EXHIBIT 4.11
INTERCREDITOR AGREEMENT
Dated as of
February 15, 2000
AMONG
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee under the
American Trans Air 2000-1G Pass Through Trust
and
American Trans Air 2000-1C Pass Through Trust,
CITIBANK, N.A.
as Class G Liquidity Provider
and Class C Liquidity Provider,
AMBAC ASSURANCE CORPORATION
as Policy Provider
AND
WILMINGTON TRUST COMPANY,
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and Trustee
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................2
ARTICLE II TRUST ACCOUNTS; CONTROLLING PARTY...............................23
SECTION 2.1 Agreement to Terms of Subordination; Payments from Monies
Received Only.............................................23
SECTION 2.2 Trust Accounts...............................................23
SECTION 2.3 Deposits to the Collection Account and Special Payments
Account....................................................25
SECTION 2.4 Distributions of Special Payments............................25
SECTION 2.5 Designated Representatives...................................28
SECTION 2.6 Controlling Party............................................29
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF.......................31
SECTION 3.1 Written Notice of Distribution...............................31
SECTION 3.2 Distribution of Amounts on Deposit in the Collection Account.33
SECTION 3.3 Distribution of Amounts on Deposit Following a Triggering
Event.....................................................35
SECTION 3.4 Other Payments...............................................38
SECTION 3.5 Payments to the Trustees, the Liquidity Providers and the
Policy Provider...........................................39
SECTION 3.6 Liquidity Facilities.........................................39
SECTION 3.7 The Policy..................................................44
ARTICLE IV EXERCISE OF REMEDIES............................................48
SECTION 4.1 Directions from the Controlling Party........................48
SECTION 4.2 Remedies Cumulative..........................................49
SECTION 4.3 Discontinuance of Proceedings................................50
SECTION 4.4 Right of Certificateholders to Receive Payments Not to
Be Impaired...............................................50
SECTION 4.5 Undertaking for Costs........................................50
ARTICLE V DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS
OF TRUSTEES, ETC............................................................50
SECTION 5.1 Notice of Indenture Default or Triggering Event..............50
SECTION 5.2 Indemnification..............................................51
SECTION 5.3 No Duties Except as Specified in Intercreditor Agreement.....51
SECTION 5.4 Notice from the Liquidity Providers and Trustees.............52
ARTICLE VI THE SUBORDINATION AGENT.........................................52
SECTION 6.1 Authorization; Acceptance of Trusts and Duties...............52
SECTION 6.2 Absence of Duties............................................52
SECTION 6.3 No Representations or Warranties as to Documents.............52
SECTION 6.4 No Segregation of Monies; No Interest........................53
SECTION 6.5 Reliance; Agents; Advice of Counsel..........................53
SECTION 6.6 Capacity in Which Acting.....................................54
SECTION 6.7 Compensation.................................................54
SECTION 6.8 May Become Certificateholder.................................54
SECTION 6.9 Subordination Agent Required; Eligibility....................54
SECTION 6.10 Money to Be Held in Trust...................................55
ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT.........................55
ARTICLE VIII SUCCESSOR SUBORDINATION AGENT.................................55
SECTION 8.1 Replacement of Subordination Agent; Appointment of
Successor...............................................55
ARTICLE IX SUPPLEMENTS AND AMENDMENTS......................................56
SECTION 9.1 Amendments, Waivers, Etc.....................................56
SECTION 9.2 Subordination Agent Protected................................58
SECTION 9.3 Effect of Supplemental Agreements............................59
SECTION 9.4 Notice to Rating Agencies....................................59
ARTICLE X MISCELLANEOUS....................................................59
SECTION 10.1 Termination of Intercreditor Agreement......................59
SECTION 10.2 Intercreditor Agreement for Benefit of Trustees, Liquidity
Providers, Policy Provider and Subordination Agent.......59
SECTION 10.3 Notices.....................................................60
SECTION 10.4 Severability................................................61
SECTION 10.5 No Oral Modifications or Continuing Waivers.................61
SECTION 10.6 Successors and Assigns......................................61
SECTION 10.7 Headings....................................................61
SECTION 10.8 Counterpart Form............................................62
SECTION 10.9 Subordination...............................................62
SECTION 10.10 GOVERNING LAW...............................................63
SECTION 10.11 Submission to Jurisdiction; Waiver of Jury Trial............63
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of February 15, 2000, among
WILMINGTON TRUST COMPANY, a Delaware banking corporation ("WTC"), not in its
individual capacity but solely as Trustee of each Trust (each as defined
below), CITIBANK, N.A., a national banking association ("Citibank"), as Class
G Liquidity Provider and Class C Liquidity Provider, AMBAC ASSURANCE
CORPORATION, a Wisconsin domiciled stock-insurance company as Policy Provider,
and WTC, not in its individual capacity except as expressly set forth herein,
but solely as Subordination Agent and trustee hereunder (in such capacity,
together with any successor appointed pursuant to Article VIII hereof, the
"Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the respective
meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture (i) in the case of each Aircraft
that is owned by ATA at the time such Indenture is entered into (the "Owned
Aircraft"), ATA will issue on a recourse basis two series of Equipment Notes
to finance the purchase of such Aircraft and (ii) in the case of each Aircraft
that is leased to ATA pursuant to a related Lease at the time such Indenture
is entered into (the "Leased Aircraft"), the related Owner Trustee will issue
on a nonrecourse basis two series of Equipment Notes to finance the purchase
of such Aircraft;
WHEREAS, pursuant to the Financing Agreements, each Trust will
acquire Equipment Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;
WHEREAS, pursuant to each Trust Agreement, the Trust created thereby
proposes to issue a single class of Certificates (a "Class") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to the Purchase Agreement, the Initial Purchasers
propose to purchase the Certificates issued by each Trust in the aggregate
face amount set forth opposite the name of such Trust on Schedule I thereto on
the terms and subject to the conditions set forth therein;
WHEREAS, the initial Liquidity Provider proposes to enter into two
separate revolving credit agreements (each, a "Liquidity Facility") with the
Subordination Agent, as agent for the respective Trustee of each of the two
Trusts, for the benefit of the Certificateholders of such Trust;
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 Trustee and Class G Certificateholders;
and
WHEREAS, it is a condition precedent to the obligations of the
Initial Purchasers under the Purchase Agreement that the Subordination Agent,
the Trustees, the Liquidity Providers and the Policy Provider agree to the
terms of subordination set forth in this Agreement in respect of each Class of
Certificates, and the Subordination Agent, the Trustees, the Liquidity
Providers and the Policy Provider, by entering into this Agreement, hereby
acknowledge and agree to such terms of subordination and the other provisions
of this Agreement.
2
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without limitation".
"Acceleration" means, with respect to the amounts payable in respect
of the Equipment Notes issued under any Indenture, the declaration of such
amounts to be immediately due and payable by deceleration or otherwise.
"Accelerate", "Accelerating" and "Accelerated" have meanings correlative to
the foregoing.
"Accrued Class G Interest" has the meaning specified in Section
3.7(a).
"Adjusted Expected Distributions" means with respect to the
Certificates of any Trust on any Current Distribution Date the sum of (x) the
amount of accrued and unpaid interest on such Certificates (excluding
interest, if any, payable with respect to the Deposits related to such Trust)
and (y) the greater of:
(A) the difference between (x) the Pool Balance of such Certificates
as of the immediately preceding Distribution Date (or, if the Current
Distribution Date is the first Distribution Date, the original aggregate
face amount of the Certificates of such Trust) and (y) the Pool Balance
of such Certificates as of the Current Distribution Date calculated on
the basis that (i) the principal of the Non-Performing Equipment Notes
held in such Trust has been paid in full and such payments have been
distributed to the holders of such Certificates, (ii) the principal of
the Performing Equipment Notes held in such Trust has been paid when due
(but without giving effect to any Acceleration of Performing Equipment
Notes) and such payments have been distributed to the holders of such
Certificates and (iii) the principal of any Equipment Notes formerly held
in such Trust that have been sold pursuant to the terms hereof has been
paid in full and such payments have been distributed to the holders of
such Certificates, but without giving effect to any reduction in the Pool
Balance as a result of any distribution attributable to Deposits
occurring after the immediately preceding Distribution Date (or, if the
Current Distribution Date is the first Distribution Date, occurring after
the initial issuance of the Certificates of such Trust); and
(B) the amount of the excess, if any, of (i) the Pool Balance of such
Class of Certificates as of the immediately preceding Distribution Date
(or, if the Current Distribution Date is the first Distribution Date, the
original aggregate face amount of the Certificates of such Trust), less
the amount of the Deposits for such Class of Certificates as of such
preceding Distribution Date (or, if the Current Distribution Date is the
first Distribution Date, the original aggregate amount of the Deposits
for such Class of Certificates) other than any portion of such Deposits
thereafter used to acquire Equipment Notes pursuant to the Note Purchase
Agreement, over (ii) the Aggregate LTV Collateral Amount for such Class
of Certificates for the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B) above
shall not apply.
For purposes of calculating Adjusted Expected Distributions with
respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust which has not been distributed to the
Certificateholders of such Trust (other than such premium or a portion thereof
applied to the payment of interest on the Certificates of such Trust or the
reduction of the Pool Balance of such Trust) shall be added to the amount of
Adjusted Expected Distributions.
"Advance", with respect to any Liquidity Facility, means any
Advances as defined in such Liquidity Facility.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For the purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such Person whether through the ownership of voting securities or
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Aggregate LTV Collateral Amount" means, for any Class of
Certificates for any Distribution Date, the sum of the applicable LTV
Collateral Amounts for each Leased Aircraft and Owned Aircraft minus the Pool
Balance for each Class of Certificates, if any, senior to such Class, after
giving effect to any distribution of principal on such Distribution Date with
respect to such senior Class or Classes, but in no event an amount less than
zero.
"Aircraft" means, with respect to each Indenture, the "Aircraft"
referred to therein.
"Amtran" means Amtran, Inc., an Indiana corporation, and its
successors and assigns.
"Appraised Current Market Value" of any Leased Aircraft or Owned
Aircraft means the lower of the average and the median of the three most
recent LTV Appraisals of such Aircraft.
"Appraisers" means Aircraft Information Services, Inc., Xxxxxx Xxxxx
and Xxxxx, Inc. and Simat, Helliesen and Xxxxxxx, Inc.
"Assignment and Assumption Agreements" means each of the Assignment
and Assumption Agreements to be executed among a Trustee and the trustee of
the relevant Successor Trust in accordance with the relevant Trust Agreement,
as the same may be amended, modified or supplemented from time to time.
"ATA" means American Trans Air, Inc., an Indiana corporation, and
its successors and assigns.
"ATA Bankruptcy Event" means the occurrence and continuation of any
of the following:
(a) the commencement of an involuntary case or other proceeding in
respect of ATA in an involuntary case under the federal bankruptcy laws,
as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United States or
seeking the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of ATA or for all or
substantially all of its property, or seeking the winding-up or
liquidation of its affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of ninety (90)
consecutive days or an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without the
consent of ATA, a receiver, trustee or liquidator of ATA, or of any
substantial part of its property, or sequestering any substantial part of
the property of ATA and any such order, judgment or decree or appointment
or sequestration shall be final or shall remain in force undismissed,
unstayed or unvacated for a period of ninety (90) days after the date of
entry thereof; or
(b) the commencement by ATA of a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law
in the United States, or the consent by ATA to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of ATA or for all or
substantially all of its property, or ATA shall admit in writing its
inability to pay its debts generally as they come due, or the making by
ATA of any assignment for the benefit of creditors or the taking by ATA
of any corporate action to authorize any of the foregoing.
"Business Day" means any day other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in Indianapolis,
Indiana, New York, New York, or, so long as any Certificate is outstanding,
the city and state in which any Trustee, the Subordination Agent or any Loan
Trustee maintains its Corporate Trust Office or receives and disburses funds
and, solely with respect to draws under any Liquidity Facility, that is also a
"Business Day" as defined in such Liquidity Facility.
"Cash Collateral Account" means the Class G Cash Collateral Account
or the Class C Cash Collateral Account, as applicable.
"Certificate" means a Class G Certificate or a Class C Certificate,
as applicable.
"Certificateholder" means any holder of one or more Certificates.
"Class" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Class C Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class C Liquidity Facility pursuant to Section 3.6(c),
3.6(d) or 3.6(i) shall be deposited.
"Class C Certificateholder" means, at any time, any holder of one or
more Class C Certificates.
"Class C Certificates" means the certificates issued by the Class C
Trust, substantially in the form of Exhibit A to the Class C Trust Agreement,
and authenticated by the Class C Trustee, representing fractional undivided
interests in the Class C Trust, and any certificates issued in exchange
therefor or in replacement thereof pursuant to the terms of the Class C Trust
Agreement and/or the Registration Rights Agreement (including, without
limitation, any Exchange Certificates (as defined in the Class C Trust
Agreement)).
"Class C Liquidity Facility" means, initially, the Revolving Credit
Agreement dated as of the date hereof, between the Subordination Agent, as
agent and trustee for the Class C Trustee, and the initial Class C Liquidity
Provider and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Class C Liquidity Provider" means Citibank, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class C Liquidity Facility pursuant to Section 3.6(e).
"Class C Trust" means (i) prior to the Transfer, the American Trans
Air 2000-1C-O Pass Through Trust created and administered pursuant to the
Class C Trust Agreement and (ii) after the Transfer, the American Trans Air
2000-1C-S Pass Through Trust created and administered pursuant to the Class C
Trust Agreement.
"Class C Trust Agreement" means (i) prior to the Transfer, the Pass
Through Trust Agreement dated as of February 15, 0000, xxxxx XXX, Xxxxxx and
the Class C Trustee governing the creation and administration of the American
Trans Air 2000-1C-O Pass Through Trust and the issuance of the Class C
Certificates, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms, and (ii) after the Transfer,
the Pass Through Trust Agreement dated as of February 15, 0000 xxxxx XXX,
Xxxxxx and the Class C Trustee governing the creation and administration of
the American Trans Air 2000-1C-S Pass Through Trust and the issuance of the
Class C Certificates, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Class C Trustee" means WTC, not in its individual capacity except
as expressly set forth in the Class C Trust Agreement, but solely as trustee
under the Class C Trust Agreement, together with any successor trustee
appointed pursuant thereto.
"Class D Certificates" means pass through certificates, if any,
issued by the Class D Trust representing fractional undivided interests in the
Class D Trust.
"Class D Trust" means the American Trans Air 2000-1D Pass Through
Trust, if and when established.
"Class G Cash Collateral Account" means an Eligible Deposit Account
in the name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into which all
amounts drawn under the Class G Liquidity Facility pursuant to Section 3.6(c),
3.6(d) or 3.6(i) shall be deposited.
"Class G Certificateholder" means, at any time, any holder 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 in replacement thereof pursuant to the terms of the Class G Trust
Agreement and/or the Registration Rights Agreement (including, without
limitation, any Exchange Certificates (as defined in the Class G Trust
Agreement)).
"Class G Deposits" means the Deposits with respect to the Class G
Certificates.
"Class G 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 the initial Class G Liquidity
Provider, and, from and after the replacement of such Agreement pursuant
hereto, the Replacement Liquidity Facility therefor, if any, in each case as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Class G Liquidity Provider" means Citibank, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity
Facility to replace any Class G Liquidity Facility pursuant to Section 3.6(e).
"Class G Paying Agent Account" means the Paying Agent Account as
defined in the Escrow and Paying Agent Agreement relating to the Class G
Certificates.
"Class G Trust" means (i) prior to the Transfer, American Trans Air
2000-1G-O Pass Through Trust created and administered pursuant to the Class G
Trust Agreement and (ii) after the Transfer, the American Trans Air 2000-1G-S
Pass Through Trust created and administered pursuant to the Class G Trust
Agreement.
"Class G Trust Agreement" means (i) prior to the Transfer, the Pass
Through Trust Agreement dated as of February 15, 0000, xxxxx XXX, Xxxxxx and
the Class G Trustee governing the creation and administration of the American
Trans Air 2000-1G-O Pass Through Trust 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, and (ii) after the Transfer,
the Pass Through Trust Agreement dated as of February 15, 0000 xxxxx XXX,
Xxxxxx and the Class G Trustee governing the creation and administration of
the American Trans Air 2000-1G-S Pass Through Trust 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 WTC, 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 February 15, 2000.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning assigned to such term in the
Indentures.
"Collection Account" means the Eligible Deposit Account established
by the Subordination Agent pursuant to Section 2.2 which the Subordination
Agent shall make deposits in and withdrawals from in accordance with this
Agreement.
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Trustee, the
Subordination Agent or any Loan Trustee, the office of such Person in the city
at which, at any particular time, its corporate trust business shall be
principally administered.
"Current Distribution Date" means a Distribution Date specified as a
reference date for calculating the Adjusted Expected Distributions or Expected
Distributions with respect to the Certificates of any Trust as of such
Distribution Date.
"Delivery Period Expiry Date" means the earlier of (a) December 31,
2000, or if the Equipment Notes relating to all the Aircraft (or Substitute
Aircraft in lieu thereof) have not been purchased by the Trusts on or prior to
such date due to any reason beyond the control of ATA or Amtran and not
occasioned by ATA's or Amtran's fault or negligence, May 31, 2001 and (b) the
date on which Equipment Notes with respect to all Aircraft (or Substitute
Aircraft in lieu thereof) have been purchased by the Trusts in accordance with
the Note Purchase Agreement.
"Deposit Agreement" shall mean, with respect to any Class, the
Deposit Agreement pertaining to such Class dated the date hereof between the
Escrow Agent and the Depositary, as
the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Depositary" means Citibank, N.A., a national banking association,
as depositary under each Deposit Agreement, or its successors and assigns.
"Deposits" with respect to any Class, shall have the meaning set
forth in the Deposit Agreement pertaining to such Class.
"Designated Representatives" means the Subordination Agent
Representatives, the Trustee Representatives and the Provider Representatives
identified under Section 2.5.
"Disposition" has the meaning assigned to such term in Section
3.7(c).
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" or "$"means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in Section
3.6(c).
"Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing, a
Non-Extension Drawing or a Downgrade Drawing, as the case may be.
"EBO Date" shall mean the date set forth on Schedule 1 to the Lease
as the "EBO Date".
"Election Distribution Date" has the meaning assigned to such term
in Section 3.7(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 of America or any one of the states thereof or the
District of Columbia (or any U.S. branch of a foreign bank), having corporate
trust powers and acting as trustee for funds deposited in such account, so
long as any of the securities of such depository institution has a long-term
unsecured debt rating from each Rating Agency of at least A-3 or its
equivalent. An Eligible Deposit Account may be maintained with a Liquidity
Provider so long as such Liquidity Provider is an Eligible Institution;
provided that such Liquidity Provider shall have waived all rights of set-off
and counterclaim with respect to such account.
"Eligible Institution" means (a) the corporate trust department of
the Subordination Agent or any Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any U.S.branch of a
foreign bank), which has a long-term unsecured debt rating from each Rating
Agency of at least A-3 or its equivalent.
"Eligible Investments" means (a) investments in obligations of, or
guaranteed by, the United States Government having maturities no later than 90
days following the date of such investment, (b) investments in open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any state thereof with a short-term unsecured debt rating
issued by Moody's and Standard & Poor's of at least P-1 and A-1, respectively,
having maturities no later than 90 days following the date of such investment,
(c) investments in negotiable certificates of deposit, time deposits, banker's
acceptances, commercial paper or other direct obligations of, or obligations
guaranteed by, commercial banks organized under the laws of the United States
or of any political subdivision thereof (or any U.S. branch of a foreign bank)
with issuer ratings of at least by P-1 Moody's and A-1 by Standard & Poor's,
having maturities no later than 90 days following the date of such investment,
or (d) investments in any U.S. money market fund registered under the
Investment Company Act of 1940, as amended, which has been issued the highest
rating in its category by Moody's and Standard & Poor's that invests solely in
obligations described in clause (a) above; provided, however, that (x) all
Eligible Investments that are bank obligations shall be denominated in U.S.
dollars; and (y) the aggregate amount of Eligible Investments at any one time
that are bank obligations issued by any one bank shall not be in excess of 5%
of such bank's capital surplus; provided further that (1) any investment of
the types described in clause (a), (b) or (c) above may be made through a
repurchase agreement in commercially reasonable form with a bank or other
financial institution qualifying as an Eligible Institution so long as such
investment is held by a third party custodian also qualifying as an Eligible
Institution, and (2) all such investments set forth in clauses (a), (b) and
(c) above mature no later than the Business Day immediately preceding the next
Regular Distribution Date; provided further, however, that in the case of any
Eligible Investment issued by a domestic branch of a foreign bank, the income
from such investment shall be from sources within the United States for
purposes of the Code. Notwithstanding the foregoing, no investment of the
types described in clause (b) or (c) above which is issued or guaranteed by
ATA or Amtran or any of their respective Affiliates shall be an Eligible
Investment, unless, in each case, 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.
"Equipment Notes" means, at any time, the Series G Equipment Notes
and the Series C Equipment Notes, collectively, and in each case, any
Equipment Notes issued in exchange therefor or replacement thereof pursuant to
the terms of the Indentures.
"Escrow Agent" means First Security Bank, National Association, as
escrow agent under each Escrow and Paying Agent Agreement, together with its
successors in such capacity.
"Escrow and Paying Agent Agreement" shall mean, with respect to any
Class, the Escrow and Paying Agent Agreement pertaining to such Class dated
the date hereof among the Escrow Agent, the Initial Purchasers, the Trustee
for such Class and the Paying Agent, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Excess Interest Policy Drawing" means a drawing by a Liquidity
Provider under the Policy as contemplated in Section 3.7(c).
"Excess Reimbursement Obligations" means, (a) in the event of any
Policy Provider Election, the portion of the Policy Provider Obligations that
represents interest on the Series G Equipment Note (in respect of which the
Policy Provider Election has been made) in excess of 24 months of interest at
the interest rate applicable to such Equipment Note and (b) any interest on
the Liquidity Obligations in respect of the Class G Liquidity Facility and
Class C Liquidity Facility paid by the Policy Provider to the Liquidity
Provider from and after the end of the 24- month period referred to in Section
3.7(c) hereof.
"Expected Distributions" means, with respect to the Certificates of
any Trust on any Current Distribution Date, the sum of (x) accrued and unpaid
interest on such Certificates (excluding interest, if any, payable with
respect to the Deposits related to such Trust) and (y) the difference between
(A) the Pool Balance of such Certificates as of the immediately preceding
Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, the original aggregate face amount of the Certificates of
such Trust) and (B) the Pool Balance of such Certificates as of the Current
Distribution Date, calculated on the basis that (i) the principal of the
Equipment Notes held in such Trust has been paid when due (whether at stated
maturity or upon redemption, prepayment, purchase, acceleration or otherwise)
and such payments have been distributed to the holders of such Certificates
and (ii) the principal of any Equipment Notes formerly held in such Trust that
have been sold pursuant to the terms hereof has been paid in full and such
payments have been distributed to the holders of such Certificates, but
without giving effect to any reduction in the Pool Balance as a result of any
distribution attributable to the Deposits occurring after the immediately
preceding Distribution Date (or, if the Current Distribution Date is the first
Distribution Date, occurring after the initial issuance of the Certificates of
such Trust). For purposes of calculating Expected Distributions with respect
to the Certificates of any Trust, any premium paid on the Equipment Notes held
in such Trust which has not been distributed to the Certificateholders of such
Trust (other than such premium or a portion thereof applied to the payment of
interest on the Certificates of such Trust or the reduction of the Pool
Balance of such Trust) shall be added to the amount of such Expected
Distributions.
"Expiry Date" with respect to any Liquidity Facility, shall have the
meaning set forth in such Liquidity Facility.
"Fee Letter" means the Fee Letter dated as of the date hereof among
Citibank, ATA and the Subordination Agent with respect to the initial
Liquidity Facilities and any fee letter entered into among the Subordination
Agent, ATA and any Replacement Liquidity Provider.
"Final Distributions" means, with respect to the Certificates of any
Trust on any Distribution Date, the sum of (a) the aggregate amount of all
accrued and unpaid interest on such Certificates (excluding interest, if any,
payable with respect to the Deposits relating to such Trust) and (b) the Pool
Balance of such Certificates as of the immediately preceding Distribution Date
(less the amount of the Deposits for such Class of Certificates as of such
preceding Distribution Date other than any portion of such Deposits thereafter
used to acquire Equipment Notes pursuant to the Note Purchase Agreement). For
purposes of calculating Final Distributions with respect to the Certificates
of any Trust, any premium paid on the Equipment Notes held in such Trust which
has not been distributed to the Certificateholders of such Trust (other than
such
premium or a portion thereof applied to the payment of interest on the
Certificates of such Trust or the reduction of the Pool Balance of such Trust)
shall be added to the amount of such Final Distributions.
"Final Drawing" has the meaning assigned to such term in Section
3.6(i).
"Final Legal Distribution Date" means, for the Class G Certificates,
July 15, 2017 and for the Class C Certificates, January 15, 2008.
"Financing Agreement" means each of the Participation Agreements and
the Note Purchase Agreement.
"Indenture" means each of the Trust Indenture and Mortgage
Agreements entered into by the Loan Trustee, and the Owner Trustee or ATA,
pursuant to the Note Purchase Agreement, in each case as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Indenture Default" means, with respect to any Indenture, any Event
of Default (as such term is defined in such Indenture) thereunder.
"Initial Purchasers" means, collectively, Xxxxxxx Xxxxx Xxxxxx Inc.,
Xxxxxx Xxxxxxx & Co. Incorporated, Chase Securities Inc., and Banc One Capital
Markets, Inc.
"Interest Drawing" has the meaning assigned to such term in Section
3.6(a).
"Interest Payment Date" means, with respect to any Liquidity
Facility, each date on which interest is due and payable under Section 3.7(c)
or 3.7(d) of such Liquidity Facility on a Downgrade Drawing, Non-Extension
Drawing or Final Drawing.
"Investment Earnings" means investment earnings on funds on deposit
in the Trust Accounts net of losses and investment expenses of the
Subordination Agent in making such investments.
"Lease" means, with respect to each Indenture pertaining to a Leased
Aircraft, the "Lease" referred to therein.
"Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.
"Leased Aircraft Indenture" means, with respect to each Leased
Aircraft, the Indenture pertaining thereto.
"Lien" means any mortgage, pledge, lien, charge, claim, disposition
of title, encumbrance, lease, sublease, sub-sublease or security interest of
any kind, including, without limitation, any thereof arising under any
conditional sales or other title retention agreement.
"Liquidity Event of Default", with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity Facility.
"Liquidity Expenses" means all Liquidity Obligations other than (i)
the principal amount of any Drawings under the Liquidity Facilities and (ii)
any interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class G Liquidity
Facility or the Class C Liquidity Facility, as applicable.
"Liquidity Obligations" means all principal, interest, fees and
other amounts owing to the Liquidity Providers under the Liquidity Facilities,
the Fee Letter, Section 7 of the Participation Agreements for Owned Aircraft
or Section 9 of the Participation Agreements for Leased Aircraft.
"Liquidity Provider" means, at any time, the Class G Liquidity
Provider or the Class C Liquidity Provider, as applicable.
"Loan Trustee" means, with respect to any Indenture, the indenture
trustee thereunder.
"LTV Appraisal" means a current fair market appraisal (which may be
a "desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.
"LTV Collateral Amount" of any Leased Aircraft or Owned Aircraft for
any Class of Certificates means, on any Distribution Date, the lesser of (i)
the LTV Ratio for such Class of Certificates multiplied by the Appraised
Current Market Value of such Aircraft (or with respect to any such Aircraft
which has suffered an Event of Loss under and as defined in the relevant Lease
(in the case of a Leased Aircraft) or Indenture (in the case of an Owned
Aircraft), the amount of the insurance proceeds paid to the related Loan
Trustee in respect thereof to the extent then held by such Loan Trustee
(and/or on deposit in the Special Payments Account) or payable to such Loan
Trustee in respect thereof) and (ii) the outstanding principal amount of the
Equipment Notes secured by such Aircraft after giving effect to any principal
payments of such Equipment Notes on or before such Distribution Date.
"LTV Ratio" means for the Class G Certificates, 50.1% and for the
Class C Certificates, 60.7%.
"Maximum Available Commitment" means, with respect to any Liquidity
Facility on any drawing date, an amount equal to (a) the Stated Amount of such
Liquidity Facility at such time, less (b) the aggregate amount of each
Interest Drawing honored by the Liquidity Provider under such Liquidity
Facility on or prior to such date which has not been reimbursed or reinstated
as of such date; provided that, following a Downgrade Drawing, a Non-Extension
Drawing or a Final Drawing under such Liquidity Facility, the Maximum
Available Commitment of such Liquidity Facility shall be zero.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Notes issued in respect of such Aircraft, at any time, the lesser of
(a) 75% of the Appraised Current Market Value of such Aircraft and (b) the
aggregate outstanding principal amount of such Equipment Notes, plus accrued
and unpaid interest thereon.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Non-Controlling Party" means, at any time, any Trustee, Liquidity
Provider or the Policy Provider which is not the Controlling Party at such
time.
"Non-Extended Facility" has the meaning assigned to such term in
Section 3.6(d).
"Non-Extension Drawing" has the meaning assigned to such term in
Section 3.6(d).
"Non-Performing Equipment Note" means an Equipment Note issued
pursuant to an Indenture that is not a Performing Equipment Note.
"Note Purchase Agreement" means the Note Purchase Agreement dated as
of the date hereof, among ATA, Amtran, each Trustee, the Escrow Agent, the
Subordination Agent and the Paying Agent.
"Notice for Payment" means a Notice of Nonpayment as such term is
defined in the Policy.
"Notice of Avoided Payment" has the meaning assigned to such term in
the Policy.
"Officer's Certificate" of any Person means a certification signed
by a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Liquidity
Facilities, the Policy, the Policy Provider Agreement, the Indentures, the
Trust Agreements, the Purchase Agreement, the Financing Agreements, the
Leases, the Participation Agreements, the Fee Letter, the Equipment Notes and
the Certificates, together with all exhibits and schedules included with any
of the foregoing and each of the other documents and instruments referred to
in the definitions of "Operative Documents" contained in the Leases or the
Indenture(s) with respect to Owned Aircraft.
"Order" has the meaning assigned to such term 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) Certificates of such Class for which money in the full amount
required to make the final distribution with respect to such Certificates
pursuant to Section 11.01 of such Trust Agreement has been theretofore
deposited with the related Trustee in trust for the holders of such
Certificates as provided in Section 4.01 of such Trust Agreement pending
distribution of such money to such Certificateholders pursuant to such
final distribution payment; and
(iii) Certificates of such Class in exchange for or in lieu of which
other Certificates have been authenticated and delivered pursuant to such
Trust Agreement;
provided, however, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any
Certificates owned by Amtran, ATA or any of their Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether such Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Certificates
that such Trustee knows to be so owned shall be so disregarded. Certificates
so owned that have been pledged in good faith may be regarded as Outstanding
if the pledgee establishes to the satisfaction of the applicable Trustee the
pledgee's right so to act with respect to such Certificates and that the
pledgee is not Amtran, ATA or any of their Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is not
in fact received by the Subordination Agent within five days after the
Scheduled Payment Date relating thereto.
"Owned Aircraft" has the meaning assigned to such term in the
preliminary statements to this Agreement.
"Owned Aircraft Indenture" means, with respect to each Owned
Aircraft, the Indenture pertaining to such Aircraft.
"Owner Participant" means, with respect of each Leased Aircraft, the
meaning provided in each of the Leases.
"Owner Trustee" means, with respect to any Indenture pertaining to a
Leased Aircraft, the Owner Trustee (as defined therein) not in its individual
capacity but solely as trustee under the related owner trust agreement,
together with any successor trustee appointed pursuant to such owner trust
agreement.
"Participation Agreement" means, with respect to each Indenture, the
"Participation Agreement" referred to therein.
"Payee" has the meaning assigned to such term in Section 2.4(e).
"Paying Agent" means Wilmington Trust Company, as paying agent under
each Escrow and Paying Agent Agreement, together with its successors in such
capacity.
"Performing Equipment Note" means an Equipment Note issued pursuant
to an Indenture with respect to which no payment default has occurred and is
continuing (without giving effect to any Acceleration); provided that in the
event of a bankruptcy proceeding involving ATA under Title 11 of the United
States Code (the "Bankruptcy Code"), (i) any payment default existing during
the 60-day period under Section 1110(a)(1)(A) of the Bankruptcy Code (or such
longer period as may apply under Section 1110(b) of the Bankruptcy Code) (the
"Section 1110 Period") shall not be taken into consideration, unless during
such Section 1110 Period the trustee in such proceeding or ATA refuses to
assume or agree to perform its obligations under the Lease related to such
Equipment Note (in the case of a Leased Aircraft) or under the Indenture
related to such Equipment Note (in the case of an Owned Aircraft) and (ii) any
payment default occurring after the date of the order of relief in such
proceeding shall not be taken into consideration if such payment default is
cured under Section 1110(a)(1)(B) of the Bankruptcy Code before the later of
(A) 30 days after the date of such default or (B) the expiration of the
Section 1110 Period.
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.
"Policy" means the Ambac Certificate Guaranty Insurance Policy No.
AB0336BE, together with the Certificate Guaranty Insurance Policy Endorsement
referred to therein and attached thereto, issued as of the Closing Date, as
amended, supplemented or otherwise modified from time to time in accordance
with its terms.
"Policy Account" means the Eligible Deposit Account established by
the Subordination Agent pursuant to Section 2.2(a)(iii).
"Policy Drawing" means any payment of a claim under the Policy.
"Policy Expenses" means all amounts (including amounts in respect of
expenses or indemnities) due to the Policy Provider under the Policy Provider
Agreement or the Financing Agreements other than the amount of any Policy
Drawing, any Excess Reimbursement Obligations, any interest accrued on any
Policy Provider Obligations, reimbursement of and interest on the Liquidity
Obligations in respect of the Liquidity Facilities paid by the Policy Provider
to any Liquidity Provider, provided that if, at the time of determination, a
Policy Provider Default exists, Policy Expenses shall not include any
indemnity payments owed to the Policy Provider under any Operative Agreements.
"Policy Provider" means Ambac Assurance Corporation.
"Policy Provider Agreement" means the Insurance and Indemnity
Agreement dated as of the date hereof among the Subordination Agent, as agent
and trustee for the Class G Trustee, ATA and the Policy Provider as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Policy Provider Default" shall mean 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 2 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 assigned to such term in
Section 3.7(c).
"Policy Provider Obligations" means all reimbursement and other
amounts, including, without limitation, fees and indemnities, due to the
Policy Provider under the Policy Provider Agreement but shall not include any
interest on Policy Drawings except, if the Class G Liquidity Provider has
failed to honor any Interest Drawing in accordance with Section 2.2(e) of the
Class G Liquidity Facility, interest on any Policy Drawing made to cover the
shortfall attributable to such failure in an amount equal to the amount of
interest that would have accrued on such Interest Drawing if such Interest
Drawing had been made in accordance with Section 2.2(e) of the Class G
Liquidity Facility 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. For the avoidance of doubt, Policy Provider Obligations
include reimbursement of, and interest on, the Liquidity Obligations in
respect of the Class G Liquidity Facility and the Class C Liquidity Facility
paid by the Policy Provider to the applicable Liquidity Provider.
"Policy Provider Rating" shall mean the respective ratings by each
of the Ratings Agencies of the Policy Provider's financial strength in respect
of the Policy.
"Policy Provider Threshold Rating" shall mean a Policy Provider
Rating of Aaa by Moody's and AAA by Standard & Poor's.
"Pool Balance" means, with respect to each Trust or the Certificates
issued by any Trust, as of any date, (i) the original aggregate face amount of
the Certificates of such Trust less (ii) the aggregate amount of all payments
made in respect of the Certificates of such Trust or in respect of Deposits
relating to such Trust, other than payments made in respect of interest or
premium thereon or reimbursement of any costs and expenses in connection
therewith. The Pool Balance for each Trust or for the Certificates issued by
any Trust as of any Distribution Date shall be computed after giving effect to
any special distribution with respect to unused Deposits, any payment of
principal of the Equipment Notes, payments under the Policy (other than in
respect of interest on the Certificates) or payment with respect to other
Trust Property held in such Trust and the distribution thereof to be made on
that date.
"Preference Amount" has the meaning assigned to such term in the
Policy.
"Prior Funds" has the meaning assigned to such term in Section
3.7(a).
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Provider Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(c).
"Provider Representatives" has the meaning assigned to such term in
Section 2.5(c).
"PTC Event of Default" means, with respect to each Trust Agreement,
the failure to pay within 10 Business Days of the due date thereof: (i) the
outstanding Pool Balance of the applicable Class of Certificates on the Final
Legal Distribution Date for such Class or (ii) interest due on such
Certificates on any Distribution Date (unless the Subordination Agent shall
have made an Interest Drawing, or a withdrawal from the Cash Collateral
Account or, in the case of the Class G Trust Agreement, 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 February 8,
2000, among the Initial Purchasers, ATA and Amtran, relating to the purchase
of the 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 nationally
recognized rating agency which shall have been requested to rate the
Certificates and which shall then be rating the Certificates. Initially, the
Rating Agencies shall consist of Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed to
be taken, a written confirmation from each of the Rating Agencies that such
action would not result in (i) a reduction of the rating for any Class of
Certificates below the then current rating for such Class of Certificates
(such ratings as determined without regard to the Policy) or (ii) a withdrawal
or suspension of the rating of any Class of Certificates.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement dated as of the date hereof, among the Initial Purchasers,
the Trustees and ATA, as amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"Regular Distribution Dates" means each January 15, April 15, July
15 and October 15, commencing on April 15, 2000; provided, however, that, if
any such day shall not be a Business Day, the related distribution shall be
made on the next succeeding Business Day without additional interest.
"Replacement Liquidity Facility" means, for any Trust, a revolving
credit agreement issued by a Replacement Liquidity Provider in substantially
the form of the replaced Liquidity Facility for such Trust, including
reinstatement provisions or in such other form (which may include a letter of
credit) as shall permit the Rating Agencies to confirm in writing their
respective ratings then in effect for each Class of Certificates (before the
downgrading of such ratings, if any, as a result of the downgrading of the
replaced Liquidity Provider) and, in the case of the Class G Liquidity
Facility only, be consented to by the Policy Provider, which consent shall not
be unreasonably withheld or delayed, in a face amount equal to the Required
Amount for such Liquidity Facility and issued by a Replacement Liquidity
Provider, provided that, if a form of Liquidity Facility that is not
substantially in the form of the replaced Liquidity Facility is to be used,
ATA shall have received a satisfactory opinion of tax counsel satisfactory to
ATA with respect to such form of Replacement Liquidity Facility (and a copy of
such opinion shall be furnished to the Subordination Agent).
"Replacement Liquidity Provider" means a Person having unsecured
debt ratings issued by each Rating Agency which are equal to or higher than
the Threshold Rating who issues a Replacement Liquidity Facility.
"Required Amount" means, with respect to each Liquidity Facility, or
the Cash Collateral Account related thereto, for any Class, for any day, the
sum of the aggregate amount of interest, calculated at the rate per annum
equal to the Stated Interest Rate for the related Class of Certificates, that
would be payable on such Class of Certificates on each of the six successive
Regular Distribution Dates immediately following such day or, if such day is a
Regular Distribution Date, on such day and the succeeding five Regular
Distribution Dates, in each case calculated on the basis of the Pool Balance
of such Class of Certificates on such date and without regard to expected
future payments of principal on such Class of Certificates. The Pool Balance
for purposes of the definition of Required Amount with respect to the Class G
Liquidity Facility shall, in the event of any Policy Provider Election, be
deemed to be reduced by the amount (if positive) by which (a) the then
outstanding principal balance of each 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
administration department of the Subordination Agent or such Trustee or any
other officer customarily performing functions similar to those performed by
the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject, (ii) with respect to each Liquidity
Provider and the Policy Provider, any authorized officer of each such
Liquidity Provider and the Policy Provider, respectively.
"Scheduled Payment" means, with respect to any Equipment Note, (i)
any payment of principal or interest on such Equipment Note (other than an
Overdue Scheduled Payment) due from the obligor thereon or (ii) any payment of
interest on the corresponding Class of Certificates with funds drawn under any
Liquidity Facility or the Policy, which payment represents the installment of
principal at the stated maturity of such installment of principal on such
Equipment
Note, the payment of regularly scheduled interest accrued on the unpaid
principal amount of such Equipment Note, or both; provided that any payment of
principal of, premium, if any, or interest resulting from the redemption or
purchase of any Equipment Note shall not constitute a Scheduled Payment.
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be made.
"Section 2.4(b) Fraction" has the meaning assigned to such term in
Section 2.4(b).
"Series C Equipment Notes" means the 9.644% Series C Secured
Certificates issued pursuant to each Indenture by the related Owner Trustee or
ATA, as the case may be, and authenticated by the Loan Trustee thereunder, and
any such equipment notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Series D Equipment Notes" means equipment notes, if any, issued
pursuant to any Indenture by the related Owner Trustee or ATA, as the case may
be, and authenticated by the Loan Trustee thereunder, and designated as
"Series D" 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 8.039% Series G Secured
Certificates issued pursuant to each Indenture by the related Owner Trustee or
ATA, as the case may be, and authenticated by the Loan Trustee thereunder, and
any such Equipment Notes issued in exchange therefor or replacement thereof
pursuant to the terms of such Indenture.
"Special Distribution Date" means with respect to any Special
Payment, (i) the date chosen by the Subordination Agent pursuant to Section
2.4(a) for the distribution of such Special Payment in accordance with this
Agreement, whether distributed pursuant to Section 2.4 or Section 3.3 hereof;
provided, however, that, if any such day shall not be a Business Day, the
related distribution shall be made on the next succeeding Business Day without
additional interest, whether pursuant to Section 2.4 or Section 3.3 or (ii)
the date chosen by the Subordination Agent pursuant to Section 3.7(b), 3.7(c)
or 3.7(e), as the case may be, for the distribution of such Special Payment in
accordance with the provisions thereof.
"Special Payment" means any payment (other than a Scheduled Payment)
in respect of, or any proceeds of, any Equipment Note, Trust Indenture Estate
or Collateral (as defined in each Indenture), including Overdue Scheduled
Payments, payments in respect of the redemption or repurchase of any Equipment
Note, Preference Amounts, payments in respect of the sale of any Equipment
Note to the related Owner Trustee, Owner Participant (in the case of a Leased
Aircraft) or any other Person.
"Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account to the Collection Account.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
"Stated Amount" means with respect to any Liquidity Facility, the
Maximum Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"Stated Expiration Date" has the meaning assigned to it in Section
3.6(d).
"Stated Interest Rate" means (i) with respect to the Class G
Certificates, 8.039% per annum and, (ii) with respect to the Class C
Certificates, 9.644% per annum (such rate with respect to each Class of
Certificates, the "Initial Stated Interest Rate" for such Class), plus, in
each case, solely in the event no Registration Event (as defined in the
Registration Rights Agreement) occurs on or prior to the 210th day after the
Closing Date, an additional margin equal to 0.50% per annum, from and
including such 210th day (provided that any such additional margin shall cease
to be in effect from and including the earlier of (i) the date on which such
Registration Event occurs and (ii) the date on which there ceases to be any
Registrable Certificates (as defined in the Registration Rights Agreement));
provided that if the Shelf Registration Statement (as defined in the
Registration Rights Agreement) ceases to be effective at any time during the
period specified by Section 2(b)(B) of the Registration Rights Agreement for
more than 60 days, whether or not consecutive, during any 12-month period, the
Stated Interest Rate shall be increased by 0.50% per annum from the 61st day
of the applicable 12-month period such Shelf Registration Statement ceases to
be effective until such time as the Shelf Registration Statement again becomes
effective (or, if earlier, the end of the period specified by Section 2(b)(B)
of the Registration Rights Agreement). For the avoidance of doubt, the Stated
Interest Rate for any Class of Certificates shall never exceed 0.50% per annum
over the Initial Stated Interest Rate for such Class of Certificates.
"Subordination Agent" has the meaning assigned to it in the preamble
to this Agreement.
"Subordination Agent Incumbency Certificate" has the meaning
assigned to such term in Section 2.5(a).
"Subordination Agent Representatives" has the meaning assigned to
such term in Section 2.5(a).
"Substitute Aircraft" shall have the meaning set forth in the Note
Purchase Agreement.
"Successor Trusts" means, collectively, American Trans Air 2000-1G-S
Pass Through Trust and American Trans Air 2000-1C-S Pass Through Trust.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto) imposed
or otherwise assessed by the United States of America or by any state, local
or foreign government (or any subdivision or agency thereof) or other taxing
authority, including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth and similar
charges; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, taxes
on goods and services, gainstaxes, license, registration and documentation
fees, customs duties, tariffs, and similar charges.
"Threshold Rating" means the short-term unsecured debt rating of P-1
by Moody's and A-1 by Standard & Poor's.
"Transfer" means the transfers contemplated by the Assignment and
Assumption Agreements.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Triggering Event" means (x) the occurrence of an Indenture Default
under all of the Indentures resulting in a PTC Event of Default with respect
to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of, or a failure to pay at final maturity, all of the outstanding
Equipment Notes or (z) the occurrence of an ATA Bankruptcy Event.
"Trust" means either of the Class G Trust or the Class C Trust.
"Trust Accounts" has the meaning assigned to such term in Section
2.2(a).
"Trust Agreement" means either of the Class G Trust Agreement or the
Class C Trust Agreement.
"Trust Property" with respect to any Trust, has the meaning set
forth in the Trust Agreement for such Trust.
"Trustee" means either of the Class G Trustee or the Class C
Trustee.
"Trustee Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(b).
"Trustee Representatives" has the meaning assigned to such term in
Section 2.5(b).
"Written Notice" means, from the Subordination Agent, any Trustee,
any Liquidity Provider or the Policy Provider, a written instrument executed
by the Designated Representative of such Person. An invoice delivered by a
Liquidity Provider pursuant to Section 3.1 in accordance with its normal
invoicing procedures shall constitute Written Notice under such Section.
"WTC" has the meaning assigned to such term in the preamble to this
Agreement.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from
Monies Received Only. (a) Each Trustee hereby acknowledges and agrees to the
terms of subordination and distribution set forth in this Agreement in respect
of each Class of Certificates and agrees to enforce such provisions and cause
all payments in respect of the Equipment Notes and the Liquidity Facilities to
be applied in accordance with the terms of this Agreement. In addition, each
Trustee hereby agrees to cause the Equipment Notes purchased by the related
Trust to be registered in the name of the Subordination Agent or its nominee,
as agent and trustee for such Trustee, to be held in trust by the
Subordination Agent solely for the purpose of facilitating the enforcement of
the subordination and other provisions of this Agreement.
(b) Except as otherwise expressly provided in the next succeeding
sentence of this Section 2.1 or as provided in Section 2.4(b), all payments to
be made by the Subordination Agent hereunder shall be made only from amounts
received by it that constitute Scheduled Payments, Special Payments or
payments under Section 7 of the Participation Agreements for Owned Aircraft
and Section 9 of the Participation Agreements for Leased Aircraft or payments
under Section 6 of the Note Purchase Agreement, and only to the extent that
the Subordination Agent shall have received sufficient income or proceeds
therefrom to enable it to make such payments in accordance with the terms
hereof. Each of the Trustees and the Subordination Agent hereby agrees and, as
provided in each Trust Agreement, each Certificateholder, by its acceptance of
a Certificate, each Liquidity Provider, by entering into the Liquidity
Facility to which it is a party and the Policy Provider, by entering into the
Policy Provider Agreement, has agreed to look solely to such amounts to the
extent available for distribution to it as provided in this Agreement and to
the relevant Deposits and that none of the Trustees, Owner Trustees, Loan
Trustees, Owner Participants nor the Subordination Agent or WTC is personally
liable to any of them for any amounts payable or any liability under this
Agreement, any Trust Agreement, any Liquidity Facility, 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 in each Trust Agreement or (in the case of the Owner Trustees and the
Loan Trustees) as expressly provided in any Operative Agreement.
SECTION 2.2 Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name
(i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders, the Liquidity
Providers and the Policy Provider, (ii) as a sub-account in the Collection
Account, the Special Payments Account as an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Trustees, the Certificateholders, the Liquidity
Providers and the Policy Provider, and (iii) the 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 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 3.6(f) hereof. Upon such establishment and
maintenance under Section 3.6(f) hereof, the Cash Collateral Accounts shall,
together with the Collection Account, constitute the "Trust Accounts"
hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Eligible Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of any then specified Special Distribution Date,
as the case may be, next following the date of such investment; provided,
however, that following the making of a Downgrade Drawing or Non-Extension
Drawing, the Subordination Agent shall invest and reinvest such amounts in
Eligible Investments at the direction of ATA (or, if and to the extent so
specified to the Subordination Agent by ATA with respect to any Liquidity
Facility, the Liquidity Provider with respect to such Liquidity Facility);
provided, further, however, that upon the occurrence and during the
continuation of a Triggering Event, the Subordination Agent shall invest and
reinvest such amounts in Eligible Investments in accordance with the written
instructions of the Controlling Party. Unless otherwise expressly provided in
this Agreement (including, without limitation, with respect to Investment
Earnings on amounts on deposit in the Cash Collateral Accounts, the provisions
of Section 3.6(f) hereof), any Investment Earnings shall be deposited in the
Collection Account when received by the Subordination Agent and shall be
applied by the Subordination Agent in the same manner as the other amounts on
deposit in the Collection Account are to be applied and any losses shall be
charged against the principal amount invested, in each case net of the
Subordination Agent's reasonable fees and expenses in making such investments.
The Subordination Agent shall not be liable for any loss resulting from any
investment, reinvestment or liquidation required to be made under this
Agreement other than by reason of its willful misconduct or gross negligence.
Eligible Investments and any other investment required to be made hereunder
shall be held to their maturities except that any such investment may be sold
(without regard to its maturity) by the Subordination Agent without
instructions whenever such sale is necessary to make a distribution required
under this Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon). The Trust Accounts
shall be held in trust by the Subordination Agent under the sole dominion and
control of the Subordination Agent for the benefit of the Trustees, the
Certificateholders, 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 and each Rating Agency may consent) establish a new Collection
Account, Special Payments Account, Policy Account or Cash Collateral Account,
as the case may be, as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Collection Account, Special Payments
Account, Policy Account or Cash Collateral Account, as the case may be. So
long as WTC is an Eligible Institution, the Trust Accounts shall be maintained
with it as Eligible Deposit Accounts.
SECTION 2.3 Deposits to the Collection Account and Special Payments
Account. (a) The Subordination Agent shall, upon receipt thereof, deposit in
the Collection Account all
Scheduled Payments received by it (other than any Scheduled Payment which by
the express terms hereof is to be deposited in the Policy Account or a Cash
Collateral Account).
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate amount
of such Special Payments.
SECTION 2.4 Distributions of Special Payments. (a) Notice of Special
Payment. Except as provided in Section 2.4(e) below, upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any
notice of a Special Payment (or, in the absence of any such notice, upon
receipt by the Subordination Agent of a Special Payment), the Subordination
Agent shall promptly give notice thereof to each Trustee, the Liquidity
Providers and the Policy Provider. The Subordination Agent shall promptly
calculate the amount of the redemption or purchase of Equipment Notes or the
amount of any Overdue Scheduled Payment or the proceeds of Equipment Notes or
Collateral, as the case may be, comprising such Special Payment under the
applicable Indenture or Indentures and shall promptly send to each Trustee a
Written Notice of such amount and the amount allocable to each Trust. Such
Written Notice shall also set the distribution date for such Special Payment
(a "Special Distribution Date"), which shall be the first Business Day which
follows the later to occur of (x) the 20th day after the date of such Written
Notice or (y) the date the Subordination Agent receives or expects to receive
such Special Payment. Amounts on deposit in the Special Payments Account shall
be distributed in accordance with Sections 2.4(b) and 2.4(c) hereof, as
applicable.
(b) Redemptions and Purchases of Equipment Notes. (i) So long as no
Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b)
of amounts on deposit in the Special Payments Account on account of the
redemption, purchase (including, without limitation, a purchase resulting from
a sale of the Equipment Notes permitted by Article IV hereof) or prepayment of
all of the Equipment Notes issued pursuant to an Indenture on the Special
Distribution Date for such Special Payment in the following order of priority:
first, such amount as shall be required to pay (A) the aggregate
amount of all accrued, due and unpaid Liquidity Expenses and Policy
Expenses then in arrears ("past due amounts") plus
(B) the product of (x) the aggregate amount of all accrued, but not due
and unpaid Liquidity Expenses and Policy Expenses not in arrears to such
Special Distribution Date multiplied by (y) a fraction (the "Section
2.4(b) Fraction"), the numerator of which is the aggregate outstanding
principal amount of Equipment Notes being redeemed, purchased or prepaid
on such Special Distribution Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Notes ("accrued
amounts"), shall be distributed to the Liquidity Providers and the Policy
Provider first in satisfaction of any past due amounts and then in
satisfaction of the accrued amounts, in each case, pro rata on the basis
of the amount of Liquidity Expenses and Policy Expenses, owed to each
Liquidity Provider and the Policy Provider;
second, such amount as shall be required to pay (i) (A) all accrued
and unpaid interest (including interest accrued and unpaid on any
Interest Drawing or any Applied Provider
Advance (as defined in any Liquidity Facility)) then in arrears on all
Liquidity Obligations plus (B) the product of (x) the aggregate amount of
all accrued and unpaid interest on all Liquidity Obligations not in
arrears to such Special Distribution Date (at the rate provided in the
applicable Liquidity Facility) multiplied by (y) the Section 2.4(b)
Fraction (in each case determined after application of the proceeds of
any Excess Interest Policy Drawing or other payment by the Policy
Provider to the applicable Liquidity Provider in respect of any interest
on Interest Drawings in accordance with the provisions of Section
2.6(c)), (ii) (A) all accrued and unpaid interest then in arrears on any
Policy Drawings made in respect of any shortfall attributable to a
failure by the Class G Liquidity Provider to honor an Interest Drawing
(as more fully provided in the definition of "Policy Provider
Obligations") plus (B) the product of (x) the aggregate amount of all
accrued and unpaid interest on such Policy Drawings not in arrears to
such Special Distribution Date multiplied by (y) the Section 2.4(b)
Fraction and (iii) if the Policy Provider has elected pursuant to Section
2.6(c) to pay to any Liquidity Provider all outstanding Drawings and
interest thereon owing to such Liquidity Provider under the applicable
Liquidity Facility, the product of (x) the amount of such payment made to
such Liquidity Provider attributable to interest accrued on such Drawings
multiplied by (y) the Section 2.4(b) Fraction, shall be distributed to
the Liquidity Providers and the Policy Provider pro rata on the basis of
the amount of such Liquidity Obligations owed to each Liquidity Provider
and the amount of such Policy Provider Obligations payable under this
clause "second" to the Policy Provider;
third, such amount as shall be required (i)(A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Cash Collateral Account up to its Required Amount
shall be deposited in such Cash Collateral Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended Facility at
a time when unreimbursed Interest Drawings under such Liquidity Facility
have reduced the Maximum Available Commitment thereunder to zero, to
deposit into the related Cash Collateral Account an amount equal to such
Cash Collateral Account's Required Amount shall be deposited in such Cash
Collateral Account, and (C) if, with respect to any particular Liquidity
Facility, neither subclause (A) nor subclause (B) of this clause "third"
are applicable, to pay or reimburse the Liquidity Provider in respect of
such Liquidity Facility in an amount equal to the amount of any
unreimbursed Interest Drawings (net of any and all payments made by the
Policy Provider to the applicable Liquidity Provider with respect to the
principal of any Interest Drawing under such Liquidity Facility) under
such Liquidity Facility and (ii) if the Policy Provider has elected
pursuant to the proviso to Section 2.6(c) to pay to any Liquidity
Provider all outstanding Drawings and interest thereon owing to such
Liquidity Provider under the applicable Liquidity Facility, the amount of
such payment made to such Liquidity Provider in respect of principal of
Drawings under such Liquidity Facility, shall be distributed to such
Liquidity Provider and the Policy Provider, pro rata on the basis of the
amounts of all such deficiencies and/or unreimbursed Interest Drawings in
respect of each Liquidity Provider and the amount of such Policy Provider
Obligations payable under this clause "third" to the Policy Provider;
fourth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (i)(A) or
(i)(B) of clause "third" above, then the Liquidity Provider with respect
to such Liquidity Facility shall be paid the excess of (x) the
aggregate outstanding amount of unreimbursed Advances (whether or not
then due) under such Liquidity Facility over (y) the Required Amount for
the relevant Class, pro rata on the basis of such amounts in respect of
each Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class G Certificates on such Special
Distribution Date shall be distributed to the Class G Trustee;
sixth, such amount as shall be required to pay the Policy Provider
all Policy Provider Obligations then due to the Policy Provider under the
Policy Provider Agreement (other than amounts payable pursuant to clauses
"first", "second" and "third" of this Section 2.4 and any Excess
Reimbursement Obligations) shall be paid to the Policy Provider;
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Certificates on such Special
Distribution Date shall be distributed to the Class C Trustee;
eighth, such amounts as shall be required to pay any Excess
Reimbursement Obligations to the Policy Provider;
ninth, if Class D Certificates are issued, such amount as shall be
required to pay in full "Expected Distributions" (to be defined in a
manner equivalent to the definition for other Classes of Certificates) to
the holders of Class D Certificates on such Special Distribution Date
shall be distributed to the Class D Trustee; and
tenth, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance with
Section 3.2 hereof.
For the purposes of this Section 2.4(b)(i), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued, due
and unpaid interest on such Certificates together with (without duplication)
accrued and unpaid interest on a portion of such Certificates equal to the
outstanding principal amount of the Equipment Notes held in such Trust and
being redeemed, purchased or prepaid (immediately prior to such redemption,
purchase or prepayment) (in each case excluding interest, if any, payable with
respect to the Deposits related to such Trust)".
(ii) At any time following the occurrence of a Triggering Event
(whether or not continuing), the Subordination Agent shall make
distributions of amounts on deposit in the Special Payments Account on
account of the redemption, prepayment or purchase of all of the Equipment
Notes issued pursuant to an Indenture on the Special Distribution Date
for such Special Payment in accordance with Section 3.3 hereof.
(c) Other Special Payments. Except as provided in clause (e) below,
any amounts on deposit in the Special Payments Account other than in respect
of amounts to be distributed pursuant to Section 2.4(b) shall be distributed
on the Special Distribution Date therefor in accordance with Article III
hereof.
(d) Investment of Amounts in Special Payments Account. Any amounts
on deposit in the Special Payments Account prior to the distribution thereof
pursuant to Section 2.4(b) or (c) shall be invested in accordance with Section
2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will distribute
promptly upon receipt thereof (i) any indemnity payment or expense
reimbursement received by it from the Owner Participant, the Owner Trustee,
Amtran or ATA in respect of any Trustee, any Liquidity Provider, the Policy
Provider, any Paying Agent, any Depositary or any Escrow Agent (collectively,
the "Payees") and (ii) any compensation (including, without limitation, any
fees payable to any Liquidity Provider under Section 2.03 of any Liquidity
Facility or to the Policy Provider under the Policy Provider Agreement)
received by it from the Owner Participant, the Owner Trustee, Amtran or ATA
under any Operative Agreement in respect of any Payee, directly to the Payee
entitled thereto.
SECTION 2.5 Designated Representatives. (a) With the delivery of
this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider, 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 any Trustee's request (which request
shall not be made more than one time in any 12-month period), a certificate (a
"Subordination Agent Incumbency Certificate") of a Responsible Officer of the
Subordination Agent certifying as to the incumbency and specimen signatures of
the officers of the Subordination Agent and the attorney-in-fact and agents of
the Subordination Agent (the "Subordination Agent Representatives") authorized
to give Written Notices on behalf of the Subordination Agent hereunder. Until
each Liquidity Provider, the Policy Provider and each Trustee receives a
subsequent Subordination Agent Incumbency Certificate, it shall be entitled to
rely on the last Subordination Agent Incumbency Certificate delivered to it
hereunder.
(b) With the delivery of this Agreement, each Trustee shall furnish
to the Subordination Agent, and from time to time thereafter may furnish to
the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Trustee Incumbency
Certificate") of a Responsible Officer of such Trustee certifying as to the
incumbency and specimen signatures of the officers of such Trustee and the
attorney-in-fact and agents of such Trustee (the "Trustee Representatives")
authorized to give Written Notices on behalf of such Trustee hereunder. Until
the Subordination Agent receives a subsequent Trustee Incumbency Certificate,
it shall be entitled to rely on the last Trustee Incumbency Certificate
delivered to it hereunder.
(c) With the delivery of this Agreement, each Liquidity Provider and
the Policy Provider shall furnish to the Subordination Agent, and from time to
time thereafter may furnish to the Subordination Agent, at such Liquidity
Provider's or 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 (each a "Provider Incumbency Certificate") of any
Responsible Officer of such Liquidity Provider or Policy Provider certifying
as to the incumbency and specimen signatures of any officer, attorney-in-fact,
agent or other designated representative of such
Liquidity Provider or Policy Provider respectively (in each case the "Provider
Representatives" and, together with the Subordination Agent Representatives
and the Trustee Representatives, the "Designated Representatives") authorized
to give Written Notices on behalf of such Liquidity Provider or Policy
Provider hereunder. Until the Subordination Agent receives a subsequent
Provider Incumbency Certificate, it shall be entitled to rely on the last
Provider Incumbency Certificate delivered to it hereunder by the relevant
Liquidity Provider or the Policy Provider.
SECTION 2.6 Controlling Party. (a) Except as provided in Section
2.6(c) and 9.1(b) hereof, the Trustees, the Liquidity Providers and the Policy
Provider hereby agree that, with respect to any Indenture at any given time,
the Loan Trustee thereunder will be directed by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with respect to
any Indenture shall be: (x) the Policy Provider so long as the Final
Distribution on the Class G Certificates has not been made or any Policy
Provider Obligations remain outstanding, or, if any Policy Provider Default
shall have occurred and be continuing and the Final Distribution on the Class
G Certificates has not been made, the Class G Trustee; and (y) upon payment of
the Final Distributions to the Class G Certificateholders and for so long as
either (i) no Policy Provider Obligations remain outstanding or (ii) a Policy
Provider Default has occurred and is continuing, the Class C Trustee, such
that if the Policy Provider is required to make a Policy Drawing in respect of
a Preference Amount after the payment of the Final Distributions to the Class
G Certificateholders, then provided no Policy Provider Default has occurred
and is continuing, the Policy Provider will be the Controlling Party until no
Policy Provider Obligations remain outstanding, then the Class C Trustee. For
purposes of giving effect to the foregoing provisions of Section 2.6(a) and
this Section 2.6(b), the Trustees (other than the Controlling Party)
irrevocably agree (and the Certificateholders (other than the
Certificateholders represented by the Controlling Party) shall be deemed to
agree by virtue of their purchase of Certificates) that the Subordination
Agent, as record holder of the Equipment Notes, shall exercise its voting
rights in respect of the Equipment Notes as directed by the Controlling Party
and any vote so exercised shall be binding upon the Trustees and all
Certificateholders.
The Subordination Agent shall give written notice to all of the
other parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party 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 any Liquidity Facility shall have been drawn (for any reason
other than a Downgrade Drawing or a Non-Extension Drawing) and remain
unreimbursed, (ii) the date on which the entire amount of any Downgrade
Drawing or Non-Extension Drawing under any Liquidity Facility shall have
become and remain "Applied Downgrade Advances" or "Applied Non-Extension
Advances", as the case may be, under and as defined in such Liquidity Facility
and (iii) the date on which all Equipment Notes shall have been Accelerated,
the Liquidity Provider, if any, with the highest outstanding amount of
Liquidity Obligations then owed to it and not then in default in its
obligations to make any Drawing under any Liquidity Facility shall have the
right to elect, by Written Notice to the Subordination Agent, 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, however, that if within 15 Business Days after
its receipt of any such written notice from such Liquidity Provider (A) (i)
the Policy Provider then meets the Policy Provider Threshold Rating and (ii)
the Policy Provider delivers to the Subordination Agent (with a copy to each
of the Trustees and each Liquidity Provider) (a) an amended Policy (x)
extending the benefits of the Policy to and covering in full all Drawings
under each Liquidity Facility together with accrued interest thereon
(determined without regard to the availability of funds for the payment
thereof by the Subordination Agent) in respect of the Class G Liquidity
Facility and the Class C Liquidity Facility, (y) permitting each Liquidity
Provider when and as such Liquidity Obligations become due under the
applicable Liquidity Facility to demand a payment thereof under such amended
Policy directly from the Policy Provider and (z) prohibiting any amendment or
modification of such amended Policy without the prior written consent of each
Liquidity Provider and otherwise in form and substance reasonably satisfactory
to each Liquidity Provider, (b) a legal opinion to the effect that the Policy
as amended constitutes an enforceable obligation of the Policy Provider and
(c) a Ratings Confirmation issued by each Rating Agency with respect thereto
or (B) the Policy Provider pays to the Class G Liquidity Provider and the
Class C Liquidity Provider all outstanding Drawings under each Liquidity
Facility together with accrued interest thereof (as so determined) in respect
of the Class G Liquidity Facility and the Class C Liquidity Facility,
respectively, then, in either case, the Policy Provider rather than such
Liquidity Provider shall be the Controlling Party so long as no Policy
Provider Default has occurred and is continuing (in which case such 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 such Liquidity Obligations
remain outstanding, the Class G Trustee, shall become the Controling Party).
In connection with the delivery of any such amended Policy, the parties hereto
agree to enter into an amendment to this Agreement and the Subordination Agent
agrees to enter into an amendment to the Policy Provider Agreement, in each
instance, to make such changes thereto as may be necessary to give effect to
the foregoing (any such amendment to this Agreement to be subject to delivery
to each of the Trustees and the Subordination Agent of a Ratings Confirmation
issued by each Rating Agency with respect thereto and each such amendment to
be in form and substance reasonably satisfactory to each party thereto). In
addition, each Liquidity Provider agrees to request the Policy Drawings
permitted by such amended Policy and that the proceeds thereof shall reduce
pro tanto the Liquidity Obligations owing to it.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution. (a) No later than 3:00
P.M. (New York City time) on the Business Day immediately preceding each
Regular Distribution Date (or Special Distribution Date for purposes of
Section 2.4(b) hereof, as the case may be), each of the following Persons
shall deliver to the Subordination Agent a Written Notice setting forth the
following information as at the close of business on such Business Day:
(i) With respect to the Class G Certificates, the Class G
Trustee shall set forth the amounts to be paid in accordance with
clause "fifth" of Section 3.2 or Section 2.4(b), as the case may be,
hereof;
(ii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in
accordance with clause "seventh" of Section 3.2 or Section 2.4(b), as
the case may be, hereof;
(iii) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid
to it in accordance with clauses "first", "second", "third" and
"fourth" of Section 3.2 or Section 2.4(b), as the case may be,
hereof;
(iv) With respect to the Policy and the Policy Provider
Agreement, the Policy Provider shall set forth the amounts to be paid
to it in accordance with clauses "first", "second", "third", "sixth"
and "eighth" of Section 3.2 or Section 2.4(b), as the case may be,
hereof; and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "ninth" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a
schedule or similar document provided to the Subordination Agent by the
parties referenced therein or by any one of them, which schedule or similar
document may state that, unless there has been a prepayment of the
Certificates, such schedule or similar document is to remain in effect until
any substitute notice or amendment shall be given to the Subordination Agent
by the party providing such notice.
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the following
Persons, and each of the following Persons shall, upon the request of the
Subordination Agent, deliver a Written Notice to the Subordination Agent
setting forth for such Person the following information:
(i) With respect to the Class G Certificates, the Class G
Trustee shall set forth the amounts to be paid in accordance with
clauses "first" and "sixth" (to reimburse payments made by the Class
G Certificateholders pursuant to subclause (iv) of clause "first" and
subclause (iii) of clause "sixth" hereof) and "seventh" of Section
3.3 hereof;
(ii) With respect to the Class C Certificates, the Class C
Trustee shall separately set forth the amounts to be paid in
accordance with clauses "first" and "sixth" (to reimburse payments
made by the Class C Certificateholders pursuant to subclause (iv) of
clause "first" and subclause (iii) of "sixth" hereof) and "ninth" of
Section 3.3 hereof;
(iii) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid
to it in accordance with subclause (iii) of clause "first" and
clauses "second", "third", "fourth" and "fifth" of Section 3.3
hereof; and
(iv)With respect to the Policy and the Policy Provider
Agreements, the Policy Provider shall separately set forth amounts to
be paid to it in accordance with subclauses (iii) and (iv) of clause
"first", subclause (ii) of clause "second", subclauses (ii) and (iii)
of clause "third", subclause (II) of clause "fourth", clause "eighth"
and clause "tenth" of Section 3.3 hereof; and
(v) Each Trustee shall set forth the amounts to be paid in
accordance with clause "sixth" of Section 3.3 hereof.
(c) At such time as a Trustee, a Liquidity Provider or the Policy
Provider shall have received all amounts owing to it (and, in the case of a
Trustee, the Certificateholders for which it is acting) pursuant to Sections
2.4, 3.2, 3.3 or 3.7 hereof, as applicable, and, in the case of a Liquidity
Provider or the Policy Provider, its commitment under the related Liquidity
Facility or the Policy, respectively, shall have terminated or expired, such
Person shall, by a Written Notice, so inform the Subordination Agent and each
other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent shall
be fully protected in relying on any of the information set forth in a Written
Notice provided by any Trustee, any Liquidity Provider or the Policy Provider
pursuant to paragraphs (a) through (c) above and shall have no independent
obligation to verify, calculate or recalculate any amount set forth in any
Written Notice delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Trustee, a Liquidity Provider
or the Policy Provider, as applicable, pursuant to Sections 3.1(a), 3.1(b) or
3.1(c) hereof, if made prior to 10:00 A.M. (New York City time) on any
Business Day, shall be effective on the date delivered (or if delivered later
on a Business Day or if delivered on a day which is not a Business Day shall
be effective as of the next Business Day). Subject to the terms of this
Agreement, the Subordination Agent shall as promptly as practicable comply
with any such instructions; provided, however, that any transfer of funds
pursuant to any instruction received after 10:00 A.M. (New York City time) on
any Business Day may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from any
Person any information set forth in paragraph (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 2.4(b), 3.2 or 3.3 hereof, the Subordination Agent
shall request such information and, failing to receive any such information,
the Subordination Agent shall not make such distribution(s) to such Person. In
such event, the Subordination Agent shall make distributions pursuant to
clauses "first" through "tenth" of
Section 2.4(b) or clauses "first" through "tenth" of Section 3.2 and clauses
"first" through "tenth" of Section 3.3, as the case may be, to the extent it
shall have sufficient information to enable it to make such distributions, and
shall continue to hold any funds remaining, after making such distributions,
until the Subordination Agent shall receive all necessary information to
enable it to distribute any funds so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider, the Policy Provider or any Trustee shall request, the
Subordination Agent shall send to such party a written statement reflecting
all amounts on deposit with the Subordination Agent pursuant to Section 3.1(f)
hereof.
SECTION 3.2 Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Regular Distribution Date (or,
in the case of any amount described in Section 2.4(c), on the Special
Distribution Date thereof) in the following order of priority and in
accordance with the information provided to the Subordination Agent pursuant
to Section 3.1(a) hereof:
first, such amount as shall be required to pay (i) all accrued and
unpaid Liquidity Expenses owed to each Liquidity Provider and (ii) all
accrued and unpaid Policy Expenses owed to the Policy Provider, shall be
distributed to the Liquidity Providers and the Policy Provider pro rata
on the basis of the amount of Liquidity Expenses and Policy Expenses owed
to each Liquidity Provider and the Policy Provider;
second, such amount as shall be required to pay (i) the aggregate
amount of interest accrued and unpaid on all Liquidity Obligations (at
the rate, or in the amount, provided in the applicable Liquidity
Facility) (determined after the application of the proceeds of any Excess
Interest Policy Drawing or other payment by the Policy Provider to the
applicable Liquidity Provider in respect of any interest on Interest
Drawings in accordance with the provisions of Section 2.6(c)), (ii) the
aggregate amount of interest accrued and unpaid on any Policy Drawings
made in respect of any shortfall attributable to a failure by the Class G
Liquidity Provider to honor any Interest Drawing (as more fully provided
in the definition of "Policy Provider Obligations"), and (iii) if the
Policy Provider has elected pursuant to the proviso to Section 2.6(c) to
pay to any Liquidity Provider all outstanding Drawings and interest
thereon owing to such Liquidity Provider under the applicable Liquidity
Facility, the amount of such payment made to such Liquidity Provider
attributable to interest accrued on such Drawings, shall be distributed
to the Liquidity Providers and the Policy Provider pro rata on the basis
of the amount of such Liquidity Obligations owed to each Liquidity
Provider and the amount of such Policy Provider Obligations payable under
this clause "second" to the Policy Provider;
third, such amount as shall be required (i) (A) if any Cash
Collateral Account had been previously funded as provided in Section
3.6(f), to fund such Cash Collateral Account up to its Required Amount
shall be deposited in such Cash Collateral Account, (B) if any Liquidity
Facility shall become a Downgraded Facility or a Non-Extended Facility at
a time when unreimbursed Interest Drawings under such Liquidity Facility
have reduced the Maximum
Available Commitment thereunder to zero, to deposit into the related Cash
Collateral Account an amount equal to such Cash Collateral Account's
Required Amount shall be deposited in such Cash Collateral Account, and
(C) if, with respect to any particular Liquidity Facility, neither
subclause (A) nor subclause (B) of this clause "third" is applicable, to
pay or reimburse the Liquidity Provider in respect of such Liquidity
Facility in an amount equal to the amount of all Liquidity Obligations
(net of any and all payments made by the Policy Provider to the
applicable Liquidity Provider with respect to the principal of any
Interest Drawing under such Liquidity Facility) then due under such
Liquidity Facility (other than amounts payable pursuant to clause "first"
or "second" of this Section 3.2), and (ii) if the Policy Provider has
elected pursuant to the proviso to Section 2.6(c) to pay to any Liquidity
Provider all outstanding Drawings and interest thereon owing to such
Liquidity Provider under the applicable Liquidity Facility, the amount of
such payment made to such Liquidity Provider in respect of principal of
Drawings under such Liquidity Facility, shall be distributed to such
Liquidity Provider and the Policy Provider, pro rata on the basis of the
amounts of all such deficiencies and/or unreimbursed Liquidity
Obligations in respect of each Liquidity Provider and the amount of such
Policy Provider Obligations payable under this clause "third" to the
Policy Provider;
fourth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (A) or (B) of
clause "third" above, then the Liquidity Provider with respect to such
Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the
relevant Class, pro rata on the basis of such amounts in respect of each
Liquidity Provider;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class G Certificates on such
Distribution Date shall be distributed to the Class G Trustee;
sixth, such amount as shall be required to pay the Policy Provider
all Policy Provider Obligations then due to the Policy Provider under the
Policy Provider Agreement (other than amounts payable pursuant to clauses
"first", "second" and "third" of this Section 3.2 and any Excess
Reimbursement Obligations) shall be paid to the Policy Provider
seventh, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Certificates on such
Distribution Date shall be distributed to the Class C Trustee;
eighth, such amount as shall be required to pay in full any Excess
Reimbursement Obligations shall be distributed to the Policy Provider;
ninth, such amount as shall be required to pay in full the aggregate
unpaid amount of fees and expenses payable as of such Distribution Date
to the Subordination Agent and each Trustee pursuant to the terms of this
Agreement and the Trust Agreements, as the case may be, shall be
distributed to the Subordination Agent and such Trustee; and
tenth, the balance, if any, of any such payment remaining thereafter
shall be held in the Collection Account for later distribution in
accordance with this Article III.
SECTION 3.3 Distribution of Amounts on Deposit Following a
Triggering Event. Except as otherwise provided in Sections 3.1(f), 3.6(b) and
3.6(k) hereof, upon the occurrence of a Triggering Event and at all times
thereafter, all funds in the Collection Account or the Special Payments
Account shall be promptly distributed by the Subordination Agent in the
following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Notes or
any Collateral securing such Equipment Notes, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses, (ii)
each Trustee for any amounts of the nature described in clause (i) above
actually incurred by it under the applicable Trust Agreement (to the
extent not previously reimbursed), shall be distributed to such Trustee,
(iii) the Policy Provider for any amounts of the nature described in
clause (i) above actually incurred by it (to the extent not previously
reimbursed), shall be distributed to the Policy Provider, and (iv) any
Liquidity Provider, the Policy Provider or any Certificateholder for
payments, if any, made by it to the Subordination Agent or any Trustee in
respect of amounts described in clause (i) above, shall be distributed to
such Liquidity Provider, the Policy Provider or to the applicable Trustee
for the account of such Certificateholder, in each such case, pro rata on
the basis of all amounts described in clauses (i) through (iv) above;
second, such amount remaining as shall be required to pay (i) all
accrued and unpaid Liquidity Expenses owed to each Liquidity Provider and
(ii) all accrued and unpaid Policy Expenses owed to the Policy Provider,
shall be distributed to each Liquidity Provider and the Policy Provider
pro rata on the basis of the amount of Liquidity Expenses and Policy
Expenses owed to each Liquidity Provider and the Policy Provider;
third, such amount remaining as shall be required to pay (i) the
aggregate amount of interest accrued and unpaid on all Liquidity
Obligations (at the rate, or in the amount, provided in the applicable
Liquidity Facility) (determined after the application of the proceeds of
any Excess Interest Policy Drawing or other payment by the Policy
Provider to the applicable Liquidity Provider in accordance with the
provisions of Section 2.6(c), (ii) the aggregate amount of interest
accrued and unpaid on any Policy Drawings made in respect of any
shortfall attributable to a failure by the Class G Liquidity Provider to
honor any Interest Drawing (as more fully provided in the definition of
"Policy Provider Obligations"), and (iii) if the Policy Provider has
elected pursuant to the proviso to Section 2.6(c) to pay to any Liquidity
Provider all outstanding Drawings and interest thereon owing to such
Liquidity Provider under the applicable Liquidity Facility, the amount of
such payment made to such Liquidity Provider attributable to interest
accrued on such Drawings, shall be distributed to the Liquidity Providers
and the Policy Provider pro rata on the basis of the amount of such
Liquidity Obligations owed to each Liquidity Provider and the amount of
such Policy Provider Obligations payable under this clause "third" to the
Policy Provider;
fourth, such amount remaining as shall be required (I) (A) if any
Cash Collateral Account had been previously funded as provided in Section
3.6(f), unless (i) a Performing Note Deficiency exists and a Liquidity
Event of Default shall have occurred and be continuing with respect to
the relevant Liquidity Facility or (ii) a Final Drawing shall have
occurred with respect to such Liquidity Facility, to fund such Cash
Collateral Account up to its Required Amount (less the amount of any
repayments of Interest Drawings under such Liquidity Facility while
subclause (A)(i) above is applicable) shall be deposited in such Cash
Collateral Account, (B) if any Liquidity Facility shall become a
Downgraded Facility or a Non-Extended Facility at a time when
unreimbursed Interest Drawings under such Liquidity Facility have reduced
the Maximum Available Commitment thereunder to zero, unless (i) a
Performing Note Deficiency exists and a Liquidity Event of Default shall
have occurred and be continuing with respect to the relevant Liquidity
Facility or (ii) a Final Drawing shall have occurred with respect to such
Liquidity Facility, to deposit into the related Cash Collateral Account
an amount equal to such Cash Collateral Account's Required Amount (less
the amount of any repayments of Interest Drawings under such Liquidity
Facility while subclause (B)(i) above is applicable) shall be deposited
in such Cash Collateral Account, and (C) if, with respect to any
particular Liquidity Facility, neither subclause (A) nor subclause (B) of
this clause "fourth" are applicable, to pay in full the outstanding
amount of all Liquidity Obligations (net of any and all payments made by
the Policy Provider to the applicable Liquidity Provider) then due under
such Liquidity Facility (other than amounts payable pursuant to clause
"second" or "third" of this Section 3.3), and (II) if the Policy Provider
has elected pursuant to the proviso to Section 2.6(c) to pay to any
Liquidity Provider all outstanding Drawings and interest thereon owing to
such Liquidity Provider under the applicable Liquidity Facility, the
amount of such payment made to such Liquidity Provider in respect of
principal of Drawings under such Liquidity Facility, shall be distributed
to such Liquidity Provider and the Policy Provider, pro rata on the basis
of the amounts of all such deficiencies and/or unreimbursed Liquidity
Obligations in respect of each Liquidity Provider and the amount of such
Policy Provider Obligations payable under this clause "fourth" to the
Policy Provider;
fifth, if, with respect to any particular Liquidity Facility, any
amounts are to be distributed pursuant to either subclause (I)(A) or
(I)(B) of clause "fourth" above, then the Liquidity Provider with respect
to such Liquidity Facility shall be paid the excess of (x) the aggregate
outstanding amount of unreimbursed Advances (whether or not then due)
under such Liquidity Facility over (y) the Required Amount for the
relevant Class (less the amount of any repayments of Interest Drawings
under such Liquidity Facility while subclause (I)(A)(i) or (I)(B)(i), as
the case may be, of clause "fourth" above is applicable), pro rata on the
basis of such amounts in respect of each Liquidity Provider;
sixth, such amount as shall be required to reimburse or pay (i) the
Subordination Agent for any Tax (other than Taxes imposed on compensation
paid hereunder), expense, fee, charge or other loss incurred by or any
other amount payable to the Subordination Agent in connection with the
transactions contemplated hereby (to the extent not previously
reimbursed), shall be applied by the Subordination Agent in reimbursement
of such amount, (ii) each Trustee for any Tax (other than Taxes imposed
on compensation paid under the applicable Trust Agreement), expense, fee,
charge, loss or any other amount payable to such Trustee under the
applicable Trust Agreements (to the extent not previously reimbursed),
shall be distributed to
such Trustee, and (iii) each Certificateholder for payments, if any, made
by it pursuant to Section 5.2 hereof in respect of amounts described in
clause (i) above, shall be distributed to the applicable Trustee for the
account of such Certificateholder, in each such case, pro rata on the
basis of all amounts described in clauses (i) through (iii) above;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class G Certificates shall be
distributed to the Class G Trustee;
eighth, such amount as is required to pay to the Policy Provider all
Policy Provider Obligations then due to the Policy Provider under the
Policy Provider Agreement (other than amounts payable pursuant to clauses
"first", "second", "third" and "fourth" of this Section 3.3 and Excess
Reimbursement Obligations) shall be paid to the Policy Provider;
ninth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Certificates shall be
distributed to the Class C Trustee;
tenth, such amount remaining as shall be required to pay in full any
Excess Reimbursement Obligations shall be distributed to the Policy
Provider; and
eleventh, if Class D Certificates are issued, such amount as is
required to pay in full "Adjusted Expected Distributions" (to be defined
in a manner equivalent to the definition for other Classes of
Certificates) on the Class D Certificates shall be distributed to the
Class D Trustee.
SECTION 3.4 Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this Agreement shall be distributed by the Subordination Agent (i) in
the order of priority specified in Section 3.3 hereof and (ii) to the extent
received or realized at any time after the Final Distributions for each Class
of Certificates have been made, in the manner provided in clause "first" of
Section 3.3 hereof.
(b) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled Payment
Date relating thereto, but prior to such payment becoming an Overdue Scheduled
Payment, then the Subordination Agent shall deposit such Scheduled Payment in
the Collection Account and promptly distribute such Scheduled Payment in
accordance with the priority of distributions set forth in Section 3.2 hereof;
provided that, for the purposes of this Section 3.4(c) only, each reference in
clause "ninth" of Section 3.2 to "Distribution Date" shall be deemed to mean
the actual date of payment of such Scheduled Payment and each reference in
clause "fifth" or "seventh" of Section 3.2 to "Distribution Date" shall be
deemed to refer to such Scheduled Payment Date.
SECTION 3.5 Payments to the Trustees, the Liquidity Providers and
the Policy Provider. Any amounts distributed hereunder to any Liquidity
Provider or the Policy Provider shall be paid to such Liquidity Provider or
Policy Provider by wire transfer of funds to the address such Liquidity
Provider or Policy Provider shall provide to the Subordination Agent. The
Subordination Agent shall provide a Written Notice of any such transfer to the
applicable Liquidity Provider or Policy Provider, as the case may be, at the
time of such transfer. Any
amounts distributed hereunder by the Subordination Agent to any Trustee which
shall not be the same institution as the Subordination Agent shall be paid to
such Trustee by wire transfer funds at the address such Trustee shall provide
to the Subordination Agent.
SECTION 3.6 Liquidity Facilities. (a) Interest Drawings. If on any
Distribution Date, after giving effect to the subordination provisions of this
Agreement, the 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 or the Class C Certificates (at the Stated Interest Rate
for such Class of Certificates), then, prior to 10:00 a.m.(New York City time)
on such Distribution Date, the Subordination Agent shall request a drawing
(each such drawing, an "Interest Drawing") under the Liquidity Facility with
respect to such Class of Certificates (and concurrently with the making of
such request, the Subordination Agent shall give notice to the Policy Provider
of such insufficiency of funds) in an amount equal to the lesser of (i) an
amount sufficient to pay the amount of such accrued interest (at the Stated
Interest Rate for such Class of Certificates) and (ii) the Maximum Available
Commitment under such Liquidity Facility, and shall pay such amount to the
Trustee with respect to such Class of Certificates in payment of such accrued
interest.
(b) Application of Interest Drawings. Notwithstanding anything to
the contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class G
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class G Cash Collateral Account, and payable in each case to the Class G
Trustee on behalf of the Class G Certificateholders, shall be promptly
distributed to the Class G Trustee and (ii) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class C
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class C Cash Collateral Account, and payable in each case to the Class C
Trustee on behalf of the Class C Certificateholders, shall be promptly
distributed to the Class C Trustee, except that if after any Distribution Date
the Subordination Agent shall receive any amount in respect of an Interest
Drawing under the Class G Liquidity Facility or a withdrawal from the Class G
Cash Collateral Account to pay Accrued Class G Interest after such Accrued
Class G Interest has been fully paid by a Policy Drawing under the Policy,
such amounts shall be paid directly to the Policy Provider as reimbursement of
such Policy Drawing rather than to the Class G Trustee on behalf of the Class
G Certificateholders and shall constitute an Interest Drawing under the Class
G Liquidity Facility or a withdrawal from the Class G Cash Collateral Account
hereunder.
(c) Downgrade Drawings. If at any time the short-term unsecured debt
rating of any Liquidity Provider issued by either Rating Agency is lower than
the applicable Threshold Rating, within 30 days after receiving notice of such
downgrading (but no later than the expiration date of the Liquidity Facility
issued by the downgraded Liquidity Provider (the "Downgraded Facility")), such
Liquidity Provider may arrange, or the Subordination Agent (in consultation
with ATA), may arrange for a Replacement Liquidity Provider to issue and
deliver a Replacement Liquidity Facility to the Subordination Agent. If a
Downgraded Facility has not been replaced in accordance with the terms of this
paragraph, the Subordination Agent shall, on such 30th day (or 10th day, if
the Liquidity Provider is rated lower than P-3 or A-3 by Moody's or Standard &
Poor's respectively) (or if such 30th or 10th day, as the case may be, is not
a Business Day, on the next succeeding Business Day) (or, if earlier, the
expiration date of such Downgraded Facility),
request a drawing in accordance with and to the extent permitted by such
Downgraded Facility (such drawing, a "Downgrade Drawing") of all available and
undrawn amounts thereunder. Amounts drawn pursuant to a Downgrade Drawing
shall be maintained and invested as provided in Section 3.6(f) hereof. The
applicable Liquidity Provider may also arrange for a Replacement Liquidity
Provider to issue and deliver a Replacement Liquidity Facility at any time
after such Downgrade Drawing so long as such Downgrade Drawing has not been
reimbursed in full to such Liquidity Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with respect
to any Class of Certificates is scheduled to expire on a date (the "Stated
Expiration Date") prior to the date that is 15 days after the Final Legal
Distribution Date for such Class of Certificates, then, no earlier than the
60th day and no later than the 40th day prior to the then Stated Expiration
Date for such class of Certificates, the Subordination Agent shall request
that such Liquidity Provider extend such Stated Expiration Date to the earlier
of (i) the date which is fifteen days after the Final Legal Distribution Date
for such Class of Certificates and (ii) the day that is the day immediately
preceding the 364th day occurring after such Stated Expiration Date (unless
the obligations of such Liquidity Provider thereunder are earlier terminated
in accordance with such Liquidity Facility). Such Liquidity Provider shall
advise the Subordination Agent, no earlier than 40 days and no later than 25
days prior to the Stated Expiration Date, whether, in its sole discretion, it
agrees to so extend the Stated Expiration Date. If, on or before such 25th
day, such Liquidity Facility shall not have been so extended or replaced in
accordance with Section 3.6(e), or if the Liquidity Provider fails irrevocably
and unconditionally to advise the Subordination Agent on or before the 25th
day prior to the Stated Expiration Date then in effect that such Stated
Expiration Date shall be so extended, the Subordination Agent shall, on such
25th day (or as soon as possible thereafter), in accordance with and to the
extent permitted by the terms of the expiring Liquidity Facility (a
"Non-Extended Facility"), request a drawing under such expiring Liquidity
Facility (such drawing, a "Non-Extension Drawing") of all available and
undrawn amounts thereunder. Amounts drawn pursuant to a Non-Extension Drawing
shall be maintained and invested in accordance with Section 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. At any time, the
Subordination Agent may, at its option, in consultation with ATA, arrange for
a Replacement Liquidity Facility to replace the Liquidity Facility for any
Class of Certificates; provided that the initial Liquidity Provider may not be
replaced (except as provided in any other section of this Agreement) unless
there shall have become due to the initial Liquidity Provider amounts pursuant
to Section 3.1, 3.2 or 3.3 of the Liquidity Facilities and the replacement of
the initial Liquidity Provider would reduce or eliminate the obligation to pay
such amounts. In any such consultation, the Subordination Agent shall accept
the recommendations of ATA, in the absence of a good faith reason not to do
so. If such Replacement Liquidity Facility is provided at any time after a
Downgrade Drawing or a Non-Extension Drawing has been made, all funds on
deposit in the relevant Cash Collateral Account will be returned to the
Liquidity Provider being replaced. No such Replacement Liquidity Facility
executed in connection therewith shall become effective and
39
no such Replacement Liquidity Facility shall be deemed a "Liquidity Facility"
under the Operative Agreements, unless and until (i) the conditions referred
to in the immediately following paragraph shall have been satisfied and (ii)
if such Replacement Liquidity Facility shall materially adversely affect the
rights, remedies, interests or obligations of the Class G Certificateholders
or the Class C Certificateholders
under any of the Operative Agreements, the applicable Trustee shall have
consented, in writing, to the execution and issuance of such Replacement
Liquidity Facility.
In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each Rating
Agency that such Replacement Liquidity Facility will not cause a reduction of
the rating then in effect for any Class of Certificates by such Rating Agency
(without regard to the ratings of any Liquidity Provider being replaced
pursuant to Section 3.6(c) or 3.6(d) hereof and without regard to the Policy
and, in the case of the Class G Liquidity Facility only, the written consent
of the Policy Provider (which consent shall not be unreasonably withheld or
delayed)), (y) pay all Liquidity Obligations then owing to the replaced
Liquidity Provider (which payment shall be made first from available funds in
the applicable Cash Collateral Account as described in clause (vii) of Section
3.6(f) hereof and thereafter from any other available source, including,
without limitation, a drawing under the Replacement Liquidity Facility, it
being understood that no Replacement Liquidity Facility shall become effective
(other than insofar as necessary to permit the repayment of amounts owed to
the replaced Liquidity Provider) until all amounts owed to the replaced
Liquidity Provider have been paid) and (z) cause the issuer of the Replacement
Liquidity Facility to deliver the Replacement Liquidity Facility to the
Subordination Agent, together with a legal opinion opining that such
Replacement Liquidity Facility is an enforceable obligation of such
Replacement Liquidity Provider. Upon satisfaction of the conditions set forth
in this Section 3.6(e), (i) the replaced Liquidity Facility shall terminate
and (ii) such Replacement Liquidity Provider shall be deemed to be a Liquidity
Provider with the rights and obligations of a Liquidity Provider hereunder and
under the other Operative Agreements and such Replacement Liquidity Facility
shall be deemed to be a Liquidity Facility hereunder and under the other
Operative Agreements.
(f) Cash Collateral Accounts; Withdrawals; Investments. In the event
the Subordination Agent shall draw all available amounts under the Class G
Liquidity Facility or the Class C Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or a Final Drawing shall be made as provided in the Liquidity
Facility, amounts so drawn shall be deposited by the Subordination Agent in
the Class G Cash Collateral Account or the Class C Cash Collateral Account,
respectively. Amounts so deposited shall be invested in Eligible Investments
in accordance with Section 2.2(b) hereof. Investment Earnings on amounts on
deposit in the Cash Collateral Accounts shall be deposited in the Collection
Account prior to giving effect to the distributions below on each Distribution
Date after any such amounts are deposited in any Cash Collateral Account. The
Subordination Agent shall deliver a written statement to ATA and the
respective Liquidity Provider to be paid one day prior to each Distribution
Date setting forth the aggregate amount of Investment Earnings held in the
Cash Collateral Accounts as of such date. In addition, from and after the date
funds are so deposited, the Subordination Agent shall make withdrawals from
such account as follows:
(i) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid
interest on the Class G Certificates (at the Stated Interest Rate for the
Class G Certificates) from any other source, withdraw from the Class G
Cash Collateral Account, and pay to the Class G Trustee an amount equal
to the lesser of (x) an amount, which when added to the amount of
interest payable by the Depositary on the Deposits with respect to the
Class G Certificates on each Distribution Date,
equals the amount necessary to pay accrued and unpaid interest (at the
Stated Interest Rate for the Class G Certificates) on such Class G
Certificates and (y) the amount on deposit in the Class G Cash Collateral
Account;
(ii) on each Distribution Date, the Subordination Agent shall, to the
extent it shall not have received funds to pay accrued and unpaid
interest on the Class C Certificates (at the Stated Interest Rate for the
Class C Certificates) from any other source, withdraw from the Class C
Cash Collateral Account, and pay to the Class C Trustee an amount equal
to the lesser of (x) an amount, which when added to the amount of
interest payable by the Depositary on the Deposits with respect to the
Class C Certificates on each Distribution Date, equals the amount
necessary to pay accrued and unpaid interest (at the Stated Interest Rate
for the Class C Certificates) on such Class C Certificates and (y) the
amount on deposit in the Class C Cash Collateral Account;
(iii) 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 2.4, 3.2 or 3.3 hereof or pursuant
to Section 2.03 of the Escrow and Paying Agent Agreement for such Class,
the Subordination Agent shall withdraw from the Class G Cash Collateral
Account such amount as is necessary so that, after giving effect to the
reduction of the Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class G
Cash Collateral Account on such date), the Required Amount (with respect
to the Class G Liquidity Facility) will be on deposit in the Class G Cash
Collateral Account and shall first, pay such amount to the Class G
Liquidity Provider until the Liquidity Obligations (with respect to the
Class G Certificates) shall have been paid in full, and second, deposit
any remaining amount in the Collection Account;
(iv) on each date on which the Pool Balance of the Class C Trust
shall have been reduced by payments made of the Class C
Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or pursuant
to Section 2.03 of the Escrow and Paying Agent Agreement for such Class,
the Subordination Agent shall withdraw from the Class C Cash Collateral
Account such amount as is necessary so that, after giving effect to the
reduction of the Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class C
Cash Collateral Account on such date), the Required Amount (with respect
to the Class C Liquidity Facility) will be on deposit in the Class C Cash
Collateral Account and shall first, pay such amount to the Class C
Liquidity Provider until the Liquidity Obligations (with respect to the
Class C Certificates) shall have been paid in full, and second, deposit
any remaining amount in the Collection Account;
(v) if a Replacement Liquidity Facility for any Class of
Certificates shall be delivered to the Subordination Agent following the
date on which funds have been deposited into the Cash Collateral Account
for such Class of Certificates, the Subordination Agent shall withdraw
all amounts on deposit in such Cash Collateral Account and shall pay such
amounts to the replaced Liquidity Provider until all Liquidity
Obligations owed to such Person shall have been paid in full, and shall
deposit any remaining amount in the Collection Account; and
(vi) following the payment of Final Distributions with respect to any
Class of Certificates, on the date on which the Subordination Agent shall
have been notified by the Liquidity Provider for such Class of
Certificates that the Liquidity Obligations owed to such Liquidity
Provider have been paid in full, the Subordination Agent shall withdraw
all amounts on deposit in the Cash Collateral Account in respect of such
Class of Certificates and shall deposit such amount in the Collection
Account.
(g) Reinstatement. With respect to any Interest Drawing under the
Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Maximum Available Commitment
of such Liquidity Facility shall be reinstated by an amount equal to the
amount of such Interest Drawing so reimbursed to the applicable Liquidity
Provider, but not to exceed the Stated Amount for such Liquidity Facility;
provided, however, that such Liquidity Facility shall not be so reinstated in
part or in full at any time if (x) both a Performing Note Deficiency exists
and a Liquidity Event of Default shall have occurred and be continuing under
such Liquidity Facility or (y) a Final Drawing shall have occurred under such
Liquidity Facility. In the event that under any particular Liquidity Facility
funds are withdrawn from any Cash Collateral Account pursuant to clause (i),
(ii) or (iii) of Section 3.6(f) hereof or (ii) such Liquidity Facility shall
become a Downgraded Facility or a Non-Extended Facility at any time when
unreimbursed Interest Drawings have reduced the Maximum Available Commitment
to zero, then funds received by the Subordination Agent at any time other than
(x) any time when a Liquidity Event of Default shall have occurred and be
continuing with respect to such Liquidity Facility and a Performing Note
Deficiency exists or (y) any time after a Final Drawing shall have occurred
under such Liquidity Facility shall be deposited in such Cash Collateral
Account as provided in clause "third" of Section 2.4(b)(i), clause "third" of
Section 3.2 or clause "fourth" of Section 3.3, as applicable, and applied in
accordance with Section 3.6(f) hereof.
(h) Reimbursement. The amount of each drawing under the Liquidity
Facilities shall be due and payable, together with interest thereon, on the
dates and at the rates, respectively, provided in the Liquidity Facilities.
(i) Final Drawing. Upon receipt from a Liquidity Provider of a
Termination Notice with respect to any Liquidity Facility, the Subordination
Agent shall, not later than the date specified in such Termination Notice, in
accordance with and to the extent permitted by the terms of such Liquidity
Facility, request a drawing under such Liquidity Facility of all available and
undrawn amounts thereunder (a "Final Drawing"). Amounts drawn pursuant to a
Final Drawing shall be maintained and invested in accordance with Section
3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each date on
which the Required Amount of the Liquidity Facility for a Class of
Certificates is reduced as a result of a reduction in the Pool Balance with
respect to such Certificates, the Subordination Agent shall, if any such
Liquidity Facility provides for reductions of the Stated Amount of such
Liquidity Facility and if such reductions are not automatic, request such
Liquidity Provider for such Class of Certificates to reduce such Stated Amount
to an amount equal to the Required Amount with respect to such Liquidity
Facility (as calculated by the Subordination Agent after giving effect to such
payment).
Each such request shall be made in accordance with the provisions of the
applicable Liquidity Facility.
(k) Relation to Subordination Provisions. Interest Drawings under
the Liquidity Facilities and withdrawals from the Cash Collateral Accounts, in
each case, in respect of interest on the Certificates of any Class, will be
distributed to the Trustee for such Class of Certificates notwithstanding
Sections 2.4, 3.2, 3.3 and 3.6(h) hereof.
(l) Assignment of Liquidity Facility. The Subordination Agent agrees
not to consent to the assignment by any Liquidity Provider of any of its
rights or obligations under any Class G Liquidity Facility or any interest
therein, unless the Policy Provider shall have consented to such assignment
(which consent shall not be unreasonably withheld or delayed), and, upon the
receipt of such consent from the Policy Provider, the Subordination Agent
shall give such consent.
SECTION 3.7 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 any amounts received by the Escrow Agent in the Class G Paying
Agent Account in respect of accrued interest on the Class G Deposits, any
Drawing paid under the Class G Liquidity Facility in respect of interest due
on the Class G Certificates on such Distribution Date and any withdrawal of
funds from the Class G Cash Collateral Account in respect of such interest
(collectively, "Prior Funds"), the Subordination Agent does not then have
sufficient funds available for the payment of all amounts due and owing in
respect of accrued interest on the Class G Certificates at the Stated Interest
Rate for Class G Certificates ("Accrued Class G Interest"), then, on such
Distribution Date, the Subordination Agent shall request a Policy Drawing in
accordance with Section 3.7(f) in an amount sufficient to enable the
Subordination Agent to pay such Accrued Class G Interest.
(b) Proceeds Deficiency Drawing. If on any Special Distribution Date
(other than an Election Distribution Date) established by the Subordination
Agent by reason of its receipt of a Special Payment constituting the proceeds
of any Series G Equipment Note or related Collateral, as the case may be, and
if on such Special Distribution Date after giving effect to the subordination
provisions of this Agreement and to the application of any Prior Funds, the
Subordination Agent does not then have sufficient funds available for a
reduction in the outstanding Pool Balance of the Class G Certificates by an
amount equal to the outstanding principal amount of such Equipment Note
(determined immediately prior to the receipt of such proceeds) plus interest
on the amount of such reduction accrued at the Stated Interest Rate for the
period from the immediately preceding Regular Distribution Date to such
Special Distribution Date, then on such Special Distribution Date the
Subordination Agent shall request a Policy Drawing in accordance with Section
3.7(f) in an amount sufficient to enable the Subordination Agent to pay the
amount of such reduction plus such accrued interest.
(c) No Proceeds Drawing. On the first Business Day that is 24 months
after the last date on which any payment was made on any Series G Equipment
Note as to which there has subsequently been a failure to pay principal or
that has subsequently been Accelerated, if the Subordination Agent has not
received a Special Payment constituting proceeds from the disposition of that
Equipment Note or the related Collateral (a "Disposition"), then the
Subordination Agent shall on such Business Day request a Policy Drawing in
accordance with Section 3.7(f) in an amount equal to the then outstanding
principal amount of such Equipment Note plus accrued interest thereon at the
Stated Interest Rate for the Class G Certificates from the immediately
preceding Regular Distribution Date to the below referred to Special
Distribution Date. The Subordination Agent shall promptly, but not less than
25 days prior to such Business Day, send to the Class G Trustee a Written
Notice setting forth the non-receipt of any such Special Payment and
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. For the avoidance of doubt, after the payment in full of
such amount under this Section 3.7(c), the Subordination Agent shall have no
right to make any further Policy Drawings under this Section 3.7(c) in respect
of any Disposition of or in respect of such Equipment Note.
Notwithstanding the foregoing, the Policy Provider has the right at
the end of any such 24-month period, so long as no Policy Provider Default
shall have occurred and be continuing, to elect (the "Policy Provider
Election") instead (a) to pay on such Special Distribution Date an amount
equal to any shortfall in the scheduled principal and interest that came due
on such Series G Equipment Note (without regard to the acceleration thereof)
during such 24-month period (after giving effect to the application of any
Prior Funds), (b) thereafter, on each Regular Distribution Date until the
establishment of an Election Distribution Date, to permit drawings under the
Policy for an amount equal to the scheduled principal and interest that were
to become due on such Equipment Note on the related payment date (without
regard to any acceleration thereof) and (c) (i) 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 to
request the Subordination Agent, or (ii) following either the occurrence and
continuation of a Policy Provider Default or a Disposition of or in respect of
such Equipment Note, on any Business Day (which shall be a Special
Distribution Date) specified by the Subordination Agent upon 20 days' Written
Notice to the Class G Trustee (each such Business Day in the case of clauses
(i) and (ii) an "Election Distribution Date") to permit the Subordination
Agent, in each case, to make a Policy Drawing for an amount equal to the then
outstanding principal balance of such Equipment Note less any Policy Drawings
previously paid by the Policy Provider in respect of principal of such
Equipment Note and accrued 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 (after giving effect to
any drawings paid on the Election Distribution Date under the Class G
Liquidity Facility or withdrawals made on the Election Distribution Date from
the Class G Cash Collateral Account) and without derogation of the Policy
Provider's continuing obligations for all previous Policy Drawings that remain
unpaid in respect of such Equipment Note. The Subordination Agent shall
request each Policy Drawing on the Election Distribution Date referred to in
this paragraph in accordance with Section 3.7(f).
In addition, regardless of whether or not the Policy Provider makes
a Policy Provider Election, the Policy Provider shall, at the end of such
24-month period cover drawings by a Liquidity Provider for the amounts
referred to in the Policy ("Excess Interest Policy Drawing"). Each Liquidity
Provider agrees to make Excess Interest Policy Drawings and that the proceeds
thereof shall reduce pro tanto the Liquidity Obligations owing to it.
(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 to the application of any Prior Funds, the Subordination
Agent does not then have sufficient funds available on such date for the
payment in full of the Final Distributions (calculated as at such date but
excluding any accrued and unpaid premium) on the Class G Certificates then,
the Subordination Agent shall request a Policy Drawing in accordance with
Section 3.7(f) in an amount equal to the minimum amount sufficient to enable
the Subordination Agent to pay the Final Distributions (calculated as at such
date but excluding any accrued and unpaid premium) on the Class G
Certificates.
(e) Avoidance Drawings. If at any time prior to the expiration of
the Policy the Subordination Agent shall have actual knowledge of the issuance
of any Order, the Subordination Agent shall promptly give notice thereof to
each Trustee, the Liquidity Providers 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 (for payment to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy and/or to the
Subordination Agent for deposit into the Policy Account, as applicable) 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 to 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 date of
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 upon its receipt of the proceeds
thereof and pay the amount thereof from the Payment Account to the Class G
Trustee in reinstatement of the Preference Amount.
(f) Policy Drawings. The Subordination Agent shall (a) request any
Policy Drawing under Sections 3.7(a), 3.7(b), 3.7(c) or 3.7(d) by delivering a
Notice of Payment to the Policy Provider or its fiscal agent prior to 1:00
p.m. on the applicable Distribution Date (including any Election Distribution
Date), and (b) shall pay on the date received all amounts in the Policy
Account from such Policy Drawings (i) to the Class G Pass Through Trustee in
payment of Expected Distributions to the Class G Certificateholders and (ii)
in reduction of the outstanding Pool Balance of the Class G Certificates
(except for Policy Drawings attributable to interest on the Class G
Certificates, in which case, in reduction of such interest). Notwithstanding
the foregoing, the Policy Provider will continue, after termination of the
Policy, to be obligated to pay amounts with respect to which a request in
accordance with the Policy for a Policy Drawing has been made prior to
termination of the Policy.
(g) Application of Policy Drawings. Notwithstanding anything to the
contrary contained in this Agreement (including, without limitation, Sections
2.4, 3.2 and 3.3 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.
(h) Limitation to Outstanding Pool Balance. Notwithstanding anything
to the contrary in this Section 3.7 except as provided in Section 3.7(e), at
no time shall the Subordination Agent make any Policy Drawing for payment in
respect of the Class G Certificates under clause (b), (c) or (d) of this
Section 3.7 in excess of the then outstanding Pool Balance of the Class G
Certificates and accrued and unpaid interest at the Stated Interest Rate on
the Class G Certificates.
(i) Terms of Policy. Nothing contained in this Intercreditor
Agreement shall 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.
(j) Resubmission of Notice for Payment. If the Policy Provider at any
time informs the Subordination Agent in accordance with the Policy that a
Notice for Payment or Notice of Avoided Payment submitted by the Subordination
Agent does not meet 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 for Payment 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
for Payment or Notice of Avoided Payment, as the case may be, when received.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party. (a) (i) Following
the occurrence and during the continuation of an Indenture Default under any
Indenture, the Controlling Party shall direct the Subordination Agent which
shall in turn direct the Loan Trustee under such Indenture in the exercise of
remedies available to the holders of the Equipment Notes issued pursuant to
such Indenture, including, without limitation, the ability to vote all such
Equipment Notes in favor of Accelerating such Equipment Notes in accordance
with, the provisions of such Indenture. Subject to the Owner Trustees' and the
Owner Participants' rights, if any, set forth in the Indentures with respect
to Leased Aircraft to purchase the Equipment Notes and the provisions of the
next paragraph, if the Equipment Notes issued pursuant to any Indenture have
been Accelerated following an Indenture Default with respect thereto, the
Controlling Party may sell, assign, contract to sell or otherwise dispose of
and deliver all (but not less than all) of such Equipment Notes to any Person
at public or private sale, at any location at the option of the Controlling
Party, all upon such terms and conditions as it may reasonably deem advisable
in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights, if any, set forth in the Indentures with respect to the Leased
Aircraft to purchase the Equipment Notes, and
notwithstanding the foregoing, so long as any Certificates remain Outstanding,
during the period ending on the date which is nine months after the earlier of
(x) the Acceleration of the Equipment Notes issued pursuant to any Indenture
or (y) the occurrence of an ATA Bankruptcy Event, without the consent of each
Trustee, (A) no Aircraft subject to the Lien of such Indenture or such
Equipment Notes may be sold if the net proceeds from such sale would be less
than the Minimum Sale Price for such Aircraft or such Equipment Notes, and (B)
with respect to any Leased Aircraft, the amount and payment dates of rentals
payable by ATA under the Lease for such Aircraft may not be adjusted, if, as a
result of such adjustment, the discounted present value of all such rentals
would be less than 75% of the discounted present value of the rentals payable
by ATA under such Lease before giving effect to such adjustment, in each case,
using the weighted average interest rate of the Equipment Notes then
outstanding pursuant to such Indenture as the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture Default
(and before the occurrence of a Triggering Event) commission LTV Appraisals
with respect to the Aircraft subject to such Indenture.
(iv) After a Triggering Event occurs and any Equipment Note becomes
a NonPerforming Equipment Note, the Subordination Agent shall obtain LTV
Appraisals for the Aircraft as soon as practicable and additional LTV
Appraisals on or prior to each anniversary of the date of such initial LTV
Appraisals; provided that, if the Controlling Party reasonably objects to the
appraised value of the Aircraft shown in any such LTV Appraisals, the
Controlling Party shall have the right to obtain or cause to be obtained
substitute LTV Appraisals (including any LTV Appraisals based upon physical
inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of
such Aircraft or Equipment Notes. In addition, in lieu of any sale,
assignment, contract to sell or other disposition, the Controlling Party may
maintain or cause the Subordination Agent to maintain possession of such
Equipment Notes and continue to apply monies received in respect of such
Equipment Notes in accordance with Article III hereof. In addition, in lieu of
such sale, assignment, contract to sell or other disposition, or in lieu of
such maintenance of possession, the Controlling Party may, subject to the
terms and conditions of the related Indenture, instruct the Loan Trustee under
such Indenture to foreclose on the Lien on the related Aircraft or to take any
other remedial action permitted under such Indenture or under any applicable
law.
SECTION 4.2 Remedies Cumulative. Each and every right, power and
remedy given to the Trustees, the Liquidity Providers, the 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 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 4.3 Discontinuance of Proceedings. In case any party to this
Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case each such party shall, subject to any determination in such Proceeding,
be restored to its former position and rights hereunder, and all rights,
remedies and powers of such party shall continue as if no such Proceeding had
been instituted.
SECTION 4.4 Right of Certificateholders to Receive Payments Not to
Be Impaired. Anything in this Agreement to the contrary notwithstanding but
subject to each Trust Agreement, the right of any Certificateholder, any
Liquidity Provider or the Policy Provider, respectively, to receive payments
hereunder (including without limitation pursuant to Section 2.4, 3.2 or 3.3
hereof) when due, or to institute suit for the enforcement of any such payment
on or after the applicable Distribution Date, shall not be impaired or
affected without the consent of such Certificateholder, Liquidity Provider or
the Policy Provider, respectively.
SECTION 4.5 Undertaking for Costs. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any Proceeding
against any Controlling Party or the Subordination Agent for any action taken
or omitted by it as Controlling Party or Subordination Agent, as the case may
be, a court in its discretion may require the filing by any party litigant in
the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees
and expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
The provisions of this Section do not apply to a suit instituted by the
Subordination Agent, a Liquidity Provider, the Policy Provider or a Trustee or
a suit by Certificateholders holding more than 10% of the original principal
amount of any Class of Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF TRUSTEES, ETC.
SECTION 5.1 Notice of Indenture Default or Triggering Event. (a) In
the event the Subordination Agent shall have actual knowledge of the
occurrence of an Indenture Default or a Triggering Event, as promptly as
practicable, and in any event within 10 days after obtaining knowledge
thereof, the Subordination Agent shall transmit by mail or courier to the
Rating Agencies, the Liquidity Providers, the Policy Provider and the Trustees
notice of such Indenture Default or Triggering Event, unless such Indenture
Default or Triggering Event shall have been cured or waived by the Controlling
Party. For all purposes of this Agreement, in the absence of
actual knowledge on the part of a Responsible Officer, the Subordination Agent
shall not be deemed to have knowledge of any Indenture Default, Performing
Note Deficiency, Liquidity Event of Default or Triggering Event unless
notified in writing by one or more Trustees, one or more Liquidity Providers
or the Policy Provider or one or more Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider, the Policy Provider and Trustee, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to the
Subordination Agent as registered holder of the Equipment Notes or otherwise
in its capacity as Subordination Agent to the extent the same shall not have
been otherwise directly distributed to such Liquidity Provider, the Policy
Provider or Trustee, as applicable, pursuant to the express provision of any
other Operative Agreement.
(c) Determinations and Notifications. The Subordination Agent agrees
to provide to ATA, upon its request, information in its possession concerning
amounts contained in, and returns earned on, any Cash Collateral Account and
any other information needed for ATA to determine amounts owing to any
Liquidity Provider.
SECTION 5.2 Indemnification. The Subordination Agent shall not be
required to take any action or refrain from taking any action under Section
5.1 (other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the
manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under
any obligation to take any action, or refrain from taking any action, under
this Agreement and nothing contained in this Agreement shall require the
Subordination Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it. The
Subordination Agent shall not be required to take any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof, nor shall any
other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or is
otherwise contrary to law.
SECTION 5.3 No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of this Agreement; and no
implied duties or obligations shall be read into this Agreement against the
Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity and at its own cost and expense (but without any right of
indemnity in respect of any such cost or expense under Section 5.2 or 7.1
hereof) promptly take such action as may be necessary to duly discharge all
Liens on any of the Trust Accounts or any monies deposited therein which
result from claims against it in its individual capacity not related to its
activities hereunder or any other Operative Agreement.
SECTION 5.4 Notice from the Liquidity Providers and Trustees. If a
Responsible Officer of any Liquidity Provider, any Trustee or the Policy
Provider has notice of an Indenture Default or a Triggering Event, such
Liquidity Provider, Policy Provider or Trustee, as the case may be, shall
promptly give notice thereof to all other Liquidity Providers, the Policy
Provider and Trustees and to the Subordination Agent; provided, however, that
no such Person shall have any liability hereunder as a result of its failure
to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization; Acceptance of Trusts and Duties. Each of
the Class G Trustee and the Class C Trustee hereby designates and appoints the
Subordination Agent as the agent and trustee of such Trustee under the
applicable Liquidity Facility (and, in the case of the Class G Trustee, the
Policy and the Policy Provider Agreement) and authorizes the Subordination
Agent to enter into the applicable Liquidity Facility and Fee Letter (and, in
the case of the Class G Trustee, the Policy Provider Agreement) as agent and
trustee for such Trustee. Each of the Liquidity Providers, the Policy Provider
and the Trustees hereby designates and appoints the Subordination Agent as the
Subordination Agent under this Agreement.
WTC hereby accepts the duties hereby created and applicable to it as
the Subordination Agent and agrees to perform the same but only upon the terms
of this Agreement and agrees to receive and disburse all monies received by it
in accordance with the terms hereof. The Subordination Agent shall not be
answerable or accountable under any circumstances, except (a) for its own
willful misconduct or gross negligence (or ordinary negligence in the handling
of funds), (b) as provided in Sections 2.2 and 5.3 hereof and (c) for
liabilities that may result from the material inaccuracy of any representation
or warranty of the Subordination Agent made in its individual capacity in any
Operative Agreement. The Subordination Agent shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.
SECTION 6.2 Absence of Duties. The Subordination Agent shall have no
duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
SECTION 6.3 No Representations or Warranties as to Documents. The
Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Agreement or any other Operative Agreement
or as to the correctness of any statement contained in any thereof, except for
the representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees, the Liquidity Providers and the Policy
Provider make no representation or warranty hereunder whatsoever.
SECTION 6.4 No Segregation of Monies; No Interest. Any monies paid
to or retained by the Subordination Agent pursuant to any provision hereof and
not then required to be distributed to any Trustee or any Liquidity Provider
as provided in Articles II and III hereof or deposited into one or more Trust
Accounts need not be segregated in any manner except to the extent required by
such Articles II and III and by law, and the Subordination Agent shall not
(except as otherwise provided in Section 2.2 hereof) be liable for any
interest thereon; provided, however, that any payments received or applied
hereunder by the Subordination Agent shall be accounted for by the
Subordination Agent so that any portion thereof paid or applied pursuant
hereto shall be identifiable as to the source thereof.
SECTION 6.5 Reliance; Agents; Advice of Counsel. The Subordination
Agent shall not incur liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to
the Subordination Agent for any action taken or omitted to be taken by it in
good faith in reliance thereon. As to any fact or matter relating to the
Liquidity Providers, 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. The Subordination Agent shall assume, and shall be fully protected in
assuming, that each of the Liquidity Providers , the Policy Provider and each
of the Trustees are authorized to enter into this Agreement and to take all
action to be taken by them pursuant to the provisions hereof, and shall not
inquire into the authorization of each of the Liquidity Providers, the Policy
Provider and each of the Trustees with respect thereto. In the administration
of the trusts hereunder, the Subordination Agent may execute any of the trusts
or powers hereof and perform its powers and duties hereunder directly or
through agents or attorneys and may consult with counsel, accountants and
other skilled persons to be selected and retained by it at the cost of ATA,
and the Subordination Agent shall not be liable for the acts or missions of
any agent appointed with due care or for anything done, suffered or omitted in
good faith by it in accordance with the advice or written opinion of any such
counsel, accountants or other skilled persons.
SECTION 6.6 Capacity in Which Acting. The Subordination Agent acts
hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7 Compensation. The Subordination Agent shall be entitled
to compensation, including expenses and disbursements, for all services
rendered hereunder (such compensation shall be set forth in a separate fee
agreement between ATA and WTC) and shall have a priority claim to the extent
set forth in Article III hereof on all monies collected hereunder for the
payment of such compensation, to the extent that such compensation shall not
be paid by others. The Subordination Agent agrees that it shall have no right
against any Trustee, Liquidity
Provider or the Policy Provider for any fee as compensation for its services
as agent under this Agreement. The provisions of this Section 6.7 shall
survive the termination of this Agreement.
SECTION 6.8 May Become Certificateholder. The institution acting as
Subordination Agent hereunder may become a Certificateholder and have all
rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.
SECTION 6.9 Subordination Agent Required; Eligibility. There shall
at all times be a Subordination Agent hereunder which shall be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $100,000,000 (or the obligations of which, whether now in
existence or hereafter incurred, are fully and unconditionally guaranteed by a
corporation organized and doing business under the laws of the United States
of America, any State thereof or of the District of Columbia and having a
combined capital and surplus of at least $100,000,000), if there is such an
institution willing and able to perform the duties of the Subordination Agent
hereunder upon reasonable or customary terms. Such corporation shall be a
citizen of the United States of America and shall be authorized under the laws
of the United States of America or any State thereof or of the District of
Columbia to exercise corporate trust powers and shall be subject to
supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.
SECTION 6.10 Money to Be Held in Trust. All Equipment Notes, monies
and other property deposited with or held by the Subordination Agent pursuant
to this Agreement shall be held in trust for the benefit of the parties
entitled to such Equipment Notes, monies and other property. All such
Equipment Notes, monies or other property shall be held in the Trust
Department of the institution acting as Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
The Subordination Agent shall be indemnified hereunder to the extent
and in the manner described in Section 7 of the Participation Agreements for
Owned Aircraft, Section 9 of the Participation Agreements for Leased Aircraft
and Section 6 of the Note Purchase Agreement. The indemnities contained in
such Sections of such agreements shall survive the termination of this
Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1. Replacement of Subordination Agent; Appointment of
Successor. The Subordination Agent may resign at any time by so notifying each
Trustee, each Liquidity Provider and the Policy Provider. The Controlling
Party may remove the Subordination Agent for cause by so notifying the
Subordination Agent and may appoint a successor Subordination Agent. The
Controlling Party shall remove the Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9 hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party shall promptly appoint a successor Subordination
Agent.
A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility and the Policy Provider Agreement 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 held by it as
Subordination Agent to the successor Subordination Agent.
If a successor Subordination Agent does not take office within 60
days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or one or more of the Trustees may petition any
court of competent jurisdiction for the appointment of a successor
Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof
(to the extent applicable), one or more of the Trustees, one or more of the
Liquidity Providers or the Policy Provider may petition any court of competent
jurisdiction for the removal of the Subordination Agent and the appointment of
a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc. (a) This Agreement may not be
supplemented, amended or modified without the consent of each Trustee (acting
with the consent of holders of Certificates of the related Class evidencing
interests in the related Trust aggregating not less than a majority in
interest in such Trust or as otherwise authorized pursuant to the relevant
Trust Agreement), the Subordination Agent, each Liquidity Provider and the
Policy Provider; provided, however, that this Agreement may be supplemented,
amended or modified without the consent of (x) any Trustee if such supplement,
amendment or modification (i) is in accordance with Section 9.1(c) hereof or
(ii) cures an ambiguity or inconsistency or does not materially adversely
affect such Trustee or the holders of the related Class of Certificates and
(y) any Liquidity Provider or the Policy Provider if such supplement,
amendment or modification is in accordance with Section 9.1(c) hereof.
Notwithstanding the foregoing, without the consent of each Certificateholder
and each Liquidity Provider and the Policy Provider, no supplement, amendment
or modification of this Agreement may (i) reduce the percentage of the
interest in any Trust evidenced by the Certificates issued by such Trust
necessary to consent to modify or amend any provision of this Agreement or to
waive compliance therewith or (ii) except as provided in Section 9.1(c),
modify Section 2.4, 3.2 or 3.3 hereof, relating to the distribution of monies
received by the Subordination Agent hereunder from the Equipment Notes or
pursuant to the Liquidity Facilities or the Policy. Nothing contained in this
Section shall require the consent of a Trustee at any time following the
payment of Final Distributions with respect to the related Class of
Certificates.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Notes, receives a request for its consent to any
amendment, modification, consent or waiver under such Equipment Notes, the
Indenture pursuant to which such Equipment Notes were issued, or the related
Lease, Participation Agreement or other related document, (i) if no Indenture
Default shall have occurred and be continuing with respect to such Indenture,
the Subordination Agent shall request directions from the Trustee of the Trust
which holds each series of such Equipment Notes and shall vote or consent in
accordance with the directions of such Trustee except that so long as the
Final Distribution on the Class G Certificates has not been made or any Policy
Provider Obligations remain outstanding and no Policy Provider Default shall
have occurred and be continuing, the Subordination Agent shall request
directions from the Policy Provider rather than the Class G Trustee with
respect to the Series G Equipment Notes held in the Class G Trust, and (ii) if
any Indenture Default (which, in the case of any Indenture pertaining to a
Leased Aircraft, has not been cured by the applicable Owner Trustee or the
applicable Owner Participant, if applicable, pursuant to Section 4.03 of such
Indenture) shall have occurred and be continuing with respect to such
Indenture, the Subordination Agent will exercise its voting rights as directed
by the Controlling Party, subject to Sections 4.1 and 4.4 hereof; provided
that no such
amendment, modification or waiver shall, without the consent of each Liquidity
Provider and the Policy Provider, reduce the amount of rent, supplemental rent
or stipulated loss values payable by ATA under any Lease or reduce the amount
of principal or interest payable by ATA under any Equipment Note issued under
any Indenture in respect of an Owned Aircraft; and provided further that no
amendment of or supplement to any Indenture, any Lease, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement,
Engine Manufacturer Warranty Agreement, the Guarantee, the Note Purchase
Agreement or any Participation Agreement (the terms "Purchase Agreement",
"Purchase Agreement Assignment", "Consent and Agreement", "Engine Manufacturer
Warranty Agreement" and "Guarantee" having the meanings specified in the
Participation Agreements or the Note Purchase Agreement) or waiver or
modification of the terms of, or consent under, any thereof, shall, without
the consent of each Liquidity Provider and the Policy Provider, have any of
the effects listed in the proviso to Section 9.01(b) of such Indenture, if
such Indenture is an Leased Aircraft Indenture, and 10.01(b) of such Indenture
if such Indenture is an Owned Aircraft Indenture.
(c) If with respect to any Owned Aircraft, ATA issues Class D
Certificates, this Agreement shall be amended to provide for the subordination
of such Class D Certificates to the Class G Certificates and the Class C
Certificates substantially in the same manner as the Class C Certificates are
subordinated hereunder to the Class G Certificates. No such amendment shall
materially adversely affect any Trustee, Liquidity Provider, the Policy
Provider or the holders of any Class of Certificates. The amendment to this
Agreement to give effect to the issuance of any Class D Certificates shall
include, without limitation:
(i) the trustee of the Class D Trust shall be added as a party to
this Agreement;
(ii) the definitions of "Cash Collateral Account," "Certificate,"
"Class," "Equipment Notes," "Final Legal Distribution Date," "Liquidity
Facilities," "Liquidity Provider," "LTV Ratio" "Stated Interest Rate,"
"Trust," "Trust Agreement," "Controlling Party" shall be revised, as
appropriate, to reflect the issuance of Class D Certificates (and the
subordination thereof); and
the provisions of this Agreement governing payments with respect to
Certificates and related notices, including, without limitation, Sections
2.4, 3.1, 3.2, 3.3 and 3.6(e), shall be revised to provide for
distributions on the Class D Certificates after payment of all relevant
distributions on the Class C Certificates.
If, with respect to any Aircraft, Series D Equipment Notes are
issued to any Person other than the Class D Trust, this Agreement shall be
amended by written agreement of ATA and the Subordination Agent to (i) provide
for each holder of a Series D Equipment Note to be bound by the provisions of
Section 2.6(a) hereof so that the Controlling Party shall, among other things,
be entitled to direct the Loan Trustee as provided therein (and such Series D
Equipment Notes shall make effective provision therefor so as to bind each
holder thereof to such provisions of Section 2.6(a) hereof) and (ii) to revise
the definitions of "Controlling Party" and "Equipment Notes", as appropriate,
to reflect the issuance of the Series D Equipment Notes (and the prior rights,
as against the holders of such Series D Equipment Notes, of the Policy
Provider, Class G Trustee
and the Class C Trustee to be such "Controlling Party"). No such amendment
shall materially adversely affect any Trustee, Liquidity Provider or the
Policy Provider.
(d) Without the consent of each Liquidity Provider and the Policy
Provider, the Trustee for each Class of Certificates agrees that it will not
consent to any amendment or modification of, or grant any waiver with respect
to, the Escrow and Paying Agent Agreement to which it is a party or the
Deposit Agreement with respect to such Class.
SECTION 9.2 Subordination Agent Protected. If, in the opinion of
counsel or the reasonable opinion of the institution acting as the
Subordination Agent hereunder, any document required to be executed pursuant
to the terms of Section 9.1 adversely affects any right, duty, immunity or
indemnity with respect to it under this Agreement, any Liquidity Facility or
the Policy, the Subordination Agent may in its discretion decline to execute
such document.
SECTION 9.3 Effect of Supplemental Agreements. Upon the execution of
any amendment, consent or supplement hereto pursuant to the provisions hereof,
this Agreement shall be and be deemed to be and shall be modified and amended
in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Agreement of the parties hereto
and beneficiaries hereof shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
agreement shall be and be deemed to be and shall be part of the terms and
conditions of this Agreement for any and all purposes. In executing or
accepting any supplemental agreement permitted by this Article IX, the
Subordination Agent shall be entitled to receive, and shall be fully protected
in relying upon, an opinion of counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement.
SECTION 9.4 Notice to Rating Agencies. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement. Following
payment of Final Distributions with respect to each Class of Certificates and
the payment in full of all Liquidity Obligations to the Liquidity Providers
and 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 Policy Provider and the Subordination
Agent hereunder or under the Trust Agreements, and that the commitment of the
(i) Liquidity Providers under the Liquidity Facilities and (ii) Policy
Provider under the Policy shall have expired or been terminated, this
Agreement and the trusts created hereby shall terminate and this Agreement
shall be of no further force or effect. Except as aforesaid or otherwise
provided, this Agreement and the trusts created hereby shall continue in full
force and effect in accordance with the terms hereof.
SECTION 10.2 Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers, Policy Provider and Subordination Agent. Subject to the
second sentence of Section 10.6 and the provisions of Sections 4.4 and 9.1,
nothing in this Agreement, whether express or implied, shall be construed to
give to any Person other than the Trustees, the Liquidity Providers, the
Policy Provider and the Subordination Agent any legal or equitable right,
remedy or claim under or in respect of this Agreement.
SECTION 10.3 Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed to at its office at:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Corporate Trust Administration
(ii) if to any Trustee addressed to it at its office at:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Corporate Trust Administration
(iii) if to any Liquidity Provider, addressed to it at its office at:
Citibank, N.A.
0 Xxxxx Xxx, Xxxxx 000
Xxx Xxxxxx, XX 00000
Attention: Xxx Xxxxx, Global Loans
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Citibank N. A.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxx
Facsimile: (000) 000-0000
Telephone: (000 000-0000
(iv) if to the initial Policy Provider, addressed to it at its office
at:
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Department
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Attention: General Counsel - Urgent
Telecopy: (000) 000-0000
Whenever any notice in writing is required to be given by any Trustee,
Liquidity Provider, the Policy Provider or the Subordination Agent to any of
the other of them, such notice shall be deemed given and such requirement
satisfied when such notice is received unless received outside of business
hours, in which case on the open of business on the next Business Day. A copy
of any notice given by any Trustee, Liquidity Provider or the Subordination
Agent shall be given to the Policy Provider; provided that the failure to do
so shall not impair the validity of any such notice or the Policy Provider's
obligations hereunder and under the Policy. Any party hereto may change the
address to which notices to such party will be sent by giving notice of such
change to the other parties to this Agreement.
SECTION 10.4 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 10.5 No Oral Modifications or Continuing Waivers. No terms
or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other Person against whom enforcement of the change, waiver, discharge or
termination is sought and any other party or other Person whose consent is
required pursuant to this Agreement and any waiver of the terms hereof shall
be effective only in the specific instance and for the specific purpose given.
58
SECTION 10.6 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and assigns of each, all as herein
provided.
SECTION 10.7 Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8 Counterpart Form. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9 Subordination. (a) As between the Liquidity Providers
and the Policy Provider, on the one hand, and the Trustees and the
Certificateholders, on the other hand, and as among the Trustees, this
Agreement shall be a subordination agreement for purposes of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Bankruptcy Code, as amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if prior to
the payment in full to the (i) Liquidity Providers of all Liquidity
Obligations then due and payable and (ii) Policy Provider of all Policy
Provider Obligations then due and payable, any party hereto shall have
received any payment or distribution in respect of Equipment Notes or any
other amount under the Indentures or other Operative Agreements which, had the
subordination provisions of this Agreement been properly applied to such
payment, distribution or other amount, would not have been distributed to such
Person, then such payment, distribution or other amount shall be received and
held in trust by such Person and paid over or delivered to the Subordination
Agent for application as provided herein.
(c) If any Trustee, any Liquidity Provider, the Policy Provider or
the Subordination Agent receives any payment in respect of any obligations
owing hereunder (or, in the case of the Liquidity Providers or the Policy
Provider, in respect of the Liquidity Obligations or the Policy Provider
Obligations, as the case may be), which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver or
other party, then, to the extent of such payment, such obligations (or, in the
case of the Liquidity Providers or the Policy Provider, such Liquidity
Obligations or 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 confirm that the payment priorities specified in Sections
2.4, 3.2 and 3.3 shall apply in all circumstances, notwithstanding the fact
that the obligations owed to the Trustees and the holders of Certificates are
secured by certain assets and the Liquidity Obligations and the Policy
Provider Obligations may not be so secured. The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity Obligations or the Policy Provider Obligations
(except as specifically set forth in Section 2.4, 3.2 or 3.3) due to their
status as secured creditors in any bankruptcy, insolvency or other legal
proceeding.
59
(e) Each of the Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers, the Policy Provider and the
Subordination Agent may take any of the following actions without impairing
its rights under this Agreement:
(i) obtain a Lien on any property to secure any amounts owing to it
hereunder, including, in the case of the Liquidity Providers and the
Policy Provider, the Liquidity Obligations or the Policy Provider
Obligations, as the case may be,
(ii) obtain the primary or secondary obligation of any other obligor
with respect to any amounts owing to it hereunder, including, in the case
of the Liquidity Providers and the Policy Provider, any of the Liquidity
Obligations or the Policy Provider Obligations, as the case may be,
(iii) renew, extend, increase, alter or exchange any amounts owing to
it hereunder, including, in the case of the Liquidity Providers and the
Policy Provider, any of the Liquidity Obligations or the Policy Provider
Obligations, as the case may be, or release or compromise any obligation
of any obligor with respect thereto,
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated party
or a surety under applicable law;
provided, however, that the taking of any such actions by any of the Trustees,
the Liquidity Providers, the Policy Provider or the Subordination Agent shall
not prejudice the rights or adversely affect the obligations of any other
party under this Agreement;
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have, or
(v) take any other action which might discharge a subordinated party
or a surety under applicable law.
SECTION 10.10 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 10.11. Submission to Jurisdiction; Waiver of Jury Trial.
(a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative
Agreement, or for recognition and enforcement of any judgment in
respect hereof or thereof, to the nonexclusive general jurisdiction
of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and the appellate
courts from any thereof;
(ii)consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to each party hereto at its address set forth in Section
10.3 hereof, or at such other address of which the other parties
shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED,
including, without limitation, contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each of the parties
warrants and represents that it has reviewed this waiver with its legal
counsel, and that it knowingly and voluntarily waives its jury trial rights
following consultation with such legal counsel. THIS WAIVER CANNOT BE MODIFIED
ORALLY.
SECTION 10.12. Transfer. No party hereto shall be entitled to assign
or otherwise transfer this Agreement (or any interest herein) other than (in
the case of the Subordination Agent or Trustee) to a successor subordination
agent or trustee, as the case may be, and any purported assignment in
violation hereof shall be void. This Agreement shall be binding upon the
parties hereto and their respective successors and (in the case of the
Subordination Agent) permitted assigns. Upon the occurrence of the Transfer
contemplated by the Assignment and Assumption Agreements, each Trustee shall
(without further act) be deemed to have transferred all of its right, title
and interest in and to this Agreement to the trustee of each corresponding
Successor Trust and, thereafter, the trustee of each Successor Trust shall be
deemed to be a "Trustee" hereunder, and each reference herein to (i) "American
Trans Air 2000-1G-O Pass Through Trust" shall be deemed to be a reference to
"American Trans Air 2000-1G-S Pass Through Trust" and (ii) "American Trans Air
2000-1C-O Pass Through Trust" shall be deemed to be a reference to "American
Trans Air 2000-1C-S Pass Through Trust." The Subordination Agent, each of the
Liquidity Providers and the Policy Provider hereby acknowledge and consent to
the Transfer contemplated by the Assignment and Assumption Agreements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written, and acknowledge that this Agreement has
been made and delivered in the City of New York, and this Agreement has become
effective only upon such execution and delivery.
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as Trustee
for each of the Trusts
By_________________________________
Name:
Title:
CITIBANK, N.A.
as Class G Liquidity Provider and
Class C Liquidity Provider
By______________________________
Name:
Title:
AMBAC ASSURANCE CORPORATION,
as Policy Provider
By________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, not in its individual
capacity except as expressly set forth herein but
solely as Subordination Agent and trustee
By______________________________
Name:
Title:
