article III 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, the Policy Provider or Liquidity Provider for any fee as compensation
for its services as agent under this Agreement. The provisions of this Section
6.07 shall survive the termination of this Agreement.
Section 6.08. 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 6.09. Subordination Agent Required; Eligibility. There shall
at all times be a Subordination Agent hereunder that is a Citizen of the United
States, a bank, trust company or other financial institution organized and doing
business under the laws of the United States or any state thereof and eligible
to act as a trustee under Section 310(a) of the Trust Indenture Act of 1939, as
amended, and that has a combined capital and surplus of at least $75,000,000 (or
a combined capital and surplus in excess of $5,000,000 and the obligations of
which, whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized under the laws of the
United States or any State or territory thereof or the District of Columbia and
having a combined capital and surplus of at least $75,000,000). If such bank,
trust company or other financial institution or such corporation publishes
reports of conditions at least annually, pursuant to law or to the requirements
of federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 6.09 the combined capital and
surplus of such bank, trust company or other financial institution or such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section 6.09, the
Subordination Agent shall resign immediately in the manner and with the effect
specified in Section 7.01.
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 and the Subordination Agent, in
its individual capacity, hereby waives all rights of set-off and counterclaim
with respect to all such property.
ARTICLE VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01. Replacement of Subordination Agent; Appointment of
Successor. (a) The Subordination Agent or any successor thereto must resign if
at any time it fails to comply with Section 6.09 and may resign at any time
without cause by giving 60 days' prior written notice to Delta, the Trustees,
the Policy Provider and the Liquidity Providers. The Controlling Party (or the
party that would be the Controlling Party if an Indenture Event of Default had
occurred) shall remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.09;
(2) the Subordination Agent is adjudged bankrupt or insolvent or
files a bankruptcy petition;
(3) a receiver of the Subordination Agent shall be appointed or any
public officer shall take charge or control of the Subordination Agent or
its property or affairs for the purpose of rehabilitation, conservation or
liquidation; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party (or the party that would be the Controlling Party
if an Indenture Event of Default had occurred) shall promptly appoint a
successor Subordination Agent. If a successor Subordination Agent shall not have
been appointed within 60 days after such notice of resignation or removal, the
retiring Subordination Agent, one or more of the Trustees, the Policy Provider
or one or more of the Liquidity Providers may petition any court of competent
jurisdiction for the appointment of a successor Subordination Agent to act until
such time, if any, as a successor shall have been appointed as provided above.
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, the Policy Provider and the Trustees. The retiring Subordination
Agent shall promptly transfer its rights under each of the Liquidity Facilities
and all of the property and all books and records, or true, complete and correct
copies thereof, held by it as Subordination Agent to the successor Subordination
Agent.
If the Subordination Agent fails to comply with Section 6.09 (to the
extent applicable), one or more of the Trustees, the Policy Provider or one or
more of the Liquidity Providers may petition a 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
and so long as no Policy Provider Default has occurred and is continuing, the
Policy Provider shall have consented to such successor Subordination Agent.
(b) Any corporation into which the Subordination Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Subordination Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Subordination Agent, shall be the successor
of the Subordination Agent hereunder, provided that such corporation shall be
otherwise qualified and eligible under Section 6.09, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01. 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 3.06(e)(v)(3)
or any amendment contemplated by the last sentence of this Section 8.01(a), with
the consent of holders of Certificates of the related Class evidencing
Fractional Undivided 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 (including, without limitation, without the consent of
the Certificateholders to the extent permitted thereby, Section 9.01 of the
Basic Agreement)), the Subordination Agent, the Policy Provider and each
Liquidity Provider; provided, however, that this Agreement may be supplemented,
amended or modified without the consent of any Trustee in order (i) to cure any
ambiguity or omission or to correct any mistake, (ii) to correct or supplement
any provision, or (iii) to make any other provision in regard to matters or
questions arising hereunder that will not materially adversely affect the
interests of any Trustee or the holders of the related Class of Certificates;
provided further, however, that, if such supplement, amendment or modification
(x) would directly or indirectly amend, modify or supersede, or otherwise
conflict with, Section 2.02(b), 3.06(c), 3.06(e), 3.06(f) (other than the last
sentence thereof), 3.06(l), this proviso of Section 8.01(a), the last sentence
of Section 8.01(a), or Section 9.06 (collectively, the "Delta Provisions"), (y)
would otherwise affect the interests of a potential Replacement Liquidity
Provider or of Delta with respect to its ability to replace any Liquidity
Facility or with respect to its payment obligations under any Operative
Agreement or (z) is made pursuant to the last sentence of this Section 8.01(a),
then such supplement, amendment or modification shall not be effective without
the additional written consent of Delta. Notwithstanding the foregoing, without
the consent of each Certificateholder affected thereby, the Policy Provider 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 the last sentence of this Section 8.01(a), modify Section 2.04,
3.02 or 3.03 hereof relating to the distribution of monies received by the
Subordination Agent hereunder from the Equipment Notes or pursuant to the
Liquidity Facilities or any Policy. Nothing contained in this Section 8.01(a)
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 is to be comprised of
more than one instrument as contemplated by the definition of the term
"Replacement Liquidity Facility", then each party hereto agrees to amend this
Agreement and the other Operative Agreements to incorporate appropriate
mechanics for multiple Liquidity Facilities for a single Trust.
(b) Subject to Section 2.06, if the Subordination Agent, as the
registered holder of any Equipment Notes, receives a request for its consent to
any amendment, modification, consent or waiver under such Equipment Notes, to
the Indenture pursuant to which such Equipment Notes were issued or the related
Lease, Participation Agreement or other related document, (i) if no Indenture
Event of 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, except that so long as the Final Distribution on the Class G-1
Certificates or Class G-2 Certificates has not been made or any Policy Provider
Obligations or any other obligations owing to the Policy Provider hereunder
remain outstanding and no Policy Provider Default shall have occurred and be
continuing, the Subordination Agent shall request directions from the Policy
Provider rather than the Class G-1 Trustee or Class G-2 Trustee with respect to
the Series G-1 Equipment Notes or Series G-2 Equipment Notes held in the Class
G-1 Trust or Class G-2 Trust, respectively, and shall vote or consent in
accordance with the directions of such Trustee or the Policy Provider, as the
case may be, and (ii) if any Indenture Event of Default (which, in the case of
any Indenture pertaining to a Leased Aircraft, has not been cured by the
applicable Owner Trustee or applicable Owner Participant, if applicable,
pursuant to Section 4.03 of such Indenture) shall have occurred and be
continuing with respect to such Indenture, the Subordination Agent will exercise
its voting rights as directed by the Controlling Party, subject to Section 4.01
and 4.04; provided that no such amendment, modification, consent or waiver
shall, without the consent of each Liquidity Provider, the Policy Provider, the
Class G-1 Certificateholders and the Class G-2 Certificateholders, (i) reduce
the amount of principal or interest payable by Delta under any Equipment Note
issued under any Indenture in respect of an Owned Aircraft (other than in
connection with a reoptimization relating to a sale/leaseback transaction for a
Boeing 737-832 Aircraft) or reduce the amount of rent, supplemental rent,
stipulated loss value or termination value payable by Delta under any Lease,
(ii) create any Lien with respect to any Collateral or Indenture Estate prior to
or pari passu with the Lien of the related Indenture or deprive any holder of an
Equipment Note issued under such Indenture of the benefit of the Lien of such
Indenture upon the related Collateral or Indenture Estate or (iii) reduce the
percentage in principal amount of the outstanding Equipment Notes issued under
any Indenture required to take or approve any action render such Indenture.
(c) Notwithstanding any provision to the contrary contained herein,
so long as Delta and/or its Affiliates holds or beneficially owns a majority in
interest of the Class D Certificates or otherwise controls the actions of the
Class D Trustee, any consent or approval of the Class D Trustee or any Class D
Certificateholders otherwise required in accordance with the foregoing
provisions shall not be required.
Section 8.02. Subordination Agent Protected. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed by it pursuant to the terms of Section 8.01
adversely affects any right, duty, immunity or indemnity with respect to such
institution under this Agreement, any Liquidity Facility or any Policy, the
Subordination Agent may in its discretion decline to execute such document.
Section 8.03. Effect of Supplemental Agreements. Upon the execution
of any amendment, consent or supplement hereto pursuant to the provisions
hereof, this Agreement shall be and shall be deemed to 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 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 VIII, 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 8.04. Notice to Rating Agencies and the Policy Provider.
Promptly following its receipt of each amendment, consent, modification,
supplement or waiver contemplated by this Article VIII, the Subordination Agent
shall send a copy thereof to each Rating Agency and the Policy Provider.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Termination of Intercreditor Agreement. Upon (or at
any time after) 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 all Policy Provider Obligations to the Policy Provider
and provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers, the Subordination
Agent and the Policy Provider hereunder or under the Trust Agreements, and that
the commitment of (i) the Liquidity Providers under the Liquidity Facilities and
(ii) the Policy Provider under the Policies shall have expired or been
terminated, this Agreement shall terminate and 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 9.02. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers, Policy Provider and Subordination Agent. Subject to the
second sentence of Section 9.06 and the provisions of Section 4.04, nothing in
this Agreement, whether express or implied, shall be construed to give to any
Person other than the Trustees, the Liquidity Providers, the Policy Provider and
the Subordination Agent any legal or equitable right, remedy or claim under or
in respect of this Agreement.
Section 9.03. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices required or permitted under the terms
and provisions of this Agreement shall be in English and in writing, and any
such notice may be given by United States mail, courier service or facsimile or
any other customary means of communication, and any such notice shall be
effective when delivered (or, if mailed, three Business Days after deposit,
postage prepaid, in the first class United States mail and, if delivered by
facsimile, upon completion of transmission and confirmation by the sender (by a
telephone call to a representative of the recipient or by machine confirmation)
that such transmission was received),
if to the Subordination Agent, to:
State Street Bank and Trust Company of Connecticut,
National Association
000 Xxxxxx Xxxxxx
Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to any Trustee, to:
State Street Bank and Trust Company of Connecticut,
National Association
000 Xxxxxx Xxxxxx
Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Liquidity Provider, to:
Westdeutsche Landesbank Girozentrale
New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Transportation Finance Global
Structured Finance/Americas
Telecopy: (000) 000-0000
if to the Policy Provider, to:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Insured Portfolio Management, Structured
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Any party, by notice to the other parties hereto, may designate
additional or different addresses for subsequent notices or communications.
Whenever the words "notice" or "notify" or similar words are used herein, they
mean the provision of formal notice as set forth in this Section 9.03.
Section 9.04. 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 9.05. 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 9.06. Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of, and be enforceable by,
each of the parties hereto and the successors and permitted assigns of each, all
as herein provided. In addition, the Delta Provisions shall inure to the benefit
of Delta and its successors and permitted assigns, and (without limitation of
the foregoing) Delta is hereby constituted, and agreed to be, an express third
party beneficiary of the Delta Provisions.
Section 9.07. 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 9.08. Counterparts. This Agreement may be executed in any
number of counterparts (and each party shall not be required to execute the same
counterpart). Each counterpart of this Agreement including a signature page or
pages executed by each of the parties hereto shall be an original counterpart of
this Agreement, but all of such counterparts together constitute one instrument.
Section 9.09. Subordination. (a) As among the Trustees, and as
between the Liquidity Providers and the Policy Provider, on the one hand, and
the Trustees and the Certificateholders, on the other hand, this Agreement shall
be a subordination agreement for purposes of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Bankruptcy Code, as amended from time to time. In addition, as among the
Trustees and the Certificateholders of each Class, this Agreement shall be a
subordination agreement for purposes of such Section 510.
(b) Notwithstanding the provisions of this Agreement, if prior to
the payment in full to (i) the Liquidity Providers of all Liquidity Obligations
then due and payable and (ii) the Policy Provider of all Policy Provider
Obligations or prior to the distribution in full of any other amount
distributable hereunder, 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, the Policy Provider or
the Subordination Agent receives any payment in respect of any obligations owing
or amounts distributable hereunder (or, in the case of the Liquidity Providers
or the Policy Provider, in respect of the Liquidity Obligations or the Policy
Provider Obligations, as the case may be), which is subsequently invalidated,
declared preferential, set aside and/or required to be repaid to a trustee,
receiver or other party, then, to the extent of such payment, such obligations
or amounts (or, in the case of the Liquidity Providers or the Policy Provider,
such Liquidity Obligations or the Policy Provider Obligations, as the case may
be) intended to be satisfied shall be revived and continue in full force and
effect as if such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers, the Policy Provider and the
Subordination Agent expressly confirm and agree that the payment priorities and
subordination specified in Articles II and III shall apply in all circumstances,
notwithstanding (x) the fact that the obligations owed to the Trustees are
secured by certain assets and the Liquidity Obligations and the Policy Provider
Obligations are not so secured and (y) the occurrence of a Delta Bankruptcy
Event or any similar event or occurrence relating to any other Person (it being
expressly agreed that the payment priorities and subordination specified in
Articles II and III shall apply whether or not a claim for post-petition or
post-filing interest is allowed in the proceedings resulting from such Delta
Bankruptcy Event or other event or occurrence). The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations or Policy Provider Obligations (or
other obligations due to the Policy Provider hereunder) 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, the Policy Provider and the
Subordination Agent may take any of the following actions without impairing its
rights under this Agreement:
(i) obtain a Lien on any property to secure any amounts owing to it
hereunder, including, in the case of the Liquidity Providers and the
Policy Provider, the Liquidity Obligations or the Policy Provider
Obligations, as the case may be;
(ii) obtain the primary or secondary obligation of any other obligor
with respect to any amounts owing to it hereunder, including, in the case
of the Liquidity Providers and the Policy Provider, any of the Liquidity
Obligations or the Policy Provider Obligations, as the case may be;
(iii) renew, extend, increase, alter or exchange any amounts owing
to it hereunder, including, in the case of the Liquidity Providers and the
Policy Provider, any of the Liquidity Obligations or the Policy Provider
Obligations, as the case may be, or release or compromise any obligation
of any obligor with respect thereto;
(iv) refrain from exercising any right or remedy, or delay in
exercising any 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, the Policy Provider or the Subordination Agent shall
not prejudice the rights or adversely affect the obligations of any other party
under this Agreement.
Section 9.10. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN
THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.11. Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity. (a) Each of the parties hereto, to the extent it may do so
under applicable law, for purposes hereof and of all other Operative Agreements
hereby (i) irrevocably submits itself to the non-exclusive jurisdiction of the
courts of the State of New York sitting in the City of New York and to the
non-exclusive jurisdiction of the United States District Court for the Southern
District of New York, for the purposes of any suit, action or other proceeding
arising out of this Agreement, the subject matter hereof or any of the
transactions contemplated hereby brought by any party or parties hereto or
thereto, or their successors or permitted assigns and (ii) waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof or any of the transactions
contemplated hereby may not be enforced in or by such courts.
(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 or of any state thereof
and waives any immunity any of its properties located in the United States 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.
Section 9.12. Non-Petition. Each Liquidity Provider covenants that
(i) until one year and one day after the Series G-1 Equipment Notes have been
paid in full, it shall not acquiesce, petition or otherwise invoke or cause or
join in invoking or causing the Class G-1 Trust or any other Person to invoke
the process of any governmental authority for the purpose of commencing or
sustaining a case (whether voluntary or not) against the Class G-1 Trust under
any bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Class G-1 Trust or any substantial part of its property or ordering the
winding-up or liquidation of the affairs of the Class G-1 Trust, (ii) until one
year and one day after the Series G-2 Equipment Notes have been paid in full, it
shall not acquiesce, petition or otherwise invoke or cause or join in invoking
or causing the Class G-2 Trust or any other Person to invoke the process of any
governmental authority for the purpose of commencing or sustaining a case
(whether voluntary or not) against the Class G-2 Trust under any bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Class G-2
Trust or any substantial part of its property or ordering the winding-up or
liquidation of the affairs of the Class G-2 Trust, (iii) until one year and one
day after the Series C Equipment Notes have been paid in full, it shall not
acquiesce, petition or otherwise invoke or cause or join in invoking or causing
the Class C Trust or any other Person to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case (whether voluntary
or not) against the Class C Trust under any bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Class C Trust or any substantial
part of its property or ordering the winding-up or liquidation of the affairs of
the Class C Trust and (iv) until one year and one day after the Series D
Equipment Notes have been paid in full, it shall not acquiesce, petition or
otherwise invoke or cause or join in invoking or causing the Class D Trust or
any other Person to invoke the process of any governmental authority for the
purpose of commencing or sustaining a case (whether voluntary or not) against
the Class D Trust under any bankruptcy, insolvency or similar law or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Class D Trust or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Class D Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized, as of
the date first above written.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
as Trustee for each of the Trusts
By: ____________________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH,
as Class G-1 Liquidity Provider, Class
G-2 Liquidity Provider and Class C
Liquidity Provider
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent
By: ____________________________________
Name:
Title:
MBIA INSURANCE CORPORATION,
as Policy Provider
By: ____________________________________
Name:
Title:
