EXHIBIT 4.4
INTERCREDITOR AGREEMENT
Dated as of January 30, 2003
among
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee of the
Delta Air Lines Pass Through Trust 2003-1G,
Delta Air Lines Pass Through Trust 2003-1C,
and
Delta Air Lines Pass Through Trust 2003-1D
LANDESBANK BADEN-WURTTEMBERG,
as Primary Liquidity Provider
XXXXXXX XXXXX CAPITAL SERVICES, INC,
as Above-Cap Liquidity Provider
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Subordination Agent
and
AMBAC ASSURANCE CORPORATION,
as Policy Provider
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions.................................................................................2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01. Agreement to Terms of Subordination; Payments from Monies Received Only....................23
Section 2.02. Trust Accounts.............................................................................24
Section 2.03. Deposits to the Collection Account and Special Payments Account; Certain Distributions.....25
Section 2.04. Distributions of Special Payments..........................................................26
Section 2.05. Designated Representatives.................................................................29
Section 2.06. Controlling Party..........................................................................30
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.01. Written Notice of Distribution.............................................................32
Section 3.02. Distribution of Amounts on Deposit in the Collection Account...............................35
Section 3.03. Distribution of Amounts on Deposit Following a Triggering Event............................37
Section 3.04. Other Payments.............................................................................41
Section 3.05. Payments to the Trustees, the Primary Liquidity Provider and the Policy Provider...........41
Section 3.06. Liquidity Facilities.......................................................................41
Section 3.07. The Policy.................................................................................50
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.01. Directions from the Controlling Party......................................................54
Section 4.02. Remedies Cumulative........................................................................55
Section 4.03. Discontinuance of Proceedings..............................................................55
Section 4.04. Right of Certificateholders, the Primary Liquidity Provider and the Policy Provider to
Receive Payments Not to Be Impaired........................................................55
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.01. Notice of Indenture Event of Default or Triggering Event...................................56
Section 5.02. Indemnification............................................................................56
Section 5.03. No Duties Except as Specified in Intercreditor Agreement...................................56
Section 5.04. Notice from the Liquidity Providers and Trustees...........................................57
Section 5.05. Agreements Relating to the Above-Cap Liquidity Facility....................................57
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.01. Authorization; Acceptance of Trusts and Duties.............................................57
Section 6.02. Absence of Duties..........................................................................57
Section 6.03. No Representations or Warranties as to Documents...........................................57
Section 6.04. No Segregation of Monies; No Interest......................................................58
Section 6.05. Reliance; Agents; Advice of Counsel........................................................58
Section 6.06. Capacity in Which Acting...................................................................58
Section 6.07. Compensation...............................................................................58
Section 6.08. May Become Certificateholder...............................................................59
Section 6.09. Subordination Agent Required; Eligibility..................................................59
Section 6.10. Money to Be Held in Trust..................................................................59
ARTICLE VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01. Replacement of Subordination Agent; Appointment of Successor...............................59
ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01. Amendments, Waivers, Etc...................................................................61
Section 8.02. Subordination Agent Protected..............................................................62
Section 8.03. Effect of Supplemental Agreements..........................................................62
Section 8.04. Notices to Rating Agencies and the Policy Provider.........................................62
ARTICLE IX
MISCELLANEOUS
Section 9.01. Termination of Intercreditor Agreement.....................................................63
Section 9.02. Intercreditor Agreement for Benefit of Trustees, Liquidity Providers, Policy Provider
and Subordination Agent....................................................................63
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Section 9.03. Notices....................................................................................63
Section 9.04. Severability...............................................................................65
Section 9.05. No Oral Modifications or Continuing Waivers................................................65
Section 9.06. Successors and Assigns.....................................................................65
Section 9.07. Headings...................................................................................65
Section 9.08. Counterparts...............................................................................65
Section 9.09. Subordination..............................................................................65
Section 9.10. Governing Law..............................................................................67
Section 9.11. Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity.......................67
Section 9.12. Non-Petition...............................................................................68
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INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of January 30, 2003, is
made by and among U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking
association (in its individual capacity, together with its successors and
permitted assigns, "U.S. BANK"), not in its individual capacity but solely as
trustee of each Trust (such term and other capitalized terms used herein without
definition being defined as provided in Article I); LANDESBANK
BADEN-WURTTEMBERG, a bank established in Germany as a public law institution
with legal capacity (Rechtsfahige Anstalt des Offentlichen Rechts), as the
Primary Liquidity Provider; XXXXXXX XXXXX CAPITAL SERVICES, INC., as the
Above-Cap Liquidity Provider; U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
individual capacity except as expressly set forth herein, but solely as
Subordination Agent and trustee hereunder (in such capacity, together with any
successor appointed pursuant to Article VII, the "SUBORDINATION AGENT"); and
AMBAC ASSURANCE CORPORATION, a Wisconsin domiciled stock insurance company
("AMBAC"), as the Policy Provider.
WHEREAS, pursuant to each Indenture Delta will issue on a
recourse basis three series of Equipment Notes secured by the related Aircraft;
WHEREAS, pursuant to the Participation Agreements, each Trust
will acquire those Equipment Notes having an interest rate identical to the
interest rate applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created
thereby proposes to issue a single class of Certificates (a "CLASS") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Purchase Agreement, the Initial
Purchasers propose to purchase the Class G Certificates in the aggregate face
amount of $391,583,000 on the terms and subject to the conditions set forth
therein;
WHEREAS, the Initial Class C Holder proposes to purchase the
Class C Certificates in the aggregate face amount of $135,423,000 on the terms
and subject to the conditions set forth in the Class C Trust Agreement and the
Class C Statutory Trust Agreement;
WHEREAS, the Initial Class D Holder proposes to purchase the
Class D Certificates in the aggregate face amount of $65,392,000 on the terms
and subject to the conditions set forth in the Class D Trust Agreement and the
Class D Statutory Trust Agreement;
WHEREAS, the Primary Liquidity Provider proposes to enter into
a revolving credit agreement and the Above-Cap Liquidity Provider proposes to
enter into an irrevocable interest rate cap agreement, in each case, with the
Subordination Agent, as agent and trustee for the Trustee of the Class G Trust,
for the benefit of the Class G Certificateholders;
WHEREAS, the obligations of Xxxxxxx Xxxxx Capital Services,
Inc. under the Above-Cap Liquidity Facility will be guaranteed by its parent,
Xxxxxxx Xxxxx & Co., Inc. pursuant to a guarantee agreement (the "GUARANTEE");
WHEREAS, the Policy Provider proposes to enter into the Policy
Provider Agreement providing for the issuance by the Policy Provider of the
Policy for the benefit of the Class G Certificateholders;
WHEREAS, the Subordination Agent, the Trustees, the Liquidity
Providers and the Policy Provider hereby agree to the terms of subordination set
forth in this Agreement in respect of each Class of Certificates; and
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and of other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) The definitions stated herein
apply equally to the singular and the plural forms of the terms defined.
(b) All references in this Agreement to designated
"Articles", "Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement.
(c) The words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
(d) Unless the context otherwise requires, whenever the
words "including", "include" or "includes" are used herein, it shall be deemed
to be followed by the phrase "without limitation".
(e) For purposes of this Agreement, unless the context
otherwise requires, the following capitalized terms shall have the following
meanings:
"ABOVE-CAP ACCOUNT" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution, which
shall be the Subordination Agent if it shall so qualify, into which all amounts
paid under the Above-Cap Liquidity Facility pursuant to Section 3.06(a) shall be
deposited.
"ABOVE-CAP LIQUIDITY FACILITY" means, initially, the ISDA
Master Agreement, dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class G Trust, and the initial Above-Cap Liquidity
Provider, together with the Schedule and Confirmation thereto, relating to the
Class G Certificates, and, from and after the replacement of such ISDA Master
Agreement pursuant hereto, the Replacement Above-Cap Liquidity Facility
therefor, if any, in each case as amended, supplemented or otherwise modified
from time to time in accordance with its terms.
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"ABOVE-CAP LIQUIDITY PROVIDER" means Xxxxxxx Xxxxx Capital
Services, Inc. or any Replacement Above-Cap Liquidity Provider which has issued
a Replacement Above-Cap Liquidity Facility to replace the Above-Cap Liquidity
Facility pursuant to Section 3.06(c)(ii).
"ABOVE-CAP PAYMENT" has the meaning specified in Section
3.06(a).
"ABOVE-CAP RESERVE ACCOUNT" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts paid under the Above-Cap Liquidity Facility pursuant to Section 3.06(f)
shall be deposited.
"ABOVE-CAP WITHDRAWAL" has the meaning specified in Section
3.06(a).
"ACCELERATION" means, with respect to the amounts payable in
respect of the Equipment Notes issued under any Indenture, such amounts becoming
immediately due and payable by declaration or otherwise. "Accelerate",
"Accelerated" and "Accelerating" have meanings correlative to the foregoing.
"ACCRUED CLASS G INTEREST" means, with respect to any
Distribution Date, all amounts due and owing in respect of accrued and unpaid
interest on the Class G Certificates at the Stated Interest Rate for the Class G
Certificates on such Distribution Date.
"ADDITIONAL PAYMENT" means any Break Amount and/or Make-Whole
Amount payable in respect of the Equipment Notes.
"ADJUSTED EXPECTED DISTRIBUTIONS" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (x)
accrued and unpaid interest in respect of such Certificates and (y) the greater
of:
(A) the difference between (x) the Pool Balance of such
Certificates as of the immediately preceding Distribution Date (or, if
the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust) and
(y) the Pool Balance of such Certificates as of the Current
Distribution Date calculated on the basis that (i) the principal of the
Non-Performing Equipment Notes held in such Trust has been paid in full
and such payments have been distributed to the holders of such
Certificates, (ii) the principal of the Performing Equipment Notes held
in such Trust has been paid when due (whether at stated maturity or
upon redemption (including but not limited to redemption pursuant to
Section 2.10 of any Indenture), prepayment, purchase or otherwise, but
without giving effect to any Acceleration of Performing Equipment
Notes) and such payments have been distributed to the holders of such
Certificates and (iii) the principal of any Equipment Notes formerly
held in such Trust that have been sold pursuant to the terms hereof has
been paid in full and such payments have been distributed to the
holders of such Certificates, and
(B) the amount of the excess, if any, of (i) the Pool
Balance of such Class of Certificates as of the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the
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Certificates of such Trust), over (ii) the Aggregate LTV Collateral
Amount for such Class of Certificates for the Current Distribution
Date;
provided that, until the date of the initial LTV Appraisals for all the
Aircraft, clause (B) shall not apply.
For purposes of calculating Adjusted Expected Distributions
with respect to the Certificates of any Trust, any Additional Payment paid on
the Equipment Notes held in such Trust that has not been distributed to the
Certificateholders of such Trust (other than such Additional Payment or a
portion thereof applied to the distribution of interest on the Certificates of
such Trust or the reduction of the Pool Balance of such Trust) shall be added to
the amount of Adjusted Expected Distributions.
"ADVANCE" means any Advance as defined in the Primary
Liquidity Facility.
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under direct or
indirect common control with such Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AGGREGATE LTV COLLATERAL AMOUNT" for any Class of
Certificates for any Distribution Date means an amount, not less than zero,
equal to the sum of the applicable LTV Collateral Amounts for such Class of
Certificates for all Aircraft, minus the Pool Balance for each Class of
Certificates, if any, senior to such Class, after giving effect to any
distribution of principal on such Distribution Date with respect to such senior
Class or Classes.
"AIRCRAFT" means, with respect to each Indenture, the
"Aircraft" referred to therein.
"APPRAISAL" means a current fair market value appraisal (which
may be a "desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"APPRAISED CURRENT MARKET VALUE" of any Aircraft means the
lower of the average and the median of the three most recent LTV Appraisals of
such Aircraft.
"APPRAISERS" means Aircraft Information Systems, Inc., BK
Associates, Inc. and AvSolutions, Inc.
"BANKRUPTCY CODE" means the United States Bankruptcy Code, 11
United States Code xx.xx. 101 et seq., as amended, or any successor statutes
thereto.
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"BASIC AGREEMENT" means that certain Pass Through Trust
Agreement, dated as of November 16, 2000, between Delta and U.S. Bank, as
successor trustee, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms, but does not include
any Trust Supplement.
"BREAK AMOUNT" has the meaning specified in the Indentures.
"BUSINESS DAY" means, with respect to the Certificates of any
Class, (a) any day other than a Saturday, a Sunday or a day on which, (i)
commercial banks are required or authorized to close in New York, New York,
Atlanta, Georgia, or, so long as any Certificate of such Class is outstanding,
the city and state in which the Trustee, the Subordination Agent or any related
Loan Trustee maintains its Corporate Trust Office or receives and disburses
funds, or (ii) solely with respect to draws under the Policy, the fiscal agent
(if any) under the Policy, at its office specified in the Policy, the Policy
Provider, at its office specified in the Policy, and insurance companies in New
York, New York are required or authorized by law or executive order to close and
(b) solely with respect to drawings under any Liquidity Facility, which day is
also a "Business Day" as defined in such Liquidity Facility.
"CAPPED INTEREST RATE" means initially 12.75% per annum and
from and after the date on which the Stated Interest Rate applicable to the
Class G Certificates is no longer subject to an additional margin as provided in
the Registration Rights Agreement, shall mean 12.50% per annum.
"CAPPED LIBOR" means, at any time, 11.75% per annum.
"CASH COLLATERAL ACCOUNT" means the Primary Cash Collateral
Account or the Above-Cap Reserve Account, as applicable.
"CERTIFICATE" means a Class G Certificate, a Class C
Certificate or a Class D Certificate, as applicable.
"CERTIFICATEHOLDER" means, with respect to any Class of
Certificates, the Person in whose name a Certificate is registered in the
Register for the Certificates of such Class.
"CITIZEN OF THE UNITED STATES" has the meaning specified for
such term in Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States enacted in substitution or replacement
therefor.
"CLASS" has the meaning specified in the recitals to this
Agreement.
"CLASS C CERTIFICATEHOLDER" means, at any time, any
Certificateholder of one or more Class C Certificates.
"CLASS C CERTIFICATES" means the certificates issued by the
Class C Trust, substantially in the form of Exhibit A to the Class C Trust
Agreement, and authenticated by the Class C Trustee, representing Fractional
Undivided Interests in the Class C Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class C
Trust Agreement.
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"CLASS C STATUTORY TRUST AGREEMENT" means the Trust Agreement
dated as of January 29, 2003 between Delta and Wilmington Trust Company, as
owner trustee, governing the creation and administration of the Initial Class C
Holder, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"CLASS C TRUST" means the Delta Air Lines Pass Through Trust
2003-1C created and administered pursuant to the Class C Trust Agreement.
"CLASS C TRUST AGREEMENT" means the Basic Agreement, as
supplemented by Trust Supplement No. 2003-1C thereto, dated as of the date
hereof, governing the creation and administration of the Delta Air Lines Pass
Through Trust 2003-1C and the issuance of the Class C Certificates, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS C TRUSTEE" means U.S. Bank Trust National Association,
not in its individual capacity except as expressly set forth in the Class C
Trust Agreement, but solely as trustee under the Class C Trust Agreement,
together with any successor trustee appointed pursuant thereto.
"CLASS D CERTIFICATEHOLDER" means, at any time, any
Certificateholder of one or more Class D Certificates.
"CLASS D CERTIFICATES" means the certificates issued by the
Class D Trust, substantially in the form of Exhibit A to the Class D Trust
Agreement, and authenticated by the Class D Trustee, representing Fractional
Undivided Interests in the Class D Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class D
Trust Agreement.
"CLASS D STATUTORY TRUST AGREEMENT" means the Trust Agreement
dated as of January 29, 2003 between Delta and Wilmington Trust Company, as
owner trustee, governing the creation and administration of the Initial Class D
Holder, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"CLASS D TRUST" means the Delta Air Lines Pass Through Trust
2003-1D created and administered pursuant to the Class D Trust Agreement.
"CLASS D TRUST AGREEMENT" means the Basic Agreement, as
supplemented by Trust Supplement No. 2003-1D thereto, dated as of the date
hereof, governing the creation and administration of the Delta Air Lines Pass
Through Trust 2003-1D and the issuance of the Class D Certificates, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS D TRUSTEE" means U.S. Bank Trust National Association,
not in its individual capacity except as expressly set forth in the Class D
Trust Agreement, but solely as trustee under the Class D Trust Agreement,
together with any successor trustee appointed pursuant thereto.
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"CLASS G CERTIFICATEHOLDER" means, at any time, any
Certificateholder of one or more Class G Certificates.
"CLASS G CERTIFICATES" means the certificates issued by the
Class G Trust, substantially in the form of Exhibit A to the Class G Trust
Agreement, and authenticated by the Class G Trustee, representing Fractional
Undivided Interests in the Class G Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class G
Trust Agreement.
"CLASS G TRUST" means the Delta Air Lines Pass Through Trust
2003-1G created and administered pursuant to the Class G Trust Agreement.
"CLASS G TRUST AGREEMENT" means the Basic Agreement, as
supplemented by Trust Supplement No. 2003-1G thereto, dated as of the date
hereof, governing the creation and administration of the Delta Air Lines Pass
Through Trust 2003-1G and the issuance of the Class G Certificates, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"CLASS G TRUSTEE" means U.S. Bank Trust National Association,
not in its individual capacity except as expressly set forth in the Class G
Trust Agreement, but solely as trustee under the Class G Trust Agreement,
together with any successor trustee appointed pursuant thereto.
"CLOSING DATE" means January 30, 2003.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" means, with respect to any Indenture, the
"Collateral" referred to therein.
"COLLECTION ACCOUNT" means the Eligible Deposit Account
established by the Subordination Agent pursuant to Section 2.02(a) in and from
which the Subordination Agent shall make deposits and withdrawals in accordance
with this Agreement.
"CONSENT NOTICE" has the meaning specified in Section 3.06(d).
"CONSENT PERIOD" has the meaning specified in Section 3.06(d).
"CONTROLLING PARTY" means the Person entitled to act as such
pursuant to the terms of Section 2.06.
"CORPORATE TRUST OFFICE" means, with respect to any Trustee,
the Subordination Agent or any Loan Trustee, the office of such Person in the
city at which, at any particular time, its corporate trust business shall be
principally administered.
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"CURRENT DISTRIBUTION DATE" means a Distribution Date
specified as a reference date for calculating the Expected Distributions or the
Adjusted Expected Distributions with respect to the Certificates of any Trust as
of such Distribution Date.
"DEFAULTED SERIES G EQUIPMENT NOTE" has the meaning specified
in Section 3.07(c).
"DEFICIENCY AMOUNT" has the meaning specified in Section
3.06(a).
"DELTA" means Delta Air Lines, Inc., a Delaware corporation,
and its successors and permitted assigns.
"DELTA BANKRUPTCY EVENT" means the occurrence and continuation
of any of the following:
(a) Delta consents to the appointment of or the taking of
possession by a receiver, trustee or liquidator of itself or of a
substantial part of its property, admits in writing its inability to
pay its debts generally as they come due or makes a general assignment
for the benefit of creditors;
(b) Delta files a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization, liquidation or
other relief as a debtor in a case under any bankruptcy laws or
insolvency laws (as in effect at such time) or an answer admitting the
material allegations of a petition filed against Delta as a debtor in
any such case, or Delta seeks relief as a debtor by voluntary petition,
answer or consent, under the provisions of any other bankruptcy or
other similar law providing for the reorganization or winding-up of
corporations (as in effect at such time), or Delta seeks an agreement,
composition, extension or adjustment with its creditors under such
laws; or
(c) an order, judgment or decree is entered by any court
of competent jurisdiction appointing, without the consent of Delta , a
receiver, trustee or liquidator of Delta or sequestering any
substantial part of its property, or granting any other relief in
respect of Delta as a debtor under any bankruptcy laws or insolvency
laws (as in effect at such time), and any such order, judgment or
decree of appointment or sequestration remains in force undismissed,
unstayed and unvacated for a period of 90 days after the date of entry
thereof; or
(d) a petition against Delta as a debtor in a case under
the federal bankruptcy laws or other insolvency laws (as in effect at
such time) is filed and not withdrawn or dismissed within 90 days
thereafter, or if, under the provisions of any law providing for
reorganization or winding-up of corporations that applies to Delta, any
court of competent jurisdiction assumes jurisdiction, custody or
control of Delta or of any substantial part of its property and such
jurisdiction, custody or control remains in force unrelinquished,
unstayed and unterminated for a period of 90 days.
"DELTA PROVISIONS" has the meaning specified in Section
8.01(a).
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"DESIGNATED REPRESENTATIVES" means the Subordination Agent
Representatives, the Trustee Representatives, the Policy Provider
Representatives, and the Liquidity Provider Representatives identified under
Section 2.05.
"DISPOSITION PAYMENT" has the meaning specified in Section
3.07(b).
"DISTRIBUTION DATE" means a Regular Distribution Date or a
Special Distribution Date.
"DOLLARS" means the lawful currency of the United States.
"DOWNGRADE DRAWING" has the meaning specified in Section
3.06(c).
"DOWNGRADED FACILITY" has the meaning specified in Section
3.06(c).
"DRAWING" means an Interest Drawing, a Final Drawing, a
Non-Extension Drawing or a Downgrade Drawing, as the case may be.
"ELECTION DISTRIBUTION DATE" has the meaning specified in
Section 3.07(c).
"ELECTION INTEREST PAYMENT" has the meaning specified in
Section 3.07(c).
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States or any one of the states thereof or the District of
Columbia (or any United States branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution has a long-term unsecured debt
rating of at least A3 or its equivalent by Moody's or at least A- or its
equivalent by S&P. An Eligible Deposit Account may be maintained with the
Subordination Agent or Primary Liquidity Provider so long as the Subordination
Agent or such Primary Liquidity Provider is an Eligible Institution; provided
that the Subordination Agent, in its individual capacity, or such Primary
Liquidity Provider shall have waived all rights of set-off and counterclaim with
respect to such account.
"ELIGIBLE INSTITUTION" means (a) the corporate trust
department of the Subordination Agent or any Trustee, as applicable, or (b) a
depository institution organized under the laws of the United States of America
or any state thereof or the District of Columbia (or any U.S. branch of a
foreign bank), which has a long-term unsecured debt rating of at least A3 or its
equivalent by Moody's or at least A- or its equivalent by S&P.
"ELIGIBLE INVESTMENTS" means investments in (a) obligations of
the United States government or agencies thereof, or obligations guaranteed by
the United States government, having maturities no later than 90 days following
the date of such investment, (b) open market commercial paper of any corporation
incorporated under the laws of the United States or any state thereof with a
short-term unsecured debt rating of at least P-1 or its equivalent by Moody's or
with a short-term issuer credit rating of at least A-1 or its equivalent by S&P,
having maturities no later than 90 days following the date of such investment,
(c) certificates of deposit issued by commercial banks organized under the laws
of the United States or of any political
9
subdivision thereof (or any United States branch of a foreign bank) having a
combined capital and surplus in excess of $500,000,000 which banks or their
holding companies have a short-term unsecured debt rating of A or its equivalent
by Moody's or a short-term issuer credit rating of A or its equivalent by S&P,
provided, however, that the aggregate amount of Eligible Investments at any one
time invested in certificates of deposit issued by any one bank shall not be in
excess of 5% of such bank's capital and surplus, (d) Dollar denominated offshore
certificates of deposit issued by, or offshore time deposits with, any
commercial bank described in (c) or any subsidiary thereof, and (e) repurchase
agreements with any financial institution having combined capital and surplus of
at least $500,000,000 with any of the obligations described in clauses (a)
through (d) as collateral so long as such investment is held by a third party
custodian also qualifying as an Eligible Institution. Notwithstanding the
foregoing, no investment of the type described in clause (b) above which is
issued or guaranteed by Delta or any of its Affiliates and no investment in the
obligations of any one bank in excess of $10,000,000 shall be an Eligible
Investment unless written approval has been obtained from the Policy Provider
and a Ratings Confirmation shall have been received with respect to the making
of such investment. If none of the above investments is available, the entire
amounts to be invested may be used to purchase Federal funds from an entity
described in clause (c). All Eligible Investments must be held in an Eligible
Deposit Account. Any of the investments described herein may be made through or
with, as applicable, the bank acting as Trustee or its Affiliates.
"EQUIPMENT NOTES" means, at any time, the Series G Equipment
Notes, the Series C Equipment Notes and the Series D Equipment Notes,
collectively, and in each case, any Equipment Notes issued in exchange therefor
or replacement thereof pursuant to the terms of the Indentures.
"EXCESS INTEREST POLICY DRAWING" has the meaning specified in
Section 3.07(c).
"EXCESS REIMBURSEMENT OBLIGATIONS" means, (a) in the event of
any Policy Provider Election with respect to a Series G Equipment Note, the
portion of the Policy Provider Obligations that represents interest on such
Equipment Note in excess of 21 months of interest at the interest rate
applicable to such Equipment Note and (b) any interest on the Liquidity
Obligations in respect of the Primary Liquidity Facility paid by the Policy
Provider to the Primary Liquidity Provider from and after the end of the
21-month period referred to in Section 3.07(c).
"EXPECTED DISTRIBUTIONS" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (x)
accrued and unpaid interest in respect of such Certificates and (y) the
difference between (A) the Pool Balance of such Certificates as of the
immediately preceding Distribution Date (or, if the Current Distribution Date is
the first Distribution Date, the original aggregate face amount of the
Certificates of such Trust) and (B) the Pool Balance of such Certificates as of
the Current Distribution Date calculated on the basis that (i) the principal of
the Equipment Notes held in such Trust has been paid when due (whether at stated
maturity or upon redemption (including but not limited to any redemption
pursuant to Section 2.10 of any Indenture), prepayment, purchase or Acceleration
or otherwise) and such payments have been distributed to the holders of such
Certificates and (ii) the principal of any Equipment Notes formerly held in such
Trust that have been sold pursuant to the terms hereof has been paid in full and
such payments have been distributed to the holders of such Certificates.
10
For purposes of calculating Expected Distributions with
respect to the Certificates of any Trust, any Additional Payment paid on the
Equipment Notes held in such Trust which has not been distributed to the
Certificateholders of such Trust (other than such Additional Payment or a
portion thereof applied to distributions of interest on the Certificates of such
Trust or the reduction of the Pool Balance of such Trust) shall be added to the
amount of such Expected Distributions.
"FEE LETTER" means the Fee Letter among the initial Primary
Liquidity Provider, the Subordination Agent and Delta with respect to the
initial Primary Liquidity Facility and any fee letter entered into among the
Subordination Agent, Delta and any Replacement Primary Liquidity Provider.
"FINAL DISTRIBUTIONS" means, with respect to the Certificates
of any Trust on any Distribution Date, the sum of (x) the aggregate amount of
all accrued and unpaid interest in respect of such Certificates and (y) the Pool
Balance of such Certificates as of the immediately preceding Distribution Date.
For purposes of calculating Final Distributions with respect to the Certificates
of any Trust, any Additional Payment paid on the Equipment Notes held in such
Trust which has not been distributed to the Certificateholders of such Trust
(other than such Additional Payment or a portion thereof applied to
distributions of interest on the Certificates of such Trust or the reduction of
the Pool Balance of such Trust) shall be added to the amount of such Final
Distributions.
"FINAL DRAWING" has the meaning specified in Section 3.06(i).
"FINAL LEGAL DISTRIBUTION DATE" means (i) with respect to the
Class G Certificates, July 25, 2009, (ii) with respect to the Class C
Certificates, January 25, 2008 and (iii) with respect to the Class D
Certificates, January 25, 2008.
"FRACTIONAL UNDIVIDED INTEREST" means the fractional undivided
interest in a Trust that is represented by a Certificate relating to such Trust.
"GUARANTEE" has the meaning specified in the recitals to this
Agreement.
"INDENTURE" means each of the Indenture and Security
Agreements dated the date hereof entered into by the Loan Trustee and Delta
pursuant to the related Participation Agreements providing for the issuance of
the Equipment Notes on the date hereof, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"INDENTURE EVENT OF DEFAULT" means, with respect to any
Indenture, any Event of Default (as such term is defined in such Indenture)
thereunder.
"INITIAL CLASS C HOLDER" means Delta 2003-1 Class C
Certificate Trust, a Delaware statutory trust organized pursuant to the Class C
Statutory Trust Agreement, as the sole initial purchaser and holder of the Class
C Certificates.
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"INITIAL CLASS D HOLDER" means Delta 2003-1 Class D
Certificate Trust, a Delaware statutory trust organized pursuant to the Class D
Statutory Trust Agreement, as the sole initial purchaser and holder of the Class
D Certificates.
"INITIAL PURCHASERS" means the initial purchasers listed as
such in the Purchase Agreement.
"INTEREST DRAWING" has the meaning specified in Section
3.06(a).
"INTEREST PAYMENT DATE" means, each date on which interest is
due and payable under the Primary Liquidity Facility on a Downgrade Drawing,
Non-Extension Drawing or Final Drawing thereunder.
"INTEREST PERIOD" has the meaning assigned to such term in the
Indentures.
"INVESTMENT EARNINGS" means investment earnings on funds on
deposit in the Trust Accounts net of losses and the Subordination Agent's
reasonable expenses in making such investments.
"LATE PAYMENT RATE" has the meaning specified in the Policy
Provider Agreement.
"LIBOR" has the meaning assigned to such term in the Reference
Agency Agreement.
"LIEN" means any mortgage, pledge, lien, charge, claim,
encumbrance, lease, sublease or security interest of any kind.
"LIQUIDITY EVENT OF DEFAULT" has the meaning specified in the
Primary Liquidity Facility.
"LIQUIDITY EXPENSES" means, with respect to the Primary
Liquidity Facility, all Liquidity Obligations other than (i) the principal
amount of any Drawings under the Primary Liquidity Facility and (ii) any
interest accrued on any Liquidity Obligations.
"LIQUIDITY FACILITY" means, at any time, the Primary Liquidity
Facility or the Above-Cap Liquidity Facility, as applicable.
"LIQUIDITY OBLIGATIONS" means all principal, interest, fees
and other amounts owing to the Primary Liquidity Provider under the Primary
Liquidity Facility, Section 4.02 of the Participation Agreements or the Fee
Letter.
"LIQUIDITY PROVIDER" means, at any time, the Primary Liquidity
Provider, or the Above-Cap Liquidity Provider, as applicable.
"LIQUIDITY PROVIDER INCUMBENCY CERTIFICATE" has the meaning
specified in Section 2.05(c).
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"LIQUIDITY PROVIDER REPRESENTATIVES" has the meaning specified
in Section 2.05(c).
"LOAN TRUSTEE" means, with respect to any Indenture, the bank,
trust company or other financial institution designated as loan trustee
thereunder, and any successor to such loan trustee.
"LTV APPRAISALS" has the meaning specified in Section
4.01(a)(iv).
"LTV COLLATERAL AMOUNT" of any Aircraft for any Class of
Certificates means, as of any Distribution Date, the lesser of (i)(x) with
respect to any Aircraft other than an Aircraft referred to in the following
clause (y), the LTV Ratio for such Class of Certificates multiplied by the
Appraised Current Market Value of such Aircraft or (y) with respect to any such
Aircraft that has suffered an Event of Loss under and as defined in the relevant
Indenture, the amount of the insurance proceeds paid to the related Loan Trustee
in respect thereof to the extent then held by such Loan Trustee (and/or on
deposit in the Special Payments Account) or payable to such Loan Trustee in
respect thereof and (ii) the outstanding principal amount of the Equipment Notes
secured by such Aircraft after giving effect to any principal payments of such
Equipment Notes on or before such Distribution Date.
"LTV RATIO" means (i) for the Class G Certificates, 49.0%,
(ii) for the Class C Certificates, 65.9%, and (iii) for the Class D
Certificates, 74.1%.
"MAKE- WHOLE AMOUNT" has the meaning specified in the
Indentures.
"MANDATORY TERMINATION EVENT" has the meaning specified in
Section 3.06(c)(ii).
"MAXIMUM AVAILABLE COMMITMENT" has the meaning specified in
the Primary 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, the Policy
Provider, any Trustee or Liquidity Provider which is not the Controlling Party
at such time.
"NON-EXTENDED FACILITY" has the meaning specified in Section
3.06(d).
"NON-EXTENSION DRAWING" has the meaning specified in Section
3.06(d).
"NON-PERFORMING EQUIPMENT NOTE" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"NOTICE OF AVOIDED PAYMENT" has the meaning specified in the
Policy.
13
"NOTICE OF NONPAYMENT" has the meaning specified in the
Policy.
"OPERATIVE AGREEMENTS" means this Agreement, the Liquidity
Facilities, the Guarantee, the Statutory Trust Agreements, the Policy, the
Policy Provider Agreement, the Policy Fee Letter, the Fee Letter, the
Indentures, the Trust Agreements, the Participation Agreements, the Reference
Agency Agreement, the Equipment Notes and the Certificates, together with all
exhibits and schedules included with any of the foregoing.
"ORDER" has the meaning specified in the Policy.
"OUTSTANDING" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such Class
theretofore authenticated and delivered under the related Trust Agreement,
except:
(i) Certificates of such Class theretofore cancelled by
the Registrar (as defined in such Trust Agreement) or delivered to the
Trustee thereunder or such Registrar for cancellation;
(ii) all of the Certificates of such Class if money in the
full amount required to make the final distribution with respect to
such Class pursuant to Section 11.01 of such Trust Agreement has been
theretofore deposited with the related Trustee in trust for the
Certificateholders of such Certificates as provided in Section 4.01 of
such Trust Agreement, pending distribution of such money to such
Certificateholders pursuant to payment of such final distribution
payment; and
(iii) Certificates of such Class in exchange for or in lieu
of which other Certificates of such Class have been authenticated and
delivered pursuant to such Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Fractional Undivided Interest of such Certificates have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by Delta or any of its Affiliates shall be disregarded and
deemed not to be Outstanding. In determining whether such Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that such Trustee knows to be so
owned shall be so disregarded. Notwithstanding the foregoing, (x) if Delta and
its Affiliates own 100% of the Certificates of each Class, such Certificates
shall not be so disregarded and (y) if any amount of such Certificates owned by
Delta and its Affiliates have been pledged in good faith, such Certificates
shall not be disregarded if the pledgee establishes to the satisfaction of the
applicable Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not Delta or any of its Affiliates.
"OVERDUE SCHEDULED PAYMENT" means any Scheduled Payment which
is not in fact received by the Subordination Agent within five days after the
Scheduled Payment Date relating thereto.
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"PARTICIPATION AGREEMENT" means, with respect to each
Indenture, the "Participation Agreement" referred to therein, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"PAYEES" has the meaning specified in Section 2.03(c).
"PERFORMING EQUIPMENT NOTE" means an Equipment Note issued
pursuant to an Indenture with respect to which no payment default has occurred
and is continuing (without giving effect to any Acceleration); provided, that in
the event of a bankruptcy proceeding in which Delta is a debtor under the
Bankruptcy Code, (i) any payment default occurring before the date of the order
for relief for such proceeding shall not be taken into consideration during the
60-day period under Section 1110(a)(2)(A) of the Bankruptcy Code (or such longer
period as may apply under Section 1110(b) of the Bankruptcy Code) (the "Section
1110 Period"), (ii) any payment default occurring after the date of the order
for relief in such proceeding shall not be taken into consideration if such
payment default is cured under Section 1110(a)(2)(B) of the Bankruptcy Code
before the later of 30 days after the date of such default or the expiration of
the Section 1110 Period and (iii) any payment default occurring after the
Section 1110 Period will not be taken into consideration if such payment default
is cured before the end of the grace period, if any, set forth in the related
Indenture.
"PERFORMING NOTE DEFICIENCY" means any time that less than 65%
of the then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.
"POLICY" means the Ambac Certificate Guaranty Insurance Policy
No. AB0634BE issued as of the Closing Date by the Policy Provider, together with
the Certificate Guaranty Insurance Policy Endorsement attached thereto, in favor
of the Subordination Agent for the benefit of the Class G Certificateholders, as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"POLICY ACCOUNT" means the Eligible Deposit Account
established pursuant to Section 2.02(a)(iii) into which amounts shall be
deposited as referred to in Section 3.07.
"POLICY DRAWING" means any payment of a claim under the
Policy.
"POLICY EXPENSES" means all amounts (including amounts in
respect of expenses) owing to the Policy Provider under the Policy Provider
Agreement or the Participation Agreements other than (i) any amounts due under
the Policy Fee Letter, (ii) the amount of any Policy Drawing and any interest
accrued thereon, (iii) reimbursement of and interest on the Liquidity
Obligations paid to the Primary Liquidity Provider by the Policy Provider, (iv)
any indemnity payments owed to the Policy Provider, (v) any amounts that the
Policy Provider is entitled to receive by virtue of the subrogation rights of
the Policy Provider hereunder, including, without limitation, fees and expenses
incurred in connection with the enforcement of such rights and (vi) any Excess
Reimbursement Obligations.
15
"POLICY FEE LETTER" means the fee letter, dated as of January
30, 2003 from the Policy Provider to Delta and the Subordination Agent setting
forth the Premium and certain other amounts payable in respect of the Policy.
"POLICY PROVIDER" means Ambac Assurance Corporation, or any
successor thereto, as issuer of the Policy.
"POLICY PROVIDER AGREEMENT" means the Insurance and Indemnity
Agreement, dated as of the date of issuance of the Certificates, among the
Subordination Agent, the Class G Trustee, Delta and the Policy Provider, as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"POLICY PROVIDER DEFAULT" means the occurrence of any of the
following events: (a) the Policy Provider fails to make a payment required under
the Policy in accordance with its terms and such failure remains unremedied for
two Business Days following the delivery of Written Notice of such failure to
the Policy Provider or (b) the Policy Provider (i) files any petition or
commences any case or proceeding under any provisions of any federal or state
law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (ii) makes a general assignment for the benefit of its creditors
or (iii) has an order for relief entered against it under any federal or state
law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization that is final and nonappealable, or (c) a court of competent
jurisdiction, the Wisconsin Department of Insurance or another competent
regulatory authority enters a final and nonappealable order, judgment or decree
(i) appointing a custodian, trustee, agent or receiver for the Policy Provider
or for all or any material portion of its property or (ii) authorizing the
taking of possession by a custodian, trustee, agent or receiver of the Policy
Provider (or taking of possession of all or any material portion of the Policy
Provider's property).
"POLICY PROVIDER ELECTION" has the meaning specified in
Section 3.07(c).
"POLICY PROVIDER INCUMBENCY CERTIFICATE" has the meaning
specified in Section 2.05(d).
"POLICY PROVIDER INTEREST AMOUNTS" means (i) interest on
unreimbursed Policy Drawings to the extent not included in Policy Provider
Obligations and (ii) interest on all amounts due and unpaid to the Policy
Provider under the Policy Provider Agreement (including, without limitation,
interest on all due and unpaid premium, fees, expenses, and indemnities), in
each case, accruing at the Late Payment Rate. For the avoidance of doubt,
interest on unreimbursed Policy Drawings shall be deemed to commence accruing on
the date on which such Policy Drawing is made.
"POLICY PROVIDER OBLIGATIONS" means all reimbursement and
other amounts, including fees and indemnities, due to the Policy Provider under
the Policy Provider Agreement (including, without limitation, Policy Drawings)
to the extent not included in the definition of Policy Expenses, but shall not
include (i) any amounts due under the Policy Fee Letter or Excess Reimbursement
Obligations and (ii) any interest on Policy Drawings except, if the Primary
Liquidity Provider has failed to honor its obligation to make a payment on any
Interest Drawing in respect of the Class G Certificates, interest on the portion
of any Policy Drawing made to
16
cover the shortfall attributable to such failure by the Primary Liquidity
Provider in an amount equal to the amount of interest that would have accrued on
such Interest Drawing if such Interest Drawing had been made at the interest
rate applicable to such Interest Drawing until such Policy Drawing has been
repaid in full, up to a maximum of six such Policy Drawings under the Policy.
For the avoidance of doubt, and subject to the effect of payment priorities with
respect to Excess Reimbursement Obligations, Policy Provider Obligations include
reimbursement of and interest on the Liquidity Obligations in respect of the
Primary Liquidity Facility paid by the Policy Provider to the Primary Liquidity
Provider.
"POLICY PROVIDER REPRESENTATIVES" has the meaning specified in
Section 2.05(d).
"POOL BALANCE" means, with respect to the Certificates of any
Class, as of any date, (i) the original aggregate face amount of the
Certificates of such Class less (ii) the aggregate amount of all distributions
made as of such date in respect of such Certificates other than distributions
made as of such date in respect of interest or Additional Payment thereon or
reimbursement of any costs or expenses incurred in connection therewith. The
Pool Balance as of any Distribution Date with respect to each Class shall be
computed after giving effect to the payment of principal, if any, on the
Equipment Notes or other Trust Property held in the related Trust and the
distribution thereof to be made on such date and, with respect to the Class G
Trust, payments under the Policy for the benefit of the Class G
Certificateholders (other than in respect of the Liquidity Facilities and
interest on the Class G Certificates).
"PREFERENCE AMOUNT" has the meaning specified in the Policy.
"PREMIUM" has the meaning specified in the Policy Fee Letter.
"PRIMARY CASH COLLATERAL ACCOUNT" means an Eligible Deposit
Account in the name of the Subordination Agent maintained at an Eligible
Institution, which shall be the Subordination Agent if it so qualifies, into
which amounts shall be deposited as referred to in Section 3.06(f).
"PRIMARY LIQUIDITY FACILITY" means, initially, the Revolving
Credit Agreement, dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class G Trustee, and Landesbank Baden-Wurttemberg
and, from and after the replacement of such agreement pursuant hereto, the
Replacement Primary Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"PRIMARY LIQUIDITY PROVIDER" means Landesbank
Baden-Wurttemberg or any Replacement Primary Liquidity Provider that has issued
a Replacement Primary Liquidity Facility to replace the Primary Liquidity
Facility pursuant to Section 3.06(c) or 3.06(e).
"PROCEEDING" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PTC EVENT OF DEFAULT" means, with respect to each Trust
Agreement, the failure to distribute within 10 Business Days after the
applicable Distribution Date: (i) the outstanding Pool Balance of the applicable
Class of Certificates on the Final Legal Distribution Date for such
17
Class (unless, in the case of the Class G Certificates, the Subordination Agent
shall have made a drawing under the Policy, in an amount sufficient to pay such
outstanding Pool Balance and shall have distributed such amount to the Class G
Trustee) or (ii) interest scheduled for distribution on such Certificates on any
Distribution Date (unless, in the case of the Class G Certificates, the
Subordination Agent shall have made an Interest Drawing, or a withdrawal from
the Primary Cash Collateral Account and/or a withdrawal from the Above-Cap
Account and/or a drawing under the Policy, with respect thereto in an aggregate
amount sufficient to pay such interest and shall have distributed such amount to
the Trustee entitled thereto).
"PURCHASE AGREEMENT" means the Purchase Agreement dated
January 24, 2003 among Delta and the Initial Purchasers relating to the purchase
of the Class G Certificates by the Initial Purchasers, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.
"RATING AGENCIES" means, collectively, at any time, each of
two nationally recognized rating agencies that have been requested to rate the
Certificates and that are then rating the Certificates. The initial Rating
Agencies will be Moody's and S&P.
"RATINGS CONFIRMATION" means, with respect to any action
proposed to be taken, a written confirmation from each of the Rating Agencies
that such action (without regard to the Policy in the case of the Class G
Certificates) would not result in (i) a reduction of the rating for any Class of
Certificates below the then current rating for such Class of Certificates or
(ii) a withdrawal or suspension of the rating of any Class of Certificates.
"REFERENCE AGENCY AGREEMENT" means the Reference Agency
Agreement, dated as of the date hereof, among Delta, U.S. Bank, as the reference
agent thereunder, the Subordination Agent and the Loan Trustee.
"REGISTER", with respect to any Trust, has the meaning
ascribed to such term in the Trust Agreement for such Trust.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated January 30, 2003 among Delta, the Initial Purchasers and the
Class G Trustee.
"REGULAR DISTRIBUTION DATES" means each January 25, April 25,
July 25 and October 25, commencing on April 25, 2003; provided, however, that,
if any such day shall not be a Business Day, the related distribution shall be
made on the next succeeding Business Day.
"REPLACEMENT ABOVE-CAP LIQUIDITY FACILITY" means an
irrevocable interest rate cap agreement (or agreements) for the same term as the
Above-Cap Liquidity Facility being replaced, in substantially the form of the
Above-Cap Liquidity Facility being replaced or in such other form (which may
include a letter of credit) as shall permit the Rating Agencies to issue in
writing, and the Rating Agencies shall have issued in writing, a Ratings
Confirmation (before the downgrading of the ratings on the Certificates, if any,
as a result of any downgrading of the Above-Cap Liquidity Provider), issued by a
Person (or Person(s)) having short-term unsecured debt ratings or corporate
credit ratings, as the case may be, issued by Xxxxx'x and S&P that are equal to
or higher than the applicable Threshold Rating (which Person will be consented
to by the Policy Provider, which consent shall not be unreasonably withheld or
denied).
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"REPLACEMENT ABOVE-CAP LIQUIDITY PROVIDER" means a Person (or
Persons) who issues a Replacement Above-Cap Liquidity Facility.
"REPLACEMENT PRIMARY LIQUIDITY FACILITY" means, an irrevocable
revolving credit agreement (or agreements) in substantially the form of the
Primary Liquidity Facility being replaced, including reinstatement provisions,
or in such other form (which may include a letter of credit, surety bond,
financial insurance policy or guaranty) as shall permit the Rating Agencies to
confirm in writing their respective ratings then in effect for the Class G
Certificates (before downgrading of such ratings, if any, as a result of the
downgrading, if any, of the Primary Liquidity Provider and without regard to the
Policy), and, to be consented to by the Policy Provider, which consent shall not
be unreasonably withheld or delayed, in a face amount (or in an aggregate face
amount) equal to the Required Amount and issued by a Person (or Persons) having
short-term ratings issued by both Rating Agencies that are equal to or higher
than the Threshold Rating specified in clause (a) of the definition of
"Threshold Rating" or if such Person (or Persons) does not have a short-term
rating from a given Rating Agency, a long-term rating issued by such Rating
Agency that is equal to or higher than the "Threshold Rating" specified in
clause (b) of the definition of Threshold Rating. Without limitation of the form
that a Replacement Primary Liquidity Facility otherwise may have pursuant to the
preceding sentence, a Replacement Primary Liquidity Facility may have a stated
expiration date earlier than 15 days after the Final Legal Distribution Date so
long as the Replacement Primary Liquidity Facility provides for a Non-Extension
Drawing as contemplated by Section 3.06(d) hereof.
"REPLACEMENT PRIMARY LIQUIDITY PROVIDER" means a Person who
issues a Replacement Primary Liquidity Facility.
"REQUIRED AMOUNT" means, with respect to the Primary Liquidity
Facility, or the Primary Cash Collateral Account, for any day, the sum of the
aggregate amount of interest, calculated on the basis of a year of 360 days and
actual number of days elapsed during the relevant period at the rate per annum
equal to the Capped Interest Rate, that would be distributable on the Class G
Certificates on each of the six successive Regular Distribution Dates
immediately following such date or, if such date 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 the Class G Certificates on such
date and without regard to expected future distributions of principal on the
Class G Certificates. The Pool Balance for purposes of the definition of
Required Amount shall, in the event of any Policy Provider Election, be deemed
to be reduced by an amount (if positive) by which (a) the outstanding principal
balance of the Series G Equipment Note, in respect of which such Policy Provider
Election has been made shall exceed (b) the amount of any Policy Drawings
previously paid by the Policy Provider in respect of principal on such Series G
Equipment Note.
"RESPONSIBLE OFFICER" means (i) with respect to the
Subordination Agent and each of the Trustees, any officer in the Corporate Trust
Department or similar department of the Subordination Agent or such Trustee, as
the case may be, or any other officer customarily performing functions similar
to those performed by the persons who at the time shall be such officers or to
whom any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject, (ii) with respect to each Liquidity
Provider, any authorized
19
officer of such Liquidity Provider and (iii) with respect to the Policy
Provider, any of its authorized officers.
"SCHEDULED PAYMENT" means, with respect to any Equipment Note,
(i) any payment of principal or interest on such Equipment Note (other than an
Overdue Scheduled Payment) or (ii) in the case of any Series G Equipment Note,
any distribution in respect of interest on such Series G Equipment Note to the
Class G Certificateholders with funds drawn under the Primary Liquidity Facility
or withdrawn from the Primary Cash Collateral Account or the Above-Cap Account
or drawn under the Policy, which payment in the case of clause (i) or clause
(ii) represents the installment of principal at the stated maturity of such
installment, the payment of regularly scheduled interest accrued on the unpaid
principal amount of such Equipment Note, or both; provided that any payment of
principal or Additional Payment, if any, or interest resulting from the
redemption or purchase of any Equipment Note shall not constitute a Scheduled
Payment.
"SCHEDULED PAYMENT DATE" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be made.
"SECTION 2.04(B) FRACTION" has the meaning specified in
Section 2.04(b).
"SERIES C EQUIPMENT NOTES" means the Series C Equipment Notes
issued pursuant to each Indenture by Delta and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"SERIES D EQUIPMENT NOTES" means the Series D Equipment Notes
issued pursuant to each Indenture by Delta and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"SERIES G EQUIPMENT NOTES" means the Series G Equipment Notes
issued pursuant to each Indenture by Delta and authenticated by the Loan Trustee
thereunder, and any such Equipment Notes issued in exchange therefor or
replacement thereof pursuant to the terms of such Indenture.
"SPECIAL DISTRIBUTION DATE" means, (i) with respect to any
Special Payment, the Business Day chosen by the Subordination Agent pursuant to
Section 2.04(a) or 3.07(b) for the distribution of such Special Payment in
accordance with this Agreement, (ii) an Election Distribution Date or (iii) each
other date designated in Section 3.07(c) or 3.07(e) as a Special Distribution
Date.
"SPECIAL PAYMENT" means any payment (other than a Scheduled
Payment or a distribution referred to in Section 2.03(c)) in respect of, or any
proceeds of, any Equipment Note or Collateral (as defined in each Indenture).
"SPECIAL PAYMENTS ACCOUNT" means the Eligible Deposit Account
created pursuant to Section 2.02(a) as a sub-account to the Collection Account.
20
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc.
" "STATED AMOUNT" at any time, means the Maximum Commitment
(as defined in the Primary Liquidity Facility) at such time.
"STATED EXPIRATION DATE" has the meaning specified in Section
3.06(d).
"STATED INTEREST RATE" for any Interest Period means (i) with
respect to the Class G Certificates, LIBOR for such Interest Period plus 0.75%
per annum, (ii) with respect to the Class C Certificates, LIBOR for such
Interest Period plus 2.00% per annum, and (iii) with respect to the Class D
Certificates, LIBOR for such Interest Period plus 2.50% per annum, plus, in the
case of the Class G Certificates, an additional margin of 0.25% for any period
required by the Registration Rights Agreement .
"STATUTORY TRUST AGREEMENT" means the Class C Statutory Trust
Agreement or the Class D Statutory Trust Agreement.
"SUBORDINATION AGENT" has the meaning specified in the
introductory paragraph to this Agreement.
"SUBORDINATION AGENT INCUMBENCY CERTIFICATE" has the meaning
specified in Section 2.05(a).
"SUBORDINATION AGENT REPRESENTATIVES" has the meaning
specified in Section 2.05(a).
"TAX" and "TAXES" means all governmental fees (including,
without limitation, license, filing and registration fees) and all taxes
(including, without limitation, franchise, excise, stamp, value added, income,
gross receipts, sales, use and property taxes), withholdings, assessments,
levies, imposts, duties or charges, of any nature whatsoever, together with any
related penalties, fines, additions to tax or interest thereon imposed,
withheld, levied or assessed by any country, taxing authority or governmental
subdivision thereof or therein or by any international authority, including any
taxes imposed on any Person as a result of such Person being required to collect
and pay over withholding taxes.
"TERMINATION AMOUNT" has the meaning assigned to such term in
the Above-Cap Liquidity Facility.
"TERMINATION NOTICE" has the meaning specified in the Primary
Liquidity Facility.
"THRESHOLD RATING" means (a) a short-term unsecured debt
rating of P-1 in the case of Xxxxx'x and a short-term issuer credit rating of
A-1 in the case of S&P and (b) in the case of any Person who does not have such
short-term rating from either or both of such Rating Agencies, then in lieu of
such short-term rating from such Rating Agency or Rating Agencies, a long-term
unsecured debt rating of A1 in the case of Xxxxx'x and a long-term issuer credit
rating of A+ in the case of S&P.
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"TREASURY REGULATIONS" means regulations, including proposed
or temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRIGGERING EVENT" means (x) the occurrence of an Indenture
Event of Default under all of the Indentures resulting in a PTC Event of Default
with respect to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment Notes or (z) the occurrence of
a Delta Bankruptcy Event.
"TRUST" means any of the Class G Trust, the Class C Trust or
the Class D Trust.
"TRUST ACCOUNTS" has the meaning specified in Section 2.02(a).
"TRUST AGREEMENT" means any of the Class G Trust Agreement,
the Class C Trust Agreement or the Class D Trust Agreement.
"TRUST PROPERTY", with respect to any Trust, has the meaning
specified in the Trust Agreement for such Trust.
"TRUST SUPPLEMENT" means an agreement supplemental to the
Basic Agreement pursuant to which (i) a separate trust is created for the
benefit of the holders of Certificates of a series, (ii) the issuance of the
Certificates of a series representing fractional undivided interests in such
trust is authorized and (iii) the terms of the Certificates of such series are
established, as such agreement may from time to time be supplemented, amended or
otherwise modified.
"TRUSTEE" means any of the Class G Trustee, the Class C
Trustee or the Class D Trustee.
"TRUSTEE INCUMBENCY CERTIFICATE" has the meaning specified in
Section 2.05(b).
"TRUSTEE REPRESENTATIVES" has the meaning specified in Section
2.05(b).
"UNITED STATES" means the United States of America.
"U.S. BANK" has the meaning specified in the introductory
paragraph of this Agreement.
"WITHDRAWAL NOTICE" has the meaning specified in Section
3.06(d).
"WRITTEN NOTICE" means, from the Subordination Agent, any
Trustee, any Liquidity Provider or the Policy Provider, a written instrument
executed by the Designated Representative of such Person. An invoice delivered
by the Primary Liquidity Provider pursuant to Section 3.01 in accordance with
its normal invoicing procedures shall constitute Written Notice under such
Section.
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ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
Section 2.01. Agreement to Terms of Subordination; Payments
from Monies Received Only. (a) Each Trustee hereby (i) acknowledges and agrees
to the terms of subordination and distribution set forth in this Agreement in
respect of each Class of Certificates, (ii) agrees to enforce such provisions
and cause all payments in respect of the Equipment Notes, the Liquidity
Facilities and the Policy to be applied in accordance with the terms of this
Agreement and (iii) with respect to payments in respect of the Equipment Notes
received by it, agrees to allocate such payments first, to interest payable in
respect of the Certificates of the related Class, second, to Additional Payment,
if any, payable in respect of the Certificates of the related Class, and third,
to principal payable in respect of the Certificates of the related Class. In
addition, each Trustee hereby agrees to cause the Equipment Notes purchased by
the related Trust to be registered in the name of the Subordination Agent or its
nominee, as agent and trustee for such Trustee, to be held in trust by the
Subordination Agent solely for the purpose of facilitating the enforcement of
the subordination and other provisions of this Agreement.
(b) Except as otherwise expressly provided in the next
succeeding sentence of this Section 2.01(b), all payments to be made by the
Subordination Agent hereunder shall be made only from amounts received by it
that constitute Scheduled Payments, Special Payments or other payments under the
Operative Agreements, including payments under Section 4.02 of the Participation
Agreements and Section 2.14 of the Indentures, and only to the extent that the
Subordination Agent shall have received sufficient income or proceeds therefrom
to enable it to make such payments in accordance with the terms hereof. Each of
the Trustees and the Subordination Agent hereby agrees and each
Certificateholder, by its acceptance of a Certificate, the Primary Liquidity
Provider, by entering into the Primary Liquidity Facility, and the Policy
Provider, by entering into the Policy Provider Agreement, has agreed to look
solely to such amounts to the extent available for distribution to it as
provided in this Agreement or the applicable Trust Agreement, as the case may
be, and that none of the Trustees, Loan Trustees or the Subordination Agent is
personally liable to any of them for any amounts payable or any liability under
this Agreement, any Trust Agreement, the Primary Liquidity Facility, the Policy
Provider Agreement or such Certificate, except (in the case of the Subordination
Agent) as expressly provided herein or (in the case of the Trustees) as
expressly provided herein and in each Trust Agreement or (in the case of the
Loan Trustees) as expressly provided in any Operative Agreement.
Notwithstanding anything to the contrary in this Agreement and
in the other Operative Agreements, the Certificates do not represent
indebtedness of the related Trust, and references in this Agreement and the
Operative Agreements to accrued interest or principal amounts payable on the
Certificates of any Class are included only for computational purposes. For
purposes of such computations, the Certificates of any Class shall be deemed to
be comprised of interest and principal components, with the principal component
deemed to be the Pool Balance, and the interest component deemed to equal
interest accruing at the Stated Interest Rate for such Class of Certificates
from (i) the later of (1) the date of the issuance thereof and (2) the most
recent but preceding Distribution Date to which such interest was distributed to
(ii) the
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applicable date of determination, such interest to be considered payable in
arrears and to be calculated on the basis of the actual number of days elapsed
over a 360-day year.
Section 2.02. Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name (i)
the Collection Account as an Eligible Deposit Account, bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustees, the Certificateholders, the Primary Liquidity Provider
and the Policy Provider, (ii) as a sub-account in the Collection Account, the
Special Payments Account as an Eligible Deposit Account, bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustees, the Certificateholders, the Primary Liquidity Provider
and the Policy Provider, (iii) a Policy Account as an Eligible Deposit Account
bearing a designation clearly indicating that the funds deposited therein are
held in trust for the benefit of the Class G Certificateholders and (iv) an
Above-Cap Account bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Class G Trustee and
the Class G Certificateholders. The Subordination Agent shall establish and
maintain the Cash Collateral Accounts pursuant to and under the circumstances
set forth in Section 3.06(f). Each Cash Collateral Account shall bear a
designation clearly indicating that the funds deposited herein are held in trust
for the benefit of the Class G Trustee and the Class G Certificateholders. Upon
such establishment and maintenance under Section 3.06(f), the Collection
Account, the Cash Collateral Accounts, the Policy Account and the Above-Cap
Account shall constitute the "Trust Accounts" hereunder. Without limiting the
foregoing, all monies credited to the Trust Accounts shall be, and shall remain,
the property of the relevant Trust(s).
(b) Funds on deposit in the Trust Accounts shall be
invested and reinvested by the Subordination Agent in Eligible Investments
selected by Delta or its designated representative if such investments are
reasonably available and have maturities no later than the earlier of (i) 90
days following the date of such investment and (ii) the Business Day immediately
preceding the Regular Distribution Date or the date of the related distribution
pursuant to Section 2.04, as the case may be, next following the date of such
investment (provided that the Subordination Agent shall invest and reinvest
funds on deposit in the Above-Cap Account and Above-Cap Reserve Account in the
manner specified in Schedule 2.02(b) attached hereto, subject to the foregoing
limitation on the maturity of such investment); provided, however, that,
following the making of a Downgrade Drawing or a Non-Extension Drawing under the
Primary Liquidity Facility, the Subordination Agent shall invest and reinvest
the amounts in the Primary Cash Collateral Account in Eligible Investments
pursuant to the written instructions of the Primary Liquidity Provider, and
provided further, however, that upon the occurrence and during the continuation
of a Triggering Event, the Subordination Agent shall invest and reinvest such
amounts (other than amounts in the Cash Collateral Accounts as a result of a
Downgrade Drawing or a Non-Extension Drawing, which shall be governed by the
foregoing proviso) in Eligible Investments in accordance with the written
instructions of the Controlling Party. Unless otherwise expressly provided in
this Agreement (including, without limitation, with respect to Investment
Earnings on amounts on deposit in the Above-Cap Reserve Account and in the
Above-Cap Account, in each case, pursuant to Section 3.06(f)), any Investment
Earnings shall be deposited in the Collection Account when received by the
Subordination Agent and shall be applied by the Subordination Agent in the same
manner as the other amounts on deposit in the Collection Account are to be
applied. The Subordination Agent's reasonable fees and expenses actually
24
incurred in making such investments and any losses incurred in such investments
shall be charged against the principal amount invested. The Subordination Agent
shall not be liable for any loss resulting from any investment, reinvestment or
liquidation required to be made under this Agreement other than by reason of its
willful misconduct or negligence. Eligible Investments and any other investment
required to be made hereunder shall be held to their maturities except that any
such investment may be sold (without regard to its maturity) by the
Subordination Agent without instructions whenever such sale is necessary to make
a distribution required under this Agreement. Uninvested funds held hereunder
shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right,
title and interest in all funds on deposit from time to time in the Trust
Accounts and in all proceeds thereof (including all income thereon, except as
otherwise expressly provided herein with respect to Investment Earnings). The
Trust Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the Trustees,
the Certificateholders, the Liquidity Providers and the Policy Provider, as the
case may be. If, at any time, any of the Trust Accounts ceases to be an Eligible
Deposit Account, the Subordination Agent shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, to which the Policy Provider, the
Liquidity Providers and each Rating Agency may consent) establish a new
Collection Account, Special Payments Account, Policy Account, Cash Collateral
Account or Above-Cap Account, as the case may be, as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new Collection
Account, Special Payments Account, Policy Account, Cash Collateral Account or
Above-Cap Account, as the case may be. So long as the Subordination Agent is an
Eligible Institution, the Trust Accounts shall be maintained with it as Eligible
Deposit Accounts.
Section 2.03. Deposits to the Collection Account and Special
Payments Account; Certain Distributions. (a) The Subordination Agent shall, on
each day when one or more Scheduled Payments are made to the Subordination Agent
as holder of the Equipment Notes (other than any Scheduled Payment which by the
express terms hereof is to be deposited to the Policy Account or a Cash
Collateral Account), deposit in the Collection Account the aggregate amount of
such Scheduled Payments.
(b) The Subordination Agent shall, on each day when one
or more Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate amount of
such Special Payments.
(c) In the event that a Loan Trustee distributes to the
Subordination Agent pursuant to Section 3.04 or clause "first" of Section 3.03
of any Indenture any amounts payable under clauses (b), (c), (d) or (e) of
Section 2.14 of any Indenture, the Subordination Agent shall promptly deposit
such amounts in the Collection Account. Notwithstanding anything to the contrary
herein, the Subordination Agent will distribute promptly upon receipt thereof
(or in the case of any such payment, compensation or reimbursement in respect of
the Subordination Agent, will retain) (i) any indemnity payment received by it
from Delta in respect of any Trustee, the Subordination Agent, any Liquidity
Provider or the Policy Provider (collectively, the "PAYEES") and (ii) any
compensation or reimbursement received by it from Delta or the Loan Trustee
under any Operative Agreement in respect of any Payee (including, without
limitation,
25
any fees payable to the Primary Liquidity Provider under Section 2.03 of the
Primary Liquidity Facility, any premium payable to the Policy Provider under the
Policy Provider Agreement or other amounts referred to in clauses (a), (c), (d)
or (e) of Section 2.14 of any Indenture), in any such case directly to the Payee
entitled thereto, provided that if such Payee has previously received from the
Collection Account such payment, compensation or reimbursement, then the
Subordination Agent shall deposit such amount in the Collection Account.
Section 2.04. Distributions of Special Payments. (a) Notice of
Special Payment. Upon receipt by the Subordination Agent, as registered holder
of the Equipment Notes, of any notice of a Special Payment (or, in the absence
of any such notice, upon receipt by the Subordination Agent of a Special
Payment), the Subordination Agent shall promptly give notice thereof to each
Trustee, the Primary Liquidity Provider and the Policy Provider. The
Subordination Agent shall promptly calculate the amount of the prepayment
(including upon Acceleration), redemption or purchase of Equipment Notes or the
amount of any Overdue Scheduled Payment or the proceeds of any Collateral, as
the case may be, comprising such Special Payment under the applicable Indenture
or Indentures and shall promptly send to each Trustee, the Primary Liquidity
Provider and the Policy Provider a Written Notice of such amount and the amount
allocable to each Trust. Such Written Notice shall also set the distribution
date for such Special Payment, which shall be the first Business Day that
follows the later to occur of (x) the 15th day after the date of such Written
Notice or (y) the date the Subordination Agent has received or expects to
receive such Special Payment. Amounts on deposit in the Special Payments Account
shall be distributed in accordance with Sections 2.04(b) and 2.04(c) hereof, as
applicable.
(b) Redemptions, Purchases and Prepayments of Equipment
Notes. (i) So long as no Triggering Event shall have occurred (whether or not
continuing), the Subordination Agent shall make distributions pursuant to this
Section 2.04(b) of amounts on deposit in the Special Payments Account on account
of the redemption, purchase (including, without limitation, a purchase resulting
from a sale of the Equipment Notes permitted by Article IV) or prepayment
(including upon Acceleration) of all of the Equipment Notes issued pursuant to
an Indenture on the Special Distribution Date for such Special Payment in the
following order of priority:
(i) first, such amount as shall be required to pay (A)
all accrued and unpaid Liquidity Expenses and Policy Expenses then in
arrears plus (B) the product of (x) the aggregate amount of all accrued
and unpaid Liquidity Expenses and Policy Expenses not in arrears to
such Special Distribution Date multiplied by (y) a fraction, the
numerator of which is the aggregate outstanding principal amount of
Equipment Notes being redeemed, purchased or prepaid on such Special
Distribution Date and the denominator of which is the aggregate
outstanding principal amount of all Equipment Notes (the "SECTION
2.04(B) FRACTION"), shall be distributed to the Primary Liquidity
Provider and the Policy Provider first in satisfaction of any amounts
in arrears and then in satisfaction of any amounts not in arrears, pro
rata on the basis of the amount of Liquidity Expenses and Policy
Expenses owed to the Primary Liquidity Provider and the Policy
Provider, respectively;
(ii) second, such amount as shall be required to pay (i)
(A) all accrued and unpaid interest (including interest accrued and
unpaid on any Interest Drawing or any
26
Applied Provider Advance (as defined in the Primary Liquidity
Facility)) then in arrears on all Liquidity Obligations (determined
after giving effect to payments, if any, made by the Policy Provider to
the Primary Liquidity Provider, in respect of interest on drawings
under the Primary Liquidity Facility) plus (B) 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
Primary Liquidity Facility) (determined after giving effect to
payments, if any, made by the Policy Provider to the Primary Liquidity
Provider, in respect of interest on drawings under the Primary
Liquidity Facility), (ii) if the Primary Liquidity Provider has
defaulted in its obligation to make any Interest Drawing, (A) the
aggregate amount of interest accrued on the portion of any Policy
Drawing made to cover the shortfall attributable to such default by the
Primary Liquidity Provider at the rate provided in the "except" clause
of clause (ii) of the definition of "Policy Provider Obligations" which
is then in arrears plus (B) the aggregate amount of all accrued and
unpaid interest on such Policy Drawings not in arrears to such Special
Distribution Date, and (iii) if the Policy Provider has elected to pay
to the Primary Liquidity Provider all outstanding drawings and interest
owing to the Primary Liquidity Provider under the Primary Liquidity
Facility pursuant to Section 2.06(c) hereof, the amount of such payment
made to the Primary Liquidity Provider attributable to such interest
accrued on such drawings, shall be distributed to the Primary Liquidity
Provider and the Policy Provider, pro rata on the basis of the amount
of such Liquidity Obligations owed to the Primary Liquidity Provider
and the amount of such unreimbursed Policy Provider Obligations payable
to the Policy Provider under this clause "second";
(iii) third, such amount as shall be required (A) if the
Primary Cash Collateral Account has been previously funded as provided
in Section 3.06(f), to fund the Primary Cash Collateral Account up to
the Required Amount shall be deposited in the Primary Cash Collateral
Account, (B) if the Primary Liquidity Facility shall have become a
Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under the Primary Liquidity Facility
have reduced the Maximum Available Commitment thereunder to zero, to
deposit into the Primary Cash Collateral Account an amount equal to the
Required Amount shall be deposited in the Primary Cash Collateral
Account, (C) if, neither subclause (A) nor subclause (B) of this clause
"third" is applicable, to pay or reimburse the Primary Liquidity
Provider in an amount equal to the amount of any unreimbursed Interest
Drawings shall be distributed to the Primary Liquidity Provider (other
than amounts payable pursuant to clause "first" or "second" of this
Section 2.04(b) and as determined after giving effect to payments made
by the Policy Provider to the Primary Liquidity Provider in respect of
principal of drawings under the Primary Liquidity Facility), pro rata
with any amount distributable pursuant to subclause (D) of this clause
"third" on the basis of the amount of all such unreimbursed Interest
Drawings and unreimbursed Policy Provider Obligations payable to the
Policy Provider under subclause (D) of this clause "third" and (D) if
the Policy Provider has elected to pay to the Primary Liquidity
Provider all outstanding drawings and interest owing to the Primary
Liquidity Provider under the Primary Liquidity Facility pursuant to
Section 2.06(c) hereof, to reimburse the Policy Provider for the
principal amount of such payment made to the Primary Liquidity
Provider, shall be distributed to the Policy Provider, but only after
giving effect to the application of amounts, if any, under subclause
(A) or (B) of this clause "third", and if any amount shall be
distributable under subclause (C) of this
27
clause "third", pro rata with any amount distributable pursuant to such
subclause (C) on the basis of the amounts of all such unreimbursed
Interest Drawings and the amount of such unreimbursed Policy Provider
Obligations payable to the Policy Provider under this clause "third";
(iv) fourth, if, with respect to the Primary Liquidity
Facility, any amounts are to be distributed pursuant to either
subclause (A) or (B) of clause "third" above, then the Primary
Liquidity Provider shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under the Primary Liquidity Facility over (y) the Required Amount;
(v) fifth, if the Above-Cap Reserve Account had been
previously funded as provided in Section 3.06(f), such amount as shall
be required to fund the Above-Cap Reserve Account up to an amount equal
to the Termination Amount (as recalculated on such Distribution Date)
less any amount then on deposit in the Above-Cap Account shall be
deposited in the Above-Cap Reserve Account;
(vi) sixth, if any Class G Certificates are Outstanding on
such Special Distribution Date, such amount as shall be required to pay
in full Expected Distributions to the holders of Class G Certificates
on such Special Distribution Date shall be distributed to the Class G
Trustee;
(vii) seventh, such amount as shall be required to pay all
Policy Provider Obligations then due (other than amounts payable
pursuant to the preceding clauses of this Section 2.04(b) and other
than any Policy Provider Interest Amounts) to the Policy Provider;
(viii) eighth, such amount as shall be required to pay (x)
Excess Reimbursement Obligations and Policy Provider Interest Amounts
to the Policy Provider and (y) the product of any amounts due under the
Policy Fee Letter multiplied by the Section 2.04(b) Fraction;
(ix) ninth, if any Class C Certificates are Outstanding on
such Special Distribution Date, such amount as shall be required to pay
in full Expected Distributions to the holders of Class C Certificates
on such Special Distribution Date shall be distributed to the Class C
Trustee, provided that once all of the beneficial interest in the
Initial Class C Holder has been transferred to an entity other than
Delta or any of its Affiliates, the Expected Distributions on the Class
C Certificates shall be distributed prior to the payment of Excess
Reimbursement Obligations, Policy Provider Interest Amounts and amounts
due under the Policy Fee Letter to the Policy Provider as provided in
the preceding clause "eighth";
(x) tenth, if any Class D Certificates are Outstanding on
such Special Distribution Date, such amount as shall be required to pay
in full Expected Distributions to holders of Class D Certificates on
such Special Distribution Date shall be distributed to the Class D
Trustee;
28
(xi) eleventh, such amount as shall be required, if the
Above-Cap Reserve Account had been previously funded as provided in
Section 3.06(f), to fund the Above-Cap Reserve Account up to an amount
equal to the Termination Amount (as recalculated on such Distribution
Date) shall be deposited in the Above-Cap Reserve Account; and
(xii) twelfth, the balance, if any, of such Special Payment
shall be deposited in the Collection Account.
For the purposes of this Section 2.04(b), clause (x) of the
definition of "Expected Distributions" shall be deemed to read as follows: "(x)
accrued, due and unpaid interest in respect of such Certificates together with
(without duplication) accrued and unpaid interest in respect of a portion of the
outstanding Pool Balance of such Certificates equal to the outstanding principal
amount of Equipment Notes being redeemed, purchased or prepaid (immediately
prior to such redemption, purchase or prepayment)".
(ii) Upon the occurrence of a Triggering Event (whether or
not continuing), the Subordination Agent shall make distributions
pursuant to this Section 2.04(b) of amounts on deposit in the Special
Payments Account on account of the redemption, purchase or prepayment
of the Equipment Notes issued pursuant to an Indenture on the Special
Distribution Date for such Special Payment in accordance with Section
3.03.
(c) Other Special Payments. Any amounts on deposit in the
Special Payments Account other than in respect of amounts to be distributed
pursuant to Section 2.04(b) shall be distributed on the Special Distribution
Date therefor in accordance with Article III.
(d) Investment of Amounts in Special Payments Account.
Any amounts on deposit in the Special Payments Account prior to the distribution
thereof pursuant to Section 2.04(b) or 2.04(c) shall be invested in accordance
with Section 2.02(b). Investment Earnings on such investments shall be
distributed in accordance with Section 2.04(b) or 2.04(c), as the case may be.
Section 2.05. Designated Representatives. (a) With the
delivery of this Agreement, the Subordination Agent shall furnish to each
Liquidity Provider, the Policy Provider and each Trustee, and from time to time
thereafter may furnish to each Liquidity Provider, the Policy Provider and each
Trustee, at the Subordination Agent's discretion, or upon any Liquidity
Provider's, the Policy Provider's or Trustee's request (which request shall not
be made more than one time in any 12-month period), a certificate (a
"SUBORDINATION AGENT INCUMBENCY CERTIFICATE") of a Responsible Officer of the
Subordination Agent certifying as to the incumbency and specimen signatures of
the officers of the Subordination Agent and the attorney-in-fact and agents of
the Subordination Agent (the "SUBORDINATION AGENT REPRESENTATIVES") authorized
to give Written Notices on behalf of the Subordination Agent hereunder. Until
each Liquidity Provider, the Policy Provider and each Trustee receives a
subsequent Subordination Agent Incumbency Certificate, it shall be entitled to
rely on the last Subordination Agent Incumbency Certificate delivered to it
hereunder.
(b) With the delivery of this Agreement, each Trustee
shall furnish to the Subordination Agent, and from time to time thereafter may
furnish to the Subordination Agent,
29
at such Trustee's discretion, or upon the Subordination Agent's request (which
request shall not be made more than one time in any 12-month period), a
certificate (with respect to each such Trustee, a "TRUSTEE INCUMBENCY
CERTIFICATE") of a Responsible Officer of such Trustee certifying as to the
incumbency and specimen signatures of the officers of such Trustee and the
attorney-in-fact and agents of such Trustee (with respect to each such Trustee,
the "TRUSTEE REPRESENTATIVES") authorized to give Written Notices on behalf of
such Trustee hereunder. Until the Subordination Agent receives a subsequent
Trustee Incumbency Certificate from a Trustee, it shall be entitled to rely on
the last Trustee Incumbency Certificate with respect to such Trustee delivered
to it hereunder.
(c) With the delivery of this Agreement, each Liquidity
Provider shall furnish to the Subordination Agent, and from time to time
thereafter may furnish to the Subordination Agent, at such Liquidity Provider's
discretion, or upon the Subordination Agent's request (which request shall not
be made more than one time in any 12-month period), a certificate (with respect
to each such Liquidity Provider, a "LIQUIDITY PROVIDER INCUMBENCY CERTIFICATE")
of a Responsible Officer of such Liquidity Provider certifying as to the
incumbency and specimen signatures of the officers of such Liquidity Provider
and the attorney-in-fact and agents of such Liquidity Provider (with respect to
each such Liquidity Provider, the "LIQUIDITY PROVIDER REPRESENTATIVES")
authorized to give Written Notices on behalf of such Liquidity Provider
hereunder. Until the Subordination Agent receives a subsequent Liquidity
Provider Incumbency Certificate, it shall be entitled to rely on the last
Liquidity Provider Incumbency Certificate delivered to it hereunder.
(d) With the delivery of this Agreement, the Policy
Provider shall furnish to the Subordination Agent, and from time to time
thereafter may furnish to the Subordination Agent, at the Policy Provider's
discretion, or upon the Subordination Agent's request (which request shall not
be made more than one time in any 12-month period), a certificate (a "POLICY
PROVIDER INCUMBENCY CERTIFICATE") of a Responsible Officer of the Policy
Provider certifying as to the incumbency and specimen signatures of the officers
of the Policy Provider and the attorney-in-fact and agents of the Policy
Provider (the "POLICY PROVIDER REPRESENTATIVES") authorized to give Written
Notices on behalf of the Policy Provider hereunder. Until the Subordination
Agent receives a subsequent Policy Provider Incumbency Certificate, it shall be
entitled to rely on the last Policy Provider Incumbency Certificate delivered to
it hereunder.
Section 2.06. Controlling Party. (a) The Trustees, the
Liquidity Providers and the Policy Provider hereby agree that, subject to
Section 8.01(b), with respect to any Indenture at any given time, the Loan
Trustee thereunder will be directed in taking, or refraining from taking, any
action under such Indenture or with respect to the Equipment Notes issued
thereunder, including exercising remedies thereunder (including Accelerating the
Equipment Notes issued thereunder or foreclosing the Lien created thereunder on
the Aircraft securing such Equipment Notes), by the Subordination Agent as
directed by the Controlling Party.
(b) Subject to subparagraph (c) below, if Final
Distributions have not been fully paid to the holders of Class G Certificates or
if any obligations payable to the Policy Provider hereunder remain outstanding,
so long as no Policy Provider Default has occurred and is continuing, the Policy
Provider shall be the Controlling Party. At any other time the Controlling Party
shall be : (i) if Final Distributions have not been fully paid to the holders of
Class G
30
Certificates, the Class G Trustee; (ii) if Final Distributions have been fully
paid to the holders of Class G Certificates, but not to the holders of the Class
C Certificates, the Class C Trustee; and (iii) if Final Distributions have been
fully paid to the holders of Class G Certificates and Class C Certificates, the
Class D Trustee. For purposes of giving effect to the foregoing, the Trustees
(other than the Controlling Party) irrevocably agree (and the Certificateholders
(other than the Certificateholders represented by the Controlling Party) shall
be deemed to agree by virtue of their purchase of Certificates) that the
Subordination Agent, as record holder of the Equipment Notes, shall exercise its
voting rights in respect of the Equipment Notes as directed by the Controlling
Party and any vote so exercised shall be binding upon the Trustees and all
Certificateholders.
The Subordination Agent shall give written notice to all of
the other parties to this Agreement promptly upon a change in the identity of
the Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, at any time after 18
months from the earliest to occur of (i) the date on which the entire Maximum
Available Commitment under the Primary 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 the Primary 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 the Primary Liquidity
Facility or, if earlier, the date on which the entire amount of any Downgrade
Drawing or Non-Extension Drawing is converted into a Final Drawing and which in
each case, remains unreimbursed and (iii) the date on which all Equipment Notes
under all Indentures shall have been Accelerated (provided that in the event of
a bankruptcy proceeding under the Bankruptcy Code in which Delta is a debtor,
any amounts payable in respect of Equipment Notes which have become immediately
due and payable by declaration or otherwise shall not be considered Accelerated
for purposes of this subclause (iii) until the expiration of the 60-day period
under Section 1110(a)(2)(A) of the Bankruptcy Code or such longer period as may
apply under Section 1110(a)(2)(B) or Section 1110(b) of the Bankruptcy Code),
the Primary Liquidity Provider shall have the right to elect, by Written Notice
to the Subordination Agent, the Policy Provider and each of the Trustees, to
become the Controlling Party hereunder with respect to any Indenture at any time
from and including the last day of such 18-month period, provided that if,
within 15 Business Days after its receipt of any such Written Notice from the
Primary Liquidity Provider (which notice may be given on or after the fifteenth
Business Day prior to the end of such 18-month period) the Policy Provider pays
to the Primary Liquidity Provider all outstanding drawings owing to the Primary
Liquidity Provider in respect of the Primary Liquidity Facility, and interest
accrued thereon to such date, the Policy Provider shall remain the Controlling
Party so long as (x) no Policy Provider Default has occurred and is continuing
and (y) the Policy Provider thereafter pays to the Primary Liquidity Provider
all subsequent Drawings, together with accrued interest thereon, under the
Primary Liquidity Facility as and when such obligations become due (which
payments shall be applied by the Primary Liquidity Provider as repayments of
such Drawings and accrued interest thereon), provided, further, however, that
upon any such
31
Policy Provider Default or the failure to comply with clause (y) of this Section
2.06(c), the Primary Liquidity Provider, if it so elects and if Liquidity
Obligations owing to it remain outstanding, or if it does not so elect or if no
Liquidity Obligations owing to it remain outstanding, the Person determined to
be the Controlling Party in accordance with Section 2.06(b), shall become the
Controlling Party.
(d) The exercise of remedies by the Controlling Party
under this Agreement shall be expressly limited by Section 4.01(a)(ii) and
8.01(b).
(e) The Controlling Party shall not be entitled to
require or obligate any Non-Controlling Party to provide funds necessary to
exercise any right or remedy hereunder.
(f) Notwithstanding anything contained herein, neither
the Controlling Party nor the Subordination Agent shall be authorized or
empowered to do anything that would cause any Trust to fail to qualify as a
"grantor trust" for federal income tax purposes.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
Section 3.01. Written Notice of Distribution. (a) Prior to the
occurrence of a Triggering Event, no later than 3:00 p.m. (New York City time)
on the Business Day immediately preceding each Regular Distribution Date (or
Special Distribution Date for purposes of Section 2.04(b), as the case may be),
each of the following Persons shall deliver to the Subordination Agent a Written
Notice setting forth the following information as at the close of business on
such Business Day:
(i) With respect to the Class G Certificates, if any are
then Outstanding, the Class G Trustee shall separately set forth the
amounts to be paid in accordance with clause "sixth" of Section 3.02 or
2.04(b), as the case may be (without giving effect to the pro rata
sharing therein);
(ii) With respect to the Class C Certificates, if any are
then Outstanding, the Class C Trustee shall separately set forth the
amounts to be paid in accordance with clause "ninth" of Section 3.02 or
2.04(b), as the case may be;
(iii) With respect to the Class D Certificates, if any are
then Outstanding, the Class D Trustee shall separately set forth the
amounts to be paid in accordance with clause "tenth" of Section 3.02 or
2.04(b), as the case may be;
(iv) With respect to the Primary Liquidity Facility, the
Primary Liquidity Provider shall separately set forth the amounts to be
paid in accordance with clauses "first", "second", "third" and "fourth"
of Section 3.02 or 2.04(b), as the case may be; and
(v) The Policy Provider shall set forth the amounts to be
paid to it in accordance with clauses "first", "second" and "third" of
Section 2.04(b) or Section 3.02, as the case may be; and
32
(vi) Each Trustee shall set forth the amounts to be paid
in accordance with clause "eleventh" of Section 3.02.
The notices required under this Section 3.01(a) may be in the form of a schedule
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document may
state that, unless there has been a redemption, purchase or prepayment of the
Equipment Notes, such schedule or similar document is to remain in effect until
any substitute notice or amendment shall be given to the Subordination Agent by
the party providing such notice.
(b) Following the occurrence of a Triggering Event
(whether or not continuing), the Subordination Agent shall request the following
information from the following Persons, and may from time to time thereafter
again request such information from such Persons, and each of the following
Persons shall, within five Business Days of such request of the Subordination
Agent, deliver a Written Notice to the Subordination Agent setting forth for
such Person the following information:
(i) With respect to the Class G Certificates, if any are
then Outstanding, the Class G Trustee shall separately set forth the
amounts to be paid in accordance with clauses "first" (to reimburse
payments made by the Class G Certificateholders pursuant to subclause
(D) of clause "first" of Section 3.03), "seventh" (to reimburse
payments made by the Class G Certificateholders pursuant to subclause
(C) of clause "seventh" of Section 3.03 without giving effect to the
pro rata sharing specified therein) and "eighth" of Section 3.03;
(ii) With respect to the Class C Certificates, if any are
then Outstanding, the Class C Trustee shall separately set forth the
amounts to be paid in accordance with clauses "first" (to reimburse
payments made by the Class C Certificateholders pursuant to subclause
(D) of clause "first" of Section 3.03), "seventh" (to reimburse
payments made by the Class C Certificateholders pursuant to subclause
(C) of clause "seventh" of Section 3.03) and "eleventh" of Section
3.03;
(iii) With respect to the Class D Certificates, if any are
then Outstanding, the Class D Trustee shall separately set forth the
amounts to be paid in accordance with clauses "first" (to reimburse
payments made by the Class D Certificateholders pursuant to subclause
(D) of clause "first" of Section 3.03), "seventh" (to reimburse
payments made by the Class D Certificateholders pursuant to subclause
(C) of clause "seventh" of Section 3.03) and "twelfth" of Section 3.03;
(iv) With respect to the Primary Liquidity Facility, the
Primary Liquidity Provider shall separately set forth the amounts to be
paid to it in accordance with subclause (iv) of clause "first" of
Section 3.03 and clauses "second", "third", "fourth" and "fifth" of
Section 3.03;
(v) The Policy Provider shall separately set forth
amounts to be paid to it in accordance with subclause (C) and (D) of
clause "first" of Section 3.03 and clauses "second", "third", "fourth",
"ninth" and "tenth" of Section 3.03; and
33
(vi) Each Trustee shall set forth the amounts to be paid
in accordance with subclause (B) of clause "first" of Section 3.03 and
subclause (B) of clause "seventh" of Section 3.03.
(c) At such time as a Trustee, the Primary Liquidity
Provider or the Policy Provider shall have received all amounts owing to it
(and, in the case of a Trustee, the Certificateholders for which it is acting)
pursuant to Section 2.04, 3.02, 3.03 or 3.07, as applicable, and, in the case of
the Primary Liquidity Provider or the Policy Provider, its commitment under the
Primary Liquidity Facility or the Policy shall have terminated or expired, such
Person shall, by a Written Notice, so inform the Subordination Agent and each
other party to this Agreement.
(d) As provided in Section 6.05, the Subordination Agent
shall be fully protected in relying on any of the information set forth in a
Written Notice provided by any Trustee, the Primary Liquidity Provider or the
Policy Provider pursuant to Sections 3.01(a), 3.01(b) and 3.01(c) above and
shall have no independent obligation to verify, calculate or recalculate any
amount set forth in any Written Notice delivered in accordance with such
paragraphs.
(e) Any Written Notice delivered by a Trustee, the
Primary Liquidity Provider or the Policy Provider, as applicable, pursuant to
Section 3.01(a), 3.01(b) or 3.01(c), if made prior to 10:00 a.m. (New York City
time) on a given date that is a Business Day shall be effective on the date
delivered (or if delivered later on such date or on a day that is not a Business
Day shall be effective as of the next Business Day). Subject to the terms of
this Agreement, the Subordination Agent shall as promptly as practicable comply
with any such instructions; provided, however, that any transfer of funds
pursuant to any instruction received after 10:00 a.m. (New York City time) on
any Business Day may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not
receive from any Person any information set forth in Section 3.01(a) or 3.01(b)
that is required to enable the Subordination Agent to make a distribution to
such Person pursuant to Section 2.04(b), 3.02 or 3.03, the Subordination Agent
shall not make such distribution(s) to such Person. In such event, the
Subordination Agent shall make distributions pursuant to clauses "first" through
"twelfth" of Section 2.04(b), clauses "first" through "thirteenth" of Section
3.02 and clauses "first" through "fourteenth" of Section 3.03 to the extent it
shall have sufficient information to enable it to make such distributions, and
shall continue to hold any funds remaining, after making such distributions, on
the terms hereof (including Section 2.02(b)) until the Subordination Agent shall
receive all necessary information to enable it to distribute any funds so
withheld, and upon receipt of the information necessary to distribute any funds
so withheld, the Subordination Agent shall distribute such funds.
(g) On such dates (but not more frequently than monthly)
as the Primary Liquidity Provider, the Policy Provider or any Trustee shall
request, but in any event automatically at the end of each calendar quarter, the
Subordination Agent shall send to such party a written statement reflecting all
amounts on deposit with the Subordination Agent pursuant to Section 3.01(f).
34
Section 3.02. Distribution of Amounts on Deposit in the
Collection Account. Except as otherwise provided in Sections 2.04, 3.01(f),
3.03, 3.04 and 3.06(b), amounts on deposit in the Collection Account (or, in the
case of any amount described in Section 2.04(c), on deposit in the Special
Payments Account) shall be promptly distributed on each Regular Distribution
Date (or, in the case of any amount described in Section 2.04(c), on the Special
Distribution Date thereof) in the following order of priority and in accordance
with the information provided to the Subordination Agent pursuant to Section
3.01(a):
(i) first, such amount as shall be required to pay in
full (A) all accrued and unpaid Liquidity Expenses owed to the Primary
Liquidity Provider and (B) all accrued and unpaid Policy Expenses owed
to the Policy Provider, shall be distributed to the Primary Liquidity
Provider and the Policy Provider, pro rata on the basis of the amount
of Liquidity Expenses owed to the Primary Liquidity Provider and Policy
Expenses owed to the Policy Provider;
(ii) second, such amount as shall be required to pay (A)
accrued and unpaid interest on the Liquidity Obligations as provided in
the Primary Liquidity Facility (determined after giving effect to
payments made by the Policy Provider to the Primary Liquidity Provider,
if any, in respect of interest on drawings under the Primary Liquidity
Facility in accordance with the provisions of Section 2.06(c)), (B) if
the Primary Liquidity Provider has defaulted in its obligation to make
any Interest Drawing in respect of the Class G Certificates, the
aggregate amount of interest accrued on the portion of any Policy
Drawing made to cover the shortfall attributable to such default by the
Primary Liquidity Provider at the rate provided in the "except" clause
of clause (ii) of the definition of "Policy Provider Obligations" and
(C) if the Policy Provider has elected to pay to the Primary Liquidity
Provider all outstanding drawings and interest owing to the Primary
Liquidity Provider under the Primary Liquidity Facility pursuant to
subsection 2.06(c) hereof, the amount of such payment made to the
Primary Liquidity Provider attributable to such interest accrued on
such drawings, shall be distributed to the Primary Liquidity Provider
and the Policy Provider, pro rata on the basis of the amount of such
Liquidity Obligations owed to the Primary Liquidity Provider and the
amount of such Policy Provider Obligations payable to the Policy
Provider under this clause "second";
(iii) third, such amount as shall be required (A) if the
Primary Cash Collateral Account has been previously funded as provided
in Section 3.06(f), to fund the Primary Cash Collateral Account up to
its Required Amount shall be deposited in the Primary Cash Collateral
Account, (B) if the Primary Liquidity Facility shall have become a
Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under the Primary Liquidity Facility
have reduced the Maximum Available Commitment thereunder to zero, to
deposit into the Primary Cash Collateral Account an amount equal to the
Required Amount shall be deposited in the Primary Cash Collateral
Account, (C) if, with respect to the Primary Liquidity Facility,
neither subclause (A) nor subclause (B) of this clause "third" is
applicable, to pay or reimburse the Primary Liquidity Provider in an
amount equal to the amount of all Liquidity Obligations then due under
the Primary Liquidity Facility shall be distributed to the Primary
Liquidity Provider (other than amounts payable pursuant to clause
"first" or "second" of this Section 3.02 and as determined after giving
effect to payments made by the Policy Provider to the
35
Primary Liquidity Provider in respect of principal of drawings under
the Primary Liquidity Facility), pro rata with any amount distributable
pursuant to subclause (D) of this clause "third" on the basis of the
amount of all such unreimbursed Liquidity Obligations and unreimbursed
Policy Provider Obligations payable to the Policy Provider under
subclause (D) of this clause "third" and (D) if the Policy Provider has
elected to pay to the Primary Liquidity Provider all outstanding
drawings and interest thereon owing to the Primary Liquidity Provider
under the Primary Liquidity Facility pursuant to Section 2.06(c)
hereof, to reimburse the Policy Provider for the principal amount of
such payment made to the Primary Liquidity Provider, shall be
distributed to the Policy Provider, but only after giving effect to the
application of amounts, if any, under subclause (A) or (B) of this
clause "third", and if any amount shall be distributable under
subclause (C) of this clause "third", pro rata (without duplication)
with any amount distributable pursuant to such subclause (C), on the
basis of the amounts of all such unreimbursed Liquidity Obligations and
the amount of such unreimbursed Policy Provider Obligations payable to
the Policy Provider under this clause "third";
(iv) fourth, if, with respect to the Primary Liquidity
Facility and the Primary Cash Collateral Account, any amounts are to be
distributed pursuant to either subclause (A) or (B) of clause "third"
above, then the Primary Liquidity Provider with respect to the Primary
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under the Primary Liquidity Facility over (y) the Required Amount;
(v) fifth, if the Above-Cap Reserve Account had been
previously funded as provided in Section 3.06(f), such amount as shall
be required to fund the Above-Cap Reserve Account up to an amount equal
to the Termination Amount (as recalculated on such Distribution Date)
less any amount then on deposit in the Above-Cap Account shall be
deposited in the Above-Cap Reserve Account;
(vi) sixth, if any Class G Certificates are Outstanding on
such Distribution Date, such amount as shall be required to pay in full
Expected Distributions to the holders of the Class G Certificates on
such Distribution Date shall be distributed to the Class G Trustee;
(vii) seventh, such amount as shall be required to pay the
Policy Provider all Policy Provider Obligations then due (other than
amounts payable pursuant to the preceding clauses of this Section 3.02
and other than any Policy Provider Interest Amounts) shall be
distributed to the Policy Provider;
(viii) eighth, such amount as shall be required to pay in
full any Excess Reimbursement Obligations, any Policy Provider Interest
Amounts and any amounts due under the Policy Fee Letter shall be
distributed to the Policy Provider;
(ix) ninth, if any Class C Certificates are Outstanding on
such Distribution Date, such amount as shall be required to pay in full
Expected Distributions to the holders of the Class C Certificates on
such Distribution Date shall be distributed to the Class C Trustee,
provided that once all of the beneficial interest in the Initial Class
C Holder has
36
been transferred to an entity other than Delta or any of its
Affiliates, the Expected Distributions on the Class C Certificates
shall be distributed prior to the payment of Excess Reimbursement
Obligations, Policy Provider Interest Amounts and amounts due under the
Policy Fee Letter to the Policy Provider as provided in the preceding
clause "eighth";
(x) tenth, if any Class D Certificates are Outstanding on
such Distribution Date, such amount as shall be required to pay in full
Expected Distributions to holders of Class D Certificates on such
Distribution Date shall be distributed to the Class D Trustee;
(xi) eleventh, such amount as shall be required to pay in
full (without duplication of any amounts otherwise payable hereunder or
under any Operative Agreement) the aggregate unpaid amount of fees and
expenses payable as of such Distribution Date to the Subordination
Agent and each Trustee pursuant to the terms of this Agreement and the
Trust Agreements, as the case may be, shall be distributed to the
Subordination Agent and such Trustee;
(xii) twelfth, such amount as shall be required, if the
Above-Cap Reserve Account had been previously funded as provided in
Section 3.06(f), to fund the Above-Cap Reserve Account up to an amount
equal to the Termination Amount (as recalculated on such Distribution
Date) shall be deposited in the Above-Cap Reserve Account; and
(xiii) thirteen, the balance, if any, of any such amount
remaining thereafter shall be held in the Collection Account for later
distribution in accordance with this Article III.
Section 3.03. Distribution of Amounts on Deposit Following a
Triggering Event. Except as otherwise provided in Sections 3.01(f) and 3.06(b),
upon the occurrence of a Triggering Event and at all times thereafter, all funds
in the Collection Account or the Special Payments Account shall be promptly
distributed by the Subordination Agent in the following order of priority:
(i) first, such amount as shall be required to reimburse
(A) the Subordination Agent for any reasonable out-of-pocket costs and
expenses actually incurred by it (to the extent not previously
reimbursed) in the protection of, or the realization of the value of,
the Equipment Notes or any Collateral, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses, (B)
each Trustee for any amounts of the nature described in clause (A)
above actually incurred by it under the applicable Trust Agreement (to
the extent not previously reimbursed), shall be distributed to such
Trustee, (C) the Policy Provider for any amounts of the nature
described in clause (A) above actually incurred by it (to the extent
not previously reimbursed), shall be distributed to the Policy
Provider, and (D) the Primary Liquidity Provider, the Policy Provider
or Certificateholder for payments, if any, made by it to the
Subordination Agent or any Trustee in respect of amounts described in
clause (A) above, shall be distributed to the Primary Liquidity
Provider, the Policy Provider or the applicable Trustee for the account
of such Certificateholder, in each such case, pro rata on the basis of
all amounts described in clauses (A) through (D) above;
37
(ii) second, such amount as shall be required to pay (A)
all accrued and unpaid Liquidity Expenses and (B) all accrued and
unpaid Policy Expenses shall be distributed to the Primary Liquidity
Provider and the Policy Provider, pro rata on the basis of the amount
of Liquidity Expenses and Policy Expenses owed to the Primary Liquidity
Provider and the Policy Provider;
(iii) third, such amount as shall be required to pay (A)
accrued and unpaid interest on the Liquidity Obligations as provided in
the Primary Liquidity Facility (determined after giving effect to
payments made by the Policy Provider to the Primary Liquidity Provider,
if any, in respect of interest on drawings under the Primary Liquidity
Facility in accordance with Section 2.06(c)), (B) if the Primary
Liquidity Provider has defaulted in its obligation to make any Interest
Drawing in respect of the Class G Certificates, the aggregate amount of
interest accrued on the portion of any Policy Drawing made to cover the
shortfall attributable to such default by the Primary Liquidity
Provider at the rate provided in the "except" clause of clause (ii) of
the definition of "Policy Provider Obligations" and (C) if the Policy
Provider has elected to pay to the Primary Liquidity Provider all
outstanding drawings and interest owing to the Primary Liquidity
Provider under the Primary Liquidity Facility pursuant to Section
2.06(c) hereof, the amount of such payment made to the Primary
Liquidity Provider attributable to such interest accrued on such
drawings, shall be distributed to the Primary Liquidity Provider and
the Policy Provider, pro rata (without duplication) on the basis of the
amount of such Liquidity Obligations owed to the Primary Liquidity
Provider and the amount of such Policy Provider Obligations payable to
the Policy Provider under this clause "third";
(iv) fourth, such amount as shall be required (A) if any
Primary Cash Collateral Account has been previously funded as provided
in Section 3.06(f), unless (1) a Performing Note Deficiency exists and
a Liquidity Event of Default shall have occurred and be continuing with
respect to the Primary Liquidity Facility or (2) a Final Drawing shall
have occurred with respect to the Primary Liquidity Facility, to fund
the Primary Cash Collateral Account up to its Required Amount (less the
amount of any repayments of Interest Drawings under the Primary
Liquidity Facility while subclause (A)(1) above is applicable) shall be
deposited in the Primary Cash Collateral Account, (B) if the Primary
Liquidity Facility shall have become a Downgraded Facility or a
Non-Extended Facility at a time when unreimbursed Interest Drawings
under the Primary Liquidity Facility have reduced the Maximum Available
Commitment thereunder to zero, unless (1) a Performing Note Deficiency
exists and a Liquidity Event of Default shall have occurred and be
continuing with respect to the Primary Liquidity Facility or (2) a
Final Drawing shall have occurred with respect to the Primary Liquidity
Facility, to deposit into the Primary Cash Collateral Account an amount
equal to the Required Amount (less the amount of any repayments of
Interest Drawings under the Primary Liquidity Facility while subclause
(B)(1) above is applicable) shall be deposited in the Primary Cash
Collateral Account, (C) if, with respect to the Primary Liquidity
Facility, neither subclause (A) nor subclause (B) of this clause
"fourth" is applicable, to pay in full the outstanding amount of all
Liquidity Obligations then due under the Primary Liquidity Facility
shall be distributed to the Primary Liquidity Provider (other than
amounts payable pursuant to clause "second" or "third" of this Section
3.03 and as determined
38
after giving effect to payments made by the Policy Provider to the
Primary Liquidity Provider in respect of principal of drawings under
the Primary Liquidity Facility), pro rata with any amount distributable
pursuant to subclause (D) of this clause "fourth" on the basis of the
amount of all such Liquidity Obligations and unreimbursed Policy
Provider Obligations payable to the Policy Provider under subclause (D)
of this clause "fourth" and (D) if the Policy Provider has elected to
pay to the Primary Liquidity Provider all outstanding drawings and
interest owing to the Primary Liquidity Provider under the Primary
Liquidity Facility pursuant to Section 2.06(c) hereof, to reimburse the
Policy Provider for the principal amount of such payment made to the
Primary Liquidity Provider, shall be distributed to the Policy
Provider, but only after giving effect to the application of amounts,
if any, under subclause (A) or (B) of this clause "fourth", and if any
amount shall be distributable under subclause (C) of this clause
"fourth", pro rata with any amount distributable pursuant to such
subclause (C) on the basis of the amounts of all such unreimbursed
Liquidity Obligations and the amount of such unreimbursed Policy
Provider Obligations payable to the Policy Provider under this clause
"fourth";
(v) fifth, if, with respect to the Primary Liquidity
Facility, any amounts are to be deposited pursuant to either subclause
(A) or (B) of clause "fourth" above, then the Primary Liquidity
Provider with respect to the Primary Liquidity Facility shall be paid
the excess of (x) the aggregate outstanding amount of unreimbursed
Advances (whether or not then due) under the Primary Liquidity Facility
over (y) the Required Amount (less the amount of any repayments of
Interest Drawings under the Primary Liquidity Facility while subclause
(A)(1) or (B)(1), as the case may be, of clause "fourth" above is
applicable);
(vi) sixth, if the Above-Cap Reserve Account had been
previously funded as provided in Section 3.06(f), unless (A) a
Performing Note Deficiency exists and a Liquidity Event of Default
shall have occurred and be continuing with respect to the Primary
Liquidity Facility or (B) a Final Drawing shall have occurred with
respect to the Primary Liquidity Facility, such amount as shall be
required to fund the Above-Cap Reserve Account up to an amount equal to
the Termination Amount (as recalculated on such Distribution Date) less
any amount then on deposit in the Above-Cap Account shall be deposited
in the Above-Cap Reserve Account;
(vii) seventh, such amount as shall be required to
reimburse or pay (A) 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, (B) each
Trustee for any Tax (other than Taxes imposed on compensation paid
under the applicable Trust Agreement), expense, fee, charge or other
loss incurred by, or any other amount payable to, such Trustee under
the applicable Trust Agreements (to the extent not previously
reimbursed), shall be distributed to such Trustee, and (C) each
Certificateholder for payments, if any, made by it pursuant to Section
5.02 in respect of amounts described in clause (A) above (without
duplication of any amounts distributed pursuant to subclause (D)of
clause "first" of this Section 3.03), shall be distributed to the
applicable Trustee for the account of such Certificateholder, in
39
each such case, pro rata on the basis of all amounts described in
clauses (A), (B) and (C) above;
(viii) eighth, if any Class G Certificates are Outstanding
on such Distribution Date, such amount as shall be required to pay in
full Adjusted Expected Distributions on the Class G Certificates shall
be distributed to the Class G Trustee;
(ix) ninth, such amount as shall be required to pay all
Policy Provider Obligations then due to the Policy Provider (other than
amounts payable pursuant to clauses "first" through "fourth" of this
Section 3.03 and other than any Policy Provider Interest Amounts) and
any amounts due under the Policy Fee Letter shall be distributed to the
Policy Provider;
(x) tenth, such amount as shall be required to pay any
Excess Reimbursement Obligations and Policy Provider Interest Amounts
shall be distributed to the Policy Provider;
(xi) eleventh, if any Class C Certificates are Outstanding
on such Distribution Date, such amount as shall be required to pay in
full Adjusted Expected Distributions on the Class C Certificates shall
be distributed to the Class C Trustee, provided that once all of the
beneficial interest in the Initial Class C Holder has been transferred
to an entity other than Delta or any of its Affiliates, the Adjusted
Expected Distributions on the Class C Certificates shall be distributed
prior to the payment of Excess Reimbursement Obligations and Policy
Provider Interest Amounts to the Policy Provider as provided in the
preceding clause "tenth";
(xii) twelfth, if any Class D Certificates are Outstanding
on such Distribution Date, such amount as shall be required to pay in
full Adjusted Expected Distributions on the Class D Certificates shall
be distributed to the Class D Trustee;
(xiii) thirteenth, if the Above-Cap Reserve Account had been
previously funded as provided in Section 3.06(f), unless (A) a
Performing Note Deficiency exists and a Liquidity Event of Default
shall have occurred and be continuing with respect to the Primary
Liquidity Facility or (B) a Final Drawing shall have occurred with
respect to the Primary Liquidity Facility, to fund the Above-Cap
Reserve Account up to an amount equal to the applicable Termination
Amount (as recalculated on such Distribution Date) shall be deposited
in the Above-Cap Reserve Account;
(xiv) fourteenth, (A) if any Class G Certificates are
Outstanding on such Distribution Date, such amount as shall be required
to pay Final Distributions on the Class G Certificates shall be
distributed to the Class G Trustee after giving effect to the
distributions made on such Distribution Date (B) after giving effect to
clause (A) if any Class C Certificates are Outstanding on such
Distribution Date, such amount remaining as shall be required to pay
Final Distributions on the Class C Certificates shall be distributed to
the Class C Trustee and (C) after giving effect to clauses (A) and (B)
if any Class D Certificates are Outstanding on such Distribution Date,
such amount as shall be
40
required to pay Final Distributions on the Class D Certificates shall
be distributed to the Class D Trustee; and
(xv) fifteenth, the balance, if any, of any such amount
remaining shall be held in the Collection Account for later
distribution in accordance with Article III.
Section 3.04. Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent in the order
of priority specified in Section 3.03; provided, however, that to the extent any
such payments are received or realized at any time after the Final Distributions
for all Classes of Certificates have been made, such payments shall be
distributed in the following order of priority: first, in the manner provided in
clause "first" of Section 3.03 and second, in the manner provided in clause
"thirteen" of Section 3.02.
(b) Except as otherwise provided in Section 3.03 or
Sections 3.06(a) and 3.06(b), if the Subordination Agent receives any Scheduled
Payment after the Scheduled Payment Date relating thereto, but prior to such
payment becoming an Overdue Scheduled Payment, then the Subordination Agent
shall deposit such Scheduled Payment in the Collection Account and promptly
distribute such Scheduled Payment in accordance with the priority of
distributions set forth in Section 3.02; provided that, for the purposes of this
Section 3.04(b) only, each reference in clause "eleventh" of Section 3.02 to
"Distribution Date" shall be deemed to mean the actual date of payment of such
Scheduled Payment and each reference in clause "sixth", "ninth" or "tenth" of
Section 3.02 to "Distribution Date" shall be deemed to refer to such Scheduled
Payment Date.
Section 3.05. Payments to the Trustees, the Primary Liquidity
Provider and the Policy Provider. Any amounts distributed hereunder to the
Primary Liquidity Provider or the Policy Provider shall be paid to the Primary
Liquidity Provider or the Policy Provider, as the case may be, by wire transfer
of funds to the address the Primary Liquidity Provider or the Policy Provider,
as the case may be, shall provide to the Subordination Agent. The Subordination
Agent shall provide a Written Notice of any such transfer to the Primary
Liquidity Provider or the Policy Provider, as the case may be, at the time of
such transfer. Any amounts distributed hereunder by the Subordination Agent to
any Trustee that is not the same institution as the Subordination Agent shall be
paid to such Trustee by wire transfer of funds at the address such Trustee shall
provide to the Subordination Agent.
Section 3.06. Liquidity Facilities. (a) Interest Drawings and
Above-Cap Payments. If on any Distribution Date, after giving effect to the
subordination provisions of this Agreement and any Election Interest Payment
made by the Policy Provider pursuant to subclause (ii) of Section 3.07(c), the
Subordination Agent shall not have sufficient funds for the payment of any
amounts due and owing in respect of accrued interest on the Class G Certificates
(at the Stated Interest Rate for the Class G Certificates for the applicable
Interest Period), then, prior to 1:00 p.m. (New York City time) on such
Distribution Date, (i) the Subordination Agent shall request a drawing (each
such drawing, an "INTEREST DRAWING") under the Primary Liquidity Facility (and
concurrently with the making of such request, the Subordination Agent shall give
notice to the Policy Provider of such insufficiency of funds) in an amount equal
to the lesser of (x) an amount sufficient to pay the amount of such accrued
interest (at the Stated Interest Rate
41
for the Class G Certificates for the applicable Interest Period) and (y) the
Maximum Available Commitment under the Primary Liquidity Facility, and shall
upon receipt of such amount pay such amount to the Class G Trustee in payment of
such accrued interest as provided in Section 3.06(b) and (ii) if LIBOR for the
Interest Period ending on such Distribution Date (or, if such Distribution Date
is not the last day of an Interest Period, LIBOR for the Interest Period
including such Distribution Date) exceeds Capped LIBOR, the Subordination Agent
shall (if it can make the certification described in the last sentence of this
Section 3.06(a)) request an interest rate cap payment (each such payment, an
"ABOVE-CAP PAYMENT") under the Above-Cap Liquidity Facility, for credit to the
Above-Cap Account in an amount equal to the product of (x) the difference
between LIBOR for the Interest Period ending on such Distribution Date (or, if
such Distribution Date is not the last day of an Interest Period, LIBOR for the
Interest Period including such Distribution Date) and Capped LIBOR, multiplied
by (y) the Pool Balance of the Class G Certificates as of such Distribution Date
(and before giving effect to any distribution on such date), multiplied by (z)
the actual number of days elapsed in the Interest Period ending on such
Distribution Date divided by 360, and upon the receipt thereof the Subordination
Agent shall immediately deposit such Above-Cap Payment into the Above-Cap
Account. If the Interest Drawing on such Distribution Date pursuant to clause
(i) above, together with all other amounts available to the Subordination Agent
on such Distribution Date (after giving effect to the subordination provisions
of this Agreement and any withdrawals from the Primary Cash Collateral Account),
is insufficient to pay accrued interest (at the Stated Interest Rate for the
Class G Certificates for the applicable Interest Period) payable on the Class G
Certificates on such Distribution Date (such deficiency, the "DEFICIENCY
AMOUNT"), the Subordination Agent shall, prior to 4:00 p.m. (New York City time)
on such Distribution Date, withdraw (each, an "ABOVE-CAP WITHDRAWAL") from the
Above-Cap Account for the Class G Certificates an amount equal to the lesser of
(x) such Deficiency Amount and (y) the amount on deposit in the Above-Cap
Account (including any amounts deposited, or to be deposited, on such
Distribution Date pursuant to clause (ii) above), and shall pay such amount to
the Class G Trustee in payment of such accrued interest. In connection with a
request for an Above-Cap Payment under the Above-Cap Liquidity Facility pursuant
to clause (ii) above, the Subordination Agent shall certify to the Above-Cap
Liquidity Provider that at least one of the following statements is true as of
such Distribution Date prior to making such Above-Cap Withdrawal: (x) the
Maximum Available Commitment under the Primary Liquidity Facility (prior to
giving effect to any Interest Drawings to be made on such Distribution Date) is
greater than zero; (y) the amount on deposit in the Primary Cash Collateral
Account (prior to giving effect to any withdrawal to be made from such account
on such Distribution Date) is greater than zero; or (z) the amount on deposit in
the Above-Cap Account (prior to giving effect to any withdrawal to be made from
such account on such Distribution Date) is greater than zero.
(b) Application of Interest Drawings and Above-Cap
Withdrawals. Notwithstanding anything to the contrary contained in this
Agreement, (i) all payments received by the Subordination Agent in respect of an
Interest Drawing under the Primary Liquidity Facility and all amounts withdrawn
by the Subordination Agent from the Primary Cash Collateral Account, and payable
in each case to the Class G Certificateholders, shall be promptly distributed to
the Class G Trustee and applied to the payment of interest in respect of which
it was drawn, except that if (x) the Subordination Agent shall receive any
amount in respect of an Interest Drawing under the Primary Liquidity Facility or
a withdrawal from the Primary Cash Collateral Account to pay Accrued Class G
Interest after such Accrued Class G Interest has been
42
fully paid by a Policy Drawing under the applicable Policy pursuant to Section
3.07(a) hereof, or (y) the Subordination Agent shall receive any amount in
respect of a Policy Drawing under the applicable Policy pursuant to Section
3.07(a) hereof to fully pay Accrued Class G Interest after such Accrued Class G
Interest has been paid (in full or in part) to the Class G Trustee by an
Interest Drawing under the Primary Liquidity Facility or a withdrawal from the
Primary Cash Collateral Account, the Subordination Agent, in the case of either
clause (x) or (y), shall pay an amount equal to the amount of such Interest
Drawing or withdrawal directly to the Policy Provider as reimbursement of such
Policy Drawing rather than to the Class G Certificateholders or Class G Trustee
and (ii) all payments received by the Subordination Agent in respect of an
Above-Cap Withdrawal from the Above-Cap Account, and payable to the Class G
Certificateholders shall be promptly distributed to the Class G Trustee and
applied to the payment of interest in respect of which it was drawn, except that
if (x) the Subordination Agent shall receive any amount in respect of such
Above-Cap Withdrawal to pay Accrued Class G Interest after such Accrued Class G
Interest has been fully paid to the Class G Trustee by a Policy Drawing under
the Policy pursuant to Section 3.07(a) hereof or (y) the Subordination Agent
shall receive any amount in respect of a Policy Drawing under the Policy
pursuant to Section 3.07(a) to fully pay Accrued Class G Interest after such
Accrued Class G Interest has been paid (in full or in part) to the Class G
Trustee by an Above-Cap Withdrawal, in the case of either clause (x) or (y), an
amount equal to such amount received in respect of such Above-Cap Withdrawal
shall be paid directly to the Policy Provider as reimbursement of such Policy
Drawing rather than to the Class G Certificateholders or the Class G Trustee.
(c) Downgrade Drawings. (i) The Primary Liquidity
Provider will promptly, but in any event within ten days of its receipt of
notice thereof, deliver notice of any downgrading of its debt ratings to the
Subordination Agent, the Policy Provider, and Delta. If at any time the
short-term unsecured debt rating of the Primary Liquidity Provider issued by
Xxxxx'x or the short-term issuer credit rating of the Primary Liquidity Provider
issued by S&P (or if the Primary Liquidity Provider does not have a short-term
unsecured debt rating or short-term issuer credit rating, as applicable, issued
by Xxxxx'x or S&P, the long-term unsecured debt rating or long-term issuer
credit rating of the Primary Liquidity Provider issued by such Rating Agency) is
lower than the applicable Threshold Rating, within 10 days after such
downgrading (but not later than the expiration date of the Primary Liquidity
Facility issued by such downgraded Primary Liquidity Provider (the "DOWNGRADED
FACILITY")), the Primary Liquidity Provider or Delta may arrange for a
Replacement Primary Liquidity Provider to issue and deliver a Replacement
Primary 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, on the
expiration date of such Downgraded Facility), request a drawing in accordance
with and to the extent permitted by such Downgraded Facility (such drawing, a
"DOWNGRADE DRAWING") of all available and undrawn amounts thereunder. Amounts
drawn pursuant to a Downgrade Drawing shall be maintained and invested as
provided in Section 3.06(f). Subject to Section 3.06(e)(iii), the Primary
Liquidity Provider may also arrange for a Replacement Primary Liquidity Provider
to issue and deliver a Replacement Primary Liquidity Facility at any time after
such Downgrade Drawing so long as such Downgrade Drawing has not been reimbursed
in full to the Primary Liquidity Provider.
43
(ii) If a "Termination Event" or an "Additional
Termination Event" (each as defined in the Above-Cap Liquidity Facility, each
such event, a "MANDATORY TERMINATION EVENT") shall occur under the Above-Cap
Liquidity Facility, the Above-Cap Liquidity Provider shall provide notice of
such Mandatory Termination Event in writing to Delta, the Subordination Agent,
the Policy Provider and the Class G Trustee, and within the time period
specified in the Above-Cap Liquidity Facility (but in no event later than the
expiration date of the Above-Cap Liquidity Facility) Delta or the Above-Cap
Liquidity Provider may, in each case at its own expense, arrange for one or more
Replacement Above-Cap Liquidity Providers to issue and deliver a Replacement
Above-Cap Liquidity Facility for the Above-Cap Liquidity Facility to the
Subordination Agent. In the event that the Above-Cap Liquidity Provider or Delta
makes arrangements for a Replacement Above-Cap Liquidity Facility in accordance
with the terms of the Above-Cap Liquidity Facility, (y) the Subordination Agent
shall, if and to the extent so requested by the Above-Cap Liquidity Provider or
Delta, execute and deliver any certificate or other instrument required to give
effect to such replacement and (z) each of the parties hereto shall enter into
any amendments to this Agreement necessary to give effect to such replacement.
If the Above-Cap Liquidity Facility is subject to a Mandatory Termination Event
and has not been replaced in accordance with its terms and the terms of this
paragraph or if an Early Termination Date has been designated under the
Above-Cap Liquidity Facility after the occurrence of an Event of Default (as
defined in the Above-Cap Liquidity Facility), the Above-Cap Liquidity Facility
shall be terminated and the Above-Cap Liquidity Provider shall, on such Early
Termination Date, pay to the Subordination Agent, for the benefit of the Class G
Trustee on behalf of the holders of the Class G Certificates, the Termination
Amount for credit to the Above-Cap Reserve Account, to be applied as provided in
Section 3.06(f) hereof plus the amount of all other unpaid sums due and payable
by the Above-Cap Liquidity Provider thereunder on or prior to such date, and
upon such payment, such Above-Cap Liquidity Facility shall be terminated.
Nothing contained herein shall limit the rights of the Above-Cap Liquidity
Provider to transfer its rights and obligations under the Above-Cap Liquidity
Facility or otherwise arrange for a Replacement Above-Cap Liquidity Facility,
subject to and in accordance with the provisions of the Above-Cap Liquidity
Facility.
(d) Non-Extension Drawings. If the Primary Liquidity
Facility is scheduled to expire on a date (the "STATED EXPIRATION DATE") prior
to the date that is 15 days after the Final Legal Distribution Date for the
Class G Certificates, then no earlier than the 60th day and no later than the
40th day prior to the then applicable Stated Expiration Date, the Subordination
Agent shall request in writing that the Primary Liquidity Provider extend the
Stated Expiration Date to the earlier of (i) the date that is 15 days after the
Final Legal Distribution Date for the Class G Certificates and (ii) the date
that is the day immediately preceding the 364th day after the last day of the
Consent Period (unless the obligations of the Primary Liquidity Provider
thereunder are earlier terminated in accordance with the Primary Liquidity
Facility). The Primary Liquidity Provider shall by notice (the "CONSENT NOTICE")
to the Subordination Agent, during the period commencing on the date that is 60
days prior to the then effective Stated Expiration Date and ending on the date
that is 25 days prior to such Stated Expiration Date (the "CONSENT PERIOD")
advise the Subordination Agent whether, in its sole discretion, it agrees to so
extend the Stated Expiration Date; provided, however, that such extension shall
not be effective with respect to the Primary Liquidity Provider if, by notice
(the "WITHDRAWAL NOTICE") to the Subordination Agent prior to the end of the
Consent Period, the Primary Liquidity Provider revokes the Consent Notice. If
the Primary Liquidity Provider advises the Subordination Agent
44
in the Consent Notice that such Stated Expiration Date shall not be so extended,
gives a Withdrawal Notice to the Subordination Agent prior to the end of the
Consent Period, or fails to irrevocably and unconditionally advise the
Subordination Agent on or before the end of the Consent Period that such Stated
Expiration Date shall be so extended (and, in each case, if the Primary
Liquidity Provider shall not have been replaced in accordance with Section
3.06(e)), the Subordination Agent shall, on the date on which the Consent Period
ends (or as soon as possible thereafter but prior to the Stated Expiration
Date), in accordance with and to the extent permitted by the terms of the
expiring Primary Liquidity Facility (a "NON-EXTENDED FACILITY"), request a
drawing under the expiring Primary Liquidity Facility (such drawing, a
"NON-EXTENSION DRAWING") of all available and undrawn amounts thereunder.
Amounts drawn pursuant to a Non-Extension Drawing shall be maintained and
invested in accordance with Section 3.06(f). If any amounts shall be drawn
pursuant to a Non-Extension Drawing and, within 30 days thereafter, the Primary
Liquidity Provider shall not have been replaced, then at any time following the
30th day after such Non-Extension Drawing, the Primary Liquidity Provider may,
by written notice to the Subordination Agent, agree to reinstate the Primary
Liquidity Facility on the terms of the existing Primary Liquidity Facility for a
period ending on the 364th day after the end of the Consent Period; provided,
however, that in such event the Primary Liquidity Provider shall reimburse the
Subordination Agent for any costs actually incurred by or on behalf of the
Subordination Agent in drawing pursuant to the Non-Extension Drawing and funding
the Primary Cash Collateral Account or otherwise in connection with the
Non-Extension Drawing. The Primary Liquidity Provider shall provide to the
Policy Provider a copy of each notice delivered by it to the Subordination Agent
under this Section 3.06(d).
(e) Issuance of Replacement Primary Liquidity Facility.
(i) Subject to Section 3.06(e)(iii) and the agreements, if any, in the Fee
Letter, at any time, Delta may, at its option, with notice to the Policy
Provider, with cause or without cause, arrange for a Replacement Primary
Liquidity Facility to replace the Primary Liquidity Facility (including the
Replacement Primary Liquidity Facility provided pursuant to Section
3.06(e)(ii)). If a Replacement Primary 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 Primary Cash Collateral Account resulting from such
Downgrade Drawing or Non-Extension Drawing will be returned to the Primary
Liquidity Provider being replaced.
(ii) If any Primary Liquidity Provider shall determine not
to extend its Primary Liquidity Facility in accordance with Section 3.06(d),
then such Primary Liquidity Provider may, at its option, arrange for a
Replacement Primary Liquidity Facility to replace its Primary Liquidity Facility
during the period no earlier than 40 days and no later than 25 days prior to the
then effective Stated Expiration Date of such Primary Liquidity Facility.
(iii) No Replacement Primary Liquidity Facility arranged by
Delta or a Primary Liquidity Provider in accordance with Section 3.06(c) or
clause (i) or (ii) of this Section 3.06(e) shall become effective and no such
Replacement Primary Liquidity Facility shall be deemed a "Primary Liquidity
Facility" under the Operative Agreements, unless and until (A) each of the
conditions referred to in Section 3.06(e)(iv) below shall have been satisfied
and (B) in the case of a Replacement Primary Liquidity Facility arranged by the
Primary Liquidity Provider under Section 3.06(c) or Section 3.06(e)(ii), such
Replacement Primary Liquidity Provider and such Replacement Primary Liquidity
Facility (including the fees, compensation,
45
interest, increased costs or withholding payable thereunder to the Replacement
Primary Liquidity Provider) are reasonably acceptable to Delta.
(iv) In connection with the issuance of a Replacement
Primary Liquidity Facility, the Subordination Agent shall (x) prior to the
issuance of such Replacement Primary Liquidity Facility, obtain written
confirmation from each Rating Agency that such Replacement Primary Liquidity
Facility will not cause a reduction of any rating then in effect for the Class G
Certificates by such Rating Agency (without regard to any downgrading of any
rating of the Primary Liquidity Provider being replaced pursuant to Section
3.06(c) and without regard to the Policy), and the written consent of the Policy
Provider (which consent shall not be unreasonably withheld or delayed), (y) pay
all Liquidity Obligations then owing to the replaced Primary Liquidity Provider
(which payment shall be made first from available funds in the applicable
Primary Cash Collateral Account as described in Section 3.06(f)(iii), and
thereafter from any other available source, including, without limitation, a
drawing under the Replacement Primary Liquidity Facility) and (z) cause the
issuer of the Replacement Primary Liquidity Facility to deliver the Replacement
Primary Liquidity Facility to the Subordination Agent, together with a legal
opinion addressed to the Subordination Agent, the Policy Provider, the Trustees
and Delta opining that such Replacement Primary Liquidity Facility is an
enforceable obligation of such Replacement Primary Liquidity Provider.
(v) Upon satisfaction of the conditions set forth in
Sections 3.06(e)(iii) and 3.06(e)(iv), (1) the replaced Primary Liquidity
Facility shall terminate, (2) the Subordination Agent shall, if and to the
extent so requested by Delta or the Primary Liquidity Provider being replaced,
execute and deliver any certificate or other instrument required in order to
terminate the replaced Primary Liquidity Facility, shall surrender the replaced
Primary Liquidity Facility to the Primary Liquidity Provider being replaced and
shall execute and deliver the Replacement Primary Liquidity Facility and any
associated Fee Letter, (3) each of the parties hereto shall enter into any
amendments to this Agreement necessary to give effect to the replacement of the
Primary Liquidity Provider with the Replacement Primary Liquidity Provider and
the replacement of the Primary Liquidity Facility with the Replacement Primary
Liquidity Facility and (4) the Replacement Liquidity Provider shall be deemed to
be the Primary Liquidity Provider with the rights and obligations of the Primary
Liquidity Provider hereunder and under the other Operative Agreements and such
Replacement Primary Liquidity Facility shall be deemed to be the Primary
Liquidity Facility hereunder and under the other Operative Agreements.
(f) Cash Collateral Accounts; Above-Cap Account
Withdrawals; Withdrawals; Investments. If the Subordination Agent shall draw all
available amounts under the Primary Liquidity Facility pursuant to Section
3.06(c), 3.06(d) or 3.06(i), or in the event amounts are to be deposited in the
Primary Cash Collateral Account pursuant to subclause (A) or (B) of clause
"third" of Section 2.04(b), subclause (A) or (B) of clause "third" of Section
3.02 or subclause (A) or (B) of clause "fourth" of Section 3.03, amounts so
drawn or to be deposited, as the case may be, shall be deposited by the
Subordination Agent in the Primary Cash Collateral Account. If the Above-Cap
Liquidity Provider shall at any time make a Termination Amount payment under the
Above-Cap Liquidity Facility, such Termination Amount payment shall be deposited
by the Subordination Agent in the Above-Cap Reserve Account to be applied as
specified below in this Section 3.06(f). All amounts on deposit in each Cash
Collateral Account shall be invested and reinvested in Eligible Investments in
accordance with Section 2.02(b). On each Interest
46
Payment Date (or, in the case of any Special Distribution Date occurring prior
to the occurrence of a Triggering Event, on such Special Distribution Date),
Investment Earnings on amounts on deposit in the Primary Cash Collateral Account
(or in the case of any Special Distribution Date occurring prior to the
occurrence of a Triggering Event, Investment Earnings equal to the product of
such Investment Earnings multiplied by the Section 2.04(b) Fraction) shall be
deposited in the Collection Account (or, in the case of any Special Distribution
Date occurring prior to the occurrence of a Triggering Event, the Special
Payments Account) and applied on such Interest Payment Date (or Special
Distribution Date, as the case may be) in accordance with Section 2.04(b), 3.02
or 3.03 (as applicable). Investment Earnings on amounts on deposit in the
Above-Cap Reserve Account shall be credited to such account and applied in the
same manner as the Termination Amount payment credited thereto. Investment
Earnings on amounts on deposit in the Above-Cap Account shall be credited to
such account and applied in the same manner as Above-Cap Payments credited
thereto. The Subordination Agent shall deliver a written statement to Delta, the
Policy Provider and the Liquidity Providers, one day prior to each Interest
Payment Date and Special Distribution Date setting forth the aggregate amount of
Investment Earnings held in each of the Cash Collateral Accounts as of such
date. The Subordination Agent shall also deliver a written statement to Delta,
the Policy Provider and the Above-Cap Liquidity Provider one day after each
Distribution Date on which amounts have been deposited in the Above-Cap Account
and/or withdrawn from the Above-Cap Reserve Account setting forth the amount of
such deposit and/or withdrawal. In addition, from and after the date funds are
so deposited, the Subordination Agent shall make withdrawals from such account
as follows:
(i) on each Distribution Date, the Subordination Agent
shall, to the extent it shall not have received funds to pay accrued
and unpaid interest due and owing on the Class G Certificates (at the
Stated Interest Rate for the Class G Certificates for the applicable
Interest Period) after giving effect to the subordination provisions of
this Agreement and any Election Interest Payment made by the Policy
Provider, (A) withdraw from the Primary Cash Collateral Account, and
pay to the Class G Trustee an amount equal to the lesser of (x) an
amount necessary to pay accrued and unpaid interest (at the Stated
Interest Rate for the Class G Certificates for the applicable Interest
Period) on such Class G Certificates and (y) the amount on deposit in
the Primary Cash Collateral Account (so long as the aggregate amount of
unreplenished withdrawals, including such withdrawal, does not exceed
the Required Amount for such Distribution Date); and (B) if an
"Above-Cap Payment" would have been required to be made on such
Distribution Date pursuant to the terms of the Above-Cap Liquidity
Facility were such Liquidity Facility still in effect, withdraw from
the Above-Cap Reserve Account, and deposit into the Above-Cap Account,
an amount (if any) equal to the lesser of (x) an amount equal to such
Above-Cap Payment and (y) the amount on deposit in the Above-Cap
Reserve Account;
(ii) on each date on which the Pool Balance of the Class G
Trust shall have been reduced by payments made to the Class G
Certificateholders pursuant to Section 2.04(b), 3.02 or 3.03, the
Subordination Agent shall withdraw from the Primary Cash Collateral
Account such amount as is necessary so that, after giving effect to the
reduction of such Pool Balance on such date (including any such
reduction resulting from a prior withdrawal of amounts on deposit in
the Primary Cash Collateral Account on such
47
date) and any transfer of Investment Earnings from the Primary Cash
Collateral Account to the Collection Account or the Special Payments
Account on such date, an amount equal to the sum of the Required Amount
(with respect to the Primary Liquidity Facility) plus the remaining
Investment Earnings on deposit in the Primary Cash Collateral Account
(if any) will be on deposit in the Primary Cash Collateral Account and
shall, first, pay such withdrawn amount to the Primary Liquidity
Provider until the Liquidity Obligations owing to the Primary Liquidity
Provider shall have been paid in full and, second, deposit any
remaining amount in the Collection Account;
(iii) if a Replacement Primary Liquidity Facility shall be
delivered to the Subordination Agent following the date on which funds
have been deposited into the Primary Cash Collateral Account, the
Subordination Agent shall withdraw all amounts remaining on deposit in
the Primary Cash Collateral Account and shall pay such amounts to the
replaced Primary Liquidity Provider until all Liquidity Obligations
owed to such Person shall have been paid in full, and deposit any
remaining amount in the Collection Account; and
(iv) (A) following the payment of Final Distributions with
respect to the Class G Certificates, on the date on which the
Subordination Agent shall have been notified by the Primary Liquidity
Provider that the Liquidity Obligations owed to the Primary Liquidity
Provider have been paid in full, the Subordination Agent shall withdraw
all amounts on deposit in the Primary Cash Collateral Account and
deposit such amount in the Collection Account and, (B) on the first
Business Day occurring immediately after the earlier of (1) the date of
the payment of Final Distributions with respect to the Class G
Certificates and (2) the Final Legal Distribution Date for the Class G
Certificates (after giving effect to all distributions to be made on
such date), the Subordination Agent shall pay to the Above-Cap
Liquidity Provider an amount equal to the sum of the amounts (if any)
on deposit in the Above-Cap Account and the Above-Cap Reserve Account.
(g) Reinstatement. With respect to any Interest Drawing
under the Primary Liquidity Facility, upon the reimbursement of the Primary
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Maximum Available Commitment
shall be reinstated by an amount equal to the amount of such Interest Drawing so
reimbursed to the Primary Liquidity Provider but not to exceed the Stated Amount
for the Primary Liquidity Facility; provided, however, that the Primary
Liquidity Facility shall not be so reinstated in part or in full at any time if
(x) both a Performing Note Deficiency exists and a Liquidity Event of Default
shall have occurred and be continuing or (y) a Final Drawing shall have
occurred; provided, further, that any payment by the Policy Provider to the
Primary Liquidity Provider of any amounts pursuant to the second proviso to
Section 2.06(c) shall not reinstate the Primary Liquidity Facility, but the
Primary Liquidity Facility (so long as it is in effect) shall be reinstated, pro
tanto, to the extent the Policy Provider receives any reimbursement in respect
of such payment under clause "third" of Section 2.04(b), clause "third" of
Section 3.02 or clause "fourth" of Section 3.03., unless (x) both a Performing
Note Deficiency exists and a Liquidity Event of Default shall have occurred with
respect to the Primary Liquidity Facility or (y) a Final Drawing shall have
occurred with respect to the Primary Liquidity Facility. In the event that (i)
funds are withdrawn from the Primary Cash Collateral Account pursuant to clause
(i), (ii), (iii) or (iv) of Section 3.06(f) or (ii) such Primary Liquidity
Facility shall become
48
a Downgraded Facility or a Non-Extended Facility at a time when unreimbursed
Interest Drawings under the Primary Liquidity Facility have reduced the Maximum
Available Commitment thereunder to zero, then funds received by the
Subordination Agent at any time, other than (x) any time when both a Performing
Note Deficiency exists and a Liquidity Event of Default shall have occurred and
be continuing or (y) any time after a Final Drawing shall have occurred, shall
be deposited in the Primary Cash Collateral Account as and to the extent
provided in clause "third" of Section 2.04(b), clause "third" of Section 3.02 or
clause "fourth" of Section 3.03, as applicable, and applied in accordance with
Section 3.06(f).
(h) Reimbursement. The amount of each drawing under the
Primary Liquidity Facility shall be due and payable, together with interest
thereon, on the dates and at the rates, respectively, provided in the Primary
Liquidity Facility. The Subordination Agent shall have no obligation to
reimburse the Above-Cap Liquidity Provider for any Above-Cap Payments and the
Above-Cap Liquidity Provider shall have no interest in any monies credited to
any Trust Account except as provided in Section 3.06(f)(iv) hereof.
(i) Final Drawing. Upon receipt from the Primary
Liquidity Provider of a Termination Notice with respect to the Primary Liquidity
Facility, the Subordination Agent shall, not later than the date specified in
such Termination Notice, in accordance with and to the extent permitted by the
terms of the Primary Liquidity Facility, request a drawing under the Primary
Liquidity Facility of all available and undrawn amounts thereunder (a "FINAL
DRAWING"). Amounts drawn pursuant to a Final Drawing shall be maintained and
invested in accordance with Section 3.06(f).
(j) Reduction of Stated Amount. Promptly following each
date on which the Required Amount of the Primary Liquidity Facility is reduced
as a result of a reduction (i) in the Capped Interest Rate or (ii) in the Pool
Balance with respect to the Class G Certificates (including by reason of a
Policy Provider Election with respect to any Series G Equipment Note), the
Subordination Agent shall, if the Primary Liquidity Facility provides for
reductions of the Stated Amount of the Primary Liquidity Facility and if such
reductions are not automatic, request the Primary Liquidity Provider to reduce
such Stated Amount to an amount equal to the Required Amount with respect to the
Primary Liquidity Facility (as calculated by the Subordination Agent after
giving effect to such payment). Each such request shall be made in accordance
with the provisions of the Primary Liquidity Facility.
(k) Relation to Subordination Provisions. Interest
Drawings under the Primary Liquidity Facility and withdrawals from the Primary
Cash Collateral Account and the Above-Cap Account, in each case, in respect of
interest on the Class G Certificates, will be distributed to the Class G
Trustee, notwithstanding Sections 2.04(b), 3.02, 3.03 and 3.06.
(l) Assignment of the Primary Liquidity Facility. The
Subordination Agent agrees not to consent to the assignment by the Primary
Liquidity Provider of any of its rights or obligations under the Primary
Liquidity Facility or any interest therein unless (i) Delta shall have consented
to such assignment, (ii) each Rating Agency shall have provided a Ratings
Confirmation in respect of such assignment and (iii) the Policy Provider shall
have consented to such assignment (which consent shall not be unreasonably
withheld or delayed); provided that
49
the Subordination Agent shall consent to such assignment if the conditions in
the foregoing clauses (i), (ii) and (iii) are satisfied.
Section 3.07. The Policy. (a) Interest Drawings. If on any
Regular Distribution Date (other than the Final Legal Distribution Date) after
giving effect to the subordination provisions of this Agreement and to the
application of available funds in accordance with the priorities specified in
Section 2.04 and Article III, and taking into account the application of any
Drawing paid under the Primary Liquidity Facility in respect of Accrued Class G
Interest due on such Distribution Date and any withdrawal of funds from the
Primary Cash Collateral Account and the Above-Cap Account in respect of such
Accrued Class G Interest on such Distribution Date, the Subordination Agent does
not then have sufficient funds available for the payment of Accrued Class G
Interest, then, prior to 1:00 p.m. (New York City time) on such Distribution
Date, the Subordination Agent (i) shall deliver a Notice of Nonpayment, as
provided in the Policy to the Policy Provider or its fiscal agent, requesting a
Policy Drawing under the Policy (for payment into the Policy Account) in an
amount sufficient to enable the Subordination Agent to pay such Accrued Class G
Interest and (ii) upon receipt shall pay such amount from the Policy Account to
the Class G Trustee in payment of such Accrued Class G Interest on such
Distribution Date.
(b) Proceeds Deficiency Drawing. If on any Special
Distribution Date (other than a Special Distribution Date established pursuant
to the second paragraph of Section 3.07(c)) established by the Subordination
Agent by reason of its receipt of a Special Payment (a "DISPOSITION PAYMENT")
constituting the proceeds of any Series G Equipment Note or related Collateral,
as the case may be, there exists a shortfall in the amounts available to the
Subordination Agent (after giving effect to the subordination provisions of this
Agreement and to the application of available funds (including, without
limitation, the amount of such Disposition Payment) in accordance with the
priorities specified in Section 2.04 and Article III, and (if the disposition of
such Series G Equipment Note or related Collateral occurs prior to a Policy
Provider Election with respect to such Series G Equipment Note) taking into
account the application of any Drawing paid under the Primary Liquidity Facility
in respect of Accrued Class G Interest and any withdrawal of funds in the
Primary Cash Collateral Account and the Above-Cap Account in respect of such
interest) required to reduce the outstanding Pool Balance of the Class G
Certificates by an amount equal to the outstanding principal amount of the
applicable Series G Equipment Note (determined immediately prior to the receipt
of such Disposition Payment and less the amount of any Policy Drawing previously
paid by the Policy Provider in respect of principal of such Series G Equipment
Note) plus accrued and unpaid interest on the amount of such reduction accrued
at the Stated Interest Rate for the Class G Certificates for the period from the
immediately preceding Regular Distribution Date to such Special Distribution
Date, then, prior to 1:00 p.m. (New York City time) on such Special Distribution
Date, the Subordination Agent (x) shall deliver a Notice of Nonpayment, as
provided in the Policy to the Policy Provider or its fiscal agent requesting a
Policy Drawing under the Policy (for payment into the Policy Account) in an
amount equal to the amount of such shortfall and (y) shall pay the amount
specified in clause (x) from the Policy Account to the Class G Trustee in
payment of such reduction in the outstanding Pool Balance of the Class G
Certificates plus such accrued and unpaid interest on such Special Distribution
Date. The Subordination Agent shall promptly, but not less than 20 days prior to
the Special Distribution Date established pursuant to this Section
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3.07(b), send to Delta, the Trustees, the Primary Liquidity Provider and the
Policy Provider, a Written Notice of such Special Distribution Date.
(c) No Proceeds Drawing. On the first Business Day (which
shall be a Special Distribution Date) that is 21 months after the last date on
which full payment was made on any Series G Equipment Note (a "DEFAULTED SERIES
G EQUIPMENT NOTE") as to which there has subsequently been a failure to pay
principal or that has subsequently been Accelerated, if on or prior to such
Business Day the Subordination Agent has not theretofore made a drawing under
the Policy pursuant to Section 3.07(b), the Subordination Agent shall deliver a
Notice of Nonpayment, as provided in the Policy, to the Policy Provider or its
fiscal agent, requesting a Policy Drawing under the Policy (for payment into the
Policy Account) in an amount equal to the then outstanding principal amount of
such Defaulted Series G Equipment Note plus accrued and unpaid interest thereon
at the Stated Interest Rate from the immediately preceding Regular Distribution
Date. The Subordination Agent shall promptly, but not less than 25 days prior to
such Business Day, send to Delta, the Trustees, the Primary Liquidity Provider
and the Policy Provider a Written Notice establishing such Business Day as the
date for the distribution of the proceeds of such Policy Drawing, which date
shall constitute a Special Distribution Date. No later than 1:00 p.m. (New York
City time) on the specified Special Distribution Date the Subordination Agent
shall make the specified Policy Drawing and upon its receipt of the proceeds
thereof pay the amount thereof from the Policy Account to the Class G Trustee in
reduction of the outstanding Pool Balance of the Class G Certificates together
with such accrued and unpaid interest on the amount of such reduction. For the
avoidance of doubt, after the payment by the Policy Provider in full of such
amount under this Section 3.07(c), the Subordination Agent shall have no right
to make any further Policy Drawings under Section 3.07(c) in respect of such
Defaulted Series G Equipment Note except for a drawing in respect of Preference
Amounts as provided in Section 3.07(e).
Notwithstanding the foregoing, the Policy Provider has the
right, so long as no Policy Provider Default shall have occurred and be
continuing, upon notice to the Subordination Agent given at least five days
prior to the Special Distribution Date established by the Subordination Agent
pursuant to the first paragraph of this Section 3.07(c), to elect instead (the
"POLICY PROVIDER ELECTION") to pay (i) on such Special Distribution Date an
amount equal to the scheduled principal and interest that came due on such
Defaulted Series G Equipment Note (without regard to the Acceleration thereof)
but was not paid during such 21-month period (after giving effect to the
application of funds received from the Primary Liquidity Facility, the Primary
Cash Collateral Account and the Above-Cap Account, in each case attributable to
such interest) and (ii) thereafter, on each Regular Distribution Date, an amount
equal to the scheduled principal and interest that were to become due on such
Defaulted Series G Equipment Note on the related payment date (without regard to
any Acceleration thereof or to any funds available under the Primary Liquidity
Facility, any Cash Collateral Account or the Above-Cap Account) until the
establishment of an Election Distribution Date or a Special Distribution Date
established as provided in the immediately following sentence (the interest
portion of each such payment, an "ELECTION INTEREST PAYMENT"). Following a
Policy Provider Election with respect to a Defaulted Series G Equipment Note, on
any Business Day (which shall be a Special Distribution Date) elected by the
Policy Provider upon 20 days' Written Notice to the Subordination Agent and the
Class G Trustee, the Policy Provider may, notwithstanding the Policy Provider
Election, request the Subordination Agent to, and the Subordination Agent shall,
51
make a Policy Drawing for an amount equal to the then outstanding principal
balance of such Defaulted Series G Equipment Note (less any Policy Drawings
previously paid by the Policy Provider in respect of principal of such Defaulted
Series G Equipment Note) and accrued and unpaid interest on such amounts at the
Stated Interest Rate for the Class G Certificates from the immediately preceding
Regular Distribution Date to such Special Distribution Date.
Further, following a Policy Provider Election with respect to
a Defaulted Series G Equipment Note, upon the occurrence and continuance of a
Policy Provider Default, the Subordination Agent shall on any Business Day (an
"ELECTION DISTRIBUTION DATE", which shall be a Special Distribution Date)
elected by the Subordination Agent upon 20 days' Written Notice to the Class G
Trustee and the Policy Provider, make a Policy Drawing for an amount equal to
the then outstanding principal balance of such Defaulted Series G Equipment Note
(less any Policy Drawings previously paid by the Policy Provider in respect of
principal of such Defaulted Series G Equipment Note) and accrued and unpaid
interest on such amounts at the Stated Interest Rate for the Class G
Certificates from the immediately preceding Regular Distribution Date to such
Election Distribution Date. The Subordination Agent shall make each such Policy
Drawing referred to in this subparagraph (c) under the Policy (for payment into
the Policy Account) no later than 1:00 p.m. (New York City time) on the relevant
Special Distribution Date and upon its receipt of the proceeds thereof pay the
amount thereof from the Policy Account to the Class G Trustee in reduction of
the outstanding Pool Balance of the Class G Certificates together with such
accrued and unpaid interest thereon.
In addition, regardless of whether or not the Policy Provider
makes a Policy Provider Election, the Policy Provider shall, from and after the
end of such 21-month period, honor drawings by the Primary Liquidity Provider in
respect of amounts referred to in clause (g) of the definition of "Deficiency
Amount" contained in the Policy (each, an "EXCESS INTEREST POLICY DRAWING"). The
Primary Liquidity Provider agrees to make such Excess Interest Policy Drawings
and that the proceeds thereof shall reduce pro tanto the Liquidity Obligations
owing to it. Upon the issuance of any Replacement Primary Liquidity Facility
pursuant to Section 3.06(e), the Policy Provider agrees to promptly deliver to
the Replacement Primary Liquidity Provider providing such Replacement Primary
Liquidity Facility a certified copy of the Policy, provided that the Primary
Liquidity Provider being replaced returns its certified copy of the Policy to
the Policy Provider.
(d) Final Policy Drawing. If on the Final Legal
Distribution Date of the Class G Certificates after giving effect to the
subordination provisions of this Agreement and the application of available
funds in accordance with the priorities specified in Section 2.04 and Article
III, and taking into account the application of any Drawing paid under the
Primary Liquidity Facility in respect of interest included in the Final
Distribution and any withdrawal of funds in the Primary Cash Collateral Account
and Above-Cap Account in respect of interest included in the Final Distribution,
the Subordination Agent does not then have sufficient funds available on such
date for the payment in full of the Final Distribution (calculated as at such
date but excluding any accrued and unpaid Additional Payment) on the Class G
Certificates then, prior to 1:00 p.m. (New York City time) on such date, the
Subordination Agent shall: (i) deliver a Notice of Nonpayment, as provided in
the Policy, to the Policy Provider or its fiscal agent, requesting a Policy
Drawing under the Policy (for payment into the Policy Account) in an amount
equal to the minimum amount sufficient to enable the Subordination Agent to pay
the
52
Final Distribution (calculated as at such date but excluding any accrued and
unpaid Additional Payment) on the Class G Certificates, and (ii) upon receipt
shall pay such amount from the Policy Account to the Class G Trustee in payment
of such amount on such date.
(e) Avoidance Drawings. If at any time the Subordination
Agent shall have actual knowledge of the issuance of an Order, the Subordination
Agent shall promptly give notice thereof to Delta, each Trustee, the Primary
Liquidity Provider and the Policy Provider. The Subordination Agent shall
thereupon calculate the relevant Preference Amounts resulting therefrom and
shall promptly: (a) send to the Class G Trustee a Written Notice of such amount
and (b) prior to the expiration of the Policy deliver to the Policy Provider, or
its fiscal agent, a Notice of Avoided Payment, together with a copy of the
documentation required by the Policy with respect thereto, requesting a Policy
Drawing thereunder (for payment to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy and/or the Subordination Agent for
deposit into the Policy Account) in an amount equal to the amount of relevant
Preference Amount. To the extent that any portion of such Preference Amount is
to be paid by the Subordination Agent, such Written Notice shall also set the
date for the distribution of such portion of the proceeds of such Policy
Drawing, which date shall constitute a Special Distribution Date and shall be
the earlier of the third Business Day that immediately precedes the expiration
of the Policy and the Business Day that immediately follows the 25th day after
the date of such Written Notice. No later than 1:00 p.m. (New York City time) on
the specified Special Distribution Date, the Subordination Agent shall make the
specified Policy Drawing and, upon its receipt of the proceeds thereof, pay the
amount thereof from the Policy Account to the Class G Trustee.
(f) Application of Policy Drawings. Notwithstanding
anything to the contrary contained in this Agreement (including, without
limitation, Sections 2.04, 3.02 and 3.03 hereof), except as provided in Section
3.06(b)(i)(x) and (y) and Section 3.06(b)(ii)(x) and (y) hereof, all payments
received by the Subordination Agent in respect of a Policy Drawing (including,
without limitation, that portion, if any, of the proceeds of a Policy Drawing
for any Preference Amount that is to be paid to the Subordination Agent and not
to any receiver, conservator, debtor-in-possession or trustee-in-bankruptcy as
provided in the Policy) shall be promptly paid from the Policy Account to the
Class G Trustee for distribution to the Class G Certificateholders.
(g) Reduction of Outstanding Pool Balance. Promptly
following each date on which the Pool Balance of the Class G Certificates is
reduced as a result of a payment under this Agreement, the Subordination Agent
shall inform the Policy Provider of such reduction. Anything contained herein to
the contrary notwithstanding, (i) no Policy Drawing for payment in respect of
the Class G Certificates under clause (a) of this Section 3.07 shall be in
excess of Accrued Class G Interest and (ii) no Policy Drawing under clauses (b)
to (d) of this Section 3.07 shall be for an amount in excess of the then
outstanding Pool Balance of the Class G Certificates plus Accrued Class G
Interest. Nothing contained in this Intercreditor Agreement shall be deemed to
alter or amend the liabilities, obligations, requirements or procedures of the
Policy Provider under the Policy and the Policy Provider shall not be obligated
to make payment except at the times and in the amounts and under the
circumstances expressly set forth in the Policy.
(h) Resubmission of Notice of Payment. If the Policy
Provider at any time informs the Subordination Agent in accordance with the
Policy that a Notice of Nonpayment or
53
Notice of Avoided Payment submitted by the Subordination Agent does not satisfy
the requirements of the Policy, the Subordination Agent shall, as promptly as
possible after being so informed, submit to the Policy Provider an amended and
revised Notice of Nonpayment or Notice of Avoided Payment, as the case may be,
and shall pay to the Class G Trustee out of the Policy Account the amount
received pursuant to such amended or revised Notice of Nonpayment or Notice of
Avoided Payment, as the case may be, when received.
(i) Subrogation. The Policy Provider will be subrogated
to all of the rights of the holders of the Class G Certificates to payment on
the Class G Certificates to the extent of the payments made under the Policy as
set forth herein, the exercise of such subrogation right to be subject to the
other provisions of this Agreement.
ARTICLE IV
EXERCISE OF REMEDIES
Section 4.01. Directions from the Controlling Party. (a) (i)
The Controlling Party shall direct the Subordination Agent, which in turn shall
direct the Loan Trustee under each 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. If the Equipment Notes issued pursuant to any
Indenture have been Accelerated following an Indenture Event of Default with
respect thereto, the Controlling Party may direct the Subordination Agent to
sell, assign, contract to sell or otherwise dispose of and deliver all (but not
less than all) of such Equipment Notes to any Person at public or private sale,
at any location at the option of the Controlling Party, all upon such terms and
conditions as it may reasonably deem advisable and in accordance with applicable
law.
(ii) Notwithstanding the foregoing, so long as any
Certificates remain Outstanding, during the period ending on the date which is
nine months after the earlier of (x) the Acceleration of the Equipment Notes
issued pursuant to any Indenture or (y) the occurrence of a Delta Bankruptcy
Event, without the consent of each Trustee (other than the Trustee of any Trust
all of the Certificates of which are held or beneficially owned by Delta and/or
its Affiliates), 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.
(iii) At the request of the Controlling Party, the
Subordination Agent may from time to time during the continuance of an Indenture
Event of Default (and before the occurrence of a Triggering Event) commission an
LTV Appraisal with respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment
Note becomes a Non-Performing Equipment Note, the Subordination Agent shall
obtain Appraisals with respect to all of the Aircraft (the "LTV APPRAISALS") as
soon as practicable and additional LTV Appraisals on or prior to each
anniversary of the date of such initial LTV Appraisals; provided that, if the
Controlling Party reasonably objects to the appraised value of the Aircraft
shown in such LTV Appraisals,
54
the Controlling Party shall have the right to obtain or cause to be obtained
substitute LTV Appraisals (including any LTV Appraisals based upon physical
inspection of the Aircraft).
(b) To the extent permitted by applicable law, the
Subordination Agent, at the direction of the Controlling Party, shall take such
actions as it may reasonably deem most effectual to complete the sale or other
disposition of such Aircraft or Equipment Notes. In addition, in lieu of any
sale, assignment, contract to sell or other disposition, if the Subordination
Agent is so directed by the Controlling Party, the Subordination Agent may
maintain possession of such Equipment Notes and continue to apply monies
received in respect of such Equipment Notes in accordance with Section 2.04(b)
and Article III. In addition, in lieu of such sale, assignment, contract to sell
or other disposition, or in lieu of such maintenance of possession, the
Controlling Party may direct the Subordination Agent to, subject to the terms
and conditions of the related Indenture, instruct the Loan Trustee under such
Indenture to foreclose on the Lien on the related Aircraft or take any other
remedial action permitted by such Indenture or applicable law.
Section 4.02. Remedies Cumulative. Each and every right, power
and remedy given to the Trustees, the Liquidity Providers, the Policy Provider,
the Controlling Party or the Subordination Agent specifically or otherwise in
this Agreement shall be cumulative and shall be in addition to every other
right, power and remedy herein specifically given or now or hereafter existing
at law, in equity or by statute, and each and every right, power and remedy
whether specifically herein given or otherwise existing may, subject always to
the terms and conditions hereof, be exercised from time to time and as often and
in such order as may be deemed expedient by any Trustee, any Liquidity Provider,
the Policy Provider, the Controlling Party or the Subordination Agent, as
appropriate, and the exercise or the beginning of the exercise of any right,
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No delay or
omission by any Trustee, any Liquidity Provider, the Policy Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
Section 4.03. Discontinuance of Proceedings. In case any party
to this Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.
Section 4.04. Right of Certificateholders, the Primary
Liquidity Provider and the Policy Provider to Receive Payments Not to Be
Impaired. Subject to the provisions of this Agreement and each Trust Agreement,
the right of any Certificateholder or the Primary Liquidity Provider or the
Policy Provider, respectively, to receive payments hereunder (including, without
limitation, pursuant to Section 2.04, 3.02 or 3.03) when due, or to institute
suit for the enforcement of any such payment on or after the applicable
Distribution Date, shall not be
55
impaired or affected without the consent of such Certificateholder, the Primary
Liquidity Provider or the Policy Provider, respectively.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
Section 5.01. Notice of Indenture Event of Default or
Triggering Event. (a) If the Subordination Agent shall have knowledge of an
Indenture Event of Default or a Triggering Event, as promptly as possible and in
any event within ten days after obtaining actual knowledge thereof, the
Subordination Agent shall give notice thereof to the Rating Agencies, Delta, the
Liquidity Providers, the Policy Provider and the Trustees by facsimile or
telephone (to be promptly confirmed in writing), unless such Indenture Event of
Default or Triggering Event shall have been cured or waived. For all purposes of
this Agreement, in the absence of actual knowledge, the Subordination Agent
shall not be deemed to have knowledge of any Indenture Event of Default or
Triggering Event unless notified in writing by Delta, one or more Trustees, one
or more Liquidity Providers, the Policy Provider or one or more
Certificateholders; and "actual knowledge" (as used in the foregoing clause) of
the Subordination Agent shall mean actual knowledge of an officer in the
Corporate Trust Office of the Subordination Agent or any other Responsible
Officer thereof.
(b) The Subordination Agent will furnish to each
Liquidity Provider, the Policy Provider and each Trustee, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to the
Subordination Agent as registered holder of the Equipment Notes or otherwise in
its capacity as Subordination Agent to the extent the same shall not have been
otherwise directly distributed to such Liquidity Provider, the Policy Provider
or each Trustee, as applicable, pursuant to any other Operative Agreement.
Section 5.02. Indemnification. The Subordination Agent shall
not be required to take any action or refrain from taking any action under
Article IV unless the Subordination Agent shall have received indemnification
against any risks incurred in connection therewith in form and substance
reasonably satisfactory to it, including, without limitation, adequate advances
against costs that may be incurred by it in connection therewith. The
Subordination Agent shall not be required to take any action under Article IV,
nor shall any other provision of this Agreement or any other Operative Agreement
be deemed to impose a duty on the Subordination Agent to take any action, if the
Subordination Agent shall have been advised by outside counsel that such action
is contrary to the terms hereof or is otherwise contrary to law.
Section 5.03. No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to take
or refrain from taking any action under, or in connection with, this Agreement,
except as expressly provided by the terms of this Agreement; and no implied
duties or obligations shall be read into this Agreement against the
Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity and at its own cost and expense (but without any right of
indemnity in respect of any such cost or expense) promptly take such action as
may be necessary duly to discharge all Liens on any of the
56
Trust Accounts or any monies deposited therein that are attributable to the
Subordination Agent in its individual capacity and that are unrelated to the
transaction contemplated hereby and by the other Operative Agreements.
Section 5.04. Notice from the Liquidity Providers and
Trustees. If any Liquidity Provider, the Policy Provider or any Trustee has
notice of an Indenture Event of Default or a Triggering Event, such Person shall
promptly give notice thereof to all other Liquidity Providers, the Policy
Provider and all other Trustees and to the Subordination Agent; provided,
however, that no such Person shall have any liability hereunder as a result of
its failure to deliver any such notice.
Section 5.05. Agreements Relating to the Above-Cap Liquidity
Facility. Each of the Subordination Agent and the Class G Trustee agrees at the
request of the Above-Cap Liquidity Provider to use reasonable efforts
(consistent with applicable legal and regulatory restrictions) to take any
action that would avoid the need for, or reduce the amount of, any payment under
Section 2(d) of the ISDA Master Agreement forming part of the Above-Cap
Liquidity Facility; provided that any such action would not, in the reasonable
judgment of such Person, be materially disadvantageous to it. Notwithstanding
anything to the contrary contained herein, but without limiting, and subject to,
the rights of the Subordination Agent hereunder, the obligation of the Above-Cap
Liquidity Provider to make any Above-Cap Payment or pay any Termination Amount
shall be governed exclusively by the applicable Above-Cap Liquidity Facility.
ARTICLE VI
THE SUBORDINATION AGENT
Section 6.01. Authorization; Acceptance of Trusts and Duties.
The Class G Trustee hereby designates and appoints the Subordination Agent as
its agent and trustee under the applicable Liquidity Facility and authorizes the
Subordination Agent to enter into the applicable Liquidity Facility as its agent
and trustee. Each of the Liquidity Providers, the Policy Provider and the
Trustees hereby designates and appoints the Subordination Agent as the
Subordination Agent under this Agreement. U.S. Bank accepts the trusts and
duties hereby created and applicable to it and agrees to perform such duties,
but only upon the terms of this Agreement and agrees to receive, handle and
disburse all monies received by it in accordance with the terms hereof. The
Subordination Agent shall have no liability hereunder except (a) for its own
willful misconduct or negligence, (b) as provided in Section 2.02 and the last
sentence of Section 5.03, (c) for liabilities that may result from the
inaccuracy of any representation or warranty of the Subordination Agent made in
its individual capacity in any Operative Agreement and (d) as otherwise
expressly provided herein or in the other Operative Agreements.
Section 6.02. Absence of Duties. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
Section 6.03. No Representations or Warranties as to
Documents. The Subordination Agent shall not be deemed to have made any
representation or warranty as to the
57
validity, legality or enforceability of this Agreement or any other Operative
Agreement or as to the correctness of any statement contained herein or therein
(other than the representations and warranties of the Subordination Agent made
in its individual capacity under any Operative Agreement), except that the
Subordination Agent hereby represents and warrants that each of said specified
documents to which it is a party has been or will be duly executed and delivered
by one of its officers who is and will be duly authorized to execute and deliver
such document on its behalf. The Certificateholders, the Trustees, the Policy
Provider and the Liquidity Providers make no representation or warranty
hereunder whatsoever.
Section 6.04. No Segregation of Monies; No Interest. Any
monies paid to or retained by the Subordination Agent pursuant to any provision
hereof and not then required to be distributed to any Trustee, the Policy
Provider or any Liquidity Provider as provided in Articles II and III or
deposited into one or more Trust Accounts need not be segregated in any manner
except to the extent required by such Articles II and III and by law, and the
Subordination Agent shall not (except as otherwise provided in Section 2.02) be
liable for any interest thereon; provided, however, that any payments received
or applied hereunder by the Subordination Agent shall be accounted for by the
Subordination Agent so that any portion thereof paid or applied pursuant hereto
shall be identifiable as to the source thereof.
Section 6.05. Reliance; Agents; Advice of Counsel. The
Subordination Agent shall not incur any liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers, the Policy Provider or the Trustees the manner of ascertainment of
which is not specifically described herein, the Subordination Agent may for all
purposes hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider, the Policy Provider or Trustee, as the case may
be, as to such fact or matter, and such certificate shall constitute full
protection to the Subordination Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon. In the administration of the
trusts hereunder, the Subordination Agent may (a) execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and (b) consult with counsel, accountants and other skilled
Persons to be selected and retained by it. The Subordination Agent shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
Persons acting within such counsel's, accountants' or Person's area of
competence (so long as the Subordination Agent shall have exercised reasonable
care and judgment in selecting such Persons).
Section 6.06. Capacity in Which Acting. The Subordination
Agent acts hereunder solely as agent or trustee herein and not in its individual
capacity, except as otherwise expressly provided herein and in the Operative
Agreements.
Section 6.07. Compensation. The Subordination Agent shall be
entitled to such compensation, including reasonable expenses and disbursements,
for all services rendered
58
hereunder as Delta and the Subordination Agent may agree from time to time in
writing and shall have a priority claim to the extent set forth in Article III
on all monies collected hereunder for the payment of such compensation, to the
extent that such compensation shall not be paid by others. The Subordination
Agent agrees that it shall have no right against any Trustee, the Policy
Provider or any Liquidity Provider for any fee as compensation for its services
as agent under this Agreement. The provisions of this Section 6.07 shall survive
the termination of this Agreement.
Section 6.08. May Become Certificateholder. The institution
acting as Subordination Agent hereunder may become a Certificateholder and have
all rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.
Section 6.09. Subordination Agent Required; Eligibility. There
shall at all times be a Subordination Agent hereunder that is a Citizen of the
United States, a bank, trust company or other financial institution organized
and doing business under the laws of the United States or any state thereof and
eligible to act as a trustee under Section 310(a) of the Trust Indenture Act of
1939, as amended, and that has a combined capital and surplus of at least
$75,000,000 (or a combined capital and surplus in excess of $5,000,000 and the
obligations of which, whether now in existence or hereafter incurred, are fully
and unconditionally guaranteed by a corporation organized under the laws of the
United States or any State or territory thereof or the District of Columbia and
having a combined capital and surplus of at least $75,000,000). If such bank,
trust company or other financial institution or such corporation publishes
reports of conditions at least annually, pursuant to law or to the requirements
of federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 6.09 the combined capital and
surplus of such bank, trust company or other financial institution or such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of conditions so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section 6.09, the
Subordination Agent shall resign immediately in the manner and with the effect
specified in Section 7.01.
Section 6.10. Money to Be Held in Trust. All Equipment Notes,
monies and other property deposited with or held by the Subordination Agent
pursuant to this Agreement shall be held in trust for the benefit of the parties
entitled to such Equipment Notes, monies and other property and the
Subordination Agent, in its individual capacity, hereby waives all rights of
set-off and counterclaim with respect to all such property.
ARTICLE VII
SUCCESSOR SUBORDINATION AGENT
Section 7.01. Replacement of Subordination Agent; Appointment
of Successor. (a) The Subordination Agent or any successor thereto must resign
if at any time it fails to comply with Section 6.09 and may resign at any time
without cause by giving 60 days'
59
prior written notice to Delta, the Trustees, the Policy Provider and the
Liquidity Providers. The Controlling Party shall remove the Subordination Agent
if:
(1) the Subordination Agent fails to comply with Section
6.09;
(2) the Subordination Agent is adjudged bankrupt or
insolvent or files a bankruptcy petition;
(3) a receiver of the Subordination Agent shall be
appointed or any public officer shall take charge or control of the
Subordination Agent or its property or affairs; 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. If a successor Subordination Agent shall not have been
appointed within 60 days after such notice of resignation or removal, the
retiring Subordination Agent, one or more of the Trustees, the Policy Provider
or one or more of the Liquidity Providers may petition any court of competent
jurisdiction for the appointment of a successor Subordination Agent to act until
such time, if any, as a successor shall have been appointed as provided above.
A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility to each party hereto, upon which the
resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The successor
Subordination Agent shall mail a notice of its succession to the Liquidity
Providers, the Policy Provider and the Trustees. The retiring Subordination
Agent shall promptly transfer its rights under each of the Liquidity Facilities
and all of the property and all books and records, or true, complete and correct
copies thereof, held by it as Subordination Agent to the successor Subordination
Agent.
If the Subordination Agent fails to comply with Section 6.09
(to the extent applicable), one or more of the Trustees, the Policy Provider or
one or more of the Liquidity Providers may petition a court of competent
jurisdiction for the removal of the Subordination Agent and the appointment of a
successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of
the Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings Confirmation
and so long as no Policy Provider Default has occurred and is continuing, the
Policy Provider shall have consented to such successor Subordination Agent.
(b) Any corporation, bank, trust company or other
financial institution into which the Subordination Agent may be merged or
converted or with which it may be consolidated, or
60
any corporation, bank, trust company or other financial institution resulting
from any merger, conversion or consolidation to which the Subordination Agent
shall be a party, or any corporation, bank, trust company or other financial
institution succeeding to all or substantially all of the corporate trust
business of the Subordination Agent, shall be the successor of the Subordination
Agent hereunder, provided that such corporation, bank, trust company or other
financial institution shall be otherwise qualified and eligible under Section
6.09, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VIII
SUPPLEMENTS AND AMENDMENTS
Section 8.01. Amendments, Waivers, Etc. (a) This Agreement may
not be supplemented, amended or modified without the consent of each Trustee
(acting, except in the case of any amendment pursuant to Section 3.06(e)(v)(3)
or Section 3.06(c)(ii) or any amendment contemplated by the last sentence of
this Section 8.01(a), with the consent of holders of Certificates of the related
Class evidencing Fractional Undivided Interests in the related Trust aggregating
not less than a majority in interest in such Trust or as otherwise authorized
pursuant to the relevant Trust Agreement (including, without limitation, without
the consent of the Certificateholders to the extent permitted thereby, Section
9.01 of the Basic Agreement)), the Subordination Agent, the Policy Provider and
each Liquidity Provider; provided, however, that this Agreement may be
supplemented, amended or modified without the consent of any Trustee in order
(i) to cure any ambiguity or omission or to correct any mistake, (ii) to correct
or supplement any provision, or (iii) to make any other provision in regard to
matters or questions arising hereunder that will not materially adversely affect
the interests of any Trustee or the holders of the related Class of
Certificates; provided further, however, that, if such supplement, amendment or
modification (x) would directly or indirectly amend, modify or supersede, or
otherwise conflict with, Section 2.02(b), 3.06(c), 3.06(e), 3.06(f) (other than
the last sentence thereof), 3.06(l), this proviso of this Section 8.01(a), the
last sentence of Section 8.01(a), or Section 9.06 (collectively, the "DELTA
PROVISIONS"), (y) would otherwise adversely affect the interests of a potential
Replacement Primary Liquidity Provider or of Delta with respect to its ability
to replace the Primary Liquidity Facility or with respect to its payment
obligations under any Operative Agreement or (z) is made pursuant to the last
sentence of this Section 8.01(a), then such supplement, amendment or
modification shall not be effective without the additional written consent of
Delta. Notwithstanding the foregoing, without the consent of each
Certificateholder affected thereby, the Policy Provider and each Liquidity
Provider, no supplement, amendment or modification of this Agreement may (i)
reduce the percentage of the interest in any Trust evidenced by the Certificates
issued by such Trust necessary to consent to modify or amend any provision of
this Agreement or to waive compliance therewith or (ii), except as provided in
the last sentence of this Section 8.01(a), modify Section 2.04, 3.02 or 3.03
hereof relating to the distribution of monies received by the Subordination
Agent hereunder from the Equipment Notes or pursuant to the Liquidity Facilities
or the Policy. Nothing contained in this Section 8.01(a) shall require the
consent of a Trustee at any time following the payment of Final Distributions
with respect to the related Class of Certificates. If the Replacement Primary
Liquidity Facility for the Primary Liquidity Facility is to be comprised of more
than one instrument as contemplated by the definition of the term "Replacement
Primary Liquidity Facility", then each party hereto agrees to amend this
Agreement and the other Operative
61
Agreements to incorporate appropriate mechanics for multiple Primary Liquidity
Facilities for a single Trust.
(b) Subject to Section 2.06, if the Subordination Agent,
as the registered holder of any Equipment Notes, receives a request for its
consent to any amendment, modification, consent or waiver under such Equipment
Notes, to the Indenture pursuant to which such Equipment Notes were issued or
the related Participation Agreement or other related document, the Subordination
Agent will exercise its voting rights as directed by the Controlling Party,
subject to Section 4.01 and 4.04; provided that no such amendment, modification,
consent or waiver shall (i) reduce the amount of principal or interest payable
by Delta under any Equipment Note issued under any Indenture or delay the timing
of any such payment, (ii) create any Lien with respect to any Collateral prior
to, pari passu with or subordinate to the Lien of the related Indenture or
deprive any holder of an Equipment Note issued under such Indenture of the
benefit of the Lien of such Indenture upon the related Collateral, or (iii)
reduce the percentage in principal amount of the outstanding Equipment Notes
issued under any Indenture required to take or approve any action under such
Indenture without, in the case of the preceding clauses (i), (ii) and (iii), the
consent of each Liquidity Provider, the Policy Provider and the Trustee of each
Trust (other than any Trust all the Certificates of which are held or
beneficially owned by Delta and/or any of its Affiliates) whose
Certificateholders would be affected thereby, the consent of each such Trustee
to be given only at the direction of the holders of all of the Certificates
Outstanding under such Trust.
Section 8.02. Subordination Agent Protected. If, in the
reasonable opinion of the institution acting as the Subordination Agent
hereunder, any document required to be executed by it pursuant to the terms of
Section 8.01 adversely affects any right, duty, immunity or indemnity with
respect to such institution under this Agreement, any Liquidity Facility or the
Policy, the Subordination Agent may in its discretion decline to execute such
document.
Section 8.03. Effect of Supplemental Agreements. Upon the
execution of any amendment, consent or supplement hereto pursuant to the
provisions hereof, this Agreement shall be and shall be deemed to be modified
and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Agreement of the parties
hereto and beneficiaries hereof shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental agreement shall be and
be deemed to be part of the terms and conditions of this Agreement for any and
all purposes. In executing or accepting any supplemental agreement permitted by
this Article VIII, the Subordination Agent shall be entitled to receive, and
shall be fully protected in relying upon, an opinion of counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement.
Section 8.04. Notices to Rating Agencies and the Policy
Provider. (a) Promptly following its receipt of each amendment, consent,
modification, supplement or waiver contemplated by this Article VIII, the
Subordination Agent shall send a copy thereof to each Rating Agency and the
Policy Provider.
(b) Until such time as an Indenture Event of Default has
occurred under an Indenture, the Policy Provider shall provide at least seven
days prior notice to S&P and Xxxxx'x
62
of each action it intends to take with respect to such Indenture in its capacity
as Controlling Party.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Termination of Intercreditor Agreement. Upon (or
at any time after) payment of Final Distributions with respect to each Class of
Certificates and the payment in full of all Liquidity Obligations to the Primary
Liquidity Provider and all Policy Provider Obligations to the Policy Provider
and provided that there shall then be no other amounts due to the
Certificateholders, the Trustees, the Liquidity Providers, the Subordination
Agent and the Policy Provider hereunder or under the Trust Agreements, and that
the commitment of (i) the Liquidity Providers under the Liquidity Facilities and
(ii) the Policy Provider under the Policy shall have expired or been terminated,
this Agreement shall terminate and shall be of no further force or effect.
Except as aforesaid or otherwise provided, this Agreement and the trusts created
hereby shall continue in full force and effect in accordance with the terms
hereof.
Section 9.02. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers, Policy Provider and Subordination Agent. Subject to the
second sentence of Section 9.06 and the provisions of Section 4.04 and 8.01,
nothing in this Agreement, whether express or implied, shall be construed to
give to any Person other than the Trustees, the Liquidity Providers, the Policy
Provider and the Subordination Agent any legal or equitable right, remedy or
claim under or in respect of this Agreement.
Section 9.03. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices required or permitted under the terms
and provisions of this Agreement shall be in English and in writing, and any
such notice may be given by United States mail, courier service or facsimile or
any other customary means of communication, and any such notice shall be
effective when delivered (or, if mailed, three Business Days after deposit,
postage prepaid, in the first class United States mail and, if delivered by
facsimile, upon completion of transmission and confirmation by the sender (by a
telephone call to a representative of the recipient or by machine confirmation)
that such transmission was received),
if to the Subordination Agent, to:
U.S. Bank Trust National Association
000 Xxxxxx Xxxxxx
Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
63
if to any Trustee, to:
U.S. Bank Trust National Association
000 Xxxxxx Xxxxxx
Xxxxxxx Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Primary Liquidity Provider, to:
Xxxxxxxxxx Xxxxx-Xxxxxxxxxxx
Xx Xxxxxxxxxxxx 0
X-00000 Xxxxxxxxx
Xxxxxxx
Attention: Transportation Finance/Xxxxxxxx Xxxx
Telephone: x00 (0) 000-000-0000
Telecopy: x00 (0) 000-000-0000
and
Landesbank Baden-Wurttemberg, New York Branch
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx, Vice President or
Xxxxx Xxxxxx, Assistant Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Above-Cap Liquidity Provider, to:
Xxxxxxx Xxxxx Capital Services, Inc.
Xxxxxxx Xxxxx World Headquarters
4 World Financial Center
New York, New York 10080
Attention: Swap Group
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
64
if to the Policy Provider, to:
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Surveillance Department
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Any party, by notice to the other parties hereto, may designate
additional or different addresses for subsequent notices or communications.
Whenever the words "notice" or "notify" or similar words are used herein, they
mean the provision of formal notice as set forth in this Section 9.03. A copy of
any notice given by the Trustee, any Liquidity Provider or the Subordination
Agent shall be given to the Policy Provider therewith.
Section 9.04. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 9.05. No Oral Modifications or Continuing Waivers. No terms or
provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party or other Person
against whom enforcement of the change, waiver, discharge or termination is
sought and any other party or other Person whose consent is required pursuant to
this Agreement and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
Section 9.06. Successors and Assigns. All covenants and agreements
contained herein shall bind and inure to the benefit of, and be enforceable by,
each of the parties hereto and the successors and permitted assigns of each, all
as herein provided. In addition, the Delta Provisions shall inure to the benefit
of Delta and its successors and permitted assigns, and (without limitation of
the foregoing) Delta is hereby constituted, and agreed to be, an express third
party beneficiary of the Delta Provisions.
Section 9.07. Headings. The headings of the various Articles and
Sections herein and in the Table of Contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section 9.08. Counterparts. This Agreement may be executed in any
number of counterparts (and each party shall not be required to execute the same
counterpart). Each counterpart of this Agreement including a signature page or
pages executed by each of the parties hereto shall be an original counterpart of
this Agreement, but all of such counterparts together constitute one instrument.
Section 9.09. Subordination. (a) As among the Trustees, and as between
the Liquidity Providers and the Policy Provider, on the one hand, and the
Trustees and the Certificateholders, on the other hand, this Agreement shall be
a subordination agreement for
65
purposes of Section 510 of the Bankruptcy Code. In addition, as among the
Trustees and the Certificateholders of each Class, this Agreement shall be a
subordination agreement for purposes of such Section 510.
(b) Notwithstanding the provisions of this Agreement, if
prior to the payment in full to (i) the Primary Liquidity Provider of all
Liquidity Obligations then due and payable and (ii) the Policy Provider of all
Policy Provider Obligations or prior to the distribution in full of any other
amount distributable hereunder, any party hereto shall have received any payment
or distribution in respect of Equipment Notes or any other amount under the
Indentures or other Operative Agreements which, had the subordination provisions
of this Agreement been properly applied to such payment, distribution or other
amount, would not have been distributed to such Person, then such payment,
distribution or other amount shall be received and held in trust by such Person
and paid over or delivered to the Subordination Agent for application as
provided herein.
(c) If any Trustee, any Liquidity Provider, the Policy
Provider or the Subordination Agent receives any payment in respect of any
obligations owing or amounts distributable hereunder (or, in the case of the
Primary Liquidity Provider or the Policy Provider, in respect of the Liquidity
Obligations or the Policy Provider Obligations, as the case may be), which is
subsequently invalidated, declared preferential, set aside and/or required to be
repaid to a trustee, receiver or other party, then, to the extent of such
payment, such obligations or amounts (or, in the case of the Primary Liquidity
Provider or the Policy Provider, such Liquidity Obligations or the Policy
Provider Obligations, as the case may be) intended to be satisfied shall be
revived and continue in full force and effect as if such payment had not been
received.
(d) The Trustees (on behalf of themselves and the holders
of Certificates), the Liquidity Providers, the Policy Provider and the
Subordination Agent expressly confirm and agree that the payment priorities and
subordination specified in Articles II and III shall apply in all circumstances,
notwithstanding (x) the fact that the obligations owed to the Trustees are
secured by certain assets and the Liquidity Obligations and the Policy Provider
Obligations may not be so secured and (y) the occurrence of a Delta Bankruptcy
Event or any similar event or occurrence relating to any other Person (it being
expressly agreed that the payment priorities and subordination specified in
Articles II and III shall apply whether or not a claim for post-petition or
post-filing interest is allowed in the proceedings resulting from such Delta
Bankruptcy Event or other event or occurrence). The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations or Policy Provider Obligations (or
other obligations due to the Policy Provider hereunder) due to their status as
secured creditors in any bankruptcy, insolvency or other legal proceeding.
(e) Each of the Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers, the Policy Provider and the
Subordination Agent may take any of the following actions without impairing its
rights under this Agreement:
(i) obtain a Lien on any property to secure any amounts
owing to it hereunder, including, in the case of the Primary Liquidity
Provider and the Policy Provider, the Liquidity Obligations or the
Policy Provider Obligations, as the case may be;
66
(ii) obtain the primary or secondary obligation of any
other obligor with respect to any amounts owing to it hereunder,
including, in the case of the Primary Liquidity Provider and the Policy
Provider, any of the Liquidity Obligations or the Policy Provider
Obligations, as the case may be;
(iii) renew, extend, increase, alter or exchange any
amounts owing to it hereunder, including, in the case of the Primary
Liquidity Provider and the Policy Provider, any of the Liquidity
Obligations or the Policy Provider Obligations, as the case may be, or
release or compromise any obligation of any obligor with respect
thereto;
(iv) refrain from exercising any right or remedy, or delay
in exercising any right or remedy, which it may have; or
(v) take any other action which might discharge a
subordinated party or a surety under applicable law;
provided, however, that the taking of any such actions by any of the Trustees,
Liquidity Providers, the Policy Provider or the Subordination Agent shall not
prejudice the rights or adversely affect the obligations of any other party
under this Agreement.
Section 9.10. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED
IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.11. Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity. (a) Each of the parties hereto, to the extent it may
do so under applicable law, for purposes hereof and of all other Operative
Agreements hereby (i) irrevocably submits itself to the non-exclusive
jurisdiction of the courts of the State of New York sitting in the City of New
York and to the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York, for the purposes of any suit, action or
other proceeding arising out of this Agreement, the subject matter hereof or any
of the transactions contemplated hereby brought by any party or parties hereto
or thereto, or their successors or permitted assigns and (ii) waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof or any of the transactions
contemplated hereby may not be enforced in or by such courts.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED,
including, without limitation, contract claims, tort claims, breach of duty
claims and all other common law and statutory
67
claims. Each of the parties warrants and represents that it has reviewed this
waiver with its legal counsel, and that it knowingly and voluntarily waives its
jury trial rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.
(c) Each Liquidity Provider hereby waives any immunity it
may have from the jurisdiction of the courts of the United States or of any
state thereof and waives any immunity any of its properties located in the
United States may have from attachment or execution upon a judgment entered by
any such court under the United States Foreign Sovereign Immunities Act of 1976
or any similar successor legislation.
Section 9.12. Non-Petition. Each Liquidity Provider covenants
that until one year and one day after the Equipment Notes have been paid in
full, it shall not acquiesce, petition or otherwise invoke or cause or join in
invoking or causing any Trust or any other Person to invoke the process of any
governmental authority for the purpose of commencing or sustaining a case
(whether voluntary or not) against such Trust under any bankruptcy, insolvency
or similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of such Trust or any
substantial part of its property or ordering the winding-up or liquidation of
the affairs of such Trust.
68
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized, as of the date first above written.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee for each of the Trusts
By:
--------------------------------------
Name:
Title:
LANDESBANK BADEN-WURTTEMBERG, as Primary
Liquidity Provider,
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
XXXXXXX XXXXX CAPITAL SERVICES, INC.,
as Above-Cap Liquidity Provider
By:
--------------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Subordination Agent
By:
--------------------------------------
Name:
Title:
69
AMBAC ASSURANCE CORPORATION,
as Policy Provider
By:
--------------------------------------
Name:
Title:
70
SCHEDULE 2.02(b)
Upon the funding of any Above-Cap Account or Above-Cap Reserve Account
or the maturity or redemption of any investment of funds in any such account
(such funds, the "Funds"), the Above-Cap Liquidity Provider shall send a notice
to the Subordination Agent containing a list of Eligible Investments (the
"Specified Investments") which shall contain at least 10 investments in open
market commercial paper of corporations incorporated under the laws of the
United States of America or any state thereof.
Following receipt of such notice, the Subordination Agent shall use its
best efforts to invest or reinvest the Funds in any Specified Investment. If no
Specified Investment is then available, the Subordination Agent shall invest or
reinvest the Funds in any other Eligible Investment selected by the
Subordination Agent.
Following such investment or reinvestment of the Funds by the
Subordination Agent in any Specified Investment or other Eligible Investment,
the Subordination Agent shall deliver a written statement to the Above-Cap
Liquidity Provider setting forth for each such Specified Investment or Eligible
Investment the CUSIP number or other similar number for such obligation (or, if
such obligation does not have such a number, (i) the name of the issuer, (ii)
its maturity date, (iii) its yield or rate of return, and (iv) its rating, if
rated by any nationally recognized rating agency).
71
