EXECUTION COPY
INTERCREDITOR AGREEMENT
Dated as of
March 28, 2002
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
American Trans Air 2002-1A Pass Through Trust
and
American Trans Air 2002-1B Pass Through Trust,
AIG MATCHED FUNDING CORP.
as Class A Liquidity Provider
and Class B Liquidity Provider,
AND
WILMINGTON TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................................................2
ARTICLE II TRUST ACCOUNTS; CONTROLLING PARTY....................................................................20
SECTION 2.1 Agreement to Terms of Subordination; Payments from Monies Received Only....................20
SECTION 2.2 Trust Accounts.............................................................................21
SECTION 2.3 Deposits to the Collection Account and Special Payments Account............................22
SECTION 2.4 Distributions of Special Payments..........................................................22
SECTION 2.5 Designated Representatives.................................................................25
SECTION 2.6 Controlling Party..........................................................................26
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF............................................................27
SECTION 3.1. Written Notice of Distribution............................................................27
SECTION 3.2. Distribution of Amounts on Deposit in the Collection Account..............................29
SECTION 3.3. Distribution of Amounts on Deposit Following a Triggering Event...........................31
SECTION 3.4 Other Payments.............................................................................33
SECTION 3.5. Payments to the Trustees and the Liquidity Providers......................................33
SECTION 3.6. Liquidity Facilities......................................................................33
ARTICLE IV EXERCISE OF REMEDIES.................................................................................39
SECTION 4.1. Directions from the Controlling Party.....................................................39
SECTION 4.2. Remedies Cumulative.......................................................................40
SECTION 4.3. Discontinuance of Proceedings.............................................................40
SECTION 4.4. Right of Certificateholders to Receive Payments Not to Be Impaired........................41
SECTION 4.5. Undertaking for Costs.....................................................................41
ARTICLE V DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC........................................41
SECTION 5.1. Notice of Indenture Default or Triggering Event...........................................41
SECTION 5.2. Indemnification...........................................................................42
SECTION 5.3. No Duties Except as Specified in Intercreditor Agreement..................................42
SECTION 5.4. Notice from the Liquidity Providers and Trustees..........................................42
ARTICLE VI THE SUBORDINATION AGENT..............................................................................43
SECTION 6.1. Authorization; Acceptance of Trusts and Duties............................................43
SECTION 6.2. Absence of Duties.........................................................................43
SECTION 6.3. No Representations or Warranties as to Documents..........................................43
SECTION 6.4. No Segregation of Monies; No Interest.....................................................43
SECTION 6.5. Reliance; Agents; Advice of Counsel.......................................................44
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SECTION 6.6. Capacity in Which Acting..................................................................44
SECTION 6.7. Compensation..............................................................................44
SECTION 6.8. May Become Certificateholder..............................................................45
SECTION 6.9. Subordination Agent Required; Eligibility.................................................45
SECTION 6.10. Money to Be Held in Trust................................................................45
ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT..............................................................45
SECTION 7.1. Indemnification...........................................................................45
ARTICLE VIII SUCCESSOR SUBORDINATION AGENT......................................................................46
SECTION 8.1. Replacement of Subordination Agent; Appointment of Successor..............................46
ARTICLE IX SUPPLEMENTS AND AMENDMENTS...........................................................................47
SECTION 9.1. Amendments, Waivers, Etc..................................................................47
SECTION 9.2. Subordination Agent Protected.............................................................49
SECTION 9.3. Effect of Supplemental Agreements.........................................................49
SECTION 9.4. Notice to Rating Agency...................................................................50
ARTICLE X MISCELLANEOUS.........................................................................................50
SECTION 10.1. Termination of Intercreditor Agreement...................................................50
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees, Liquidity Providers and
Subordination Agent................................................................50
SECTION 10.3. Notices..................................................................................50
SECTION 10.4. Severability.............................................................................51
SECTION 10.5. No Oral Modifications or Continuing Waivers..............................................52
SECTION 10.6. Successors and Assigns...................................................................52
SECTION 10.7. Headings.................................................................................52
SECTION 10.8. Counterpart Form.........................................................................52
SECTION 10.9. Subordination............................................................................52
SECTION 10.10. GOVERNING LAW...........................................................................54
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial........................................54
SECTION 10.12. Transfer................................................................................54
SECTION 10.13. Subordination Agent's Liability.........................................................55
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INTERCREDITOR AGREEMENT
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INTERCREDITOR AGREEMENT dated as of March 28, 2002, among WILMINGTON
TRUST COMPANY, a Delaware banking corporation ("WTC"), not in its individual
capacity but solely as Trustee of each Trust (each as defined below), AIG
Matched Funding Corp., a Delaware corporation, as Class A Liquidity Provider and
Class B Liquidity Provider, and WTC, not in its individual capacity except as
expressly set forth herein, but solely as Subordination Agent and trustee
hereunder (in such capacity, together with any successor appointed pursuant to
Article VIII hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each Aircraft
that is owned by ATA at the time such Indenture is entered into (the "Owned
Aircraft"), ATA will issue on a recourse basis two series of Equipment Notes to
finance the purchase of such Aircraft and (ii) in the case of each Aircraft that
is leased to ATA pursuant to a related Lease at the time such Indenture is
entered into (the "Leased Aircraft"), the related Owner Trustee will issue on a
nonrecourse basis two series of Equipment Notes to finance the purchase of such
Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust will acquire
Equipment Notes having an interest rate equal to the interest rate applicable to
the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single class of Certificates (a "Class") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, the Company and Amtran have entered into two Certificate
Purchase Agreements (together, as amended, supplemented or otherwise modified in
accordance with their terms, the "Certificate Purchase Agreements"), each dated
as of March 26, 2002 with Nyala Funding LLC (the "Class A Purchaser") and PK
AirFinance US, Inc. (the "Class B Purchaser"), respectively, providing for the
purchase of the Class A Certificates and the Class B Certificates, respectively;
WHEREAS, the Company, Amtran, the Trustee, the Subordination Agent, the
Escrow Agent, the Liquidity Provider, the Paying Agent, the Class A Purchaser
and the Class B Purchaser concurrently herewith are entering into a Delayed
Funding Implementation Agreement, dated as of the date hereof (the "Delayed
Funding Implementation Agreement"), pursuant to which the parties thereto agree
to supplement and modify the Operative Agreements, as defined therein;
WHEREAS, the initial Liquidity Provider proposes to enter into the
Class A Liquidity Facility and the Class B Liquidity Facility with the
Subordination Agent, as agent for the respective Trustee of each of the two
Trusts, for the benefit of the Certificateholders of such Trust;
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WHEREAS, American International Group, Inc. will guarantee, pursuant to
two separate guarantee agreements dated as of the date hereof (each, a
"Guarantee Agreement") the payment obligations of AIG-MF under the Class A
Liquidity Facility and the Class B Liquidity Facility, respectively;
WHEREAS, it is a condition precedent to the purchase of the Class A
Certificates by the Class A Purchaser and of the Class B Certificates by the
Class B Purchaser that the Subordination Agent, the Trustees, and the Liquidity
Providers agree to the terms of subordination set forth in this Agreement in
respect of each Class of Certificates, and the Subordination Agent, the Trustees
and the Liquidity Providers, by entering into this Agreement, hereby acknowledge
and agree to such terms of subordination and the other provisions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"Acceleration" means, with respect to the amounts payable in respect of
the Equipment Notes issued under any Indenture, such amounts becoming
immediately due and payable by declaration or otherwise. "Accelerate",
"Accelerating" and "Accelerated" have meanings correlative to the foregoing.
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"Adjusted Expected Distributions" means with respect to the
Certificates of any Trust on any Current Distribution Date the sum of (x) the
amount of accrued and unpaid interest on such Certificates (excluding interest,
if any, payable with respect to the Deposits related to such Trust) and (y) the
greater of:
(A) 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 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, but
without giving effect to any reduction in the Pool Balance as a result of
any distribution attributable to Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution Date is the
first Distribution Date, occurring after the initial issuance of the
Certificates of such Trust); 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), less the
amount of the Deposits for such Class of Certificates as of such preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate amount of the Deposits for such
Class of Certificates) other than any portion of such Deposits thereafter
used to acquire Equipment Notes pursuant to the Note Purchase Agreement,
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 of the
Aircraft, clause (B) above 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 which has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion thereof
applied to the payment of interest on the Certificates of such Trust or the
reduction of the Pool Balance of such Trust) shall be added to the amount of
Adjusted Expected Distributions.
"Advance", with respect to any Liquidity Facility, means any Advances
as defined in such Liquidity Facility.
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"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For the purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such Person whether through the ownership of voting securities or by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" means, for any Class of Certificates
for any Distribution Date, the sum of the applicable LTV Collateral Amounts for
each Leased Aircraft and Owned 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, but in no event an amount less than zero.
"AIG" means American International Group, Inc., a Delaware corporation,
and its successors and permitted assigns.
"AIG-MF" means AIG Matched Funding Corp., a Delaware corporation, and
its successors and permitted assigns.
"Aircraft" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"Amtran" means Amtran, Inc., an Indiana corporation, and its successors
and permitted assigns.
"Appraised Current Market Value" of any Leased Aircraft or Owned
Aircraft means the lower of the average and the median of the three most recent
LTV Appraisals of such Aircraft.
"Appraisers" means Aircraft Information Services, Inc., Xxxxxx Xxxxx
and Xxxxx, Inc. and Simat, Helliesen and Xxxxxxx, Inc.
"ATA" means American Trans Air, Inc., an Indiana corporation, and its
successors and permitted assigns.
"ATA Bankruptcy Event" means the occurrence and continuation of any of
the following:
(a) the commencement of an involuntary case or other proceeding in
respect of ATA in an involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United States or seeking
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of ATA or for all or substantially all
of its property, or seeking the winding-up or liquidation of its affairs
and the continuation of any such case or other proceeding undismissed and
unstayed for a period of ninety (90) consecutive days or an order, judgment
or decree shall be entered in
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any proceeding by any court of competent jurisdiction appointing, without
the consent of ATA, a receiver, trustee or liquidator of ATA, or of any
substantial part of its property, or sequestering any substantial part of
the property of ATA and any such order, judgment or decree or appointment
or sequestration shall be final or shall remain in force undismissed,
unstayed or unvacated for a period of ninety (90) days after the date of
entry thereof; or
(b) the commencement by ATA of a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law in
the United States, or the consent by ATA to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of ATA or for all or substantially
all of its property, or ATA shall admit in writing its inability to pay its
debts generally as they come due, or the making by ATA of any assignment
for the benefit of creditors or the taking by ATA of any corporate action
to authorize any of the foregoing.
"Business Day" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Indianapolis,
Indiana, New York, New York, or, so long as any Certificate is outstanding, the
city and state in which any Trustee, the Subordination Agent or any Loan Trustee
maintains its Corporate Trust Office or receives and disburses funds and, solely
with respect to draws under any Liquidity Facility, that is also a "Business
Day" as defined in such Liquidity Facility.
"Cash Collateral Account" means the Class A Cash Collateral Account or
the Class B Cash Collateral Account, as applicable.
"Certificate" means a Class A Certificate or a Class B Certificate, as
applicable.
"Certificateholder" means any holder of one or more Certificates.
"Certificate Purchase Agreements" has the meaning assigned to such term
in the preliminary statements to this Agreement.
"Class" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Class A Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class A Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or
3.6(i) shall be deposited.
"Class A Certificateholder" means, at any time, any holder of one or
more Class A Certificates.
"Class A Certificates" means the certificates issued by the Class A
Trust, substantially in the form of Exhibit A to the Class A Trust Agreement,
and authenticated by the
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Class A Trustee, representing fractional undivided interests in the Class A
Trust, and any certificates issued in exchange therefor or in replacement
thereof pursuant to the terms of the Class A Trust Agreement and/or the
Registration Rights Agreement (including without limitation, any Exchange
Certificates (as defined in the Class A Trust Agreement)).
"Class A Deposits" means the Deposits with respect to the Class A
Certificates.
"Class A Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as agent
and trustee for the Class A Trustee, and the initial Class A Liquidity Provider,
and, from and after the replacement of such Agreement pursuant hereto, the
Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class A Liquidity Provider" means AIG Matched Funding Corp., together
with any Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class A Liquidity Facility pursuant to Section 3.6(e).
"Class A Purchaser" has the meaning assigned to such term in the
preliminary statements to this Agreement.
"Class A Trust" means American Trans Air 2002-1A Pass Through Trust
created and administered pursuant to the Class A Trust Agreement.
"Class A Trust Agreement" means the Pass Through Trust Agreement dated
as of Xxxxx 00, 0000, xxxxx XXX, Xxxxxx and the Class A Trustee governing the
creation and administration of American Trans Air 2002-1A Pass Through Trust and
the issuance of the Class A Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class A Trustee" means WTC, not in its individual capacity except as
expressly set forth in the Class A Trust Agreement, but solely as trustee under
the Class A Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class B Cash Collateral Account" means an Eligible Deposit Account in
the name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
drawn under the Class B Liquidity Facility pursuant to Section 3.6(c), 3.6(d) or
3.6(i) shall be deposited.
"Class B Certificateholder" means, at any time, any holder of one or
more Class B Certificates.
"Class B Certificates" means the certificates issued by the Class B
Trust, substantially in the form of Exhibit A to the Class B Trust Agreement,
and authenticated by the Class B Trustee, representing fractional undivided
interests in the Class B Trust, and any certificates issued in exchange therefor
or in replacement thereof pursuant to the terms of the
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Class B Trust Agreement and/or the Registration Rights Agreement (including,
without limitation, any Exchange Certificates (as defined in the Class B Trust
Agreement)).
"Class B Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as agent
and trustee for the Class B Trustee, and the initial Class B Liquidity Provider
and, from and after the replacement of such Agreement pursuant hereto, the
Replacement Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class B Liquidity Provider" means AIG Matched Funding Corp., together
with any Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class B Liquidity Facility pursuant to Section 3.6(e).
"Class B Purchaser" has the meaning assigned to such term in the
preliminary statements to this Agreement
"Class B Trust" means American Trans Air 2002-1B Pass Through Trust
created and administered pursuant to the Class B Trust Agreement.
"Class B Trust Agreement" means the Pass Through Trust Agreement dated
as of Xxxxx 00, 0000 xxxxx XXX, Xxxxxx and the Class B Trustee governing the
creation and administration of the American Trans Air 2002-1B Pass Through Trust
and the issuance of the Class B Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Class B Trustee" means WTC, not in its individual capacity except as
expressly set forth in the Class B Trust Agreement, but solely as trustee under
the Class B Trust Agreement, together with any successor trustee appointed
pursuant thereto.
"Class C Certificates" means pass through certificates, if any, issued
by the Class C Trust representing fractional undivided interests in the Class C
Trust.
"Class C Trust" means the American Trans Air 2002-1C Pass Through
Trust, if and when established.
"Closing Date" means March 28, 2002.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning assigned to such term in the Indentures.
"Collection Account" means the Eligible Deposit Account established by
the Subordination Agent pursuant to Section 2.2 which the Subordination Agent
shall make deposits in and withdrawals from in accordance with this Agreement.
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"Controlling Party" means the Person entitled to act as such pursuant
to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the city
at which, at any particular time, its corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as a
reference date for calculating the Adjusted Expected Distributions or Expected
Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"Delayed Funding Implementation Agreement" has the meaning assigned to
such term in the preliminary statements to this Agreement.
"Delivery Period Expiry Date" means the earlier of (a) September 29,
2002, and (b) the date on which Equipment Notes with respect to all Aircraft (or
Substitute Aircraft in lieu thereof) have been purchased by the Trusts in
accordance with the Note Purchase Agreement.
"Deposit Agreement" shall mean, with respect to each Class, prior to
the Delayed Funding Date (as defined in the Delayed Funding Implementation
Agreement), the Deposit Agreement pertaining to such Class dated the date hereof
between the Escrow Agent and the Depositary, and on and after the Delayed
Funding Date, such Deposit Agreement (to the extent of any payment to be made by
the Depositary thereunder on or after the Delayed Funding Date) and the Delayed
Deposit Agreement pertaining to such Class dated the date hereof between the
Escrow Agent and the Depositary, in each case, as the same may be amended,
modified or supplemented from time to time in accordance with the terms thereof
and shall include any Replacement Deposit Agreement (as defined in the Note
Purchase Agreement).
"Depositary" means IntesaBCI S.p.A, acting through its New York Branch,
as depositary under each Deposit Agreement, or its successors and assigns.
"Deposits" with respect to any Class, shall have the meaning set forth
in the Deposit Agreement pertaining to such Class.
"Designated Representatives" means the Subordination Agent
Representatives, the Trustee Representatives and the Provider Representatives
identified under Section 2.5.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" or "$"means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in Section
3.6(c).
"Downgraded Facility" has the meaning assigned to such term in Section
3.6(c).
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"Drawing" means an Interest Drawing, a Final Drawing, a Non-Extension
Drawing or a Downgrade Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), having corporate trust powers
and acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution has a long-term unsecured debt rating
from the Rating Agency and Standard and Poor's of at least A-3 or its
equivalent. An Eligible Deposit Account may be maintained with a Liquidity
Provider so long as such Liquidity Provider is an Eligible Institution; provided
that such Liquidity Provider shall have waived all rights of set-off and
counterclaim with respect to such account.
"Eligible Institution" means (a) the corporate trust department of the
Subordination Agent or any Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or any one
of the states thereof or the District of Columbia (or any U.S. branch of a
foreign bank), which has a long-term unsecured debt rating from the Rating
Agency and Standard & Poor's of at least A-3 or its equivalent.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than 90
days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt rating
issued by Moody's and Standard & Poor's of at least P-1 and A-1, respectively,
having maturities no later than 90 days following the date of such investment,
(c) investments in negotiable certificates of deposit, time deposits, banker's
acceptances, commercial paper or other direct obligations of, or obligations
guaranteed by, commercial banks organized under the laws of the United States or
of any political subdivision thereof (or any U.S. branch of a foreign bank) with
issuer ratings of at least P-1 by Moody's and A-1 by Standard & Poor's, having
maturities no later than 90 days following the date of such investment, or (d)
investments in any U.S. money market fund registered under the Investment
Company Act of 1940, as amended, which has been issued the highest rating in its
category by Moody's and Standard & Poor's that invests solely in obligations
described in clause (a) above; provided, however, that (x) all Eligible
Investments that are bank obligations shall be denominated in U.S. dollars; and
(y) the aggregate amount of Eligible Investments at any one time that are bank
obligations issued by any one bank shall not be in excess of 5% of such bank's
capital surplus; provided further that (1) any investment of the types described
in clause (a), (b) or (c) above may be made through a repurchase agreement in
commercially reasonable form with a bank or other financial institution
qualifying as an Eligible Institution so long as such investment is held by a
third party custodian also qualifying as an Eligible Institution, and (2) all
such investments set forth in clauses (a), (b) and (c) above mature no later
than the Business Day immediately preceding the next Regular Distribution Date;
provided further, however, that in the case of any Eligible Investment issued by
a domestic branch of a foreign bank, the income from such investment shall be
from sources within the
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United States for purposes of the Code. Notwithstanding the foregoing, no
investment of the types described in clause (b) or (c) above which is issued or
guaranteed by ATA or Amtran or any of their respective Affiliates shall be an
Eligible Investment.
"Equipment Notes" means, at any time, the Series A Equipment Notes and
the Series B Equipment Notes, collectively, and in each case, any Equipment
Notes issued in exchange therefor or replacement thereof pursuant to the terms
of the Indentures.
"Escrow Agent" means Xxxxx Fargo Bank Northwest, National Association,
as escrow agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Escrow and Paying Agent Agreement" shall mean, with respect to any
Class, the Escrow and Paying Agent Agreement pertaining to such Class dated the
date hereof among the Escrow Agent, the Trustee for such Class, the Paying Agent
and the Class A Purchaser or the Class B Purchaser, as the case may be, as the
same may be amended, modified or supplemented from time to time in accordance
with the terms thereof.
"Expected Distributions" means, with respect to the Certificates of any
Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates (excluding interest, if any, payable with respect
to the Deposits related to such Trust) 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, 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, but without giving effect to
any reduction in the Pool Balance as a result of any distribution attributable
to the Deposits occurring after the immediately preceding Distribution Date (or,
if the Current Distribution Date is the first Distribution Date, occurring after
the initial issuance of the Certificates of such Trust). For purposes of
calculating Expected Distributions with respect to the Certificates of any
Trust, any premium paid on the Equipment Notes held in such Trust which has not
been distributed to the Certificateholders of such Trust (other than such
premium or a portion thereof applied to the payment of interest on the
Certificates of such Trust or the reduction of the Pool Balance of such Trust)
shall be added to the amount of such Expected Distributions.
"Expiry Date" with respect to any Liquidity Facility, shall have the
meaning set forth in such Liquidity Facility.
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"Fee Letter" means the Fee Letter dated as of the date hereof among AIG
Matched Funding Corp., ATA and the Subordination Agent with respect to the
initial Liquidity Facilities and any fee letter entered into among the
Subordination Agent, ATA and any Replacement Liquidity Provider, in each case as
it may be amended, supplemented or otherwise modified from time to time.
"Final Distributions" means, with respect to the Certificates of any
Trust on any Distribution Date, the sum of (a) the aggregate amount of all
accrued and unpaid interest on such Certificates (excluding interest, if any,
payable with respect to the Deposits relating to such Trust) and (b) the Pool
Balance of such Certificates as of the immediately preceding Distribution Date
(less the amount of the Deposits for such Class of Certificates as of such
preceding Distribution Date other than any portion of such Deposits thereafter
used to acquire Equipment Notes pursuant to the Note Purchase Agreement). For
purposes of calculating Final Distributions with respect to the Certificates of
any Trust, any premium paid on the Equipment Notes held in such Trust which has
not been distributed to the Certificateholders of such Trust (other than such
premium or a portion thereof applied to the payment of interest on the
Certificates of such Trust or the reduction of the Pool Balance of such Trust)
shall be added to the amount of such Final Distributions.
"Final Drawing" has the meaning assigned to such term in Section
3.6(i).
"Final Legal Distribution Date" means, for the Class A Certificates,
November 20, 2014 and for the Class B Certificates, August 20, 2009.
"Financing Agreement" means each of the Participation Agreements and
the Note Purchase Agreement.
"Guarantee Agreement" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Guarantee Event" has the meaning assigned to such term in Section
3.6(c),
"Indenture" means each of the Trust Indenture and Mortgages entered
into by the Loan Trustee, and the Owner Trustee or ATA, pursuant to the Note
Purchase Agreement, in each case as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Indenture Default" means, with respect to any Indenture, a Mortgage
Event of Default under (and as defined in) any Indenture relating to a Leased
Aircraft or an Event of Default under (and as defined in) an Indenture relating
to an Owned Aircraft.
"Interest Drawing" has the meaning assigned to such term in Section
3.6(a).
12
"Interest Payment Date" means, with respect to any Liquidity Facility,
each date on which interest is due and payable under Section 3.7(c) or 3.7(d) of
such Liquidity Facility on a Downgrade Drawing, Non-Extension Drawing or Final
Drawing.
"Investment Earnings" means investment earnings on funds on deposit in
the Trust Accounts net of losses and investment expenses of the Subordination
Agent in making such investments.
"Lease" means, with respect to each Indenture pertaining to a Leased
Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Leased Aircraft Indenture" means, with respect to each Leased
Aircraft, the Indenture pertaining thereto.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition of
title, encumbrance, lease, sublease, sub-sublease or security interest of any
kind, including, without limitation, any thereof arising under any conditional
sales or other title retention agreement.
"Liquidity Event of Default", with respect to any Liquidity Facility,
has the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i) the
principal amount of any Drawings under the Liquidity Facilities and (ii) any
interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A Liquidity Facility
or the Class B Liquidity Facility, as applicable.
"Liquidity Obligations" means all principal, interest, fees and other
amounts owing to the Liquidity Providers under the Liquidity Facilities, the Fee
Letter, Section 7 of the Participation Agreements for Owned Aircraft or Section
9 of the Participation Agreements for Leased Aircraft.
"Liquidity Provider" means, at any time, the Class A Liquidity Provider
or the Class B Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the "Mortgagee"
thereunder.
"LTV Appraisal" means a current fair market appraisal (which may be a
"desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion
13
to buy and an informed and willing seller under no compulsion to sell and both
having knowledge of all relevant facts.
"LTV Collateral Amount" of any Leased Aircraft or Owned Aircraft for
any Class of Certificates means, on any Distribution Date, the lesser of (i) the
LTV Ratio for such Class of Certificates multiplied by the Appraised Current
Market Value of such Aircraft (or with respect to any such Aircraft which has
suffered an Event of Loss under and as defined in the relevant Lease (in the
case of a Leased Aircraft) or Indenture (in the case of an Owned Aircraft), 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)
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 for the Class A Certificates, 51% and for the Class B
Certificates, 66%.
"Maximum Available Commitment" with respect to any Liquidity Facility,
has the meaning assigned to such term in such Liquidity Facility.
"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, any Trustee or Liquidity
Provider which is not the Controlling Party at such time.
"Non-Extended Facility" has the meaning assigned to such term in
Section 3.6(d).
"Non-Extension Drawing" has the meaning assigned to such term in
Section 3.6(d).
"Non-Performing Equipment Note" means an Equipment Note issued pursuant
to an Indenture that is not a Performing Equipment Note.
"Note Purchase Agreement" means the Note Purchase Agreement dated as of
the date hereof, among ATA, Amtran, each Trustee, the Escrow Agent, the
Subordination Agent and the Paying Agent, as the same may be amended, modified
or supplemented from time to time in accordance with the terms thereof.
"Officer's Certificate" of any Person means a certification signed by a
Responsible Officer of such Person.
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"Operative Agreements" means this Agreement, the Liquidity Facilities,
the Escrow and Paying Agent Agreements, the Deposit Agreements, the Indentures,
the Trust Agreements, the Certificate Purchase Agreements, the Delayed Funding
Implementation Agreement, the Financing Agreements, the Leases, the
Participation Agreements, the Fee Letter, the Equipment Notes and the
Certificates, together with all exhibits and schedules included with any of the
foregoing and each of the other documents and instruments referred to in the
definitions of "Operative Agreements" contained in the Leases or the
Indenture(s) with respect to Owned Aircraft.
"Outstanding" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such Class
theretofore authenticated and delivered under the related Trust Agreement,
except:
(i) Certificates of such Class theretofore cancelled by the Registrar
(as defined in such Trust Agreement) or delivered to the Trustee thereunder
or such Registrar for cancellation;
(ii) Certificates of such Class for which money in the full amount
required to make the final distribution with respect to such Certificates
pursuant to Section 11.01 of such Trust Agreement has been theretofore
deposited with the related Trustee in trust for the holders of such
Certificates as provided in Section 4.01 of such Trust Agreement pending
distribution of such money to such Certificateholders pursuant to such
final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of which
other Certificates have been authenticated and delivered pursuant to such
Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any Certificates
owned by Amtran, ATA or any of their Affiliates shall be disregarded and deemed
not to be Outstanding, except that, in determining whether such Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that such Trustee knows to be so
owned shall be so disregarded. Certificates so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the applicable Trustee the pledgee's right so to act with
respect to such Certificates and that the pledgee is not Amtran, ATA or any of
their 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 assigned to such term in the
preliminary statements to this Agreement.
15
"Owned Aircraft Indenture" means, with respect to each Owned Aircraft,
the Indenture pertaining to such Aircraft.
"Owner Participant" with respect to each Leased Aircraft, has the
meaning provided in the Lease relating thereto.
"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.
"Payee" has the meaning assigned to such term in Section 2.4(e).
"Paying Agent" means Wilmington Trust Company, as paying agent under
each Escrow and Paying Agent Agreement, together with its successors in such
capacity.
"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 involving ATA 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 proceedings 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 of 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 (A) 30 days after the date of such
default or (B) 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, partnership, joint venture,
association, limited liability company, joint-stock company, trust, trustee,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance" means, with respect to each Trust or the Certificates
issued by any Trust, as of any date, (i) the original aggregate face amount of
the Certificates of such Trust less (ii) the aggregate amount of all payments
made in respect of the Certificates of such Trust or in respect of Deposits
relating to such Trust, other than payments made in respect of interest or
16
premium thereon or reimbursement of any costs and expenses in connection
therewith. The Pool Balance for each Trust or for the Certificates issued by any
Trust as of any Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, any payment of principal
of the Equipment Notes or payment with respect to other Trust Property held in
such Trust and the distribution thereof to be made on that date.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Provider Incumbency Certificate" has the meaning assigned to such term
in Section 2.5(c).
"Provider Representatives" has the meaning assigned to such term in
Section 2.5(c).
"PTC Event of Default" means, with respect to each Trust Agreement, the
failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class or (ii) interest due on such Certificates
on any Distribution Date (unless the Subordination Agent shall have made an
Interest Drawing, or a withdrawal from the Cash Collateral Account with respect
thereto in an aggregate amount sufficient to pay such interest and shall have
distributed such amount to the Trustee entitled thereto).
"Rating Agency" means, at any time, a nationally recognized rating
agency which shall have been requested to rate the Certificates and which shall
then be rating the Certificates. Initially, the Rating Agency shall be Xxxxx'x.
"Rating Confirmation" means, with respect to any action proposed to be
taken, a written confirmation from the Rating Agency that such action would not
result in (i) a reduction of the rating for any Class of Certificates below the
then current rating for such Class of Certificates or (ii) a withdrawal or
suspension of the rating of any Class of Certificates.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of March 26, 2002, among the Investors (as defined therein), the
Trustees, Amtran and ATA, as amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Regular Distribution Dates" means each February 20, May 20, August 20
and November 20, commencing on May 20, 2002; 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 Trust, a revolving
credit agreement issued by a Replacement Liquidity Provider in substantially the
form of the replaced Liquidity Facility for such Trust, including reinstatement
provisions or in such other form (which may include a letter of credit) as shall
permit the Rating Agency to confirm in writing its rating
17
then in effect for each Class of Certificates (before the downgrading of such
rating, if any, as a result of the downgrading of the replaced Liquidity
Provider) in a face amount equal to the Required Amount for such Liquidity
Facility and issued by a Replacement Liquidity Provider, provided that, if a
form of Liquidity Facility that is not substantially in the form of the replaced
Liquidity Facility is to be used, ATA shall have received a satisfactory opinion
of tax counsel satisfactory to ATA with respect to such form of Replacement
Liquidity Facility (and a copy of such opinion shall be furnished to the
Subordination Agent).
"Replacement Liquidity Provider" means a Person having a short-term
unsecured debt rating (or, as applicable, a short-term corporate credit rating)
issued by the Rating Agency or Standard & Poor's which is equal to or higher
than the Threshold Rating who issues a Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility, or
the Cash Collateral Account related thereto, 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, that would be
payable on such Class of Certificates on each of the six successive Regular
Distribution Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding five Regular Distribution
Dates, in each case calculated on the basis of the Pool Balance of such Class of
Certificates on such date and without regard to expected future payments of
principal on such Class of Certificates.
"Responsible Officer" means (i) with respect to the Subordination Agent
and each of the Trustees, any officer in the corporate trust administration
department of the Subordination Agent or such Trustee or any other officer
customarily performing functions similar to those performed by the Persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with a particular
subject, (ii) with respect to the Liquidity Provider, any authorized officer of
such Liquidity Provider.
"Scheduled Payment" means, with respect to any Equipment Note, (i) any
payment of principal or interest on such Equipment Note (other than an Overdue
Scheduled Payment) due from the obligor thereon or (ii) any payment of interest
on the corresponding Class of Certificates with funds drawn under any Liquidity
Facility, which payment represents the installment of principal at the stated
maturity of such installment of principal on such Equipment Note, the payment of
regularly scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both; provided that any payment of principal of, premium, if
any, or interest resulting from the redemption or purchase of any Equipment Note
shall not constitute a Scheduled Payment.
"Scheduled Payment Date" means, with respect to any Scheduled Payment,
the date on which such Scheduled Payment is scheduled to be made.
"Section 2.4(b) Fraction" has the meaning assigned to such term in
Section 2.4(b).
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"Series A Equipment Notes" means the 8.328% Series A Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or ATA, as the
case may be, and authenticated by the Loan Trustee thereunder, and any such
secured certificate issued in exchange therefor or replacement thereof pursuant
to the terms of such Indenture.
"Series B Equipment Notes" means the 10.699% Series B Equipment Notes
issued pursuant to each Indenture by the related Owner Trustee or ATA, as the
case may be, and authenticated by the Loan Trustee thereunder, and any such
secured certificate issued in exchange therefor or replacement thereof pursuant
to the terms of such Indenture.
"Series C Equipment Notes" means equipment notes, if any, issued
pursuant to any Indenture by the related Owner Trustee or ATA, as the case may
be, and authenticated by the Loan Trustee thereunder, and designated as "Series
C" thereunder, and any such equipment notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"Special Distribution Date" means with respect to any Special Payment,
the date chosen by the Subordination Agent pursuant to Section 2.4(a) for the
distribution of such Special Payment in accordance with this Agreement, whether
distributed pursuant to Section 2.4 or Section 3.3 hereof; 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,
whether pursuant to Section 2.4 or Section 3.3.
"Special Payment" means any payment (other than a Scheduled Payment) in
respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate or
Collateral (as defined in each Indenture), including Overdue Scheduled Payments,
payments in respect of the redemption or repurchase of any Equipment Note, and
payments in respect of the sale of any Equipment Note to the related Owner
Trustee or Owner Participant (in the case of a Leased Aircraft) or any other
Person.
"Special Payments Account" means the Eligible Deposit Account created
pursuant to Section 2.2 as a sub-account to the Collection Account.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
"Stated Amount" means with respect to any Liquidity Facility, the
Maximum Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"Stated Expiration Date" has the meaning assigned to it in Section
3.6(d).
"Stated Interest Rate" means (i) with respect to the Class A
Certificates, 8.328% per annum and, (ii) with respect to the Class B
Certificates, 10.699% per annum, plus, in each case, an additional margin of
0.50% per annum for any period required by the Registration Rights Agreement.
19
"Subordination Agent" has the meaning assigned to it in the preamble to
this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning assigned
to such term in Section 2.5(a).
"Subordination Agent Representatives" has the meaning assigned to such
term in Section 2.5(a).
"Substitute Aircraft" shall have the meaning set forth in the Note
Purchase Agreement.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto) imposed or
otherwise assessed by the United States of America or by any state, local or
foreign government (or any subdivision or agency thereof) or other taxing
authority, including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth and similar
charges; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, taxes on goods and services, gains taxes,
license, registration and documentation fees, customs duties, tariffs, and
similar charges.
"Threshold Rating" means the short-term unsecured debt rating of P-1 by
Moody's or the short-term corporate credit rating of A-1 by Standard & Poor's,
as the case may be.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Default
under all of the Indentures resulting in a PTC Event of Default with respect to
the most senior Class of Certificates then Outstanding, (y) the Acceleration of,
or a failure to pay at final maturity, all of the outstanding Equipment Notes or
(z) the occurrence of an ATA Bankruptcy Event.
"Trust" means either of the Class A Trust or the Class B Trust.
"Trust Accounts" has the meaning assigned to such term in Section
2.2(a).
"Trust Agreement" means either of the Class A Trust Agreement or the
Class B Trust Agreement.
20
"Trust Property" with respect to any Trust, has the meaning set forth
in the Trust Agreement for such Trust.
"Trustee" means either of the Class A Trustee or the Class B Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to such term
in Section 2.5(b).
"Trustee Representatives" has the meaning assigned to such term in
Section 2.5(b).
"Written Notice" means, from the Subordination Agent, any Trustee or
any Liquidity Provider a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing procedures shall
constitute Written Notice under such Section.
"WTC" has the meaning assigned to such term in the preamble to this
Agreement.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from Monies
Received Only. (a) Each Trustee hereby acknowledges and agrees to the terms of
subordination and distribution set forth in this Agreement in respect of each
Class of Certificates and agrees to enforce such provisions and cause all
payments in respect of the Equipment Notes and the Liquidity Facilities to be
applied in accordance with the terms of this Agreement. In addition, each
Trustee hereby agrees to cause the Equipment Notes purchased by the related
Trust to be registered in the name of the Subordination Agent or its nominee, as
agent and trustee for such Trustee, to be held in trust by the Subordination
Agent solely for the purpose of facilitating the enforcement of the
subordination and other provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1 or as provided in Section 2.4(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 or payments
under Section 7 of the Participation Agreements for Owned Aircraft and Section 9
of the Participation Agreements for Leased Aircraft or payments under Section 6
of the Note Purchase Agreement, and only to the extent that the Subordination
Agent shall have received sufficient income or proceeds therefrom to enable it
to make such payments in accordance with the terms hereof. Each of the Trustees
and the Subordination Agent hereby agrees and, as provided in each Trust
Agreement, each Certificateholder, by its acceptance of a Certificate, each
Liquidity Provider, by entering into the Liquidity Facility to
21
which it is a party, has agreed to look solely to such amounts to the extent
available for distribution to it as provided in this Agreement and to the
relevant Deposits and that none of the Trustees, Owner Trustees, Loan Trustees,
Owner Participants nor the Subordination Agent or WTC is personally liable to
any of them for any amounts payable or any liability under this Agreement, any
Trust Agreement, any Liquidity Facility or such Certificate, except (in the case
of the Subordination Agent) as expressly provided herein or (in the case of the
Trustees) as expressly provided in each Trust Agreement or (in the case of the
Owner Trustees and the Loan Trustees) as expressly provided in any Operative
Agreement.
SECTION 2.2 Trust Accounts. (a) Upon the execution of this Agreement,
the Subordination Agent shall establish and maintain in its name (i) the
Collection Account as an Eligible Deposit Account, bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Trustees, the Certificateholders and the Liquidity Providers, and (ii) as a
sub-account in the Collection Account, the Special Payments Account as an
Eligible Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof. Upon such establishment and
maintenance under Section 3.6(f) hereof, the Cash Collateral Accounts shall,
together with the Collection Account, constitute the "Trust Accounts" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Liquidity Provider 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 any then specified Special Distribution Date,
as the case may be, next following the date of such investment; provided,
however, that following the making of a Downgrade Drawing or Non-Extension
Drawing, the Subordination Agent shall invest and reinvest such amounts in
Eligible Investments at the direction of ATA (or, if and to the extent so
specified to the Subordination Agent by ATA with respect to any Liquidity
Facility, the Liquidity Provider with respect to such Liquidity Facility);
provided, further, however, that upon the occurrence and during the continuation
of a Triggering Event, the Subordination Agent shall invest and reinvest such
amounts in Eligible Investments in accordance with the written instructions of
the Controlling Party. Unless otherwise expressly provided in this Agreement
(including, without limitation, with respect to Investment Earnings on amounts
on deposit in the Cash Collateral Accounts, the provisions of Section 3.6(f)
hereof), any Investment Earnings shall be deposited in the Collection Account
when received by the Subordination Agent and shall be applied by the
Subordination Agent in the same manner as the other amounts on deposit in the
Collection Account are to be applied and any losses shall be charged against the
principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination Agent
shall not be liable for any loss resulting from any investment, reinvestment or
liquidation required to be made under this Agreement other than by
22
reason of its willful misconduct or gross negligence. Eligible Investments and
any other investment required to be made hereunder shall be held to their
maturities except that any such investment may be sold (without regard to its
maturity) by the Subordination Agent without instructions whenever such sale is
necessary to make a distribution required under this Agreement. Uninvested funds
held hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and interest
in all funds on deposit from time to time in the Trust Accounts and in all
proceeds thereof (including all income thereon). The Trust Accounts shall be
held in trust by the Subordination Agent under the sole dominion and control of
the Subordination Agent for the benefit of the Trustees, the Certificateholders
and the Liquidity Providers, as the case may be. If, at any time, any of the
Trust Accounts ceases to be an Eligible Deposit Account, the Subordination Agent
shall within 10 Business Days (or such longer period, not to exceed 30 calendar
days, to which the Rating Agency may consent) establish a new Collection
Account, Special Payments Account or Cash Collateral Account, as the case may
be, as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Collection Account, Special Payments Account or Cash
Collateral Account, as the case may be. So long as WTC is an Eligible
Institution, the Trust Accounts shall be maintained with it as Eligible Deposit
Accounts.
SECTION 2.3 Deposits to the Collection Account and Special Payments
Account. (a) The Subordination Agent shall, upon receipt thereof, deposit in the
Collection Account all Scheduled Payments received by it (other than any
Scheduled Payment which by the express terms hereof is to be deposited in the
Cash Collateral Account).
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the Equipment
Notes, deposit in the Special Payments Account the aggregate amount of such
Special Payments.
SECTION 2.4 Distributions of Special Payments. (a) Notice of Special
Payment. Except as provided in Section 2.4(e) below, upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any notice
of a Special Payment (or, in the absence of any such notice, upon receipt by the
Subordination Agent of a Special Payment), the Subordination Agent shall
promptly give notice thereof to each Trustee and the Liquidity Providers. The
Subordination Agent shall promptly calculate the amount of the redemption or
purchase of Equipment Notes or the amount of any Overdue Scheduled Payment or
the proceeds of Equipment Notes or Collateral, as the case may be, comprising
such Special Payment under the applicable Indenture or Indentures and shall
promptly send to each Trustee a Written Notice of such amount and the amount
allocable to each Trust. Such Written Notice shall also set the distribution
date for such Special Payment (a "Special Distribution Date"), which shall be
the first Business Day which follows the later to occur of (x) the 15th day
after the date of such Written Notice or (y) the date the Subordination Agent
receives or expects to receive such Special Payment. Amounts on deposit in the
Special Payments Account shall be distributed in accordance with Sections 2.4(b)
and 2.4(c) hereof, as applicable.
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(b) Redemptions and Purchases 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 2.4(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 hereof) or prepayment 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) the aggregate amount
of all accrued, due and unpaid Liquidity Expenses then in arrears ("past
due amounts") plus (B) the product of (x) the aggregate amount of all
accrued, but not due and unpaid Liquidity Expenses not in arrears to such
Special Distribution Date multiplied by (y) a fraction (the "Section 2.4(b)
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 ("accrued amounts"),
shall be distributed to the Liquidity Providers first in satisfaction of
any past due amounts and then in satisfaction of the accrued amounts, in
each case, pro rata on the basis of the amount of Liquidity Expenses owed
to each Liquidity Provider;
second, such amount as shall be required to pay (A) all accrued and
unpaid interest (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 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) multiplied by
(y) the Section 2.4(b) Fraction shall be distributed to the Liquidity
Providers pro rata on the basis of the amount of such Liquidity Obligations
owed to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(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 become
a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Maximum Available Commitment 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, and (C) if, with respect to any particular Liquidity Facility,
neither subclause (A) nor subclause (B) of this clause "third" are
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 the
Liquidity Providers pro rata on the basis of the amount of such Liquidity
Obligations owed to each Liquidity Provider;
24
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, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Certificates on such Special
Distribution Date shall be distributed to the Class A Trustee;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Certificates on such Special
Distribution Date shall be distributed to the Class B Trustee;
seventh, if Class C Certificates are issued, such amount as shall be
required to pay in full "Expected Distributions" (to be defined in a manner
equivalent to the definition for other Classes of Certificates) to the
holders of Class C Certificates on such Special Distribution Date shall be
distributed to the Class C Trustee; and
eighth, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance with
Section 3.2 hereof.
For the purposes of this Section 2.4(b)(i), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued, due
and unpaid interest on such Certificates together with (without duplication)
accrued and unpaid interest on a portion of such Certificates equal to the
outstanding principal amount of the Equipment Notes held in such Trust and being
redeemed, purchased or prepaid (immediately prior to such redemption, purchase
or prepayment) (in each case excluding interest, if any, payable with respect to
the Deposits related to such Trust)".
(ii) At any time following the occurrence of a Triggering Event (whether or
not continuing), the Subordination Agent shall make distributions of amounts on
deposit in the Special Payments Account on account of the redemption, prepayment
or purchase of all of the Equipment Notes issued pursuant to an Indenture on the
Special Distribution Date for such Special Payment in accordance with Section
3.3 hereof.
(c) Other Special Payments. Except as provided in clause (e) below, any
amounts on deposit in the Special Payments Account other than in respect of
amounts to be distributed pursuant to Section 2.4(b) shall be distributed on the
Special Distribution Date therefor in accordance with Article III hereof.
25
(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 2.4(b) or (c) shall be invested in accordance with Section
2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will distribute promptly
upon receipt thereof (i) any indemnity payment or expense reimbursement received
by it from the Owner Participant, the Owner Trustee, Amtran or ATA in respect of
any Trustee, any Liquidity Provider, any Paying Agent, any Depositary or any
Escrow Agent (collectively, the "Payees") and (ii) any compensation (including,
without limitation, any fees payable to any Liquidity Provider under Section
2.03 of any Liquidity Facility) received by it from the Owner Participant, the
Owner Trustee, Amtran or ATA under any Operative Agreement in respect of any
Payee, directly to the Payee entitled thereto.
SECTION 2.5 Designated Representatives. (a) With the delivery of this
Agreement, the Subordination Agent shall furnish to each Liquidity Provider and
each Trustee, and from time to time thereafter may furnish to each Liquidity
Provider and each Trustee, at the Subordination Agent's discretion, or upon any
Liquidity Provider's or any Trustee's request (which request shall not be made
more than one time in any 12-month period), a certificate (a "Subordination
Agent Incumbency Certificate") of a Responsible Officer of the Subordination
Agent certifying as to the incumbency and specimen signatures of the officers of
the Subordination Agent and the attorney-in-fact and agents of the Subordination
Agent (the "Subordination Agent Representatives") authorized to give Written
Notices on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider and each Trustee receives a subsequent Subordination Agent Incumbency
Certificate, it shall be entitled to rely on the last Subordination Agent
Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish to
the Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Trustee's discretion, or upon the Subordination
Agent's request (which request shall not be made more than one time in any
12-month period), a certificate (a "Trustee Incumbency Certificate") of a
Responsible Officer of such Trustee certifying as to the incumbency and specimen
signatures of the officers of such Trustee and the attorney-in-fact and agents
of such Trustee (the "Trustee Representatives") authorized to give Written
Notices on behalf of such Trustee hereunder. Until the Subordination Agent
receives a subsequent Trustee Incumbency Certificate, it shall be entitled to
rely on the last Trustee Incumbency Certificate delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Liquidity Provider's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (each a "Provider Incumbency
Certificate") of any Responsible Officer of such Liquidity Provider certifying
as to the incumbency and specimen signatures of any officer, attorney-in-fact,
agent or
26
other designated representative of such Liquidity Provider respectively (in each
case the "Provider Representatives" and, together with the Subordination Agent
Representatives and the Trustee Representatives, the "Designated
Representatives") authorized to give Written Notices on behalf of such Liquidity
Provider hereunder. Until the Subordination Agent receives a subsequent Provider
Incumbency Certificate, it shall be entitled to rely on the last Provider
Incumbency Certificate delivered to it hereunder by the relevant Liquidity
Provider.
SECTION 2.6 Controlling Party. (a) The Trustees and the Liquidity
Providers hereby agree that, with respect to any Indenture at any given time,
the Loan Trustee thereunder will be directed (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, 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, a majority of outstanding principal amount of such
Equipment Notes), and (ii) after the occurrence and during the continuance of an
Indenture Default thereunder, in taking, or refraining from taking, any action
under such Indenture or with respect to such Equipment Notes, including
exercising remedies thereunder (including Accelerating the Equipment Notes
issued thereunder or foreclosing the Lien created thereunder on the Aircraft
securing such Equipment Notes), by the Subordination Agent as directed by the
Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to any
Indenture shall be: (x) the Class A Trustee so long as the Final Distribution on
the Class A Certificates has not been made; and (y) upon payment of the Final
Distributions to the Class A Certificateholders, the Class B Trustee. For
purposes of giving effect to the foregoing provisions of Section 2.6(a) and this
Section 2.6(b), the Trustees (other than the Controlling Party) irrevocably
agree (and the Certificateholders (other than the Certificateholders represented
by the Controlling Party) shall be deemed to agree by virtue of their purchase
of Certificates) that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes 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 if 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 Maximum Available
Commitment under any
27
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, if any, with the highest
outstanding amount of Liquidity Obligations then owed to it and not then in
default in its obligations to make any Drawing under any Liquidity Facility
shall have the right to elect, by Written Notice to the Subordination Agent and
each of the Trustees, to become the Controlling Party hereunder with respect to
any Indenture at any time from and including the last day of such 18-month
period.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or obligate
any Non-Controlling Party to provide funds necessary to exercise any right or
remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1. Written Notice of Distribution. (a) No later than 3:00
P.M. (New York City time) on the Business Day immediately preceding each Regular
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall deliver to the
Subordination Agent a Written Notice setting forth the following information as
at the close of business on such Business Day:
(i) With respect to the Class A Certificates, the Class A Trustee shall
set forth the amounts to be paid in accordance with clause "fifth" of
Section 3.2 or Section 2.4(b), as the case may be, hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with clause
"sixth" of Section 3.2 or Section 2.4(b), as the case may be, hereof;
(iii) With respect to each Liquidity Facility, the Liquidity Provider
thereunder shall separately set forth the amounts to be paid to it in
accordance with clauses "first", "second", "third" and "fourth" of Section
3.2 or Section 2.4(b), as the case may be, hereof; and
28
(iv) Each Trustee shall set forth the amounts to be paid in accordance
with clause "eighth" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a schedule
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document may
state that, unless there has been a prepayment of the Certificates, such
schedule or similar document is to remain in effect until any substitute notice
or amendment shall be given to the Subordination Agent by the party providing
such notice.
(b) Following the occurrence of a Triggering Event, the Subordination
Agent shall request the following information from the following Persons, and
each of the following Persons shall, upon the request of the Subordination
Agent, deliver a Written Notice to the Subordination Agent setting forth for
such Person the following information:
(i) With respect to the Class A Certificates, the Class A Trustee shall
set forth the amounts to be paid in accordance with clauses "first" and
"sixth" (to reimburse payments made by the Class A Certificateholders
pursuant to subclause (iii) of clause "first" and subclause (iii) of clause
"sixth" of Section 3.3 hereof) and "seventh" of Section 3.3 hereof;
(ii) With respect to the Class B Certificates, the Class B Trustee
shall separately set forth the amounts to be paid in accordance with
clauses "first" and "sixth" (to reimburse payments made by the Class B
Certificateholders pursuant to subclause (iii) of clause "first" and
subclause (iii) of "sixth" of Section 3.3 hereof) and "eighth" of Section
3.3 hereof;
(iii) 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 (iii) of clause "first" and clauses "second",
"third", "fourth" and "fifth" of Section 3.3 hereof; and
(iv) Each Trustee shall set forth the amounts to be paid in accordance
with clause "sixth" of Section 3.3 hereof.
(c) At such time as a Trustee or a Liquidity Provider shall have
received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Sections 2.4, 3.2, 3.3 or
3.7 hereof, as applicable, and, in the case of a Liquidity Provider, its
commitment under the related Liquidity Facility, shall have terminated or
expired, such Person shall, by a Written Notice, so inform the Subordination
Agent and each other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall be
fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee or any Liquidity Provider pursuant to paragraphs
(a) through (c) above and shall have no
29
independent obligation to verify, calculate or recalculate any amount set forth
in any Written Notice delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee or a Liquidity Provider,
as applicable, pursuant to Sections 3.1(a), 3.1(b) or 3.1(c) hereof, if made
prior to 10:00 A.M. (New York City time) on any Business Day, shall be effective
on the date delivered (or if delivered later on a Business Day or if delivered
on a day which is not a Business Day shall be effective as of the next Business
Day). Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; provided, however,
that any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraph (a) or (b) above which is required
to enable the Subordination Agent to make a distribution to such Person pursuant
to Section 2.4(b), 3.2 or 3.3 hereof, the Subordination Agent shall request such
information and, failing to receive any such information, the Subordination
Agent shall not make such distribution(s) to such Person. In such event, the
Subordination Agent shall make distributions pursuant to clauses "first" through
"eighth" of Section 2.4(b) or clauses "first" through "ninth" of Section 3.2 and
clauses "first" through "ninth" of Section 3.3, as the case may be, to the
extent it shall have sufficient information to enable it to make such
distributions, and shall continue to hold any funds remaining, after making such
distributions, until the Subordination Agent shall receive all necessary
information to enable it to distribute any funds so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Trustee shall request, the Subordination Agent shall
send to such party a written statement reflecting all amounts on deposit with
the Subordination Agent pursuant to Section 3.1(f) hereof.
SECTION 3.2. Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments Account)
shall be promptly distributed on each Regular Distribution Date (or, in the case
of any amount described in Section 2.4(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 3.1(a)
hereof (provided that for the avoidance of doubt, any amounts received by the
Trustee by noon on a Regular Distribution Date shall be distributed on such
Regular Distribution Date and in no event later than the immediately succeeding
Business Day):
first, such amount as shall be required to pay all accrued and unpaid
Liquidity Expenses owed to each Liquidity Provider shall be distributed to
the Liquidity Providers pro rata on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
30
second, such amount as shall be required to pay the aggregate amount of
interest accrued and unpaid on all Liquidity Obligations (at the rate, or
in the amount, provided in the applicable Liquidity Facility) shall be
distributed to the Liquidity Providers pro rata on the basis of the amount
of such Liquidity Obligations owed to each Liquidity Provider;
third, such amount as shall be required (A) if any Cash Collateral
Account had been previously funded as provided in Section 3.6(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 become
a Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Maximum Available Commitment 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, and (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 (other than amounts
payable pursuant to clause "first" or "second" of this Section 3.2);
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, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Certificates on such
Distribution Date shall be distributed to the Class A Trustee;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Certificates on such
Distribution Date shall be distributed to the Class B Trustee;
seventh, if Class C Certificates are issued, such amount as shall be
required to pay in full "Expected Distributions" (to be defined in a manner
equivalent to the definition for other Classes of Certificates) to the
holders of Class C Certificates on such Distribution Date shall be
distributed to the Class C Trustee; and
eighth, such amount as shall be required to pay in full the aggregate
unpaid amount of fees and expenses payable as of such Distribution Date to
the Subordination Agent and each Trustee pursuant to the terms of this
Agreement and the Trust
31
Agreements, as the case may be, shall be distributed to the Subordination
Agent and such Trustee; and
ninth, the balance, if any, of any such payment remaining thereafter
shall be held in the Collection Account for later distribution in
accordance with this Article III.
SECTION 3.3. Distribution of Amounts on Deposit Following a Triggering
Event. Except as otherwise provided in Sections 3.1(f), 3.6(b) and 3.6(k)
hereof, upon the occurrence of a Triggering Event and at all times thereafter,
all funds in the Collection Account or the Special Payments Account shall be
promptly distributed by the Subordination Agent in the following order of
priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the protection
of, or the realization of the value of, the Equipment Notes or any
Collateral securing such Equipment Notes, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses, (ii) each
Trustee for any amounts of the nature described in clause (i) above
actually incurred by it under the applicable Trust Agreement (to the extent
not previously reimbursed), shall be distributed to such Trustee, and (iii)
any Liquidity Provider or any Certificateholder for payments, if any, made
by it to the Subordination Agent or any Trustee in respect of amounts
described in clause (i) above, shall be distributed to such Liquidity
Provider or to the applicable Trustee for the account of such
Certificateholder, in each such case, pro rata on the basis of all amounts
described in clauses (i) through (iii) above;
second, such amount remaining as shall be required to pay all accrued
and unpaid Liquidity Expenses owed to each Liquidity Provider shall be
distributed to each Liquidity Provider pro rata on the basis of the amount
of Liquidity Expenses owed to each Liquidity Provider;
third, such amount remaining as shall be required to pay the aggregate
amount of interest accrued and unpaid on all Liquidity Obligations (at the
rate, or in the amount, provided in the applicable Liquidity Facility)
shall be distributed to the Liquidity Providers pro rata on the basis of
the amount of such Liquidity Obligations owed to each Liquidity Provider;
fourth, such amount remaining as shall be required (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(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
32
be deposited in such Cash Collateral Account, (B) if any Liquidity Facility
shall become a Downgraded Facility or a Non-Extended Facility at a time
when unreimbursed Interest Drawings under such Liquidity Facility have
reduced the Maximum Available Commitment 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, and (C) if, with respect to any particular Liquidity
Facility, neither subclause (A) nor subclause (B) of this clause "fourth"
are applicable, to pay in full the outstanding amount of all Liquidity
Obligations then due under such Liquidity Facility (other than amounts
payable pursuant to clause "second" or "third" of this Section 3.3), shall
be distributed to such Liquidity Provider, pro rata on the basis of the
amounts of all such deficiencies and/or unreimbursed Liquidity Obligations
in respect of each Liquidity Provider;
fifth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "fourth" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due) under
such Liquidity Facility over (y) the Required Amount for the relevant Class
(less the amount of any repayments of Interest Drawings under such
Liquidity Facility while subclause (I)(A)(i) or (I)(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, loss or any other amount payable to such Trustee under the
applicable Trust Agreements (to the extent not previously reimbursed),
shall be distributed to such Trustee, and (iii) each Certificateholder for
payments, if any, made by it pursuant to Section 5.2 hereof in respect of
amounts described in clause (i) above, shall be distributed to the
applicable Trustee for the account of such Certificateholder, in each such
case, pro rata on the basis of all amounts described in clauses (i) through
(iii) above;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Certificates shall be
distributed to the Class A Trustee;
33
eighth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Certificates shall be
distributed to the Class B Trustee;
ninth, if Class C Certificates are issued, such amount as is required
to pay in full "Adjusted Expected Distributions" (to be defined in a manner
equivalent to the definition for other Classes of Certificates) on the
Class C Certificates shall be distributed to the Class C Trustee;
tenth, such amount remaining shall be retained in the Collection
Account until the immediately succeeding Distribution Date; and
eleventh, if all Classes of Certificates shall have been paid in full,
such amount remaining shall be distributed to the Certificateholders of the
related Trust.
SECTION 3.4 Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent (i) in the
order of priority specified in Section 3.3 hereof and (ii) to the extent
received or realized at any time after the Final Distributions for each Class of
Certificates have been made, in the manner provided in clause "first" of Section
3.3 hereof.
(b) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled Payment
Date relating thereto, but prior to such payment becoming an Overdue Scheduled
Payment, then the Subordination Agent shall deposit such Scheduled Payment in
the Collection Account and promptly distribute such Scheduled Payment in
accordance with the priority of distributions set forth in Section 3.2 hereof;
provided that, for the purposes of this Section 3.4(c) only, each reference in
clause "eighth" of Section 3.2 to "Distribution Date" shall be deemed to mean
the actual date of payment of such Scheduled Payment and each reference in
clause "fifth" or "sixth" of Section 3.2 to "Distribution Date" shall be deemed
to refer to such Scheduled Payment Date.
SECTION 3.5. Payments to the Trustees and the Liquidity Providers. Any
amounts distributed hereunder to any Liquidity Provider shall be paid to such
Liquidity Provider by wire transfer of funds to the address such Liquidity
Provider shall provide to the Subordination Agent. The Subordination Agent shall
provide a Written Notice of any such transfer to the applicable Liquidity
Provider, as the case may be, at the time of such transfer. Any amounts
distributed hereunder by the Subordination Agent to any Trustee which shall not
be the same institution as the Subordination Agent shall be paid to such Trustee
by wire transfer funds at the address such Trustee shall provide to the
Subordination Agent.
SECTION 3.6. Liquidity Facilities.(a) Interest Drawings. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the
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Subordination Agent shall not have sufficient funds for the payment of any
amounts due and owing in respect of accrued interest on the Class A Certificates
or the Class B Certificates (at the Stated Interest Rate for such Class of
Certificates), 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 in an amount equal to the lesser of (i) an amount sufficient to pay
the amount of such accrued interest (at the Stated Interest Rate for such Class
of Certificates) and (ii) the Maximum Available Commitment under such Liquidity
Facility, and shall pay such amount to the Trustee with respect to such Class of
Certificates in payment of such accrued interest.
(b) Application of Interest Drawings. Notwithstanding anything to the
contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A Cash Collateral Account, and payable in each case to the Class A Trustee
on behalf of the Class A Certificateholders, shall be promptly distributed to
the Class A Trustee and (ii) all payments received by the Subordination Agent in
respect of an Interest Drawing under the Class B Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class B Cash Collateral
Account, and payable in each case to the Class B Trustee on behalf of the Class
B Certificateholders, shall be promptly distributed to the Class B Trustee.
(c) Downgrade Drawings. If at any time (i) the short-term unsecured
debt rating of any Liquidity Provider other than AIG-MF issued by the Rating
Agency or Standard & Poor's is lower than the applicable Threshold Rating or in
the case of AIG-MF, the short-term unsecured debt rating of AIG-MF issued by the
Rating Agency is lower than the applicable Threshold Rating or (ii) so long as
AIG-MF is the Liquidity Provider, the short-term unsecured debt rating of AIG
issued by Standard & Poor's is lower than the applicable Threshold Rating or the
related Guarantee Agreement ceases to be in full force and effect, becomes
invalid or unenforceable or AIG denies its liability thereunder (any such
occurrence described in clause (ii), a "Guarantee Event"), within 10 days after
such downgrading or Guarantee Event (but no later than the expiration date of
the Liquidity Facility issued by the relevant Liquidity Provider (the
"Downgraded Facility")), such Liquidity Provider may arrange, or the
Subordination Agent (in consultation with ATA), 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 day (or if such 10th day is not a Business Day, on the next succeeding
Business Day) (or, if earlier, the expiration date of such Downgraded Facility),
request a drawing in accordance with and to the extent permitted by such
Downgraded Facility (such drawing, a "Downgrade Drawing") of all available and
undrawn amounts thereunder. Amounts drawn pursuant to a Downgrade Drawing shall
be maintained and invested as provided in Section 3.6(f) hereof. The applicable
Liquidity Provider may also arrange for a Replacement Liquidity Provider to
issue and deliver a Replacement Liquidity Facility at any time after such
Downgrade Drawing so long as such Downgrade Drawing has not been reimbursed in
full to such Liquidity Provider.
35
(d) Non-Extension Drawings. At any time after the second anniversary of
the date of this Agreement, the Liquidity Provider of a Liquidity Facility with
respect to any Class of Certificates may, at its option, notify the
Subordination Agent and ATA of the early termination of such Liquidity Facility
pursuant to Section 2.10 of such Liquidity Facility, (a "Non-Extended
Facility"), specifying the date of early termination, which shall be not earlier
than the 40th day after the date of such notice (the "Early Termination Date").
If on or prior to the 15th day prior to the Early Termination Date there shall
not have been delivered to the Borrower a Replacement Liquidity Facility as
provided in Section 3.6(e) hereof, the Subordination Agent shall, on such 15th
day (or as soon as possible thereafter), in accordance with and to the extent
permitted by the terms of the Non-Extended Facility, request a drawing under
such Non-Extended 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 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. At any time, the
Subordination Agent may, at its option, in consultation with ATA, arrange for a
Replacement Liquidity Facility to replace the Liquidity Facility for any Class
of Certificates; provided that the initial Liquidity Provider may only be
replaced in whole and not in part with respect to all Liquidity Facilities and
may not be replaced (except as provided in any other section of this Agreement)
unless there shall have become due to the initial Liquidity Provider amounts
pursuant to Section 3.1, 3.2 or 3.3 of the Liquidity Facilities and the
replacement of the initial Liquidity Provider would reduce or eliminate the
obligation to pay such amounts. In any such consultation, the Subordination
Agent shall accept the recommendations of ATA, in the absence of a good faith
reason not to do so. Notwithstanding anything to the contrary contained herein,
at any time, the initial Liquidity Provider may, at its option, arrange for a
Replacement Liquidity Facility to replace its Liquidity Facility, provided that
such replacement will not result in any increased costs payable by the related
Trust. If such Replacement Liquidity Facility is provided at any time after a
Downgrade Drawing or a Non-Extension Drawing has been made, all funds on deposit
in the relevant Cash Collateral Account will be returned to the Liquidity
Provider being replaced. No such Replacement Liquidity Facility executed in
connection therewith shall become effective and no such Replacement Liquidity
Facility shall be deemed a "Liquidity Facility" under the Operative Agreements,
unless and until (i) the conditions referred to in the immediately following
paragraph shall have been satisfied and (ii) if such Replacement Liquidity
Facility shall materially adversely affect the rights, remedies, interests or
obligations of the Class A Certificateholders or the Class B Certificateholders
under any of the Operative Agreements, the applicable Trustee shall have
consented, in writing, to the execution and issuance of such Replacement
Liquidity Facility.
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 the Rating Agency that such
Replacement Liquidity Facility will not cause a reduction of the rating then in
effect for any Class of Certificates by such Rating Agency (without regard to
the rating of any Liquidity Provider being replaced pursuant to Section 3.6(c)
or 3.6(d) hereof, (y) pay all Liquidity Obligations then owing to the replaced
Liquidity
36
Provider (which payment shall be made first from available funds in the
applicable Cash Collateral Account as described in clause (vii) of Section
3.6(f) hereof and thereafter from any other available source, including, without
limitation, a drawing under the Replacement Liquidity Facility, it being
understood that no Replacement Liquidity Facility shall become effective (other
than insofar as necessary to permit the repayment of amounts owed to the
replaced Liquidity Provider) until all amounts owed to the replaced Liquidity
Provider have been paid) and (z) cause the issuer of the Replacement Liquidity
Facility to deliver the Replacement Liquidity Facility to the Subordination
Agent, together with a legal opinion opining that such Replacement Liquidity
Facility is an enforceable obligation of such Replacement Liquidity Provider.
Upon satisfaction of the conditions set forth in this Section 3.6(e), (i) the
replaced Liquidity Facility shall terminate and (ii) such Replacement Liquidity
Provider shall be deemed to be a Liquidity Provider with the rights and
obligations of a Liquidity Provider hereunder and under the other Operative
Agreements and such Replacement Liquidity Facility shall be deemed to be a
Liquidity Facility hereunder and under the other Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In the event
the Subordination Agent shall draw all available amounts under the Class A
Liquidity Facility or the Class B Liquidity Facility pursuant to Section 3.6(c),
3.6(d) or a Final Drawing shall be made as provided in the Liquidity Facility,
amounts so drawn shall be deposited by the Subordination Agent in the Class A
Cash Collateral Account or the Class B Cash Collateral Account, respectively.
Amounts so deposited shall be invested in Eligible Investments in accordance
with Section 2.2(b) hereof. Investment Earnings on amounts on deposit in the
Cash Collateral Accounts shall be deposited in the Collection Account prior to
giving effect to the distributions below on each Distribution Date after any
such amounts are deposited in any Cash Collateral Account. The Subordination
Agent shall deliver a written statement to ATA and the respective Liquidity
Provider to be paid one day prior to each 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
on the Class A Certificates (at the Stated Interest Rate for the Class A
Certificates) from any other source, withdraw from the Class A Cash
Collateral Account, and pay to the Class A Trustee an amount equal to the
lesser of (x) an amount which, when added to the amount of interest payable
by the Depositary on the Deposits with respect to the Class A Certificates
on such Distribution Date, equals the amount necessary to pay accrued and
unpaid interest (at the Stated Interest Rate for the Class A Certificates)
on such Class A Certificates and (y) the amount on deposit in the Class A
Cash Collateral Account;
(ii) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid interest
on the Class B Certificates (at the Stated Interest Rate for the Class B
Certificates) from any other source, withdraw from the Class B Cash
Collateral Account, and pay to the Class B Trustee an amount equal
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to the lesser of (x) an amount which, when added to the amount of interest
payable by the Depositary on the Deposits with respect to the Class B
Certificates on such Distribution Date, equals the amount necessary to pay
accrued and unpaid interest (at the Stated Interest Rate for the Class B
Certificates) on such Class B Certificates and (y) the amount on deposit in
the Class B Cash Collateral Account;
(iii) on each date on which the Pool Balance of the Class A Trust shall
have been reduced by payments made to the Class A Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant to Section 2.03 of
the Escrow and Paying Agent Agreement for such Class, the Subordination
Agent shall withdraw from the Class A Cash Collateral Account such amount
as is necessary so that, after giving effect to the reduction of the Pool
Balance on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class A Cash Collateral Account on
such date), the Required Amount (with respect to the Class A Liquidity
Facility) will be on deposit in the Class A Cash Collateral Account and
shall first, pay such amount to the Class A Liquidity Provider until the
Liquidity Obligations (with respect to the Class A Certificates) shall have
been paid in full, and second, deposit any remaining amount in the
Collection Account;
(iv) on each date on which the Pool Balance of the Class B Trust shall
have been reduced by payments made of the Class B Certificateholders
pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant to Section 2.03 of
the Escrow and Paying Agent Agreement for such Class, the Subordination
Agent shall withdraw from the Class B Cash Collateral Account such amount
as is necessary so that, after giving effect to the reduction of the Pool
Balance on such date (including any such reduction resulting from a prior
withdrawal of amounts on deposit in the Class B Cash Collateral Account on
such date), the Required Amount (with respect to the Class B Liquidity
Facility) will be on deposit in the Class B Cash Collateral Account and
shall first, pay such amount to the Class B Liquidity Provider until the
Liquidity Obligations (with respect to the Class B Certificates) shall have
been paid in full, and second, deposit any remaining amount in the
Collection Account;
(v) if a Replacement Liquidity Facility for any Class of Certificates
shall be delivered to the Subordination Agent following the date on which
funds have been deposited into the Cash Collateral Account for such Class
of Certificates, the Subordination Agent shall withdraw all amounts on
deposit in such Cash Collateral Account and shall pay such amounts to the
replaced Liquidity Provider until all Liquidity Obligations owed to such
Person shall have been paid in full, and shall deposit any remaining amount
in the Collection Account; and
(vi) following the payment of Final Distributions with respect to any
Class of Certificates, on the date on which the Subordination Agent shall
have been notified by the Liquidity Provider for such Class of Certificates
that the Liquidity Obligations owed to such Liquidity Provider have been
paid in full, the Subordination Agent shall withdraw
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all amounts on deposit in the Cash Collateral Account in respect of such
Class of Certificates and shall deposit such amount in the Collection
Account.
(g) Reinstatement. With respect to any Interest Drawing under the
Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Maximum Available Commitment 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 (i) 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 under such Liquidity
Facility or (y) a Final Drawing shall have occurred under such Liquidity
Facility. In the event that under any particular Liquidity Facility funds (i)
are withdrawn from any Cash Collateral Account pursuant to clause (i), (ii) or
(iii) of Section 3.6(f) hereof or (ii) such Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at any time when unreimbursed
Interest Drawings have reduced the Maximum Available Commitment to zero, then
funds received by the Subordination Agent at any time other than (x) any time
when a Liquidity Event of Default shall have occurred and be continuing with
respect to such Liquidity Facility and a Performing Note Deficiency exists or
(y) any time after a Final Drawing shall have occurred under such Liquidity
Facility shall be deposited in such Cash Collateral Account as provided in
clause "third" of Section 2.4(b)(i), clause "third" of Section 3.2 or clause
"fourth" of Section 3.3, as applicable, and applied in accordance with Section
3.6(f) hereof.
(h) Reimbursement. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) Final Drawing. 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 3.6(f)
hereof.
(j) Adjustment of Stated Amount. Promptly following each date on which
the Required Amount of the Liquidity Facility for a Class of Certificates is
adjusted in accordance with the terms of such Liquidity Facility, the
Subordination Agent shall, if any such Liquidity Facility provides for
adjustments of the Stated Amount of such Liquidity Facility and if such
adjustments are not automatic, request such Liquidity Provider for such Class of
Certificates to adjust 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 the event leading to such
adjustment). Each such request shall be made in accordance with the provisions
of the applicable Liquidity Facility.
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(k) Relation to Subordination Provisions. Interest Drawings under the
Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in each
case, in respect of interest on the Certificates of any Class, will be
distributed to the Trustee for such Class of Certificates notwithstanding
Sections 2.4, 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1. Directions from the Controlling Party. (a) (i) Following
the occurrence and during the continuation of an Indenture Default under any
Indenture, the Controlling Party shall direct the Subordination Agent which
shall in turn 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, if any, set forth in the Indentures with respect to Leased
Aircraft to purchase the Equipment Notes and the provisions of the next
paragraph, if the Equipment Notes issued pursuant to any Indenture have been
Accelerated following an Indenture Default with respect thereto, the Controlling
Party may sell, assign, contract to sell or otherwise dispose of and deliver all
(but not less than all) of such Equipment Notes to any Person at public or
private sale, at any location at the option of the Controlling Party, all upon
such terms and conditions as it may reasonably deem advisable in accordance with
applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants' rights,
if any, set forth in the Indentures with respect to the 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
an ATA Bankruptcy Event, without the consent of each Trustee, (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
ATA 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
ATA under such Lease before giving effect to such adjustment, in each case,
using the weighted average interest rate of the Equipment Notes then
outstanding pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination Agent
may from time to time during the continuance of an Indenture Default (and
before the occurrence of
40
a Triggering Event) commission LTV Appraisals 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 LTV
Appraisals for the Aircraft 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 any such LTV Appraisals, the
Controlling Party shall have the right to obtain or cause to be obtained
substitute LTV Appraisals (including any LTV Appraisals based upon physical
inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may reasonably
deem most effectual to complete the sale or other disposition of such Aircraft
or Equipment Notes. In addition, in lieu of any sale, assignment, contract to
sell or other disposition, the Controlling Party may maintain or cause the
Subordination Agent to maintain possession of such Equipment Notes and continue
to apply monies received in respect of such Equipment Notes in accordance with
Article III hereof. In addition, in lieu of such sale, assignment, contract to
sell or other disposition, or in lieu of such maintenance of possession, the
Controlling Party may, subject to the terms and conditions of the related
Indenture, instruct the Loan Trustee under such Indenture to foreclose on the
Lien on the related Aircraft or to take any other remedial action permitted
under such Indenture or under any applicable law.
SECTION 4.2. Remedies Cumulative. Each and every right, power and
remedy given to the Trustees, the Liquidity Providers, the Controlling Party or
the Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may, subject always to the terms and conditions
hereof, be exercised from time to time and as often and in such order as may be
deemed expedient by any Trustee, any Liquidity Provider, the Controlling Party
or the Subordination Agent, as appropriate, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by any Trustee, any Liquidity Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
SECTION 4.3. Discontinuance of Proceedings. In case any party to this
Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such Proceeding, be
restored to
41
its former position and rights hereunder, and all rights, remedies and powers of
such party shall continue as if no such Proceeding had been instituted.
SECTION 4.4. Right of Certificateholders to Receive Payments Not to Be
Impaired. Anything in this Agreement to the contrary notwithstanding but subject
to each Trust Agreement, the right of any Certificateholder or any Liquidity
Provider to receive payments hereunder (including without limitation pursuant to
Section 2.4, 3.2 or 3.3 hereof) when due, or to institute suit for the
enforcement of any such payment on or after the applicable Distribution Date,
shall not be impaired or affected without the consent of such Certificateholder
or Liquidity Provider.
SECTION 4.5. Undertaking for Costs. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any Proceeding
against any Controlling Party or the Subordination Agent for any action taken or
omitted by it as Controlling Party or Subordination Agent, as the case may be, a
court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. The provisions of
this Section do not apply to a suit instituted by the Subordination Agent, a
Liquidity Provider or a Trustee or a suit by Certificateholders holding more
than 10% of the original principal amount of any Class of Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1. Notice of Indenture Default or Triggering Event. (a) In
the event the Subordination Agent shall have actual knowledge of the occurrence
of an Indenture Default or a Triggering Event, as promptly as practicable, and
in any event within 10 days after obtaining knowledge thereof, the Subordination
Agent shall transmit by mail or courier to the Rating Agency, the Liquidity
Providers and the Trustees notice of such Indenture Default or Triggering Event,
unless such Indenture Default or Triggering Event shall have been cured or
waived by the Controlling Party. For all purposes of this Agreement, in the
absence of actual knowledge on the part of a Responsible Officer, the
Subordination Agent shall not be deemed to have knowledge of any Indenture
Default, Performing Note Deficiency, Liquidity Event of Default or Triggering
Event unless notified in writing by one or more Trustees, one or more Liquidity
Providers or one or more Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider and Trustee, promptly upon receipt thereof, duplicates or
copies of all reports, notices,
42
requests, demands, certificates, financial statements and other instruments
furnished to the Subordination Agent as registered holder of the Equipment Notes
or otherwise in its capacity as Subordination Agent to the extent the same shall
not have been otherwise directly distributed to such Liquidity Provider or
Trustee, as applicable, pursuant to the express provision of any other Operative
Agreement.
(c) Determinations and Notifications. The Subordination Agent agrees to
provide to ATA, upon its request, information in its possession concerning
amounts contained in, and returns earned on, any Cash Collateral Account and any
other information needed for ATA to determine amounts owing to any Liquidity
Provider.
SECTION 5.2. Indemnification. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the manner
reasonably satisfactory to the Subordination Agent) against any liability, cost
or expense (including counsel fees and expenses) which may be incurred in
connection therewith. The Subordination Agent shall not be under any obligation
to take any action, or refrain from taking any action, under this Agreement and
nothing contained in this Agreement shall require the Subordination Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. The Subordination Agent shall not be required to
take any action under Section 5.1 (other than the first sentence of Section
5.1(a)) or Article IV hereof, nor shall any other provision of this Agreement be
deemed to impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to law.
SECTION 5.3. No Duties Except as Specified in Intercreditor Agreement.
The Subordination Agent shall not have any duty or obligation to take or refrain
from taking any action under, or in connection with, this Agreement, except as
expressly provided by the terms of this Agreement; and no implied duties or
obligations shall be read into this Agreement against the Subordination Agent.
The Subordination Agent agrees that it will, in its individual capacity and at
its own cost and expense (but without any right of indemnity in respect of any
such cost or expense under Section 5.2 or 7.1 hereof) promptly take such action
as may be necessary to duly discharge all Liens on any of the Trust Accounts or
any monies deposited therein which result from claims against it in its
individual capacity not related to its activities hereunder or any other
Operative Agreement.
SECTION 5.4. Notice from the Liquidity Providers and Trustees. If a
Responsible Officer of any Liquidity Provider or any Trustee has notice of an
Indenture Default or a Triggering Event, such Liquidity Provider or Trustee, as
the case may be, shall promptly give notice thereof to all other Liquidity
Providers and Trustees and to the Subordination Agent;
43
provided, however, that no such Person shall have any liability hereunder as a
result of its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1. Authorization; Acceptance of Trusts and Duties. Each of
the Class A Trustee and the Class B Trustee hereby designates and appoints the
Subordination Agent as the agent and trustee of such Trustee under the
applicable Liquidity Facility and authorizes the Subordination Agent to enter
into the Delayed Funding Implementation Agreement, the applicable Liquidity
Facility and Fee Letter as agent and trustee for such Trustee. Each of the
Liquidity Providers and the Trustees hereby designates and appoints the
Subordination Agent as the Subordination Agent under this Agreement.
WTC hereby accepts the duties hereby created and applicable to it as
the Subordination Agent and agrees to perform the same but only upon the terms
of this Agreement and agrees to receive and disburse all monies received by it
in accordance with the terms hereof. The Subordination Agent shall not be
answerable or accountable under any circumstances, except (a) for its own
willful misconduct or gross negligence (or ordinary negligence in the handling
of funds), (b) as provided in Sections 2.2 and 5.3 hereof and (c) for
liabilities that may result from the material inaccuracy of any representation
or warranty of the Subordination Agent made in its individual capacity in any
Operative Agreement. The Subordination Agent shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.
SECTION 6.2. Absence of Duties. The Subordination Agent shall have no
duty to see to any recording or filing of this Agreement or any other document,
or to see to the maintenance of any such recording or filing.
SECTION 6.3. No Representations or Warranties as to Documents. The
Subordination Agent in its individual capacity does not make nor shall be deemed
to have made any representation or warranty as to the validity, legality or
enforceability of this Agreement or any other Operative Agreement or as to the
correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.
SECTION 6.4. No Segregation of Monies; No Interest. Any monies paid to
or retained by the Subordination Agent pursuant to any provision hereof and not
then required to be distributed to any Trustee or any Liquidity Provider as
provided in Articles II and III hereof or
44
deposited into one or more Trust Accounts need not be segregated in any manner
except to the extent required by such Articles II and III and by law, and the
Subordination Agent shall not (except as otherwise provided in Section 2.2
hereof) be liable for any interest thereon; provided, however, that any payments
received or applied hereunder by the Subordination Agent shall be accounted for
by the Subordination Agent so that any portion thereof paid or applied pursuant
hereto shall be identifiable as to the source thereof.
SECTION 6.5. Reliance; Agents; Advice of Counsel. The Subordination
Agent shall not incur liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers or the Trustees the manner of ascertainment of which is not
specifically described herein, the Subordination Agent may for all purposes
hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider or Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Subordination Agent shall assume, and shall be
fully protected in assuming, that each of the Liquidity Providers and each of
the Trustees are authorized to enter into this Agreement and to take all action
to be taken by them pursuant to the provisions hereof, and shall not inquire
into the authorization of each of the Liquidity Providers and each of the
Trustees with respect thereto. In the administration of the trusts hereunder,
the Subordination Agent may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents or attorneys
and may consult with counsel, accountants and other skilled persons to be
selected and retained by it at the cost of ATA, and the Subordination Agent
shall not be liable for the acts or omissions of any agent appointed with due
care or for anything done, suffered or omitted in good faith by it in accordance
with the advice or written opinion of any such counsel, accountants or other
skilled persons.
SECTION 6.6. Capacity in Which Acting. The Subordination Agent acts
hereunder solely as agent and trustee herein and not in its individual capacity,
except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7. Compensation. The Subordination Agent shall be entitled to
compensation, including expenses and disbursements, for all services rendered
hereunder (such compensation shall be set forth in a separate fee agreement
between ATA and WTC) and shall have a priority claim to the extent set forth in
Article III hereof on all monies collected hereunder for the payment of such
compensation, to the extent that such compensation shall not be paid by others.
The Subordination Agent agrees that it shall have no right against any Trustee
or
45
Liquidity Provider for any fee as compensation for its services as agent under
this Agreement. The provisions of this Section 6.7 shall survive the termination
of this Agreement.
SECTION 6.8. May Become Certificateholder. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all rights
and benefits of a Certificateholder to the same extent as if it were not the
institution acting as the Subordination Agent.
SECTION 6.9. Subordination Agent Required; Eligibility. There shall at
all times be a Subordination Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $100,000,000 (or the obligations of which, whether now in existence
or hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States of America, any
State thereof or of the District of Columbia and having a combined capital and
surplus of at least $100,000,000), if there is such an institution willing and
able to perform the duties of the Subordination Agent hereunder upon reasonable
or customary terms. Such corporation shall be a citizen of the United States of
America and shall be authorized under the laws of the United States of America
or any State thereof or of the District of Columbia to exercise corporate trust
powers and shall be subject to supervision or examination by federal, state or
District of Columbia authorities. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of any of
the aforesaid supervising or examining authorities, then, for the purposes of
this Section 6.9, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
In case at any time the Subordination Agent shall cease to be eligible
in accordance with the provisions of this Section, the Subordination Agent shall
resign immediately in the manner and with the effect specified in Section 8.1.
SECTION 6.10. Money to Be Held in Trust. All Equipment Notes, monies
and other property deposited with or held by the Subordination Agent pursuant to
this Agreement shall be held in trust for the benefit of the parties entitled to
such Equipment Notes, monies and other property. All such Equipment Notes,
monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1. Indemnification. The Subordination Agent shall be
indemnified hereunder to the extent and in the manner described in Section 7 of
the Participation Agreements
46
for Owned Aircraft, Section 9 of the Participation Agreements for Leased
Aircraft and Section 6 of the Note Purchase Agreement. The indemnities contained
in such Sections of such agreements shall survive the termination of this
Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment of
Successor. The Subordination Agent may resign at any time by so notifying each
Trustee and each Liquidity Provider. The Controlling Party may remove the
Subordination Agent for cause by so notifying the Subordination Agent and may
appoint a successor Subordination Agent. The Controlling Party shall remove the
Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9 hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy exists
in the office of Subordination Agent for any reason (the Subordination Agent in
such event being referred to herein as the retiring Subordination Agent), the
Controlling Party shall promptly appoint a successor Subordination Agent.
A successor Subordination Agent shall deliver (x) a written acceptance
of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility to each party hereto, upon which the
resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The successor
Subordination Agent shall mail a notice of its succession to the Liquidity
Providers and the Trustees. The retiring Subordination Agent shall promptly
transfer its rights under each of the Liquidity Facilities and all of the
property held by it as Subordination Agent to the successor Subordination Agent.
If a successor Subordination Agent does not take office within 60 days
after the retiring Subordination Agent resigns or is removed, the retiring
Subordination Agent or one or more of the Trustees may petition any court of
competent jurisdiction for the appointment of a successor Subordination Agent.
47
If the Subordination Agent fails to comply with Section 6.9 hereof (to
the extent applicable), one or more of the Trustees, one or more of the
Liquidity Providers may petition any court of competent jurisdiction for the
removal of the Subordination Agent and the appointment of a successor
Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agency shall have delivered a Rating Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1. Amendments, Waivers, Etc. (a) Except as provided in
Section 9.1(b), this Agreement may not be supplemented, amended or modified
without the consent of each Trustee (acting with the consent of holders of
Certificates of the related Class evidencing interests in the related Trust
aggregating not less than a majority in interest in such Trust or as otherwise
authorized pursuant to the relevant Trust Agreement), the Subordination Agent
and each Liquidity Provider; provided, however, that this Agreement may be
supplemented, amended or modified without the consent of any Trustee if such
supplement, amendment or modification (i) is in accordance with Section 9.1(d)
hereof and does not materially adversely affect such Trustee or the holders of
the related Class of Certificates or (ii) cures an ambiguity or inconsistency or
does not materially adversely affect such Trustee or the holders of the related
Class of Certificates. Notwithstanding the foregoing, without the consent of
each Certificateholder and each Liquidity Provider, no supplement, amendment or
modification of this Agreement may (i) reduce the percentage of the interest in
any Trust evidenced by the Certificates issued by such Trust necessary to
consent to modify or amend any provision of this Agreement or to waive
compliance therewith or (ii) except as provided in Section 9.1(c), modify
Section 2.4, 3.2 or 3.3 hereof, relating to the distribution of monies received
by the Subordination Agent hereunder from the Equipment Notes or pursuant to the
Liquidity Facilities. Nothing contained in this Section shall require the
consent of a Trustee at any time following the payment of Final Distributions
with respect to the related Class of Certificates.
(b) Notwithstanding any provision of this Agreement, upon and
simultaneously with the issuance of the Additional Certificates (as defined in
the Delayed Funding Implementation Agreement), this Agreement shall be forthwith
amended as provided in the Delayed Funding Implementation Agreement, without any
need for further action on the part of any party hereto and without any consent
of any of the Certificateholders.
(c) In the event that the Subordination Agent, as the registered holder
of any Equipment Notes, receives a request for its consent to any amendment,
modification, consent or
48
waiver under such Equipment Notes, the Indenture pursuant to which such
Equipment Notes were issued, or the related Lease, Participation Agreement or
other related document, (i) if no Indenture Default shall have occurred and be
continuing with respect to such Indenture, the Subordination Agent shall request
directions from the Trustee of the Trust which holds each series of such
Equipment Notes and shall vote or consent in accordance with the directions of
such Trustee, and (ii) if any Indenture Default (which, in the case of any
Indenture pertaining to a Leased Aircraft, has not been cured by the applicable
Owner Trustee or the 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 Sections 4.1 and 4.4
hereof; provided that no such amendment, modification or waiver shall, without
the consent of each Liquidity Provider, reduce the amount of rent, supplemental
rent termination values, purchase price or stipulated loss values payable by ATA
under any Lease or reduce the amount of principal or interest payable by ATA
under any Equipment Note issued under any Indenture in respect of an Owned
Aircraft; and provided further that no amendment of or supplement to any
Indenture, any Lease, any Purchase Agreement, any Purchase Agreement Assignment,
any Consent and Agreement, any Engine Warranty Assignment, the Guarantee, the
Note Purchase Agreement or any Participation Agreement (the terms "Purchase
Agreement", "Purchase Agreement Assignment", "Consent and Agreement", "Engine
Warranty Assignment" and "Guarantee" having the meanings specified in the
Participation Agreements or the Note Purchase Agreement) or waiver or
modification of the terms of, or consent under, any thereof, shall, without the
consent of each Liquidity Provider, have any of the effects listed in the
proviso to Section 9.01(b) of such Indenture, if such Indenture is an Leased
Aircraft Indenture, or 10.01(b) of such Indenture if such Indenture is an Owned
Aircraft Indenture.
(d) If with respect to any Owned Aircraft, ATA issues Class C
Certificates, this Agreement shall be amended to provide for the subordination
of such Class C Certificates to the Class A Certificates and the Class B
Certificates substantially in the same manner as the Class B Certificates are
subordinated hereunder to the Class A Certificates. The amendments to this
Agreement to give effect to the issuance of any Class C Certificates shall
include, without limitation:
(i) the trustee of the Class C Trust shall be added as a party to this
Agreement;
(ii) the definitions of "Cash Collateral Account," "Certificate,"
"Class," "Equipment Notes," "Final Legal Distribution Date," "Liquidity
Facilities," "Liquidity Provider," "LTV Ratio" "Stated Interest Rate,"
"Trust," "Trust Agreement," "Controlling Party" shall be revised, as
appropriate, to reflect the issuance of Class C Certificates (and the
subordination thereof); and
(iii) the provisions of this Agreement governing payments with respect
to Certificates and related notices, including, without limitation,
Sections 2.4, 3.1, 3.2, 3.3
49
and 3.6(e), shall be revised to provide for distributions on the Class C
Certificates after payment of all relevant distributions on the Class B
Certificates.
If, with respect to any Aircraft, Series C Equipment Notes are issued
to any Person other than the Class C Trust, this Agreement shall be amended by
written agreement of ATA and the Subordination Agent to (i) provide for each
holder of a Series C Equipment Note to be bound by the provisions of Section
2.6(a) hereof so that the Controlling Party shall, among other things, be
entitled to direct the Loan Trustee as provided therein (and such Series C
Equipment Notes shall make effective provision therefor so as to bind each
holder thereof to such provisions of Section 2.6(a) hereof) and (ii) to revise
the definitions of "Controlling Party" and "Equipment Notes", as appropriate, to
reflect the issuance of the Series C Equipment Notes (and the prior rights, as
against the holders of such Series C Equipment Notes, of the Class A Trustee and
the Class B Trustee to be such "Controlling Party").
Each Liquidity Provider hereby agrees and confirms that (i) it shall be
deemed to consent to the issuance of any Class C Certificates and Series C
Equipment Notes and the amendments to this Agreement made in connection
therewith in accordance with this Section 9.1 and (ii) any such issuance and
amendments shall not affect any of its respective obligations under its
Liquidity Facility or any other document relating to the Certificates to which
it is a party.
The parties hereto agree that no amendments shall be made to this
Agreement pursuant to this Section 9.1(d) unless the Rating Agency shall have
provided written confirmation that the issuance of the Class C Certificates will
not cause a reduction of the rating then in effect for any Class of Certificates
by such Rating Agency.
(e) Without the consent of each Liquidity Provider, the Trustee for
each Class of Certificates agrees that it will not consent to any amendment or
modification of, or grant any waiver with respect to, the Escrow and Paying
Agent Agreement to which it is a party or the Deposit Agreement with respect to
such Class.
SECTION 9.2. Subordination Agent Protected. If, in the opinion of
counsel or the reasonable opinion of the institution acting as the Subordination
Agent hereunder, any document required to be executed pursuant to the terms of
Section 9.1 adversely affects any right, duty, immunity or indemnity with
respect to it under this Agreement or any Liquidity Facility, the Subordination
Agent may in its discretion decline to execute such document.
SECTION 9.3. Effect of Supplemental Agreements. Upon the execution of
any amendment, consent or supplement hereto pursuant to the provisions hereof,
this Agreement shall be and be deemed to be and shall be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Agreement of the parties hereto
and beneficiaries hereof shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental agreement shall be and be
deemed to be and shall
50
be part of the terms and conditions of this Agreement for any and all purposes.
In executing or accepting any supplemental agreement permitted by this Article
IX, the Subordination Agent shall be entitled to receive, and shall be fully
protected in relying upon, an opinion of counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.
SECTION 9.4. Notice to Rating Agency. Promptly following its receipt of
each amendment, consent, modification, supplement or waiver contemplated by this
Article IX, the Subordination Agent shall send a copy thereof to the Rating
Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Termination of Intercreditor Agreement. Following payment
of Final Distributions with respect to each Class of Certificates and the
payment in full of all Liquidity Obligations to the Liquidity Providers and
provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers and the Subordination
Agent hereunder or under the Trust Agreements, and that the commitment of the
Liquidity Providers under the Liquidity Facilities shall have expired or been
terminated, this Agreement and the trusts created hereby shall terminate and
this Agreement shall be of no further force or effect. Except as aforesaid or
otherwise provided, this Agreement and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.
SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent. Subject to the second sentence of
Section 10.6 and the provisions of Sections 4.4 and 9.1, nothing in this
Agreement, whether express or implied, shall be construed to give to any Person
other than the Trustees, the Liquidity Providers and the Subordination Agent any
legal or equitable right, remedy or claim under or in respect of this Agreement.
SECTION 10.3. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed to at its office at:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
51
Facsimile: (000) 000-0000
Attention: Corporate Trust Administration
(ii) if to any Trustee addressed to it at its office at:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Corporate Trust Administration
(iii) if to any Liquidity Provider, addressed to it at its office at:
prior to April 7, 2002:
AIG Matched Funding Corp.
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
on or after April 7, 2002:
AIG Matched Funding Corp.
00 Xxxxxxx Xxxx
Xxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
Whenever any notice in writing is required to be given by any Trustee, Liquidity
Provider or the Subordination Agent to any of the other of them, such notice
shall be deemed given and such requirement satisfied when such notice is
received unless received outside of business hours, in which case on the open of
business on the next Business Day.
SECTION 10.4. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the
52
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 10.5. No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other Person
against whom enforcement of the change, waiver, discharge or termination is
sought and any other party or other Person whose consent is required pursuant to
this Agreement and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
SECTION 10.6. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
parties hereto and the successors and assigns of each, all as herein provided.
SECTION 10.7. Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8. Counterpart Form. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9. Subordination. (a) As between the Liquidity Providers, on
the one hand, and the Trustees and the Certificateholders, on the other hand,
and as among the Trustees, this Agreement shall be a subordination agreement for
purposes of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, as amended from
time to time.
(b) Notwithstanding the provisions of this Agreement, if prior to the
payment in full to the Liquidity Providers of all Liquidity Obligations then due
and payable, any party hereto shall have received any payment or distribution in
respect of Equipment Notes or any other amount under the Indentures or other
Operative Agreements which, had the subordination provisions of this Agreement
been properly applied to such payment, distribution or other amount, would not
have been distributed to such Person, then such payment, distribution or other
amount shall be received and held in trust by such Person and paid over or
delivered to the Subordination Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider or the Subordination Agent
receives any payment in respect of any obligations owing hereunder (or, in the
case of the Liquidity Providers, in respect of the Liquidity Obligations), which
is subsequently invalidated, declared preferential, set aside and/or required to
be repaid to a trustee, receiver or other party, then, to the extent of such
payment, such
53
obligations (or, in the case of the Liquidity Providers, such Liquidity
Obligations) intended to be satisfied shall be revived and continue in full
force and effect as if such payment had not been received.
(d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm that
the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall apply in all
circumstances, notwithstanding the fact that the obligations owed to the
Trustees and the holders of Certificates are secured by certain assets and the
Liquidity Obligations may not be so secured. The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations (except as specifically set forth in
Section 2.4, 3.2 or 3.3) due to their status as secured creditors in any
bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent may take any
of the following actions without impairing its rights under this Agreement:
(i) obtain a Lien on any property to secure any amounts owing to it
hereunder, including, in the case of the Liquidity Providers, the Liquidity
Obligations,
(ii) obtain the primary or secondary obligation of any other obligor
with respect to any amounts owing to it hereunder, including, in the case
of the Liquidity Providers, any of the Liquidity Obligations,
(iii) renew, extend, increase, alter or exchange any amounts owing to
it hereunder, including, in the case of the Liquidity Providers, any of the
Liquidity Obligations, or release or compromise any obligation of any
obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated party or
a surety under applicable law;
provided, however, that the taking of any such actions by any of the Trustees,
the Liquidity Providers or the Subordination Agent shall not prejudice the
rights or adversely affect the obligations of any other party under this
Agreement;
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated party or
a surety under applicable law.
54
SECTION 10.10. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial.
(a) Each of the parties hereto hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York located in the City of New York, the courts of the
United States of America for the Southern District of New York, and the
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED, including,
without limitation, contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each of the parties warrants and
represents that it has reviewed this waiver with its legal counsel, and that it
knowingly and voluntarily waives its jury trial rights following consultation
with such legal counsel. THIS WAIVER CANNOT BE MODIFIED ORALLY.
SECTION 10.12. Transfer. Except as provided herein, no party hereto
shall be entitled to assign or otherwise transfer this Agreement (or any
interest herein) other than (in the case of the Subordination Agent or Trustee)
to a successor subordination agent or trustee, as the
55
case may be, and any purported assignment in violation hereof shall be void.
This Agreement shall be binding upon the parties hereto and their respective
successors and (in the case of the Subordination Agent) permitted assigns.
SECTION 10.13. Subordination Agent's Liability. Notwithstanding
anything contained herein to the contrary, it is expressly understood and agreed
by the parties hereto that (a) this Agreement is executed and delivered by
Wilmington Trust Company in connection with its role as Pass Through Trustee and
Subordination Agent, not individually or personally but solely as Pass Through
Trustee and Subordination Agent, in the exercise of the powers and authority
conferred and vested in it under the Pass Through Trust Agreement and herein
respectively, (b) each of the representations, undertakings and agreements
herein made on the part of the Pass Through Trustee or Subordination Agent is
made and intended not as personal representations, undertakings and agreements
by Wilmington Trust Company but is made and intended for the purpose for binding
only the Pass Through Trustee or Subordination Agent, as the case may be, and
(c) under no circumstances shall Wilmington Trust Company be personally liable
for the payment of any indebtedness or expenses of the Pass Through Trustee or
Subordination Agent, or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Pass Through
Trustee or Subordination Agent under this Agreement or the other related
documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written, and acknowledge that this Agreement has been
made and delivered in the City of New York, and this Agreement has become
effective only upon such execution and delivery.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Trustee for each of the Trusts
By
--------------------------------------
Name:
Title:
AIG MATCHED FUNDING CORP.
as Class A Liquidity Provider and
Class B Liquidity Provider
By
--------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity except as
expressly set forth herein but solely as
Subordination Agent and trustee
By
--------------------------------------
Name:
Title:
